Nixxy, Inc.

Previous wording

We have eight subsidiaries, Recruiter.com, Inc., Recruiter.com Recruiting Solutions LLC (“Recruiting Solutions”), VocaWorks, Inc. (“VocaWorks”), Recruiter.com Scouted Inc. (“Scouted”), Recruiter.com Upsider Inc. (“Upsider”), Recruiter.com OneWire Inc. (“OneWire”), and Recruiter.com Consulting, LLC (“Recruiter.com Consulting”), and Auralink AI, Inc. (“Auralink”). Additionally, the Company owns a controlling interest in Atlantic Energy Solutions, Inc., a Colorado company that is traded on the OTC Markets (OTC: AESO).

Current wording

We have eight subsidiaries, Recruiter.com, Inc., Nixxy, LLC, VocaWorks, Inc. (“VocaWorks”), Recruiter.com Scouted Inc. (“Scouted”), Recruiter.com Upsider Inc. (“Upsider”), Recruiter.com OneWire Inc. (“OneWire”), and Recruiter.com Consulting, LLC (“Recruiter.com Consulting”), and Auralink AI, Inc. (“Auralink”). Additionally, the Company owns a controlling interest in Atlantic Energy Solutions, Inc., a Colorado company that is traded on the OTC Markets (OTC: AESO).

Previous wording

In the first quarter of 2025, the period ending March 31, 2025, the Company continued to concentrate on finalizing its strategic transactions critical to its evolution. The Company is in a period of profound change after significantly reducing its operating footprint to focus primarily on strategic financial matters. The Company also continued preparing for its planned spin-out transaction of certain operating assets to its Atlantic Energy Solutions subsidiary, which is currently being renamed CognoGroup, a Nevada Corporation (“CognoGroup”). CognoGroup is planned to hold the current recruitment-related technology assets, including Mediabistro, a job board for the media industry, as well as other assets and projects of the Company, such as its AI-enabled CandidatePitch software and RecruitingClasses.com.

Current wording

In the second quarter of 2025, the period ending June 30, 2025, the Company continued to concentrate on finalizing its strategic transactions critical to its evolution. The Company is in a period of profound change after significantly reducing its operating footprint to focus primarily on strategic financial matters. The Company also continued preparing for its planned spin-out transaction of certain operating assets to its Atlantic Energy Solutions subsidiary, which is currently being renamed CognoGroup, a Nevada Corporation (“CognoGroup”). CognoGroup is planned to hold the current recruitment-related technology assets, including Mediabistro, a job board for the media industry, as well as other assets and projects of the Company, such as its AI-enabled CandidatePitch software and RecruitingClasses.com.

Previous wording

We had revenue of $1.4 million for the three-month period ended March 31, 2025, as compared to $0.2 million for the three-month period ended March 31, 2024, representing an increase of $1.2 million or 528%. The increase resulted primarily due to the increase in telecommunication services of $1.3 million.

Current wording

We had revenue of $13.5 million for the three-month period ended June 30, 2025, as compared to $0.1 million for the three-month period ended June 30, 2024, representing an increase of $13.3 million or 10016%. The increase resulted primarily due to the increase in telecommunication services of $13.4 million.

Previous wording

Cost of revenue was $1.3 million for the three-month period ended March 31, 2025, compared to $3 thousand for the corresponding three-month period in 2024, representing an increase of $1.3 million. This increase resulted primarily from the increase in revenue generating operations during the quarter.

Current wording

Cost of revenue was $13.5 million for the three-month period ended June 30, 2025, compared to $0 for the corresponding three-month period in 2024, representing an increase of $13.5 million. This increase resulted primarily from the increase in revenue generating operations during the quarter.

Previous wording

We had total operating expenses of $6.2 million for the three-month period ended March 31, 2025, compared to $1.3 million for the corresponding three-month period in 2024, an increase of $4.9 million or 384%. This increase was due to increases in general and administrative, sales and marketing, and cost of revenue of $3.0 million, $0.6 million, and $1.3 million respectively, which were partially offset by a decrease in amortization of intangibles of $42 thousand.

Current wording

We had total operating expenses of $16.2 million for the three-month period ended June 30, 2025, compared to $1.1 million for the corresponding three-month period in 2024, an increase of $15.1 million or 1351%. This increase was due to increases in general and administrative, amortization of intangibles, and cost of revenue of $1.5 million, $0.3 million, and $13.4 million respectively.

Previous wording

Our product development expense for the three-months ended March 31, 2025, increased to $18 thousand from $12 thousand for the corresponding period in 2024 due to an increase in hosting and data expense.

Current wording

Our product development expense for the three-months ended June 30, 2025, increased to $27 thousand from $5 thousand for the corresponding period in 2024 due to an increase in hosting and data expense.

Previous wording

For the three-month period ended March 31, 2025, we incurred a non-cash amortization charge of $272 thousand as compared to $314 thousand for the corresponding period in 2024. The amortization expense in 2025 and 2024 relates to the intangible assets acquired from Genesys (now our Recruiting Solutions division), Scouted, Upsider, OneWire, Parrut Novo Group, GOLQ, Aqua Software, Wizco, and Savitr Tech.

Current wording

For the three-month period ended June 30, 2025, we incurred a non-cash amortization charge of $558 thousand as compared to $273 thousand for the corresponding period in 2024. The amortization expense in 2025 and 2024 relates to the intangible assets acquired from Genesys (now our Nixxy, LLC division), Scouted, Upsider, OneWire, Parrut Novo Group, GOLQ, Aqua Software, Wizco, Savitr Tech, and NexGenAI.

