NIXXY, INC. 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2026

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-40563

NIXXY, INC.

(Exact name of registrant as specified in its charter)

Nevada		90-1505893
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1178 Broadway, 3rd Floor New York, NY		10001
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number (877) 708-8868

___________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		NIXX		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý

As of August 12, 2026, the number of shares of the registrant’s common stock outstanding was 28,908,839.

TABLE OF CONTENTS

		Page Number
Part I - Financial Information

Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 (Unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45

Part II - Other Information

Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

Nixxy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	June 30, 2026			December 31, 2025
	(Unaudited)
ASSETS
Current assets:
Cash	$	330		$	182
Accounts receivable, net of allowance for doubtful accounts of $838 and $835, respectively		3,401			1,331
Prepaid expenses and other current assets		127			108
Investment in Marketable Securities		1,437			343
Total current assets		5,295			1,964

Property and equipment, net of accumulated depreciation of $61 and $61, respectively		–			–
Intangible assets, net		9,794			11,217
Goodwill		–			–
Total assets	$	15,089		$	13,181

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,560		$	2,506
Accrued expenses		882			930
Accrued compensation		34			125
Accrued interest		7			11
Contingent consideration		–			500
Other liabilities		17			17
Loans payable - current portion, net of discount		36			56
Line of credit payable		1,000			775
Refundable deposit on preferred stock purchase		285			285
Total current liabilities		6,821			5,205
Total liabilities		6,821			5,205
Commitments and contingencies (Note 9)		–			–
Stockholders’ Equity
Common stock, $0.0001 par value; 200,000,000 shares authorized; 28,908,839 and 25,946,889 shares issued and outstanding as of June 30, 2026, and December 31, 2025, respectively		3			3
Common Stock to be issued, 406,071 and 402,737 shares as of June 30, 2026, and December 31, 2025, respectively		–			–
Additional paid-in capital		123,825			121,771
Accumulated deficit		(115,560	)		(113,798	)
Total stockholders’ equity		8,268			7,976
Total liabilities and stockholders’ equity	$	15,089		$	13,181

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Nixxy, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended June 30, 2026			Three Months Ended June 30, 2025			Six Months Ended June 30, 2026			Six Months Ended June 30, 2025
REVENUE
Revenue	$	16,091		$	13,363		$	45,186		$	14,625
OPERATING EXPENSES
Cost of revenue (exclusive of amortization shown separately below)		16,051			13,351			45,091			14,613
Sales and marketing		127			9			127			558
Product development		2			19			4			34
Amortization of intangibles		713			439			1,423			601
General and administrative		818			1,776			1,386			4,877
Total operating expenses		17,711			15,594			48,031			20,683
LOSS FROM CONTINUING OPERATIONS		(1,620	)		(2,231	)		(2,845	)		(6,058	)

OTHER INCOME (EXPENSES)
Interest expense		(22	)		(36	)		(40	)		(74	)
Gain on change in fair value of marketable securities		(673	)		(46	)		1,094			(44	)
Other income (expense)		15			1			29			165
Change in fair value of contingent consideration		–			(1,319	)		–			(1,319	)
Total other income (expenses)		(680	)		(1,400	)		1,083			(1,272	)

Income (loss) from continuing operations before income taxes		(2,300	)		(3,631	)		(1,762	)		(7,330	)
Provision for income taxes		–			–			–			–
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		(2,300	)		(3,631	)		(1,762	)		(7,330	)
Net income (loss) from discontinued operations		–			(625	)		–			(1,470	)
NET INCOME (LOSS) ATTRIBUTABLE TO NIXXY, INC.	$	(2,300	)	$	(4,256	)	$	(1,762	)	$	(8,800	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(2,300	)	$	(4,256	)	$	(1,762	)	$	(8,800	)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE - BASIC AND DILUTED	$	(0.08	)	$	(0.19	)	$	(0.07	)	$	(0.42	)
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE - BASIC AND DILUTED	$	–		$	(0.03	)	$	–		$	(0.08	)
NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED	$	(0.08	)	$	(0.22	)	$	(0.07	)	$	(0.51	)
WEIGHTED AVERAGE COMMON SHARES - BASIC AND DILUTED		28,019,664			19,144,354			26,350,735			17,299,292

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Nixxy, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity

For The Three and Six Months Ended June 30, 2026, and 2025

(In thousands, except share data)

(Unaudited)


	Common stock			Common stock to be issued				Additional Paid in		Accumulated			Equity Attributable to Noncontrolling		Total Stockholders’
	Shares	Amount		Shares		Amount		Capital		Deficit			Interests		Equity
Balance as of December 31, 2025	25,946,889	$	3	402,737		$	–	$	121,771	$	(113,798	)	$	–	$	7,976
Stock based compensation – Stock	30,000		–	(13,333	)		–		83		–			–		83
Issuance of common stock in private offering	–		–	1,481,482			–		1,000		–			–		1,000
Issuance of common stock for intangible assets	915,540		–	–			–		500		–			–		500
Net Income	–		–	–			–		–		537			–		537
Balance as of March 31, 2026	26,892,429	$	3	1,870,886		$	–	$	123,353	$	(113,260	)	$	–	$	10,096

