Nixxy, Inc 10-Q for FY2022 Q2

Nixxy, Inc. (NIXX)

10-Q 2022-08-15 For: 2022-06-30

Added on April 05, 2026

About this 10-Q

Nixxy, Inc filed this 10-Q on August 15, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.11M; up 62.4% from $4.38M a year earlier
Net loss: $1.19M; compared with net income of $3.53M a year earlier

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

500 Seventh Avenue New York, New York		10018
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page
		number
Part I - Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	3
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	4
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	56

Part II - Other Information
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	59

	June 30,			December 31,
	2022			2021
	(unaudited)
ASSETS

Current assets:
Cash	$	1,713,660		$	2,584,062
Accounts receivable, net of allowance for doubtful accounts of $1,184,809 and $934,219, respectively		4,261,232			5,650,668
Accounts receivable - related parties		-			49,033
Prepaid expenses and other current assets		393,211			546,079

Total current assets		6,368,103			8,829,842

Property and equipment, net of accumulated depreciation of $3,463 and $2,982, respectively		-			481
Intangible assets, net		8,579,904			9,741,832
Goodwill		7,683,198			7,718,842

Total assets	$	22,631,205		$	26,290,997

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable	$	1,336,078		$	1,121,510
Accounts payable - related parties		25,931			163,672
Accrued expenses		1,378,696			1,285,339
Accrued compensation		900,162			1,551,162
Accrued interest		4,869			19,726
Contingent consideration for acquisitions		-			578,591
Deferred payroll taxes		81,728			81,728
Other liabilities		17,333			17,333
Loans payable - current portion		3,862,052			1,712,387
Refundable deposit on preferred stock purchase		285,000			285,000
Customer advances		426,136			-
Deferred revenue		523,631			746,449

Total current liabilities		8,841,616			7,562,897

Loans payable - long term portion		632,201			2,637,875

Total liabilities		9,473,817			10,200,772

Commitments and contingencies (Note 11)

Stockholders' Equity:
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 86,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021		9			9
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,851,146 and 14,566,420 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		1,486			1,457
Shares to be issued, 587,945 shares as of June 30, 2022 and December 31, 2021		59			59
Additional paid-in capital		69,386,572			66,948,340
Accumulated deficit		(56,230,738	)		(50,859,640	)
Total Stockholders' Equity		13,157,388			16,090,225

Total Liabilities and Stockholders' Equity	$	22,631,205		$	26,290,997

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Revenue (including related party revenue of $0, $0, $0 and $970, respectively)	$	7,112,450		$	4,380,894		$	13,981,103		$	7,545,439
Cost of revenue (including related party costs of $0, $212,279, $0 and $417,540, respectively)		4,183,478			2,946,084			8,361,549			5,200,994

Gross profit		2,928,972			1,434,810			5,619,554			2,344,445

Operating expenses:
Sales and marketing		158,040			75,006			276,796			132,549
Product development (including related party expense of $0, $54,696, $16,771 and $112,684, respectively)		89,473			75,004			682,859			145,664
Amortization of intangibles		917,239			675,095			1,925,712			834,268
General and administrative (including share-based compensation expense of $669,047, $1,112,834, $2,404,064 and $1,615,241, respectively, and related party expenses of $0, $106,149, $19,825 and $232,781, respectively)		4,097,397			3,062,597			9,193,101			5,608,502

Total operating expenses		5,262,149			3,887,702			12,078,468			6,720,983

Loss from operations		(2,333,177	)		(2,452,892	)		(6,458,914	)		(4,376,538	)

Other income (expenses):
Interest expense (including related party interest expense of $0, $18,193, $0 and $30,466, respectively)		(64,491	)		(1,592,822	)		(131,906	)		(3,020,410	)
Initial derivative expense		-			-			-			(3,585,983	)
Other income		3,713			-			14,527			-
Change in fair value of derivative liability		-			7,574,750			-			8,203,371
Gain on debt extinguishment		1,205,195			-			1,205,195			24,925
Grant income		-			-			-			3,382
Net recognized gain (loss) on marketable securities		-			(757	)		-			(534	)
Total other income (expenses)		1,144,417			5,981,171			1,087,816			1,624,751