Previous wording

General and administrative expense for the three-month period ended March 31, 2025, includes compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses. For the three-month period ended March 31, 2025, our general and administrative expenses were $3.9 million, including $2.2 million of non-cash stock-based compensation. In 2024, for the corresponding period, our general and administrative expenses were $0.9 million, including $300 thousand of non-cash stock-based compensation.

Current wording

General and administrative expense for the three-month period ended June 30, 2025, includes compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses. For the three-month period ended June 30, 2025, our general and administrative expenses were $2.2 million, including $1.1 million of non-cash stock-based compensation. In 2024, for the corresponding period, our general and administrative expenses were $0.8 million, including $28 thousand of non-cash stock-based compensation.

Previous wording

For the three-months ended March 31, 2025, we had a net loss from continuing operations of $4.5 million compared to a net loss of $0.8 million during the corresponding three-month period in 2024.

Current wording

For the three-months ended June 30, 2025, we had a net loss from continuing operations of $4.3 million compared to a net loss of $1.0 million during the corresponding three-month period in 2024.

Previous wording

Our sales and marketing expense for the three-month period ended March 31, 2025, was $0.7 million compared to $0.1 million for the corresponding three-month period in 2024, an increase of $0.6 million, which reflects the increase in revenue generating activities.

Current wording

Our sales and marketing expense for the six-month period ended June 30, 2025, was $0.7 million compared to $93 thousand for the corresponding six-month period in 2024, an increase of $0.6 million, which reflects the increase in revenue generating activities.

Previous wording

Other income (expense) for the three-month period ended March 31, 2025, was income of $234 thousand compared to income of $275 thousand in the corresponding 2024 period.

Current wording

Other income (expense) for the six-month period ended June 30, 2025, was expense of $1.3 million compared to income of $243 thousand in the corresponding 2024 period. Loss on change in fair value of contingent consideration of $1.2 million was the primary driver in the increase.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $1.8 million, compared to net cash used in operating activities of $0.7 million for the corresponding three-month period in 2024. For the three months ended March 31, 2025, net loss was $4.6 million. Net loss includes non-cash items of depreciation and amortization expense of $278 thousand, bad debt expense of $4 thousand, stock based compensation expense of $2.2 million, loss on fair value of warrant liability of $8 thousand, gain on fair value of contingent consideration of $164 thousand, gain on fair value of derivative liability of $113 thousand, and gain on fair value of marketable securities of $2 thousand.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $3.0 million, compared to net cash used in operating activities of $1.2 million for the corresponding six-month period in 2024. For the six months ended June 30, 2025, net loss was $8.8 million. Net loss includes non-cash items of depreciation and amortization expense of $839 thousand, bad debt expense of $11 thousand, stock-based compensation expense of $3.3 million, loss on fair value of warrant liability of $7 thousand, loss on fair value of contingent consideration of $1.2 million, loss on fair value of derivative liability of $17 thousand, and loss on fair value of marketable securities of $44 thousand. Net cash used in operation activities also includes an increase in accounts receivable of $412 thousand, a decrease in prepaid expenses and other current assets of $312 thousand, and an increase in accounts payable and accrued liabilities of $507 thousand.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $0.7 million. For the three months ended March 31, 2024, net loss was $0.8 million. Net loss includes non-cash items of depreciation and amortization expense of $320 thousand, bad debt recovery (expense) of $49 thousand, equity-based compensation expense of $300 thousand, warrant modification expense of $64 thousand, amortization of debt discount and debt costs of $177 thousand, unrealized loss on marketable securities of $109 thousand, and a gain on extinguishment of debt of $580 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $392 thousand, and prepaid expenses and other current assets decreased by $30 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue decreased in total by $427 thousand.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was $1.2 million, compared to net cash used in operating activities of $1.7 million for the corresponding six-month period in 2023. For the six months ended June 30, 2024, net loss was $1.8 million. Net loss includes non-cash items of depreciation and amortization expense of $602 thousand, equity-based compensation expense of $328 thousand, change in fair value of warrant of $68 thousand, amortization of debt discount and debt costs of $177 thousand, loss on marketable securities of $142 thousand, and a gain on extinguishment of debt of $580 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $434 thousand, and prepaid expenses and other current assets increased by $19 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue decreased in total by $280 thousand.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $0.4 million. The principal factor was purchase of intangible assets of $0.4 million. The Company received $0.1 million for the three months ended March 31, 2024 from the sale of assets.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $0.4 million. The principal factor was purchase of intangible assets of $0.4 million. The Company received $0.3 million for the six months ended June 30, 2024 from the sale of assets.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing activities was $0.

Current wording

For the six months ended June 30, 2025, net cash provided by financing activities was $1.8 million. The principal factor was $1.8 million of cash received from issuance of common stock.

Previous wording

Based on cash on hand as of March 31, 2025, of approximately $0.3 million, we do not have the capital resources to meet our working capital needs for the next 12 months.

Current wording

Based on cash on hand as of June 30, 2025, of approximately $0.9 million, we do not have the capital resources to meet our working capital needs for the next 12 months.

Previous wording

Our condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We incurred net losses and negative operating cash flows since inception. For the three months ended March 31, 2025, we recorded a net loss of $4.6 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable.

Current wording

Our condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We incurred net losses and negative operating cash flows since inception. For the six months ended June 30, 2025, we recorded a net loss of $8.8 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable.