Financial Performance - Total service revenue for the nine months ended September 30, 2022, was $9.20 million, a decrease of 18.4% compared to $11.26 million for the same period in 2021 [16]. - Net loss for the nine months ended September 30, 2022, was $8.54 million, compared to a net income of $3.90 million for the same period in 2021 [18]. - The company reported a gross loss of $1.44 million for the three months ended September 30, 2022, compared to a gross profit of $2.49 million for the same period in 2021 [16]. - Earnings per share for the three months ended September 30, 2022, was $(0.05), compared to $0.01 for the same period in 2021 [16]. - For the nine months ended September 30, 2022, the company reported a net loss of $8,538,874 compared to a profit of $3,904,385 for the same period in 2021 [77]. - The company reported a net loss of $8,538,874 for the nine-month period ended September 30, 2022, compared to a net income of $3,904,385 in 2021, reflecting an increase in net loss of approximately $12.4 million [131]. - The company incurred a net loss of $8,657,092 for the three-month period ended September 30, 2022, compared to a net income of $1,410,271 in 2021, reflecting an increase in net loss of approximately $10.1 million [137]. Assets and Liabilities - Total assets increased to $46.09 million as of September 30, 2022, up from $19.47 million at December 31, 2021, representing a 136% increase [14]. - Total liabilities decreased to $4.04 million as of September 30, 2022, from $4.94 million at December 31, 2021, a reduction of 18.1% [14]. - Cash and cash equivalents increased to $20.26 million at the end of September 2022, compared to $1.40 million at the end of September 2021, marking a significant increase of 1,353% [19]. - As of September 30, 2022, accounts receivable from non-related customers amounted to $4,473,310, a decrease of 20.4% from $5,627,463 as of December 31, 2021 [93]. - Tax payable as of September 30, 2022, was $178,855, a significant decrease of 74.9% from $711,841 as of December 31, 2021 [110]. Revenue and Expenses - Operating expenses for the nine months ended September 30, 2022, were $10.42 million, up from $4.70 million in the same period of 2021, reflecting a 121% increase [16]. - General and administrative expenses surged to $10,419,873 in 2022 from $4,695,727 in 2021, an increase of approximately 121.5%, mainly due to costs associated with the Nasdaq up-listing [129]. - The company generated revenues of $8,508,642 from four third-party customers and $689,039 from related party Changtongfu for the nine months ended September 30, 2022 [84]. - Total revenue for the nine-month period ended September 30, 2022, was $9,197,681, a decrease of 18.4% from $11,262,491 in 2021, primarily due to a decline in Gross Merchandise Volume (GMV) caused by COVID-19 lockdowns in major cities in China [127]. Cash Flow - Cash used in operating activities increased to $18,447,262 for the nine-month period ended September 30, 2022, compared to $2,451,061 in the prior period, an increase of approximately $16.0 million [139]. - Cash provided by financing activities was $39,050,371 for the nine-month period ended September 30, 2022, compared to cash used of $357,770 in the prior period, mainly due to share issuance [142]. - Cash on hand as of September 30, 2022, was $20,261,881, a significant increase from $1,395,025 in the prior period, primarily due to the issuance of 10,000,000 shares on NASDAQ with net proceeds of $37,057,176 [138]. Market and Growth Opportunities - The YCloud system aims to serve a potential market of 330 million individual micro-business owners by 2023, indicating significant growth opportunities in the micro-business sector [31]. - The company has entered into service agreements with three new customers in Q3 2022, expanding its market reach in the media and tourism industries [33][34][35]. - The company utilizes big data analytics and AI technology to enhance its service offerings, which is expected to drive future growth in various industries including tourism and retail [32][38]. - The company has established trial operations in Hong Kong, indicating its intention to expand its geographical footprint beyond mainland China [31]. - The company plans to utilize the YCloud system to establish global strategic cooperation with various social media platforms [122]. System Development and Technology - The YCloud system integrates multiple payment methods, allowing micro-business owners to reduce labor costs and error rates, thereby improving data analysis capabilities [37]. - The YCloud system is designed to provide tailored recommendations based on user behavior, enhancing customer engagement and satisfaction [40]. - The company expects to complete the YCloud system upgrade and data storage improvement, with a prepayment of approximately $2.6 million, by 2023 [95]. - The company recorded related party transactions totaling $1,344,544 for system and software service fees for the nine months ended September 30, 2022, compared to $485,190 in the same period of 2021 [105].
Next Technology Holding Inc.(NXTT) - 2022 Q3 - Quarterly Report