What changed in Nixxy, Inc.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of Nixxy, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+419 added−287 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-16)
Top changes in Nixxy, Inc.'s 2024 10-K
419 paragraphs added · 287 removed · 163 edited across 6 sections
- Item 7. Management's Discussion & Analysis+185 / −127 · 90 edited
- Item 1. Business+135 / −105 · 38 edited
- Item 1A. Risk Factors+89 / −48 · 28 edited
- Item 3. Legal Proceedings+7 / −4 · 4 edited
- Item 5. Market for Registrant's Common Equity+2 / −2 · 2 edited
Item 1. Business
Business — how the company describes what it does
38 edited+97 added−67 removed34 unchanged
Item 1. Business
Business — how the company describes what it does
38 edited+97 added−67 removed34 unchanged
2023 filing
2024 filing
Biggest changeThe principles of our approach to community management include: ● Value : Each member of the recruiter network is an asset to our business. ● Understanding : We form relationships with a human touch and develop real understandings of recruiters’ business needs and capacities. ● Personal: Every On Demand recruiter has a named contact. ● Shared Success : We take pride in our community, and we incentivize success and connections. 14 Table of Contents Competition The market for online staffing and recruitment services is highly competitive, fragmented, and undergoing rapid changes following increasing demand, technological advancements, and shifting needs.
Biggest changeWe intend to continue to invest in various technology initiatives related to e-commerce and telecommunications, including website and platform development. 14 table of Contents Competition The market for online staffing and recruitment services is highly competitive, fragmented, and undergoing rapid changes following increasing demand, technological advancements, and shifting needs.
Corporate Information We operate virtually. Our principal mailing address is 123 Farmington Avenue, Suite 252, Bristol, CT 06010. Our telephone number is (855) 931-1500. Our website address is https://www.recruiter.com. The information contained on, or that can be accessed through, our site is not a part of this filing.
Corporate Information We operate virtually. Our principal mailing address is 123 Farmington Avenue, Suite 252, Bristol, CT 06010. Our telephone number is (855) 931-1500. Our website address is https://www.nixxy.com. The information contained on, or that can be accessed through, our site is not a part of this filing.
("CAB"), as documented in the Superior Court of California, County of Santa Clara, case number 24CV433086. CAB's complaint, filed on March 13, 2024, alleges that the Company failed to fulfill payment obligations under contracts with CAB's assignor, totaling approximately $213,899.94. CAB seeks recovery of the owed amounts, interest, attorney fees, costs, and other damages deemed appropriate by the court.
("CAB"), as documented in the Superior Court of California, County of Santa Clara, case number 24CV433086. CAB's complaint, filed on March 13, 2024, alleges that the Company failed to fulfil payment obligations under contracts with CAB's assignor, totalling approximately $213,899.94. CAB seeks recovery of the owed amounts, interest, attorney fees, costs, and other damages deemed appropriate by the court.
For businesses, this includes sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. We earn revenue as we complete agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer.
For businesses, this includes job postings, sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. We earn revenue by completing agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer.
Further, our current Chairman was retained as a consultant prior to the Merger with the understanding that if the Merger occurred, he would be appointed as our Executive Chairman. On May 13, 2020, we effected a reincorporation from the State of Delaware to the State of Nevada.
Further, our current Chairman was retained as a consultant prior to the Merger with the understanding that if the Merger occurred, he would be appointed as our Executive Chairman. 6 table of Contents On May 13, 2020, we effected a reincorporation from the State of Delaware to the State of Nevada.
The full-time placement fee is typically either a percentage of the referred candidates’ first year base salary or an agreed-upon flat fee. · Marketplace: Our “Marketplace” category comprises services for businesses and individuals that leverage our online presence.
The full-time placement fee is typically either a percentage of the referred candidates’ first year base salary or an agreed-upon flat fee. · Marketplace: Our Marketplace category comprises services for businesses and individuals that leverage our online presence and career communities.
Our resume distribution service allows a job seeker to upload his/her resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service.
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.
Given the early stage of the litigation, the Company is unable to predict the outcome of the case or estimate the possible loss or range of loss, if any. On April 1, 2024, Recruiter.com Group, Inc. ("the Company") became involved in legal proceedings initiated by Creditors Adjustment Bureau, Inc.
The Company has additionally filed a counterclaim. Given the early stage of the litigation, the Company is unable to predict the outcome of the case or estimate the possible loss or range of loss, if any. On April 1, 2024, Recruiter.com Group, Inc. ("the Company") became involved in legal proceedings initiated by Creditors Adjustment Bureau, Inc.
In some cases, we earn a percent of revenue a business receives from attracting new clients by advertising on our online platform. Businesses can also pay us to post job openings on our proprietary job boards to promote open job positions they are trying to fill.
In some cases, we earn a percentage of revenue a business receives from attracting new clients by advertising on the Platform. Companies can also pay us to post job openings on our proprietary job boards to promote open job positions they are trying to fill.
In addition to its work with direct clients, we categorize all online advertising and affiliate marketing revenue as Marketplace. For individuals, Marketplace includes services to assist with career development and advancement, including a resume distribution service which involves promoting these job seekers’ profiles and resumes to assist with their procuring employment, and upskilling and training.
In addition to our work with direct clients, we categorize all online advertising and affiliate marketing revenue as Marketplace revenue. For individuals, Marketplace includes services to assist with career development and advancement, including a resume distribution service that promotes these job seekers’ profiles and resumes to help with their procuring employment, upskilling, and training.
On February 13, 2024, the Company obtained the consent of Job Mobz to proceed with the transactions contemplated by the Job Mobz Agreement without obtaining such shareholder approval. This transaction has not yet closed.
On February 13, 2024, the Company obtained the consent of Job Mobz to proceed with the transactions contemplated by the Job Mobz Agreement without obtaining such shareholder approval. The transaction closed in September 2024.
Investors should not rely on any such information in deciding whether to purchase our securities.
Investors should not rely on any such information in deciding whether to purchase our securities. 18 table of Contents
Our fiscal year end was also changed, as of the Effective Date, from March 31 to December 31. Immediately prior to the completion of the Merger, Pre-Merger Recruiter.com owned approximately 98% of our outstanding shares of common stock (“Common Stock”).
Following the Merger, on May 9, 2019, we changed our corporate name to Recruiter.com Group, Inc. Our fiscal year end was also changed, as of the Effective Date, from March 31 to December 31. Immediately prior to the completion of the Merger, Pre-Merger Recruiter.com owned approximately 98% of our outstanding shares of common stock (“Common Stock”).
Legal Proceedings 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.
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.
Proceedings in the other lawsuit remain ongoing. On September 6, 2023, Recruiter.com Group, Inc. (the "Company") was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain.
Proceedings in the other lawsuit remain ongoing. The Company has been unable to collect against BKR Strategy Group due to lack of response and communication. On September 6, 2023, Recruiter.com Group, Inc. (the "Company") was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain.
Except for the aforementioned proceedings described above, as of the date of this filing, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and, to our knowledge, there are no material proceedings to which any of our directors, executive officers, or affiliates are a party adverse to us or which have a material interest adverse to us. 16 Table of Contents Employees As of April 3, 2024, the Company employed 4 full time employees and a number of independent contractors.
Furthermore, management believe it is more likely than not that we will prevail. 17 table of Contents Except for the aforementioned proceedings described above, as of the date of this filing, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and, to our knowledge, there are no material proceedings to which any of our directors, executive officers, or affiliates are a party adverse to us or which have a material interest adverse to us Employees As of March 15, 2025, the Company employed 3 full time employees and a number of independent contractors.
Revenue Share : We refer certain clients to a third party in exchange for a referral fee. The amount of the referral fee is dependent upon whether the referral is an existing client of ours and what services we currently provide that client, or a client of a third party who is not historically serviced by us.
The amount of the referral fee is dependent upon whether the referral is an existing client of ours and what services we currently provide that client, or a client of a third party who is not historically serviced by us. Referral fees under the revenue share arrangement are subject to certain minimum and maximum payout amounts.
We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly schedule of invoicing. Through a strategic sale to Futuris, Inc. In October, 2023, we exited the Consulting and Staffing line of business, and consider it discontinued.
We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly schedule of invoicing. Through a strategic sale to Futuris, Inc.
As such, the fair value of the transaction consideration received on the closing date would be $551,127. 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 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”).
Upon the employer hiring one or more of our candidate referrals, we earned a “full-time placement fee”, an amount separately negotiated with each employer client.
Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earned a “full-time placement fee”, an amount separately negotiated with each employer client.
These “three uniques” form our competitive “moat,” which management believes would be highly challenging for any competitor to replicate. Intellectual Property The protection of our intellectual property is an essential aspect of our business. We own our domain names and trademarks relating to our website’s design and content, including our brand name and various logos and slogans.
Intellectual Property The protection of our intellectual property is an essential aspect of our business. We own our domain names and trademarks relating to our website’s design and content, including our brand name and various logos and slogans.
Specific projects include: · Improvements in the user interface of our career communities · Improvements in automation of our On Demand recruiting services 13 Table of Contents Sales and Marketing Strategy Our sales and marketing strategy is centered around driving cost-effective awareness of our brand and the benefits of our platform among recruiters and employers of all sizes, from small businesses to Fortune 100 companies.
