UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 8-K

________________________________

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 2, 2023

________________________________

 

RECRUITER.COM GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada

001-53641

90-1505893

(State or other jurisdiction

of incorporation)

(Commission

 File Number)

(IRS Employer

Identification No.)

500 Seventh Avenue

New York, New York 10018

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (855) 931-1500

 

Not Applicable

(Former name or former address, if changed since last report.)

________________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

☐ 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

☐ 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

☐ 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 Securities registered pursuant to 12(b) of the Act:

 

Title of class

 

Trading symbol

 

Name of exchange on which registered

Common Stock

 

RCRT

 

NASDAQ Capital Market

Common Stock Purchase Warrants

 

RCRTW

 

NASDAQ Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Novo Amendment

 

On February 2, 2023, Recruiter.com Group, Inc. (the “Company”) entered into a Consent and Amendment No. 1 to Promissory Note with Novo Group, Inc. (“Novo”) and Montage Capital II, L.P. (solely with respect to Section 2 thereof) (“Montage”) effective November 1, 2022 (the “Novo Amendment”). The Novo Amendment modifies the Promissory Note issued to Novo on August 27, 2021 (the “Novo Note”) by amending the payment schedule pursuant to which the Company shall make payments of principal and interest to Novo, as further described in the Novo Amendment.

 

The summary of the Novo Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Novo Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

 

Montage Amendment

 

On February 2, 2023, the Company entered into a First Amendment to Loan and Security Agreement (the “Montage Amendment”), by and between the Company, its subsidiaries (Recruiter.com, Inc., Recruiter.com Recruiting Solutions, LLC, Recruiter.com Consulting, LLC, VocaWorks, Inc., Recruiter.com Scouted, Inc., Recruiter.com Upsider, Inc., and Recruiter.com - OneWire, Inc.), and Montage, effective as December 18, 2022. 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.

 

The summary of the Montage Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Montage Amendment, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K.

 

Warrant Amendments

 

On February 3, 2023, the Company entered into amendments (the “Warrant Amendments”) to Common Stock Purchase Warrants issued on August 17, 2022 (the “Warrants”) to each of Cavalry Fund I LP, Firstfire Global Opportunities Fund LLC, and Porter Partners, L.P. (the “Warrantholders”). The Warrant Amendments modify the time period until the Warrantholders are permitted to exercise the Warrants by means of a “cashless exercise.” In addition, the Warrant Amendments lower the exercise price of the Warrants to $0.38 per warrant share, as further described in the Warrant Amendments. As a result of the lowered exercise price of the Warrants, the exercise price of warrants issued by the Company on May 28, 2020, January 5, 2021, January 20, 2021, August 17, 2022, and August 30, 2022, will be automatically lowered to $0.38 per warrant share.

 

The summary of the Warrant Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Warrant Amendments, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

To the extent required by Item 2.03 of Form 8-K, the information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits:

 

Exhibit

 

Description

4.1

 

Form of First Amendment to Common Stock Purchase Warrant dated as of February 3, 2023.

10.1

 

Consent and Amendment No. 1 to Promissory Note, by and between the Company, Novo Group, Inc., and Montage Capital II, L.P. dated February 2, 2023 and effective as of November 1, 2022.

10.2

 

First Amendment to Loan and Security Agreement, by and among the Company, its subsidiaries, and Montage Capital II, L.P. dated February 2, 2023 and effective December 18, 2022.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Recruiter.com Group, Inc.

    

Date: February 8, 2023

/s/ Evan Sohn

 

 

Evan Sohn

 
  

Chief Executive Officer

 
    

 

 

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EXHIBIT 4.1

 

FIRST AMENDMENT TO COMMON STOCK PURCHASE WARRANT

 

THIS FIRST AMENDMENT TO COMMON STOCK PURCHASE WARRANT (this “Amendment”) is dated as of February 3, 2023, and is by and between Recruiter.com Group, Inc., a Nevada corporation (the “Company”), and __________________________________ (the “Holder”).

