Next Technology Holding Inc. 10-Q

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 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. 14 Results of Operations Results of Operations for the Six months period Ended June 30, 2024 and 2023 The following tables provide a comparison of a summary of our results of operations for the six months period ended June 30, 2024 and 2023. For the period June 30, 2024 From the period June 30, 2023 Revenue: Service revenue $ — $ — Cost of Revenue — — Gross profit — — Operating Expenses: Gain from digital assets 15,595,778 — General and administrative expenses (675,143 ) (302,775 ) Net profit/ (loss) before income tax 14,920,635 (302,775 ) Income tax expenses (2,290,819 ) — Net profit/ (loss) 12,629,816 (302,775 ) Revenue from Operations For the six-month period ended June 30, 2024 and 2023, total revenue were $nil respectively. General and Administrative Expenses For the six months period ended June 30, 2024 and 2023, general and administrative expenses were $675,143 and $302,775 respectively. The increase is mainly due to increase in BTC consulting fee during the period. Other Income The other income of $15,595,778 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 $12,629,816 and net loss of $302,775 for the period ended June 30, 2024 and 2023, respectively. The increase in net profit is mainly due to gain from digital assets during the period. Results of Operations for the Three months period Ended June 30, 2024 and 2023 The following tables provide a comparison of a summary of our results of operations for the three months period ended June 30, 2024 and 2023. For the period June 30, 2024 From the period June 30, 2023 Revenue: Service revenue $ — $ — Cost of Revenue — — Gross profit — — Operating Expenses: Loss from digital assets (8,423,620 ) — General and administrative expenses (345,000 ) (166,294 ) Net profit/ (loss) before income tax (8,768,620 ) (166,294 ) Income tax income 1,851,941 — Net profit/ (loss) 6,916,679 (166,294 ) Revenue from Operations For the three-month period ended June 30, 2024 and 2023, total revenue were $nil respectively. 15 General and Administrative Expenses For the three months period ended June 30, 2024 and 2023, general and administrative expenses were $345,000 and $166,294 respectively. The increase is mainly due to increase in BTC consulting fee during the period. Other Income/(loss) The other loss of $8,423,620 is mainly due to loss from digital assets during the period. Net loss As a result of the factors described above, there was a net loss of $6,916,679 and net loss of $166,294 for the period ended June 30, 2024 and 2023, respectively. The increase in net loss is mainly due to loss from digital assets during the period. Liquidity and Capital Resources As of June 30, 2024, we had cash on hand of $668,387. There is no change in cash held during the period. Operating activities As of June 30, 2024, our cash flow used in operating activities is $529 for the period ended June 30, 2024 as compared to the cash flow used in operating activities of $648,252 in prior period. The decrease was mainly due to increase in deferred tax liabilities during the period. Financing activities Cash provided by our financing activities was $634 for the period ended June 30, 2024 as compared to cash provided by financing activities of $318,000. 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. 16 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.