Next Technology Holding Inc 10-Q/A for FY2024 Q1
Next Technology Holding Inc. (NXTT)
About this 10-Q/A
Next Technology Holding Inc filed this 10-Q/A on December 12, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Amendment No. 2
For the quarterly period ended:
For the transition period from ____________ to _____________
| (Exact name of small business issuer as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. . I.D. No.) |
(Address of Principal Executive Offices)
(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller Reporting Company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of December 12, 2024, there were
Explanatory Note
Next Technology Holding Inc (formerly known as WeTrade Group Inc. (the “Company”)) is filing this Amendment No.2 (the “Amendment No.2”) to the Quarterly Report on Form 10-Q for the period ended March 31, 2024, originally filed with the Securities and Exchange Commission (the “SEC”) on May 20, 2024 (the “Original Filing”), to amend our consolidated financial statements.
This Amendment No.2 amends the Original Filing, and the Amended Quarterly Report on Form 10-Q/A of the Company for the quarter ended March 31, 2024 filed on September 12, 2024 (the “Amendment No.1”). This Amendment No.2 is being filed to revise disclosure in “Note 8 – Prepayments” in connection with the BTC Contract (as defined below), and to include the restatement of previously issued financial statements describing the natures of all affected financial statements as restated that affect for the period ended March 31, 2024.
In accordance with applicable SEC rules, this Amendment No.2 includes new certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, from our Chief Executive Officer and Chief Financial Officer.
Except as described above, this Form 10-Q/A does not amend, update or change any other items or disclosures contained in the Original Filing, and accordingly, this Form 10-Q/A does not reflect or purport to reflect any information or events occurring after the original filing date of the Original Filing or modify or update those disclosures affected by subsequent events. Accordingly, this Form 10-Q/A should be read in conjunction with the Original Filing and the Company’s other filings with the SEC
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). These forward-looking statements are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other locations as well. These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements.
We identify forward-looking statements by use of terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” “hope,” “plan,” “believe,” “predict,” “envision,” “intend,” “will,” “continue,” “potential,” “should,” “confident,” “could” and similar words and expressions, although some forward-looking statements may be expressed differently. You should be aware that our actual results could differ materially from those contained in the forward-looking statements.
Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report. These factors include, among others:
| ● | our ability to execute on our growth strategies; | |
| ● | our ability to find manufacturing partners on favorable terms; | |
| ● | declines in general economic conditions in the markets where we may compete; | |
| ● | our anticipated needs for working capital; and |
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis.
Forward-looking statements speak only as of the date of this report or the date of any document incorporated by reference in this report. Except to the extent required by applicable law or regulation, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.
ii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
NEXT TECHNOLOGY HOLDINGS INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (All amounts shown in U.S. Dollars) | As of March 31, 2024 | As
of (audited) | ||||||
| Restated | Restated | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| *Digital assets | ||||||||
| Accounts receivable- non related parties, net | ||||||||
| Prepayments | ||||||||
| Total current assets | ||||||||
| Total assets | $ | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Account payables | ||||||||
| ****Amount due to related parties | ||||||||
| **Tax payable | ||||||||
| ***Other payables | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| **Deferred tax liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock; par value; | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| *****Retained Earnings/(Accumulated Deficit) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
| * | There is an adjustment of $263,947 in digital assets due to over-statement of its fair value of $263,947 |
| ** | There is an adjustment of $4,142,759 in both tax expenses and deferred tax liabilities due to under-provision of tax expenses and an adjustment of $130,934 in tax payable. |
| *** | There is a reclassification of $50,020 from accrued expenses to other payables and an adjustment of $520 in other payables due to error recording in other payables. |
| **** | There is an adjustment of $12,000 in the amount due to related parties due to error recording in the amount due to related parties. |
| ***** | There is a prior year adjustment of $211,738 in FY 2023 accumulated deficit due to an increase in loss of discontinued operation in prior year. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
NEXT TECHNOLOGY HOLDINGS INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