 

RECITALS

 

WHEREAS, the Company and the Holder are parties to that certain Common Stock Purchase Warrant of the Company, dated August 17, 2022 (the “Warrant”);

 

WHEREAS, pursuant to Section 5(l) of the Warrant, the provisions of the Warrant may be modified, amended, or waived, with the written consent of the Company and the Holder;

 

WHEREAS, any capitalized terms that are not otherwise defined herein shall have the meaning ascribed to them in the Warrant;

 

WHEREAS, the Company desires to revise Section 2(c) of the Warrant to extend the deadline for registering the resale of the Warrant Shares by the Holder prior to which time Holder cannot exercise the Warrant by means of a “cashless exercise”; and

 

WHEREAS, as an inducement for the Holder agreeing to revise Section 2(c) and exercising at one hundrd percent (100%) of the current registered Warrant Shares which are [●] warrants from [●] via a single Notice of Exercise, the Company proposes to reduce the Exercise Price.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holder, intending to be legally bound, agree as follows:

 

AGREEMENT

 

Exercise Price of the Warrant. Provided that Holder exercises one hundred percent (100%) of the Warrant Shares via a single Notice of Exericse delivered prior to February 6, 2023, Section 2(b) of the Warrant is hereby amended and restated in its entirety as follows:

 

(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.38, subject to adjustment hereunder (the “Exercise Price”).

 

Cashless Exercise of the Warrant. The opening paragraph of Section 2(c) of the Warrant is hereby amended and restated in its entirety as follows:

 

(c) Cashless Exercise. If at any time after the eight-month anniversary of the Initial Exercise Date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

Warrant in Effect. Except as otherwise specifically provided herein, all other terms and conditions of the Warrant shall remain in full force and effect.

 

 

 

 

 

Representations. The Holder hereby represents that he, she or it is, as of the date hereof, the holder of the Warrant. Each of the Holder and the Company hereby represents and warrants that such party has full power and authority to enter into this amendment and that this Amendment constitutes the legal, valid and binding obligation of such party, enforceable by its terms.

 

Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but which together shall constitute one document. Delivery by facsimile of an executed copy of this Amendment shall be deemed effective delivery and each facsimile shall be deemed effective and enforceable as if it were an original.

 

SIGNATURE PAGE FOLLOWS

 

 

2

 

 

IN WITNESS WHEREOF, the Company and the Holder have executed this Amendment as of the date set forth above.

 

 

 

COMPANY

 

 

 

 

RECRUITER.COM GROUP, INC.

 

       
By:

 

Name:

Evan Sohn  
  Title: Chief Executive Officer  
       

 

HOLDER

 

 

 

 

 

 

 

 

 

Printed Name:

 

 

 

 

 

 

 

3

 

 

EXHIBIT 10.1

 

CONSENT AND AMENDMENT NO. 1 TO

PROMISSORY NOTE

 

This CONSENT AND AMENDMENT NO. 1 TO PROMISSORY NOTE (this “Amendment”) is entered into as of February 2, 2023 and effective as of November 1, 2022 ("Amendment Effective Date"), by and between Recruiter.com Group, Inc., a Nevada corporation (“Borrower”), Novo Group, Inc., a Delaware corporation (“Lender”), and Montage Capital II, L.P., an [     ] limited partnership (“Montage”), solely with respect to Section 1 of this Amendment.

 

RECITALS:

 

A. As of August 27, 2021, Borrower executed and delivered to Lender that certain Promissory Note, in the original principal sum of Three Million Dollars ($3,000,000) (the “Note”);

 

B. As of October of 2022, (i) Borrower, Montage and the other parties thereto entered into that certain Loan and Security Agreement (“Senior Loan Agreement”) and (ii) Borrower, Montage and Lender entered into that certain Subordination Agreement (“Subordination Agreement”), pursuant to which Lender subordinated all of Borrower’s indebtedness and obligations owed to Lender to all of Borrower’s indebtedness and obligations owed to Montage;

 

C. Borrower has requested that Lender amend the payment terms of the Note to be interest only for the period starting November 1, 2022 though and including March 31, 2023, with payments of principal and interest to resume starting April 1, 2023 by replacing the existing payment schedule with the new payment schedule attached hereto as Exhibit A (the “Amended Payment Schedule”);

 

D. Pursuant to Section 6.11 of the Senior Loan Agreement and Section 9 of the Subordination Agreement, Lender requires Montage to consent to the amendments contemplated hereby; and

 

E. Pursuant to Section 5.5, "Modifications; Waivers" of the Note, the amendments requested by Borrower must be contained in a written agreement signed by Borrower and Lender.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto for themselves and their successors and assigns do hereby agree, represent and warrant as follows:

 

1. Amendment to Exhibit A of the Note. Exhibit A, “Payment Schedule” of the Note is hereby deleted and replaced in its entirety by Exhibit A, “Payment Schedule” attached hereto.

