Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | RECRUITER.COM GROUP, INC. | |
Entity Central Index Key | 0001462223 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 1,433,903 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40563 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 90-1505893 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 500 Seventh Avenue | |
Entity Address City Or Town | New York | |
Entity Address Postal Zip Code | 10018 | |
City Area Code | 855 | |
Local Phone Number | 931-1500 | |
Security 12b Title | Common Stock | |
Trading Symbol | RCRT | |
Security Exchange Name | NASDAQ | |
Entity Address State Or Province | NY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
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 |
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 | 0 | 1,260,343 |
Total liabilities | 9,554,841 | 9,054,967 |
Stockholders' Equity: | ||
Common stock, $0.0001 par value; 100,000,000 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 | 0 | 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 |
Series F Preferred Stocks [Member] | ||
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 | 0 | 0 |
Series E Preferred Stocks [Member] | ||
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 | 9 | 9 |
Series D Preferred Stocks [Member] | ||
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 | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Accumulated depreciation | $ 35,982 | $ 17,210 |
Allowance for doubtful accounts | $ 1,131,457 | $ 1,384,186 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 6,666,667 | 100,000,000 |
Common stock, shares issued | 1,433,903 | 1,085,184 |
Common stock, shares outstanding | 1,433,903 | 1,085,184 |
Shares to be issued | 0 | 39,196 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 86,000 | 86,000 |
Preferred stock, shares outstanding | 86,000 | 86,000 |
Series F Preferred Stocks [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series E Preferred Stocks [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 775,000 | 775,000 |
Preferred stock, shares issued | 86,000 | 86,000 |
Preferred stock, shares outstanding | 86,000 | 86,000 |
Series D Preferred Stocks [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidated Statements of Operations (Unaudited) | ||||
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: | ||||
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 | 0 | 2,129,101 | 0 | 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 | 2,026,366 | 7,605,564 | 6,943,096 | 19,653,579 |
Loss from Operations | (2,094,535) | (5,720,297) | (6,095,580) | (12,688,099) |
Other income (expenses): | ||||
Interest expense | (622,883) | (208,351) | (1,784,252) | (340,257) |
Income from ERC Credit | 1,422,773 | 0 | 2,177,568 | 0 |
Other (expense) income | (12,566) | (610) | (11,262) | 13,917 |
Finance cost | 0 | 0 | (327,073) | 0 |
Gain on settlement of payables | 0 | 0 | 178,749 | 0 |
Gain on debt extinguishment | 0 | 0 | 0 | 1,205,195 |
Total other income (expenses) | 787,324 | (208,961) | 233,730 | 878,855 |
Loss from continuing operations before income taxes | (1,307,211) | (5,929,258) | (5,861,850) | (11,809,244) |
Provision for income taxes | 0 | 0 | 0 | 0 |
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 | 0 | (658,266) | (503,643) | (658,266) |
Net loss attributable to common shareholders | $ (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 | $ (0.75) | $ (6.35) | $ (4.79) | $ (11.80) |
Weighted average common shares - basic and diluted | 1,367,343 | 990,076 | 1,215,995 | 987,625 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) | Total | Series D Preferred Stock | Series E Preferred Stock | Series F Preferred Stock | Common Stock | Common stock to be issued | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2021 | 86,000 | 971,095 | 39,196 | |||||
Balance, amount at Dec. 31, 2021 | $ 16,090,225 | $ 0 | $ 9 | $ 0 | $ 97 | $ 4 | $ 66,949,755 | $ (50,859,640) |
Stock based compensation - Options and Warrants | 1,397,804 | 0 | 0 | 0 | 0 | 0 | 1,397,804 | 0 |
Stock based compensation - RSUs | 268,956 | 0 | 0 | 0 | $ 0 | 0 | 268,956 | 0 |
Common stock issued for the exchange of warrants, shares | 7,515 | |||||||
Common stock issued for the exchange of warrants, amount | 152,244 | 0 | 0 | 0 | $ 1 | 0 | 152,243 | 0 |
Common stock issued for restricted stock units, shares | 7,045 | |||||||
Common stock issued for restricted stock units, amount | 0 | 0 | 0 | 0 | $ 1 | 0 | (1) | 0 |
Net loss | (4,182,338) | 0 | $ 0 | 0 | $ 0 | $ 0 | 0 | (4,182,338) |
Balance, shares at Mar. 31, 2022 | 86,000 | 985,655 | 39,196 | |||||
Balance, amount at Mar. 31, 2022 | 13,726,891 | 0 | $ 9 | 0 | $ 99 | $ 4 | 68,768,757 | (55,041,978) |
Balance, shares at Dec. 31, 2021 | 86,000 | 971,095 | 39,196 | |||||
Balance, amount at Dec. 31, 2021 | 16,090,225 | 0 | $ 9 | 0 | $ 97 | $ 4 | 66,949,755 | (50,859,640) |
Net loss | (10,997,463) | |||||||
Balance, shares at Sep. 30, 2022 | 86,000 | 990,076 | 39,196 | |||||
Balance, amount at Sep. 30, 2022 | 9,486,474 | 0 | $ 9 | 0 | $ 100 | $ 4 | 72,000,289 | (62,515,369) |
Balance, shares at Mar. 31, 2022 | 86,000 | 985,655 | 39,196 | |||||
Balance, amount at Mar. 31, 2022 | 13,726,891 | 0 | $ 9 | 0 | $ 99 | $ 4 | 68,768,757 | (55,041,978) |
Stock based compensation - Options and Warrants | 381,351 | 0 | 0 | 0 | 0 | 0 | 381,351 | 0 |
Stock based compensation - RSUs | 237,906 | 0 | 0 | 0 | $ 0 | 0 | 237,906 | 0 |
Common stock issued for restricted stock units, shares | 4,422 | |||||||
Common stock issued for restricted stock units, amount | 0 | 0 | 0 | 0 | $ 1 | 0 | (1) | 0 |
Net loss | (1,188,760) | 0 | $ 0 | 0 | $ 0 | $ 0 | 0 | (1,188,760) |
Balance, shares at Jun. 30, 2022 | 86,000 | 990,076 | 39,196 | |||||
Balance, amount at Jun. 30, 2022 | 13,157,388 | 0 | $ 9 | 0 | $ 100 | $ 4 | 69,386,572 | (56,230,738) |
Stock based compensation - Options and Warrants | 765,743 | 0 | 0 | 0 | 0 | 0 | 765,743 | 0 |
Stock based compensation - RSUs | 156,866 | 0 | 0 | 0 | 0 | 0 | 156,866 | 0 |
Net loss | (5,626,365) | 0 | 0 | 0 | 0 | 0 | 0 | (5,626,365) |
Anti-dilution adjustment to warrants | 0 | 0 | 0 | 0 | 0 | 0 | 658,266 | (658,266) |
Relative fair value of warrants issued with debt | 1,032,842 | 0 | $ 0 | 0 | $ 0 | $ 0 | 1,032,842 | 0 |
Balance, shares at Sep. 30, 2022 | 86,000 | 990,076 | 39,196 | |||||
Balance, amount at Sep. 30, 2022 | 9,486,474 | 0 | $ 9 | 0 | $ 100 | $ 4 | 72,000,289 | (62,515,369) |
Balance, shares at Dec. 31, 2022 | 86,000 | 1,085,184 | 39,196 | |||||
Balance, amount at Dec. 31, 2022 | 5,078,317 | 0 | $ 9 | 0 | $ 109 | $ 4 | 74,333,736 | (69,255,541) |
Stock based compensation - Options and Warrants | 390,806 | 0 | 0 | 0 | 0 | 0 | 390,806 | 0 |
Stock based compensation - RSUs | 152,143 | 0 | 0 | 0 | $ 0 | 0 | 152,143 | 0 |
Common stock issued for restricted stock units, shares | 7,387 | |||||||
Common stock issued for restricted stock units, amount | 0 | 0 | 0 | 0 | $ 1 | 0 | (1) | 0 |
Net loss | (3,315,769) | 0 | 0 | 0 | 0 | 0 | 0 | (3,315,769) |
Anti-dilution adjustment to warrants | 0 | 0 | 0 | 0 | $ 0 | 0 | 503,643 | (503,643) |
Common stock issued upon exercise of warrants, shares | 54,768 | |||||||
Common stock issued upon exercise of warrants, amount | 315,178 | 0 | $ 0 | 0 | $ 5 | $ 0 | 315,173 | 0 |
Balance, shares at Mar. 31, 2023 | 86,000 | 1,147,339 | 39,196 | |||||
Balance, amount at Mar. 31, 2023 | 2,620,675 | 0 | $ 9 | 0 | $ 115 | $ 4 | 75,695,500 | (73,074,953) |
Balance, shares at Dec. 31, 2022 | 86,000 | 1,085,184 | 39,196 | |||||
Balance, amount at Dec. 31, 2022 | 5,078,317 | 0 | $ 9 | 0 | $ 109 | $ 4 | 74,333,736 | (69,255,541) |
Net loss | (5,326,724) | |||||||
Balance, shares at Sep. 30, 2023 | 86,000 | 1,433,903 | ||||||
Balance, amount at Sep. 30, 2023 | 1,878,740 | 0 | $ 9 | 0 | $ 143 | $ 0 | 76,964,496 | (75,085,908) |
Balance, shares at Mar. 31, 2023 | 86,000 | 1,147,339 | 39,196 | |||||
Balance, amount at Mar. 31, 2023 | 2,620,675 | 0 | $ 9 | 0 | $ 115 | $ 4 | 75,695,500 | (73,074,953) |
Stock based compensation - Options and Warrants | 219,560 | 0 | 0 | 0 | $ 0 | $ 0 | 219,560 | 0 |
Common stock issued for the exchange of warrants, shares | 38,804 | (39,196) | ||||||
Common stock issued for the exchange of warrants, amount | 0 | 0 | 0 | 0 | $ 4 | $ (4) | 0 | 0 |
Net loss | (980,273) | 0 | $ 0 | 0 | $ 0 | 0 | 0 | (980,273) |
Balance, shares at Jun. 30, 2023 | 86,000 | 1,186,143 | ||||||
Balance, amount at Jun. 30, 2023 | 1,859,962 | 0 | $ 9 | 0 | $ 119 | 0 | 75,915,060 | (74,055,226) |
Stock based compensation - Options and Warrants | 343,951 | 0 | 0 | 0 | 0 | 0 | 343,951 | 0 |
Net loss | (1,030,682) | 0 | 0 | 0 | $ 0 | 0 | 0 | (1,030,682) |
Issuance of common stock, net of equity issuance costs, shares | 130,000 | |||||||
Issuance of common stock, net of equity issuance costs, amount | 785,509 | 0 | 0 | 0 | $ 13 | 0 | 785,496 | 0 |
