Next Technology Holding Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the Nasdaq Capital Market under the symbol “NXTT”. The following table sets forth, for the periods indicated since then, the high and low closing prices of our common stock on the Nasdaq Capital Market as reported by Yahoo Finance. High bid Low bid Fiscal Year 2024 March 31, 2023 $ 6.66 $ 3.83 Fiscal Year 2023 December 31, 2023 $ 6.2 $ 2.1 September 30, 2023 $ 14.3 $ 2.8 June 30, 2023(from June 9, 2023, post-reverse stock split) 47.1 6.8 March 31, 2023 The last reported sales price for our shares of common stock on the Nasdaq Capital Market as of March 31, 2024 was $6.22 per share. As of March 31, 2024, we had approximately 2,700 shareholders of record for our common stock. Transfer Agent The transfer agent for our common stock is Globex Transfer LLC. The transfer agent’s telephone number and address is (813) 344-4490 and 780 Deltona Blvd, Deltona, FL 32725. Holders As of the close of business on December 31, 2023, there were approximately 2,700 holders of record of our common stock. Dividends We have not declared any cash dividends on our common stock during our two most recent fiscal years. In the near future, we intend to retain any earnings to finance the development and expansion of our business. We do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. The declaration and payment of cash dividends by us are subject to the discretion of the Board. Any future determination to pay cash dividends will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant at the time by the board of Directors. We are not currently subject to any contractual arrangements that restrict our ability to pay cash dividends. Securities Authorized for Issuance Under Equity Compensation Plans As of December 31, 2023, there are no compensation plans under which our equity securities are authorized for issuance. 27 Recent Sales of Unregistered Securities 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 (“Reverse Stock Split”). The total issued and outstanding shares of the Company’s common stock decreased from 195,057,503 to 1,054,530 shares, with the par value unchanged at zero. In September, 2023, there are 1,570,600 shares issued with the total amount of $12,616,454, the Company’s common stock issued has been increased to 2,625,130 shares as of December 31, 2023. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not, nor did anyone on our behalf or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) of the Exchange Act, repurchase any outstanding shares of our common stock during any month of our fiscal year ended December 31, 2023. ITEM 5A. SELECTED FINANCIAL DATA 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 301 of Regulation S-K. ITEM 6. 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 annual 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 annual report . Overview NEXT TECHNOLOGY HOLDING 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 included 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. 28 Change of Officer and Director On December 11, 2023, according to the voting results of the Annual Shareholders’ Meeting (the “Meeting”), Lichen Dong, Lim Kian Wee, Mahesh Thapaliya and Jianbo Sun are respectively appointed as the director of the Company, forming the new Board of Directors of the Company. Biming Guo, Ning Qin, Yuxing Ye no longer serves as the director of the Company. On December 11, 2023, the new Board of Directors held a regular meeting, and made the following resolutions: 1. Mr. Lichen Dong is appointed as the Chairman of the Board. 2. The Audit Committee of the Company is composed of all four independent directors (Lichen Dong, Lim Kian Wee, Mahesh Thapaliya and Jianbo Sun) as members, and Lim Kian Wee is designated as the Chair of the Audit Committee. 3. The Nominating Committee of the Company is composed of all four independent directors (Lichen Dong, Lim Kian Wee, Mahesh Thapaliya and Jianbo Sun) as members, and Lichen Dong is designated as the Chair of the Nominating Committee. 4. The Compensation Committee of the Company is composed of all four independent directors (Lichen Dong, Lim Kian Wee, Mahesh Thapaliya and Jianbo Sun) as members, and Jianbo Sun is designated as the Chair of the Compensation Committee. Each of Lichen Dong, Lim Kian Wee, Mahesh Thapaliya and Jianbo Sun qualifies as an independent director under rules of The Nasdaq Stock Market, and does not have a family relationship with any director or executive officer of the Company, and has not been involved in any transaction with the Company during the past two years that would require disclosure under Item 404(a) of Regulation S-K. On December 13, 2023, Ms. Annie Huang tendered her resignation as a Chief Financial officer of NEXT TECHNOLOGY HOLDING INC. (the “Company”), effective from December 13, 2023. On the same day, approved by the Board of Directors, the Nominating Committee and the Compensation Committee, Mr. Ken Tsang was appointed as the Chief Financial Officer of the Company, effective December 13, 2023. On December 28, 2023, Mr. Wei He Chun tendered his resignation as the chief executive officer, effective December 28, 2023. 