 

2. Consent of Montage. Montage hereby expressly consents to the revised payment terms of the Note pursuant to the Amended Payment Schedule. Montage acknowledges that its consent hereto satisfies the requirements of Section 6.11 of the Senior Loan Agreement and Section 9 of the Subordination Agreement.

 

3. Conditions of Effectiveness. This Amendment shall become effective as of the Amendment Effective Date upon satisfaction of all of the following conditions precedent:

 

(a) Lender shall have received execution and delivery of, by all parties signatory thereto the following: a duly executed original of this Amendment.

 

 
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4. Reference to and Effect on the Note. Upon the effectiveness of this Amendment, each reference in the Note to “Note,” “Agreement,” the prefix “herein,” “hereof,” or words of similar import shall mean and be a reference to the Note as amended hereby. Except as specifically amended herein, the Note shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Except as otherwise expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right of Lender, nor constitute a waiver of any provision of the Note.

 

5. Waiver of Right to Trial by Jury. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THERE MAY BE A CONSTITUTIONAL RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY CLAIM, DISPUTE OR LAWSUIT ARISING BETWEEN OR AMONG THEM, BUT THAT SUCH RIGHT MAY BE WAIVED. ACCORDINGLY, THE PARTIES AGREE THAT, NOTWITHSTANDING SUCH CONSTITUTIONAL RIGHT, IN THIS COMMERCIAL MATTER THE PARTIES BELIEVE AND AGREE THAT IT SHALL BE IN THEIR BEST INTERESTS TO WAIVE SUCH RIGHT, AND, ACCORDINGLY, HEREBY WAIVE SUCH RIGHT TO A JURY TRIAL, AND FURTHER AGREE THAT THE BEST FORUM FOR HEARING ANY CLAIM, DISPUTE, OR LAWSUIT, IF ANY, ARISING IN CONNECTION WITH THIS AMENDMENT, THE NOTE, OR THE RELATIONSHIP AMONG THE PARTIES HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, OR WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, SHALL BE A COURT OF COMPETENT JURISDICTION SITTING WITHOUT A JURY.

 

6. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, and all of which together will constitute one and the same instrument. Receipt by Lender of a facsimile copy of an executed signature page hereof will constitute receipt by Lender of an executed counterpart of this Amendment.

 

7. Successors and Assigns. This Amendment shall inure to the benefit of and be binding upon Borrower, Lender, Montage and each of their respective successors and assigns.

 

8. Governing Law. This Amendment and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Ohio.

 

9. Headings. Section headings in this Amendment are included herein for convenience of reference only and will not constitute a part of this Amendment for any other purpose.

 

[SIGNATURE PAGE FOLLOWS.]

 

 
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IN WITNESS WHEREOF, Borrower, Lender and Montage have hereunto set their hands as of the date first set forth above.

 

 

BORROWER:

 

 

 

 

 

RECRUITER.COM GROUP, INC., a Nevada corporation

 

 

 

 

 

By:

 

 

 

 

[     ], its [     ]

 

 

 

 

 

 

LENDER:

 

 

 

 

 

NOVO GROUP, INC., a Delaware corporation

 

 

 

 

 

 

By:

 

 

 

[     ], its [     ]

 

 

 

 

 

 

PARTY SOLELY WITH RESPECT TO SECTION 2:

 

 

MONTAGE CAPITAL II, L.P, an [     ] limited partnership

 

 

 

 

 

 

By:

 

 

 

 

[     ], its [     ]

 

 

Signature Page to Consent and Amendment No. 1 to Promissory Note

 

 

 

 

 

 

 

 

EXHIBIT 10.2

 

FIRST AMENDMENT TO

LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement is entered into as of February 2, 2023 (the “Amendment”), and is effective as of December 18, 2022 (the “Amendment Effective Date”) by and between Recruiter.com Group, Inc. (“Parent”), Recruiter.com, Inc. (“Recruiter.com”), Recruiter.com Recruiting Solutions, LLC (“Recruiting Solutions”), Recruiter.com Consulting, LLC (“Recruiting Consulting”), VocaWorks, Inc. (“Vocaworks”), Recruiter.com Scouted, Inc. (“Scouted”), Recruiter.com Upsider, Inc. (“Upsider”), Recruiter.com - OneWire, Inc. (“OneWire”), and Montage Capital II, L.P. (“Lender”). Parent, Recruiter.com, Recruiting Solutions, Recruiting Consulting, Vocaworks, Scouted, Upsider, and OneWire are each also referred to herein as a “Borrower” and collectively, as “Borrowers.”