Recapitalization | (80,000) | 0 | 0 | 0 | $ 0 | 0 | (80,000) | 0 |
Effect of the August twenty twenty three reverse stock split on common stock, shares | 25,537 | |||||||
Effect of the reverse stock split on common stock, amount | 0 | 0 | 0 | 0 | $ 2 | 0 | (2) | 0 |
Common stock issued upon exercise of pre-funded warrants, shares | 92,223 | |||||||
Common stock issued upon exercise of pre-funded warrants, amount | 0 | 0 | $ 0 | 0 | $ 9 | 0 | (9) | 0 |
Balance, shares at Sep. 30, 2023 | 86,000 | 1,433,903 | ||||||
Balance, amount at Sep. 30, 2023 | $ 1,878,740 | $ 0 | $ 9 | $ 0 | $ 143 | $ 0 | $ 76,964,496 | $ (75,085,908) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 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 | 0 | (1,205,195) |
Gain on settlement of debt | (178,749) | 0 |
Equity based compensation expense | 1,106,460 | 3,415,670 |
Warrant modification expense | 0 | 152,244 |
Amortization of debt discount and debt costs | 1,212,006 | 135,161 |
Impairment expense | 0 | 2,129,101 |
Change in fair value of earn-out liability | 0 | 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 | 0 | 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 deferred revenue | (32,696) | (226,208) |
Decrease in accounts payable and accrued liabilities - related parties | 0 | (163,672) |
Net cash used in operating activities | (1,872,449) | (4,657,214) |
Cash Flows From Investing Activities: | ||
Capitalized software development costs | 0 | (1,325,491) |
Purchase of property and equipment | 0 | (73,037) |
Net cash used in investing activities | 0 | (1,398,528) |
Cash Flows From Financing Activities: | ||
Proceeds from notes | 0 | 2,135,000 |
Proceeds from ERC advances | 450,000 | 0 |
Repayment of ERC advances | (450,000) | 0 |
Issuance of common stock, net of equity issuance costs of $300,490 | 785,509 | 0 |
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 | 0 |
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 | 0 | 0 |
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 | 0 | 35,644 |
Debt discount on warrants granted with notes | 600,000 | 1,032,842 |
Debt issuance costs accrued | 50,000 | 0 |
Deemed dividends | 503,643 | 0 |
Offering costs as a result of modification of warrants to induce exercise | $ 10,400 | $ 0 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Recruiter.com Group, Inc., a Nevada corporation (“RGI” or the “Company”), is a holding company based in New York, New York. The Company has eight subsidiaries, Recruiter.com, Inc., Recruiter.com Recruiting Solutions LLC (“Recruiting Solutions”), 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 consolidated group is hereinafter referred to as the “Company,” “we”, “us” or “our”. 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 intent of the company to 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 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 business day prior to the date of Closing (“Closing Consideration”). Following the issuance of the 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 such target. This transaction is awaiting shareholder approval and has not yet closed. On August 16, 2023, the Company entered into an Asset Purchase Agreement (the “Job Mobz Purchase Agreement”) with Job Mobz Inc., a California corporation (“Job Mobz”). Upon the terms and subject to 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 adjustments. This transaction has not yet closed. The Company is currently seeking shareholder approval to the terms of that certain Job Mobz Asset Purchase Agreement. Principles of Consolidation and Basis of Presentation The unaudited consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying 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”) 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. In the opinion of management, these unaudited interim financial statements as of and for the three and nine months ended September 30, 2023 include all adjustments (consisting of normal recurring 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 three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future period. All references to September 30, 2023 in these footnotes are unaudited. Discontinued Operations See Note 6, Discontinued Operations, for a discussion of the Company’s significant accounting policy surrounding the sale of substantially all of the Company’s staffing and consulting services revenue line in connection with the sale of Use of Estimates The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may differ from 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 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 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. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. At September 30, 2023 and December 31, 2022, the Company had $15,253 and $612,691 in excess of the FDIC limit, respectively. 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. Revenue Recognition The Company recognizes revenue in accordance with 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 those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. We generate revenue from the following activities: · Software Subscriptions: · Recruiters On Demand: · Full-time Placement: · Marketplace: 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. · Consulting and Staffing: · Revenue Share: We have a sales team and sales partnerships with direct employers as well as vendor management system companies and managed service companies that help create sales channels for clients that buy staffing, direct hire, and sourcing services. Once we have secured the relationship and contract with the interested Enterprise customer, the delivery and product teams will provide the service to fulfil any or all of the revenue segments. Revenues as presented on the consolidated statements of operations represent services rendered to customers less sales adjustments and allowances. Software subscription revenues are recognized over the term of the 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 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 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. 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 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 deferred revenues are recognized. Sales tax collected is recorded on a net basis and is excluded from revenue. Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless they are short term in nature. As a practical matter, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of September 30, 2023 or December 31, 2022. Contract Liabilities - Deferred Revenue The Company’s contract liabilities consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for services by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized. Revenue Disaggregation For each of the identified periods, revenues can be categorized into the following: 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 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 recognized approximately $200,000 of revenue that was deferred as of December 31, 2022. Deferred revenue as of September 30, 2023 is categorized and expected to be recognized as follows. Expected Deferred Revenue Recognition Schedule 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 Revenue from international sources was approximately 0.01% and 1.0% for the three months ended September 30, 2023 and 2022, respectively. Revenue from international sources was approximately 0.02% and 3% for the nine months ended September 30, 2023 and 2022, respectively. Costs of Revenue Costs of revenues consist of employee costs, third party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of Recruiting Solutions gross margin. Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. We have recorded an allowance for doubtful accounts of $1,131,457 and $1,384,186 as of September 30, 2023 and December 31, 2022, respectively. Bad debt expense (recovery) was $(24,537)and $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. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Property and equipment depreciation expense for the three months ended September 30, 2023 and 2022 was $6,257 and $3,603 respectively and was $18,772 and $4,084 for the nine months ended September 30, 2023 and 2022, respectively. Concentration of Credit Risk and Significant Customers and Vendors (Continuing Operations) As of September 30, 2023, three customers accounted for more than 10% of the accounts receivable balance, for a total of 63%. As of December 31, 2022, there were no customers accounted for more than 10% of the accounts receivable balance. For the three months ended September 30, 2023 two customer accounted for more than 10% of total revenue at 35%. For the three months ended September 30, 2022 one customer accounted for more than 10% of total revenue, at 18%. For the nine months ended September 30, 2023, there were no customers accounted for more than 10% of total revenue For the nine months ended September 30, 2022, one customer accounted for more than 10% of total revenue, at 12% and 10%, for a total of 22%. We used a related party firm located overseas for software development and maintenance related to our website and the platform underlying our operations. One of our former employees and principal shareholders is an employee of this firm and exerts control over this firm (see Note 11). 