Sales and Marketing Strategy Our sales and marketing strategy has historically been centered around driving cost-effective awareness of our brand and the benefits of our platform among recruiters and employers of all sizes, from small businesses to Fortune 100 companies.
Facilities We operate virtually and from time to time in leased flexible office space, such as WeWork offices. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations. Legal Proceedings We are currently pursuing two related collections matters against BKR Strategy Group.
Inflation The Company generally may be impacted by rising costs for certain inflation-sensitive operating expenses such as labor and employee benefits. The Company believes inflation could have a material impact to pricing and operating expenses in future periods due to the state of the economy and current inflation rates.
Inflation The Company generally may be impacted by rising costs for certain inflation-sensitive operating expenses such as labor and employee benefits.
We generated full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we refer. Employers alert us of their hiring needs through our Platform, or other communications. We sourced qualified candidate referrals for the employers’ available jobs through independent recruiter users that access the Platform and other tools.
Employers alert us of their hiring needs through our Platform, or other communications. We sourced qualified candidate referrals for the employers’ available jobs through independent recruiter users that access the Platform and other tools. We supported and supplemented the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team.
We rely upon a combination of trademarks, trade secrets, copyrights, confidentiality procedures, contractual commitments, and other legal rights to establish and protect our intellectual property. We generally enter into confidentiality agreements and invention or work product assignment agreements with our employees and consultants to control access to and clarify ownership of our software, documentation, and other proprietary information.
We rely upon a combination of trademarks, trade secrets, copyrights, confidentiality procedures, contractual commitments, and other legal rights to establish and protect our intellectual property.
All share and per share data in the accompanying consolidated financial statements and footnotes and throughout this annual report has been retroactively adjusted to reflect the effects of the reverse stock split. 6 Table of Contents Market Opportunity Industry Overview Employers invest significant amounts of capital in finding qualified employees, the practice of “talent acquisition.” Market opportunities within talent acquisition are diverse.
All share and per share data in the accompanying consolidated financial statements and footnotes and throughout this annual report has been retroactively adjusted to reflect the effects of the reverse stock split.
The Company is currently reviewing the complaint and intends to defend itself vigorously. At this stage, the Company is unable to predict the outcome of the case or estimate the potential financial impact.
The Company is currently in ongoing legal communications about the complaint and intends to defend itself vigorously. At this stage, the Company is unable to predict the outcome of the case or estimate the potential financial impact. November 20, 2024, Recruiter.com Inc. has been named as a defendant in a lawsuit filed by HireTeammate, Inc.
At the effective time of the Merger, our newly formed wholly owned subsidiary merged with and into Pre-Merger Recruiter.com, with Pre-Merger Recruiter.com continuing as the surviving corporation and as our wholly owned subsidiary. Following the Merger, on May 9, 2019, we changed our corporate name to Recruiter.com Group, Inc.
(“Pre-Merger Recruiter.com”), an affiliate of the Company, pursuant to a Merger Agreement and Plan of Merger, dated March 31, 2019 (the “Merger”). At the effective time of the Merger, our newly formed wholly owned subsidiary merged with and into Pre-Merger Recruiter.com, with Pre-Merger Recruiter.com continuing as the surviving corporation and as our wholly owned subsidiary.
The costs of our revenue primarily consist of employee costs, third-party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of our gross margin. 8 Table of Contents Disrupting an Industry - Recruit Talent Faster We believe we are fundamentally modernizing the recruiting process by digitizing and democratizing the recruiting process.
We record referral fees earned under our revenue share arrangement on a net basis. 12 table of Contents The costs of our revenue primarily consist of employee costs, third-party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of our gross margin.
As of April 3, 2024, our trademarks include the terms “Recruiter.com,” “OneWire,” and “Matchbook.” The Company also has trademarks in the process of becoming registered, which include “Mediabistro,” “Recruiter Index,” and “MyRecruiter.” 15 Table of Contents Government Regulation We are subject to a number of U.S. federal and state and foreign laws and regulations that apply to internet companies and businesses that operate online marketplaces connecting businesses with recruiters.
Government Regulation We are subject to a number of U.S. federal and state and foreign laws and regulations that apply to internet companies and businesses that operate online marketplaces connecting businesses with recruiters.
Most of our new recruiter and employer registrations come from direct navigation to our website through unpaid search engine results listings, social media, and other content-based, no-cost referrals. Sales Strategy Most of our sales opportunities are derived from internet marketing and content strategies, which generate interest and traffic from search engines, such as Google, which index our website content.
Most of our new recruiter and employer registrations come from direct navigation to our website through unpaid search engine results listings, social media, and other content-based, no-cost referrals Public Relations For PR and marketing purposes, we rely mostly on the continued development of our thought leadership content.
We have the unique ability to survey our vast network of independent recruiting and talent acquisition specialists to uncover job market trends. Given the Recruiter Index’s ® consistent media appearances beginning in June 2020, including on CNBC, there appears to be strong demand for leading labor market indicators.
Given the Recruiter Index’s ® consistent media appearances beginning in June 2020, including on CNBC, there appears to be strong demand for leading labor market indicators. 13 table of Contents Community Management We consider our community management and social media groups an important asset and part of our go-to-market and overall marketing strategy.
To round out our offerings, we provide other talent acquisition support services, including job posting, consulting, and staffing. The Company is currently undergoing a strategic transformation, having sold its staffing business in 2023 and planning to sell its Recruiter.com website in 2024.
(“Upsider”), Recruiter.com OneWire Inc. (“OneWire”), and Recruiter.com Consulting, LLC (“Recruiter.com Consulting”). The Company formed a new subsidiary, AuraLink AI, Inc. (“AuraLink”) to house its new telecom business. The Company is currently undergoing a strategic transformation, having sold its staffing business in 2023 and its Recruiter.com website in 2024.
Corporate History We were incorporated in February 2015 as a Delaware corporation. Effective March 31, 2019 (the “Effective Date”), we completed a merger with Recruiter.com, Inc. (“Pre-Merger Recruiter.com”), an affiliate of the Company, pursuant to a Merger Agreement and Plan of Merger, dated March 31, 2019 (the “Merger”).
Accordingly, there can be no assurance that the Company will complete the CognoGroup Spin-out or otherwise consummate the transaction in its currently proposed form, if at all. Corporate History We were incorporated in January 2015 as a Delaware corporation. Effective March 31, 2019 (the “Effective Date”), we completed a merger with Recruiter.com, Inc.
ITEM 1. BUSINESS Overview Recruiter.com Group, Inc., a Nevada corporation (along with its subsidiaries, “we”, “the Company”, “us”, and “our”), is a holding company that, through its subsidiaries, operates an On Demand recruiting platform aimed at transforming the $46.7 billion dollar Employment and Recruiting Agency industry (Per IBIS World Employment& Recruiting Agencies in the US 2005-2030).
ITEM 1. BUSINESS Overview Nixxy Inc., a Nevada corporation (along with its subsidiaries, “we”, “Nixxy”, “the Company”, “us”, and “our”), is a holding company that, through its subsidiaries, has historically operated an On Demand recruiting platform, including on-demand contract recruiting, job board platforms, recruitment education services, and a candidate marketing software. Recently, the Company acquired the license from GoLogiq, Inc.
The Company generally may continue to be impacted by corporate layoffs of professional employees, if they are substantive, long-term, and/or widespread. Operating Businesses and Revenue We generate revenue or have generated from the following activities: · Software Subscriptions : We offered a subscription to our web-based platforms that help employers recruit talent.
We evaluate opportunities to acquire complementary businesses and personnel in furtherance of our ongoing strategy to utilize data to disrupt specific old-line industry sectors. 11 table of Contents Our Recruiting Services Operating Businesses and Revenue We have historically generated revenue from the following activities: · Software Subscriptions : We offer a subscription to our web-based platforms that help employers recruit talent.
Under the GOLQ Licensing Agreement, GOLQ grants the Company a worldwide, exclusive license (the “GOLQ License”) to the Company to develop its fintech technology (the “GOLQ Technology”) and sell products derived thereof, including its Createapp, Paylogiq, Gologiq, and Radix AI technology and products (the “Licensed Products”), for a term of 10 years, with automatic two (2) year renewals as further described therein (the “Term”).
(“GoLogiq”), to operate its fintech technology (the “GOLQ Technology”) and sell products derived thereof, including its Createapp, Paylogiq, Gologiq, and Radix AI technology and products.
Removed
The Company offers recruiting related services, including on-demand contract recruiting, job board platforms, recruitment education services, and a candidate marketing software. We have seven operating 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”), and Recruiter.com Consulting, LLC (“Recruiter.com Consulting”).
Added
Additionally, in February 2025, the Company acquired certain assets from Savitr Tech OU, an Estonian corporation (“Savitr”) specializing in telecommunications and software development, with a focus on billing systems, AI integration, wholesale long distance interconnections and sales, and is the owner of associated and intellectual property. We have three operating subsidiaries: Recruiter.com Recruiting Solutions LLC (“Recruiting Solutions”); AuraLink AI, Inc.
