Next Technology Holding Inc.(US:NXTT)2025-10-08 17:38Financial Performance - For the three months ended September 30, 2025, service revenue was $1,788,205, compared to $0 for the same period in 2024[18]. - The company reported a net loss from continuing operations of $16,892,250 for the three months ended September 30, 2025, compared to a net income of $1,372,076 for the same period in 2024[18]. - For the nine months ended September 30, 2025, the net income from continuing operations was $295.1 million, a significant increase from $14.0 million in the same period in 2024[30]. - The company reported a fair value gain on digital assets of $430.4 million for the nine months ended September 30, 2025, compared to a gain of $17.9 million in the prior year[30]. - The Company reported revenue of $1,788,205 for both the three and nine months ended September 30, 2025, from custom software development services[119]. - The effective income tax rate for the nine months ended September 30, 2025, was 23.4%, compared to 16.0% for the same period in 2024[127]. - The Company experienced a net loss of $16,892,250 for the three months ended September 30, 2025, with a net income of $295,122,702 for the nine months ended September 30, 2025[134]. Assets and Liabilities - As of September 30, 2025, total assets amounted to $679,538,464, a significant increase from $92,916,317 as of December 31, 2024[15]. - Total stockholders' equity as of September 30, 2025, was $575,106,590, up from $81,628,062 as of December 31, 2024[15]. - As of September 30, 2025, the Company held cash in bank amounting to $12,357,568, with $4,437,518 in bank deposits outside the USA and $7,920,050 inside the USA[87]. - The Company's contract liabilities increased to $3,370,542 as of September 30, 2025, compared to nil as of December 31, 2024[68]. - As of September 30, 2025, accounts receivable amounted to $69,747, a decrease from $1,800,000 as of December 31, 2024[102]. - Other payables totaled $2,187,320 as of September 30, 2025, compared to $1,221,337 as of December 31, 2024, reflecting an increase in short-term loans[107]. Shareholder Equity and Stock Activity - The weighted-average shares outstanding decreased to 2,461,018 for the three months ended September 30, 2025, from 34,882 in the same period of 2024 due to a reverse stock split[18]. - The company completed a 200-for-1 reverse stock split on September 16, 2025, reducing outstanding shares from approximately 566,265,135 to approximately 2,865,730[15]. - The total outstanding shares of the Company increased to 436,265,135 shares following the issuance related to the BTC acquisition[99]. - The Company registered 80 million shares under the 2025 Equity Incentive Plan, with grants of 20 million and 50 million shares made in July and August 2025, increasing total outstanding shares to 506,265,135[115]. - A registered direct offering on September 3, 2025, resulted in the issuance of 25,313,256 shares at $0.15 per share and pre-funded warrants, generating net proceeds of approximately $8,030,250 for working capital[116]. Business Strategy and Operations - The company has shifted its business strategy to focus on acquiring and holding bitcoin while continuing to provide software development services[32]. - The company is expanding its customer base in various sectors, including new media, financial services, and healthcare[33]. - The company’s AI-driven software development services are designed to support enterprises across diverse industries, enhancing operational efficiency and decision-making[34]. - The company plans to continue monitoring market conditions to determine the timing and scale of additional bitcoin acquisitions[36]. - The company has shifted its business strategy to focus on software development services and acquiring and holding bitcoin, following the termination of operations in the PRC[143]. Accounting and Financial Reporting - The Company has adopted ASU 2023-08 for the accounting of crypto assets, allowing for the recognition of unrealized gains and losses in net income[52]. - Revenue is recognized over time for custom software development contracts, using the cost-to-cost input method to measure progress[62]. - The Company applies ASC 606 for revenue recognition, which includes a five-step model to determine transaction prices and performance obligations[59]. - The Company recognizes share-based compensation expenses based on the fair value of common shares at the grant date, with costs recognized over the vesting period[79]. - The Company adopted ASU 2023-07 and ASU 2023-09 during the year ended December 31, 2024, improving segment reporting and income tax disclosures, respectively[85][86]. - The Company regularly evaluates impairment of investments based on performance and financial position, recognizing losses when the carrying value exceeds fair value[57]. Legal and Compliance Issues - A derivative lawsuit was filed by purported shareholders seeking control of the Company, which was dismissed without prejudice on October 18, 2023[186]. - The Chancery Court granted a temporary restraining order on November 7, 2023, restraining unauthorized individuals from claiming to act on behalf of the Company[188]. - The Company remains under the control of its current board of directors, which consists of four members as of the date of the report[189]. - The Company moved to dismiss a lawsuit seeking repayment of certain loans, asserting that the guarantees were unauthorized and null and void[195]. - As of the date of the report, the Company's motion to dismiss remains pending before the Wyoming Chancery Court[198]. - The Company is classified as a "smaller reporting company" and is not required to provide certain risk factor information[199]. Internal Controls and Governance - As of September 30, 2025, the Company concluded that its disclosure controls and procedures were not effective due to limited internal resources and lack of transaction review[179]. - Management identified material weaknesses in internal audit functions and lack of segregation of duties within accounting functions[180]. - The Company plans to implement procedures to assure that the initiation of transactions, custody of assets, and recording of transactions will be performed by separate individuals[181]. - There were no changes in internal control over financial reporting that materially affected the Company's internal control during the most recently completed fiscal quarter[183].