Part I Financial Information This section presents the company's condensed consolidated financial statements, management's discussion and analysis, and disclosures on market risk and controls Condensed Consolidated Financial Statements The company's financial statements for Q1 2025 reflect a strategic pivot, with total assets increasing to $11.8 million driven by acquisitions, a sharp decrease in cash to $0.3 million, and revenue surging to $1.4 million offset by a wider net loss of $4.5 million due to increased operating expenses Condensed Consolidated Balance Sheets As of March 31, 2025, total assets grew to $11.8 million from $7.0 million at year-end 2024, primarily due to a significant increase in intangible assets to $7.5 million, while cash reserves sharply decreased to $0.3 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Assets | | | | Cash | 294,166 | 2,532,990 | | Total current assets | 1,829,780 | 3,166,762 | | Intangible assets, net | 7,534,015 | 1,376,485 | | Total assets | 11,772,295 | 6,957,288 | | Liabilities & Equity | | | | Accounts payable | 2,481,026 | 1,141,978 | | Total current liabilities | 6,207,427 | 4,376,970 | | Total liabilities | 6,207,427 | 4,376,970 | | Total stockholders' equity | 5,564,868 | 2,580,318 | | Total liabilities and stockholders' equity | 11,772,295 | 6,957,288 | Condensed Consolidated Statements of Operations For Q1 2025, revenue significantly increased to $1.4 million from $0.2 million year-over-year, driven by new telecommunication services, but a sharp rise in operating expenses to $6.2 million resulted in a wider net loss of $4.5 million Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Revenue | 1,396,898 | 222,557 | | Cost of revenue | 1,261,487 | 3,029 | | Total operating expenses | 6,173,168 | 1,275,862 | | Loss from operations | (4,776,270) | (1,053,305) | | Net loss | (4,542,163) | (778,427) | | Net loss per common share - Basic and Diluted | (0.30) | (0.40) | | Weighted average common shares - Basic and Diluted | 15,412,809 | 1,947,492 | Condensed Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity increased from $2.6 million to $5.6 million in Q1 2025, primarily due to the issuance of 2.8 million common shares for intangible assets valued at $5.2 million and $2.2 million in stock-based compensation, partially offset by a $4.6 million net loss - The company issued 2,843,319 shares of common stock for intangible assets, adding $5,174,556 to additional paid-in capital17 - Stock-based compensation for the quarter totaled approximately $11 thousand for options and $2.1 million for stock17 Condensed Consolidated Statements of Cash Flows In Q1 2025, the company used $1.8 million in cash from operating activities, a significant increase from Q1 2024, and $0.4 million for investing activities, resulting in a decrease of the cash balance from $2.5 million to $0.3 million Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash (used) in operating activities | (1,838,824) | (669,798) | | Net cash (used) in / provided by investing activities | (400,000) | 100,000 | | Net cash used in financing activities | – | (129,000) | | Net decrease in cash | (2,238,824) | (698,798) | | Cash, end of period | 294,166 | 309,610 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's name change to Nixxy, Inc., a strategic pivot to telecommunications via acquisitions, a disclosed substantial doubt about its going concern ability due to cash burn and working capital deficit, the establishment of two new reporting segments (Auralink and Nixxy), and ongoing legal proceedings - The company changed its name from Recruiter.com Group, Inc. to Nixxy, Inc. on September 27, 202423 - Management has determined there is substantial doubt about the Company's ability to continue as a going concern due to a working capital deficit of approximately $4.4 million and insufficient cash to fund operations for the next 12 months97 - The company now operates in two reportable segments: Auralink (telecommunications) and Nixxy (marketplace solutions), with Auralink generating $1.3 million in revenue and Nixxy generating $0.1 million for Q1 202591195 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic transformation from recruitment to telecommunications and AI, highlighted by a 528% year-over-year revenue increase to $1.4 million in Q1 2025, alongside a 384% increase in operating expenses leading to a $4.5 million net loss, and acknowledges critical liquidity issues with only $0.3 million in cash - The company is undergoing a strategic transformation, selling its staffing and recruitment website businesses to focus on telecommunications and AI, leveraging acquisitions and a license agreement with GoLogiq204 Results of Operations Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1.4M | 0.2M | +528% | | Cost of Revenue | 1.3M | 3k | +41,885% | | Operating Expenses | 6.2M | 1.3M | +384% | | Net Loss | 4.5M | 0.8M | +462.5% | - The company does not have sufficient capital to meet its working capital needs for the next 12 months, with cash on hand of approximately $0.3 million as of March 31, 2025234 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable257 Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses in internal control over financial reporting, specifically a lack of sufficient staff for proper segregation of duties and in-house technical expertise for complex accounting transactions - The principal executive and financial officers concluded that disclosure controls and procedures were not effective as of the end of the reporting period258 - Material weaknesses identified include: (1) insufficient number of employees for proper segregation of duties and monitoring, and (2) lack of in-house technical expertise to analyze complex transactions260 Part II Other Information This section covers legal proceedings, risk factors, unregistered sales of equity securities, defaults on senior securities, mine safety disclosures, and other information Legal Proceedings The company is involved in several legal matters, including pursuing collection against BKR Strategy Group with a favorable ruling on a $0.5 million promissory note, and defending against lawsuits from Pipl, Inc. for over $0.3 million, Creditors Adjustment Bureau, Inc. for approximately $0.2 million, and HireTeammate, Inc. for over $79 thousand - The company is a defendant in a lawsuit filed by Pipl, Inc. for an alleged unpaid amount exceeding $266,562.59265 - The company is involved in legal proceedings initiated by Creditors Adjustment Bureau, Inc. for alleged unpaid obligations of approximately $213,894.44266 - HireTeammate, Inc. (hireEZ) has sued the company for a claimed $79,388.39 related to alleged breach of contract267 Risk Factors The company directs investors to the risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024, with no new risk factors presented in this quarterly report - The report refers to the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2024269 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - None270 Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - None271 Mine Safety Disclosures This section is not applicable to the company - Not applicable272 Other Information During the quarter ended March 31, 2025, no director or officer of the company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the quarter273 Exhibits This section lists the exhibits filed as part of the Quarterly Report, including certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files - Exhibits filed with the report include officer certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL documents274
Nixxy, Inc.(NIXX) - 2025 Q1 - Quarterly Report