Removed
Additionally, the Company owns a controlling interest in Atlantic Energy Solutions, Inc., a Colorado company that is traded on the OTC Markets (OTC:AESO). For employers needing talent acquisition services, we place independent recruiters from our network with our clients on a project basis.
Added
(“AuraLink”) housing the Company’s new telecom business; and, a controlling interest in Atlantic Energy Solutions, Inc., a Colorado company that is traded on the OTC Markets (OTC:AESO) and is currently in process of being renamed CognoGroup (“Atlantic Energy”). In addition, the Company owns six non-operating subsidiaries: Recruiter.com, Inc., VocaWorks, Inc. (“VocaWorks”), Recruiter.com Scouted Inc. (“Scouted”), Recruiter.com Upsider Inc.
Removed
The Company has announced plans to shift its focus, along with its license agreement with GoLogiq, and spin out the recruitment related businesses to Atlantic Energy Solutions, which is currently undergoing a name change to CognoGroup, Inc. There can be no assurance that the Company will be able to complete its planned spin out and strategic transformation.
Added
The Company has begun to substantially shift its focus and direction, as represented in the license agreement with GoLogiq, as described herein, the sale of the Recruiter.com brand, and the acquisition of Savitr technology and assets.
Removed
On June 5, 2023, the Company 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.
Added
These developments reflect a major shift in our core revenue lines and business focus and a significant transition in our strategic priorities and operational framework, indicating a fundamental change in the Company's trajectory. These acquisitions and new relationships demonstrate Nixxy’s changing strategic focus.
Removed
On February 23, 2024, the Company entered into a certain Technology License and Commercialization Agreement with GoLogiq, Inc. that supersedes and replaces in its entirety the GOLQ Agreement, as amended by the August 29 Amendment and the August 18 Amendment.
Added
We have sold or spun out many of our legacy recruitment businesses and continue to undergo an internal reorganization (the “CognoGroup Spin-out”) to separate our historical assets from our new technology operations. Through these developments, we aim to reposition ourselves as a telecom and AI-technology innovator while retaining partial interests in our previous ventures.
Removed
In exchange with such license, the Company will issue to GOLQ such number of shares of Company common stock that represents 19.99% of the number of issued and outstanding shares of the Company common stock on the business day prior to the effective date as defined therein (the “Shares”).
Added
Recent Developments Savitr Transaction On February 19, 2025, the Company entered into an Asset Purchase Agreement with Savitr (the “Savitr Agreement”). Savitr is a private company specializing in telecommunications and software development, with a focus on billing systems, AI integration, wholesale long distance interconnections and sales; and is the owner of associated and intellectual property.
Removed
Following the issuance of the Shares, GOLQ will own 16.66% of the issued and outstanding shares of the Company common stock. In addition, the Company shall pay to GOLQ a royalty of eight percent (8%) of net sales of Licensed Products, as defined therein, during the Term.
Added
Pursuant to the Savitr Agreement, the Company acquired 100% of Savitr’s assets related to billing and AI systems, hereby referred to as “TKOS Systems.” The software acquired from Savitr includes AI integration, wholesale long distance contracts, and the accompanying interconnections in identified contracts, and associated intellectual property as defined therein. 5 table of Contents Mexedia Agreement On February 24, 2025, Nixxy, Inc.
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Further, GOLQ grants to the Company the option to purchase the GOLQ Technology and the Licensed Products for a purchase price of $400,000 for the duration of the Term, subject to shareholder approval if required under applicable laws and regulations at the time of notice of exercise.
Added
(the “Company” or “Nixxy”) announced that it entered into a twelve-month contract with Mexedia SpA (“Mexedia”), an Italian technology and communications provider (the “Mexedia Agreement”). Under the Mexiedia Agreement, commencing on or before May 1, 2025, the Company may provide Mexedia SMS services over its newly integrated cloud-based platform that helps carriers and operators aggregate wholesale SMS messaging.
Removed
On March 28, 2024, the Company and GoLogiq entered into an Amendment to Technology License and Commercialization Agreement (the “Amendment”). Under the Amendment, the Company and GoLogiq agreed to and added Section 3.3 to further detail technical assistance from GOLQ to the Company.
Added
The Company has engineered its port provisioning to scale dynamically and support up to $10,000,000 in revenue per month for twelve calendar months. The Mexedia Agreement will renew automatically thereafter, subject to either party's right of termination upon proper notice.
Removed
In addition, Section 5.1 was amended such that the royalty was lowered from eight percent (8%) to five percent (5%) for which the Company granted to GoLogiq a warrant to purchase two hundred ninety-two thousand (292,000) shares of Company Common Stock (the “Warrant”) for a price equal to $0.01 per share (the “Exercise Price”).
Added
The Company will also be layering its enhanced AI platform for dynamic billing and quality and price-based routing, with the multitude of carriers it interconnects with. Aqua Software Agreement On March 28, 2025, the Company entered into an Asset Purchase Agreement with Aqua Software Technologies Inc., a private Canadian corporation.
Removed
The Warrant may be exercised at any time commencing upon the date that is six (6) months from the Effective Date and terminating at 5:00 P.M., New York time, on the three (3) year anniversary of the Effective Date, unless the closing sale price for the common stock of the Company has closed at or above $5.00 for ten consecutive trading days.
Added
Pursuant to the Agreement, the Company agreed to acquire certain billing and AI software assets, including associated intellectual property. The purchase price consisted of $50,000 in cash payable on close and the remaining $50,000 payable within the 30 days of closing, and the equity consideration of $3,800,000 payable in restricted shares of the Company’s common stock.
Removed
Further, the Amendment contains a blocker provision that limits shares issuable under the Warrant such that the shares beneficially owned by GoLogiq does not exceed 9.99% of the total number of issued and outstanding shares of the Company’s Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). 5 Table of Contents On March 5, 2024, the Company amended the August 16, 2023, agreement.
Added
The number of shares to be issued shall be determined by dividing the purchase price by the closing price of Company’s shares on NASDAQ on March 28, 2025, of $1.82 per share, which amounts to a total number of shares to be issued being 2,087,912 Shares.The transaction was executed on March 29, 2025.
Removed
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”).
Added
CognoGroup Spin-Off On February 12, 2024, our Board of Directors approved a reorganization of the Company (the “Reorganization”), which the shareholders subsequently approved, that contemplates segregating certain existing business assets and certain liabilities into our subsidiary, Atlantic Energy Solutions, Inc. (“Atlantic Energy”), and thereafter effecting a spin-out of that entity.
Removed
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.
Added
Following such spin-out, Atlantic Energy is expected to be renamed as CognoGroup, Inc. (“CognoGroup”), and we refer to the contemplated transaction as the “CognoGroup Spin-out.” The Company remains committed to pursuing a spin-out of its historical business assets to better align the Company’s strategic focus.
Removed
On March 5, 2024, the Company entered into an amendment to the August 16, 2023, Asset Purchase Agreement with Job Mobz, resulting in the extension of the closing date to June 30, 2024. Furthermore, the Company received non-refundable payments totaling $250,000 from Job Mobz in April of 2024, per the terms of the latest amendment.
Added
However, the final structure, scope of assets, and exact liabilities to be included in the CognoGroup Spin-out are currently under strategic evaluation.
Removed
The payment will be credited towards and count against the cash portion of the Purchase Price from the original Asset Purchase Agreement.
Added
As previously contemplated, substantially all of the Company’s historical business and operations (including, for example, Mediabistro, Job Mobz stock, CandidatePitch, and RecruitingClasses.com) would be transferred to CognoGroup, excluding certain technology licenses (such as the GoLogiq license) and certain newly acquired assets (such as shares of Savitr).
Removed
Although the approval of the Job Mobz Agreement and the transactions contemplated therein were not required to be approved by the shareholders of the Company pursuant to the Nevada Revised Statutes, the rules and regulation of Nasdaq or the Company’s bylaws, the Company previously agreed, pursuant to the terms of the Job Mobz Agreement to seek stockholder approval of the transactions contemplated thereby, and included such proposal in its Proxy Statement filed with the Commission on September 15, 2023, and amended on November 8, 2023, November 24, 2023, December 8, 2023, and December 11, 2023.
Added
Management remains committed to undertaking the CognoGroup Spin-out in a manner that best serves the interests of our shareholders. Nevertheless, the timing, feasibility, and ultimate terms of the transaction are still being evaluated, and evolving market conditions, regulatory considerations, or strategic imperatives may necessitate modifications to the structure or composition of the proposed spin-out.
Removed
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.
Added
On September 27, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to change the legal name of the Company from Recruiter.com Group, Inc. to Nixxy, Inc., effective as of December 1, 2024.
Removed
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. To prepare and effectuate the spin out of Atlantic Energy Solutions, Inc.
Added
Telecommunications Industry Market Opportunity Following our shift away from recruitment, we are now broadly focused on leveraging artificial intelligence (“AI”) across multiple industries, including in the telecommunications industry.
Removed
(currently being renamed CognoGroup), on February 13, , 2024, the Board authorized certain corporate actions, including the transfer of assets and liabilities between subsidiaries of the Company, the renaming of Recruiter.com Recruiting Solutions, LLC to CognoGroup, LLC, and the reorganization of Recruiter.com Recruiting Solutions, LLC to a subsidiary of Atlantic Energy Solutions, Inc.
