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

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

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

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

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

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 ~~than~~that 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.

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,~~November 14, 2023, the number of shares of the registrant’s common stock outstanding was ~~131,554,197.~~

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

	Three Months ended December 31,			Three Months ended December 31,			Nine Months ended December 31,			Nine Months ended December 31,			Three			Three			Nine			Nine
	2017			2016			2017			2016			Months Ended			Months Ended			Months Ended			Months Ended
													September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022

Revenue													$	183,722		$	5,784,424		$	3,010,870		$	18,296,826
Cost of revenue														251,891			3,899,157			2,163,354			11,331,346

Gross profit (loss)														(68,169	)		1,885,267			847,516			6,965,480
Operating expenses:
Selling, general and administrative	$	64,867		$	81,351		$	284,875		$	230,732
Sales and marketing														85,193			342,622			321,229			619,418
Product development (including related party expense of $0, $8,636, $27,041, and $25,407 respectively)														84,871			467,605			411,433			1,150,464
Amortization of intangibles														321,963			952,170			955,391			2,877,882
Impairment Expense														-			2,129,101			-			2,129,101
General and administrative (including share-based compensation expense of $343,951, $765,743, $1,106,460, and $3,415,670 respectively, and related party expense of $0, $0, $0, and $19,825 respectively)														1,534,339			3,714,066			5,255,043			12,876,714
Total operating expenses		64,867			81,351			284,875			230,732			2,026,366			7,605,564			6,943,096			19,653,579
Loss from operations		(64,867	)		(81,351	)		(284,875	)		(230,732	)

Loss from continuing operations														(2,094,535	)		(5,720,297	)		(6,095,580	)		(12,688,099	)

Other income (expenses):
Interest expense		(14,714	)		(26,973	)		(84,386	)		(73,061	)		(622,883	)		(208,351	)		(1,784,252	)		(340,257	)
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			-
Income from ERC Credit														1,422,773			-			2,177,568			-
Other (expense) income														(12,566	)		(610	)		(11,262	)		13,917
Finance cost														-			-			(327,073	)		-
Gain on settlement of payables														-			-			178,749			-
Gain on debt extinguishment														-			-			-			1,205,195
Total other income (expenses)		86,933			(97,141	)		(32,376	)		(142,893	)		787,324			(208,961	)		233,730			878,855

Income (loss) from operations before income taxes		22,066			(178,492	)		(317,251	)		(373,625	)
Loss from continuing operations before income taxes														(1,307,211	)		(5,929,258	)		(5,861,850	)		(11,809,244	)
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 from continuing operations													$	(1,307,211	)	$	(5,929,258	)	$	(5,861,850	)	$	(11,809,244	)

Net income from discontinued operations														276,529			302,893			535,126			811,781
Net loss														(1,030,682	)		(5,626,365	)		(5,326,724	)		(10,997,463	)
Deemed dividends														-			(658,266	)		(503,643	)		(658,266	)
Net loss attributable to common shareholders	$	(35,551,560	)	$	(178,492	)	$	(35,890,877	)	$	(373,625	)	$	(1,030,682	)	$	(6,284,631	)	$	(5,830,367	)	$	(11,655,729	)

Net loss from continuing operations per common share – basic and diluted														(0.96	)		(5.99	)		(4.82	)		(11.96	)
Net income from discontinued operations per common share - basic and diluted														0.20			0.31			0.44			0.82
Net loss per common share – basic and diluted	$	(0.40	)	$	(0.07	)	$	(1.15	)	$	(0.15	)	$	(0.75	)	$	(6.35	)	$	(4.79	)	$	(11.80	)

Weighted average common shares – basic and diluted		88,152,023			2,554,197			31,190,561			2,554,197
Weighted average common shares - basic and diluted														1,367,343			990,076			1,215,995			987,625

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

~~Condensed~~ Consolidated ~~Statements~~Statement of ~~Cash Flows~~Changes in Stockholders’ Equity

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

~~Truli Media~~Recruiter.com Group, Inc., a ~~Delaware~~Nevada corporation ~~(the~~(“RGI” or the “Company”), is a holding company based in Bristol, Connecticut. Immediately following the October 30, 2017 closing of the License Agreement and issuance of preferred shares described below and in Note 2, Mr. Michael Solomon, then a director of theNew York, New York. The Company ~~exercised his option, granted to him in September 2016, to purchase the Company’s subsidiary, Truli Media Corp~~has eight subsidiaries, Recruiter.com, Inc., Recruiter.com Recruiting Solutions LLC (“~~TMC”~~Recruiting Solutions”) ~~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. (“VocaWorks”), Recruiter.com Scouted Inc. (“Scouted”), Recruiter.com Upsider Inc. (“Upsider”), Recruiter.com OneWire Inc. (“OneWire”), Recruiter.com Consulting, LLC (“Recruiter.com Consulting”) and CognoGroup, Inc. RGI and its subsidiaries as a ~~New Jersey corporation.~~consolidated group is hereinafter referred to as the “Company,” “we”, “us” or “our”.

~~Prior~~On July 25, 2023, the Company acquired a shell company, Atlantic Energy Solutions, Inc., which is a dormant entity quoted on OTC Market under the symbol AESO, in which the Company acquired a controlling and majority equity interest through purchasing 1,000,000 preferred convertible shares providing voting control of Atlantic Energy Solutions, Inc. for $80,000. The transaction is accounted for as a recapitalization due to the ~~exercise~~intent of the ~~option by Mr. Solomon~~company to ~~purchase TMC,~~spin out the shell to the shareholders of Recruiter.com Group, Inc. and continue certain operations of Recruiter.com, Inc. in AESO

The Company operates an On Demand recruiting platform digitally transforming the $28.5 billion employment and recruiting agencies industry. The Company offers recruiting software and services through an online, AI-powered sourcing platform (the ″Platform”) and network of on-demand recruiters. Businesses from startups to the Fortune 100 use the Company to help address their critical talent needs and solve recruiting and hiring challenges.

The Company’s website, www.Recruiter.com, provides access to its network of recruiters to employers seeking to hire talent and utilizes an innovative web platform, software with integrated AI-driven candidate to job matching, and video screening software to source qualified talent more easily and quickly.

The Company helps businesses accelerate and streamline their recruiting and hiring processes by providing on-demand recruiting software and services. The Company leverages its 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.

Through the Company’s Recruiting Solutions division, the Company also provides consulting, staffing, (see note 6), and full-time placement services to employers, leveraging our platform and rounding out our services. The Company’s mission is to help recruit the right talent faster and become the preferred solution for hiring specialized talent.

On June 5, 2023, the Company ("Buyer") entered into a stock purchase agreement (“GoLogiq Stock Purchase Agreement”) with GoLogiq Inc. ("Seller"), a Delaware corporation (“GoLogiq”). GoLogiq owns all of the issued and outstanding membership interests (the “Membership Interests”) of GOLQ LLC, a Nevada limited liability company, that was ~~focused~~further amended on August 18 and 29, 2023. Upon the terms and subject to the conditions of the stock purchase agreement, GoLogiq is selling to the Company, and the Company is purchasing from GoLogiq, the Membership Interests. In exchange for the Company Membership Interests, the Buyer will issue to Seller such number of shares of common stock of Buyer, par value $0.0001 per share (the “Buyer Common Stock”) that represents 19.99% of the number of issued and outstanding shares of the Buyer Common Stock on the ~~on-demand media and social networking markets as an aggregator~~business day prior to the date of ~~family-friendly, faith-based Christian content, media, music and Internet Protocol Television~~Closing (“~~IPTV”~~Closing Consideration”) ~~programming. With~~. Following the ~~exercise~~issuance of the ~~option~~Closing Consideration, Seller will own 16.66% of the issued and outstanding shares of the Buyer Common Stock. In addition, additional Buyer Common Stock may be issuable to Seller as consideration upon the achievement of one or more of the following milestone targets (each a “Milestone Payment”): (i) if on a date that is six (6) months after the date of Closing, the Revenue for such six-month period is at least $2,000,000, Buyer will issue to Seller such number of additional shares of Buyer Common Stock such that Seller will own, following such issuance, 40.00% of the issued and outstanding shares of the Buyer Common Stock; (ii) if on a date that is nine (9) months after the date of Closing, the Revenue for such nine-month period is at least $4,000,000, Buyer will issue to Seller such number of additional shares of Buyer Common Stock such that Seller will own, following such issuance, 64.00% of the issued and outstanding shares of the Buyer Common Stock. Such issuance may be made as early as six (6) months after the date of Closing if $4,000,000 in Revenue is reached between six (6) and nine (9) months after the date of Closing; and (iii) if on a date that is twelve (12) months after the date of Closing, Revenue for such twelve-month period is at least $6,000,000, Buyer will issue to Seller such number of additional shares of Buyer Common Stock such that Seller will own, following such issuance, 84.00% of the fully-diluted shares of the Buyer Common Stock. Such issuance may be made as early as six (6) months after the date of Closing if $6,000,000 in Revenue is reached between six (6) and twelve (12) months after the date of Closing. Each Milestone Payment under this Section 1.02(b) shall be independent of the other Milestone Payments such that a Milestone Payment shall be payable if and only if the target attributable to such Milestone Payment is achieved within the period of time required by ~~Mr. Solomon, the Company~~such target. This transaction is awaiting shareholder approval and has ~~exited those activities.~~not yet closed.

~~Effective October 30, 2017,~~On August 16, 2023, the Company entered into ~~a License~~an Asset Purchase Agreement (the ~~“License”~~“Job Mobz Purchase Agreement”) with ~~Recruiter.com,~~Job Mobz Inc., a ~~Delaware~~California corporation (“~~Recruiter”~~Job Mobz”) ~~under which Recruiter granted~~. Upon the ~~Company’s newly created subsidiary, VocaWorks, a license~~terms and subject to ~~use~~the conditions of the Job Mobz Purchase Agreement, the Company has agreed to sell and assign its right, title, and interest in the domain name and the assets generally used to operate the business associated therewith to Job Mobz for an aggregate purchase price of $1,800,000, subject to certain ~~of Recruiter’s proprietary software and related intellectual property.~~adjustments. This transaction has not yet closed. The Company is ~~rebranding itself under~~currently seeking shareholder approval to the ~~"VocaWorks" brand name and moving into the rapidly expanding field~~terms 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.that certain Job Mobz Asset Purchase Agreement.

~~“Truli”, “our”, “us”, “we” or the “Company” refer to Truli Media Group, Inc.~~

Principles of Consolidation and ~~its subsidiaries. The operations~~Basis 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.Presentation

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

~~The Company’s operations are subject to all the risks~~those of our wholly-owned subsidiaries. All intercompany transactions and ~~uncertainties inherent~~balances 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.~~

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. Accordingly, these interim unaudited consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the years ended December 31, 2022 and 2021 in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023. The December 31, 2022 balance sheet is derived from those statements.

~~These~~In the opinion of management, these unaudited interim financial statements as of and for the three and nine months ended ~~December 31, 2017 and 2016 are unaudited; however, in the opinion of management, such statements~~September 30, 2023 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. The results for ~~the~~ three and nine months ended ~~December 31, 2017~~September 30, 2023 are not necessarily indicative of the results to be expected for the year ending ~~March~~December 31, ~~2018~~2023 or for any future period. All references to ~~December 31, 2017 and 2016~~September 30, 2023 in these footnotes are unaudited.

~~These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto~~Discontinued Operations

See Note 6, Discontinued Operations, for ~~the year ended March 31, 2017, included in~~a discussion of the Company’s ~~annual report on Form 10-K filed~~significant accounting policy surrounding the sale of substantially all of the Company’s staffing and consulting services revenue line in connection with the ~~SEC on June~~sale of its right, title, and exclusive interest in certain client contracts and associated staff, contractors, business information, and relationships to Insigma and Akvarr.

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.

~~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.~~

The preparation of financial statements in conformity with accounting principles generally accepted ~~accounting principles~~in 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 financial statements and the reported amounts of ~~revenue~~revenues and expenses during the reporting period. Actual results ~~could~~and 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 asset acquisitions and the estimated useful ~~lives~~life of assets acquired, fair value of contingent consideration in asset acquisitions and business combinations, fair value of derivative liabilities, fair value of securities issued for acquisitions and business combinations, fair value of assets acquired and liabilities assumed in business combinations, fair value of intangible assets ~~calculate the beneficial conversion feature~~and goodwill, fair value of ~~convertible notes payable and convertible preferred stock,~~capitalized software, fair value of non-monetary transactions, deferred income tax asset valuation allowances, and valuation of ~~derivative liabilities.~~stock based compensation expense.

The Company ~~follows ASC 260, “Earnings Per Share” for calculating~~considers all short-term highly liquid investments with a remaining maturity at the ~~basic~~date 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. There were 365,034,400~~maintained at financial institutions, and, ~~104,782,090 outstanding common share equivalents~~ at times, balances may exceed federally insured limits. At September 30, 2023 and December 31, ~~2017~~2022, the Company had $15,253 and ~~2016,~~$612,691 in excess of the FDIC limit, respectively.

~~Fair Value~~ The Company has not experienced any losses related to these balances as of September 30, 2023 and December 31, 2022. The Company had no cash equivalents during or at the end of either period.

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying amount reported in the condensed consolidated balance sheet for accounts payable and accrued expenses and notes payable approximates fair value because of the immediate or short-term maturity of these financial instruments.

The Company ~~evaluates and accounts for conversion options embedded in its convertible instruments~~recognizes revenue in accordance with ~~professional standards~~Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ~~“Accounting for Derivative Instruments~~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 ~~Hedging Activities”.~~(v) recognition of revenue when or as a performance obligation is satisfied.

~~Professional standards generally provides three criteria~~We generate revenue from the following activities:

We have a sales team and sales partnerships with direct employers as well as vendor management system companies and managed service companies that ~~if met, require companies~~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 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 risksfulfil any or all 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”.revenue segments.

~~The Company accounts for convertible instruments (when it has determined that~~Revenues as presented on 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 pertainconsolidated statements of operations represent services rendered 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 transactioncustomers less sales adjustments and ~~the effective conversion price embedded in the note. Debt discounts under these arrangements~~allowances.

Software subscription revenues are ~~amortized~~recognized over the term of the ~~related debt~~subscription for access to ~~their earliest date of redemption. The Company also records when necessary deemed dividends for~~services and/or our web-based platform. Revenue is recognized monthly over the ~~intrinsic value of conversion options embedded in preferred shares based upon~~subscription term. Talent effectiveness subscription revenues are recognized over the ~~differences between the fair value~~term of the ~~underlying common stock~~subscription when services are provided. Any payments received prior to the time passing to provide the subscription services are recorded as a deferred revenue liability. Revenue generated from the enhanced support package and On Demand support are recognized at the ~~commitment date of~~point-in-time when the ~~preferred shares transaction and~~service is provided. Revenue generated from placement fees that are related to the ~~effective conversion price embedded in~~software subscription are recognized at the ~~preferred shares.~~point-in-time when the 60 or 90-day guarantee expires.

~~ASC 815-40 provides that, among other things, generally, if an event~~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 ~~not~~completed. Talent Effectiveness consulting services are billed to clients upfront for a period of 12 months. Revenue is recognized on a gross basis monthly over the period the consulting services are provided.

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 on a gross basis when the ~~entity’s control~~advertising is placed and displayed or ~~could require~~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.

Marketplace advertising 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. Job posting revenue is recognized at the end of the period the job is posted. Marketplace 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.

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 ~~cash settlement, then the contract shall be classified~~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 ~~asset or a liability.~~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. 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.

~~Derivative Instruments~~Deferred revenue results from transactions in which we have 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.

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.

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 September 30, 2023 or December 31, 2022.

The Company’s ~~derivative financial instruments~~contract liabilities consist of ~~embedded derivatives related to~~advance customer payments and deferred revenue. Deferred revenue results from transactions in which the ~~convertible debt and conversion features embedded within our convertible debt. The accounting treatment of derivative financial instruments requires that we record~~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 ~~derivatives at their fair values as~~deferred revenues are recognized.

For each of the ~~inception date of~~identified periods, revenues can be categorized into the debt agreements and at fair value as of each subsequent balance sheet date. Any change in fair value was 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.following:

~~The~~As of September 30, 2023 and December 31, 2022, deferred revenue amounted to $182,523 and $215,219, respectively. During the nine months ended September 30, 2023, the Company ~~utilizes the Black-Scholes option-pricing model to determine fair value~~recognized approximately $200,000 of options and warrants granted as stock-based compensation, which requires us to make judgments relating 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 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 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 servicerevenue that was deferred as of December 31, ~~2017.~~2022. Deferred revenue as of September 30, 2023 is categorized and expected to be recognized as follows.

~~Recently Issued Accounting Pronouncements~~Expected Deferred Revenue Recognition Schedule

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

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. If an award is not probable 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,Revenue from international sources was approximately 0.01% and classification. This ASU will be applied prospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company does not expect this standard to have a material impact on its 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:

~~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.~~

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 $3,6391.0% for the three months ended ~~December 31, 2017~~September 30, 2023 and ~~2016,~~2022, respectively. ~~The Company recorded interest expense of $12,123~~Revenue from international sources was approximately 0.02% and ~~$7,699~~3% for the nine months ended September 30, 2023 and 2022, respectively.

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.