For
the Months
End | For the Three Months End March 31, 2023 | |||||||
| Restated | Restated | |||||||
| Revenue: | ||||||||
| Service revenue | $ | $ | ||||||
| Total service revenue | ||||||||
| Cost of revenue | ||||||||
| Gross Profit | ||||||||
| Operating expenses | ||||||||
| *General and administrative expense | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| **Other income | ||||||||
| Profit/ (loss) before income taxes | ( | ) | ||||||
| ***Income tax expenses | ( | ) | ||||||
| Net profit/ (loss) from continuing operation | $ | $ | ( | ) | ||||
| Net loss from discontinued operation | ( | ) | ||||||
| Comprehensive income | ||||||||
| Net profit/ (loss) | $ | $ | ( | ) | ||||
| Other comprehensive income | ||||||||
| *Foreign currency translation adjustment | ( | ) | ||||||
| Total comprehensive profit/(loss) | $ | $ | ( | ) | ||||
| Earnings /(Loss) per share, basic and diluted from continuing operation | $ | $ | ( | ) | ||||
| Earnings /(Loss) per share, basic and diluted from discontinued operation | ( | ) | ||||||
| *Weighted-average shares outstanding, basic and diluted | ||||||||
| * | |
| ** | |
| *** |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
NEXT TECHNOLOGY HOLDINGS INC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Three months ended March 31, 2024
| Common Stock | Additional Paid in | (Accumulated Deficit)/ Retained | Accumulated Other Comprehensive | Total Shareholder | ||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Income | Equity | |||||||||||||||||||
| (Restated) | ||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||
| *Net profit for the period | — | $ | $ | |||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| * |
Three months ended March 31, 2023
| Common Stock | Additional Paid in | Accumulated | Accumulated Other Comprehensive | Total Shareholder | ||||||||||||||||||||
| Shares | Amount | Capital | Deficits | Income | Equity | |||||||||||||||||||
| (Restated) | ||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||
| *Loss from discontinued operation | — | ( | ) | ( | ) | |||||||||||||||||||
| Net loss for the period | — | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| * | There is a prior year adjustment of $211,738 in FY 2023 accumulated deficit due to an increase in loss of discontinued operation in prior year. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
NEXT TECHNOLOGY HOLDINGS INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Three months Ended | For the Three months Ended | |||||||
| March 31, 2024 | March 31, 2023 | |||||||
| (Restated) | ||||||||
| Cash flows from operating activities: | ||||||||
| *Net Profit/ (loss) | $ | $ | ( | ) | ||||
| **Fair value gain from digital assets | ( | ) | ||||||
| Loss from discontinued operation | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivables | ||||||||
| ***Account payables | ( | ) | ||||||
| ****Directors’ fee payable | ||||||||
| ******Tax payable | ( | ) | ||||||
| ******Other payables | ||||||||
| *****Deferred tax liabilities | ||||||||
| Net cash flows used in continued operating activities | ( | ) | ( | ) | ||||
| Net cash flows used in discontinued operating activities | ||||||||
| Net cash flows used in operating activities | ( | ) | ( | ) | ||||
| Cash flow from financing activities: | ||||||||
| ****Shareholders loan | ||||||||
| Net cash flows provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Change in cash and cash equivalents: | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | $ | $ | ||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| * | There is an adjustment of $4,142,759 in both tax expenses and an adjustment of 194,622 in other income, therefore resulting in changes in net profit in operating activities. |
| ** | |
| *** | |
| **** | There is a reclassification of $40,000 from shareholders’ loan to directors’ fee payable in operating activities. |
| ***** | |
| ****** |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
NEXT TECHNOLOGY HOLDINGS INC
NOTES TO CONDEDSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – NATURE OF BUSINESS
Business
Next Technology Holdings Inc (formerly known as WeTrade Group, Inc) was incorporated in the State of Wyoming on March 28, 2019. We currently pursue two corporate strategies. One business strategy is to continue providing software development services, and the other strategy is to acquire and hold bitcoin.
Software development
We provide AI-enabled software development services to our customers, which include developing, designing, and implementing various SAAS software solutions for businesses of all types, including industrial and other businesses.
Bitcoin Acquisition Strategy
Our bitcoin acquisition strategy generally involves acquiring bitcoin with our liquid assets that exceed working capital requirements, and from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin.
We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin.
This overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes, including to generate cash for treasury management or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing additional strategies to create income streams or otherwise generate funds using our bitcoin holdings.
We believe that, due to its limited supply, bitcoin offers the opportunity for appreciation in value if its adoption increases and has the potential to serve as a hedge against inflation in the long-term.