Added
While our current initiatives emphasize AI-driven technologies in telecommunications, such as cloud-based platforms capable of routing, billing, and managing large volumes of SMS and other communications services in real time, we remain open to opportunistic acquisitions that bring industry-specific AI use cases.
Removed
Additionally, the Board of Directors authorized that management may take such steps necessary to change the name of Recruiter.com Group, Inc. to reflect its purpose and a corresponding change to the company’s stock symbol.
Added
We believe these flexible capabilities will allow us to continuously adapt to new market opportunities and pursue high-potential growth sectors, including but not limited to the global wholesale telecom market, where AI-driven solutions can streamline operations, improve efficiency, and enhance margins.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
28 edited+61 added−20 removed97 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
28 edited+61 added−20 removed97 unchanged
2023 filing
2024 filing
Biggest changeThere may be additional risks that we do not know of or that we believe are immaterial that could also impair our business and financial condition. 17 Table of Contents Risks Related to Our Business and Industry There is substantial doubt regarding our ability to continue as a going concern absent obtaining adequate new debt or equity financing and achieving sufficient sales levels .
Biggest changeRisks Related to Our Business and Industry There is substantial doubt regarding our ability to continue as a going concern absent obtaining adequate new debt or equity financing and achieving sufficient sales levels . We anticipate that we will continue to lose money for the foreseeable future.
If these providers increase the cost of their services, we may have to increase the fees to use the Platform, which could cause us to lose clients, or we may have to assume those increased costs, and our operating results may be adversely impacted. 20 Table of Contents Because we have historically had arrangements with related parties affecting a significant part of our operations, such arrangements may not reflect terms that would otherwise be available from unaffiliated third parties .
If these providers increase the cost of their services, we may have to increase the fees to use the Platform, which could cause us to lose clients, or we may have to assume those increased costs, and our operating results may be adversely impacted. 23 table of Contents Because we have historically had arrangements with related parties affecting a significant part of our operations, such arrangements may not reflect terms that would otherwise be available from unaffiliated third parties .
Even if we are successful in establishing and maintaining these strategic relationships with third parties, they may not result in the growth of our client base or increased revenue. 21 Table of Contents We rely in part on certain software that we license from related and third parties as part of our service offerings, and if we were to lose the ability to use such software our business and operating results would be materially and adversely affected.
Even if we are successful in establishing and maintaining these strategic relationships with third parties, they may not result in the growth of our client base or increased revenue. 24 table of Contents We rely in part on certain software that we license from related and third parties as part of our service offerings, and if we were to lose the ability to use such software our business and operating results would be materially and adversely affected.
Given our limited operating history, we may be unable to effectively implement our business plan which could materially harm our business or cause us to scale down or cease our operations. 19 Table of Contents If we are unable to respond to technological advancements and other changes in our industry by developing and releasing new services, or improving our existing services, in a timely and cost-effective manner or at all, our business could be materially and adversely affected.
Given our limited operating history, we may be unable to effectively implement our business plan which could materially harm our business or cause us to scale down or cease our operations. 22 table of Contents If we are unable to respond to technological advancements and other changes in our industry by developing and releasing new services, or improving our existing services, in a timely and cost-effective manner or at all, our business could be materially and adversely affected.
Our management has determined that there is substantial doubt about our ability to continue as a going concern and the report of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2023, and 2022 includes an explanatory paragraph with respect to the foregoing.
Our management has determined that there is substantial doubt about our ability to continue as a going concern and the report of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2024, and 2023 includes an explanatory paragraph with respect to the foregoing.
If we record impairment charges related to our goodwill and long-lived assets, our operating results would likely be materially and adversely affected. 23 Table of Contents If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
If we record impairment charges related to our goodwill and long-lived assets, our operating results would likely be materially and adversely affected. If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Given our limited capital, any delays or unexpected costs arising from these transactions could strain our financial resources, forcing us to reallocate funds from other critical areas of our business or seek additional capital at unfavorable terms. Moreover, the contingencies associated with these transactions introduce uncertainty regarding their ultimate benefit to our company.
Given our limited capital, any delays or unexpected costs arising from these transactions could strain our financial resources, forcing us to reallocate funds from other critical areas of our business or seek additional capital at unfavorable terms. 26 table of Contents Moreover, the contingencies associated with these transactions introduce uncertainty regarding their ultimate benefit to our company.
As the result of our purchase of certain assets of Genesys in March 2019 and Scouted, OneWire, Parrut, Upsider and Novo Group in 2021, we have a significant amount of long-lived intangible assets and goodwill on our consolidated balance sheet. Under the Generally Accepted Accounting Principles in the U.S.
As the result of our purchase of certain assets of Genesys in March 2019 and Scouted, OneWire, Parrut, Upsider and Novo Group in 2021, and the Gologiq license in 2024, we have a significant amount of long-lived intangible assets and goodwill on our consolidated balance sheet. Under the Generally Accepted Accounting Principles in the U.S.
This determination was based on the following factors: (i) used cash in operations of approximately $0.9 million in 2023, and our available cash as of the date of this filing will not be sufficient to fund our anticipated level of operations for the next 12 months; (ii) we will require additional financing for the fiscal year ending December 31, 2024, to continue at our expected level of operations; and (iii) if we fail to obtain the needed capital, we will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations.
This determination was based on the following factors: (i) used cash in operations of approximately $4.1 million in 2024, and our available cash as of the date of this filing will not be sufficient to fund our anticipated level of operations for the next 12 months; (ii) we will require additional financing for the fiscal year ending December 31, 2025, to continue at our expected level of operations; and (iii) if we fail to obtain the needed capital, we will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations.
For the year ended December 31, 2022, one customer accounted for more than 10% of total revenue, at 14%. Any termination of a business relationship with, or a significant sustained reduction in business from, one or more of these customers could have a material adverse effect on our operating results and cash flows.
For the year ended December 31, 2023, one customer accounted for more than 10% of total revenue, at 57%. Any termination of a business relationship with, or a significant sustained reduction in business from, one or more of these customers could have a material adverse effect on our operating results and cash flows.
Because we may issue preferred stock without the approval of our stockholders and a concentrated group of stockholders own a significant percentage of our Common Stock, it may be more difficult for a third party to acquire us and could depress our stock price .
Risks Relating to Investments in Our Common Stock Because we may issue preferred stock without the approval of our stockholders and a concentrated group of stockholders own a significant percentage of our Common Stock, it may be more difficult for a third party to acquire us and could depress our stock price.
Because we have a history of net losses, we may never achieve or sustain profitability or positive cash flow from operations . We have incurred net losses in each fiscal year since our inception, including net losses of approximately $6.7 million for the year ended December 31, 2023 and, $16.5 million for the year ended December 31, 2022.
Because we have a history of net losses, we may never achieve or sustain profitability or positive cash flow from operations . We have incurred net losses in each fiscal year since our inception, including net losses of approximately $22.6 million for the year ended December 31, 2024 and, $7.2 million for the year ended December 31, 2023.
As of December 31, 2023, we had an accumulated deficit of approximately $76.4 million. We expect to continue to incur substantial expenditures to develop and market our services and could continue to incur losses and negative operating cash flow for the foreseeable future.
As of December 31, 2024, we had an accumulated deficit of approximately $99 million. We expect to continue to incur substantial expenditures to develop and market our services and could continue to incur losses and negative operating cash flow for the foreseeable future.
This concentration of ownership may have the effect of delaying or preventing any change in control transaction, and by limiting the number of shares of our stock traded in public markets could adversely affect liquidity and price of our Common Stock. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
This concentration of ownership may have the effect of delaying or preventing any change in control transaction, and by limiting the number of shares of our stock traded in public markets could adversely affect liquidity and price of our Common Stock.
As the employer of record of our temporary employees, we incur a risk of liability to our temporary employees for various workplace events, including claims of physical injury, discrimination, harassment, or failure to protect confidential personal information.
We do not have the ability to control the workplace environment. As the employer of record of our temporary employees, we incur a risk of liability to our temporary employees for various workplace events, including claims of physical injury, discrimination, harassment, or failure to protect confidential personal information.
Any significant change in the applicable laws, regulations, or industry practices regarding the collection, use, retention, security, or disclosure of user data, or their interpretation, or any changes regarding the manner in which the express or implied consent of users for the collection, use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our platform and our products and services, in a manner that could materially affect our business. 25 Table of Contents The laws, regulations, and industry standards concerning privacy, data protection, and information security also continue to evolve.
Any significant change in the applicable laws, regulations, or industry practices regarding the collection, use, retention, security, or disclosure of user data, or their interpretation, or any changes regarding the manner in which the express or implied consent of users for the collection, use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our platform and our products and services, in a manner that could materially affect our business.
Any shortage of candidates could materially adversely affect our business, financial condition, results of operations or cash flows. We may incur potential liability to employees and clients. Our consulting and staffing business entails employing individuals on a temporary basis and placing such individuals in clients’ workplaces. We do not have the ability to control the workplace environment.
Any shortage of candidates could materially adversely affect our business, financial condition, results of operations or cash flows. 21 table of Contents We may incur potential liability to employees and clients. Our consulting and staffing business entails employing individuals on a temporary basis and placing such individuals in clients’ workplaces.