Stock based compensation – Stock	50,000		–	16,667			–		162		–			–		162
Issuance of common stock in private offering	1,966,410		–	(1,481,482	)		–		310		–			–		310
Net Loss	–		–	–			–		–		(2,300	)		–		(2,300	)
Balance as of June 30, 2026	28,908,839	$	3	406,071		$	–	$	123,825	$	(115,560	)	$	–	$	8,268

	Common stock			Common stock to be issued				Additional Paid in		Accumulated			Equity Attributable to Noncontrolling			Total Stockholders’
	Shares	Amount		Shares		Amount		Capital		Deficit			Interests			Equity
Balance as of December 31, 2024	15,086,476	$	2	506,625		$	–	$	101,591	$	(99,013	)	$	–		$	2,580
Stock based compensation - Options	–		–	–			–		11		–			–			11
Stock based compensation - Stock	–		–	480,833			–		2,149		–			55			2,204
Issuance of common stock upon settlement of debt	300,000		–	(300,000	)		–		–		–			–			–
Issuance of common stock for services	30,000		–	(30,000	)		–		–		–			–			–
Issuance of common stock for intangible assets	2,843,319		–	–			–		5,175		–			137			5,312
Net loss	–		–	–			–		–		(4,559	)		17			(4,542	)
Balance as of March 31, 2025	18,259,795	$	2	657,458		$	–	$	108,927	$	(103,571	)	$	208		$	5,565

Stock based compensation - Options	–		–	–			–		11		–			–			11
Stock based compensation - Stock	395,000		–	(374,166	)		–		127		–			55			181
Issuance of common stock for services	547,774		–	(10,000	)		–		881		–			–			881
Proceeds from sale of common stock in offering	1,113,667		–	113,333			–		1,840		–			–			1,841
Issuance of common stock for intangible assets	403,747		–	940,926			–		2,509		–			–			2,510
Net loss	–		–	–			–		–		(4,167	)		(89	)		(4,257	)
Balance as of June 30, 2025	20,719,983	$	2	1,327,551		$	–	$	114,295	$	(107,739	)	$	173		$	6,732

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Nixxy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands) (Unaudited)


	Six Months Ended
	June 30, 2026			June 30, 2025
Cash Flows From Operating Activities
Net income (loss) (before noncontrolling interests)	$	(1,762	)	$	(8,726	)
Net income attributed to noncontrolling interests		–			(73	)
Net income (loss)	$	(1,762	)	$	(8,799	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense		1,423			839
Equity based compensation expense - stock		245			3,267
Equity based compensation expense - option		–			22
Gain on fair value of marketable securities		(1,094	)		44
Change in fair value of warrant liability		–			7
Change in fair value of contingent consideration		–			1,155
Change in fair value of derivative liability		–			17
Bad debt expense		3			9
Changes in assets and liabilities:
Increase in accounts receivable		(2,073	)		(409	)
(Increase) decrease in prepaid expenses and other current assets		(19	)		312
Increase in accounts payable and accrued liabilities		1,910			506
Net cash used in operating activities		(1,367	)		(3,030	)

Cash Flows From Investing Activities:
Purchase of intangible assets		–			(400	)
Net cash used in investing activities		–			(400	)

Cash Flows From Financing Activities:
Proceeds from sale of common stock in offering		1,310			1,841
Proceeds from line of credit payable		225			–
Repayments on loans payable		(20	)		–
Net cash provided by financing activities		1,515			1,841

Net increase (decrease) in cash		148			(1,589	)
Cash, beginning of period		182			2,533

Cash, end of period	$	330		$	944

Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	43		$	–
Cash paid during the period for income taxes	$	–		$	–

Supplemental schedule of non-cash investing and financing activities:
Issuance of common stock upon purchase of intangible assets	$	500		$	6,393

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Nixxy, Inc. and Subsidiaries

Notes to unaudited Condensed Consolidated Statements

June 30, 2026

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview

Nixxy, Inc. (“Nixxy”, the “Company”, “we”, “us”, or “our”) is a Nevada corporation engaged in the wholesale telecommunications business. The Company has five wholly-owned subsidiaries: Recruiter.com, Inc.; Nixxy, LLC (formerly known as Recruiter.com Recruiting Solutions LLC); Auralink AI, Inc. ("Auralink"); Recruiter.com Consulting, LLC and VocaWorks, Inc. (“VocaWorks”).

Over the past year, the Company executed a strategic transformation from a recruitment and staffing services business into a wholesale telecommunications services business. As of December 31, 2025, the Company divested or spun out substantially all legacy recruiting operations and is primarily engaged in wholesale voice, messaging, and routing and billing solutions.

The Company's common stock trades on the Nasdaq Capital Market under the symbol “NIXX.”