 

RECITALS

 

Borrowers and Lender are parties to that certain Loan and Security Agreement dated as of October 19, 2022 and as amended from time to time (the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.

This Amendment shall become effective as of the Amendment Effective Date, provided the items in Section 8 of this Amendment below have been satisfied. For the avoidance of doubt, Lender does not waive Borrowers’ obligations under the Agreement after the date hereof and as amended hereby, and Lender does not waive any other failure by Borrowers to perform its obligations under the Agreement or other Transaction Documents.

 

2.

Section 5.6 of the Agreement is amended and restated in its entirety to read as follows:

 

 

 

5.6 Key Person Insurance. Borrowers will obtain (and continue to maintain for so long as any Advances are outstanding) key person life insurance in an amount of at least $2,250,000 on Evan Sohn, in form and substance satisfactory to Lender, subject to Section 5.9(ii) of this Agreement.

 

3.

Section 5.7 of the Agreement is amended and restated in its entirety to read as follows:

 

 

 

5.7 Account Control Agreement(s). All of Borrowers’ operating, depository and investment accounts are subject to account control agreement(s), in form and substance satisfactory to Lender, subject to Section 5.9(iii) of this Agreement.

 

4.

Sections 5.9(i), (ii), (iii), and (vi) of the Agreement are amended and restated in their entirety to read as follows:

 

 

(i)

on or before April 1, 2023, evidence of the recordation with the US Patent and Trademark Office of the assignment of certain trademarks listed on the Intellectual Property Security Agreement from Miles Jennings to Parent;

 

(ii)

on or before April 1, 2023, evidence of key person life insurance in an amount of at least $2,250,000 on Evan Sohn;

 

(iii)

on or before April 1, 2023, fully executed account control agreement(s) for Borrowers’ operating and depository accounts maintained with Bank of America;

 

(vi)

on or before April 1, 2023, subordination agreement executed by Puritan Partners LLC (or evidence that the August Note issued to such Person has been repaid in full in accordance with Section 6.10(a) below).

 

 
1

 

 

5.

Section 6.10 of the Agreement is amended and restated in its entirety to read as follows:

 

 

 

6.10 August Notes. (a) Make any payment on any of the August Notes, except under the terms of the subordination agreement applicable to such August Note(s); provided however, in the event that Puritan Partners LLC has not delivered an executed subordination agreement, Borrowers may repay its August Note on or before April 1, 2023 as long as no Event of Default has occurred that is continuing or would exist after giving effect to such payment. (b) Amend any provision of the August Notes or any document relating thereto, other than any amendments that reduce the principal amount or interest rate or extend the maturity date of such note.

 

6.

Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Lender under the Agreement, as in effect prior to the date hereof. Each Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

 

7.

Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

 

 

8.

This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is executed and delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file or electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com), such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” or electronic signature page were an original hereof.

 

 

9.

As a condition to the effectiveness of this Amendment, Lender shall have received, in form and substance satisfactory to Lender, the following:

 

 

a.

this Amendment, duly executed by Borrowers;

 

b.

payment of all Lender Expenses incurred through the date of this Amendment; and

 

c.

such other documents, and completion of such other matters, as Lender may reasonably deem necessary or appropriate.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

BORROWERS:

 

RECRUITER.COM GROUP, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

RECRUITER.COM, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

RECRUITER.COM CONSULTING, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

VOCAWORKS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

RECRUITER.COM SCOUTED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

BORROWERS:

 

RECRUITER.COM UPSIDER, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

RECRUITER.COM – ONEWIRE, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

RECRUITER.COM RECRUITING SOLUTIONS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

 
4

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

 

 

LENDER:

 

MONTAGE CAPITAL II, L.P.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 
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