We intend to continue to make substantial investments to fund our business and support our growth. In addition, we may require additional funds to respond to business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure, or acquire or develop complementary businesses and technologies.
In addition, we may require additional funds to respond to business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure, or acquire or develop complementary businesses and technologies.
As of December 31, 2023, one customer accounted for more than 10% of the accounts receivable balance, at 93%. As of December 31, 2022, one customer accounted for more than 10% of the accounts receivable balance, at 28%. For the year ended December 31, 2023, one customer accounted for more than 10% of total revenue, at 57%.
As of December 31, 2024, three customers accounted for more than 10% of the accounts receivable balance, at 77%. As of December 31, 2023, one customer accounted for more than 10% of the accounts receivable balance, at 93%. For the year ended December 31, 2024, two customers accounted for more than 10% of total revenue, at 40%.
Risks Related to Strategic Transactions and Resource Limitations Our company is currently engaged in a series of strategic transactions that involve complex financial and legal arrangements, characterized by a multitude of contingencies and obligations. These transactions are integral to our strategy for growth and expansion in a competitive marketplace.
Our strategic transactions may not be integrated into our business successfully. Our company is currently engaged in a series of strategic transactions that involve complex financial and legal arrangements, characterized by a multitude of contingencies and obligations, including the Savitr transaction. These transactions are integral to our strategy for growth and expansion in a competitive marketplace.
The regulatory framework for privacy and data protection is complex and evolving, and changes in laws or regulations relating to privacy or the protection or transfer of personal data, or any actual or perceived failure by us to comply with such laws and regulations, could adversely affect our business .
Additionally, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition. 27 table of Contents The regulatory framework for privacy and data protection is complex and evolving, and changes in laws or regulations relating to privacy or the protection or transfer of personal data, or any actual or perceived failure by us to comply with such laws and regulations, could adversely affect our business .
If the overall economy experiences a reduced need for specialized personnel, our results of operations would be materials and adversely affected. Our future success depends on our ability to retain and attract high-quality personnel, and the efforts, abilities and continued service of our senior management, and unsuccessful succession planning could adversely affect our business.
Our future success depends on our ability to retain and attract high-quality personnel, and the efforts, abilities and continued service of our senior management, and unsuccessful succession planning could adversely affect our business.
Any failure to protect or any loss of our intellectual property may have an adverse effect on our ability to compete and may adversely affect our business, financial condition, and operating results. 22 Table of Contents If we cannot manage our growth effectively, our results of operations would be materially and adversely affected.
Any failure to protect or any loss of our intellectual property may have an adverse effect on our ability to compete and may adversely affect our business, financial condition, and operating results.
While such claims have not historically had a material adverse effect upon our business or financial condition, there can be no assurance that we will continue to be able to obtain insurance at a cost that does not have a material adverse effect on our business or financial condition or that such claims will be covered by such available insurance. 18 Table of Contents We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition, and prospects.
While such claims have not historically had a material adverse effect upon our business or financial condition, there can be no assurance that we will continue to be able to obtain insurance at a cost that does not have a material adverse effect on our business or financial condition or that such claims will be covered by such available insurance.
We anticipate that we will continue to lose money for the foreseeable future. Our continued existence is dependent upon raising sufficient funds from equity or debt financing activities and generating sufficient working capital from our operations.
Our continued existence is dependent upon raising sufficient funds from equity or debt financing activities and generating sufficient working capital from our operations.
This could also cause the market price of our Common Stock shares to drop significantly, even if our business is performing well. 26 Table of Contents A small number of ten stockholders, including members of our management, controls approximately 14% of our outstanding voting power as of March 31, 2024, and therefore is able to exert a significant amount of influence over our management and affairs and all matters requiring stockholder approval, including significant corporate transactions.
A small number of ten stockholders, including members of our management, controls approximately 14% of our outstanding voting power as of March 15, 2025, and therefore is able to exert a significant amount of influence over our management and affairs and all matters requiring stockholder approval, including significant corporate transactions.
Any of the foregoing is likely to materially adversely affect our business, financial condition, results of operations or cash flows. We may be unable to find sufficient candidates for our staffing business. Our staffing services business consists of the placement of individuals seeking employment. There can be no assurance that candidates for employment will continue to seek employment through us.
There is no assurance that the Company will maintain its stockholders’ equity requirement in the future. We may be unable to find sufficient candidates for our staffing business. Our staffing services business consists of the placement of individuals seeking employment. There can be no assurance that candidates for employment will continue to seek employment through us.
Ruiz, our Chief Executive Officer Granger Whitelaw, and our Interim Chief Financial Officer Miles Jennings. Our work with each of these key personnel is subject to changes and/or termination, and our inability to effectively retain the services of our key management personnel, could materially and adversely affect our operating results and future prospects.
The loss of qualified executives and key employees, or inability to attract, retain, and motivate high-quality executives and employees required for the planned expansion of our business, may harm our operating results and impair our ability to grow. 25 table of Contents Our work with each of these key personnel is subject to changes and/or termination, and our inability to effectively retain the services of our key management personnel, could materially and adversely affect our operating results and future prospects.
Removed
We have experienced significant growth following our acquisitions of Scouted, Upsider, OneWire, Parrut, and Novo during 2021. Businesses that grow rapidly often have difficulty managing their growth while maintaining their compliance and quality standards.
Added
There may be additional risks that we do not know of or that we believe are immaterial that could also impair our business and financial condition. Summary Risk Factors Our business is subject to numerous risks and uncertainties that you should consider before investing in our company.
Removed
There can be no assurance that our management, along with our staff, will be able to effectively manage continued growth or successful integrate our products, services, and staff. Our failure to meet the challenges associated with rapid growth could materially and adversely affect our business and operating results.
Added
You should carefully consider all of the risks described more fully in the section titled “Risk Factors” in this Annual Report on page 19, before deciding to invest in our common stock. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected.
Removed
The loss of qualified executives and key employees, or inability to attract, retain, and motivate high-quality executives and employees required for the planned expansion of our business, may harm our operating results and impair our ability to grow. We depend on the continued services of our key personnel, including Directors Evan Sohn, Lillian Mbeki, Deborah Leff, Steve Pemberton, Wallace D.
Added
Important factors that could cause actual results or events to differ materially, but are not limited to, the following: Risks Related to Our Business and Industry There is substantial doubt regarding our ability to continue as a going concern absent obtaining adequate new debt or equity financing and achieving sufficient sales levels .
Removed
Additionally, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition. 24 Table of Contents Approximately 40% of visitors to our websites originate from countries outside the United States, which exposes us to risks related to operating abroad.
Added
Our business depends on a strong reputation and anything that harms our reputation will likely harm our results. We utilize AI, which could expose us to liability or adversely affect our business. We may be unable to find sufficient candidates for our staffing business. We may incur potential liability to employees and clients.
Removed
Even though we currently have a limited physical presence outside of the United States, recruiters on the Platform are located in approximately 162 countries (aside from the U.S.) around the world, the most prevalent being those recruiters who reside in India, England, and Canada, which subjects us to the risks and uncertainties associated with doing business internationally.
Added
We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition, and prospects. Because we have a history of net losses, we may never achieve or sustain profitability or positive cash flow from operations.
Removed
Additionally, users on the Platform include recruiters from some emerging markets where we have limited experience, where challenges can be significantly different from those we have faced in more developed markets, and where business practices may create greater internal control risks.
Added
Because we have a limited operating history under our current platform, it is difficult to evaluate our business and future prospects.
Removed
Because the Platform is generally accessible by users worldwide, one or more jurisdictions may claim that we or recruiters on the Platform are required to comply with the laws of such jurisdictions.
Added
If we are unable to respond to technological advancements and other changes in our industry by developing and releasing new services, or improving our existing services, in a timely and cost-effective manner or at all, our business could be materially and adversely affected.
Removed
Laws outside of the United States regulating the internet, payments, privacy, taxation, terms of service, website accessibility, consumer protection, intellectual property ownership, services intermediaries, labor and employment, wage and hour, worker classification, background checks, and recruiting and staffing companies, among others, which could be interpreted to apply to us, are often less favorable to us than those in the United States, giving greater rights to competitors, users, and other third parties.
Added
Because we have historically had arrangements with related parties affecting a significant part of our operations, such arrangements may not reflect terms that would otherwise be available from unaffiliated third parties .
Removed
Compliance with foreign laws and regulations may be more costly than expected, may require us to change our business practices or restrict our product offerings, and the imposition of any such laws or regulations on us, our users, or third parties that we or our users utilize to provide or use our services, may adversely impact our revenue and business.
Added
Because we rely on a small number of customers for a substantial portion of our revenue, the loss of any of these customers would have a material adverse effect on our operating results and cash flows. Failure to protect our intellectual property could adversely affect our business.
Removed
In addition, we may be subject to multiple overlapping legal or regulatory regimes that impose conflicting requirements and enhanced legal risks. The risks described above may also make it more difficult for us to expand our operations internationally. Analysis of, and compliance with, global laws and regulations may substantially increase our cost of doing business.