5
| Digital asset original cost basis | Gain from digital asset | Market Value of digital asset | Approximate number of Bitcoin held | |||||||||||||
| Balance on December 31, 2023 | ||||||||||||||||
| Digital asset purchase | - | |||||||||||||||
| Fair value change during the period | - | |||||||||||||||
| Balance on March 31, 2024 | ||||||||||||||||
Restatement of previously issued financial statement
The Company discovered rounding errors
and accounting treatment errors in general and administrative expenses, other income, tax expenses, amount due to related parties,
deferred tax liabilities and other payables and accrued expenses during the audit review for the period ended March 31, 2024,
including rounding error of $
Effects of the restatement are as follows:
| Consolidated statement of operation for the three-month period ended March 31, 2024 | Previously Reported (Not reviewed) | Adjustment | As Restated | |||||||||
| General and administrative expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Other income | $ | $ | ( | ) | $ | |||||||
| Tax expenses | $ | $ | ( | ) | $ | ( | ) | |||||
| Net profit | $ | $ | ( | ) | $ | |||||||
| Consolidated statement of operation for the three-month period ended March 31, 2023 | Previously Reported (Not reviewed) | Adjustment | As Restated | |||||||||
| General and administrative expenses | $ | ( | ) | $ | $ | ( | ) | |||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | |||||
| Consolidated balance sheet as of March 31, 2024 | Previously Reported (Not reviewed) | Adjustment | As Restated | |||||||||
| Digital assets | $ | $ | ( | ) | $ | |||||||
| Total assets | $ | $ | ( | ) | $ | |||||||
| Amount due to related parties | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Accrued expenses | $ | ( | ) | $ | $ | |||||||
| Deferred tax liabilities | $ | $ | ( | ) | $ | ( | ) | |||||
| Tax payable | $ | $ | ( | ) | $ | ( | ) | |||||
| Other payables and accrued expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total liabilities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Accumulated profit | $ | ( | ) | $ | ( | ) | $ | |||||
| Total equity | $ | $ | ( | ) | $ | |||||||
6
| Consolidated balance sheet as of December 31, 2023 | Previously Reported (Not reviewed) | Adjustment | As Restated | |||||||||
| Accumulated deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total shareholders’ equity | $ | $ | ( | ) | $ | |||||||
| Consolidated statement of cash flows for the three-month period ended March 31, 2024 | Previously Reported (Not reviewed) | Adjustment | As Restated | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net profit | $ | $ | ( | ) | $ | |||||||
| Fair value gain from digital assets | $ | ( | ) | $ | $ | ( | ) | |||||
| Deferred tax liabilities | $ | $ | $ | |||||||||
| Account payables | $ | ( | ) | $ | $ | ( | ) | |||||
| Directors’ fee payables | $ | $ | $ | |||||||||
| Net cash flow used in operation expenses | $ | ( | ) | $ | $ | ( | ) | |||||
| Cash flows from financing activities: | ||||||||||||
| Shareholders’ loan | $ | $ | ( | ) | $ | |||||||
| Net cash flow provided by financing activities | $ | ( | ) | $ | ||||||||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation of Financial Statements
The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.
The condensed consolidated financial statements of the Company as of and for the three months ended March 31, 2024 and 2023 are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) that have been made are necessary to fairly present the financial position of the Company as of March 31, 2024, the results of its operations for the three months ended March 31, 2024 and 2023, and its cash flows for the three months ended March 31, 2024 and 2023. Operating results for the quarterly periods presented are not necessarily indicative of the results to be expected for a full fiscal year.
The statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and other information included in the Company’s Annual Report on Form 10-K as filed with the SEC for the fiscal year ended December 31, 2023.
7
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Goodwill and Other - Crypto Assets
In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets these criteria. The amendments require crypto assets to meet the criteria to be recognized at fair value with changes recognized in net income each reporting period. Upon adoption, a cumulative-effect adjustment is made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The Company has early applied ASU 2023-08 and measured crypto assets (presented as digital assets) at fair value with changes recognized in net income this year.
| March 31, 2024 | December 31, 2023 | |||||||
| Approximate number of bitcoins held | ||||||||
| Digital assets carrying value | $ | $ | ||||||
| Gain on digital assets during the period/ Year | $ | $ | ||||||
As
of March 31, 2024, approximately
8
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a maturity period of three months or less to be cash or cash equivalents. The carrying amounts reported in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents approximate their fair value. All of the Company’s cash that is held in bank accounts in Hong Kong and PRC are not protected by Federal Deposit Insurance Corporation (“FDIC”) insurance.
Foreign Currency
The Company’s principal country of operations
is the PRC. The accompanying condensed consolidated financial statements are presented in US$. The functional currency of the Company
is US$, and the functional currency of the Company’s subsidiaries is RMB. The condensed consolidated financial statements are translated
into US$ from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital
accounts are translated at their historical exchange rates when the capital transactions occurred. The resulting translation adjustments
are recorded as a component of shareholders’ equity included in other comprehensive income. Gains and losses from foreign currency
transactions are included in profit or loss.
| March 31, 2024 | December 31, 2023 | |||||||
| RMB: US$ exchange rate | ||||||||
The balance sheet amounts, with the exception
of equity, as of March 31, 2024 and December 31, 2023 were translated at
Consolidation
The Company’s condensed consolidated financial statements include the financial statements of the Group and subsidiaries. All transactions and balances among the Group and its subsidiaries have been eliminated upon consolidation.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make judgement estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management believes that the estimates used in preparing the financial statements are reasonable and prudent; however, actual results could differ from these estimates. Significant accounting estimates include the allowance for expected credit loss, valuation of deferred tax assets, and certain accrued liabilities such as contingent liabilities.
