Next Technology Holding Inc.(NXTT) - 2025 Q1 - Quarterly Report

PART I Item 1. Financial Statements The company reported no revenue for Q1 2025, achieving a $193.4 million net income primarily from digital asset fair value gains, with total assets surging to $483.8 million due to bitcoin acquisitions Unaudited Condensed Consolidated Balance Sheets As of March 31, 2025, total assets dramatically increased to $483.8 million, driven by digital assets, while liabilities and equity also significantly rose Condensed Consolidated Balance Sheet Highlights (in USD) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $483,825,640 | $92,916,317 | | Digital assets | $481,717,253 | $78,322,430 | | Cash and cash equivalents | $668,387 | $668,387 | | Total Liabilities | $62,798,986 | $11,288,255 | | Deferred tax liabilities | $59,655,376 | $8,234,503 | | Total Stockholders' Equity | $421,026,654 | $81,628,062 | Unaudited Condensed Consolidated Statements of Operations For Q1 2025, the company reported no service revenue but a substantial net income of $193.4 million, primarily from digital asset fair value gains, despite a lower EPS due to increased shares outstanding Consolidated Statements of Operations Highlights (in USD) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Service Revenue | $0 | $0 | | General and administrative expense | ($449,858) | ($330,145) | | Other income | $245,311,156 | $24,019,399 | | Net income | $193,440,425 | $19,546,495 | | Net comprehensive income per share | $1.98 | $7.45 | | Weighted-average shares outstanding | 97,604,030 | 2,625,130 | Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity Stockholders' equity significantly increased to $421.0 million in Q1 2025, driven by $146.0 million from new share issuance and $193.4 million in net income - Total outstanding shares increased from 6,976,410 at the end of 2024 to 436,265,135 as of March 31, 2025[20] - The increase in equity was due to stock issuance of $146.0 million and net income of $193.4 million[20] Unaudited Condensed Consolidated Statements of Cash Flows Cash and cash equivalents remained unchanged at $668,387 for Q1 2025, with net cash flows from all activities being nil, despite significant net income offset by non-cash gains - Cash and cash equivalents remained unchanged at $668,387 at the end of the period[24] - Net cash flows from operating, investing, and financing activities were all zero for the quarter[24] Notes to Unaudited Consolidated Financial Statements Notes detail the company's dual strategy, the March 2025 acquisition of 5,000 BTC for $158.1 million, early adoption of ASU 2023-08 for fair value crypto accounting, and the dissolution of its PRC subsidiary - The company pursues a dual corporate strategy: providing software development services and acquiring and holding bitcoin[27] - In March 2025, the company acquired 5,000 BTC for a total consideration of $158,083,667, paid through the issuance of shares and warrants[71][100] Bitcoin Holdings Roll-forward | | Number of Bitcoin | Fair Value | | :--- | :--- | :--- | | Balance on Dec 31, 2024 | 833 | $78,322,430 | | Digital asset purchase | 5,000 | $158,083,667 | | Fair value gain in Q1 2025 | - | $245,311,156 | | Balance on Mar 31, 2025 | 5,833 | $481,717,253 | - The company early adopted ASU 2023-08 in fiscal year 2024, measuring its crypto assets at fair value with unrealized gains and losses recognized in net income[45][46] - In July 2024, the company dissolved its subsidiary in the PRC, WeTrade Technology (Shanghai) Co., Ltd., which is classified as a discontinued operation[112] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the dual strategy of software development and bitcoin acquisition, noting Q1 2025's $193.4 million net income from digital asset gains, increased G&A expenses, and limited liquidity relying on external funding - The company's business strategy involves both AI-enabled software development services and acquiring and holding bitcoin with liquid assets exceeding working capital needs[114][115][116] Q1 2025 vs Q1 2024 Operational Results (in USD) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $0 | $0 | | Other Income | $245,311,156 | $24,019,399 | | General & Admin Expenses | ($449,858) | ($330,145) | | Net Income | $193,440,425 | $19,546,495 | - The increase in Net Income is mainly due to gains from digital assets[124] - The increase in General and administrative expenses was primarily driven by higher litigation-related legal fees[126] - As of March 31, 2025, cash on hand was $668,387[127] - Operating cash flow was nil, with daily operational expenses covered by funds borrowed from former executives and third parties[128] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a "smaller reporting company," the company is exempt from providing quantitative and qualitative market risk disclosures - As a "smaller reporting company," the company is not required to provide the information for this item[133] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses including governance issues, lack of segregation of duties, and absence of an internal audit function - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[136] - Material weaknesses identified include: lack of a majority of outside directors, management dominated by two individuals, lack of segregation of duties, and lack of an internal audit function[136][137] - No changes were made to internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[140] PART II – Other Information Item 1. Legal Proceedings The company is involved in ongoing legal disputes with unauthorized individuals, including a dismissed lawsuit seeking control and a pending case regarding alleged loan guarantees - The company faced legal challenges from unauthorized persons (Mr. Zheng Dai, Mr. Pijun Liu) who attempted to assert control over the company[142] - A lawsuit in Wyoming Chancery Court seeking control of the company was dismissed with prejudice on April 8, 2024, in favor of the current board[144][147] - A separate lawsuit was filed in New York regarding loan guarantees allegedly signed by the unauthorized individuals; the company has moved to dismiss this case, and the motion is pending[151][152] Item 1A. Risk Factors As a "smaller reporting company," the company is not required to provide risk factor disclosures - As a "smaller reporting company," the company is not required to provide risk factor disclosures[153] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None reported[154] Item 3. Defaults Upon Senior Securities No senior securities were issued or outstanding during the nine months ended March 31, 2025, resulting in no defaults - No senior securities were issued and outstanding during the period[155] Item 4. Mine Safety Disclosures This item is not applicable to the company's business operations - Not applicable to the Company[156] Item 5. Other information No other information was reported for the period - None[157] Item 6. Exhibits The report includes required certifications from the Principal Executive Officer and Principal Financial Officer, along with XBRL-formatted financial statements - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and XBRL data files[157]