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). Advertising and Marketing Costs The Company expenses all advertising and 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 operations. Fair Value of Financial Instruments and Fair Value Measurements The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a hierarchical framework for measuring fair value, and enhances fair value measurement disclosure. ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices for identical assets or liabilities in active markets to which we have access at the measurement date. Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s investment in available for sale securities and warrant derivative liabilities are measured at fair value. The securities are measured based on current trading prices using Level 1 fair value inputs. The Company’s derivative instruments are valued using Level 3 fair value inputs. The Company’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 using significant unobservable inputs (Level 3), the following table provides a 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: 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 $ - Business Combinations 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 contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. Intangible Assets Intangible assets consist primarily of the 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 Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value. The Company performs its annual goodwill impairment assessment on December 31st of each year or as impairment indicators dictate (see Note 5). When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the quantitative impairment testing methodology. Under the quantitative method we compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined using an appropriate valuation method. 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 Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life of the asset in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of 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 the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited (see Note 5). Software Costs We capitalize certain software development costs incurred in connection with developing or obtaining software for internal use when both the preliminary project stage is completed, and it is 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 employees who are directly associated with the software project and (iii) interest costs incurred while developing internal-use software. Income Taxes We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and 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 future years of differences |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2023 | |
GOING CONCERN | |
GOING CONCERN | NOTE 2 - GOING CONCERN 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 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 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. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS The components of prepaid expenses and other current assets at September 30, 2023 and December 31, 2022, consisted of the following: 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 |
INVESTMENT IN AVAILABLE FOR SAL
INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2023 | |
INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES | |
INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES | NOTE 4 - INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES The Company’s investment in marketable equity securities is being held for an indefinite period. Cost basis of marketable securities held as of 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 AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill 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 test, we have determined that 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 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 the carrying amount of goodwill for the periods ended September 30, 2023 and December 31, 2022 are as follows: 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 Intangible Assets 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: 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 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 agreement, and the remaining balance is to be 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE 6 – DISCONTINUED OPERATIONS 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: 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 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: Three months Ended September 30, 2023 2022 Revenue $ 1,085,980 $ 1,183,218 Cost of revenue 808,402 877,035 Gross Profit 277,578 306,183 Operating expenses: General and Administrative 1,049 3,290 Total operating expenses 1,049 3,290 Net income from discontinued operations $ 276,529 $ 302,893 Nine months Ended September 30, 2023 2022 Revenue $ 3,592,700 $ 2,651,919 Cost of revenue 3,056,524 1,806,395 Gross Profit 536,176 845,524 Operating expenses: General and Administrative 1,050 33,743 Total operating expenses 1,050 33,743 Net income from discontinued operations $ 535,126 $ 811,781 |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
LOANS PAYABLE | |
LOANS PAYABLE | NOTE 7 - LOANS PAYABLE Promissory Notes Payable 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 upon 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. Factoring Arrangement 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: 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 The future principal payments of the loans payable are as follows: Year Ending December 31, 2023 (remainder of year) $ 3,913,197 2024 1,742,000 Total principal payments $ 5,655,197 |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 8 - STOCKHOLDERS’ EQUITY Preferred Stock 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. Preferred Stock Penalties 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 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. Common Stock 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, respectively. Shares issued for cash 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. Shares issued upon exchange of common stock warrants On January 6, 2022, upon agreement with a 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. Reverse Stock Split 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. Restricted Stock Units 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. Restricted stock grant activity for the periods identified below is as follows: 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 - |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE 9 - STOCK OPTIONS AND WARRANTS Stock Options 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: September 30, 2023 Risk-free interest rates 4.95 % Expected life (in years) 0.3 Expected volatility 171.42 % Dividend yield - 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: 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 $ - 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. Warrants 2023 Warrant Grants Warrant repricing 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 “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 anti-dilution adjustments and an increase to the carrying value of the warrants of $503,643 as a result of the trigger of the anti-dilution provisions. Warrants exercised into Common Stock 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. Warrants issued with 2023 Equity Financing 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. Warrants issued with Debt Financing 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. 2022 Warrant Grants Warrant exchange for Common Stock On January 6, 2022, the Company issued 7,515 shares of common stock upon the exchange of 7,515 warrants (See Note 8). Warrants issued with Debt Financing 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. Warrant repricing 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. Warrants for services On December 8, 2022, the Company issued 2,000 five-year term warrants to a consultant with an exercise price of $15.00. Warrant activity for the nine months ended September 30, 2023 is as follows: 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 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Legal Proceedings 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. Recruiter.com Group, Inc. v. BKR Strategy Group. 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. Settlement of Payables In April 2023, we settled an outstanding balance with a vendor and recorded a gain of $178,749. ERC Activity 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. Service Agreement 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 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 - RELATED PARTY TRANSACTIONS 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS 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 date of the 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. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