(Loss) income before income taxes		(1,188,760	)		3,528,279			(5,371,098	)		(2,751,787	)
Provision for income taxes		-			-			-			-
Net (Loss) income	$	(1,188,760	)	$	3,528,279		$	(5,371,098	)	$	(2,751,787	)

Net (loss) income per common share - basic	$	(0.08	)	$	0.99		$	(0.36	)	$	(0.89	)
Net (loss) income per common share - diluted	$	(0.08	)	$	0.69		$	(0.36	)	$	(0.89	)
Weighted average common shares - basic		14,830,738			3,560,745			14,795,691			3,091,146
Weighted average common shares - diluted		14,830,738			5,879,481			14,795,691			3,091,146

	Preferred stock Series D				Preferred stock Series E				Preferred stock Series F				Common stock				Common stock to be issued				Additional Paid in			Accumulated			Total Stockholders (Deficit)
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance as of December 31, 2021		-	$	-		86,000	$	9		-	$	-		14,566,420	$	1,457		587,945	$	59	$	66,948,340		$	(50,859,640	)	$	16,090,225
Stock based compensation - stock options		-		-		-		-		-		-		-		-		-		-		1,397,804			-			1,397,804
Stock based compensation - stock options - RSUs		-		-		-		-		-		-		-		-		-		-		268,956			-			268,956
Common stock issued for the exchange of warrants		-		-		-		-		-		-		112,726		11		-		-		152,233			-			152,244
Common stock issued for restricted stock units		-		-		-		-		-		-		105,675		11		-		-		(11	)		-			-
Net loss		-		-		-		-		-		-		-		-		-		-		-			(4,182,338	)		(4,182,338	)
Balance as of March 31, 2022		-	$	-		86,000	$	9		-	$	-		14,784,821	$	1,479		587,945	$	59	$	68,767,322		$	(55,041,978	)	$	13,726,891
Stock based compensation - Options		-		-		-		-		-		-		-		-		-		-		381,351			-			381,351
Stock based compensation - RSUs		-		-		-		-		-		-		-		-		-		-		237,906			-			237,906
Common stock issued for restricted stock units		-		-		-		-		-		-		66,325		7		-		-		(7	)		-			-
Net loss		-		-		-		-		-		-		-		-		-		-		-			(1,188,760	)		(1,188,760	)
Balance as of June 30, 2022		-	$	-		86,000	$	9		-	$	-		14,851,146	$	1,486		587,945	$	59	$	69,386,572		$	(56,230,738	)	$	13,157,388

	Preferred stock Series D						Preferred stock Series E				Preferred stock Series F						Common stock				Common stock to be issued for Acquisitions						Additional Paid in			Accumulated			Total Stockholders'
	Shares			Amount			Shares		Amount		Shares			Amount			Shares		Amount		Shares			Amount			Capital			Deficit			(Deficit)
Balance as of December 31, 2020		527,795		$	54			731,845	$	74		64,382		$	7			2,203,009	$	220	$	-		$	-		$	23,400,408		$	(34,525,025	)	$	(11,124,262	)
Stock based compensation		-			-			-		-		-			-			-		-		-			-			502,407			-			502,407
Issuance of common shares for Scouted acquisition		-			-			-		-		-			-			175,421		18		15,591			113,036			1,271,786			-			1,384,840
Issuance of shares for Upsider acquisition		-			-			-		-		-			-			-		-		271,153			2,135,331			-			-			2,135,331
Issuance of common shares for accrued compensation		-			-			-		-		-			-			1,625		-		-			-			16,425			-			16,425
issuance of common shares upon conversion of debentures and accrued interest		-			-			-		-		-			-			71,485		7		-			-			199,396			-			199,403
Cancellation of Series D preferred stock		(8,755	)		(1	)		-		-		-			-			-		-		-			-			1			-			-
Reclassification of derivative liability upon cancellation of Series D warrants		-			-			-		-		-			-			-		-		-			-			373,070			-			373,070
Issuance of common shares upon conversion of Series D preferred stock		(74,453	)		(7	)		-		-		-			-			372,266		37		-			-			(30	)		-			-
Issuance of common shares upon conversion of Series F preferred stock		-			-			-		-		(17,535	)		(2	)		87,674		9		-			-			(7	)		-			-
Net loss three months ended March 31, 2021		-			-			-		-		-			-			-		-		-			-			-			(6,280,066	)		(6,280,066	)
Balance as of March 31, 2021		444,587		$	46			731,845	$	74		46,847		$	5			2,911,480	$	291		286,744		$	2,248,367		$	25,763,456		$	(40,805,091	)	$	(12,792,852	)