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 $1,131,457 and $1,384,186 as of September 30, 2023 and December 31, ~~2017~~ 2022, respectively. Bad debt expense (recovery) was $(24,537)and ~~2016,~~$115,363 for the three-month periods ending September 30, 2023 and 2022, respectively, and $175,463 and $479,065 for the nine months ending September 30, 2023 and 2022, respectively. ~~As a result of Mr. Solomon’s exercise of~~

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the ~~purchase option to acquire TMC, this note and~~straight-line method beginning on the ~~related accrued interest of $24,800~~date an asset is ~~no longer a liability of~~placed in service. The Company regularly evaluates the ~~Company. Accrued interest payable was $12,677 at March 31, 2017.~~

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 sharesestimated remaining useful lives of the Company’s ~~common stock at~~property and equipment to determine whether events or changes in circumstances warrant a revision to the ~~rate~~remaining period of ~~$0.02 per share, subject~~depreciation. Maintenance and repairs are charged to ~~certain restrictions of beneficial ownership. The Company recorded interest~~ expense ~~of $6,645~~as incurred.

Property and ~~$19,720~~equipment depreciation expense for the three months ended ~~December 31, 2017~~September 30, 2023 and ~~2016, respectively. The Company recorded interest expense of $45,871~~2022 was $6,257 and ~~$58,946~~$3,603 respectively and was $18,772 and $4,084 for the nine months ended ~~December 31, 2017~~September 30, 2023 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,~~2022, respectively.

~~Effective~~Concentration of Credit Risk and Significant Customers and Vendors(Continuing Operations)

As of 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 exchange30, 2023, three customers accounted for ~~$102,500 from each Investor, each of whom acquired a convertible note for one-half~~more than 10% of the ~~principal (together the “Investor Convertible Notes”). The NPA included~~accounts receivable balance, for a ~~provision under which the Founder has an option to purchase all~~total of 63%.

As of December 31, 2022, there were no customers accounted for more than 10% 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.accounts receivable balance.

~~Subsequent to~~For the three months ended 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~~2023 two customer accounted for more than 10% 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.

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 forFor the three ~~and~~months ended September 30, 2022 one customer accounted for more than 10% of total revenue, at 18%.

For the nine months ended ~~December 31, 2017, respectively. Accrued interest payable was $4,972 and $2,000 at October~~September 30, ~~2017 (the date~~2023, there were no customers accounted for more than 10% of ~~the exchange of the notes into Series C-1 Convertible Preferred Stock) and March 31, 2017, respectively.~~total revenue

~~On April 6, 2017,~~For 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~~September 30, 2022, one customer accounted for more than 10% of total revenue, at 12% and ~~$0 at October 30, 2017 (the date~~10%, for a total of ~~the exchange of the notes into Series C-1 Convertible Preferred Stock) and March 31, 2017, respectively.~~22%.

~~On October 30, 2017,~~We used a related party firm located overseas for software development and maintenance related to our website and the ~~Investors exchanged the November~~platform underlying our operations. One of our former employees and ~~April Notes~~principal shareholders is an employee of this firm 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.exerts control over this firm (see Note 11).

~~NOTE 3 — DERIVATIVES~~We were a party to a license agreement with a related party firm (see Note 11).

We had used a related party firm to provide certain employer of record services (see Note 11).

The Company ~~has identified certain embedded derivatives related to its convertible notes~~expenses all advertising and ~~common stock purchase warrants. Since certain~~marketing costs as incurred. Advertising and marketing costs were $85,193 and $342,622 for the three months ended September 30, 2023 and 2022, respectively. Advertising and marketing costs were $321,229 and $619,418 for the nine months ended September 30, 2023 and 2022, respectively and included in sales and marketing in the accompanying consolidated statements of ~~the notes are convertible into a variable number~~operations.

Fair Value 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. Financial Instruments and Fair Value Measurements

The ~~accounting treatment of derivative financial instruments requires that the~~ Company ~~record~~measures and discloses the fair value of ~~the derivatives as of the inception date~~assets and liabilities required to ~~adjust to~~be carried at fair value ~~as of each subsequent balance sheet date.~~

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~~ASC 820, Fair Value Measurements 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~~Disclosures. ASC 820 defines fair value, ~~of the derivative. The warrants expired unexercised on September 10, 2016.~~

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 theestablishes a hierarchical framework for measuring fair value, ~~of the derivatives as of the inception date of the note~~ and ~~to adjust the~~enhances 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.

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.

ASC ~~825-10~~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 ~~825-10~~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 ~~825-10~~825 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.~~liabilities in active markets to which we have access at the measurement date.

Level 2 - ~~Observable inputs~~Inputs other than quoted prices within 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 inputsthat are observable for the asset or ~~can be derived principally from~~liability, either directly or ~~corroborated by observable market data for substantially the full term of the assets or liabilities.~~indirectly.

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

~~To the extent that valuation~~The determination of where assets and liabilities fall within this hierarchy 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 onupon the lowest level of input that is significant to the fair value measurement.

~~Items~~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’s contingent accrued earn-out business acquisition consideration liability was considered Level 3 fair value liability instruments requiring period fair value assessments. Contingent consideration liabilities are recorded at fair value on the acquisition date and are re-measured quarterly based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3. In April 2022, the earn-out liability was forgiven in full and recorded as a gain on debt extinguishment on the consolidated statement of operations. In fair valuing these instruments, the income valuation approach is applied, and the valuation inputs include the contingent payment arrangement terms, projected revenues and cash flows, rate of return, and probability assessments. The Company does not have any other financial instruments which require re-measurement to fair value. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and loans payable represent fair value based upon their short-term nature.

For the Company’s earn-out liability measured at fair value on a recurring basis inusing significant unobservable inputs (Level 3), the ~~accompanying unaudited condensed consolidated financial statements consisted of the following items as of December 31, 2017:~~

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

~~The~~ following table provides a ~~summary~~reconciliation of the beginning and ending balance for each category therein, and gains or losses recognized during the periods ended September 30, 2023 and December 31, 2022:

For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, generally at their fair values with any excess of purchase price over the net assets recorded as goodwill.

Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value and accretion costs are recognized in earnings. The increases or decreases in the fair value of ~~the Company’s Level 3 derivative liabilities for the nine months ended December 31, 2017~~contingent consideration can result from changes in anticipated revenue levels and ~~2016:~~

~~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~~

Intangible assets consist primarily of the ~~date~~assets acquired from Genesys in the third quarter of 2019, including customer contracts and intellectual property, the assets acquired from Scouted and Upsider during the first quarter of 2021, the assets acquired from OneWire during the second quarter of 2021, and the assets acquired from Parrut and Novo Group during the third quarter of 2021. Amortization expense is recorded on the straight-line basis over the estimated economic lives.

Goodwill is comprised of the ~~end~~purchase price of business combinations in excess of the ~~period covered by this Quarterly Report~~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 ~~Form 10-Q. This determination was based on~~an annual basis, or when events occur, or circumstances indicate the ~~following factors: (i) the Company’s available cash as~~fair value of ~~the date of this filing will not be sufficient to fund~~a reporting unit is below 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 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. carrying value.

There is no assurance that the Company will be successful in any 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' ownership. The Company cannot guarantee when or if it will generate positive cash flow.

The Company ~~is currently in negotiations for another round~~performs its annual goodwill impairment assessment on December 31st of funding anticipated for the fourth quarter of fiscal 2018. However, there is no assurance that the Company will be successful in this 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 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.

~~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.~~

Intangible assets consist of a License Agreement (the “License”) with Recruiter.com, Inc. (“Recruiter”), under which Recruiter granted VocaWorks a license to use certain of Recruiter’s proprietary software and related intellectual property. In consideration for the License, the Company issued to Recruiter 125,000,000 shares of common stock. We have valued the license at $625,000. 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. Recruiter shall provide VocaWorks with support services free of charge, which shall include (i) a total of 2,400 hours of Technology and Development Services to be provided by Recruiter personnel during the two year period following the effective Date, with a total value of $200,000; and (ii) marketing 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 $28,750 related to the development of our website and iPhone app, both to be used in conjunction with the license acquired from Recruiter.~~

The Company is authorized to issue 10,000,000 shares of $0.0001 par value preferred stock. As of December 31, 2017 and March 31, 2017 the Company has 720,938.752 and no shares of preferred stock issued and outstanding, respectively.

~~On October 24, 2017, the Company filed a Certificate of Designations with the Delaware Secretary of State designating 700,000 shares of the Company’s authorized preferred stock~~or as Series A Convertible Preferred Stock (the “Series A”), which is convertible into shares of common stock at $0.005 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 conversion price of the Series A. The Company entered into Securities Purchase Agreements (each a “SPA”) 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 of 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 other preferred stock and the common stock upon liquidation 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.

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 625,000 shares of Series B 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 following the achievement of certain milestones as provided for in the License.

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 millionimpairment indicators dictate (see Note ~~12)~~5).

~~The Company is authorized to issue 250,000,000 shares~~When evaluating the potential impairment of ~~common stock, par value $0.0001 per share. As~~goodwill, management first assess a range of ~~December 31, 2017 and March 31, 2017 the Company had 127,554,197 and 2,554,197 shares of common stock issued and outstanding, respectively.~~

~~In consideration for the acquisition of the license described in Note 6, the Company issued 125,000,000 shares of common stock.~~

As a result of Mr. Solomon’s exercise of his option 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.

In connection with the sale of our Series A preferred stock, we issued an aggregate of 120,000,000 common stock purchase warrants to the purchasers of the preferred stock. The warrants are immediately exercisable at an exercise price 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.

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. 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:

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. The term of each plan option and 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. The terms of grants of any other type of award under the 2017 Plan is determined by the Board 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.

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 using the Black Scholes option pricing model. Further, we attributed a beneficial conversion feature of $34,492,426 to the Series A, Series C and Series C-1 preferred shares based upon the difference between the effective conversion price of those shares and the closing price of our common shares on the date of issuance. The assumptions used in the Black Scholes model are as follows: (1) dividend yield of 0%; (2) expected volatility of 353%, (3) risk-free interest rate of 2%, (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.

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

~~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.~~

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.

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.

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, 2018 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 500,000 options to purchase common stock, exercisable at $0.08 per share, under the terms of the 2017 Equity Incentive Plan. The options vest 41,667 upon grants and the remaining options shall vest quarterly in equal amounts over a 33-month period with the first vesting date being April 30, 2018.

~~ITEM 2. MANAGEMENT'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 report on Form 10-Q. 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 certainqualitative factors, including but not limited to, ~~those set forth under “Risk Factors”~~macroeconomic conditions, industry conditions, the competitive environment, changes in ~~our Annual Report on Form 10-K~~the market for the ~~year ended March 31, 2017~~Company’s products and services, regulatory and political developments, entity specific factors such as ~~filed with~~strategy and changes in key personnel, and the ~~Securities and Exchange Commission, or the SEC.~~

~~As used in this report, the terms "Company", "we", "our", "us" and "Truli" refer to Truli Media Group, Inc. and its subsidiary, VocaWorks, Inc. and its former subsidiary TMC.~~

~~The Company was incorporated in Oklahoma in 2008. On March 17, 2015, the Company reincorporated in Delaware.~~

~~On September 21, 2016, Michael J. Solomon, the founder and Chairman~~overall financial performance for each of the ~~Board~~Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of ~~the Company (the “Founder”) sold~~ a ~~convertible note with a principal amount of $1,955,934 previously issued by the Company~~reporting unit is less than its carrying value, we then proceed to the ~~Founder (the “Convertible Note”) to two institutional investors (the “Investors”) in equal amounts in exchange for payment of $102,500 from each investor.~~quantitative impairment testing methodology.

Under the ~~terms~~quantitative method we compare the carrying value of the ~~Note Purchase Agreement (the “NPA”),~~reporting unit, including goodwill, with its fair value, as determined using an appropriate valuation method. If the ~~Founder was required~~carrying value of a reporting unit exceeds its fair value, then the amount of impairment to ~~pay all of~~be recognized is recognized as the liabilities as of the date of the NPA other than the Convertible Note and public company expenses and continue to pay all operating liabilities other than the public company liabilities, which were paidamount by ~~the Investors for one year. The NPA includes a provision under~~ which the ~~Founder had an option to purchase all of~~carrying amount exceeds the Company’s current operating assets for $5,000 through September 23, 2017. Effective as of September 23, 2017, the Company agreed to extend the option held by the Founder through October 31, 2017. On October 30, 2017, immediately following the sale of the Series A Convertible Preferred Stock and Warrants, the Founder exercised the option and acquired TMC.fair value.

~~On October 30, 2017, the Company entered into~~When required, we may arrive at our estimates of fair value using a ~~License with Recruiter.com, Inc. (“Recruiter”) under~~discounted cash flow methodology which ~~Recruiter granted the Company’s newly created subsidiary, VocaWorks, Inc., a license~~includes estimates of future cash flows to use Recruiter’s proprietary software and related intellectual property (the “License”). In consideration for the License, the Company issued Recruiter 125,000,000 shares 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 entitled to receive an additional 1,250,000 shares of Series B on the achievement of certain milestones as provided in the License. The Chief Executive Officer of Recruiter was appointed Chief Executive Officer 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.

~~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~~be generated by specifically identified 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.

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 selecting a ~~web-based SaaS platform offering~~discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and ~~will facilitate~~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 are reviewed for impairment whenever events or changes in circumstances indicate that the ~~hiring of personnel, including project-based consultants, focusing initially on specialized technology talent. The initial test launch~~book value of the ~~web platform is currently scheduled for release at the end of fiscal 2019 Q1, dependent on software development.~~

~~Truli has~~asset may 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.~~

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

~~Three Months Ended December 31, 2017 Compared to Three Months Ended December 31, 2016:~~

recoverable. The Company ~~had no revenue for~~periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the ~~three-month periods ended December 31, 2017 or 2016. VocaWorks has recently begun to implement its new business plan commencing with~~Company estimates the ~~execution~~future undiscounted net cash flows of the ~~License agreement with Recruiter. Truli officially launched its website on July 10, 2012 but had not yet generated material revenue through~~related asset or asset group over 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~~remaining life of the ~~following factors.~~

~~The Company incurred marketing, general and administrative expenses~~asset in measuring whether the long-lived asset should be written down to fair value. Measurement of ~~$64,867 and $81,351 for~~ the ~~three-month periods ended December 31, 2017 and 2016, respectively, principally comprised~~amount of ~~marketing, website development costs, professional fees and consulting fees. The decrease~~impairment would be based on generally accepted valuation methodologies, as deemed appropriate. If the carrying amount is greater than the undiscounted cash flows, the carrying amount of 20% in 2017 compared to 2016 was primarily attributable to decreased marketing costs and a reversal of accounts payable and accrued expenses of $98,593, partially offset by an increase in professional fees.

~~Other income (expense)~~the asset is ~~comprised of interest and financing costs, expense related~~reduced to the ~~change in~~asset’s fair ~~value of our derivative liabilities, and gain on extinguishment of debt. The decrease in interest~~value. An impairment loss is recognized immediately as an operating expense in the ~~2017 three month period compared to the 2016 three month period results from the settlement~~consolidated statements of ~~debt in the 2017 period. The change in the fair value~~operations. Reversal of our derivative liabilities results primarily from the changes in our stock price and the volatility of 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:~~previously recorded impairment losses are prohibited (see Note 5).

The Company had no revenue for the nine-month periods ended December 31, 2017 or 2016. Net loss of $317,251 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) 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 of our common stock during the reported periods. The gain on extinguishment of debt results from the settlement of debt in the 2017 period.

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

Our net cash used in operating activities was $236,554 and $269,408 for the nine months ended December 31, 2017 and 2016, respectively. The decrease in cash used is primarily attributable to an increase in loss (after adjusting for non-cash items) of approximately $103,000, which was offset by an increase in accounts payable and accrued interest of approximately $136,000. Cash used in investing activities during the nine months ended December 31, 2017 consisted of expenditures forcapitalize certain software development ~~of approximately $29,000 and a transfer of approximately $9,000 upon~~costs incurred in connection with developing or obtaining software for internal use when both the exercise of an option to purchase our TMC subsidiary. There were no cash flows from investing activities for the nine months ended December 31, 2016. Net cash provided by financing activities was approximately $636,000 for the nine months ended December 31, 2017, derived primarily from the proceeds 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 advances from the Founder. The Company’s recent funding has come through the sale of convertible preferred stock. The Company’s management has evaluated whether therepreliminary project stage 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. 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 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.

The Company is currently in negotiations for another round of funding anticipated for the fourth quarter of fiscal 2018. However, there is no assurance that the Company will be successful in this 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 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.

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.

~~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,completed, and it is ~~not possible~~probable that the software will be used as intended. Capitalization ceases after the software is operational; however, certain upgrades and enhancements may be capitalized if they add functionality. Capitalized software costs include only (i) external direct costs of materials and services utilized in developing or obtaining software, (ii) compensation and related benefits for ~~us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as~~employees who are directly associated with the ~~result of new information, future events or otherwise.~~

~~Off-Balance Sheet Arrangements~~software project and (iii) interest costs incurred while developing internal-use software.