Accounts Receivable
Accounts receivables are presented net of allowance for expected credit loss. The Company uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required.
The Company maintains an allowance for expected credit loss which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for expected credit loss on general basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.
9
Leases
The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
Operating leases are included in operating lease right-of-use (“ROU”) assets and short-term and long-term lease liabilities in our condensed consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our condensed consolidated balance sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, we use the industry incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
ASU 2016-02 requires that public companies use a secured incremental browning rate for the present value of lease payments when the rate implicit in the contract is not readily determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly.
Software Development Costs
We apply ASC 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed, in analyzing our software development costs. ASC 985-20 requires the capitalization of certain software development costs subsequent to the establishment of technological feasibility for a software product in development. Research and development costs associated with establishing technological feasibility are expensed as incurred. Based on our software development process, technological feasibility is established upon the completion of a working model. In addition, we apply this to our review of development projects related to software used exclusively for our SaaS subscription offerings. In these reviews, all costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized.
10
Income Tax
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for
how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected
to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely
than not that the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently
be measured as the largest amount of tax benefit that has a greater than
The Company has subsidiaries in Hong Kong and PRC. The Company is subject to tax in Hong Kong and PRC jurisdictions. As a result of its future business activities, the Company will be required to file tax returns that are subject to examination by the Inland Revenue Department of Hong Kong and Tax Department of PRC.
Earnings / (Loss) Per Share
Earnings/(Loss) per share of common stock attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding for the period. Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying outstanding stock-based awards, warrants, options, or convertible debt using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per share of common stock attributable to common stockholders when their effect is dilutive.
Potential dilutive securities are excluded from the calculation of diluted EPS in profit periods as their effect would be anti-dilutive.
| For the period March 31, 2024 | For the period March 31, 2023 | |||||||
| (Restated) | (Restated) | |||||||
| Statement of Operations Summary Information: | ||||||||
| Net Profit/ (Loss) | $ | $ | ( | ) | ||||
| Weighted-average common shares outstanding - basic and diluted | ||||||||
| Earnings / (loss) per share, basic and diluted | $ | $ | ( | ) | ||||
11
Fair Value Measurements
The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to non-financial items that are recognized and disclosed at fair value in the financial statements on a non-recurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
NOTE 4 – REVENUE
We are in the business of providing AI-enabled software development services for industrial and other customers.
As of and for the period ended March 31, 2024, there were revenue generated from SAAS business.
12
NOTE 5 – CASH AND CASH EQUIVALENTS
| March 31, 2024 | December 31, 2023 | |||||||
| Bank Deposits- Outside USA | $ | $ | ||||||
NOTE 6 – DIGITAL ASSETS
| March 31, 2024 | December 31, 2023 | |||||||
| (Restated) | (Restated) | |||||||
| Opening balance | $ | $ | ||||||
| Purchase of BTC | ||||||||
| Gain from digital assets | ||||||||
| Ending balance | $ | $ | ||||||
As of March 31, 2024, the Company held approximately
833 BTC at the total cost of $
NOTE 7 – ACCOUNTS RECEIVABLE
| March 31, 2024 | December 31, 2023 | |||||||
| Accounts Receivable | $ | $ | ||||||
The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. There is no allowance for expected credit loss as the accounts receivable has been received as at reporting date.
13
NOTE 8 – PREPAYMENTS
| March 31, 2024 |
December 31, 2023 |
|||||||
| Prepayment for digital assets | $ | $ | ||||||
As previously disclosed in a Form 8-K filed on September 28, 2023, the Company entered into a BTC Trading Contract (the “BTC Contract”) with an autonomous organization (the “Association Seller”), which supports its members in the sale of BTC. While the Association Seller provides services to facilitate the sale of BTC by its members, it does not exert control over them by ownership or contract, nor does it make decisions for its members relating to the sale of BTC. None of the members of the Association Seller hold equity, serve as director or officer, or otherwise has voting power or management rights of the Association Seller.