General | Recruiter.com Group, Inc., a Nevada corporation (“RGI” or the “Company”), is a holding company based in New York, New York. The Company has eight subsidiaries, Recruiter.com, Inc., Recruiter.com Recruiting Solutions LLC (“Recruiting Solutions”), 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 consolidated group is hereinafter referred to as the “Company,” “we”, “us” or “our”. 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 intent of the company to 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 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 business day prior to the date of Closing (“Closing Consideration”). Following the issuance of the 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 such target. This transaction is awaiting shareholder approval and has not yet closed. On August 16, 2023, the Company entered into an Asset Purchase Agreement (the “Job Mobz Purchase Agreement”) with Job Mobz Inc., a California corporation (“Job Mobz”). Upon the terms and subject to 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 adjustments. This transaction has not yet closed. The Company is currently seeking shareholder approval to the terms of that certain Job Mobz Asset Purchase Agreement. |
Principles of Consolidation and Basis of Presentation | The unaudited consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying 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”) 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. In the opinion of management, these unaudited interim financial statements as of and for the three and nine months ended September 30, 2023 include all adjustments (consisting of normal recurring 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 three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future period. All references to September 30, 2023 in these footnotes are unaudited. |
Discontinued Operations | See Note 6, Discontinued Operations, for a discussion of the Company’s significant accounting policy surrounding the sale of substantially all of the Company’s staffing and consulting services revenue line in connection with the sale of |
Use Of Estimates | The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may differ from 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 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 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. |
Cash And Cash Equivalents | The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. At September 30, 2023 and December 31, 2022, the Company had $15,253 and $612,691 in excess of the FDIC limit, respectively. 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. |
Revenue Recognition | The Company recognizes revenue in accordance with 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 those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. We generate revenue from the following activities: · Software Subscriptions: · Recruiters On Demand: · Full-time Placement: · Marketplace: 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. · Consulting and Staffing: · Revenue Share: We have a sales team and sales partnerships with direct employers as well as vendor management system companies and managed service companies that help create sales channels for clients that buy staffing, direct hire, and sourcing services. Once we have secured the relationship and contract with the interested Enterprise customer, the delivery and product teams will provide the service to fulfil any or all of the revenue segments. Revenues as presented on the consolidated statements of operations represent services rendered to customers less sales adjustments and allowances. Software subscription revenues are recognized over the term of the 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 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 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. 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 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. 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 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 deferred revenues are recognized. Sales tax collected is recorded on a net basis and is excluded from revenue. Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless they are short term in nature. As a practical matter, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of September 30, 2023 or December 31, 2022. Contract Liabilities - Deferred Revenue The Company’s contract liabilities consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for services by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized. For each of the identified periods, revenues can be categorized into the following: Three Months Ended 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 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 recognized approximately $200,000 of revenue that was deferred as of December 31, 2022. Deferred revenue as of September 30, 2023 is categorized and expected to be recognized as follows. |
Expected Deferred Revenue Recognition Schedule | 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 Revenue from international sources was approximately 0.01% and 1.0% for the three months ended September 30, 2023 and 2022, respectively. Revenue from international sources was approximately 0.02% and 3% for the nine months ended September 30, 2023 and 2022, respectively. |
Cost Of Revenue | Costs of revenues consist of employee costs, third party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of Recruiting Solutions gross margin. |
Accounts Receivable | Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. We have recorded an allowance for doubtful accounts of $1,131,457 and $1,384,186 as of September 30, 2023 and December 31, 2022, respectively. Bad debt expense (recovery) was $(24,537)and $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. |
Property And Equipment | Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Property and equipment depreciation expense for the three months ended September 30, 2023 and 2022 was $6,257 and $3,603 respectively and was $18,772 and $4,084 for the nine months ended September 30, 2023 and 2022, respectively. |
Concentration Of Credit Risk And Significant Customers And Vendors | As of September 30, 2023, three customers accounted for more than 10% of the accounts receivable balance, for a total of 63%. As of December 31, 2022, there were no customers accounted for more than 10% of the accounts receivable balance. For the three months ended September 30, 2023 two customer accounted for more than 10% of total revenue at 35%. For the three months ended September 30, 2022 one customer accounted for more than 10% of total revenue, at 18%. For the nine months ended September 30, 2023, there were no customers accounted for more than 10% of total revenue For the nine months ended September 30, 2022, one customer accounted for more than 10% of total revenue, at 12% and 10%, for a total of 22%. We used a related party firm located overseas for software development and maintenance related to our website and the platform underlying our operations. One of our former employees and principal shareholders is an employee of this firm and exerts control over this firm (see Note 11). We were a party to a license agreement with a related party firm (see Note 11). |
Advertising And Marketing Costs | The Company expenses all advertising and 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 operations. |
Fair Value Of Financial Instruments And Fair Value Measurements | The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a hierarchical framework for measuring fair value, and enhances fair value measurement disclosure. ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices for identical assets or liabilities in active markets to which we have access at the measurement date. Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s investment in available for sale securities and warrant derivative liabilities are measured at fair value. The securities are measured based on current trading prices using Level 1 fair value inputs. The Company’s derivative instruments are valued using Level 3 fair value inputs. The Company’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. |