~~Critical Accounting Estimates~~We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and ~~Recent Accounting Pronouncements~~

~~The preparation~~liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in ~~conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect~~future years of differences between the ~~reported amounts~~tax bases of assets and liabilities and ~~disclosure~~their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

The Company recognizes the impact of ~~contingent assets and liabilities at the date of~~a tax position in the financial statements ~~and~~only if that position is more likely than not to be sustained upon examination by taxing authorities, based on the ~~reported amounts~~technical merits of ~~revenue and expenses during~~ the ~~reporting period. Actual results could differ from those estimates. Included in these estimates are assumptions about inputs used~~position. Our practice is to ~~estimate useful lives of intangible assets, calculate beneficial conversion of convertible notes payable and convertible preferred stock, deferred~~recognize interest and/or penalties, if any, related to income tax ~~asset valuation allowances, and valuation of derivative liabilities.~~matters in income tax expense.

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 its 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 estimates involve inherent uncertainties and the application of management judgment.

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ~~professional standards for “Accounting for Derivative Instruments and Hedging Activities”.~~various accounting standards.

~~Professional 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” generally ~~provide~~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~~Conventional Convertible Debt ~~Instrument”.~~

The Company accounts for convertible instruments (when it has determined that 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,Instrument.” 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 discounts 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 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 orand could require net cash settlement, then the contract shall be classified as an asset or a liability.

~~The Company’s derivative financial instruments~~Product development costs are included in selling, general and administrative expenses and consist of ~~embedded derivatives related~~support, maintenance and upgrades of our website and our Platform and are charged to the convertible debt and conversion features embedded within our convertible debt. The accounting treatment of derivative financial instruments requires that we record the derivatives at their fair valuesoperations 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 was 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.incurred.

The Company ~~utilizes~~follows ASC 260 “Earnings Per Share” for calculating the ~~Black-Scholes option-pricing model~~basic and diluted earnings (or loss) per share. Basic earnings (or loss) per share are computed by dividing earnings (or loss) available to ~~determine fair value~~common shareholders by the weighted-average number of ~~options~~common shares outstanding. Diluted earnings (or loss) per share is computed similar to basic loss per share except that the denominator 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 ~~warrants granted~~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 1,039,501 and 895,491 were excluded from the computation of diluted earnings per share for the nine months ended September 30, 2023 and 2022, respectively, because their effects would have been anti-dilutive.

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 ~~stock-based compensation, which requires us to make judgments relating to~~ the ~~inputs required to be included in the model. In this regard, the expected volatility is based on the historical price volatility of~~basis for identifying the Company’s ~~common stock. The dividend yield represents~~reportable segments. Using the ~~Company’s anticipated cash dividend on common stock over~~management 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.Company determined that it has one operating segment.

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,~~October 2021, the FASB issued ASU ~~2017-09, “Compensation – Stock Compensation~~No. 2021-08, “Business Combinations (Topic ~~718)~~805): ~~Scope of Modification Accounting”, which clarifies when~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities (e.g. deferred revenue) acquired in a business combination to ~~account for a change to~~be recognized and measured by the ~~terms or conditions of a share-based payment award as a modification. Under~~acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. Generally, this new guidance ~~modification accounting is required only if~~will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value ~~the vesting conditions, or the classification of the award changes as a result of the change~~ in ~~terms or conditions. If an award is not probable of vesting at the time a change is made, the new~~purchase accounting. The guidance ~~clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. This ASU will be applied prospectively and~~ is effective for fiscal years beginning after December 15, ~~2017, and~~2022, including interim periods within those ~~years, with early~~fiscal years. Early adoption ~~permitted. The Company does~~is permitted, including in interim periods, for any financial statements that have not ~~expect this standard to~~yet been issued. On January 1, 2023 the adoption of ASU 2021-08 did not have a material impact on ~~its~~the Company’s consolidated financial statements.

In ~~July 2017,~~June 2016, the FASB issued ~~Accounting Standards Update~~ASU No. ~~(“ASU’’) 2017-11, Earnings Per Share~~2016-13, Financial Instruments—Credit Losses (Topic ~~260), Distinguishing Liabilities from Equity (Topic 480)~~326): Measurement of Credit Losses on Financial Instruments, which significantly changes how entities will measure credit losses for most financial assets, including accounts receivable. ASU No. 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. On November 15, 2019, the FASB delayed the effective date of Topic 326 for certain small public companies and ~~Derivatives~~other private companies until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and ~~Hedging (Topic 815). The amendments in this Update provide guidance about:~~not-for-profit entities.

~~1. Accounting~~In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The guidance was issued as improvements to ASU No. 2016-13 described above. The vintage disclosure changes require an entity to disclose current-period gross write-offs by year of origination 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~~

financing receivables. 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 instrumentguidance 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 I of this Update are~~ effective for financial statements issued for fiscal years beginning after December 15, 2022, and interim periods within those fiscal ~~years, beginning after December 15, 2018.~~years. The amendments should be applied prospectively. Early adoption of the amendments is permitted, ~~for all entities,~~ including adoption in an interim period. ~~If an entity early adopts~~The adoption of ASU 2022-02 did not have a material impact on the ~~amendments~~Company’s consolidated financial statements.

Management believes it may not have sufficient cash to fund its liabilities and operations for at least the next twelve months from the issuance of these consolidated financial statements.

These unaudited consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in ~~an interim period, any adjustments should be reflected~~the normal course of 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 ~~beginning~~date of the end of the period covered by this report. This determination was based on the following factors: (i) the Company used cash of approximately $1.9 million cash used in operating activities operations during the nine months ended September 30, 2023 and has a working capital deficit of approximately $6.9 million at September 30, 2023; (ii) 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; (iii) the Company will require additional financing for the fiscal year ending December 31, 2023 to continue at its expected level of operations; and (iv) 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 report and for one year from the issuance of these consolidated financial statements.

The components of prepaid expenses and other current assets at September 30, 2023 and December 31, 2022, consisted of the following:

The Company’s investment in marketable equity securities is being held for an indefinite period. Cost basis of marketable securities held as of September 30, 2023 and December 31, 2022 were $59,720 and $42,720 and accumulated unrealized losses were $58,320 and $42,720 as of September 30, 2023 and December 31, 2022, respectively. The fair market value of available for sale marketable securities was $1,400 and $0 as of September 30, 2023 and December 31, 2022, respectively, based on 178,000 shares of common stock held in one entity with an average per share market price of approximately $0.00 and 2,000 shares of preferred convertible stock held in another entity with the estimated average value upon conversion into common stock of $1,400, and is included within prepaid expenses and other current assets within accompanying consolidated balance sheet.

During the three months ended September 30, 2023, the Company received 2,000 shares initially valued at $17,000 in exchange for $150,000 of accounts receivable which was fully reserved for.

Goodwill is derived from our 2019 business combination as well as our five business combinations in the first three quarters of 2021. The aggregate goodwill recognized from our five 2021 acquisitions was $6,731,852 while the remaining goodwill from the 2019 acquisition was $3,517,315 at December 31, 2020. The Company performed a goodwill impairment test during 2021 using market data and discounted cash flow analysis. Based on that ~~includes~~test, we have determined that ~~interim period.~~the carrying value of goodwill related to the 2019 acquisition of Genesys was further impaired in the amount of $2,530,325 during 2021. The ~~amendments~~Company performed its annual goodwill impairment test during 2022 using market data and discounted cash flow analysis and determined that goodwill was further impaired by $582,114.

The changes in ~~Part 1~~the carrying amount of goodwill for the periods ended September 30, 2023 and December 31, 2022 are as follows:

On March 31, 2019, the Company acquired Intangible assets totaling $1,910,072 from Genesys, including customer contracts and intellectual property which are being amortized over the three year useful life.

During 2021, we acquired certain intangible assets pursuant to our Scouted, Upsider, OneWire, Parrut, and Novo Group acquisitions. These intangible assets aggregate approximately $11.6 million and consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets. We completed the accounting and valuations of the assets acquired.

Intangible assets for the periods ended September 30, 2023 and December 31, 2022 are summarized as follows:

Amortization expense of intangible assets was $321,963 and $952,170 for the three months ended September 30, 2023 and 2022, respectively, and was $955,391 and $2,877,882 for the nine months ended September 30, 2023 and 2022, respectively related to the intangible assets acquired in business combinations. Future amortization of intangible assets is expected to be approximately as follows: 2023 (remainder of year), $280,426; 2024 $739,547; 2025, $455,683; 2026, $122,507; 2027, $2,738; and thereafter, $22,399. The Company began amortizing intangible assets from the Scouted, Upsider and OneWire acquisitions in the second quarter of 2021 and the Parrut and Novo Group acquisitions in the third quarter of 2021.

The Company performed its impairment test during 2022 using the market and income approach, and determined that the Company’s customer contracts, software acquired, internal use software developed, and domains were impaired by $3,838,425.

On November 21, 2022, the Company entered into a Domain Name sale and Ownership Transfer Agreement with Chief Executive Group (“CEG”). Per the agreement, the Company agreed to sell and transfer to CEG all ownership rights in and to the domain name CFO-Job.com and its associated social media property (“Domain Assets’). In exchange for the Domain Assets, the Company received cash consideration of $50,000, and $200,000 worth of advertising from CEG. Half of the advertising consideration is to be used within one year of this ~~Update should~~agreement, and the remaining balance is to be ~~applied~~used within two years of the agreement. During the year ended December 31, 2022, the Company recorded a gain on sale of intangible asset of $250,000 which was included in general and administrative expenses on the consolidated statements of operations during the year ended December 31, 2022. The Company additionally recorded a prepaid advertising expense within prepaid expenses and other current assets on the consolidated balance sheet. As of September 30, 2023, the Company utilized approximately $54,000 of advertising from CEG.

On December 5, 2022, the Company entered into an asset purchase agreement in which the Company sold to a third party Upsider’s candidate sourcing and engagement platform and all related intellectual property for $1,000,000 in cash consideration. The recorded value of the internal use software developed at the date of the sale was $1,000,000 resulting in no gain or loss on the sale. For a period of eighteen months from the date of the sale, the Company will have continued access to this platform.

On August 4, 2023, (i) Recruiter.com Consulting and Insigma, Inc.(“Insigma”), a wholly owned subsidiary of Futuris Company (“FTRS”), entered into an asset purchase agreement (“Insigma Agreement”) and (ii) Recruiter.com Consulting and Akvarr, Inc., (“Akvarr”) and a wholly owned subsidiary of FTRS, entered into an asset purchase agreement (“Insigma Agreement”). Upon the terms and subject to the conditions of the agreements, the Company agreed to sell its right, title, and exclusive interest in certain client contracts and associated staff, contractors, business information, and relationships related staffing and consulting services revenue stream (“Assets Sold”) to Insigma and Akvarr.

The Company’s carrying net book value of the related assets and liabilities in connection with assets sale under the Insigma Agreement as of September 30, 2023 and December 31, 2022 was $0.

As consideration for the assets sold, and upon completion of the assignment of certain acquired assets to Insigma, Insigma would issue to the Company a number of shares of common stock of FTRS equal to $500,000 based on the 30 day volume weighted average price preceding the closing date, as defined. The Insigma Agreement also provides for the payment of up to $2,000,000 of additional cash consideration as an earnout payment to the Company, which shall be payable in monthly installments beginning 30 days from the closing date and based on the Gross Margin (as defined in the Insigma Agreement) generated by the acquired assets. On October 2, 2023 the Company and Insigma finalized the transfer based on the Closing Date (as defined in the Insigma Agreement). On October 5, 2023 the Company received 9,518,605 shares of common stock of FTRS. The shares were Valued at $634,605 based on the October 2, 2023, stock price of $0.0667.

The Company determined all of the required criteria for held-for-sale in accordance with ASC 205-20-45-1E and discontinued operations classification were met as of September 30, 2023.

In accordance with ASC 205-20, Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity (disposal group) is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the disposal group meets the criteria to be classified as held-for-sale. The consolidated statements of operations reported for current and prior periods report the results of operations of the discontinued operations recognized as a component of net income separate from the net loss from continuing operations.

The following table presents the components in assets and liabilities associated with discontinued operations:

The following table presents the major income and expense line items relate to the staffing and consulting services revenue as reported in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022:

We received $250,000 in proceeds from an institutional investor pursuant to a promissory note dated May 6, 2021. The note bears interest at 12% per year and matures on May 6, 2023. In April 2022, we paid off the total principal balance of the note and the accrued interest.

We issued a promissory note for $1,750,000 pursuant to the Parrut acquisition agreement dated July 7, 2021. The note had a term of 24 months, accrued interest at 6%, and originally matured on July 1, 2023. The note required monthly payments of $77,561. On October 19, 2022, Parrut agreed to subordinate their note to a promissory note issued to Montage Capital II, L.P. In return, we restructured the payment schedule for the Parrut note which was set to mature on August 31, 2023, and bears interest at 12%. On August 31, 2023, we did not make payments of amounts due under the note and defaulted with Parrut and are currently negotiating an extension of the maturity date of the note. At September 30, 2023 and December 31, 2022, the outstanding balance on the promissory note with Parrut was $261,112 and $444,245, respectively.

We issued a promissory note for $3,000,000 pursuant to the Novo Group acquisition agreement dated August 27, 2021. The note originally had a term of 30 months, bears interest at 6%, and was scheduled to mature on February 1, 2024. The note requires monthly payments of $85,000 for the first 12 months, $110,000 for months 13 through 24, $155,000 for months 25 through 29, and $152,357 for month 30. In April 2022, we negotiated a reduction in this promissory note with Novo Group due to employee turnover that occurred following the acquisition. We entered into an agreement with Novo Group to reduce the outstanding principal balance by $600,000 and changed the maturity date to November 1, 2023. The reduction in the promissory note was accounted for as gain on debt extinguishment on the consolidated statement of operations.

In October 2022, Novo Group entered into a Subordination Agreement (“Subordination Agreement”), pursuant to which Novo agreed to subordinate all its indebtedness and obligations we owe to Novo to all the indebtedness and obligations we owe to Montage Capital.

In February 2023, we entered into an additional Amendment to the Promissory Note with Novo Group, Inc. (the “Novo Amendment”). The Novo Amendment further modifies the Promissory Note issued to Novo on August 27, 2021 (the “Novo Note”) and amended on April 1, 2022, by amending the payment schedule pursuant to which we would make payments of principal and interest to Novo. Novo agreed we would pay interest only for the period starting November 1, 2022 though and including March 31, 2023, with payments of principal and interest to resume starting April 1, 2023. We also replaced the existing payment schedule with a new payment schedule terminating on October 31, 2023. On November 1, 2023, we did not make payments due on the promissory note with Novo Group and are currently in process of amending the maturity date of the note. At September 30, 2023 and December 31, 2022, the outstanding balance of he Novo Promissory Notes was $1,217,529 and $1,292,360, respectively

On August 17, 2022, we issued promissory notes for $1,111,111, in the aggregate (the “8/17/22 Notes”) We received proceeds of $960,000, net of debt issuance costs of $40,000 and an original issue discount of $111,111. The 8/17/22 Notes have a term of 12 months, bear interest at 6%, and was set to mature on August 17, 2023. The 8/17/22 Notes was set to be paid off in full on August 17, 2023. As a part of these financings, we granted the noteholders 46,296 warrants to purchase our common stock (See Note 9) (the “8/17/22 Warrants”). The 8/17/22 Warrants were valued at $463,737 and treated as a debt discount to be amortized over the life of the note. On August 7, 2023 the Company signed an amendment to the 8/17/22 Notes. The amendment extends each of the maturity dates of August 17, 2023 and August 30, 2023 respectively, by 180 days. In return, the company has agreed to give $50,000 in either stock or cash at its discretion within ninety days of signing the amendment. As of September 30, 2023, the related $50,000 of debt issuance costs was recorded within accrued expenses as no discretion has been elected (see Note 12 default notice).

At September 30, 2023 and December 31, 2022, the outstanding balance on the 8/17/22 Notes, net of the unamortized debt issuance costs and debt discounts of $38,056 and $384,280, respectively, was $1,073,055 and $726,831, respectively (see Note 12 default notice).

On August 30, 2022, we issued promissory notes for $1,305,556, in the aggregate (the “8/30/22 Notes,” and together with the 8/17/22 Notes, the “August 2022 Notes”). We received proceeds of $1,175,000, net of an original issue discount of $130,556. The 8/30/22 Notes have a term of 12 months, bear interest at 6%, and was set to mature on August 30, 2023. The 8/30/22 Notes were set to be paid off in full on August 30, 2023. As a part of these financings, we granted the noteholders 54,398 warrants to purchase our common stock (See Note 9) (the “8/30/22 Warrants, and together with the 8/17/22 Warrants, the “August 2022 Warrants”). These 8/30/22 Warrants were valued at $569,106 and treated as a debt discount to be amortized over the life of the note. At September 30, 2023 and December 31, 2022, the outstanding balance on the 8/30/22 Notes, net of the unamortized debt issuance costs and debt discounts of $0 and $466,441, respectively, was $1,194,445 and $839,115, respectively (see Note 12 default notice).