Under the BTC Contract, the Company has the right to purchase up to 6,000 BTC from the members of the Association Seller (each, a “BTC Seller”) through the Association Seller at a locked price of $30,000/BTC over a 12-month period commencing on September 25, 2023, with payment to be made in the form of cash or the Company’s shares. Although the BTC Contract states that the Association Seller (Party B) “owns the virtual currency”, to our knowledge, this statement was mistakenly made. As of the date of the BTC Contract, it were the individual members of the Association Seller, not the Association Seller itself, who own the BTC to be sold under the BTC Contract. We believe the Association Seller will coordinate with its members to fulfill the Company’s purchase of BTC, however, we cannot guarantee that the Company will be able to purchase BTC from the BTC Sellers. The BTC Contract was entered into solely between the Company and the Association Seller and no BTC Sellers owe any legal obligation to the Company in connection with the purchase and sale of BTC.
Following the execution of the BTC Contract, the Company
purchased 833 BTC from the BTC Sellers and decided to purchase an additional 1,000 BTC (the “1,000 BTC Purchase”). As of
December 31, 2023, the Company made a prepayment to the BTC Sellers through the Association Seller of approximately $
While negotiating the terms of the 1,000 BTC Purchase with the BTC Sellers, the Company decided to exercise its right under the BTC Contract to purchase 5,000 BTC (the “5,000 BTC Purchase”), which includes the previously planned 1,000 BTC. To reflect the then price increase in BTC and finalize the transaction details of the 5,000 BTC Purchase, the Company and the Association Seller entered into that certain Amendment Agreement (the “Amendment Agreement”) on May 2, 2024, which was previously disclosed in a Form 8-K filed by the Company on May 6, 2024.
According to the Amendment Agreement, the Company agreed
to pay the aggregate price for the 5,000 BTC through the issuance of
14
NOTE 9 – AMOUNT DUE TO RELATED PARTIES
| March 31, 2024 | December 31, 2023 | |||||||
| (Restated) | (Restated) | |||||||
| Related parties payable | $ | $ | ||||||
| Amount due to shareholders | ||||||||
| Director fee payable | ||||||||
| $ | $ | |||||||
The related party balance of $
As of March 31, 2024, the amount due to shareholders
of $
As of March 31, 2024, the director fee payable
of $
The amount due to related parties are interest free, unsecured and have no fixed repayment period.
NOTE 10 – ACCOUNT PAYABLES
| December 31, 2023 | December 31, 2023 | |||||||
| Account payable | $ | $ | ||||||
NOTE 11 – OTHER PAYABLES
| March 31, 2024 | December 31, 2023 | |||||||
| Professional fees | $ | $ | ||||||
Professional fees of $
15
NOTE 12 – SHAREHOLDERS’ EQUITY
The
Company has an unlimited number of authorised ordinary shares and has issued
On March 29, 2019, the Company issued
In February 2020, there are
On September 15, 2020, the Wyoming Secretary
of State approved the Company’s certificate of amendment to amend its Articles of Incorporation to effect
On September 21, 2020, there are
On April 13, 2022, the Company and 15 shareholders
entered into that certain Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which Company and the 15
Shareholders have cancelled
On July 21, 2022, the Company completed uplisting
of its common stock to the Nasdaq Capital Market, and the closing of its public offering of
On July 22, 2022, the Company issued
On
June 9, 2023, the Wyoming Secretary of State approved the Company’s certificate of amendment to amend its Articles of Incorporation
to effect
In September 2023, there were
16
NOTE 13 – INCOME TAXES
The Company is subject to U.S. Federal tax laws. The Company has not recognized an income tax benefit for its operating losses in the United States because the Company does not expect to commence active operations in the United States.
There
are several subsidiaries were incorporated in Hong Kong and are subject to Hong Kong profits tax at a tax rate of
The Company is currently conducting its certain
operations in the PRC through its subsidiaries, which are subject to tax to
NOTE 14 – SUBSEQUENT EVENTS
Acquisition of Company
On
March 1,2024, the Company entered into a share purchase agreement (the “Purchase Agreement”) with certain existing shareholders
(the “Sellers”) of Future Dao Group Holding Limited, an exempted company incorporated and existing under the laws of the
Cayman Islands(the “Target”),pursuant to which the Company agrees to purchase from the Sellers indirectly through Next Investment
Group Limited, a wholly-owned subsidiary of the Company (“Next Investment”), and the Sellers agree to sell to Next Investment,
an aggregate of
Change of Company name
Effective April 2, 2024, the Company has changed its name to Next Technology Holdings Inc. The name change was made pursuant to the Wyoming Business Corporations Act, and an amendment to Article I of the Company’s Amended and Restated Articles of Incorporation was filed with the Wyoming Secretary of State on March 18, 2024 (Amendment ID: 2024-004669585).
