2. Liquidity, Financial Condition and Management's Plans

 

The Company funds its operations principally from cash flows generated in its operating activities, cash on hand and accounts receivable collected.

 

We had been dependent on Monster Worldwide, Inc. ("Monster Worldwide" or "Monster") for all of our recruitment revenue pursuant to an alliance agreement that expired on December 31, 2012. As more fully described in Note 12 below, we entered into a diversity recruitment partnership agreement with LinkedIn Corporation ("LinkedIn") on November 12, 2012, which became effective on January 1, 2013. Pursuant to the agreement, LinkedIn may resell to its customer's diversity-based job postings and recruitment and advertising on our websites.

The non-renewal of our agreement with Monster Worldwide had a material impact on revenue and operating cash flow during the first and second quarters of 2013. With respect to job postings that Monster sold prior to the expiration of our agreement on December 31, 2012, we permitted Monster to maintain such postings on our websites until June 30, 2013. In addition, we agreed to continue to provide Monster with access to certain data until December 31, 2013.  We have incurred and expect to continue to incur only de minimis additional labor and costs, and will not receive any additional payments from Monster Worldwide subsequent to the expiration of our agreement. Additionally, as of January 1, 2013, we have begun to sell our products and services directly to employers, except for those identified as restricted by LinkedIn.

 

As of June 30, 2013, we have incurred various expenses associated with the evolution of our business. These costs include public company compliance expenses, sales and marketing expenses to access recruiting customers directly and investments in our recruiting platform to better serve our diverse job seekers.