On October 19, 2022, the Company closed a Loan and Security Agreement (the “Loan Agreement”), by and among the Company and Montage Capital II, L.P. (the “Lender”). Pursuant to the Loan Agreement, the Lender will make advances (“Advances”) in the aggregate principal amount of $2,250,000, with the first Advance of $2,000,000 being provided on or around the Closing Date and the second Advance of $250,000 being available to the Company uponrequest prior to April 30, 2023. Interest will accrue on all Advances under the Loan Agreement at a per annum rate of 12.75%. In the event of a default under the terms of the Loan Agreement, the interest rate increases by 5 percentage points above the interest rate in effect immediately prior to a default. The entire outstanding principal balance of the Advances, all accrued and unpaid interest thereon, and all fees and other amounts outstanding thereunder will be immediately due and payable on the 42nd month anniversary of the Closing Date (the “Maturity Date”). In connection with the Loan Agreement, the Company granted and pledged to the Lender a continuing security interest in all presently existing and hereafter acquired or arising Collateral (as more specifically defined in the Loan Agreement) which includes all personal property of the Company and its subsidiaries. The Loan Agreement contains certain affirmative and negative covenants to which the Company is also subject. The Company agreed to pay the Lender a fee of $45,600, with $40,000 due upon the execution of the Loan Agreement and the balance due upon the funding of the second Advance. The Company is permitted to prepay any amounts due to the Lender; provided, however, that a Prepayment Fee (as more specifically defined in the Loan Agreement) shall be owed to the Lender depending on when the amounts are prepaid.

In addition, in connection with the Loan Agreement, the Company issued 47,103 warrants to purchase common stock of the Company (the “Warrants”) to the Lender, with 41,520 Warrants issued and exercisable upon the Closing Date and the additional 5,580 Warrants becoming exercisable upon funding of the second Advance. The Warrants are exercisable for ten years from the Closing Date at an exercise price of $30.00 per share, subject to certain adjustments. Upon the earlier of the Maturity Date or a sale of the Company or other change in control, the Lender has the right to cause the Company to repurchase the Warrants for up to $703,125 ($600,000 if only the first Advance has been made and $703,125 if both Advances have been made) which is recorded as a warrant liability for puttable warrants. The Company is also obligated to pay the Lender a cash fee equal to 1.25% of the aggregate principal amount of the Advances that is outstanding on each anniversary of the Closing Date if (i) the average closing price of the Company’s common stock for the thirty (30) day period prior to such anniversary date is less than $30.00 or (ii) the closing price of the Company’s common stock for the date immediately prior to such anniversary date is less than $30.00.

The Company accrues anniversary fees each year on the one-year anniversary of the issuance date of 1.25% of the outstanding advance balance depending on the stock price. The accrued anniversary fees are payable on the date the buyout fee becomes due and payable. The Company records an expense for the 1.25% cash fee ratably over the 12 months.

On February 2, 2023, the Company entered into a First Amendment to Loan and Security Agreement (the “Montage Amendment”), by and between the Company, its subsidiaries (Recruiter.com, Inc., Recruiter.com Recruiting Solutions, LLC, Recruiter.com Consulting, LLC, VocaWorks, Inc., Recruiter.com Scouted, Inc., Recruiter.com Upsider, Inc., and Recruiter.com - OneWire, Inc.), and Montage, effective as December 18, 2022. The Montage Amendment modifies that certain Loan and Security Agreement by and among the Company, its subsidiaries, and Montage to provide the Company with additional time to meet certain post-closing covenants.

On August 16, 2023, we entered into a Second Amendment to Loan and Security Agreement (the “Second Montage Amendment”), by and among the Company, its subsidiaries and Montage. The Second Montage Amendment modifies that certain Loan and Security Agreement by and among the Company, its subsidiaries, and Montage, as amended (the “Loan and Security Agreement”) to join CognoGroup, Inc. as an additional borrower to the Loan and Security Agreement and amend and restate the definition of “Maturity Date” to the earlier of (i) the four month anniversary of the initial closing of the Purchase Agreement or (ii) February 28, 2024. Additionally, the Montage Amendment provides for Montage’s consent to certain transactions that would have otherwise been prohibited under the Loan and Security Agreement, including the transaction contemplated by the Purchase Agreement with Job Mobz.

In addition, in connection with the Second Montage Amendment, the Company issued warrants to purchase common stock of CognoGroup, Inc. (the “CognoGroup, Inc Warrants”) to the Lender. The number of shares shall be equal to 1.4% of the CognoGroup, Inc outstanding capital stock on a fully diluted basis at the exercise price of $0.01 per share and with expiration date of October 19, 2032. On and after the earlier to occur of (i) October 19, 2026, (ii) any sale, license, or other disposition of all or substantially all of the assets of the CognoGroup, Inc., or any reorganization, consolidation, or merger of the CognoGroup, Inc. where the holders of the CognoGroup, Inc.’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction, (iii) a transaction in which any “person” or “group” becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of the CognoGroup, Inc. ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of the CognoGroup, Inc., who did not have such power before such transaction (“Change in Control”), or (iv) the dissolution or liquidation of the CognoGroup, Inc. (“Wind-Up”), CognoGroup, Inc. shall, at the request of Holder, purchase all rights that Holder has under this CognoGroup, Inc. Warrants for a cash payment in the amount equal to $600,000 (the “Buyout Fee”). In addition to the foregoing, at any time on or after October 19, 2026, and in the absence of an Acquisition, Change in Control, or Wind-Up, Holder may elect to receive a portion of the Buyout Fee. These CognoGroup, Inc Warrants were valued at $600,000 and treated as a debt discount to be amortized over the life of the note and a puttable liability was established.

On November 8, 2023, we notified Montage and other lenders of the occurrence of the receipt of a default notice from Cavalry (see Note 12), which would have the effect of triggering a cross default.

At September 30, 2023 and December 31, 2022, the outstanding balance on the Loan Agreement, net of the unamortized debt issuance costs and debt discounts of $872,258 and $622,630, respectively, was $998,743 and $1,377,370, respectively.

At September 30, 2023 and December 31, 2022, the outstanding principal balance on the promissory notes payable totaled $5,655,197 and $6,153,272, respectively.

We entered into a factoring agreement with CSNK Working Capital Finance Corp. d/b/a Bay View Funding, a subsidiary of Heritage Bank of Commerce (the “Buyer”), effective April 27, 2022 (the “Factoring Agreement”), for the purpose of factoring our trade accounts receivable with recourse. The proceeds of the factoring are used to fund our general working capital needs. The Company is accounting for this transaction as a secured borrowing under the Transfers and Servicing of Financial Assets guidance. The agreement is for a term of twelve months with an auto renewal clause for an additional twelve months unless terminated by the parties. The agreement is secured by substantially all assets of the Company.

Pursuant to the Factoring Agreement, we sell certain trade accounts receivable to the Buyer. We are charged a finance fee, defined as a floating rate per annum on outstanding advances under the Factoring Agreement, equal to the prime rate plus 3.25% due on the first day of each month. We are also charged a factoring fee of 0.575% of the gross face value of any trade accounts receivables for the first 30 days from when the trade accounts receivable is purchased and 0.30% for each fifteen days afterward until the purchased receivable is paid in full or repurchased.

We receive advances of up to 85% of the amount of eligible trade accounts receivable. Advances outstanding shall not exceed the lesser of $3,000,000 or an amount equal to the sum of all undisputed purchased trade accounts receivable multiplied by 85%, less any reserved funds.

All collections of purchased receivables go directly to the Buyer controlled lockbox and Buyer shall apply these collections to the Company’s obligations. The Company will immediately turn over to Buyer any payment on a purchased receivable, or receivable assigned to Buyer under the Factoring Agreement, that comes into the Company’s possession. In the event the Company comes into possession of a remittance comprising payments of both a purchased receivable and receivable which has not been purchased by Buyer, the Company is required to hold the same in accordance with the provisions set forth above and immediately turn same over to Buyer.

As stated previously, the Company factors the accounts receivable on a recourse basis. Therefore, if the Buyer cannot collect the factored accounts receivable from the customer, the Company must refund the advance amount remitted to us for any uncollected accounts receivable from the customer. Accordingly, the Company records the liability of potentially having to refund the advance amount as short-term debt when the factoring arrangement is utilized. As of September 30, 2023 and December 31, 2022, $0 and $545,216 of advances were outstanding under the factoring arrangement, respectively, and $38,488 and $263,939, was due from the factor, respectively, resulting in a net $0 and $281,277 loan payable to the factor, respectively. As of September 30, 2023, amount due from factor is included in prepaid expenses and other current assets.

As consideration for Buyer forgoing other factoring transactions in the marketplace and for establishing the maximum credit of $3,000,000, the Company paid the Buyer a facility fee upon entering into the Factoring Agreement (the “Facility Fee”) in the amount of one half of one percent (0.50%) of the maximum credit, $15,000. An additional Facility Fee is charged for increases to the maximum credit, but only for the incremental increase. The Facility Fee was accounted for as a factoring fee expense, which is included as part of the interest expense along with all other factor fees.

The cost of factoring for the three months ended September 30, 2023 and 2022 was $244 and $26,302, respectively, and the for the nine months ended September 30, 2023 and 2022 was $20,481 and $104,683, respectively.

The status of the loans payable as of September 30, 2023 and December 31, 2022 are summarized as follows:

The Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share. As of September 30, 2023 and December 31, 2022, the Company had 86,000 shares of preferred stock issued and outstanding. No shares of preferred stock were issued during the nine months ended September 30, 2023.

Our Series E preferred stock is the only class of our preferred stock that is currently outstanding. Series E preferred stock has a stated value of $20 per share, which is convertible at any time after issuance at the option of the holder, subject to a beneficial ownership limitation of 4.99% or if waived, 9.99%, into common stock based on the stated value per share divided by $4.00 per share, subject to adjustment in the event of stock splits, stock dividends or reverse splits. Holders of Series E Preferred Stock 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% or if waived, 9.99%. If at any time while any shares of Series E Preferred Stock remain outstanding and any triggering event contained in the Certificate of Designation for such series occurs, we shall pay, within three days, to each holder $210 per each $1,000 of the stated value of each such holder’s shares of Series E Preferred Stock.

On March 31, 2019, we entered into certain agreements with investors pursuant to which we issued convertible preferred stock and warrants, as described above. Each of the series of preferred stock and warrants required us to reserve shares of common stock in the amount equal to two times the common stock issuable upon conversion of the preferred stock and exercise of the warrants. We did not comply in part due to our attempts to manage the Delaware tax which increases to a maximum of $200,000 as the authorized capital increases without the simultaneous increase in the number of shares outstanding. In May 2020 following ~~ways: 1. Retrospectively~~stockholder approval at a special meeting the Company effected a reincorporation from Delaware to Nevada and a simultaneous increase in our authorized common stock from 31,250,000 shares to 250,000,000 shares. As of December 31, 2019, we estimated that we owed approximately $6 million in penalties (prior to any waivers of penalties) to holders of preferred stock. Subsequent to December 31, 2019, we have received waivers from a substantial number of the preferred shareholders with respect to these penalties. We have agreed to issue to the holders of Series D Preferred Stock an aggregate of 106,134 additional shares of Series D Preferred Stock (valued at $1,929,516) as consideration for the waivers. We have accrued this cost at December 31, 2019. Additionally, certain holders of Series E and Series F Preferred Stock have not waived the penalties. We have accrued $308,893 at December 31, 2019 related to these Series E and Series F Preferred holders. Because of our ongoing liquidity problems, we will be required to cease operations if faced with material payment requests from investors who did not agree to waive the penalties. The total accrued penalty amount of $2,238,314 was included in accrued expenses on the balance sheet at December 31, 2019. The $1,929,516 accrual was reclassified to equity during the three months ended March 31, 2020 as a result of our issuance of the 106,134 shares of Series D Preferred Stock. At both September 30, 2023 and December 31, 2022, the remaining balance of 308,798 is included in accrued expense on the consolidated balance sheets.

The Company is authorized to issue 6,666,667 shares of common stock, par value $0.0001 per share. As of September 30, 2023 and December 31, 2022 the Company had 1,433,903 and 1,085,184 shares of common stock outstanding, ~~financial instruments~~respectively.

On August 17, 2023, we entered into a securities purchase agreement with the investor, pursuant to which the Company agreed to sell and issue, in a registered direct offering, an aggregate of (i) 130,000 shares of common stock at a purchase price of $4.662 per Share and accompanying Warrant (2023 Warrant) and (ii) 92,222 pre-funded warrants (the “2023 Pre-Funded Warrants”) to purchase up to an aggregate of 92,222 shares of common stock at a purchase price of $4.6062 per 2023 Pre-Funded Warrant and accompanying Warrant. Also, pursuant to securities purchase agreement, in a concurrent private placement, the Company also agreed to sell and issue to the purchaser warrants (the “2023 Warrants”) to purchase up to 222,222 shares of Common Stock. The 2023 Warrants will be exercisable as of February 21, 2024, at an exercise price of $1.287 per share and will expire five and one-half years from the date of issuance. The total aggregate cash proceeds to the Company were $785,509 deduction of equity issuance costs of $3000,490.

On January 6, 2022, upon agreement with a ~~down round feature~~warrant holder, the Company issued 7,515 shares of common stock upon the exchange of 7,515 warrants. The shares were valued at approximately $473,000 based on the stock price, while the exchanged warrants had a Black-Scholes value of approximately $321,000, resulting in a loss on exchange and credit to equity of $152,244.

On August 4, 2023, the Company approved a one-for-fifteen (1:15) reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). On August 22, 2023, the Company filed a Certificate of Change pursuant to Nevada Revised Statutes with the Nevada Secretary of State to effect a reverse stock split of the Common Stock, and the proportional decrease of the Company’s authorized shares of Common Stock at a ratio of one-for-fifteen (15). All share and per share data have been retrospectively adjusted for the effects of the reserve split.

On September 18, 2020 the Company awarded to Evan Sohn, our Executive Chairman and CEO at that time, 14,773 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 $0 and $148,836 during the three months ended September 30, 2023 and 2022 respectively. During the nine months ended September 30, 2023 and 2022, we recognized compensation expense of $152,143 and $446,507 respectively. The shares began vesting on June 30, 2021, the quarter the Uplisting occurred.

On February 2, 2022, 500 RSUs vested and 500 were issued to a vendor for services related to a 2021 agreement. The Company expensed the remaining $27,000 in 2022 as the service period expired.

During the three months ended March 31, 2022, 2,133 RSUs were granted to vendors for services. 1,467 RSUs vested immediately and were issued as common stock to the vendor, and the remaining 667 were issued in May 2022. The total 2,133 RSUs were valued at $93,120 and were expensed as of March 31, 2022 based on the service period in the contract.

During the three months ended June 30, 2022, 63,825 RSUs were granted to vendors for services. 56,325 RSUs have vested and were issued as common stock to the vendors, and the remaining 7,500 were vested and issuable as of June 30, 2022. The total 63,825 RSUs were valued at $100,020.

During the three months ended September 30, 2022, no RSUs were granted to vendors for services. 7,500 RSUs were vested and issuable as of September 30, 2022 related to RSUs granted in prior periods.

Total expenses for RSUs for the three and nine months ended September 30, 2023 was $0 and $152,143, respectively. Total expense for RSUs for the three and nine months ended September 30, 2022 was $245,864 and $870,773.

On January 6, 2022, the Company granted to a consultant a total of 1,333 options to purchase common stock, exercisable at $39.60 per share, under the terms of the 2021 Equity Incentive Plan (the “2021 Plan”). The options have a term of five years. The options vested 50% at March 3, 2022 and 50% on April 3, 2022.

On January 10, 2022, the Company granted to a director a total of 1,000 options to purchase common stock, exercisable at $36.00 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options vest quarterly over a four-year period.

On January 19, 2022, the Company granted to a director a total of 1,000 options to purchase common stock, exercisable at $36.00 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options vest quarterly over a four-year period.

On January 20, 2022, the Company granted to directors a total of 4,000 options to purchase common stock, exercisable at $36.00 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options vest quarterly over a four-year period.

On March 11, 2022, the Company granted to employees a total of 3,500 options to purchase common stock, exercisable between $43.05 and $44.25 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on June 11, 2022..

On April 1, 2022, the Company granted an employee a total of 25,000 options to purchase common stock, exercisable at $2.47 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on July 1, 2022. On April 5, 2022, the Company granted an employee a total of 37,000 options to purchase common stock, exercisable at $2.12 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on July 1, 2022.

On April 5, 2022, the Company granted to employees a total of 57,500 options to purchase common stock, exercisable at $2.12 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on July 5, 2022.

On April 7, 2022, the Company granted to employees a total of 120,100 options to purchase common stock, exercisable at $2.03 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on July 7, 2022.

On April 28, 2022, the Company granted a consultant a total of 35,000 options to purchase common stock, exercisable at $1.60 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest monthly over two months, with the first portion vesting on May 28, 2022.

On May 17, 2022, the Company granted a consultant a total of 5,000 options to purchase common stock, exercisable at $1.07 per share, under the terms of the 2021 Plan. The options have a term of five years. The options vested immediately.

On May 17, 2022, the Company granted to employees a total of 22,500 options to purchase common stock, exercisable at $1.07 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years with a one-year cliff, with the first portion vesting on May 17, 2023.

On June 2, 2022, the Company granted a consultant a total of 25,461 options to purchase common stock, exercisable at $1.00 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest monthly over one year, with the first portion vesting on July 6, 2022.

On June 27, 2022, the Company granted to employees a total of 37,500 options to purchase common stock, exercisable at $1.00 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years with a one-year cliff, with the first portion vesting on June 27, 2023.

On August 30, 2022, the Company granted to directors a total of 270,000 options to purchase common stock, exercisable at $1.31 per share, under the terms of the 2021 Plan. The options have a term of five years. The options vest immediately.

