Financial Performance - Net profit for the three months ended March 31, 2024, was $23,883,878, a significant increase from a net loss of $212,194 for the same period in 2023[11] - The company reported a profit per share of $9.10 for the three months ended March 31, 2024, compared to a loss per share of $0.08 for the same period in 2023[11] - The company recognized a gain of $24.2 million on digital assets for the three months ended March 31, 2024, compared to a gain of $10.2 million for the same period in 2023[53] - The company reported a net profit of $23,883,878 for the period ended March 31, 2024, compared to a net loss of $212,194 for the same period in 2023, primarily due to a gain from digital assets of $24,214,021[84] Asset Growth - Total current assets increased to $73,345,474 as of March 31, 2024, compared to $49,133,905 as of December 31, 2023, representing a 49.2% growth[9] - Digital assets held increased to $59,420,922 as of March 31, 2024, up from $35,206,901 as of December 31, 2023, reflecting a 68.8% increase[9] - Total stockholders' equity rose to $68,809,595 as of March 31, 2024, compared to $44,925,822 as of December 31, 2023, marking a 53.2% increase[12] Operating Expenses - Operating expenses for the three months ended March 31, 2024, were $330,143, up from $212,194 in the same period of 2023, indicating a 55.7% increase[11] - General and administrative expenses increased to $330,143 for the three months ended March 31, 2024, up from $212,194 in the prior year, mainly due to higher BTC consulting fees[85] Bitcoin Acquisition Strategy - The company continues to pursue a strategy of acquiring and holding bitcoin, with a total of 833 bitcoins held as of March 31, 2024[20] - The company’s bitcoin acquisition strategy involves using liquid assets exceeding working capital requirements to acquire bitcoin, with no specific target for the amount to hold[80] - As of March 31, 2024, the company held approximately 833.19 bitcoins with a carrying value of approximately $59.4 million, up from $35.2 million as of December 31, 2023[27] - The company has a prepayment of approximately $12,125,500 for the 40% prepayment of 1000 BTC, expected to be delivered by May 2024 at a lock-up price of $30,000 per BTC[55] Cash and Cash Equivalents - Cash and cash equivalents remained stable at $668,388 as of March 31, 2024, unchanged from the previous period[14] - The company held cash in bank amounting to $668,388 as of March 31, 2024, unchanged from December 31, 2023[52] - The company had cash on hand of $668,388 as of March 31, 2024, with cash flow used in operating activities of $40,530, a decrease from $212,194 in the prior period[86] Internal Controls and Governance - As of March 31, 2024, the company's management concluded that its disclosure controls and procedures were not effective due to limited internal resources and lack of multiple levels of transaction review[94] - Material weaknesses identified include lack of an audit committee and insufficient oversight from outside directors, leading to ineffective internal controls[94] - The company identified material weaknesses related to internal audit functions and lack of segregation of duties within accounting functions[95] - The company plans to remediate significant deficiencies in internal controls with proper funding and will continue to monitor the effectiveness of these steps[96] - There were no changes in internal control over financial reporting that materially affected the company's controls during the most recently completed fiscal quarter[98] Shareholder Matters - The company entered into a share purchase agreement on March 1, 2024, to acquire 2,000 ordinary shares of Future Dao Group Holding Limited for an aggregate purchase price of $13,396,000, to be paid by issuing 3,940,000 shares of common stock[73] - As of March 31, 2024, the total issued and outstanding common stock increased to 2,625,130 shares following the issuance of 1,570,600 shares in September 2023[69] - 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[105][106] - As of March 31, 2024, the company's common stock issued increased to 2,625,130 shares, with a total amount of $12,616,454 for 1,570,600 shares issued in September 2023[107] Legal Matters - A derivative lawsuit was filed against the company by purported shareholders seeking control, which was dismissed without prejudice on October 18, 2023[99] - A preliminary injunction was issued on January 5, 2024, restraining unauthorized individuals from claiming control or acting on behalf of the company[103] Revenue Generation - The company did not generate any revenue from its SaaS business during the period ended March 31, 2024[52] - The company applies ASC 606 for revenue recognition, which includes a five-step model for recognizing revenue as performance obligations are satisfied[25] Currency Exchange - The RMB to USD exchange rate was 7.22 as of March 31, 2024, compared to 7.09 as of December 31, 2023[30]
Next Technology Holding Inc.(NXTT) - 2024 Q1 - Quarterly Report