29 Result of Operations The following tables provide a comparison of a summary of our results of operations for the fiscal years ended December 31, 2023 and 2022. Results of Operations for the fiscal years ended December 31, 2023 and 2022 For the year ended December 31, 2023 For the year ended December 31, 2022 Revenue: (Unaudited) Service revenue, non-related party $ 2,633,308 $ — Cost of Revenue (1,198,033 ) — Gross Profit 1,435,275 — Operating Expenses: General and Administrative (3,478,482 ) (6,793,718 ) Operations loss (2,043,207 ) (6,793,718 ) Other expenses (1,130,153 ) — Loss before income tax (3,173,360 ) (6,793,718 ) Income tax expenses — — Net Loss $ (3,173,360 ) $ (6,793,718 ) Revenue from Operations For the fiscal year ended December 31, 2023 and 2022, total revenue was $2,633,308 and $nil, respectively. the revenue is mainly generated from the AI software development and SAAS software solutions for industrial and other businesses users. Cost of revenue Cost of revenue mainly consists of staff payroll, system development costs and outsourcing staff cost for system development, which is in line with the increase in revenue during the period. General and Administrative Expenses For the fiscal year ended December 31, 2023 and 2022, general and administrative expenses were $3,478,482 and $6,793,718 respectively. The decrease is mainly due to lesser expenses were incurred for the Nasdaq IPO professional fees in 2023 as compare to the prior reporting year. Net loss As a result of the factors described above, there was a net loss of $3,173,360 and $6,793,718 for the fiscal year ended December 31, 2023 and 2022, respectively, the decrease is mainly due to lesser expenses were incurred for the Nasdaq IPO professional fees in 2023 as compare to the prior reporting year. 30 The following chart provides a summary of our balance sheets for the fiscal years ended December 31, 2023 and 2022, it should be read in conjunction with the financial statements, and notes thereto. 2023 2022 Cash and Cash equivalents $ 668,387 $ 22,926 Digital Assets 35,206,901 — Receivables 1,133,117 — Prepayments 12,125,500 50,000 Other receivables 5,805,500 5,805,500 Assets related to discontinued operations — 41,138,333 Total assets $ 54,939,405 $ 47,016,759 Account payable 926,456 — Amount due to related parties 1,681,098 1,220,366 Other liabilities 1,430,530 50,000 Liabilities related to discontinued operations — 3,545,900 Total liabilities $ 4,038,084 $ 4,816,266 Total stockholders’ equity $ 50,901,321 $ 42,200,493 As of December 31, 2023, we had total assets of $54,939,405, which mainly consisted of $668,387 in cash, $35,206,901 in digital assets, and $17,931,000 in other receivables and prepayments; we had total liabilities of $4,038,084 which consisted of $926,456 in accounts payables, $1,681,098 in amount due to related parties and $1,430,530 in other liabilities; we had total stockholders’ equity of $50,901,321. Operating activities Our continuing cash flow generated from operating activities is $8,129,215 for the fiscal years ended December 31, 2023 as compare to the cash flow used in operating activities of $38,205,344 in prior year, which was increased by approximately of $46.3 million. The increase were mainly due to increase in assets related to discontinued operation. Investing activities Our continuing cash flow used in investing activities is $24,990,000 for the fiscal years ended December 31, 2023 as compare to $nil in prior year. The increase was mainly due to acquisition of 833 BTC with the amount of $24,990,000 during the year. Financing activities Cash generated from financing activities was $17,506,254 for the year ended December 31, 2023 as compare to the net cash generated from financing activities of $39,345,676, which was decreased by approximately of $22.4 million. The decrease is mainly due to lesser in share placement of approximately $12.6 million during the period as compare to the share placement of $37.5 million in prior year. Inflation Inflation does not materially affect our business or the results of our operations. 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 31 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. 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. Use of Estimate The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Accounts receivable Accounts receivable are presented net of allowance for doubtful accounts. The Group 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 doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to the 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 acquires 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. 32 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. Off-Balance Sheet Arrangements On March 1,2024, the Company entered into that the 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 2,000 ordinary shares (the “Purchased Shares”) of the Target (the “Transaction”) at a per share purchase price of $6,698 per share for an aggregate purchase price of $13,396,000 (the “Purchase Price”).Pursuant to the Purchase Agreement, at the closing of the Transaction, the Company will pay the Purchase Price by issuing to the Sellers an aggregate of 3,940,000 shares of common stock of the Company (the “Next Technology Common Stock”) based on an agreed-upon valuation of $3.4 per share (the “Per Share Price”). The Per Share Price is above $3.19, which is the average price per share of the shares of common stock of the Company traded on Nasdaq Capital Market in the five trading days prior to the signing date of the Purchase Agreement. Pursuant to the Purchase Agreement, each Seller will receive its portion of the Company’s Common Stock proportionate to the number of the Purchased Shares to be sold by such Seller to Next Investment under the Purchase Agreement, the transaction is expected to complete in end of April 2024. Change of Company name Effective April 2, 2024, Wetrade Group Inc. (the “Company”) changed its name to Next Technology Holding 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. ITEM 7. 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.