Financial Performance - Total service revenue for the three months ended March 31, 2023, was $614,369, a decrease of 71.2% compared to $2,138,952 for the same period in 2022[12]. - Gross loss for the three months ended March 31, 2023, was $(296,137), compared to a gross profit of $1,466,314 for the same period in 2022[12]. - Net loss from continuing operations for the three months ended March 31, 2023, was $(984,842), compared to a net income of $592,316 for the same period in 2022[12]. - Comprehensive loss for the three months ended March 31, 2023, was $(2,198,826), compared to $(709,237) for the same period in 2022[12]. - As of March 31, 2023, the company reported a net loss of $2,225,147 compared to a net loss of $743,827 for the same period in 2022, indicating a significant increase in losses[56]. - Total revenue for the three-month period ended March 31, 2023, was $614,369, a decrease from $2,138,952 in the same period of 2022, primarily due to a decline in Gross Merchandise Volume (GMV)[104]. - The net loss for the period ended March 31, 2023, was $984,842, compared to a net income of $592,316 for the same period in 2022, reflecting a significant increase in losses due to the business plan adjustments[107]. Assets and Equity - Total assets increased from $43,200,496 as of December 31, 2022, to $46,229,241 as of March 31, 2023, representing a growth of 6.9%[9]. - Total stockholders' equity decreased from $41,719,510 as of December 31, 2022, to $39,516,758 as of March 31, 2023, a decline of 5.3%[11]. - As of March 31, 2023, total shareholder equity was $39,516,758, down from $41,719,510 as of December 31, 2022, reflecting a net loss of $958,520 for the period[6]. - Cash and cash equivalents decreased slightly from $20,025,480 as of December 31, 2022, to $20,125,507 as of March 31, 2023[13]. - Cash on hand as of March 31, 2023, was $20,125,507, showing a slight increase from $20,025,480 at the end of 2022[66]. Operating Expenses - Operating expenses for the three months ended March 31, 2023, were $690,793, down from $792,456 for the same period in 2022, a reduction of 12.8%[12]. - General and administrative expenses decreased to $690,793 for the three months ended March 31, 2023, from $792,456 in the same period of 2022, mainly due to reduced advertising costs[106]. Discontinued Operations - Loss from discontinued operations for the three months ended March 31, 2023, was $(1,240,305), compared to $(1,336,143) for the same period in 2022[12]. - The company reported a net loss from discontinued operations of $1,244,231, which included a net loss of $26,322 for the period[6]. - The company incurred a loss from discontinued operations of $1,240,305 for the period ended March 31, 2023, compared to a loss of $1,336,142 for the same period in 2022[80]. Market and Business Strategy - The YCloud system targets a potential market of 330 million individual micro-business owners by the end of 2023[19]. - YCloud serves various industries, including tourism, hospitality, and retail, and has established trial operations in Hong Kong[19]. - The company aims to provide technical services and solutions through its YCloud platform, which includes big data analytics and AI technology[17]. - YCloud offers multiple integrated payment methods, enhancing transaction capabilities for micro-businesses[21]. - The company aims to shift its SAAS, blockchain, and WT Pay services from the PRC to overseas markets in 2023[104]. Shareholder Information - The weighted average number of shares outstanding for basic and diluted earnings per share was 195,057,503 for the three months ended March 31, 2023[12]. - The weighted-average common shares outstanding decreased to 195,057,503 from 305,451,498 year-over-year, reflecting a reduction in share count[56]. - A reverse stock split of 1 for 185 was approved, reducing total issued shares from 195,057,503 to 1,054,364 to comply with Nasdaq listing requirements[96][97]. - The company executed a 1 for 185 Reverse Stock Split, reducing the total issued and outstanding shares from 195,057,503 to 1,054,364 shares[120]. - The Reverse Stock Split aims to help the company regain compliance with Nasdaq's Minimum Bid Requirement of $1.00 per share[121]. - No fractional shares will be issued; any resulting fractional shares will be rounded up to the nearest whole share[121]. Compliance and Accounting - The consolidated financial statements are prepared in accordance with GAAP, ensuring compliance with U.S. accounting standards[28]. - The company has not reported any gains or losses from foreign currency transactions from inception to March 31, 2023[36]. - The company has not recognized an income tax benefit for its operating losses in the U.S. and Singapore, as it does not expect to commence active operations in these regions[92][93]. Other Financial Metrics - Total GMV for the period was $18,606,599, down from $74,561,767 in the previous year, indicating a decline in transaction volume[64]. - The company's intangible assets, net, amounted to $21,525 as of March 31, 2023, down from $22,959 at the end of 2022, reflecting amortization of software development costs[67]. - Amortization expense for intangible assets for the three months ended March 31, 2023, was $1,434[67]. - The average exchange rate for RMB to USD was 6.84 for the period ended March 31, 2023, compared to 6.75 for the year ended December 31, 2022[37]. - The company has not recorded any impairment expenses for property, plant, and equipment during the three months ended March 31, 2023[41]. - As of March 31, 2023, the company's net property and equipment was $842,622, a decrease from $921,952 as of December 31, 2022, reflecting a depreciation expense of $79,330 for the period[69][70]. - The total accounts receivable as of March 31, 2023, was $6,748,798, slightly up from $6,723,661 as of December 31, 2022, with all service fee receivables fully settled from five main customers[72]. - The company reported prepayments totaling $13,137,035 as of March 31, 2023, primarily related to software development fees, including a significant $10 million prepayment for the WT Pay system development expected to be completed by September 2023[73]. - Loan receivables decreased to $978,133 as of March 31, 2023, down from $1,614,841 as of December 31, 2022, with no accrued interest due to a waiver for the borrower[76]. - Tax payables amounted to $86,838, a decrease from $130,717 as of December 31, 2022, reflecting a corporate income tax rate ranging from 9% to 25%[78]. - Other payables totaled $1,708,748 as of March 31, 2023, down from $2,325,188 as of December 31, 2022, primarily due to a decrease in Y-Cloud system upgrade payables[79]. - The company reported accumulated depreciation of $128,454 for property and equipment as of March 31, 2023, compared to $49,124 as of December 31, 2022[69]. - The company's amortized expenses, net, were $780,326 as of March 31, 2023, down from $828,983 as of December 31, 2022, with accumulated depreciation increasing from $166,792 to $215,449[71]. - The director fee payable increased to $812,000 as of March 31, 2023, from $770,000 as of December 31, 2022, reflecting accrued fees from the appointment date[78]. - The company completed a public offering of 10,000,000 shares at $4.00 per share, raising gross proceeds of $40,000,000 and net proceeds of $37,057,176 after costs[90]. - Cash flow used in operating activities for the period ended March 31, 2023, was $552,687, a decrease of approximately $8.1 million compared to cash flow provided by operating activities in the prior period[109].
Next Technology Holding Inc.(NXTT) - 2023 Q1 - Quarterly Report