Next Technology Holding Inc. 10-Q/A

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 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 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 financing 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. 17 Results of Operations Results of Operations for the Nine-month Period Ended September 30, 2024 and 2023 The following tables provide a comparison of a summary of our results of operations for the nine-month period ended September 30, 2024 and 2023. For the period September 30, 2024 From the period September 30, 2023 Revenue: Service revenue $ — $ 1,500,000 Cost of Revenue — (270,864 ) Gross profit — 1,229,136 Operating Expenses: Other income/ (expenses) 17,899,568 (14,406,396 ) General and administrative expenses (1,242,128 ) (537,576 ) Net profit/ (loss) before income tax 16,657,440 (13,714,836 ) Income tax expenses (2,666,078 ) — Net profit/ (loss) $ 13,991,362 $ (13,714,836 ) Revenue from Operations For the nine-month period ended September 30, 2024 and 2023, total revenue were $nil and $1,500,000 respectively. The decrease is mainly due to decrease in AI SAAS revenue during the period. General and Administrative Expenses For the nine-month period ended September 30, 2024 and 2023, general and administrative expenses were $1,242,128 and $537,576 respectively. The increase is mainly due to an increase in BTC consulting fee and legal fees during the period. Other Income/ (expenses) The other income of $17,899,568 is mainly due to an increase in gain from digital assets during the period as compared to the provision for bad debts of $11,347,054 in prior period. Net Profit/ (loss) As a result of the factors described above, there was a net profit of $13,991,362 and net loss of $13,714,836 for the period ended September 30, 2024 and 2023, respectively. The increase in net profit is mainly due to gain from digital assets during the period. 18 Results of Operations for the Three-month Period Ended September 30, 2024 and 2023 The following tables provide a comparison of a summary of our results of operations for the three-month period ended September 30, 2024 and 2023. For the period September 30, 2024 From the period September 30, 2023 Revenue: Service revenue $ — $ 1,500,000 Cost of Revenue — (270,864 ) Gross profit — 1,229,136 Operating Expenses: Other income/ (expenses) 2,303,789 (14,406,397 ) General and administrative expenses (566,983 ) (234,800 ) Net profit/ (loss) before income tax 1,736,806 (13,412,061 ) Income tax income (364,730 ) — Net loss $ 1,372,076 $ (13,412,061 ) Revenue from Operations For the three-month period ended September 30, 2024 and 2023, total revenue was $nil and $1,500,000 respectively. The decrease is mainly due to decrease in AI SAAS system revenue during the period. General and Administrative Expenses For the three-month period ended September 30, 2024 and 2023, general and administrative expenses were $566,983 and $234,800 respectively. The increase is mainly due to an increase in BTC consulting fee and legal fees during the period. Other income/ (expenses) The other income of $2,303,789 is mainly due to loss from digital assets during the period. The other expenses of $14,406,397 were mainly for fair value loss of digital assets of $3.05 million and provision for bad debts of $11.3 million in prior reporting period. Net loss As a result of the factors described above, there was a net profit of $1,372,076 and net loss of $13,412,061 for the period ended September 30, 2024 and 2023, respectively. The increase in net profit is mainly due to loss from digital assets and no provision for bad debts were incurred during the period. 19 Liquidity and Capital Resources As of September 30, 2024, we had cash on hand of $668,387. There is no change in cash held during the period. Operating activities As of September 30, 2024, our cash flow used in operating activities is $81,332 for the period ended September 30, 2024 as compared to the net cash flow from operating activities of $11,886,808 in prior period. The decrease was mainly due to the turnaround of the net profit of $13.9 million from the net losses of $13.7 million in prior reporting period. Investing activities Cash provided used in investing activities was $nil for the period ended September 30, 2024 as compared to cash used in investing activities of $37,115,500 in prior period. The decrease is mainly due to no digital assets being purchased during the period. Financing activities Cash provided by our financing activities was $81,332 for the period ended September 30, 2024 as compared to cash provided by financing activities of $17,203,894. The decrease is mainly due to lesser in shareholders’ advance and no issuance of stock during the period as compared 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. 20 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.