Strategic Transformation - The company underwent a strategic transformation, selling its staffing business in 2023 and the Recruiter.com website in Q3 2024[211] - The company exited the Consulting and Staffing line of business through a strategic sale to Futuris, Inc. in October 2023[214] - The company is preparing for a planned spin-out transaction of certain operating assets to its Atlantic Energy Solutions subsidiary, now being renamed CognoGroup[225] - The Company announced a name change to Nixxy, Inc., effective December 1, 2024, with common stock trading under the new ticker symbol "NIXX" starting October 1, 2024[228] - The Company terminated the non-binding Letter of Intent with Just Got 2 Have It, Inc. as part of its strategic shift towards telecommunications and technology[236] Revenue and Financial Performance - Revenue for the year ended December 31, 2024, was $0.6 million, a decrease of $2.6 million or 81% compared to $3.2 million in 2023, primarily due to a 99.9% decrease in the Recruiters on Demand business[230] - The Company reported no revenue from Software Subscriptions in 2024, compared to $0.4 million in 2023[230] - The company generated revenue from various activities, including software subscriptions, full-time placements, and marketplace services[212] - Revenue share revenues are recorded on a net basis as an agent, based on a percentage of revenue earned from client referrals[222] - The company recognizes revenue in accordance with ASC 606, with various revenue recognition methods based on service type[294] Expenses and Losses - Total operating expenses increased to $15.5 million in 2024 from $10.9 million in 2023, driven by a $4.7 million goodwill impairment and a $2.8 million rise in administrative expenses[232] - General and administrative expenses for the year ended December 31, 2024, were $8.9 million, an increase from $6.1 million in 2023, with non-cash stock-based compensation rising from $1.5 million to $5.6 million[238] - The Company recorded a net loss from continuing operations of $22.6 million for the year ended December 31, 2024, compared to a net loss of $7.7 million in 2023[240] - Adjusted EBITDA for the year ended December 31, 2024, was a loss of $2.1 million, an improvement from a loss of $2.4 million in 2023[246] Cash Flow and Debt Management - Net cash used in operating activities was $4.1 million for the year ended December 31, 2024, compared to $0.9 million in 2023[247] - As of December 31, 2024, the Company had approximately $2.5 million in cash, insufficient to meet its working capital needs for the next 12 months[251] - The Company extinguished approximately $1.18 million in principal and interest by converting August 2022 notes into 5,358,569 shares of common stock[228] - The Company recognized a loss on extinguishment of debt amounting to $8,224,042 for the year ended December 31, 2024, related to the 8/17/22 and 8/30/22 Notes[270] - The Company repaid $1,071,522 of principal under the Montage note during the year ended December 31, 2024[279] Agreements and Contracts - In 2024, the company focused on finalizing strategic transactions, including a license agreement with GoLogiq and an Asset Purchase Agreement with Job Mobz[225] - The Company entered into a Technology License and Commercialization Agreement with GoLogiq, Inc., granting an exclusive license for a term of 10 years with a reduced royalty from 8% to 5%[227] - A twelve-month contract with Mexedia SpA was established, expected to generate up to $10 million in revenue per month through SMS services[236] - The company entered into a factoring agreement with a maximum credit of $3,000,000, with advances of up to 85% of eligible trade accounts receivable[286] Accounting and Financial Reporting - Deferred revenue results from transactions where the company has been paid for services but has not yet met all revenue recognition criteria[223] - Software subscription revenues are recognized monthly over the subscription term, while consulting and staffing services revenues are recognized when services are rendered[296][302] - Goodwill is tested for impairment annually on December 31, with assessments based on qualitative factors and discounted cash flow methodologies[306][310] - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-09 and ASU 2024-03, on its disclosures[312][314]
Nixxy, Inc.(NIXX) - 2024 Q4 - Annual Report