On August 30, 2022, the Company granted to employees a total of 550,000 options to purchase common stock, exercisable at $1.31 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest months over two years.

On September 22, 2022, the Company granted to employees a total of 80,000 options to purchase common stock, exercisable at $1.10 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest months over two years.

On April 4, 2022, the Company granted to employees a total of 25,000 options to purchase common stock, exercisable at $2.12 per share, under the terms of the 2021 Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on July 4, 2022.

On January 9, 2023, the Company granted to an employee a total of 1,667 options to purchase common stock, exercisable at $6.75 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on April 9, 2023

On March 22, 2023, the Company granted three employees a total of 4,000 options to purchase common stock, exercisable at $3.30 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options vested immediately.

On June 2, 2023, the Company granted five employees a total of 3,833 options to purchase common stock, exercisable at $2.85 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on September 2, 2023.

On June 8, 2023, the Company granted one employee a total of 3,333 options to purchase common stock, exercisable at $4.05 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options will vest quarterly over four years, with the first portion vesting on September 8, 2023.

On August 10, 2023, the Company granted an employee 3,333 options to purchase common stock, exercisable at $3.00 per share, under the terms of the 2021 Equity Incentive Plan. The options have a term of five years. The options vest monthly through December 31, 2023.

The fair values of stock options granted during the three months ended September 30, 2023 were estimated using Black-Sholes option-pricing model with the following assumptions:

During the three months ended September 30, 2023 and 2022, we recorded $343,951 and $765,743 of compensation expense, respectively, related to stock options, and during the nine months ended September 30, 2023 and 2022, we recorded $954,317 and $2,544,898 of compensation expense, respectively related to stock options.

A summary of the status of the Company’s stock options as of September 30, 2023, and changes during the period are presented below:

As of September 30, 2023, there was approximately $485,405 of unrecognized compensation cost related to unvested stock options which vest over time and are expected to be recognized over a period of four years, as follows: 2023 (remainder of year), $101,761; 2024, $261,044; 2025, $97,984; 2026, $23,595; and 2027 and thereafter, $1,021.

On February 3, 2023, the Company entered into amendments to Common Stock Purchase Warrants issued on August 17, 2022 to each of Cavalry Fund I LP, Firstfire Global Opportunities Fund LLC, and Porter Partners, L.P. The warrant amendments modify the time period until the holders of these warrants are permitted to exercise the Warrants by means of a ~~cumulative-effect adjustment~~“cashless exercise.” In addition, the warrant amendments lower the exercise price of the Warrants to $5.70 per warrant share, as further described in the warrant amendments. These amendments were treated as modifications to induce the exercise of warrants, and as such, resulted in deferred equity costs of $10,400 on the date of the amendment. As a result of the lowered exercise price of the Warrants, the exercise price of warrants issued by the Company on May 28, 2020, January 5, 2021, January 20, 2021, August 17, 2022, and August 30, 2022, will be automatically lowered to $5.70 per warrant share due to anti-dilution provisions in these warrants. We have recorded a deemed dividend for the change in value due to the ~~statement~~anti-dilution adjustments and an increase to the carrying value of ~~financial position~~the warrants of $503,643 as a result of the trigger of the anti-dilution provisions.

In February 2023, we issued 54,768 common shares to investors who exercised warrants with a strike price of $5.70 for gross proceeds of $315,178.

In June 2023, we issued 38,804 common shares to investors who cashless exercised 39,196 warrants.

On August 17, 2023, in connections with the securities purchase agreement (the “2023 Purchase Agreement”) with the investor (See Note 8) the Company issued 92,222 pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 92,222 shares of Common Stock and accompanying 222,222 shares of warrants (the “2023 Warrants) to purchase up to an aggregate of 222,222 shares of Common Stock. The initial exercise date of the Pre-Funded Warrants under the agreement terms is August 21, 2023 at the exercise price per share of $0.0015, subject to certain adjustments. The initial exercise date of the 2023 Warrants under the agreement terms is February 21, 2024. The 2023 Warrants are exercisable for five years from the initial exercise date at the exercise price per share is $2.7870, subject to certain adjustments.

In August 2023, we issued 92,222 of common shares to investor who exercised 92,222 of Pre-Funded warrants.

In connection with the Second Montage Amendment, as discussed in Note 7, the Company will issue warrants to purchase common stock of CognoGroup, Inc. (the “CognoGroup, Inc Warrants”) to the Lender. The number of shares shall be equal to 1.4% of the CognoGroup, Inc outstanding capital stock on a fully diluted basis at the exercise price of $0.01 per share and with expiration date of October 19, 2032. On and after the earlier to occur of (i) October 19, 2026, (ii) any sale, license, or other disposition of all or substantially all of the assets of the CognoGroup, Inc., or any reorganization, consolidation, or merger of the CognoGroup, Inc. where the holders of the CognoGroup, Inc.’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction, (iii) a transaction in which any “person” or “group” becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of the CognoGroup, Inc. ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of the CognoGroup, Inc., who did not have such power before such transaction (“Change in Control”), or (iv) the dissolution or liquidation of the CognoGroup, Inc (“Wind-Up”), CognoGroup, Inc shall, at the request of Holder, purchase all rights that Holder has under this CognoGroup, Inc Warrants for a cash payment in the amount equal to $600,000 (the “Buyout Fee”). In addition to the foregoing, at any time on or after October 19, 2026, and in the absence of an Acquisition, Change in Control, or Wind-Up, Holder may elect to receive a portion of the Buyout Fee. These CognoGroup, Inc Warrants were valued at $600,000 and treated as a debt discount to be amortized over the life of the note.

On January 6, 2022, the Company issued 7,515 shares of common stock upon the exchange of 7,515 warrants (See Note 8).

During August 2022, the Company granted 100,694 warrants as a part of various debt financings (See Note 7). These warrants had an exercise price per share of $30.00 and expire in five years. The exercise price of the warrants was then reduced from $30.00 to $14.97 in connection with the issuance of stock to Parrut on October 14, 2022. The aggregate relative fair value of the warrants, which was allocated against the debt proceeds totaled $1,032,842 at the date of issuance based on the Black Scholes Merton pricing model using the following estimates: exercise price of $30.00, 3.04-3.27% risk free rate, 175.47% volatility and expected life of the warrants of 5 years. The relative fair value was reflected in additional paid-in capital and as a debt discount to be amortized over the term of the loans.

In connection with the October 19, 2022 Loan Agreement, as discussed in Note 7, the Company will issue 47,103 warrants to purchase common stock of the Company (the “Warrants”) to the Lender, with 41,520 Warrants issued and exercisable upon the Closing Date and the additional 5,581 Warrants becoming exercisable upon funding of the second Advance. The Warrants are exercisable for ten years from the Closing Date at an exercise price of $30.00 per share, subject to certain adjustments. Upon the earlier of the Maturity Date or a sale of the Company or other change in control, the Lender has the right to cause the Company to repurchase the Warrants (“Puttable Warrant”) for up to $703,125 ($600,000 if only the first Advance has been made and $703,125 if both Advances have been made). The Company is also obligated to pay the Lender a cash fee equal to 1.25% of the aggregate principal amount of the Advances that is outstanding on each anniversary of the Closing Date if (i) the average closing price of the Company’s common stock for the thirty (30) day period prior to such anniversary date is less than $30.00 or (ii) the closing price of the Company’s common stock for the date immediately prior to such anniversary date is less than $30.00.

The Company recorded the puttable warrant at its fair value, which is the cash surrender value the holder can put the warrant at. As such, on the issuance date, the Company recorded a $600,000 warrant liability for puttable warrants, offset by a debt discount to be amortized over the life of the loan. Upon the advance of the second advance tranche to the Company, it will record an additional debt discount and warrant liability in the amount of $103,125, the cash surrender value of the second tranche of warrants.

As a result of the sale in August 2022 of notes and warrants as described above and in Note 7, the number and exercise price of the 2020 Warrants and the 2021 Warrants in connection with the 2020 and 2021 debentures were adjusted due to anti-dilution provisions in such warrants. The exercise price was reduced to $30.00 from $75.00 and the number of warrants was increased from 100,806 to 163,136. We have recorded a deemed dividend for the change in value due to the anti-dilution adjustments and an increase to the carrying value of the warrants of $658,266 as a result of the trigger of the anti-dilution provisions.

On October 19, 2022, as a result of the Parrut earnout shares issued we reduced the exercise price of the 2020 and 2021 Debenture Note holder warrants from $30.00 to $14.70 due to anti-dilution provisions in these warrants. We also increased the number of warrants issued with the August 17, 2022 and August 30, 2022 notes (See Note 7) from 100,694 to 201,389 and reduced the exercise price from $30.00 to $14.70 due to anti-dilution provisions in these warrants. We have recorded a deemed dividend for the change in value due to the anti-dilution adjustments and an increase to the carrying value of the warrants of $1,262,947 as a result of the trigger of the anti-dilution provisions.

On December 8, 2022, the Company issued 2,000 five-year term warrants to a consultant with an exercise price of $15.00.

With the exception of the below, the Company is not a party to any legal proceedings or claims at September 30, 2023. From time-to-time, we may be a party to, or otherwise involved in, legal proceedings arising in the normal course of business. The nature of our business ordinarily results in a certain amount of pending as well as threatened claims, litigation, investigations, regulatory and legal and administrative cases, matters and proceedings, all of which are considered incidental to the normal conduct of business. When we determine that we have meritorious defenses to the claims asserted, we vigorously defend ourselves. We consider settlement of cases when, in management’s judgment, it is in the best interests of both the Company and its shareholders to do so.

We are currently pursuing two related collections matters against BKR Strategy Group. Since 2013, BKR Strategy Group has provided talent acquisition strategy and services to top companies. Starting in the third quarter of 2021, BKR Strategy Group subcontracted Recruiter.com to perform on Demand recruiter services on behalf of BKR Strategy Group’s clients. Although payments for services rendered were initially received in a timely fashion, BKR Strategy Group’s balance grew throughout the third and fourth quarters of 2021. This led to BKR Strategy Group executing a Promissory Note with a payment schedule for $500,000 on November 30, 2021 with a personal guarantee from its business principal as part of the note. After failing to meet the payment schedule and after repeated attempts to collect the balance due, we retained the law firm of Berkovitch & Bouskila, PLLC and filed two lawsuits against BKR Strategy Group on February 18, 2022, the first, to collect on unpaid invoices and the second, to enforce the promissory note, for a total sum of $1,400,000. On March 24, 2022, BKR Strategy Group made a counterclaim against us for $500,000 on the grounds of alleged overbilling. Management denies the basis for the counterclaim and expects to vigorously defend itself from this counterclaim. Outside counsel for the company has advised that at this stage in the proceedings, it cannot offer an opinion as to the probable outcome. As it is not possible to estimate if a loss will be incurred, there has been no accrual.

On June 21, 2022, the Supreme Court of the State of New York, New York County ruled in favor of the Company that BKR Strategy Group owes the Company $500,000, plus interest at 12% since November 22, 2021, through the entry of judgement in the lawsuit related to the enforcement on the Promissory Note executed by BKR Strategy Group. Proceedings in the other lawsuit remain ongoing.

In April 2023, we settled an outstanding balance with a vendor and recorded a gain of $178,749.

During the second and third quarters in 2023, the Company received $754,796 and $1,422,773 related to an employee retention credit from the IRS, respectively, which was recorded as other income. The services provided by a third-party company for assistance with the ERC application totaled $327,073, which was recorded as finance cost. Additionally, the company obtained two advance loans on the ERC credits totaling $450,000 with an original issue discount of $133,333, that was fully expensed as interest expense for a total owed of $583,333. The OID was repaid during the three months ended June 30, 2023. Of this amount, $80,528 of the advances was repaid during the six months ended June 30, 2023, and the remaining balance for the two loans of $369,472 was repaid from ERC cash proceeds received during the three month ended September 30, 2023.

In December of 2021 we entered into an agreement wherein a third party will assume responsibility for several of our staffing clients and in return the third party would enter into Recruiters on Demand service agreements and software subscriptions with us. As of December 31, 2022, all the conditions of the agreement have not been met. However, one of the provisions has been implemented whereby we entered into a payroll service agreement for employer of record services for one of our clients. As a result, we have recognized revenue $0 and $22,674 during the three months ended September 30, 2023 and 2022, respectively, and $0 and $236,921 during the nine months ended September 30, 2023 and 2022, respectively, related to this agreement

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 Platform underlying our operations. This was an oral arrangement 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. The consultant to the Company, who was our Chief Technology Officer until July 15, 2021, and thereafter our Chief Web Officer until August 23, 2023, is an employee of Recruiter.com Mauritius and exerts control over Recruiter.com Mauritius. 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, expenses to this firm were $0 and $8,636 for the three months ended September 30, 2023 and 2022, respectively, and expenses to this firm were $27,041 and $25,407 for the nine months ended September 30, 2023 and 2022, respectively. These Expenses are included in product development expense in our condensed consolidated statements of operations.

We were a party to that certain license agreement with Genesys. An executive officer of Genesys is a significant equity holder and a member of our Board of directors. 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 September 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 assisted with closing a recruiting program. During the three months ended September 30, 2023 and 2022 respectively, no operating expenses were provided by Opptly. During the nine months ended September 30, 2023 and 2022, we charged to operating expense $0 and $19,825 for services provided by Opptly. The license agreement expired on March 31, 2022 and was not renewed.

An employer of a director utilized the Company for services during the three months ended September 30, 2023 and 2022 in the amount of $0 and $6,000, respectively, and during the nine months ended September 30, 2023 and 2022 in the amount of $0 and $6,000, respectively.

On November 6, 2023, the Company received written notice (the “Default Notice”) from Cavalry Fund I LP that the Company was in default under that certain (i) the August 17 Note issued by the Company to Cavalry, and that certain (ii) the August 30 Note.

According to the Default Notice, the Company failed to (i) notify Cavalry of a “Subsequent Financing,” in which Cavalry had a right to participate pursuant to the Transaction Documents, and (ii) pay certain amounts to Cavalry, or issue shares of common stock in lieu thereof, as consideration for the extension of the maturity date of the Notes (collectively, the “Identified Defaults”).

Per the Default Notice, Cavalry has declared the full amounts due under the Notes, which is the Mandatory Default Amount, as set forth in the Notes, stated by Calvary in its Default Notice as $1,434,920, as of the ~~beginning~~date of the ~~first fiscal~~Default Notice, to be due and payable to Cavalry, with interest accruing at the default interest rate of fifteen percent (15%) as set forth in the Notes.

As a result of the Identified Defaults, the Company would be in default under the following agreements for indebtedness: (i) Original Issue Discount Promissory Note, dated as of August 17, 2022, issued pursuant to the August 17 SPA by the Company to Porter Partners, L.P., (ii) Original Issue Discount Promissory Note, dated as of August 30, 2022, issued pursuant to the August 30 SPA by the Company to L1 Capital Global Opportunities Master Fund, (iii) Original Issue Discount Promissory Note, dated as of August 30, 2022, issued pursuant to the August 30 SPA by the Company to Firstfire Global Opportunities Fund LLC, and (iv) Original Issue Discount Promissory Note, dated as of August 30, 2022, issued pursuant to the August 30 SPA by the Company to Puritan Partner, LLC (collectively, the “Other August 2022 Notes”). An event of default under the Other August 2022 Notes would cause the default interest rate of 15% to apply as set forth in the Other August 2022 Notes and the holders of the Other August 2022 Notes would be permitted to elect to accelerate payment of amounts due, at the Mandatory Default Amount, as defined in the Other August 2022 Notes, under each of the holder’s respective Other August 2022 Note.

In addition, as a result of the Identified Defaults, the Company would also be in default under that certain Loan and Security Agreement, dated as of October 19, 2022 (the “Montage Agreement”), between the Company and Montage Capital II, L.P. (“Montage”). An event of default under the Montage Agreement would cause the default interest rate of 17.75% to apply as set forth in the Montage Agreement and Montage would be permitted to elect to accelerate payment of amounts due under the Montage Agreement and exercise all of its rights as a secured party under the Montage Agreement with respect to Collateral (as such term is defined in the Montage Agreement).

In addition, as a result of the Identified Defaults, the Company would also be in default under that certain Promissory Note, dated as of August 27, 2021 (the “Novo Note”), issued by the Company to Novo Group, Inc. (“Novo”). An event of default under the Novo Note would cause the default interest rate of 12% to apply as set forth in the Novo Note and Novo would be permitted to elect to accelerate payment of amounts due under the Novo Note.

ITEM 2. MANAGEMENT’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 consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 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 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 December 31, 2022 as filed with the SEC on March 31, 2023.

For purposes of this Quarterly Report, “Recruiter.com,” “we,” “our,” “us,” or similar references refers to Recruiter.com Group, Inc. and ~~interim period(s)~~its consolidated subsidiaries, unless the context requires otherwise.

We operate an On-Demand recruiting platform to revolutionize the Employment and Recruitment Agency industry. Our mission is to help businesses expedite and streamline their recruiting and hiring processes by providing On-Demand recruiting services and technology. We leverage our network of recruiters to place them on project-based assignments and offer additional AI-enabled platforms, training, upskilling programs, staffing services, and career communities. Our goal is to become the preferred solution for hiring specialized talent.