Stock based compensation		-			-			-		-		-			-			-		-		-			-			960,334			-			960,334
Issuance of common shares for Scouted acquisition		-			-			-		-		-			-			15,591		2		(15,591	)		(113,036	)		113,034			-			-
Issuance of shares for Upsider acquisition		-			-			-		-		-			-			271,153		27		(271,153	)		(2,135,331	)		2,135,304			-			-
Issuance of shares for One Wire acquisition		-			-			-		-		-			-			155,327		16		-			-			1,436,761			-			1,436,777
Issuance of shares for services		-			-			-		-		-			-			20,000		2		-			-			152,498			-			152,500
issuance of common shares upon conversion of debentures		-			-			-		-		-			-			17,687		2		-			-			67,211			-			67,213
Issuance of common shares for accounts payable		-			-			-		-		-			-			32,941		3		-			-			139,997			-			140,000
Issuance of common shares upon conversion of Series D preferred stock		(68,312	)		(7	)		-		-		-			-			341,560		34		-			-			(27	)		-			-
Net income three months ended June 30, 2021		-			-			-		-		-			-			-		-		-			-			-			3,528,279			3,528,279
Balance as of June 30, 2021		376,275		$	39			731,845	$	74		46,847		$	5			3,765,739	$	377		-		$	-		$	30,768,568		$	(37,276,812	)	$	(6,507,749	)

	Six Months Ended			Six Months Ended
	June 30, 2022			June 30, 2021

Cash Flows from Operating Activities
Net loss	$	(5,371,098	)	$	(2,751,787	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense		1,926,194			834,845
Bad debt expense		363,702			58,726
Gain on debt extinguishment		(1,205,195	)		(24,925	)
Equity based compensation expense		2,404,064			1,615,241
Recognized loss on marketable securities		-			534
Warrant modification expense		152,244			-
Loan principal paid directly through grant		-			(2,992	)
Amortization of debt discount and debt costs		-			2,486,111
Initial derivative expense		-			3,585,983
Change in fair value of earn-out liability		26,604			-
Factoring discount fee and interest on factoring agreement		45,413			-
Change in fair value of derivative liability		-			(8,203,371	)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		134,002			(2,032,275	)
Decrease (increase) in accounts receivable - related parties		49,033			(5,602	)
Decrease (increase) in prepaid expenses and other current assets		34,821			(186,329	)
(Decrease) increase in accounts payable and accrued liabilities		(357,932	)		1,900,033
(Decrease) increase in accounts payable - related parties		(137,741	)		410,040
Increase in customer advances		426,136			-
(Decrease) increase in deferred revenue		(222,818	)		425,383
Net cash used in operating activities		(1,732,571	)		(1,890,385	)

Cash Flows from Investing Activities
Capitalized internal use software		(763,785	)		-
Cash and receivables acquired		-			220,153
Cash paid for acquisitions		-			(249,983	)
Net cash used in investing activities		(763,785	)		(29,830	)

Cash Flows from Financing Activities
Proceeds from notes		-			250,000
Proceeds from convertible notes		-			2,153,200
Deferred offering costs		-			(473,896	)
Payments of notes		(1,101,400	)		(11,193	)
Proceeds from factoring agreement		3,380,362			-
Repayments of factoring agreement		(653,008	)		-
Repayments of sale of future revenues		-			(10,904	)
Net cash provided by financing activities		1,625,954			1,907,207

Net decrease in cash		(870,402	)		(13,008	)
Cash, beginning of period		2,584,062			99,906