Our common stock will continue to trade on the NASDAQ Stock Market under the ticker symbol “NXTT”. Outstanding stock certificates for shares of the company are not affected by the name change. They continue to be valid and need not be exchanged.
Amended and Restated BTC Trading Contract
On September 24, 2024, the Company and the
Association Seller entered into an Amended and Restated BTC Trading Contract (the “Amended BTC Contract”), which amended
and restated the BTC Contract.
To our knowledge, the Association Seller entered into a cooperation agreement with each Schedule I BTC Sellers (the “Cooperation Agreement”) on the same day when the Amended BTC Contract was entered. Under the Cooperation Agreement, each Schedule I BTC Seller agrees to transfer a specified number of BTC (as set forth in the Cooperation Agreement) to a BTC wallet address designated by the Association Seller for the transactions contemplated under the Amended BTC Contract.
While we believe the Association Seller will be able to coordinate with its members to fulfill the Company’s purchase of BTC if the Company so decides, we cannot guarantee that the Company will successfully acquire BTC pursuant to the Amended BTC Contract. The Amended BTC Contract was entered into solely between the Company and the Association Seller and no Schedule I BTC Sellers owe any legal obligation to the Company in connection with the purchase and sale of BTC. Furthermore, as the Company is not a party to the Cooperation Agreement, it cannot enforce the terms of the Cooperation Agreement against any Schedule I BTC Sellers should such Schedule I BTC Sellers do not perform their obligations under the Cooperation Agreement. For example, if a Schedule I BTC Seller does not transfer its committed BTC to the Association Seller pursuant to the Cooperation Agreement, we may not be able to purchase such BTC from the Association Seller pursuant to the Amended BTC Contract.
17
At
the time when the Amended BTC Contract was signed, the Company indicated its intent to exercise the option to purchase 5,000 BTC out
of the Total BTC pursuant to the Amended BTC Contract (the “Amended 5,000 BTC Transaction”). According to the terms of the
Amended BTC Contract, the previously-made Prepayment Amount will be applied towards the total purchase price for the Amended 5,000 BTC
Transaction and the Company will pay the remaining balance through (i) the issuance of
The
value of $
Pursuant to the Amended BTC Contract, the Company shall exercise its
option to purchase BTC thereunder prior to September 24, 2025. While the Company’s purchase option thereunder is time-limited, the
Amended BTC Contract itself will remain in effect without a defined expiration date, unless otherwise terminated. In the event of a breach by either party, the non-breaching party has the right
to terminate the agreement. In such case, the breaching party will be obligated to pay a penalty of $
The above description of the Amended BTC Contract does not purport to be complete, and is qualified in its entirety by reference to the full text of the Amended BTC Contract, a copy of which is attached to the Company’s Current Report on Form 8-K as Exhibit 10.1, filed with the SEC on September 27, 2024, which is incorporated by reference herein.
Impact on Company’s Capitalization and Stockholder Approval
The issuance of securities pursuant to the Amended BTC Contract will not affect the rights of the Company’s existing stockholders, but such issuances will have a significant dilutive effect on the Company’s existing stockholders, including the voting power of the existing stockholders.
As of the date of this report, there were
Pursuant
to Nasdaq Rule 5635(a), if an issuer intends to issue common stock or securities convertible into or exercisable for common stock, in
connection with the acquisition of stock or assets of another company, which may equal or exceed
The Shares to be issued to the Schedule I BTC Sellers in the Amended 5,000 BTC Transaction exceeds the threshold for which stockholder approval is required under Nasdaq Rule 5635(a), and the Warrant Shares to be issued to the Schedule I BTC Sellers upon the full exercise of the Warrants could result in the issuance of a number of shares exceeding the threshold and pricing for which stockholder approval is required under Nasdaq 5635(d). As such, the Company is required to obtain requisite stockholder approval for the Amended 5,000 BTC Transaction.
As disclosed in a Preliminary Information Statement on Schedule 14C filed by the Company on October 3, 2024, the Company has obtained the requisite stockholder approval for the Amended 5,000 BTC Transaction in accordance with the Company’s articles of incorporation and bylaws on September 24, 2024.
18
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed elsewhere in this report.
Business
Next Technology Holdings Inc (formerly known as “WeTrade Group, Inc”) was incorporated in the State of Wyoming on March 28, 2019. We currently pursue two corporate strategies. One business strategy is to continue providing software development services, and the other strategy is to acquire and hold bitcoin.
Software development
We provide AI-enabled software development services to our customers, which include developing, designing, and implementing various SAAS software solutions for businesses of all types, including industrial and other businesses.
Bitcoin Acquisition Strategy
Our bitcoin acquisition strategy generally involves acquiring bitcoin with our liquid assets that exceed working capital requirements, and from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin.