Added
If recruiters on the Platform were classified as employees instead of independent contractors, our business would be materially and adversely affected. 19 table of Contents Unfavorable global economic and geopolitical conditions could adversely affect our business, financial condition, stock price, and results of operations.
Removed
We may be unable to keep current with changes in laws and regulations as they develop. Any violations could result in enforcement actions, fines, civil and criminal penalties, damages, interest, costs and fees (including but not limited to legal fees), injunctions, loss of intellectual property rights, or reputational harm.
Added
Risks Relating to the Telecommunications Industry Changes to federal, state and foreign government regulations and decisions in regulatory proceedings, as well as private litigation, could further increase our operating costs and/or alter customer perceptions of our operations, which could materially adversely affect us. Increasing competition could materially adversely affect our operating results.
Removed
If we are unable to comply with these laws and regulations or manage the complexity of global operations and supporting an international user base successfully, our business, operating results, and financial condition could be adversely affected.
Added
Any of the foregoing is likely to materially adversely affect our business, financial condition, results of operations or cash flows. 20 table of Contents We utilize AI, which could expose us to liability or adversely affect our business. We incorporate novel uses of AI technologies, including generative AI, into our products and operations.
Removed
Risks Relating to Investments in Our Common Stock As a result of our recent financings and acquisitions we have issued a substantial number of additional shares of Common Stock, which dilutes present stockholders and have issued dilutive instruments which may dilute present stockholders.
Added
AI is complex and rapidly evolving, and we face significant competition from other companies who may incorporate AI into their products more quickly or more successfully than us, as well as an evolving regulatory landscape.
Removed
During the period from March 2019 through April 2024, we engaged in a series of private placement and conversion transactions issuing to several accredited investors shares of stock and/or warrants to purchase Common Stock.
Added
The introduction of AI, and particularly generative AI, a relatively new and emerging technology in the early stages of commercial use, into new or existing products, and our operations, may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality, ethical concerns, or other complications that could adversely affect our business, reputation, or financial results.
Removed
We have also issued shares of our Common Stock in connection with the Scouted Asset Purchase, the Upsider Purchase, the OneWire Purchase, the Parrut Purchase, and the Novo Purchase.
Added
For example, generative AI has been known to produce a false or “hallucinatory” interferences or output, and certain generative AI uses machine learning and predictive analytics, which may be flawed, insufficient, of poor quality, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not be easily detectable.
Removed
As of the date of this Annual Report, there were approximately 1 million shares of Common Stock issuable upon conversion of our outstanding convertible preferred stock, stock options and exercise of warrants (including warrants issued to the placement agent in our private placement transactions). In the future, we may grant additional options, warrants and convertible securities.
Added
Our customers or others may rely on or use this flawed content to their detriment, which may expose us to brand or reputational harm, competitive harm, and/or legal liability.
Removed
The exercise, conversion, or exchange of options, warrants or convertible securities, including for other securities, will dilute the percentage ownership of our existing stockholders. The dilutive effect of the exercise or conversion of these securities may adversely affect our ability to obtain additional capital.
Added
In addition, the use of AI by other companies has resulted in, and may in the future result in, data breaches and cybersecurity incidents that implicate the personal information of AI users.
Removed
The holders of these securities may be expected to exercise or convert such options, warrants and convertible securities at a time when we would be able to obtain additional equity capital on terms more favorable than such securities or when our Common Stock is trading at a price higher than the exercise or conversion price of the securities.
Added
Further, the use of AI presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability.
Removed
If we issue them with conversion or exercise prices below the prices of the convertible securities held by the held by investors, we will be required to reduce the conversion prices of certain of our convertible securities held by the investors, which will increase future dilution.
Added
The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, privacy, data protection, cybersecurity, consumer protection, competition, and equal opportunity laws and regulations, and are expected to be subject to new laws and regulations or new applications of existing laws and regulations.
Removed
The exercise or conversion of outstanding warrants, options and convertible securities will have a dilutive effect on the securities held by our stockholders. We have in the past, and may in the future, exchange outstanding securities for other securities on terms that are dilutive to the securities held by other stockholders not participating in such exchange.
Added
AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their cybersecurity and data protection laws to AI or are considering general legal frameworks for AI.
Added
For example, in Europe, the EU’s AI Act was published in the Official Journal of the EU on July 12, 2024 and entered into force on August 1, 2024.
Added
The AI Act establishes, among other things, a risk-based governance framework for regulating AI systems in the EU by categorizing AI systems, based on the risks associated with such AI systems’ intended purposes, as creating unacceptable or high risks, with all other AI systems being considered low risk.
Added
This regulatory framework is expected to have a material impact on the way AI is regulated in the EU and beyond.
Added
As further indication of a trend in increased regulatory and legislative oversight of the use and development of AI, in 2024, California enacted a range of laws regulating the use and development of AI, which generally relate to transparency, privacy and fairness, among other concerns.
Added
As a fast-evolving and complicated technology subject to significant government attention, AI-related legislation and regulation may be developed and apply to AI in unexpected ways.
Added
We may not be able to anticipate how to respond to or comply with these rapidly evolving frameworks, and we may need to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions. The cost to comply with such frameworks could be significant and may increase our operating expenses.
Added
Additionally, if we do not have sufficient rights to use the data or other material or content on which our AI technologies rely, we may incur liability through the violation of applicable laws or regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
Added
Further, any content or other output created by our use of AI-powered tools may not be subject to copyright protection, which may adversely affect our ability to enforce our intellectual property rights.
Added
Because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI. We may not be able to maintain our compliance with Nasdaq On August 17, 2023, Recruiter.com Group, Inc.
Added
(“Recruiter.com” or the “Company”) received a notice from The Nasdaq Stock Market (“Nasdaq”) that the Company was not in compliance with the minimum $2,500,000 stockholders’ equity requirement for continued listing. Based on Nasdaq’s review of materials submitted by the Company in October 2023, Nasdaq granted the Company’s request for an extension until February 13, 2024, to comply with the requirement.
Added
Though the Company submitted documentation of actions taken to comply with the requirement, Nasdaq staff determined that the Company did not meet the terms of the extension; on February 16, 2024, Nasdaq issued the Company a letter of a staff determination of delisting procedure.
Added
On June 11, 2024, the Company received a notification letter from the Nasdaq Listing Qualifications Staff (the "Staff") of The Nasdaq Stock Market LLC that the Company has evidenced full compliance with all requirements for continued listing on The Nasdaq Capital Market, including the minimum stockholders' equity requirements set forth in Nasdaq Listing Rule 5550(b)(1).
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Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
4 edited+3 added−0 removed12 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
4 edited+3 added−0 removed12 unchanged
2023 filing
2024 filing
Biggest changeThe Company is currently reviewing the complaint and intends to defend itself vigorously. At this stage, the Company is unable to predict the outcome of the case or estimate the potential financial impact.
Biggest changeThe Company is currently in ongoing legal communications about the complaint and intends to defend itself vigorously. At this stage, the Company is unable to predict the outcome of the case or estimate the potential financial impact. November 20, 2024, Recruiter.com Inc. has been named as a defendant in a lawsuit filed by HireTeammate, Inc.
("CAB"), as documented in the Superior Court of California, County of Santa Clara, case number 24CV433086. CAB's complaint, filed on March 13, 2024, alleges that the Company failed to fulfill payment obligations under contracts with CAB's assignor, totaling approximately $213,899.94. CAB seeks recovery of the owed amounts, interest, attorney fees, costs, and other damages deemed appropriate by the court.
("CAB"), as documented in the Superior Court of California, County of Santa Clara, case number 24CV433086. CAB's complaint, filed on March 13, 2024, alleges that the Company failed to fulfil payment obligations under contracts with CAB's assignor, totaling approximately $213,899.94. CAB seeks recovery of the owed amounts, interest, attorney fees, costs, and other damages deemed appropriate by the court.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 27 Table of Contents PART II
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 31 table of Contents PART II
Proceedings in the other lawsuit remain ongoing. On September 6, 2023, Recruiter.com Group, Inc. (the "Company") was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain.
Proceedings in the other lawsuit remain ongoing. The Company has been unable to collect against BKR Strategy Group due to lack of response and communication. On September 6, 2023, Recruiter.com Group, Inc. (the "Company") was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain.
Added
(d/b/a hireEZ) in the Supreme Court of New York. The lawsuit alleges that Recruiter.com breached a contract by failing to pay for platform management services provided by hireEZ between December 12, 2022, and January 31, 2023. The total amount claimed is $79,388.39, along with interest and legal costs.
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The complaint includes claims for breach of contract, account stated, and unjust enrichment. Recruiter.com is evaluating its legal options in response to the lawsuit. All operation related invoices and activities was passed on to Job Mobz.
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Therefore, the management do not believe that Nixxy is liable for the amount stated and we will defend our position in the court of law. Furthermore management believe it is more likely than not that we will prevail.
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
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Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
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2023 filing
2024 filing
Biggest changeItem 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6 Reserved 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
Biggest changeItem 4. Mine Safety Disclosures 31 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6 Reserved 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
2 edited+0 added−0 removed3 unchanged
2023 filing
2024 filing
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Capital Market under the symbol “RCRT.” Holders The number of shareholders of record of our Common Stock as of March 31, 2024, was approximately 612 recordholders.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Capital Market under the symbol “NIXX.” Holders The number of shareholders of record of our Common Stock as of March 15, 2025, was approximately 508 recordholders.