Our third quarter focused on stewardship and strategic agility. After successfully selling our healthcare staffing business to Futuris, we concentrated on completing transformative transactions with Job Mobz and GoLogiq. These strategic moves are reshaping Recruiter.com’s foundation and trajectory. This quarter involved intentional resource allocation, prioritizing long-term value over immediate gains, and setting the stage for a more focused and financially stable future.

In the third quarter, we operated with a limited sales team, primarily focusing on selling job board postings and ensuring the successful transition of the healthcare staffing business to the subsidiaries of Futuris.

The costs of our revenue primarily comprise employee costs, third-party staffing costs, and other fees, outsourced recruiter fees, and commissions based on a percentage of our gross margin.

This quarter was characterized by a concentrated effort to finalize pivotal strategic transactions critical to our evolution. As a resource-conscious organization, we navigated through significant restructuring. The strategic relationships with Job Mobz and GoLogiq are not just about expanding our capabilities but also aligning our resources with our most promising opportunities for growth and stability. The reality of such transactions means we are in a period of profound change and significant reduction in our operating staff.

During the three months ending September 30, 2023, we further streamlined our operations, worked to complete the sale of our healthcare staffing business to Futuris, and executed our partnership with Job Mobz to reduce operating expenses further. We also focused on developing new high-margin offerings, such as our AI-enabled software product, “Candidate Pitch,” for transforming resumes into career summaries, and our “Recruiting Classes” online training program. Additionally, we worked on reinvigorating our Mediabistro brand, which has a leading presence in media as a well-used career community and job board.

We also worked on negotiating plans for a strategic asset acquisition with GoLogiq, which would refocus the company around the Fintech industry and spin out our existing operations to a newly formed company. To that end, we prepared for this transaction by creating CognoGroup, Inc., a Nevada corporation, to facilitate the spin-out of certain operating assets. Later, it was dissolved in favor of performing the transaction with Atlantic Energy Solutions, which the ~~pending content~~Company now controls. We executed a Securities Purchase Agreement with Synergy Asset Management Group, allowing the Company to purchase 1,000,000 shares of the Series A Preferred Stock (“Series A Stock”) of Atlantic Energy Solutions, Inc., a company quoted on the OTC Markets under the symbol “AESO.”

Our key highlights for the three months ending September 30, 2023, include the following:

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022:

We had revenue of $0.2 million for the three-month period ended September 30, 2023, as compared to $5.8 million for the three-month period ended September 30, 2022, representing a decrease of $5.6 million or 97%. This decrease resulted primarily from a decrease in our Recruiters on Demand business of $4.5 million or 99% as we transitioned this business to JobMobz, a Recruitment Process Outsourcing company. There was no significant Software Subscriptions revenue in 2023 compared to $694 thousand recognized in 2022 as we had sold our AI sourcing software technology last year to Talent, Inc. We also had a decrease in Permanent Placement fees of $141 thousand or 100% due to reduced focus on this line of business. We also had a decrease in our Marketplace Solutions revenue of $172 thousand or 56% due to customer churn and general market conditions.

Cost of revenue was $0.3 million for the three-month period ended September 30, 2023, compared to $3.9 million for the corresponding three-month period in 2022, representing a decrease of $3.6 million or 94%. This decrease resulted primarily from a decrease in compensation expense in line with the decrease in revenue. Cost of revenue was primarily attributable to third party staffing costs and other fees related to the recruitment and staffing business acquired from Genesys, which after its purchase, serves as our Recruiting Solutions division, as well as costs for contract recruiters supporting the Recruiters on Demand business.

Our gross profit for the three-month period ended September 30, 2023, was ($0.1) million, producing a negative gross profit margin of 37%. Our gross profit for the corresponding 2022 three-month period was $1.9 million, producing a gross profit margin of 32.6%. The decrease in the gross profit margin from the 2023 period to the 2022 period reflects the shift in the mix in sales for the period as our Consulting and Staffing Services has the lowest gross margin of all areas of business.

We had total operating expenses of $2.0 million for the three-month period ended September 30, 2023, compared to $7.6 million for the corresponding three-month period in 2022, a decrease of $5.6 million or 73%. This decrease was primarily due to lower product development, general and administrative expenses, and sales and marketing expenses during the period. Additionally, a decrease in amortization of intangibles expense from $952 thousand in the three-month period in 2022 to $322 thousand in the current period contributed to the overall decrease in operating expenses. This decline is in line with the decline in sales.

Our sales and marketing expense for the three-month period ended September 30, 2023, was $85 thousand compared to $343 thousand for the corresponding three-month period in 2022, which reflects a decrease in personnel and advertising and marketing expense in line with the decline in sales.

Our product development expense for the three-months ended September 30, 2023, decreased to $85 thousand from $468 thousand for the corresponding period in 2022. This decrease was attributable to a decrease in technology and research and development expenses. The product development expense was primarily made up of $84 thousand of hosting and data expense during the three-months ended September 30, 2023. The corresponding period in 2022 included $773 thousand technology and design expense, $91 thousand hosting expense, $39 thousand research and development expense, and was offset by $435 thousand relating to the capitalization of internal use software.

For the three-month period ended September 30, 2023, we incurred a non-cash amortization charge of $322 thousand as compared to $952 thousand for the corresponding period in 2022. The amortization expense in 2023 and 2022 relates to the intangible assets acquired from Genesys (now our Recruiting Solutions division), Scouted, Upsider, OneWire, Parrut and Novo Group. The decrease for the three-month period ended September 30, 2023 was due to impairments charges booked in Q3 and Q4 of 2022 which reduced the overall net book value of the intangible assets. This reduction decreased the quarterly amortization expense charged throughout 2023.

General and administrative expense for the three-month period ended September 30, 2023, 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 September 30, 2023, our general and administrative expenses were $1.5 million, including $344 thousand of non-cash stock-based compensation. In 2022, for the corresponding period, our general and administrative expense was $3.7 million, including $766 thousand of non-cash stock-based compensation. This 59% decrease was in line with the decline in sales.

Other income (expense) for the three-month period ended September 30, 2023, was income of $787 thousand compared to expense of ($209) thousand in the corresponding 2022 period. The primary reason for the increase in income was due to ERC income recognized in the period equal to $1.4 million.

For the three-months ended September 30, 2023, we had a net loss from continuing operations of $1.3 million compared to a net loss of $5.9 million during the corresponding three-month period in 2022. For the three-months ended September 30, 2023, we had a net income from discontinued operations of $277 thousand compared to a net income of $303 thousand during the corresponding three-month period in 2022.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022:

We had revenue of $3.0 million for the nine-month period ended September 30, 2023, as compared to $18.3 million for the nine-month period ended September 30, 2022, representing a decrease of $15.3 million or 84%. This decrease resulted primarily from a decrease in our Recruiters on Demand business of $11.6 million during the period, or 86%, as we transitioned this business to JobMobz. Software Subscriptions contributed $413 thousand of revenue in 2023 compared to $2.2 million in 2022 as we had sold our software technology last year. We also had a decrease in Permanent Placement fees of $739 thousand during the first nine months of 2023, or 97%, due to reduced focus on this line of business, and a decrease in our Marketplace Solutions revenue of $488 thousand, or 49%, due to customer churn. Additionally, we recognized approximately $100 thousand in revenue share from the JobMobz agreement.

Cost of revenue was $2.2 million for the nine-month period ended September 30, 2023, compared to $11.3 million for the corresponding nine-month period in 2022, representing a decrease of $9.1 million or 81%. This decrease resulted primarily from a decrease in compensation expense in line with the decrease in revenue. Cost of revenue for the nine-month period was primarily attributable to third party staffing costs and other fees related to the recruitment and staffing business acquired from Genesys, which after its purchase, serves as our Recruiting Solutions division, as well as costs for contract recruiters supporting the Recruiters on Demand business.

Our gross profit for the nine-month period ended September 30, 2023 was $0.8 million, producing a gross profit margin of 28%. Our gross profit for the corresponding 2022 nine-month period was $7.0 million, producing a gross profit margin of 38%. The decrease in the gross profit margin from 2022 to 2023 reflects the shift in the mix in sales for the period as our Consulting and Staffing Services has the lowest gross margin of all areas of business.

We had total operating expense of $7.0 million for the nine-month period ended September 30, 2023 compared to $19.7 million for the corresponding nine-month period in 2022, a decrease of $12.7 million or 65%. This decrease was primarily due to lower product development, sales and marketing, and general and administrative expenses totaling $8.6 million. Additionally, a decrease of $1.9 million for amortization of intangible assets and impairment expense contributed to the overall decrease in operating expenses for the nine-month period ended September 30, 2023.

Our sales and marketing expense for the nine-month period ended September 30, 2023 was $321 thousand compared to $619 thousand for the corresponding nine-month period in 2022, which reflects a decrease in personnel and advertising and marketing expense reflecting the decline in sales.

Our product development expense for the nine-months ended September 30, 2023 decreased to $0.4 million from $1.1 million for the corresponding period in 2022. This decrease was due to a decline in personnel reflecting the decline in sales.

For the nine-month period ended September 30, 2023, we incurred a non-cash amortization charge of $1.0 million as compared to $2.9 million for the corresponding period in 2022. The amortization expense in 2023 and 2022 relates to the intangible assets acquired from Genesys (now our Recruiting Solutions division), Scouted, Upsider, OneWire, Parrut and Novo Group.

General and administrative expense for the nine-month period ended September 30, 2023 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 nine-month period ended September 30, 2023, our general and administrative expense was $5.3 million, including $1.1 million of non-cash stock-based compensation. In 2022, for the corresponding period, our general and administrative expense was $12.8 million, including $3.4 million of non-cash stock-based compensation. This decrease was in line with the decline in sales.

Other income expense for the nine-month period ended September 30, 2023 was an income of $234 thousand compared to income of $879 thousand in the corresponding 2022 period. The primary reason for the decrease in other expenses was due to ERC income recognized in the period equal to $2.2 million partially offset by an increase in interest expense of $1.5 million.

For the nine-months ended September 30, 2023, we had a net loss from continuing operations of $5.9 million compared to a net loss of $11.8 million during the corresponding nine-month period in 2022. For the nine-months ended September 30, 2023, we had a net income from discontinued operations of $0.5 million compared to a net income of $0.8 million during the corresponding nine-month period in 2022.

For the nine-months ended September 30, 2023, we had a net loss attributable to common shareholders of $5.8 million compared to a net loss of $11.7 million during the corresponding nine-month period in 2022. The increase in net loss attributable to common shareholders versus the net loss reflects a deemed dividend recorded for the change in value due to the anti-dilution adjustments and an increase to the carrying value of the warrants of $504 thousand as a result of the trigger of the anti-dilution provisions.

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 ~~links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period~~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 our historical operating results 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 ~~guidance~~following non-GAAP financial measures in planning, forecasting and analyzing future periods. Our 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 the 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 impact of items 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 non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between us 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.

For the nine months ended September 30, 2023, net cash used in operating activities was $1.9 million, compared to net cash used in operating activities of $4.7 million for the corresponding nine-month period in 2022. For the nine months ended September 30, 2023, net loss was $5.3 million. Net loss includes non-cash items of depreciation and amortization expense of $974 thousand, bad debt expense of $175 thousand, equity-based compensation expense of $1.1 million, amortization of debt discount and debt costs of $1.2 million, and a factoring discount fee and interest of $20 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $99 thousand and prepaid expenses and other current assets decreased by $684. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue increased in total by $245 thousand.

For the nine months ended September 30, 2022, net cash used in operating activities was $4.7 million. For the nine months ended September 30, 2022, net loss was $11.0 million. Net loss included non-cash items of depreciation and amortization expense of $2.9 million, bad debt expense of $479 thousand, equity-based compensation expense of $3.4 million, factoring discount fees and interest expense of $150 thousand, and amortization of debt discount and debt issuance costs of $135 thousand. Changes in operating assets and liabilities included primarily the following: accounts receivable decreased by $1.2 million. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, customer advances, and deferred revenue increased in total by $536 thousand.

For the nine months ended September 30, 2023 and 2022, net cash used in investing activities was $0 and $1.4 million, respectively.

For the nine months ended September 30, 2023, net cash provided by financing activities was $1.2 million. The principal factor was $450 thousand of proceeds from ERC advances, $871 thousand of proceeds from factoring agreement, $315 thousand of proceeds from the exercise of warrants, and $786 thousand of net proceeds from the issuance of common stock. These proceeds are offset by repayment of ERC advances notes and the factoring agreement of $1.1 million.

For the nine months ended September 30, 2022, net cash provided by financing activities was $3.5 million including $7.7 million in net proceeds from factoring agreement and promissory notes, offset by $4.3 million from the payments of notes and repayments to the factor.

Based on cash on hand as of November 13, 2023 of approximately $440 thousand, we do not have the capital resources to meet our working capital needs for the next 12 months.

Our consolidated financial statements are prepared using generally accepted accounting ~~changes~~principles in ~~paragraphs 250-10-45-5~~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. We incurred net losses and negative operating cash flows since inception. For the nine months ended September 30, 2023, we recorded a net loss of $5.3 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable.

Our historical operating results indicate substantial doubt exists related to our 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. The accompanying 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, equity offerings have been our primary source of liquidity and we expect to fund future operations through ~~45-10.~~additional securities offerings.

We issued a promissory note for $1,750,000 pursuant to the Parrut acquisition agreement dated July 7, 2021. The note had a term of 24 months, accrued interest at 6%, and originally matured on July 1, 2023. The note required monthly payments of $77,561. On October 19, 2022, Parrut agreed to subordinate their note to a promissory note issued to Montage Capital II, L.P. In return, we restructured the payment schedule for the Parrut note which was set to mature on August 31, 2023, and bears interest at 12%. On August 31, 2023, we did not make payments on amounts due under the note with Parrut and are currently in process of amending the maturity date of the note. At September 30, 2023 and December 31, 2022, the outstanding balance on the promissory note with Parrut was $261,112 and $444,245, respectively.

In February 2023, we entered into an additional Amendment to the Promissory Note with Novo Group, Inc. (the “Novo Amendment”). The Novo Amendment further modifies the Promissory Note issued to Novo on August 27, 2021 (the “Novo Note”) and amended on April 1, 2022, by amending the payment schedule pursuant to which we would make payments of principal and interest to Novo. Novo agreed we would pay interest only for the period starting November 1, 2022, though and including March 31, 2023, with payments of principal and interest to resume starting April 1, 2023. We also replaced the existing payment schedule with a new payment schedule terminating on October 31, 2023. On November 1, 2023, we did not make payments due on the promissory note with Novo Group and are currently in process of amending the maturity date of the note. On September 30, 2023, and December 31, 2022, the outstanding balance on the promissory note with Novo Group was $1,217,529 and $1,292,360, respectively.

On August 17, 2022, we issued promissory notes for $1,111,111, in the aggregate (the “8/17/22 Notes”) We received proceeds of $960,000, net of debt issuance costs of $40,000 and an original issue discount of $111,111. The 8/17/22 Notes have a term of 12 months, bear interest at 6%, and was set to mature on August 17, 2023. The 8/17/22 Notes was set to be paid off in full on August 17, 2023. As a part of these financings, we granted the noteholders 694,445 warrants to purchase our common stock (See Note 8) (the “8/17/22 Warrants”). The 8/17/22 Warrants were valued at $463,737 and treated as a debt discount to be amortized over the life of the note. On August 7, 2023 the Company signed an amendment 8/17/22 Notes. The amendment extends each of the maturity dates of August 17, 2023 and August 30, 2023 notes by 180 days. In return, the company has agreed to give $50,000 in either stock or cash at its discretion within ninety days of signing the amendment. As of September 30, 2023, the related $50,000 of debt issuance costs was recorded within accrued expenses as no discretion has been elected.

On October 19, 2022, the “Company closed a Loan and Security Agreement (the “Loan Agreement”), by and among the Company and Montage Capital II, L.P. (the “Lender”). Pursuant to the Loan Agreement, the Lender will make advances (“Advances”) in the aggregate principal amount of $2,250,000, with the first Advance of $2,000,000 being provided on or around the Closing Date and the second Advance of $250,000 being available to the Company upon request prior to April 30, 2023. Interest will accrue on all Advances under the Loan Agreement at a per annum rate of 12.75%. In the event of a default under the terms of the Loan Agreement, the interest rate increases by 5 percentage points above the interest rate in effect immediately prior to a default. The entire outstanding principal balance of the Advances, all accrued and unpaid interest thereon, and all fees and other amounts outstanding thereunder will be immediately due and payable on the 42nd month anniversary of the Closing Date (the “Maturity Date”). In connection with the Loan Agreement, the Company granted and pledged to the Lender a continuing security interest in all presently existing and hereafter acquired or arising Collateral (as more specifically defined in the Loan Agreement) which includes all personal property of the Company and its subsidiaries. The Loan Agreement contains certain affirmative and negative covenants to which the Company is also subject. The Company agreed to pay the Lender a fee of $45,600, with $40,000 due upon the execution of the Loan Agreement and the balance due upon the funding of the second Advance.

The Company is permitted to prepay any amounts due to the Lender; provided, however, that a Prepayment Fee (as more specifically defined in the Loan Agreement) shall be owed to the Lender depending on when the amounts are prepaid.

