Nixxy, Inc.

ITEM 1 - LEGAL PROCEEDINGS

The Company is pursuing a collections matter against BKR Strategy Group related to unpaid invoices and a $500,000 promissory note executed on November 30, 2021. Following non-payment, the Company filed two lawsuits on February 18, 2022, totaling $1.4 million. BKR filed a $500,000 counterclaim alleging overbilling, which the Company disputes and intends to defend. On June 21, 2022, the Supreme Court of New York ruled in favor of the Company, awarding $500,000 plus 12% interest. The Company plans to drop the second lawsuit. No accrual has been made, as the outcome of the counterclaim remains uncertain.

On June 21, 2022, the Supreme Court of the State of New York, New York County ruled in favor of the Company that BKR Strategy Group owes the Company $500,000, plus interest at 12% since November 22, 2021, through the entry of judgement in the lawsuit related to the enforcement on the Promissory Note executed by BKR Strategy Group. Proceedings in the other lawsuit remain ongoing.

On September 6, 2023, the Company was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain. The lawsuit alleges that the Company failed to pay for goods and/or services provided by Pipl, Inc. between January 3, 2021, and December 7, 2022, with the claimed amount due exceeding $266,562.59 plus interest, costs, and attorneys’ fees. The Company is currently evaluating the complaint with counsel and intends to vigorously defend against the claims. The Company has additionally filed a counterclaim. Given the early stage of the litigation, the Company is unable to predict the outcome of the case or estimate the possible loss or range of loss, if any.

On April 1, 2024, the Company became involved in legal proceedings initiated by Creditors Adjustment Bureau, Inc. ("CAB"), as documented in the Superior Court of California, County of Santa Clara, case number 24CV433086. CAB’s complaint, filed on March 13, 2024, alleges that the Company failed to fulfill payment obligations under contracts with CAB’s assignor, totaling approximately $213,899.94. CAB seeks recovery of the owed amounts, interest, attorney fees, costs, and other damages deemed appropriate by the court. The Company is currently reviewing the complaint and intends to defend itself vigorously. At this stage, the Company is unable to predict the outcome of the case or estimate the potential financial impact.

November 20, 2024, Recruiter.com Inc. has been named as a defendant in a lawsuit filed by HireTeammate, Inc. (d/b/a hireEZ) in the Supreme Court of New York. The lawsuit alleges that the Company breached a contract by failing to pay for platform management services provided by hireEZ between December 12, 2022, and January 31, 2023. The total amount claimed is $79,388.39, along with interest and legal costs. The complaint includes claims for breach of contract, account stated, and unjust enrichment. The Company is evaluating its legal options in response to the lawsuit.

Regal Nutra, LLC and Dauntless Media, LLC have initiated arbitration through JAMS in New York against Nixxy, Inc. (formerly Recruiter.com Group, Inc.) and others, alleging breach of contract and fraud related to a series of business agreements. Nixxy has filed a formal objection to jurisdiction, asserting it was never a party to the contracts at issue, has no relationship with the claimants, and did not agree to arbitration. The arbitration stems from alleged conduct involving other corporate entities and individuals, and Nixxy is seeking dismissal from the proceeding with prejudice. At this stage, the Company cannot predict the outcome or estimate potential loss, if any.

Except for the aforementioned proceedings described above, as of the date of this filing, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and, to our knowledge, there are no material proceedings to which any of our directors, executive officers, or affiliates are a party adverse to us or which have a material interest adverse to us.