Cash, end of period	$	1,713,660		$	86,898

Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	59,622		$	159,325
Cash paid during the period for income taxes	$	-		$	-

Supplemental schedule of non-cash investing and financing activities:
Original issue discount deducted from convertible note proceeds	$	-		$	342,554
Debt costs deducted from convertible note proceeds	$			$	334,800
Intangible assets acquired	$	-		$	7,066,165
Notes and accrued interest converted to common stock	$			$	356,689
Common stock issued/to be issued for asset acquisitions	$	-		$	4,956,948
Notes payable and accrued interest exchanged for debentures	$			$	252,430
Accounts payable paid with common stock	$	-		$	140,000
Accrued compensation paid with common stock	$	-		$	16,425
Warrant derivative liability extinguished	$	-		$	373,070
Liabilities assumed in acquisition	$	-		$	89,089
Warrant derivative liability at inception	$	-		$	5,960,059
Accounts receivable owed under factoring agreement collected directly by factor	$	927,376		$	-
Purchase price measurement period adjustment to goodwill and accounts receivable	$	35,644		$	-

	Three Months Ended June 30,
	2022		2021
Recruiters on Demand	$	4,684,062	$	1,796,948
Consulting and staffing services		940,474		2,157,658
Permanent placement fees		313,325		188,196
Software Subscriptions		808,052		175,790
Marketplace Solutions		366,537		62,302
Total revenue	$	7,112,450	$	4,380,894

	Six Months Ended June 30,
	2022		2021
Recruiters on Demand	$	8,890,047	$	2,754,427
Consulting and staffing services		2,272,754		4,230,104
Permanent placement fees		617,575		228,162
Software Subscriptions		1,504,737		175,790
Marketplace Solutions		695,990		156,956
Total revenue	$	13,981,103	$	7,545,439

	Total Deferred June 30, 2022		Recognize Q3 2022		Recognize Q4 2022		Recognize 2023
Recruiters on Demand	$	53,372	$	53,372	$	-	$	-
Full-time Placement	$	150,000	$	150,000	$	-	$	-
Software Subscriptions	$	132,873	$	132,873	$	-	$	-
Marketplace Solutions	$	187,386	$	64,289	$	78,222	$	44,875
TOTAL	$	523,631	$	400,534	$	78,222	$	44,875

	Fair Value at December 31,		Fair Value Measurement Using
	2021		Level 1		Level 2		Level 3
Contingent consideration for acquisitions	$	578,591	$	-	$	-	$	578,591

Beginning balance, December 31, 2020	$	-
Acquisitions and Settlements:
Novo Group Acquisition		543,297
Re-measurement adjustments:
Change in fair value of earn-out liability		35,294
Ending balance, December 31, 2021		578,591
Re-measurement adjustments:
Change in fair value of earn-out liability		26,604
Gain on debt extinguishment		(605,195	)
Ending balance, June 30, 2022	$	-

	June 30, 2022	December 31, 2021

Fair value	-	$578,591
Valuation technique	Discounted cash flow	Discounted cash flow
Significant unobservable input	Projected revenue and probability of achievement	Projected revenue and probability of achievement

	Six Months Ended June 30,
	2022		2021
Balance at December 31	$	-	$	11,537,997
Additions to derivative instruments		-		5,960,059
Reclassifications to equity upon modification or cancellation of warrants		-		(373,070	)
(Gain) loss on change in fair value of derivative liability		-		(8,203,371	)
Balance at June 30,	$	-	$	8,921,615

	Three months ended
	June 30,
	2021
Net income attributable to common shareholders	$	3,528,279
Income attributable to warrant derivatives
Change in fair value of derivative		(7,574,750	)
Diluted loss attributable to common shareholders	$	(4,046,471	)

Basic shares outstanding		3,560,745
Warrant derivative shares		2,318,736
Diluted shares outstanding		5,879,481

Diluted loss per share	$	(0.69	)

	June 30, 2022		December 31, 2021
Prepaid shares issued for services	$	119,335	$	237,382
Prepaid expenses		237,344		175,263
Prepaid insurance		4,309		111,040
Other receivables		32,223		22,394
Prepaid expenses and other current assets	$	393,211	$	546,079