In addition, in connection with the Loan Agreement, the Company issued 47,103 warrants to purchase common stock of the Company (the “Warrants”) to the Lender, with 41,520 Warrants issued and exercisable upon the Closing Date and the additional 5,580 Warrants becoming exercisable upon funding of the second Advance. The Warrants are exercisable for ten years from the Closing Date at an exercise price of $30.00 per share, subject to certain adjustments. Upon the earlier of the Maturity Date or a sale of the Company or other change in control, the Lender has ~~adopted~~the right to cause the Company to repurchase the Warrants for up to $703,125 ($600,000 if only the first Advance has been made and $703,125 if both Advances have been made). The Company is also obligated to pay the Lender a cash fee equal to 1.25% of the aggregate principal amount of the Advances that is outstanding on each anniversary of the Closing Date if (i) the average closing price of the Company’s common stock for the thirty (30) day period prior to such anniversary date is less than $30.00 or (ii) the closing price of the Company’s common stock for the date immediately prior to such anniversary date is less than $30.00.

On August 16, 2023, we entered into a Second Amendment to Loan and Security Agreement (the “the Second Montage Amendment”), by and among the Company, its subsidiaries Montage. The Second Montage Amendment modifies that certain Loan and Security Agreement by and among the Company, its subsidiaries, and Montage, as amended (the “Loan and Security Agreement”) to join CognoGroup, Inc. as an additional borrower to the Loan and Security Agreement and amend and restate the definition of “Maturity Date” to the earlier of (i) the four month anniversary of the initial closing of the Purchase Agreement or (ii) February 28, 2024. Additionally, the Montage Amendment provides for Montage’s consent to certain transactions that would have otherwise been prohibited under the Loan and Security Agreement, including the transaction contemplated by the Purchase Agreement with Job Mobz.

In addition, in connection with the Second Montage Amendment, the Company will issue warrants to purchase common stock of CognoGroup, Inc. (the “CognoGroup, Inc Warrants”) to the Lender. The number of shares shall be equal to 1.4% of the CognoGroup, Inc outstanding capital stock on a fully diluted basis at the exercise price of $0.01 per share and with expiration date of October 19, 2032. On and after the earlier to occur of (i) October 19, 2026, (ii) any sale, license, or other disposition of all or substantially all of the assets of the CognoGroup, Inc., or any reorganization, consolidation, or merger of the CognoGroup, Inc. where the holders of the CognoGroup, Inc.’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction, (iii) a transaction in which any “person” or “group” becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of the CognoGroup, Inc. ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of the CognoGroup, Inc., who did not have such power before such transaction (“Change in Control”), or (iv) the dissolution or liquidation of the CognoGroup, Inc (“Wind-Up”), CognoGroup, Inc shall, at the request of Holder, purchase all rights that Holder has under this ~~update~~CognoGroup, Inc Warrants for a cash payment in the amount equal to $600,000 (the “Buyout Fee”). In addition to the foregoing, at any time on or after October 19, 2026, and in the absence of an Acquisition, Change in Control, or Wind-Up, Holder may elect to receive a portion of the Buyout Fee. These CognoGroup, Inc Warrants were valued at $600,000 and treated as a debt discount to be amortized over the life of the note.

At September 30, 2023 and December 31, 2022, the outstanding balance on the Loan Agreement, and a puttable liability was established, net of the unamortized debt issuance costs and debt discounts of $872,258 and $622,630, respectively, was $998,743 and $1,377,370, respectively.

As stated previously, the Company factors the accounts receivable on a recourse basis. Therefore, if the Buyer cannot collect the factored accounts receivable from the customer, the Company must refund the advance amount remitted to us for any uncollected accounts receivable from the customer. Accordingly, the Company records the liability of potentially having to refund the advance amount as short-term debt when the factoring arrangement is utilized. As of September 30, 2023 and December 31, 2022, $0 and $545,216 of advances were outstanding under the factoring arrangement, respectively, and $38,488 and $263,939, was due from the factor, respectively, resulting in a net $0 and $281,277 loan payable to the factor, respectively. The September 30, 2023, amount due from factor is included in prepaid expenses and other current assets.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in 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 revenues and expenses during the ~~quarter ended December 31, 2017. The Company has retrospectively applied amendments~~reporting period. Actual results and outcomes may differ from management’s estimates and assumptions. Included in ~~Part I~~these estimates are assumptions used to estimate collection of ~~ASU 2017-11~~accounts receivable, fair value of marketable securities, fair value of assets acquired and liabilities assumed in asset acquisitions and the estimated useful life of assets acquired, fair value of contingent consideration, asset acquisitions and business combinations, fair value of derivative liabilities, fair value of securities issued for acquisitions and business combinations, fair value of assets acquired and liabilities assumed in business combinations, fair value of intangible assets and goodwill, fair value of capitalized software, fair value of non-monetary transactions, deferred income tax asset valuation allowances, and valuation of stock based compensation expense.

We recognize revenue in accordance with the 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 ~~outstanding financial instruments~~customers in amounts that reflect the consideration we expect 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 ~~down round feature by means~~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 ~~cumulative-effect adjustment to~~performance obligation is satisfied.

Revenues as presented on the statement of ~~financial position as~~operations represent services rendered to customers less sales adjustments and allowances.

Software subscription revenues are recognized over the term of the ~~beginning~~subscription for access to services and/or our web-based platform. Revenue is recognized monthly over the subscription term. Talent effectiveness subscription revenues are recognized over the term of the ~~first fiscal year~~subscription when services are provided. Any payments received prior to the time passing to provide the subscription services are recorded as a deferred revenue liability. Revenue generated from the enhanced support package and ~~interim period(s)~~On Demand support are recognized at the point-in-time when the service is provided. Revenue generated from placement fees that are related to the software subscription are recognized at the point-in-time when the 60 or 90-day guarantee expires.

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. Talent Effectiveness consulting services are billed to clients upfront for a period of 12 months. Revenue is recognized on a gross basis monthly over the period the consulting services are provided.

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.

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. 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.

Revenue share revenues represent a percentage of revenue we have earned in relation to client referrals we made to a third party. We record revenue in relation to revenue share on a net basis as an agent under this arrangement. We have concluded that net reporting is appropriate because we do not provide the underlying services and arrangements to meet the demands of the client that we referred to the third party. Revenue is recorded based on a net percentage of revenue that is shared between us and the third party and earned upon delivery of the services by the third party. The third party provides the underlying services in this arrangement.

Deferred revenue results from transactions in which we have 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 ~~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.~~Sales tax collected is recorded on a net basis and is excluded from revenue.

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. We test 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.

We perform our annual goodwill impairment assessment on December 31st of each year or as impairment indicators dictate.

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 our 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 our 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 using an appropriate valuation 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 may 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 are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. We periodically evaluate whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, we estimate 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.

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 its 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 estimates involve inherent uncertainties and the application of management judgment.

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

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 evaluation~~1934, as amended (the “Exchange Act”), as of the end of the period covered by this ~~Report~~report. Based on ~~Form 10-Q,~~such evaluation, our ~~Chief Executive Officer who also serves as our Chief Financial Officer, has~~principal executive officer and principal financial officer had concluded that our disclosure controls and procedures were not effective due to ~~ensure that~~material weaknesses in internal controls over financial reporting as identified below.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the ~~information relating~~Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management evaluated the effectiveness of our ~~company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within~~internal control over financial reporting as of the ~~time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to~~end of the period covered by this Quarterly Report. In making this assessment, our management ~~to allow timely decisions regarding required disclosure~~used the criteria set forth by the Committee of Sponsor Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). Based on that evaluation, as a result of the material weaknesses described below, management has concluded that our internal control over financial reporting was not effective as of September 30, 2023.

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, 2022, management has determined that, as of that date, there were still material weaknesses in both the design 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 annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified material weaknesses in our internal control over financial reporting. Specifically, (1) 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, and (2) do not have the in-house technical expertise to identify and analyze complex or unusual transactions for proper accounting treatment. Accordingly, management’s assessment is that our internal controls over financial reporting were not effective as of September 30, 2023.

~~There were no changes~~We have worked to establish all the checks and balances needed for all financial areas of our business. We hired a consultant in ~~our internal control over financial reporting (as defined~~mid-2020 to establish best practices and help us document and implement these. This consultant is a CPA and has a significant background in ~~Rule 13a-15f of~~running the ~~Exchange Act) that occurred~~accounting and budgeting process for public companies. We began adopting these best practices during the ~~three months ended December 31, 2017 that has materially affected, or are reasonably likely~~fourth quarter of 2020. We retained an outsourced firm with a panel of CPA consultants in 2021 to ~~materially affect, our~~assist in building internal ~~control over~~controls and preparing financial ~~reporting.~~reports.

AsExcept for the BKR lawsuit and related counterclaim described under Note 10 to our unaudited consolidated financial statements, as of the date of this ~~Report,~~filing, there are no material pending legal or governmental proceedings relating to ~~our Company~~us 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.

~~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, 2022, filed March 31, 2023. 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 us. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.

~~The Company entered into the License under which the Company issued 125,000,000 shares of common stock to Recruiter.~~None.

In connection with the License and the SPA, the Company issued the Investors 600,000 shares of the Company’s Series A Convertible Preferred Stock, 102,100 shares of the Company’s Series C Convertible Preferred Stock and 18,839 shares of the Company’s Series C-1 Convertible Preferred Stock.

All of the above-mentioned securities were issued and sold to accredited investors in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. All of the above-mentioned securities were acquired for the purpose of investment and not with a view to distribution.

On February 13, 2018, the Company filed two Certificates of Amendment (the “COD Amendments”) with the Delaware Secretary of State amending the Company’s Series C Certificate of Designations and Series C-1 Certificate of Designations. The COD Amendments extend the maturity dates of the Series C and Series C-1 to five years and reduces the redemption price of the Series C and Series C-1 from approximately $2,000,000 to $1,000,000. The Form of the COD Amendments for the Series C and Series C-1 are attached hereto as Exhibit 3.7 and Exhibit 3.8, respectfully, and are incorporated herein by reference.None.

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

# Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally copies of omitted schedules and exhibits to the Securities and Exchange Commission or its staff upon its request.

~~EXHIBITS INDEX~~* 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.

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.

Nevada		~~26-3090646~~ 90-1505893
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~PO Box 86, Bristol, CT~~ 500 Seventh Avenue New York, New York		~~06011~~ 10018
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated ~~filer~~Filer	~~☐ (Do not check if a smaller reporting company)~~ ☒	Smaller reporting company	☒
		Emerging growth company	☐ ☒

			Page number
Part I -			Financial Information
Item 1.1	Consolidated Financial Statements ~~(Unaudited)~~	1 3
	~~Condensed~~ Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, ~~2017 (unaudited) and March 31, 2017~~2022	1 3
	~~Unaudited Condensed~~ Consolidated Statements of Operations for the three and nine months ended ~~December 31, 2017~~September 30, 2023 and ~~2016~~2022 (Unaudited)	2 4
	~~Unaudited Condensed~~ Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended ~~December 31, 2017~~September 30, 2023 and ~~2016~~2022 (Unaudited)	3 7
	Notes to Unaudited ~~Condensed~~ Consolidated Financial Statements	4 8
Item 2	~~Forward-Looking Statements~~
~~Item 2.~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 41
Item 3.3	Quantitative and Qualitative Disclosures About Market Risk	19 55
Item 4.4	Controls and Procedures	19 55

Part II -			Other Information
Item 1.1	Legal Proceedings	20 57
Item ~~1A.~~1A	Risk Factors	20 57
Item 2.2	Unregistered Sales of Equity Securities and Use of Proceeds	20 57
Item 3.3	Defaults Upon Senior Securities	20 57
Item 4.4	Mine Safety Disclosures	20 57
Item 5.5	Other Information	20 57
Item 6.6	Exhibits	20 58

	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

	September 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS

Current assets:
Cash	$	296,263		$	946,804
Accounts receivable, net of allowance for doubtful accounts of $1,131,457 and $1,384,186, respectively		71,615			1,965,947
Prepaid expenses and other current assets		256,232			255,548
Current assets from discontinued operations		2,042,519			1,223,869
Total current assets		2,666,629			4,392,168

Property and equipment, net of accumulated depreciation of $35,982 and $17,210, respectively		42,568			61,340
Intangible assets, net		1,623,300			2,578,692
Goodwill		7,101,084			7,101,084

Total assets	$	11,433,581		$	14,133,284

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	1,338,049		$	1,569,814
Accrued expenses		843,659			908,743
Accrued compensation		175,084			410,957
Accrued interest		222,126			81,576
Deferred payroll taxes		2,484			2,484
Other liabilities		17,333			17,333
Loans payable - current portion, net of discount		4,744,885			3,700,855
Refundable deposit on preferred stock purchase		285,000			285,000
Warrant liability for puttable warrants		1,200,000			600,000
Deferred revenue		182,523			215,219
Current liabilities associated with discontinued operations		543,698			2,643
Total current liabilities		9,554,841			7,794,624

Loans payable - long term portion		-			1,260,343

Total liabilities		9,554,841			9,054,967

Commitments and contingencies (Note 10)

Stockholders’ Equity:
Preferred stock, Series D, $0.0001 par value; 2,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 86,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		9			9
Preferred stock, Series F, $0.0001 par value; 200,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Common stock, $0.0001 par value; 6,666,667 shares authorized; 1,433,903 and 1,085,184 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		143			109
Shares to be issued, 0 and 39,196 shares as of September 30, 2023 and December 31, 2022, respectively		-			4
Additional paid-in capital		76,964,496			74,333,736
Accumulated deficit		(75,085,908	)		(69,255,541	)
Total stockholders’ equity		1,878,740			5,078,317

Total liabilities and stockholders’ equity	$	11,433,581		$	14,133,284


	Preferred stock				Preferred stock				Preferred stock								Common stock to						Additional						Total
	Series D				Series E				Series F				Common stock				be issued						Paid in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance as of December 31, 2022		-	$	-		86,000	$	9		-	$	-		1,085,184	$	109		39,196		$	4		$	74,333,736		$	(69,255,541	)	$	5,078,317
Stock based compensation - Options		-		-		-		-		-		-		-		-		-			-			390,806			-			390,806
Stock based compensation - RSUs		-		-		-		-		-		-		-		-		-			-			152,143			-			152,143
Anti-dilution adjustment to warrants		-		-		-		-		-		-		-		-		-			-			503,643			(503,643	)		-
Common stock issued for restricted stock units		-		-		-		-		-		-		7,387		1		-			-			(1	)		-			-
Common stock issued upon exercise of warrants		-		-		-		-		-		-		54,768		5		-			-			315,173			-			315,178
Net loss		-		-		-		-		-		-		-		-		-			-			-			(3,315,769	)		(3,315,769	)
Balance as of March 31, 2023		-	$	-		86,000	$	9		-	$	-		1,147,339	$	115		39,196		$	4		$	75,695,500		$	(73,074,953	)	$	2,620,675

Stock based compensation - Options		-		-		-		-		-		-		-		-		-			-			219,560			-			219,560
Common stock issued for the exchange of warrants		-		-		-		-		-		-		38,804		4		(39,196	)		(4	)		-			-			-
Net loss		-		-		-		-		-		-		-		-		-			-			-			(980,273	)		(980,273	)
Balance as of June 30, 2023		-	$	-		86,000	$	9		-	$	-		1,186,143	$	119		-		$	-		$	75,915,060		$	(74,055,226	)	$	1,859,962
Stock based compensation - Options		-		-		-		-		-		-		-		-		-			-			343,951			-			343,951
Issuance of common stock, net of equity issuance costs of $250,490		-		-		-		-		-		-		130,000		13		-			-			785,496			-			785,509
Recapitalization		-		-		-		-		-		-		-		-		-			-			(80,000	)		-			(80,000	)
Effect of the August 2023 reverse stock split on common stock		-		-		-		-		-		-		25,537		2		-			-			(2	)		-			-
Common stock issued upon exercise of pre-funded warrants		-		-		-		-		-		-		92,223		9		-			-			(9	)		-			-
Net loss		-		-		-		-		-		-		-		-		-			-			-			(1,030,682	)		(1,030,682	)

Balance as of September 30, 2023		-	$	-		86,000	$	9		-	$	-		1,433,903	$	143		-		$	-		$	76,964,496		$	(75,085,908	)	$	1,878,740

	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

	Nine months			Nine months
	September 30,			September 30,
	2023			2022
Cash Flows From Operating Activities
Net loss	$	(5,326,724	)	$	(10,997,463	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		974,164			2,881,967
Bad debt expense		175,463			479,065
Gain on debt extinguishment		-			(1,205,195	)
Gain on settlement of debt		(178,749	)		-
Equity based compensation expense		1,106,460			3,415,670
Warrant modification expense		-			152,244
Amortization of debt discount and debt costs		1,212,006			135,161
Impairment expense		-			2,129,101
Change in fair value of earn-out liability		-			26,604
Factoring discount fee and interest		20,480			150,117
Changes in assets and liabilities:
Increase in accounts receivable		(99,801	)		(1,273,012	)
Decrease in accounts receivable - related parties		-			49,033
Increase in prepaid expenses and other current assets		(684	)		(64,221	)
Increase (decrease) in accounts payable and accrued liabilities		277,632			(146,405	)
Decrease in accounts payable and accrued liabilities - related parties		-			(163,672	)
Decrease in deferred revenue		(32,696	)		(226,208	)
Net cash used in operating activities		(1,872,449	)		(4,657,214	)

Cash Flows From Investing Activities:
Capitalized software development costs		-			(1,325,491	)
Purchase of property and equipment		-			(73,037	)
Net cash used in investing activities		-			(1,398,528	)

Cash Flows From Financing Activities:
Proceeds from notes		-			2,135,000
Proceeds from ERC advances		450,000			-
Repayment of ERC advances		(450,000	)		-
Issuance of common stock, net of equity issuance costs of $300,490		785,509			-
Payments of loans		(495,473	)		(1,323,773	)
Proceeds from factoring agreement		871,821			5,613,871
Repayments of factoring agreement		(175,127	)		(2,944,876	)
Purchase of preferred shares pursuant to recapitalization		(80,000	)
Gross proceeds from exercise of warrants		315,178			-
Net cash provided by financing activities		1,221,908			3,480,222

Net decrease in cash		(650,541	)		(2,575,520	)
Cash, beginning of period		946,804			2,584,062

Cash, end of period	$	296,263		$	8,542

Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	256,552		$	208,351
Cash paid during the period for income taxes	$	-		$	-

Supplemental schedule of non-cash investing and financing activities:
Accounts receivable owed under factoring agreement collected directly by factor	$	1,000,020		$	1,955,289
Purchase price measurement period adjustment to goodwill and accounts receivable	$	-		$	35,644
Debt discount on warrants granted with notes	$	600,000		$	1,032,842
Debt issuance costs accrued	$	50,000		$	-
Deemed dividends	$	503,643		$	-
Offering costs as a result of modification of warrants to induce exercise	$	10,400		$	-

	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

·	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. We derive revenue from Recruiters On Demand 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. In addition, we also offer talent planning, talent assessment, strategic guidance, and organizational development services, which we market as our “Talent Effectiveness” practice. Companies prepay for a certain number of consulting hours at an agreed-upon, time-based rate. We source and provide the independent consultants that provide the service. In March 2023, we announced a strategic partnership with Job Mobz to transition certain Recruiters on Demand clients and staff to Job Mobz in exchange for an ongoing revenue stream. (See below Revenue Share).