This is not the actual number of beneficial owners of our Common Stock, as shares are held in “street name” by brokers and others on behalf of such owners. As of March 31, 2024, there were no holders of record of our Series E Convertible Preferred Stock.
This is not the actual number of beneficial owners of our Common Stock, as shares are held in “street name” by brokers and others on behalf of such owners. As of March 15, 2025, there were no holders of record of our Series E Convertible Preferred Stock.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
90 edited+95 added−37 removed64 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
90 edited+95 added−37 removed64 unchanged
2023 filing
2024 filing
Biggest changeIn return, we restructured the payment schedule for the Parrut note which was set to mature on August 31, 2023, and bears interest at 12%. On August 31, 2023, we did not make payments on amounts due under the note with Parrut and are currently in process of amending the maturity date of the note.
Biggest changeOn 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%.
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 the Buyer any payment on a purchased receivable, or receivable assigned to Buyer under the Factoring Agreement, that comes into the Company’s possession.
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.
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.
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.
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.
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.
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.
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.
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.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should we be unable to continue as a going concern. To date, equity and debt offerings have been our primary source of liquidity and we expect to fund future operations through additional securities offerings.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should we be unable to continue as a going concern. To date, equity offerings have been our primary source of liquidity and we expect to fund future operations through additional securities offerings.
Critical Accounting Estimates and Recent Accounting Pronouncements Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Policies, Estimates and Recent Accounting Pronouncements Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
(the “Lender”). Pursuant to the Loan Agreement, the Lender will make advances (“Advances”) in the aggregate principal amount of $2,250,000, with the first Advance of $2,000,000 being provided on or around the Closing Date and the second Advance of $250,000 being available to the Company upon request prior to April 30, 2023.
Pursuant to the Loan Agreement, the Lender will make advances (“Advances”) in the aggregate principal amount of $2,250,000, with the first Advance of $2,000,000 being provided on or around the Closing Date and the second Advance of $250,000 being available to the Company upon request prior to April 30, 2023.
As of December 31, 2023, and December 31, 2022, $0 and $545,216 of advances were outstanding under the factoring arrangement, respectively, and $6,318 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 December 31, 2023, and December 31, 2022, $0 and $545,216 advances were outstanding under the factoring arrangement, respectively, and $6,318 and $263,939, was due from the factor resulting in a net $0 and $281,277 loan payable to the factor at December 31, 2023 and 2022, respectively.
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.
(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.
Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Our management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analyzing future periods.
Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Our management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analysing future periods.
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.
As a part of these financings, the Company 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes the matters that we consider to be important to understanding the results of our operations for each of the two years in the years ended December 31, 2023, and 2022, and our capital resources and liquidity as of December 31, 2023, and 2022.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes the matters that we consider to be important to understanding the results of our operations for each of the two years in the years ended December 31, 2024, and 2023, and our capital resources and liquidity as of December 31, 2024, and 2023.
(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.
Warrants”) to the Lender. The number of shares shall be equal to 1.4% of the CognoGroup, Inc.’s 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.
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 “the Second Montage Amendment”), by and among the Company, its subsidiaries Montage.
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.
As part of our software subscriptions, we offered enhanced support packages and On Demand recruiting support services for an additional fee. Additional fees may be charged when we placed a candidate with our customer, depending on the subscription type.
As part of our software subscriptions, we offered enhanced support packages and On Demand recruiting support services for an additional fee. Additional fees may be charged when we place a candidate with our customer, depending on the subscription type.
The decrease in cash used in operating activities was attributable to the change in operating expenses outlined previously to support the changes in our business. For the year ended December 31, 2023, net loss was $6.7 million.
For the year ended December 31, 2023, net cash used in operating activities was $0.9 million. The decrease in cash used in operating activities was attributable to the change in operating expenses outlined previously to support the changes in our business. For the year ended December 31, 2023, net loss was $6.7 million.
Upon completion of the program, we issue a certificate of completion and make available a digital badge to certify their achievement for display on their online recruiter profile on the Platform. · Consulting and Staffing: Consists of providing consulting and staffing personnel services to employers to satisfy their demand for long- and short-term consulting and temporary employee needs.
Upon completion of the program, we issue a certificate of completion and make available a digital badge to certify their achievement for display on their online recruiter profile on the Platform. 33 table of Contents · Consulting and Staffing: Consists of providing consulting and staffing personnel services to employers to satisfy their demand for long- and short-term consulting and temporary employee needs.
On August 7, 2023, the Company signed an amendment 8/17/22 Notes. The amendment extends each of the maturity dates of August 17, 2023, 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.
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.
For businesses, this includes job postings, sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. We earn revenue by completing agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer.
For businesses, this includes sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. We earn revenue as we complete agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer.
The Loan Agreement contains certain affirmative and negative covenants to which the Company is also subject. The Company agreed to pay the Lender a fee of $45,600, with $40,000 due upon the execution of the Loan Agreement and the balance due upon the funding of the second Advance.
The Loan Agreement contains certain affirmative and negative covenants to which the Company is also subject. 44 table of Contents The Company agreed to pay the Lender a fee of $45,600, with $40,000 due upon the execution of the Loan Agreement and the balance due upon the funding of the second Advance.
Revenues as presented on the statement 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.
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.
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.
Our resume distribution service allows a job seeker to upload his/her resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service.
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”).
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.
Our talent delivery team selected and delivered candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earned a “full-time placement fee”, an amount separately negotiated with each employer client.
Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earned a “full-time placement fee”, an amount separately negotiated with each employer client.
For the year ended December 31, 2023, we recorded a net loss of $6.7 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern.
For the year ended December 31, 2024, we recorded a net loss of $22.6 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern.
Payments for recruitment services are typically due within 90 days of completion of services. Marketplace Solutions revenues are recognized either on a gross basis when the advertising is placed and displayed or when lead generation activities and online publications are completed, which is the point at which the performance obligations are satisfied.
Marketplace Solutions revenues are recognized either on a gross basis when the advertising is placed and displayed or when lead generation activities and online publications are completed, which is the point at which the performance obligations are satisfied. Payments for marketing and publishing are typically due within 30 days of completion of services.
The 8/17/22 Notes was set to be paid off in full on August 17, 2023. As a part of these financings, we granted the noteholders 694,445 warrants to purchase our common stock (See Note 8) (the “8/17/22 Warrants”). The 8/17/22 Warrants were valued at $463,737 and treated as a debt discount to be amortized over the life of the note.
The 8/17/22 Notes were 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.
Payments for recruitment services are typically due within 90 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.
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.
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. Off-Balance Sheet Arrangements None.
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.
In some cases, we earn a percentage of revenue a business receives from attracting new clients by advertising on the Platform. Companies can also pay us to post job openings on our proprietary job boards to promote open job positions they are trying to fill.
In some cases, we earn a percent of revenue a business receives from attracting new clients by advertising on our online platform. Businesses can also pay us to post job openings on our proprietary job boards to promote open job positions they are trying to fill.
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.
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.
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. 38 Table of Contents In addition, in connection with the Second Montage Amendment, the Company will issue warrants to purchase common stock of CognoGroup, Inc.
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.
The full-time placement fee is typically either a percentage of the referred candidates’ first year base salary or an agreed-upon flat fee. 29 Table of Contents · Marketplace: Our Marketplace category comprises services for businesses and individuals that leverage our online presence and career communities.
The full-time placement fee is typically either a percentage of the referred candidates’ first year base salary or an agreed-upon flat fee. · Marketplace: Our “Marketplace” category comprises services for businesses and individuals that leverage our online presence.
Operating Businesses and Revenue We generate revenue from the following activities: · Software Subscriptions : We offered a subscription to our web-based platforms that helped employers recruit talent. Our platforms allowed customers to source, contact, screen, and sort candidates using data science, advanced email campaigning tools, and predictive analytics.
Operating Businesses and Revenue We generate revenue or have generated from the following activities: · Software Subscriptions : We offered a subscription to our web-based platforms that help employers recruit talent. Our platforms allow customers to source, contact, screen, and sort candidates using data science, advanced email campaigning tools, and predictive analytics.
On November 1, 2023, we did not make payments due on the promissory note with Novo Group and are currently in process of amending the maturity date of the note. On December 31, 2023, and December 31, 2022, the outstanding balance on the promissory note with Novo Group was $1,198,617 and $1,292,360, respectively.
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. As of December 31, 2024, and December 31, 2023, the outstanding balance on the promissory note with Novo Group was $1,198,617.
In addition to our work with direct clients, we categorize all online advertising and affiliate marketing revenue as Marketplace revenue. For individuals, Marketplace includes services to assist with career development and advancement, including a resume distribution service that promotes these job seekers’ profiles and resumes to help with their procuring employment, upskilling, and training.
In addition to its work with direct clients, we categorize all online advertising and affiliate marketing revenue as Marketplace. For individuals, Marketplace includes services to assist with career development and advancement, including a resume distribution service which involves promoting these job seekers’ profiles and resumes to assist with their procuring employment, and upskilling and training.
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.
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.
As of December 31, 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.