We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin.
This overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes, including to generate cash for treasury management or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing additional strategies to create income streams or otherwise generate funds using our bitcoin holdings.
We believe that, due to its limited supply, bitcoin offers the opportunity for appreciation in value if its adoption increases and has the potential to serve as a hedge against inflation in the long-term.
19
Results of Operations
Results of Operations for the Three months period Ended March 31, 2024 and 2023
The following tables provide a comparison of a summary of our results of operations for the three months period ended March 31, 2024 and 2023.
| For the period March 31, 2024 | From the period March 31, 2023 | |||||||
| (Restated) | (Restated) | |||||||
| Revenue: | ||||||||
| Service revenue | $ | — | $ | — | ||||
| Cost of Revenue | — | — | ||||||
| Gross profit | — | — | ||||||
| Operating Expenses: | ||||||||
| Gain from digital assets | 24,019,399 | — | ||||||
| General and administrative expenses | (330,145 | ) | (166,295 | ) | ||||
| Net profit/ (loss) before income tax | 23,689,254 | (166,295 | ) | |||||
| Income tax expense | (4,142,759 | ) | — | |||||
| Net profit/ (loss) | 19,546,495 | (166,295 | ) | |||||
Revenue from Operations
For the three-month period ended March 31, 2024 and 2023, total revenue were $nil respectively.
General and Administrative Expenses
For the three months period ended March 31, 2024 and 2023, general and administrative expenses were $330,145 and $166,295 respectively. The increase is mainly due to increase in BTC consulting fee during the period.
Other Income
The other income of $24,019,399 is mainly due to gain from digital assets during the period.
Net Profit
As a result of the factors described above, there was a net profit of $19,546,495 and net loss of $166,295 for the period ended March 31, 2024 and 2023, respectively. The increase in net profit is mainly due to gain from digital assets during the period.
Liquidity and Capital Resources
As of March 31, 2024, we had cash on hand of $668,388. There is no change in cash held during the period.
20
Operating activities
As of March 31, 2024, our cash flow used in operating activities is $530 for the period ended March 31, 2024 as compared to the cash flow used in operating activities of $511,772 in prior period. The decrease was mainly due to higher fair value gain in BTC were made in prior period.
Financing activities
Cash provided by our financing activities was $635 for the period ended March 31, 2024 as compared to cash provided by financing activities of $186,000. The decrease is mainly due to lesser in shareholders’ advance during the period as compare to the prior period.
Inflation
Inflation does not materially affect our business or the results of our operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies
We prepare our financial statements in accordance with generally accepted accounting principles of the United States (“GAAP”). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Our actual results could differ from those estimates. We use historical data to assist in the forecast of our future results. Deviations from our projections are addressed when our financials are reviewed on a monthly basis. This allows us to be proactive in our approach to managing our business. It also allows us to rely on proven data rather than having to make assumptions regarding our estimates.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.
21
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a “smaller reporting company” as defined by Item 10(f)(1) of Regulation S-K, and as such are not required to provide the information contained in this item pursuant to Item 305 of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
With respect to the period ended March 31, 2024, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.
Based upon our evaluation regarding the period ended March 31, 2024, the Company’s management, including its Principal Executive Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Material weaknesses noted are lack of an audit committee, lack of a majority of outside directors on the board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and management is dominated by two individuals, without adequate compensating controls. However, management believes the financial statements and other information presented herewith are materially correct.
Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2024. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework - Guidance for Smaller Public Companies (the COSO criteria). Based on our assessment, management identified material weaknesses related to: (i) our internal audit functions; (ii) a lack of segregation of duties within accounting functions; and the lack of multiple levels of review of our accounting data. Based on this evaluation, our management concluded that as of March 31, 2024, we did not maintain effective internal control over financial reporting.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with any policies and procedures may deteriorate. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. To the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals. With proper funding we plan on remediating the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.
A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board Auditing Standard No. 5) or combination of control deficiencies, that results in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
22
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Since mid-September 2023, Mr. Zheng Dai, Mr. Pijun Liu, and certain individuals under their control (the “Unauthorized Persons”) had been falsely and repeatedly holding themselves out as representing and/or authorized to represent the Company. For example, the Unauthorized Persons caused to be filed certain current reports on Forms 8-K dated September 28, 2023 and October 10, 2023, in which they purported to appoint new officers and directors. These filings were false and should be disregarded.
On September 28, 2023, a derivative lawsuit was filed by certain purported shareholders affiliated with the Unauthorized Persons in the United States District Court for the District of Wyoming against certain officers and directors of the Company, seeking control of the Company. This case was dismissed without prejudice on October 18, 2023.
