Financial Performance - Total service revenue for the three months ended June 30, 2023 was $0, compared to $1,451,459 for the same period in 2022, representing a decrease of 100%[10] - Gross loss for the three months ended June 30, 2023 was $(94,582), compared to a gross profit of $1,355,510 for the same period in 2022[10] - Operating expenses for the three months ended June 30, 2023 were $822,220, down from $1,827,438 in the same period of 2022, a reduction of approximately 55%[10] - Net income from continuing operations for the three months ended June 30, 2023 was $26,079, compared to a net loss of $(452,139) for the same period in 2022[10] - Total comprehensive loss for the three months ended June 30, 2023 was $(637,193), compared to a loss of $(1,365,792) for the same period in 2022[10] - The net loss for the six-month period ended June 30, 2023, was $926,518, compared to a net income of $274,871 for the same period in 2022[110] - Total revenue for the six-month period ended June 30, 2023, was $603,343, a decrease of approximately 83.2% from $3,590,411 in the same period of 2022[111] Assets and Equity - Total assets decreased from $46,229,241 to $42,421,096, a decline of approximately 8.7%[9] - Total stockholders' equity decreased from $41,719,510 to $38,879,565, a decline of approximately 6.7%[11] - Cash on hand amounted to $20,004,914 with accounts receivable reported as nil as of June 30, 2023[45] - Cash and cash equivalents as of June 30, 2023, totaled $20,004,914, slightly down from $20,025,480 as of December 31, 2022[69] - Property and equipment, net, decreased to $739,028 as of June 30, 2023, from $921,952 as of December 31, 2022[73] - Loan receivables increased significantly to $7,220,242 as of June 30, 2023, compared to $1,614,841 as of December 31, 2022[80] Cash Flow - The company reported net cash flows provided by operating activities of $5,239,579 for the six months ended June 30, 2023, compared to $5,344,055 for the same period in 2022[17] - Cash flow provided by operating activities for the six-month period ended June 30, 2023, was $5,239,579, a slight decrease from $5,344,055 in the prior period[123] - The company incurred cash used in investing activities of $5,605,401 for the six-month period ended June 30, 2023, primarily due to a loan to a third party[123] YCloud System and Market Strategy - The YCloud system targets a potential market of 330 million individual micro-business owners by the end of 2023[20] - The company has established trial operations in Hong Kong and aims to utilize the YCloud system for global strategic cooperation with various social media platforms[20] - YCloud serves multiple industries, including tourism, hospitality, and retail, enhancing supply chain systems and marketing relationship management[21] - The company has developed new technology to meet the evolving demands of micro-business owners, particularly in response to shifts caused by the COVID-19 pandemic[26] - The company derives revenue from system service fees charged for transactions conducted through its YCloud system, receiving 2%-3.5% of the total Gross Merchandise Volume generated on the platform[67] Internal Controls and Compliance - The company conducted an evaluation of its internal control over financial reporting as of June 30, 2023, and concluded that it did not maintain effective internal control due to material weaknesses identified[132] - Management identified material weaknesses related to internal audit functions and a lack of segregation of duties within accounting functions[133] - Management plans to implement procedures to address the significant deficiencies identified in internal controls with proper funding[134] - The company believes that its financial statements and other information presented are materially correct despite the identified weaknesses[132] - There were no changes in internal control over financial reporting during the most recently completed fiscal quarter that materially affected the controls[136] Stock and Share Information - The total issued and outstanding shares of the company's common stock decreased from 195,057,503 to 1,054,364 shares following a 1 for 185 reverse stock split approved on June 9, 2023[141] - The reverse stock split aims to help the company regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share[142] - The weighted-average shares outstanding for the three months ended June 30, 2023 were 149,770,976, down from 155,826,842 in the same period of 2022[10] - The weighted-average common shares outstanding decreased from 231,052,498 in June 30, 2022 to 172,526,771 in June 30, 2023[61] Other Financial Metrics - The company experienced a foreign currency translation adjustment loss of $(663,272) for the three months ended June 30, 2023[11] - The company has no impairment expenses for property and equipment recorded during the six months ended June 30, 2023[44] - The company applies ASC 606 for revenue recognition, requiring judgment in identifying contracts and performance obligations[35] - The functional currency of the company is USD, while its subsidiaries operate in RMB[38] - The exchange rate for RMB to USD was 7.25 as of June 30, 2023, compared to 6.90 as of December 31, 2022[39] - General and administrative expenses for the six-month period ended June 30, 2023, were $1,501,985, a decrease from $2,619,894 in the same period of 2022[114]
Next Technology Holding Inc.(NXTT) - 2023 Q2 - Quarterly Report