·	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 the 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 base salary or an agreed-upon flat fee.

·	Marketplace: Our Marketplace category comprises services for businesses and individuals that leverage our online presence and career communities. For businesses, this includes job postings, 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. We earn revenue by completing agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer. In some cases, we earn a percentage of revenue a business receives from attracting new clients by advertising on the Platform. Companies can also pay us to post job openings on our proprietary job boards to promote open job positions they are trying to fill. In addition to our work with direct clients, we categorize all online advertising and affiliate marketing revenue as Marketplace revenue. For individuals, Marketplace includes services to assist with career development and advancement, including a resume distribution service that promotes these job seekers’ profiles and resumes to help with their procuring employment, upskilling, and training. Our resume distribution service allows a job seeker to upload their 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 training program through our online learning management system, located at RecruitingClasses.com and other training and upskilling programs.

	Three Months Ended September 30,
	2023		2022
Recruiters on Demand	$	46,040	$	4,540,454
Consulting and staffing services		572		99,295
Software Subscriptions		160		693,495
Marketplace Solutions		136,950		309,680
Full time placement fees		-		141,500
Revenue Share		-		-
Total revenue	$	183,722	$	5,784,424

	Nine Months Ended September 30,
	2023		2022
Recruiters on Demand	$	1,832,795	$	13,430,501
Consulting and staffing services		124,752		903,348
Software Subscriptions		413,101		2,198,232
Marketplace Solutions		517,782		1,005,670
Full time placement fees		20,000		759,075
Revenue Share		102,440		-
Total revenue	$	3,010,870	$	18,296,826

	Total Deferred September 30, 2023		Recognize Q4 2023		Recognize 2024
Recruiters on Demand	$	49,371	$	49,371	$	-
Marketplace Solutions	$	133,152	$	102,443	$	30,709
TOTAL	$	182,523	$	151,814	$	30,709

Beginning balance, December 31, 2021	$	578,591
Re-measurement adjustments:
Change in fair value of earn-out liability		26,604
Gain on debt extinguishment		(605,195	)

Ending balance, December 31, 2022		-
Re-measurement adjustments:
Change in fair value of earn-out liability		-
Ending balance, September 30, 2023	$	-

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

~~Item 1.~~	~~Financial Statements~~
2

Table of Contents

	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

	September 30, 2023		December 31, 2022
Prepaid expenses	$	60,977	$	40,860
Prepaid advertisement		146,500		200,000
Employee advance		-		8,500
Prepaid insurance		-		3,302
Other receivables		48,755		2,886
Prepaid expenses and other current assets	$	256,232	$	255,548

	2023		2022
Carrying value - January 1	$	7,101,084	$	7,718,842
Purchase price measurement period adjustments		-		(35,644	)
Impairment losses		-		(582,114	)
Carrying value - end of period	$	7,101,084	$	7,101,084

	2023			2022
Customer contracts	$	8,093,787		$	8,093,787
Software acquired		3,785,434			3,785,434
License		1,726,965			1,726,965
Internal use software developed		325,491			325,491
Domains		40,862			40,862
		13,972,539			13,972,539
Less accumulated amortization		(8,510,814	)		(7,555,422	)
Total		5,461,725			6,417,117
Less accumulated impairment		(3,838,425	)		(3,838,425	)
Carrying value	$	1,623,300		$	2,578,692

	September 30, 2023		December 31, 2022

Accounts receivable, net of allowance for doubtful accounts of $270,291 and $62,427, respectively	$	2,042,519	$	1,223,869
Total current assets from discontinued operations	$	2,042,519	$	1,223,869

Accrued expenses and compensation	$	543,698	$	2,643
Total current liabilities associated with discontinued operations	$	543,698	$	2,643

	September 30, 2023			December 31, 2022
Promissory notes	$	5,655,197		$	6,153,272
Factoring arrangement		-			281,277
Total loans payable		5,655,197			6,434,549
Less: Unamortized debt discount or debt issuance costs		(910,312	)		(1,473,351	)
Less current portion		(4,744,885	)		(3,700,855	)
Non-current portion	$	-		$	1,260,343

Year Ending December 31,
2023 (remainder of year)	$	3,913,197
2024		1,742,000
Total principal payments	$	5,655,197

	Stock Awards
Outstanding at December 31, 2021		9,733
Granted		6,388
Vested		(5,888	)
Vested and issuable		(500	)
Forfeited or cancelled		-
Outstanding at December 31, 2022		9,733
Granted		-
Vested and issued		(7,387	)
Vested and issuable		(2,346	)
Outstanding at September 30, 2023		-

	September 30, 2023
Risk-free interest rates	4.95		%
Expected life (in years)	0.3
Expected volatility	171.42		%
Dividend yield		-

	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Life (In Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		247,008		$	45.75		2.80	$	-
Granted		16,167			13.2		-		-
Exercised		-			-		-		-
Expired or cancelled		(44,623	)		42.03		-		-
Outstanding at September 30, 2023		218,552			43.38		3.09	$	-
Exercisable at September 30, 2023		181,483		$	47.25		3.24	$	-

				Weighted
				Average
				Exercise
	Warrants			Price per
	Outstanding			Share
Outstanding at December 31, 2022		752,730		$	42.60
Issued		314,444			1.97
Exercised		(185,795	)		2.87
Expired or cancelled		(89,097	)		8.10
Outstanding at September 30, 2023		792,283		$	35.53

	·	Software Subscriptions: We offer web-based platform subscriptions that assist employers in talent recruitment. Our platforms enable customers to source, contact, screen, and sort candidates using data science, advanced email campaign tools, and predictive analytics. As part of our software subscriptions, we provide enhanced support packages and On-Demand recruiting support services for an additional fee. If we place a candidate with a customer, additional fees may apply, depending on the subscription type. In such cases, if the candidate leaves the customer’s employment within the initial 90 days (the 90-day guarantee), we provide a full refund to the customer for all fees paid. In December 2022, we sold one of our software platforms to Talent, Inc., which was used in delivering the subscription service. Subsequently, we continued the service but utilized third-party tools for delivery. In the third quarter ending September 30, 2023, this revenue line did not have material operations.

	·	Recruiters On Demand: This service offers consulting and staffing for professional recruiters, marketed as Recruiters On Demand. It provides businesses of all sizes access to recruiters on an outsourced, virtual basis for hiring needs. We derive revenue from Recruiters On Demand by billing employer clients for placed recruiters’ ongoing work at an agreed-upon, time-based rate. Recruiter candidates are sourced directly from our network of recruiters. Additionally, we offer talent planning, talent assessment, strategic guidance, and organizational development services marketed as our “Talent Effectiveness” practice. Companies prepay for consulting hours at an agreed-upon, time-based rate. We source and provide independent consultants for this service. In March 2023, we announced a strategic partnership with Job Mobz to transition certain Recruiters on Demand clients and staff to Job Mobz in exchange for an ongoing revenue stream (see Revenue Share below).

	·	Full-time Placement: This service provides qualified candidate referrals to employers for full-time positions. We generate revenue by earning one-time fees each time employers hire one of the candidates we refer. Employers inform us of their hiring needs through our Platform or other communications. We source qualified candidates for available jobs through independent recruiter users and support them with dedicated internal employees we call our internal talent delivery team. Upon employers hiring our candidate referrals, we earn a “full-time placement fee,” typically either a percentage of the referred candidates’ first-year base salary or an agreed-upon flat fee. The Full-time Placement service line was inactive in the third quarter of 2023.

	·	Marketplace: Our Marketplace category offers services for businesses and individuals leveraging our online presence and career communities. For businesses, this includes job postings, digital newsletter sponsorship, online content promotion, social media distribution, banner advertising, and other branded electronic communications. We earn revenue by delivering agreed-upon marketing-related deliverables and milestones with pricing and terms mutually agreed upon. In some cases, we earn a percentage of revenue from businesses that attract new clients by advertising on the Platform. Companies can also pay us to post job openings on our proprietary job boards to promote open positions. Additionally, we categorize all online advertising and affiliate marketing revenue as Marketplace revenue.

		For individuals, Marketplace includes services to aid career development and advancement, including a resume distribution service that promotes job seekers’ profiles and resumes. Our resume distribution service allows job seekers to upload their resumes 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 training program through our online learning management system, located at RecruitingClasses.com, and other training and upskilling programs.

	·	Consulting and Staffing: This service involves providing consulting and staffing personnel services to employers for long- and short-term consulting and temporary employee needs. We generate revenue by referring qualified personnel for the employer’s specific talent needs, then placing such personnel with the employer, billing the employer for the time and work of our placed personnel at an agreed-upon, time-based rate. Our process for finding candidates for consulting and staffing engagements 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 similar means, and the employer selecting our candidates for placement. We bill employer clients for our placed candidates’ ongoing work on a weekly invoicing schedule. In Q3, we sold our healthcare staffing services business to Futuris, exiting the majority of this revenue line.

	·	Revenue Share: We refer certain clients to third parties in exchange for a referral fee. The referral fee amount depends on whether the referral is an existing client of ours and the services we currently provide that client, or a client of a third party who we do not historically service. Referral fees under the revenue share arrangement have minimum and maximum payout amounts. We record referral fees earned under our revenue share arrangement on a net basis. Additionally, our partnership with Job Mobz provided a revenue share; however, the subsequent sale of Recruiter.com brand and website to Job Mobz will have the effect of canceling this ongoing revenue stream in exchange for cash and equity consideration.

	·	Recruiter.com divested its healthcare staffing business to Futuris Company for an initial transaction value of $500,000 in Futuris stock and conditional future gross profit shares up to $2 million.
	·	The Company agreed, subject to shareholder approval, to sell its Recruiter.com brand and domain to Job Mobz in a $1.5 million cash and stock deal, coupled with a 3-year services contract and potential profit sharing from Q1 2024.
	·	Entered into a Securities Purchase Agreement with Synergy Asset Management to purchase 1,000,000 shares of Series A Preferred Stock (“Series A Stock”) of Atlantic Energy Solutions, Inc., a company quoted on the OTC Markets under the symbol “AESO.”
	·	Recruiter.com priced a registered direct and private placement offering at approximately $1.036 million, aimed at raising working capital and supporting general corporate activities.
	·	Recruiter.com Group, Inc. effected a 1-for-15 reverse stock split of its issued and outstanding common stock to meet Nasdaq Capital Market’s listing requirements.
	·	The Company issued a shareholder update letter detailing plans for the envisioned strategic transactions.

		Incorporated by Reference			Filed or Furnished
Exhibit No.	Exhibit Description	Form	Filing Date	Number	Herewith
2.1	Agreement and Plan of Merger, by and between Recruiter.com Group, Inc., a Delaware corporation and Recruiter.com Group, Inc., a Nevada corporation, and a wholly owned subsidiary of the Company, resulting in the Company’s reincorporation from the State of Delaware to the State of Nevada	10-K	3/9/21	2.1
2.2	Stock Purchase Agreement, by and between Recruiter.com Group, Inc. and GoLogiq Inc., dated June 5, 2023.	8-K	6/9/23	2.1
2.3*	Asset Purchase Agreement, dated as of August 9, 2023, by and between Recruiter Consulting, LLC and Insigma, Inc.	8-K	8/11/23	2.1
2.4*	Asset Purchase Agreement, dated as of August 9, 2023, by and between Recruiter Consulting, LLC and Akvarr, Inc.	8-K	8/11/23	2.2
2.5*	Asset Purchase Agreement, dated as of August 16, 2023, by and between Recruiter.com Group, Inc. and Job Mobz Inc.	8-K	8/22/23	2.1
2.6*	Amendment to Stock Purchase Agreement, by and between Recruiter.com Group, Inc. and GoLogiq Inc., dated August 18, 2023.	8-K	8/24/23	2.1
2.7	Stock Purchase Agreement, by and between Recruiter.com Group, Inc. and GoLogiq Inc., dated June 5, 2023.	8-K	6/9/23	2.1
3.1(a)	Articles of Incorporation	10-Q	6/25/20	3.1(a)
3.1(b)	Certificate of Designation of Series E Convertible Preferred Stock	10-Q	6/25/20	3.1(c)
3.1(c)	Certificate of Change pursuant to NRS 78.209, filed with Nevada Secretary of State on June 17, 2021	8-K	6/24/21	3.1
3.1(d)	Certificate of Change Pursuant to NRS 78.209, filed with the Nevada Secretary of State on August 22, 2023	8-K	8/28/23	3.1
3.2	Bylaws, as amended	10-Q	6/25/20	3.2
4.1	Warrant Agent Agreement by and between Recruiter.com Group, Inc., and Philadelphia Stock Transfer, Inc., dated July 2, 2021	8-K	7/6/21	4.3
4.2	Promissory Note issued to Parrut, Inc. on July 7, 2021.	8-K	7/12/21	4.1
4.3	Promissory Note issued to the Novo Group, Inc. on August 27, 2021.	8-K	9/2/21	4.1
4.4	Form of Representative Warrant	8-k	7/6/21	4.1
4.5	Form of Placement Agent Warrant	8-k	7/6/21	4.2
4.6	Form of Amended and Restated Warrant	S-1	12/17/21	4.5
4.7	Legended Promissory Note, originally dated August 27, 2021, by the Company in favor of Novo Group, Inc.	8-K	4/7/22	4.1
4.8	Form of First Amendment to Warrant Agreement	8-K	2/8/23	4.1
4.9	Form of Pre-Funded Warrant	8-K	8/21/23	4.1
4.10	Form of Warrant	8-K	8/21/23	4.2
10.1	Securities Purchase Agreement, by and between Synergy Management Group, LLC and Recruiter.com Group, Inc., dated July 25, 2023	8-K	7/31/23	10.1
10.2	Amendment to Calvary Notes Agreements, dated August 7, 2023, by and between Recruiter.com Group, Inc. and Calvary Fund I LP.	8-K	8/11/23	10.1
10.3	Form of Securities Purchase Agreement, dated August 17, 2023, by and between the Company and the Purchaser	8-K	8/21/23	10.1
10.4	Second Amendment to Loan and Security Agreement, dated as of August 16, 2023, by and among Recruiter.com Group, Inc., Recruiter.com, Inc. Recruiter.com Recruiting Solutions, LLC, Recruiter.com Consulting, LLC, VocaWorks, Inc., Recruiter.com Scouted, Inc., Recruiter.com Upsider, Inc, Recruiter.com – OneWire, Inc., CognoGroup, Inc., and Montage Capital II, L.P.	8-K	8/22/23	10.1
10.5	Amendment to Stock Purchase Agreement, by and between Recruiter.com Group, Inc. and GoLogiq Inc., dated August 29, 2023	8-K	9/5/23	10.1

31.1	Certification of Principal Executive Officer (302)	Filed
31.2	Certification of Principal Financial Officer (302)	Filed
32.1	Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer and Chief Financial Officer	Furnished*
101.INS	Inline XBRL Instance Document	Filed
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed
104	The cover page for Recruiter.com Group, Inc.’s quarterly report on Form 10-Q for the period ended September 30, 2023, formatted in Inline XBRL (included with Exhibit 101 attachments).	Filed

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

Dated: ~~February~~November 20, ~~2018~~2023	~~TRULI MEDIA~~ RECRUITER.COM GROUP, INC.

	By:	/s/ Miles Jennings
		Miles Jennings
		Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial Officer)


	~~By:~~	~~/s/ Miles Jennings~~ 59
		~~Miles Jennings~~
		~~Chief Executive Officer~~ ~~(Principal Executive Officer)~~