On October 18, 2023, the same individuals who filed the above-described derivative suit filed a direct action against the Company in the Chancery Court of the State of Wyoming (the “Chancery Court”), again seeking control of the Company. The Company responded to the lawsuit, sought a temporary restraining order restraining the plaintiff-shareholders and their affiliates (including the Unauthorized Persons) from claiming be in control of the Company.
On November 7, 2023, the Chancery Court issued a temporary restraining order substantially restraining the plaintiff-shareholders and their affiliates from claiming to act on behalf of the Company. The lawsuit remains pending as at reporting date.
On November 30, 2023, the Company responded to plaintiffs’ arguments that they controlled the Company, pointing out that plaintiffs’ case (Mr. Dai Zheng and his affiliates) was largely built upon forged signatures and other fabricated materials. In response, the plaintiffs withdrew their opposition to the Company’s request for an injunction.
On January 5, 2024, the Chancery Court entered a preliminary injunction order (attached hereto). Specifically, the order restrained Mr. Dai Zheng and his affiliates from the following conduct:
| (i) | acting as or holding themselves out as majority shareholders, directors, executives, or employees of the Company and its affiliates; |
| (ii) | making any attempts to contact the SEC, Nasdaq, government authorities, or make any filing or press release on behalf of the Company; |
| (iii) | making any attempts to change the board composition and executive team; |
| (iv) | disseminating false statements regarding the Company and its leadership; |
| (v) | making any attempts to contact the Company’s service providers, including auditors, stock transfer agents, and filing agents; |
| (vi) | making any attempts to issue the Company’s shares. |
23
ITEM 1A. RISK FACTORS
We are a “smaller reporting company” as defined by Item 10(f)(1) of Regulation S-K, and as such are not required to provide the information contained in this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No senior securities were issued and outstanding during the nine months ended March 31, 2024.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
ITEM 5. OTHER INFORMATION
On June 9, 2023, the Wyoming Secretary of State approved the Company’s certificate of amendment to amend its Articles of Incorporation to effect 1 for 185 Reverse Stock Split. The total issued and outstanding shares of the Company’s common stock decreased from 195,057,503 to 1,054,364 shares, with the par value unchanged at zero.
The Reverse Stock Split is intended to more expediently
enable the Company to regain compliance to achieve a minimum bid price of $1.00 per share for continued listing on Nasdaq, as set forth
in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). As a result of the Reverse Stock Split, every one-for-one
hundred and eighty-five (185) shares of the Company’s Common Stock then issued and outstanding will automatically, and without
any action of the Company or any holder thereof, be combined, converted, and changed into one (1) validly issued and non-assessable share
of Common Stock.
In September, 2023, there were 1,570,600 shares issued with the total amount of $12,616,454, and the Company’s common stock issued has been increased to 2,625,130 shares as of March 31, 2024.
24
ITEM 6. EXHIBITS
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEXT TECHNOLOGY HOLDINGS INC | ||
| Dated December 12, 2024 | By: | /s/ Wei Hong Liu |
| Wei Hong Liu | ||
| Chief Executive Officer | ||
| /s/ Eve Chan | |
| Eve Chan | |
| Chief Financial Officer |
26
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 15 U.S.C. SECTION 7241, AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Liu Wei Hong, certify that:
| 1 | I have reviewed the quarterly report on Form 10-Q/A of Next Technology Holdings Inc., a Wyoming corporation, for the period ended March 31, 2024, as filed with the Securities and Exchange Commission; |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report; |
| 4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 12, 2024 | /s/ Wei Hong Liu |
| Liu Wei Hong | |
| Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION BY THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eve Chan, certify that:
| 1 | I have reviewed the Quarterly Report on Form 10-Q/A of Next Technology Holdings Inc., a Wyoming corporation, for the period ended March 31, 2024, as filed with the Securities and Exchange Commission; |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report; |
| 4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 12, 2024 | /s/ Eve Chan |
| Eve Chan | |
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Liu Wei Hong, Director and Chief Executive Officer of Next Technology Holdings Inc. (the “Company”), do hereby certify, in connection with Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2024 (the “Report”) of the Company, the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: December 12, 2024 | By: | /s/ Wei Hong Liu |
| Liu Wei Hong | ||
| Chief Executive Officer | ||
| (principal executive officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Eve Chan, Director and Chief Financial Officer of Next Technology Holdings Inc . (the “Company”), do hereby certify, in connection with Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2024 (the “Report”) of the Company, the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: December 12, 2024 | By: | /s/ Eve Chan |
| Eve Chan | ||
| Chief Financial Officer | ||
| (principal financial officer) |