Business Combinations | 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 contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. |
Intangible Assets | Intangible assets consist primarily of the 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 | Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value. |
Long-lived Assets | Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life of the asset in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of 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 the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited (see Note 5). |
Software Costs | We capitalize certain software development costs incurred in connection with developing or obtaining software for internal use when both the preliminary project stage is completed, and it is 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 employees who are directly associated with the software project and (iii) interest costs incurred while developing internal-use software. |
Income Taxes | We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and 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 future years of differences between the tax bases of assets and liabilities and 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 a tax position in the financial statements only if that position is more likely than not to be sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties, if any, related to income tax matters in income tax expense. |
Stock-based Compensation | We account for our stock-based compensation under ASC 718 “Compensation - Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the shorter of the service period or the vesting period of the stock-based compensation. This guidance establishes standards for the accounting for transactions in which an entity exchanges 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. |
Convertible Instruments | The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with various accounting standards. ASC 480 “Distinguishing Liabilities From Equity” provides that instruments convertible predominantly at a fixed rate resulting in a fixed monetary amount due upon conversion with a variable quantity of shares (“stock settled debt”) be recorded as a liability at the fixed monetary amount. ASC 815 “Derivatives and Hedging” generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” ASC 815-40 provides that generally if an event is not within the entity’s control and could require net cash settlement, then the contract shall be classified as an asset or a liability. |
Product Development | Product development costs are included in selling, general and administrative expenses and consist of support, maintenance and upgrades of our website and our Platform and are charged to operations as incurred. |
Earnings (loss) Per Share | The Company follows ASC 260 “Earnings Per Share” for calculating the basic and diluted earnings (or loss) per share. Basic earnings (or loss) per share are computed by dividing earnings (or loss) available to common shareholders by the weighted-average number of 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 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. September 30, September 30, 2023 2022 Options 218,551 248,114 Stock awards - 10,195 Warrants 792,283 608,515 Convertible preferred stock 28,667 28,667 1,039,501 895,491 |
Business Segments | The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has one operating segment. |
Recently Issued Accounting Pronouncements | There have not been any recent changes in accounting pronouncements and ASU issued by the FASB that are of significance or potential significance to the Company except as disclosed below. In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): 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 be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. Generally, this new guidance 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 in purchase accounting. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. On January 1, 2023 the adoption of ASU 2021-08 did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 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 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 not-for-profit entities. 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 financing receivables. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The amendments should be applied prospectively. Early adoption of the amendments is permitted, including adoption in an interim period. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule Of Revenues | 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 |
Schedule Of Expected Deferred Revenue Recognition | 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 |
Schedule Of earn-out liability measured at fair value | 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 $ - |
Schedule Of Anti-dilutive Earnings Per Share | September 30, September 30, 2023 2022 Options 218,551 248,114 Stock awards - 10,195 Warrants 792,283 608,515 Convertible preferred stock 28,667 28,667 1,039,501 895,491 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Components Of Prepaid Expenses And Other Current Assets | 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 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule Of Carrying Amount Of Goodwill | 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 |
Schedule Of Intangible Assets | 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 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
DISCONTINUED OPERATIONS | |
Schedule of consulting services assets and liabilities | 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 |
Schedule of consulting services revenue statement of operation | Three months Ended September 30, 2023 2022 Revenue $ 1,085,980 $ 1,183,218 Cost of revenue 808,402 877,035 Gross Profit 277,578 306,183 Operating expenses: General and Administrative 1,049 3,290 Total operating expenses 1,049 3,290 Net income from discontinued operations $ 276,529 $ 302,893 Nine months Ended September 30, 2023 2022 Revenue $ 3,592,700 $ 2,651,919 Cost of revenue 3,056,524 1,806,395 Gross Profit 536,176 845,524 Operating expenses: General and Administrative 1,050 33,743 Total operating expenses 1,050 33,743 Net income from discontinued operations $ 535,126 $ 811,781 |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
LOANS PAYABLE | |
Schedule Of Loans Payable | 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 |
Schedule Of future principal payments | Year Ending December 31, 2023 (remainder of year) $ 3,913,197 2024 1,742,000 Total principal payments $ 5,655,197 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
STOCKHOLDERS EQUITY | |
Schedule Of Restricted Stock Grant Activity | 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 - |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
STOCK OPTIONS AND WARRANTS | |
Schedule Of Fair Value Of Stock Options Granted | September 30, 2023 Risk-free interest rates 4.95 % Expected life (in years) 0.3 Expected volatility 171.42 % Dividend yield - |
Schedule Of Stock Option Activity | 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 $ - |
Schedule Of Warrants Outstanding | 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 |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | $ 183,722 | $ 5,784,424 | $ 3,010,870 | $ 18,296,826 |
Recruiters on Demand [Member] | ||||
Revenue | 46,040 | 4,540,454 | 1,832,795 | 13,430,501 |
Consulting and staffing services [Member] | ||||
Revenue | 572 | 99,295 | 124,752 | 903,348 |
Software Subscriptions [Member] | ||||
Revenue | 160 | 693,495 | 413,101 | 2,198,232 |
Marketplace Solutions [Member] | ||||
Revenue | 136,950 | 309,680 | 517,782 | 1,005,670 |
Full time placement fees [Member] | ||||
Revenue | 0 | 141,500 | 20,000 | 759,075 |
Revenue Share [Member] | ||||
Revenue | $ 0 | $ 0 | $ 102,440 | $ 0 |
ORGANIZATION AND SUMMARY OF S_5
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Sep. 30, 2023 USD ($) |
Deferred revenue | $ 182,523 |
Recognize Q4 2023 | |
Deferred revenue | 151,814 |
Recognize 2024 | |
Deferred revenue | 30,709 |
Recruiters on Demand [Member] | |
Deferred revenue | 49,371 |
Recruiters on Demand [Member] | Recognize 2024 | |
Deferred revenue | 0 |
Recruiters on Demand [Member] | Recognize Q4 2023 | |
Deferred revenue | 49,371 |
Marketplace Solutions [Member] | |
Deferred revenue | 133,152 |
Marketplace Solutions [Member] | Recognize Q4 2023 | |
Deferred revenue | 102,443 |
Marketplace Solutions [Member] | Recognize 2024 | |
Deferred revenue | $ 30,709 |
ORGANIZATION AND SUMMARY OF S_6
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Balance At Beginning Of Period | $ 0 | $ 578,591 |