	Six Months Ended
	June 30,
	2022		2021
Net realized gains (losses) on investment sold	$	-	$	-
Net unrealized loss on investments still held		-		(534	)

Total	$	-	$	(534	)

	June 30, 2022			December 31, 2021
Carrying value - January 1	$	7,718,842		$	3,517,315
Goodwill acquired during the year		-			6,731,852
		7,718,842			10,249,167
Purchase price measurement period adjustments		(35,644	)		-
Impairment losses		-			(2,530,325	)
Carrying value - end of period	$	7,683,198		$	7,718,842

	June 30, 2022			December 31, 2021
Customer contracts	$	8,093,787		$	8,093,787
License		1,726,965			1,726,965
Software acquired		3,785,434			3,785,434
Internal use software		763,785			-
Domains		40,862			40,862
		14,410,833			13,647,048
Less accumulated amortization		(5,830,929	)		(3,905,216	)
Carrying value	$	8,579,904		$	9,741,832

	June 30, 2022			December 31, 2021
Term loan(s)	$	-		$	50,431
Promissory notes		2,648,862			4,299,831
Factoring arrangement		1,845,391			-
Total loans payable		4,494,253			4,350,262
Less current portion		(3,862,052	)		(1,712,387	)
Non-current portion	$	632,201		$	2,637,875

Year Ending December 31,
2022 (remainder of year)	$	2,774,759
2023		1,719,494
Total minimum principal payments	$	4,494,253

	Stock Awards
Outstanding at December 31, 2020		221,600
Granted		158,790
Vested		(151,290	)
Vested and issuable		(83,100	)
Forfeited or cancelled		-
Outstanding at December 31, 2021		146,000
Granted		95,825
Vested and issued		(88,325	)
Vested and issuable		(7,500	)
Forfeited or cancelled		-
Outstanding at June 30, 2022		146,000

	June 30, 2022
Risk-free interest rates	0.31-3.21		%
Expected life (in years)	1.00 - 5.00
Expected volatility	136-226		%
Dividend yield		0	%

	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Life (In Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2021		2,671,177		$	3.89		2.71		53,670
Granted		552,561			2.05		-		-
Exercised		-			-		-		-
Expired or cancelled		(300,662	)		3.61		-		-
Outstanding at June 30, 2022		2,923,076		$	3.80		3.87		525
Exercisable at June 30, 2022		1,219,267		$	-		4.28		-

				Weighted
				Average
				Exercise
	Warrants			Price per
	Outstanding			Share
Outstanding at December 31, 2021		6,682,359		$	4.92
Issued		-			-
Cancelled pursuant to modification		-			-
Exchanged for common stock		(112,726	)		2.00
Exercised		-			-
Expired or cancelled		-			-
Outstanding at June 30, 2022		6,569,633			4.92

Sales and client relationships and contracts	$	1,382,076
Intellectual property		98,721
Domains		18,000
Goodwill		306,386
Total Purchase Price	$	1,805,183

Sales and client relationships and contracts	$	3,130,773
Intellectual property		156,539
Domains		4,600
Goodwill		736,525
Accounts payable		(89,089	)
Total Purchase Price	$	3,939,348

Cash	$	54,868
Accounts receivable		165,285
Sales and client relationships and contracts		760,852
Intellectual property		121,700
Domains		10,152
Goodwill		369,671
Total Purchase Price	$	1,482,528

Cash	$	10,702
Accounts receivable		17,720
Prepaid Assets		11,910
Intangible Assets		3,941,266
Goodwill		657,953
Total Purchase Price	$	4,639,551

Accounts receivable	$	797,643
Prepaid Assets		55,000
Intangible Assets		2,062,296
Goodwill		4,625,674
Assumed Liabilities		(423,188	)
Total Purchase Price	$	7,117,425

·	Software Subscriptions: We offer a managed service subscription using our web-based platform to help employers recruit talent. Our Platform allows our customers to source, contact, screen, and sort candidates using data science, advanced email campaigning tools, and predictive analytics. As part of our software subscriptions, we offer enhanced support packages and on-demand recruiting support services for an additional fee. Depending on the subscription type, additional fees may be charged when we place a candidate with our customer. In such cases, if the candidate ceases to be employed by the customer during the initial 90 days (the 90-day guarantee), we refund the customer in full for all fees paid by the customer.

