Financial Performance - Revenue for the year ended December 31, 2023, was $3,188,019, a decrease of 85.0% compared to $21,251,518 for the year ended December 31, 2022 [472]. - Gross profit for 2023 was $466,812, down 93.8% from $7,576,415 in 2022 [472]. - Total operating expenses decreased to $8,203,119 in 2023 from $25,430,110 in 2022, a reduction of 67.7% [472]. - Net loss attributable to common shareholders for 2023 was $7,163,541, compared to a loss of $18,395,901 in 2022, representing a 61.0% improvement [472]. - The company reported a net loss from continuing operations per common share of $(6.08) for 2023, compared to $(17.45) for 2022 [472]. - The company experienced a net loss of $16,474,688 for the year ended December 31, 2023, compared to a net loss of $6,659,899 for the year ended December 31, 2022 [498]. - The company reported a net loss of $6,659,899 for the year ended December 31, 2023, compared to a net loss of $16,474,688 in 2022, indicating an improvement in financial performance [625]. Share Issuance and Warrants - For the year ended December 31, 2023, the company issued 54,768 common shares for gross proceeds of $315,178 from warrant exercises at a strike price of $5.70 [439]. - The company issued 92,222 common shares in August 2023 from the exercise of pre-funded warrants [440]. - The company has a total of 100,694 warrants granted in August 2022, with an exercise price reduced from $30.00 to $14.97 [444]. - The total outstanding warrants increased to 793,928 as of December 31, 2023, with a weighted average exercise price of $35.53 [580]. - The fair value of warrants granted was estimated using a risk-free interest rate of 4.42%-4.70% and an expected volatility of 307% as of December 31, 2023 [581]. - The company recorded a deemed dividend of $658,266 due to anti-dilution adjustments affecting the exercise price and number of warrants [607]. - The company recorded a deemed dividend of $503,642 due to anti-dilution adjustments related to warrants [625]. Legal Proceedings - The Company is involved in legal proceedings with Creditors Adjustment Bureau, Inc., alleging unpaid obligations totaling approximately $213,899.94 [459]. - The company intends to defend itself vigorously against the legal complaint but cannot predict the outcome or estimate the financial impact at this stage [459]. - A civil lawsuit filed by Pipl, Inc. claims the company owes over $266,562.59 for goods and services provided between January 3, 2021, and December 7, 2022 [587]. - The company has not accrued any potential losses related to ongoing legal proceedings as it cannot estimate the probable outcome [582]. Assets and Liabilities - Total current liabilities increased to $9,557,161 as of December 31, 2023, compared to $7,794,624 in 2022 [470]. - The total liabilities of the Company were reported at $9,557,161 as of December 31, 2023, compared to $9,054,967 in 2022 [470]. - Total assets decreased to $10,487,169 in 2023 from $14,133,284 in 2022, a decline of 25.8% [493]. - As of December 31, 2023, the company reported total stockholders' equity of $930,008, an increase from $5,078,317 as of December 31, 2022 [497]. - The company has a significant amount of prepaid expenses totaling $252,099 as of December 31, 2023, compared to $255,548 as of December 31, 2022 [631]. Cash Flow and Financing - Cash and cash equivalents as of December 31, 2023, were $1,008,408, an increase from $946,804 at the end of 2022 [493]. - Cash provided by financing activities was $1,008,903 in 2023, a decrease from $5,661,127 in 2022, reflecting changes in capital structure and financing strategies [525]. - The Company incurred a finance cost of $327,073 for services related to the ERC application [461]. - The Company obtained two advance loans on the ERC credits totaling $450,000, with an original issue discount of $133,333, fully expensed as interest expense [461]. Revenue Sources - The company generates revenue through various services, including Recruiters On Demand, full-time placement, and consulting and staffing services [509][510][512]. - Recruiters On Demand revenue was $1,848,268 for 2023, down from $16,005,413 in 2022, reflecting a decline of about 88% [547]. - Consulting and staffing services revenue decreased to $129,157 in 2023 from $696,368 in 2022, a drop of approximately 81% [547]. - The company recognized revenue from software subscriptions on a monthly basis over the subscription term, with additional fees for placement services based on a 90-day guarantee [514]. - The company’s revenue share revenues are recorded on a net basis, reflecting a percentage of revenue earned from client referrals to third parties [518]. Strategic Initiatives - The company operates an On Demand recruiting platform that combines online hiring software with recruiting services, aimed at transforming the Employment and Recruitment Agency industry [438]. - The company has entered into a stock purchase agreement with GoLogiq Inc., which includes a worldwide exclusive license for fintech technology and products, with a royalty of 8% on net sales during the term [503]. - A strategic partnership with Job Mobz was announced in March 2023, transitioning certain clients and staff to Job Mobz in exchange for an ongoing revenue stream [536]. - The company expects demand for recruiting solutions to improve in 2024, which may positively impact revenue share and transactions with third parties [630]. Market and Industry - The company operates in the $28.5 billion employment and recruiting agencies industry, providing an AI-powered sourcing platform and on-demand recruiting services [505]. - The company’s platform is utilized by businesses ranging from startups to Fortune 100 companies to address talent needs [505]. - The company’s mission is to become the preferred solution for hiring specialized talent, leveraging its platform and services [506]. - Revenue from international sources was approximately 0.8% in 2023, down from 3.8% in 2022, indicating a decline in international revenue contribution [571]. Tax and Goodwill - The effective income tax rate for 2023 was not disclosed, but the statutory federal income tax rate remained at 21.0% [474]. - The company has a goodwill balance of $7,101,084 as of December 31, 2023, unchanged from the previous year [491]. - Goodwill is tested for impairment annually, and the company assesses qualitative factors to determine if the fair value of reporting units is below carrying value [614]. - The company has not recognized any impairment losses on long-lived assets, indicating stable asset performance [617].
Recruiter.com(RCRT) - 2023 Q4 - Annual Report