Change in fair value of earn-out liability | 0 | 26,604 |
Gain on debt extinguishment | (605,195) | |
Balance At Ending Of Period | $ 0 | $ 0 |
ORGANIZATION AND SUMMARY OF S_7
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Common Shares Equivalents, Outstanding | 1,039,501 | 895,491 |
Convertible Preferred Stock [Member] | ||
Common Shares Equivalents, Outstanding | 28,667 | 28,667 |
Stock awards [Member] | ||
Common Shares Equivalents, Outstanding | 0 | 10,195 |
Warrants [Member] | ||
Common Shares Equivalents, Outstanding | 792,283 | 608,515 |
Options [Member] | ||
Common Shares Equivalents, Outstanding | 218,551 | 248,114 |
ORGANIZATION AND SUMMARY OF S_8
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 05, 2023 | Aug. 16, 2023 | Jul. 25, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Description of company operation | 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 business day prior to the date of Closing (“Closing Consideration”). Following the issuance of the 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 such target. This transaction is awaiting shareholder approval and has not yet closed | The Company operates an On Demand recruiting platform digitally transforming the $28.5 billion employment and recruiting agencies industry | ||||||
International Sources Revenue | 0.01% | 1% | 0.02% | 3% | ||||
Fdic Limit | $ 15,253 | $ 15,253 | $ 612,691 | |||||
Recognized of deferred revenue | $ 200,000 | 200,000 | ||||||
Deferred Revenu | 182,523 | 182,523 | 215,219 | |||||
Allowance For Doubtful Accounts | 1,131,457 | 1,131,457 | $ 1,384,186 | |||||
Bad Debt Expense | 24,537 | 115,363 | 175,463 | $ 479,065 | ||||
Depreciation Expense | 6,257 | 3,603 | 18,772 | 4,084 | ||||
Advertising And Marketing Costs | $ 85,193 | $ 342,622 | $ 321,229 | $ 619,418 | ||||
Purchase price | $ 1,800,000 | |||||||
Antidilutive Securities | 1,039,501 | 895,491 | ||||||
Purchase of preferred convertible shares | 1,000,000 | |||||||
Preferred convertible shares value | $ 80,000 | |||||||
Common stock par value | $ 0.001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Concentration Risk | 22% | |||||||
Total Revenue Two [Member] | ||||||||
Concentration Risk | 12% | |||||||
Accounts Receivable | ||||||||
Concentration Risk | 63% | 28% | ||||||
Total Revenue | ||||||||
Concentration Risk | 35% | 18% | 59% | 10% | ||||
Customer Two [Member] | ||||||||
Concentration Risk | 10% | |||||||
Customer One | Accounts Receivable | ||||||||
Concentration Risk | 10% | 10% | ||||||
Customer One | Total Revenue | ||||||||
Concentration Risk | 10% | 10% | 10% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - Liquidity [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Working capital deficit | $ 6.9 |
Cash used in operating activities | $ 1.9 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Prepaid Expenses | $ 60,977 | $ 40,860 |
Prepaid advertisement | 146,500 | 200,000 |
Employee advance | 0 | 8,500 |
Prepaid Insurance | 0 | 3,302 |
Other Receivables | 48,755 | 2,886 |
Prepaid Expenses And Other Current Assets | $ 256,232 | $ 255,548 |
INVESTMENT IN AVAILABLE FOR S_2
INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES | ||
Cost Basis Of Securities Held | $ 59,720 | $ 42,720 |
Accumulated Unrealized Losses | 58,320 | 42,720 |
Number Of Shares Owned In Marketable Securities (in Shares) | $ 1,400 | $ 0 |
Shares of preferred convertible stock | 2,000 | |
Shares of preferred convertible stock value | $ 1,400 | |
Market Price Per Share (in Dollars Per Share) | $ 0 | |
Common stock shares received, shares | 2,000 | |
Common stock shares received, amount | $ 17,000 | |
Accounts receivable | $ 150,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Carrying Value, Beginning Balance | $ 7,101,084 | $ 7,718,842 |
Purchase Price Measurement Period Adjustment | 0 | (35,644) |
Impairment Losses | 0 | (582,114) |
Carrying Value, Ending Balance | $ 7,101,084 | $ 7,101,084 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Intangible Assets Gross | $ 13,972,539 | $ 13,972,539 |
Less Accumulated Amortization | 8,510,814 | 7,555,422 |
Total | 5,461,725 | 6,417,117 |
Less impairment | (3,838,425) | (3,838,425) |
Carrying Value | 1,623,300 | 2,578,692 |
Acquired Software | ||
Intangible Assets Gross | 3,785,434 | 3,785,434 |
Internal use software developed | ||
Intangible Assets Gross | 325,491 | 325,491 |
Customer Contracts | ||
Intangible Assets Gross | 8,093,787 | 8,093,787 |
License | ||
Intangible Assets Gross | 1,726,965 | 1,726,965 |
Domains | ||
Intangible Assets Gross | $ 40,862 | $ 40,862 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Nov. 21, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 05, 2022 | Dec. 31, 2020 | Mar. 31, 2019 | |
Intangible Assets | $ 11,600,000 | $ 1,910,072 | ||||||||
Impairment of software | $ 3,838,425 | |||||||||
Advertising consideration | $ 50,000 | 200,000 | ||||||||
Intellectual property | $ 1,000,000 | |||||||||
Gain on sale of intangible asset | 250,000 | $ 1,000,000 | ||||||||
Advertising cost | $ 146,500 | $ 146,500 | 200,000 | |||||||
Future Amortization Of Intangible Assets - 2023 | 280,426 | 280,426 | ||||||||
Future Amortization Of Intangible Assets - 2024 | 739,547 | 739,547 | ||||||||
Future Amortization Of Intangible Assets - 2025 | 455,683 | 455,683 | ||||||||
Future Amortization Of Intangible Assets - 2026 | 122,507 | 122,507 | ||||||||
Future Amortization Of Intangible Assets - 2027 (remainder Of Year) | 2,738 | 2,738 | ||||||||
Future Amortization Of Intangible Assets - Thereafter | 22,399 | 22,399 | ||||||||
Recognized Identifiable Assets Acquired Goodwill | 6,731,852 | $ 3,517,315 | ||||||||
Amortization Expense Of Intangible Assets | 321,963 | $ 952,170 | 955,391 | $ 2,877,882 | ||||||
Impairment Expense | 0 | $ 2,129,101 | 0 | $ 2,129,101 | $ 582,114 | $ 2,530,325 | ||||
CEG [Member] | ||||||||||
Advertising cost | $ 54,000 | $ 54,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details ) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts receivable, net of allowance for doubtful accounts of $270291 and $62427, respectively | $ 71,615 | $ 1,965,947 |
Accrued expenses and compensation | 175,084 | 410,957 |
Total current liabilities associated with discontinued operations | 543,698 | 2,643 |
Discontinued Operations [Member] | ||
Accounts receivable, net of allowance for doubtful accounts of $270291 and $62427, 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 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 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 | (68,169) | 1,885,267 | 847,516 | 6,965,480 |
General and Administrative | 1,534,339 | 3,714,066 | 5,255,043 | 12,876,714 |
Total operating expenses | 2,026,366 | 7,605,564 | 6,943,096 | 19,653,579 |
Discontinued Operations [Member] | ||||
Revenue | 1,085,980 | 1,183,218 | 3,592,700 | 2,651,919 |
Cost of revenue | 808,402 | 877,035 | 3,056,524 | 1,806,395 |
Gross Profit | 277,578 | 306,183 | 536,176 | 845,524 |
General and Administrative | 1,049 | 3,290 | 1,050 | 33,743 |
Total operating expenses | 1,049 | 3,290 | 1,050 | 33,743 |
Net income from discontinued operations | $ 276,529 | $ 302,893 | $ 535,126 | $ 811,781 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
DISCONTINUED OPERATIONS | ||
Net book value of assets and liabilities | $ 0 | $ 0 |
Number of common stock receive from FTRS, value | 634,605 | |
Number of common stock of FTRS | 500,000 | |
Cash consideration | $ 2,000,000 | |
Number of common stock receive from FTRS | 9,518,605 | |
Number of common stock receive from FTRS, per share amount | $ 0.0667 |
LOANS PAYABLE (Details)
LOANS PAYABLE (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
LOANS PAYABLE | ||
Promissory Notes Payable | $ 5,655,197 | $ 6,153,272 |
Factoring arrangemen | 0 | 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 | $ 0 | $ 1,260,343 |
LOANS PAYABLE (Details 1)
LOANS PAYABLE (Details 1) - Notes Payable [Member] | Sep. 30, 2023 USD ($) |
2023 (remainder of year) | $ 3,913,197 |
2024 | 1,742,000 |
Total principal payments | $ 5,655,197 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 07, 2023 | Aug. 16, 2023 | Oct. 19, 2022 | Apr. 30, 2022 | Apr. 27, 2022 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Factoring cost | $ 244 | $ 26,302 | $ 20,481 | $ 104,683 | |||||||
Value of warrants | $ 1,032,842 | ||||||||||
Description of 2 promissory 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 | ||||||||||
Issuance cost | 50,000 | $ 0 | |||||||||
Unamortised debt issuance cost and debt discount | (910,312) | $ (1,473,351) | |||||||||
CSNK Working Capital Finance Corp [Member] | |||||||||||
Description of prime rates | 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 | ||||||||||
Description of factoring arrangement | 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 | ||||||||||
