♦️ During Covid-19, the traditional hiring process was never more difficult for recruiters and candidates, and it was not easy to adapt to a fully remote experience. Digital transformation has sped up significantly, and the way companies work has fundamentally changed due to the COVID-19 pandemic. Continuing significant shifts are underway in the process to leverage technology to drive efficiency for both recruiters and job-seeker alike.

♦️ In the first half-year of 2019, Recruiter.com started its mission to build the largest recruiter platform in the world. It launched its AI-powered candidate sourcing and matching technology to improve the functionality and effectiveness of the Company’s platform solutions. The platform augmented with artificial intelligence candidate sourcing and matching technology and video allows their clients to access the scalable sourcing power of an extensive network of independent recruiters. By the end of 2019, the company had a virtual team of over 20,000 small and independent recruiters using the innovative web platform. By the end of 2019, the Company recorded close to $6 million in revenue.

♦️ In 2020, COVID-19 had a dramatic effect on the US economy and the job market. Unemployment peaked at 14.7% in April of 2020.  Since then, the labor markets have improved significantly. Recruiter.com benefitted and increased its revenue by 41.1% to $8.5 million by the end of 2020 compared to 2019. Gross profit increased to $2.36 million. The Company attracted more than 28,000 small and independent recruiters.

♦️ There is no question that the way we work has fundamentally changed due to the COVID-19 pandemic. Through software and mechanisms, (AI) and human-like intelligence have accelerated digitization operations by three to four years. Video interview software and AI-powered platforms make hiring up to 90% faster and significantly reduce hiring costs. Recruiter.com expects continued strong growth throughout the second half of 2021 and beyond.

♦️ Recruiters.com will further grow by increasing its world-largest virtual recruiter network with hundreds of millions of candidates and expanding its relationship with clients, attracting new clients, increasing growth and earning opportunities with recruiters, and grow through further investments in technology and acquisitions. Its AI platform is capable of profiling 500+ million candidates.

♦️ RCRT reported strong second-quarter results. For the quarter ended June 30, 2021, the Company increased its revenues by 136.40% to $4.4 million, compared to 2Q20 and 38.4% to $4.38 million vs. 3.2 million in 1Q21. In the second quarter of 2021, the gross margin increased to 32.75%; the net profit was $3.5 million, or $.60 per share, fully diluted compared to a loss of $6.2 million for 1Q21. The gain is related to a change in the fair value of the derivative liability of $7.5 million. The RCRT generates 96% of its revenue in the U.S., significant opportunity for growth outside of the U.S exists.

♦️ In our Company analysis and valuation, we use EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Over the years, the EBITDA measure has gained importance in quarterly reports, and it is employed to analyze and compare profitability between different corporations and industries. It is for this reason that EBITDA is often preferred over other valuation metrics. Subsequent Q2 the Company raised approx. $13 million in new capital. Despite impressive 2Q2021 results and a strong growth outlook, the shares are trading on the lower-end to the 52-weeks trading range. We start covering RCRT and work on an extensive research report, available within the next twenty to thirty days.

This memorandum is for informative purposes only. SISM Investors is an investment research firm without any investment banking activities and is publishing research reports with respect to the securities of its clients. The information contained in these reports is based on sources that we consider reliable but is not guaranteed by the company nor us, nor do our reports represent a solicitation to buy or sell the securities discussed therein. While the information contained has been obtained from sources believed to be reliable, we do not represent that it is accurate or complete, and it should not be relied upon as such. Risks to our valuation include sustained weakness in demand for labor and the economic health of current and prospective clients that use Recruiter’s platform and services. SISM Investors, Erlenweg 15, 8302 Kloten Switzerland. All rights reserved.♦️