Revenue Performance - Revenue for the three months ended June 30, 2022, was $7.1 million, an increase of $2.7 million or 61% compared to $4.4 million for the same period in 2021[300]. - For the six-month period ended June 30, 2022, the company reported revenue of $14.0 million, an increase of $6.5 million or 87% compared to $7.5 million in the same period of 2021[312]. - The Recruiters on Demand business saw a revenue increase of $2.9 million or 161% due to significant growth in new customers and contributions from acquisitions[300]. - The Recruiters on Demand business contributed $6.1 million in revenue, reflecting a growth of 223% due to new customer acquisitions and contributions from acquisitions[312]. - Software Subscriptions contributed $808 thousand in revenue for the quarter ended June 30, 2022, compared to $176 thousand in the year ended December 31, 2021[300]. Profitability and Expenses - Gross profit for the three-month period ended June 30, 2022, was $2.9 million, with a gross profit margin of 41.2%, up from 32.8% in the corresponding 2021 period[302]. - Gross profit for the six-month period ended June 30, 2022, was $5.6 million, with a gross profit margin of 40.2%, up from a gross profit of $2.3 million and a margin of 31.1% in 2021[314]. - Total operating expenses for the three months ended June 30, 2022, were $5.3 million, an increase of $1.4 million or 36% compared to $3.9 million in the same period in 2021[303]. - Total operating expenses increased to $12.1 million for the six-month period ended June 30, 2022, representing an increase of $5.4 million or 81% compared to $6.7 million in 2021[315]. - General and administrative expenses for the three-month period ended June 30, 2022, were $4.1 million, including $669 thousand of non-cash, stock-based compensation[309]. - The company incurred a net loss of $5.4 million for the six-month period ended June 30, 2022, compared to a net loss of $2.8 million in the same period of 2021[321]. Cash Flow and Financing - Net cash used in operating activities was $1.7 million for the six months ended June 30, 2022, compared to $1.9 million in the same period of 2021[331]. - The company reported net cash used in investing activities of $764 thousand for the six months ended June 30, 2022, compared to $30 thousand in the same period of 2021[334]. - Financing activities provided $1.6 million in net cash for the six months ended June 30, 2022, primarily from $2.7 million in net proceeds from a factoring agreement[335]. - The company has expressed substantial doubt regarding its ability to continue as a going concern, indicating a need for adequate capital to fund operating losses until profitability is achieved[337]. Agreements and Contracts - The company signed an Accounts Receivable-backed factoring agreement with Bay View Funding to support growth[305]. - A promissory note of $3.0 million was issued as part of the Novo Group acquisition, with a reduced principal balance of $600,000 and an extended maturity date to November 30, 2023[341]. - The company entered into a factoring agreement effective April 27, 2022, allowing for advances of up to 85% of eligible trade accounts receivable, with a maximum of $3,000,000[342][344]. - The finance fee under the factoring agreement is set at the prime rate plus 3.25%, with a factoring fee of 0.575% for the first 30 days and 0.30% for each subsequent 15 days[343]. Revenue Recognition Policies - Revenue recognition follows ASC 606, with revenues recognized when control is transferred to customers, reflecting expected consideration for goods[348]. - Software subscription revenues are recognized monthly over the subscription term, while talent effectiveness subscription revenues are recognized as services are provided[352]. - Full-time placement revenues are recognized when the guarantee period specified in contracts expires, with payments typically due within 90 days of service completion[354]. - Marketplace advertising revenues are recognized when advertising is placed or lead generation activities are completed, with payments typically due within 30 days[356]. - Consulting and staffing services revenues are recognized when services are rendered, with payments typically due within 90 days of completion[357]. Accounting and Impairment - Goodwill is tested for impairment annually on December 31 or when indicators suggest fair value may be below carrying value[361][362]. - The company accounts for stock-based compensation based on fair values, recognizing expenses over the vesting period[368]. - Recent accounting pronouncements, such as ASU 2019-12, did not have a material impact on the company's consolidated financial statements[370].
Recruiter.com(RCRT) - 2022 Q2 - Quarterly Report