Description of reserve funds | 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 | ||||||||||
Loan And Security Agreement [Member] | |||||||||||
Outstanding balance of promissory note | 998,743 | 1,377,370 | |||||||||
Unamortised debt issuance cost and debt discount | 872,258 | 622,630 | |||||||||
Promissory notes payable | 5,655,197 | 6,153,272 | |||||||||
Interest Rate | 12.75% | ||||||||||
Forgiven Principal Amount | $ 2,250,000 | ||||||||||
Forgiven amount first call | 2,000,000 | ||||||||||
Forgiven amount second call | 250,000 | ||||||||||
Lender fee | 45,600 | ||||||||||
Loan agreement amount due | $ 40,000 | ||||||||||
Issue of warrants to purchase | 47,103 | ||||||||||
Warrant exercisable | 5,580 | ||||||||||
Warrant exercise price | $ 30 | ||||||||||
Issue of warrants | 41,520 | ||||||||||
Warrant repurchase amount | $ 703,125 | ||||||||||
Factoring Arrangement Member | |||||||||||
Term Loan Outstanding Balance | 0 | 545,216 | |||||||||
Loan payable | 0 | 281,277 | |||||||||
Amounts due from the factor | 38,488 | 263,939 | |||||||||
Warrants One [Member | |||||||||||
Warrant exercise price | $ 30 | ||||||||||
August 16 2023 [Member] | |||||||||||
Exercise price per shares | $ 0.01 | ||||||||||
Value of warrants | $ 600,000 | ||||||||||
Cash payment | $ 600,000 | ||||||||||
February 2023 [Member] | |||||||||||
Outstanding balance of promissory note | 1,217,529 | 1,292,360 | |||||||||
May 6, 2021 [Member] | Paycheck Protection Program [Member] | |||||||||||
Proceeds From An Institutional Investor | $ 250,000 | ||||||||||
Maturity Date Of Debt | May 06, 2023 | ||||||||||
Interest Rate | 12% | ||||||||||
July 7, 2021 [Member] | Parrut acquisition agreement dated [Member] | |||||||||||
Proceeds From An Institutional Investor | $ 1,750,000 | ||||||||||
Maturity Date Of Debt | Jul. 01, 2023 | ||||||||||
Interest Rate | 6% | ||||||||||
Monthly Payments | 77,561 | ||||||||||
Outstanding balance of promissory note | $ 261,112 | 444,245 | |||||||||
August 27, 2021 [Member] | Novo Group acquisition [Member] | |||||||||||
Proceeds From An Institutional Investor | $ 3,000,000 | ||||||||||
Maturity Date Of Debt | Nov. 01, 2023 | Feb. 01, 2024 | |||||||||
Interest Rate | 6% | ||||||||||
Monthly Payments First 12 Months | 85,000 | ||||||||||
Monthly Payments For Months 13 Through 24 | 110,000 | ||||||||||
Monthly Payments For Months 25 Through 29 | 155,000 | ||||||||||
Monthly Payments For Months 30 | 152,357 | ||||||||||
Principal Balance Reduced, Amount | $ 600,000 | ||||||||||
August 17, 2022 [Member] | |||||||||||
Maturity Date Of Debt | Aug. 17, 2023 | ||||||||||
Interest Rate | 6% | ||||||||||
Unamortized debt issuance costs | $ 38,056 | 384,280 | |||||||||
Debt issuance costs recorded within accrued expenses | 50,000 | ||||||||||
Unamortized debt discounts | 1,073,055 | 726,831 | |||||||||
Promissory note issued | 1,111,111 | ||||||||||
Proceeds from promissory note | 960,000 | ||||||||||
Issuance cost | 40,000 | ||||||||||
Original issue discount | 111,111 | ||||||||||
Warrants granted value | $ 463,737 | ||||||||||
August 30, 2022 [Member] | |||||||||||
Maturity Date Of Debt | Aug. 30, 2023 | ||||||||||
Interest Rate | 6% | ||||||||||
Outstanding balance of promissory note | $ 1,194,445 | 839,115 | |||||||||
Promissory note issued | 1,305,556 | ||||||||||
Proceeds from promissory note | 1,175,000 | ||||||||||
Original issue discount | $ 130,556 | ||||||||||
Warrants granted | 54,398 | ||||||||||
Warrants granted value | $ 569,106 | ||||||||||
Unamortised debt issuance cost and debt discount | $ 0 | $ 466,441 |
STOCKHOLDERS EQUITY (Details )
STOCKHOLDERS EQUITY (Details ) - Restricted Stock - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Outstanding Rsu Beginning Balance | 9,733 | 9,733 |
Granted | 6,388 | |
Vested | (5,888) | |
Vested And Issued | (7,387) | (500) |
Vested And Issuable | (2,346) | |
Outstanding Rsu Ending Balance | 9,733 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||||||||
Jan. 06, 2022 | Sep. 18, 2020 | Aug. 17, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2020 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 05, 2023 | Dec. 31, 2022 | May 31, 2022 | Feb. 02, 2022 | May 13, 2020 | May 12, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Common stock, shares authorized | 6,666,667 | 6,666,667 | 100,000,000 | 250,000,000 | 31,250,000 | |||||||||||||||
Preferred Stock, Shares Outstanding | 86,000 | 86,000 | 86,000 | |||||||||||||||||
Preferred Stock, Shares issued | 86,000 | 86,000 | 86,000 | |||||||||||||||||
Common Stock Share Outstanding | 1,433,903 | 1,433,903 | 1,085,184 | |||||||||||||||||
Conversion Of Stock, Shares Converted | 2,000 | |||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.001 | $ 0.0001 | ||||||||||||||||
Series E Convertible Preferred Stock | ||||||||||||||||||||
Preferred stock, par value | $ 20 | |||||||||||||||||||
Beneficial ownership limitation | 4.99% | 4.99% | ||||||||||||||||||
Ownership limitation | 4.99% | 4.99% | ||||||||||||||||||
Share price | $ 4 | $ 4 | ||||||||||||||||||
Description of trigerring event under COD | 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 | |||||||||||||||||||
Preferred Stock Penalties [Member] | ||||||||||||||||||||
Additional shares of Series D Preferred Stock issued amount | $ 1,929,516 | $ 1,929,516 | $ 1,929,516 | $ 1,929,516 | ||||||||||||||||
Additional shares of Series D Preferred Stock issued | 106,134 | |||||||||||||||||||
Accrued related to Series E and Series F Preferred holders | $ 308,893 | |||||||||||||||||||
Accrued penalty amount | 308,798 | 308,798 | $ 308,798 | 2,238,314 | ||||||||||||||||
Accrual reclassified to equity | 106,134 | |||||||||||||||||||
Authorized capital amount increases | $ 200,000 | |||||||||||||||||||
Penalties to holders of preferred stock | $ 6,000,000 | |||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||
Common Share Issued | 7,515 | |||||||||||||||||||
Conversion Of Stock Share Issued Value | $ 473,000 | |||||||||||||||||||
Conversion Of Stock, Shares Converted | 7,515 | |||||||||||||||||||
Conversion Of Stock Converted Value | $ 321,000 | |||||||||||||||||||
Loss On Exchange Of Stock | $ 152,244 | |||||||||||||||||||
2023 Warrant [Member] | ||||||||||||||||||||
Purchase price of shares issued, price per share | $ 4.662 | |||||||||||||||||||
Shares issued | 130,000 | |||||||||||||||||||
Pre-funded warrants | 92,222 | |||||||||||||||||||
Issued a purchaser warrant | 222,222 | |||||||||||||||||||
Exercise price of warrants | $ 1.287 | |||||||||||||||||||
Warrant expire period | 5 years | |||||||||||||||||||
Proceed from issuance of warrant | $ 785,509 | |||||||||||||||||||
Equity issuance cost | $ 3,000,490 | |||||||||||||||||||
Pre-Funded Warrants price per share | $ 4.6062 | |||||||||||||||||||
Restricted Stock Units | ||||||||||||||||||||
Stock Issued For Services, Shares | 0 | 63,825 | ||||||||||||||||||
Granted | 14,773 | |||||||||||||||||||
Vested, fair value | $ 1,662,000 | |||||||||||||||||||
Recognized compensation expense | $ 446,507 | 152,143 | ||||||||||||||||||
Share-based compensation expenses | $ 0 | $ 148,836 | ||||||||||||||||||
Restricted Stock Units | Mr. Sohn | ||||||||||||||||||||
Vesting Period | two-year | |||||||||||||||||||
Restricted Stock Units | Vendor | ||||||||||||||||||||
Vested In Period, Shares | 56,325 | 7,500 | 1,467 | |||||||||||||||||
Stock Issued For Services, Shares | 2,133 | |||||||||||||||||||
Stock Issued For Services, Amount | 100,020 | $ 93,120 | ||||||||||||||||||
Prepaid services, expenses | 19,225 | |||||||||||||||||||
Services expenses | 6 | |||||||||||||||||||
Services future expenses | $ 30,175 | |||||||||||||||||||
Vested And Issuable, Shares | 500 | |||||||||||||||||||
Valued in period, shares | 63,825 | 2,133 | ||||||||||||||||||
Vested And Issuable | 7,500 | 7,500 | 667 | 500 | ||||||||||||||||
Expense related to restricted stock | $ 0 | $ 245,864 | $ 152,143 | $ 870,773 | ||||||||||||||||
Remaning Expenses | $ 27,000 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Dividend yield | 0% |
Minimum [Member] | |
Expected Life (in Years) | 3 months 18 days |
Expected Volatility | 171.42% |
Maximum [Member] | |
Risk-free Interest Rates | 4.95% |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - Stock options | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Option Outstanding Beginning Balance (in Shares) | shares | 247,008 |
Option Outstanding Ending Balance (in Shares) | shares | 218,552 |
Options Outstanding Granted (in Shares) | shares | 16,167 |
Options Outstanding Expired Or Cancelled | $ | $ (44,623) |
Options Exercisable | shares | 181,483 |
Weighted Average Exercise Price Exercisable | $ 47.25 |
Weighted Average Exercise Price Granted | 13.2 |
Weighted Average Exercise Price Expired Or Cancelled | 42.03 |
Weighted Average Exercise Price Outstanding Ending Balance | 43.38 |
Weighted Average Exercise Price Outstanding Beginning Balance | $ 45.75 |
