Next Technology Holding (NXTT) risk factors, FY2025 10-K

Other

1. 01Change of Officer and Director
2. 021. Mr. Jianbo Sun is the temporary Chairman of the Board after Mr Lichen Dong resigned on December 10, 2025
3. 03(a) In July 2024, we dissolved our subsidiary, WeTrade Technology (Shanghai) Co., Ltd. in the PRC, which qualified as a discontinuing operation under ASC 205-20. We retrospectively adjusted the above comparative statements of change in stockholders’ equity for the year ended December 31, 2024
4. 04Revenue is primarily derived from AI software development services and SaaS software solutions provided to industrial and other business customers
5. 05Selling and marketing expenses primarily include
6. 06Research and development expenses primarily consist of
7. 07General and administrative expenses also consisted of (i) salary, welfare and share-based compensation for general and administrative personnel, (ii) office expense, and (iii) professional service fees and others
8. 08(ii) Higher professional service fees, as we engaged professionals to support key strategic initiatives and corporate development activities, including strategic advisory, legal, and consulting services
9. 09Net income from continuing operation
10. 10Total stockholders’ equity $ 455,579,409 $ 81,628,062
11. 11Liquidity and Capital Resources
12. 12Cash and Cash Equivalents, End of Year $ 5,623,944 $ 668,387
13. 13Post-Balance Sheet Events
14. 14Critical Accounting Policies
15. 15ASC 606 requires us to apply a five-step model to recognize revenue
16. 16Accounts receivable represent unconditional rights to consideration for services provided in accordance with contractual billing schedules, which are typically monthly in arrears. Contract liabilities primarily relate to any advance billings and are not significant
17. 17We grant our common stocks to eligible employees and non-employees. We account for share-based awards issued to employees in accordance with ASC Topic 718 Compensation – Stock Compensation
18. 18We recognize the estimated compensation cost of RSUs and common stocks based on the fair value of common stocks on the date of the grant. We recognize the compensation cost, net of estimated forfeitures, over a vesting term for service-based RSUs
19. 19Deferred income tax assets and deferred income tax liabilities