·	Recruiters on Demand: Consists of a consulting and staffing service specifically for the placement of professional recruiters, which we market as Recruiters on Demand. Recruiters on Demand is a flexible, time-based solution that provides businesses of all sizes access to recruiters on an outsourced, virtual basis for help with their hiring needs. As with other consulting and staffing solutions, we procure for our employer clients qualified professional recruiters and then place them on assignment with our employer clients. We derive revenue from Recruiters on Demand by billing the employer clients for the placed recruiters' ongoing work at an agreed-upon, time-based rate. We directly source recruiter candidates from our network of recruiters. In addition, we also offer talent planning, talent assessment, strategic guidance, and organizational development services, which we market as our “Talent Effectiveness” practice. Companies prepay for a certain number of consulting hours at an agreed-upon, time-based rate. We source and provide the independent consultants that provide the service.

·	Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generate full-time placement revenue by earning one-time fees for each time employers hire one of the candidates we refer. Employers alert us of their hiring needs through our Platform, or other communications. We source qualified candidate referrals for the employers’ available jobs through independent recruiter users that access the Platform and other tools. We support and supplement the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team. Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earn a “full-time placement fee,” an amount separately negotiated with each employer client. The full-time placement fee is typically either a percentage of the referred candidates’ first-year base salary or an agreed- upon flat fee.

·	Marketplace: Our “Marketplace” category comprises services for businesses and individuals that leverage our online presence. 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. In some cases, we earn a percentage of revenue a business receives from attracting new clients by advertising on our 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 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 that involves promoting these job seekers’ profiles and resume to help procure employment, upskilling and training. Our resume distribution service allows a job seeker to upload their resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service. We also offer a recruiter certification program encompassing our recruitment-related training content, which we make accessible through our online learning management system. Customers of the recruiter certification program use a self-managed system to navigate through a digital course of study. 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. Additionally, we partner with Careerdash, a high-quality training company, to provide Recruiter.com Academy, an immersive training experience for career changers.

·	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. We generate revenue by first referring qualified personnel for the employer’s specific talent needs, then placing such personnel with the employer, but with our providers acting as the employer of record for us, and finally, billing the employer for the time and work of our placed personnel on an ongoing basis. Our process for finding candidates for consulting and staffing engagements largely mirrors our process for full-time placement hiring. This process includes employers informing us of open consulting and temporary staffing opportunities and projects, sourcing qualified candidates through the Platform and other similar means, and, finally, the employer selecting our candidates for placement after a process of review and selection. We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly invoicing schedule.

	·	Awarded a trademark registration (Reg. No. 6,565,232) from the U.S. Trademark Office for the word-mark "Recruiter.com.";

	·	Received recognition for our career communities with Mediabistro being named one of the best websites for hiring niche employees by TechRadar and Scouted being named one of the best job search websites of 2022 by Balance Careers;

	·	Launched a new cryptocurrency career community platform to address the burgeoning crypto hiring market that has been rapidly growing with demand;

	·	Selected by Deel, a platform that streamlines worldwide compliance and payments for international teams, to join their exclusive new Talent Marketplace;

	·	Partnered with Professional Diversity Network, Inc. to help employers access diverse talent;

	·	Announced a partnership with Oyster, a global employment platform, to help growing companies hire top talent;

	·	Announced a partnership with Green Rhino Recruitment; and

	·	Signed an Accounts Receivable-backed factoring agreement to support our growth from Bay View Funding, a subsidiary of Heritage Bank of Commerce (HTBK), a premier community business bank in the heart of Silicon Valley

	·	Conducted webinars with partner Oyster, discussing remote work and sharing tips on how companies can adapt;
	·	Partnered with Revelio Labs to release relocation data, following moving trends through the United States from March 2020 to March 2022; and
	·	Conducted webinars with partner Oyster, discussing remote work and sharing tips on how companies can adapt.