Weighted Average Remaining Life (in Years), Beginning year | 2 years 9 months 18 days |
Weighted Average Remaining Life (in Years), Ending year | 3 years 1 month 2 days |
Weighted Average Remaining Life (in Years), Exercisable | 3 years 2 months 26 days |
Aggregate Intrinsic Value exercisable | $ | $ 0 |
Aggregate Intrinsic Value ending balance | $ | 0 |
Aggregate Intrinsic Value beginning balance | $ | $ 0 |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details 2) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
STOCK OPTIONS AND WARRANTS | |
Warrants Outstanding, Beginning balance | shares | 752,730 |
Warrants Outstanding, Exercised | shares | (185,795) |
Warrants Outstanding Issued | shares | 314,444 |
Warrants Outstanding, Expired or cancelled | shares | (89,097) |
Warrants Outstanding, Ending balance | shares | 792,283 |
Weighted Average Price Per Share, Beginning balance | $ / shares | $ 42.60 |
Weighted Average Price Per Share, Issued | $ / shares | 1.97 |
Weighted Average Price Per Share, Exercised | $ / shares | 2.87 |
Weighted Average Price Per Share, Expired or cancelled | $ / shares | 8.10 |
Weighted Average Price Per Share, Ending balance | $ / shares | $ 35.53 |
STOCK OPTIONS AND WARRANTS (D_4
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||
Aug. 10, 2023 | Jun. 08, 2023 | Jun. 03, 2023 | Feb. 03, 2023 | Jan. 09, 2023 | Dec. 08, 2022 | Jun. 02, 2022 | Apr. 07, 2022 | Apr. 05, 2022 | Apr. 04, 2022 | Apr. 02, 2022 | Mar. 11, 2022 | Jan. 10, 2022 | Jan. 06, 2022 | Oct. 19, 2023 | Aug. 17, 2023 | Jun. 30, 2023 | Mar. 22, 2023 | Feb. 28, 2023 | Oct. 19, 2022 | Sep. 22, 2022 | Aug. 30, 2022 | Jun. 27, 2022 | May 17, 2022 | Apr. 28, 2022 | Jan. 20, 2022 | Jan. 19, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Aug. 31, 2022 | |
Warrants for Service issued shares | 2,000 | |||||||||||||||||||||||||||||||||
Share issued | 1,433,903 | 1,433,903 | 1,085,184 | |||||||||||||||||||||||||||||||
Stock-based compensation expense | $ 343,951 | $ 765,743 | $ 954,317 | $ 2,544,898 | ||||||||||||||||||||||||||||||
Non-vested stock options (remainder of year) 2023 | 101,761 | 101,761 | ||||||||||||||||||||||||||||||||
Non-vested stock options periods 2024 | 261,044 | 261,044 | ||||||||||||||||||||||||||||||||
Non-vested stock options periods 2025 | 97,984 | 97,984 | ||||||||||||||||||||||||||||||||
Non-vested stock options periods 2027 | 1,021 | 1,021 | ||||||||||||||||||||||||||||||||
Non-vested stock options periods 2026 | 23,595 | 23,595 | ||||||||||||||||||||||||||||||||
Total unrecognized compensation cost | $ 485,405 | |||||||||||||||||||||||||||||||||
Debt discount | $ 0 | $ 1,212,006 | $ 135,161 | |||||||||||||||||||||||||||||||
Options granted to purchase common stock (in Shares) | 3,333 | 3,333 | 3,833 | 1,667 | 25,461 | 120,100 | 37,000 | 25,000 | 25,000 | 3,500 | 1,000 | 1,333 | 4,000 | 80,000 | 270,000 | 37,500 | 5,000 | 35,000 | 4,000 | 1,000 | ||||||||||||||
Value of warrants | $ 1,032,842 | |||||||||||||||||||||||||||||||||
Exercise price (in Dollars per share) | $ 3 | $ 4.05 | $ 2.85 | $ 6.75 | $ 15 | $ 1 | $ 2.03 | $ 2.12 | $ 2.12 | $ 2.47 | $ 43.05 | $ 36 | $ 39.60 | $ 3.30 | $ 1.10 | $ 1.31 | $ 1 | $ 1.07 | $ 1.60 | $ 36 | $ 36 | |||||||||||||
Description of vesting options | The options vest monthly through December 31, 2023 | The options will vest quarterly over four years, with the first portion vesting on September 8, 2023 | The options will vest quarterly over four years, with the first portion vesting on September 2, 2023 | The options will vest quarterly over four years, with the first portion vesting on April 9, 2023 | 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. | 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. | 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. | 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. | 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. | The options will vest quarterly over four years, with the first portion vesting on June 11, 2022 | The options vest quarterly over a four-year period | The options vested 50% at March 3, 2022 and 50% on April 3, 2022 | The options have a term of five years. The options will vest months over two years. | The options have a term of five years. The options vest immediately. | 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. | The options have a term of five years. The options vested immediately | 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. | The options vest quarterly over a four-year period | The options vest quarterly over a four-year period | |||||||||||||||
Warrants One [Member | ||||||||||||||||||||||||||||||||||
Share issued | 7,515 | |||||||||||||||||||||||||||||||||
Warrants Granted | 7,515 | 100,694 | ||||||||||||||||||||||||||||||||
Total debt proceeds | $ 1,032,842 | |||||||||||||||||||||||||||||||||
Excercise reduce price | $ 14.97 | |||||||||||||||||||||||||||||||||
Expected life (in years) | 5 years | |||||||||||||||||||||||||||||||||
Expected volatility | 175.47% | |||||||||||||||||||||||||||||||||
Risk-free interest rates, Maximum | 3.27% | |||||||||||||||||||||||||||||||||
Risk-free interest rates, Minimum | 3.04% | |||||||||||||||||||||||||||||||||
Common Stock Purchase Warrants [Warrants] | ||||||||||||||||||||||||||||||||||
Warrants, exercise price | $ 5.70 | |||||||||||||||||||||||||||||||||
Carriying value of warrants | $ 1,262,947 | |||||||||||||||||||||||||||||||||
Deferred equity costs | $ 10,400 | |||||||||||||||||||||||||||||||||
Transaction One [Member] | ||||||||||||||||||||||||||||||||||
Options granted to purchase common stock (in Shares) | 57,500 | 550,000 | 22,500 | |||||||||||||||||||||||||||||||
Exercise price (in Dollars per share) | $ 2.12 | $ 1.31 | $ 1.07 | |||||||||||||||||||||||||||||||
Description of vesting options | 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. | The options have a term of five years. The options will vest months over two years. | 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. | |||||||||||||||||||||||||||||||
Cogno Group Inc [Member] | ||||||||||||||||||||||||||||||||||
Cash payment for warrants | $ 600,000 | |||||||||||||||||||||||||||||||||
Value of warrants | $ 600,000 | |||||||||||||||||||||||||||||||||
Cavalry Fund I LP [Member] | ||||||||||||||||||||||||||||||||||
Warrants, exercise price | $ 5.70 | |||||||||||||||||||||||||||||||||
Carriying value of warrants | $ 503,643 | |||||||||||||||||||||||||||||||||
Investor [Member] | ||||||||||||||||||||||||||||||||||
Exercise price per share | $ 5.70 | |||||||||||||||||||||||||||||||||
Exercise price per share value | $ 92,222 | |||||||||||||||||||||||||||||||||
Common share issued | 92,222 | 38,804 | 54,768 | |||||||||||||||||||||||||||||||
Proceeds from warrants issued | $ 315,178 | |||||||||||||||||||||||||||||||||
Cashless exercised of warrants | 39,196 | |||||||||||||||||||||||||||||||||
August 17 2023 [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||||||
Warrants for Service issued shares | 92,222 | |||||||||||||||||||||||||||||||||
Description of purchase shares of Common Stock | 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 | |||||||||||||||||||||||||||||||||
Exercise price per share | $ 0.0015 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Apr. 30, 2023 | Mar. 24, 2022 | Feb. 18, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Nov. 30, 2021 | |
Recognized revenue | $ 0 | $ 22,674 | $ 0 | $ 236,921 | |||||
Complainant amount of promissory note | $ 500,000 | ||||||||
ERC Activity Member | |||||||||
Other income | $ 754,796 | 1,422,773 | |||||||
Finance cost | 327,073 | ||||||||
Advance loan on ERC Credit | 450,000 | ||||||||
Original issue discount | 133,333 | ||||||||
Interest income | $ 583,333 | ||||||||
Description of payment of loan | 80,528 | ||||||||
BKR Strategy Group | |||||||||
Promissory Note | $ 1,400,000 | ||||||||
Gain loss on settlement | $ 178,749 | $ 500,000 | |||||||
Interest rate on complainant amount of promissory note | 12% | ||||||||
Counterclaim Against Overbilling | $ 500,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Product development expenses | $ 84,871 | $ 467,605 | $ 411,433 | $ 1,150,464 | |
Operating expenses | 2,026,366 | 7,605,564 | 6,943,096 | 19,653,579 | |
Amount paid related services provided to director | 0 | 6,000 | 0 | 6,000 | |
Recruiter.com Mauritius [Member] | |||||
Product development expenses | $ 0 | $ 8,636 | 27,041 | 25,407 | |
Opptly [Member] | |||||
Operating expenses | $ 0 | $ 19,825 | |||
Monthly License Fee | $ 5,000 | ||||
Recruiter Annual Fee | $ 1,995 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Nov. 06, 2023 | Oct. 19, 2022 | Aug. 17, 2021 |
Default interest rate percenatge | 17.75% | 12% | |
Subsequent Event [Member] | |||
Default interest rate percenatge | 15% | ||
Mandatory due default amount | $ 1,434,920 |