As of December 31, 2024, and December 31, 2023, the outstanding balance on the 8/30/22 Notes, net of the unamortized debt issuance costs and debt discounts of $0 and $0, respectively, was $0 and $1,194,445 respectively.
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.
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 sourced qualified candidate referrals for the employers’ available jobs through independent recruiter users that access the Platform and other tools. We supported and supplemented the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team.
Employers alert us of their hiring needs through our Platform, or other communications. We sourced qualified candidate referrals for the employers’ available jobs through independent recruiter users that access the Platform and other tools. We supported and supplemented the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team.
We perform our annual goodwill impairment assessment on December 31st of each year or as impairment indicators dictate. 41 Table of Contents When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units.
When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units.
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. 39 Table of Contents As stated previously, the Company factors the accounts receivable on a recourse basis.
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.
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.
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.
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.
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.
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).
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 at fair value (See Note 1).
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. 30 Table of Contents Recruiters On Demand services are billed to clients as either monthly subscriptions or time-based billings.
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.
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. 40 Table of Contents Recruiters On Demand services are billed to clients as either monthly subscriptions or time-based billings.
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.
We test goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value.
We test goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value. We perform our annual goodwill impairment assessment on December 31st of each year or as impairment indicators dictate.
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.
Sales tax collected is recorded on a net basis and is excluded from revenue. 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.
As of December 31, 2023, and December 31, 2022, the outstanding balance on the Loan Agreement, and a puttable liability was established, net of the unamortized debt issuance costs and debt discounts of $164,016 and $622,630, respectively, was $1,577,984 and $1,377,370, respectively.
As of December 31, 2024, and December 31, 2023, the outstanding balance on the Loan Agreement, net of the unamortized debt issuance costs and debt discounts of $0 and $164,016, respectively, was $0 and $1,577,984, respectively.
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.
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. 46 table of Contents Revenues as presented on the statement of operations represent services rendered to customers less sales adjustments and allowances.
The principal factors were $786 thousand from issuance of common stock net of equity issuance costs, $871 thousand from proceeds from a factoring agreement, and $315 thousand from proceeds from exercised warrants. The proceeds were partially offset by $80 thousand from purchased preferred shares, $668 thousand from repayments of loans, and $215 thousand from repayments of a factoring agreement.
The principal factors were $786 thousand from issuance of common stock net of equity issuance costs, $871 thousand from proceeds from a factoring agreement, and $315 thousand from proceeds from exercised warrants.
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.
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.
Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the described excluded items. We define Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below.
Our management recognizes that the non-GAAP financial measures have inherent limitations because of the described excluded items. 40 table of Contents We define Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below.
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.
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 were set to mature on August 30, 2023. The 8/30/22 Notes were set to be paid off in full on August 30, 2023.
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.
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.
Amortization of Intangibles and Impairment Expense For the year ended December 31, 2023, we incurred a non-cash amortization charge of $1.3 million as compared to $3.7 million for the corresponding period in 2022. For the year ended December 31, 2023, we incurred a non-cash impairment expense of $0 as compared to $4.4 million for the corresponding period in 2022.
This decrease was primarily attributable to a $358 thousand decrease in hosting and data expenses during the period. Amortization of Intangibles and Impairment Expense For the year ended December 31, 2024, we incurred a non-cash amortization charge of $1.0 million as compared to $1.3 million for the corresponding period in 2023.
For the year ended December 31, 2023, our general and administrative expense was $6.1 million including $1.5 million of non-cash stock-based compensation. In 2022, our general and administrative expense was $15.3 million including $4.1 million of non-cash stock-based compensation.
For the year ended December 31, 2024, our general and administrative expenses were $8.9 million, including $5.6 million of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $6.1 million, including $1.5 million of non-cash stock-based compensation.
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.
Group, 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.
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.
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.
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 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. 42 table of Contents In February 2023, we entered into an additional Amendment to the Promissory Note with Novo Group, Inc.
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.
Accordingly, the Company records the liability of potentially having to refund the advance amount as short-term debt when the factoring arrangement is utilized.
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.
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.
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.
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.
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.
The third party provides the underlying services in this arrangement. 47 table of Contents 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.
Revenue Recognition Policy We recognize revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration we expect to be entitled to receive in exchange for those goods.
Revenues are recognized when control is transferred to customers in amounts that reflect the consideration we expect to be entitled to receive in exchange for those goods.
This decrease resulted primarily from a decrease in our Recruiters on Demand business of $14.2 million or 87.8%. Additionally, Software Subscriptions contributed $0.4 million in revenue in 2023, compared to $2.5 million in 2022. We had a decrease in our Marketplace Solutions revenue of $468 thousand or 40.9%.
This decrease resulted primarily from a decrease in our Recruiters on Demand business of $1.9 million or 99.9%. Additionally, Software Subscriptions contributed no revenue in 2024, compared to $0.4 million in 2023. We had a decrease in our Marketplace Solutions, Consulting and staffing services, Full time placement fees, and Revenue share revenue of $69, $124, $20, and $100 thousand.
The following table presents a reconciliation of net loss to Adjusted EBITDA: Year Ended December 31, 2023 2022 Net loss $ (7,734,290 ) $ (17,595,945 ) Interest expense and finance cost, net 2,645,694 965,323 Depreciation & amortization 1,302,384 3,663,953 EBITDA (loss) (3,786,212 ) (12,980,416 ) Bad debt (recovery) expense (143,774 ) 492,906 Gain on debt extinguishment - (1,205,195 ) Impairment expense - 4,420,539 Stock-based compensation 1,490,903 4,106,040 Adjusted EBITDA (Loss) $ (2,439,083 ) $ (5,389,761 ) 35 Table of Contents Liquidity and Capital Resources For the year ended December 31, 2023, net cash used in operating activities was $0.9 million, compared to net cash used in operating activities of $6.9 million for 2022.
The following table presents a reconciliation of net loss to Adjusted EBITDA: Year Ended December 31, 2024 2023 Net loss from continuing operations $ (22,593,628 ) $ (7,734,290 ) Interest expense and finance cost, net 661,104 2,645,694 Depreciation & amortization 1,054,995 1,302,384 EBITDA (loss) (20,877,529 ) (3,786,212 ) Bad debt (recovery) expense (84,377 ) (143,774 ) Loss on settlement of debt 8,521,149 - Goodwill and intangible assets impairment 4,720,624 - Stock-based compensation 5,614,921 1,490,903 Adjusted EBITDA (Loss) $ (2,105,212 ) $ (2,439,083 ) Liquidity and Capital Resources For the year ended December 31, 2024, net cash used in operating activities was $4.1 million, compared to net cash used in operating activities of $0.9 million for the corresponding period in 2023.
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.
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.
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.
Financing Arrangements Promissory Notes Payable 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.
As of December 31, 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 $13,056 and $384,280, respectively, was $1,421,864 and $726,831, respectively.
As of December 31, 2024, and December 31, 2023, the outstanding balance on the 8/17/22 Notes, net of the unamortized debt issuance costs and debt discounts of $0 and $13,056, respectively, was $0 and $1,421,864 respectively. 43 table of Contents On August 30, 2022, The Company 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”).
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.
Payments for career services are typically due upon distribution or completion of services. 34 table of Contents Consulting and Staffing Services revenues represent services rendered to customers less sales adjustments and allowances.
(See below Revenue Share). · Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generated full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we referred. Employers alerted us of their hiring needs through our Platform, or other communications.
The Company discontinued providing Recruiters On Demand following the execution of the acquisition. · Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generated full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we refer.
Cost of Revenue Cost of revenue for the year ended December 31, 2023, was $2.7 million, compared to $13.7 million in the prior year. This decrease resulted primarily due to decreases in compensation expense, third party staffing costs, and other fees related to the recruitment and staffing businesses acquired.
Cost of Revenue Cost of revenue for the year ended December 31, 2024, was $3 thousand, compared to $2.7 million in the prior year. This decrease resulted primarily from a decrease in compensation expense in line with the decrease in revenue and a higher margin revenue stream in 2024.
Net loss from continuing operations In the year ended December 31, 2023, we incurred a net loss of $7.7 million compared to a net loss of $17.6 million in the year ended December 31, 2022. 34 Table of Contents Definition of Non-GAAP Financial Measures The following discussion and analysis include both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures.
Definition of Non-GAAP Financial Measures The following discussion and analysis include both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures.
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.
This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements. 48 table of Contents ITEM 7A.
Referral fees under the revenue share arrangement are subject to certain minimum and maximum payout amounts. We record referral fees earned under our revenue share arrangement on a net basis. Revenues as presented on the consolidated statements of operations represent services rendered to customers less sales adjustments and allowances.
Referral fees under the revenue share arrangement are subject to certain minimum and maximum payout amounts. We record referral fees earned under our revenue share arrangement on a net basis. The costs of our revenue primarily consist of employee costs, third-party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of our gross margin.
The impairment expense decrease was a direct result of the acquisitions of intangible assets that occurred in 2021, with a full year of amortization and impairment charges in 2022 and amortization in 2023. 33 Table of Contents General and Administrative General and administrative expenses include compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses.
General and Administrative General and administrative expense for the year ended December 31, 2024, includes compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses.
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