Principles of Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. These condensed financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC. In the opinion of management, the accompanying condensed financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2026, and the results of its operations and its cash flows for the six months ended June 30, 2026, and 2025. The balance sheet as of December 31, 2025, is derived from the Company’s audited financial statements. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2026.

The condensed consolidated financial statements include the accounts of Nixxy Inc. and its wholly and majority owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Discontinued Operations

On December 31, 2025, the Company completed the separation of its legacy recruiting marketplace business line and assets, through a spin-off. The Company plans to issue shareholders of record on a future date a number of shares of the separated entity common stock for every one share of Nixxy, Inc. common stock on the distribution date.

In accordance with ASC 205-20, the results of the separated entity are presented as discontinued operations in the consolidated statements of operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. The consolidated statements of changes in stockholders' equity and statement of cash flows are presented on a consolidated basis for both continuing operations and discontinued operations. All amounts, percentages and disclosures for all periods presented reflect only the continuing operations of Nixxy, Inc. unless otherwise noted. See Note 6, Discontinued Operations, for additional information.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may differ from management’s estimates and assumptions. Included in these estimates are assumptions used to estimate collection of accounts receivable, fair value of marketable securities, fair value of assets acquired in asset acquisitions and the estimated useful life of assets acquired, fair value of securities issued in asset acquisitions, deferred income tax asset valuation allowances, valuation of stock-based compensation expense, and estimates related to the allocation of expenses, assets, and liabilities to CognoGroup. Critical accounting estimates are the fair value of intangible assets, goodwill, stock options and warrants.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to these balances as of June 30, 2026. As of June 30, 2026, and December 31, 2025, the Company had $0 and $0 in excess of the FDIC limit, respectively. The Company has no cash equivalents as of June 30, 2026 or December 31, 2025.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenue recognition is evaluated through the following five steps:

	·	Identification of the contract with a customer
	·	Identification of the performance obligations in the contract
	·	Determination of the transaction price
	·	Allocation of the transaction price to the performance obligations
	·	Recognition of revenue when or as performance obligations are satisfied

Telecommunications Services (Continuing Operations)

The Company generates revenue primarily through its Auralink AI subsidiary, which operates a cloud-based telecommunications platform providing:

	·	Wholesale voice termination
	·	SMS routing and delivery
	·	Carrier interconnect services
	·	Real-time billing and settlement services

These services are provided under bilateral carrier agreements that establish pricing based on contractual rate schedules (“Rate Decks”), typically on a per-minute or per-message basis.

Performance Obligations

Each successfully terminated voice call or delivered SMS message represents a distinct performance obligation. Revenue is recognized at a point in time when the telecommunications service is completed — specifically, when a voice call is successfully terminated or a message is delivered and confirmed by the recipient carrier’s network.

Principal vs. Agent Considerations

The Company evaluates whether it controls the telecommunications services before they are transferred to customers. The Company acts as principal in these transactions because it:

	·	Controls routing infrastructure
	·	Establishes pricing
	·	Is responsible for service delivery
	·	Assumes performance and credit risk
	·	Manages carrier relationships

Accordingly, revenue is recognized on a gross basis. Although settlements with counterparties may occur on a net basis for operational efficiency, revenue and cost of revenue are recorded on a gross basis in the consolidated statements of operations.

Contracts and Payment Terms

Telecommunications agreements typically have one-year terms with early termination provisions. Payment terms are generally 30 to 60 days. Revenue is measured based on reconciled call detail records and traffic reports.

Revenue Disaggregation

In accordance with ASC 606-10-50-5, the Company disaggregates revenue by revenue stream and reporting period to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenues disaggregated by revenue stream for the three and six months ended June 30, 2026 and 2025.

Schedule of revenue disaggregation
	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
Telecommunication services	$	16,091	$	13,363	$	45,186	$	14,625
Total revenue	$	16,091	$	13,363	$	45,186	$	14,625

Revenue from international sources is determined based on the customer’s location, regardless of where the services are performed or products are delivered. Revenue from international sources was approximately 100% and 99% for the six months ended June 30, 2026, and 2025, respectively.

Cost of Revenue

Cost of revenue consists almost entirely of Auralink related technology and supply costs.

Accounts Receivable

Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. The allowance is based on historical loss experience, adjusted for current conditions and reasonable and supportable forecasts about future economic conditions that may affect the collectability of the receivables. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Accounts receivable is presented net of allowance for credit losses on the consolidated balance sheet.

The Company has recorded an allowance for credit losses of $838 thousand and $835 thousand as of June 30, 2026, and December 31, 2025, respectively. Credit loss was $3 thousand and $6 thousand for the three months ended June 30, 2026, and 2025, respectively from continuing operations and $3 thousand and $9 thousand for the six months ended June 30, 2026, and 2025, respectively from continuing operations.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the straight-line method beginning on the date an asset is placed in service. The estimated useful lives of major asset classes range from 3 to 15 years. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Depreciation expense from continuing operations for the three months ended June 30, 2026, and 2025 was $0 and $4 thousand, respectively and was $