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1. 20ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
2. 21Nasdaq Compliance Matters
3. 22Change in Independent Registered Public Accounting Firm
4. 23On January 21, 2026, the Audit Committee engaged CHI to serve as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2025 and subsequent periods
5. 24Disclosure Controls and Procedures
6. 25Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is a process designed to provide reasonable assurance to management and to the Board regarding the preparation and fair presentation of published financial statements
7. 26Changes in Internal Control over Financial Reporting
8. 27Directors and Executive Officers
9. 28Mr. Weihong Liu, Chief Executive Officer
10. 29Mr. Nan Ding, Chief Operating Officer
11. 30Ms. Eve Chan, Chief Financial Officer
12. 31Mr. Hongliang Liu, Chief Technology Officer
13. 32Hsiu Wu, Director, Chairman of the Board
14. 33We have established three committees under the board of directors
15. 34Our Audit Committee consists of Wenbo Li (Chair), Guang Cui, Gwanggeun Jo, and Hsiu Wu
16. 35Our Compensation Committee consists of Guang Cui, (Chair), Wenbo Li, Gwanggeun Jo and Hsiu Wu
17. 36Our Nominating Committee consists of Hsiu Wu (Chair), Wenbo Li, Guang Cui, and Gwanggeun Jo
18. 37Involvement in Certain Legal Proceedings
19. 38Code of Business Conduct and Ethics
20. 39ITEM 11. EXECUTIVE COMPENSATION
21. 40We have entered into an independent director service agreement with each of the following directors of ours: Wenbo Li, Guang Cui, Gwanggeun Jo, and Hsiu Wu
22. 41Qi Wang 12,000 - - - - - 12,000 (2)
23. 42The initial term on employment agreements shall automatically be extended on a yearly basis unless either party gives written notice to the other party 60 days prior to the expiration of the initial term stating that such party does not wish to extend the agreement
24. 43Securities Authorized for Issuance Under Equity Compensation Plans
25. 44(1) As of December 31, 2025, no awards, including options, warrants, or restricted stock units, have been granted to any of the Company’s directors or executive officers under the 2025 Equity Incentive Plan
26. 45(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common stock. All shares represent only common stock held by shareholders as no options are issued or outstanding
27. 46Transactions with Related Persons
28. 47The Audit Committee has ratified CHI-LLTC, Independent Registered Public Accounting Firm, to audit our books, records and accounting for the year ended December 31, 2025
29. 48Audit Fees
30. 49Audit-Related Fees
31. 50Tax Fees
32. 51All Other Fees
33. 52ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
34. 533.2 Second Amended Bylaws (Incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 3, 2023)
35. 5410.10* Independent Director Service Agreement by and between the Company and Hsiu Wu
36. 5597* Company’s Compensation Recovery Policy
37. 56104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*
38. 57(Principal Executive Officer)
39. 58Opinion on the Financial Statements
40. 59As disclosed in Note 4 to the financial statements, the Company holds bitcoin for trading and can be sold at any time. The Company expects to continue to accumulate BTC, when its price is low and expect to sell when its price is high
41. 60Total current assets 524,131,414 92,916,317
42. 61LIABILITIES AND STOCKHOLDERS’ EQUITY
43. 62Total current liabilities 3,935,663 3,053,752
44. 63Total liabilities $ 68,552,005 $ 11,288,255
45. 64Total Liabilities and Stockholders’ Equity $ 524,131,414 $ 92,916,317
46. 65(All amounts in US$, except for number of shares and per share data)
47. 66Weighted average number of shares outstanding; Basic and diluted(b) 2,317,684 28,878
48. 67$ 303,245,965 $ 152,333,444 $ 455,579,409
49. 68Deferred income tax expenses 56,381,839 8,234,503
50. 69Net cash used in continuing operating activities: (3,074,693 )
51. 70Cash Flows from Investing Activities
52. 71Net cash provided by continuing financing activities: 8,030,250
53. 72Cash paid for income taxes $ 1,904 $
54. 73NOTE 1 – NATURE OF BUSINESS (CONTINUED)
55. 74Bitcoin Acquisition Strategy
56. 75(a) Basis of Presentation
57. 76(c) Use of Estimates and Assumptions
58. 77(d) Fair Value Measurements
59. 78Level 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
60. 79The accompanying consolidated financial statements are presented in US$. The functional currency of the Company and the Company’s subsidiaries is the United States dollar (“US$”)
61. 80(f) Cash and Cash Equivalents
62. 81In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60)
63. 82(h) Accounts Receivable, net
64. 83(i) Investment in Associate Company
65. 84ASC 606 requires the Company to apply a five-step model to recognize revenue
66. 85(k) Software Development Costs
67. 86(m) General and Administrative Expenses
68. 87(n) Selling and Marketing Expenses
69. 88(o) Research and development expenses
70. 89The Company grants common stocks of the Company to eligible employees and non-employees. The Company accounts for share-based awards issued to employees in accordance with ASC Topic 718 Compensation – Stock Compensation
71. 90The Company recognizes the estimated compensation cost of RSUs and common stocks based on the fair value of common stocks on the date of the grant. The Company recognizes the compensation cost, net of estimated forfeitures, over a vesting term for service-based RSUs
72. 91(y) Commitments and Contingencies
73. 92In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280)
74. 93In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (“ASU 2024-02”)
75. 94In July 2025, the FASB issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments — Credit Losses (Topic 326)
76. 95NOTE 3 – CASH AND CASH EQUIVALENTS
77. 96Ending balance $ 516,153,485 $ 78,322,430
78. 97NOTE 4 – DIGITAL ASSETS (CONTINUED)
79. 98Amended and Restated BTC Trading Contract
80. 99Completion of the Acquisition
81. 100NOTE 5 – PREPAYMENTS AND PREPAID EXPENSES
82. 101Total $ 1,999,213 $ 12,125,500
83. 102NOTE 6 – ACCOUNTS RECEIVABLE, NET
84. 103Accounts Receivable, net $ 354,772 $ 1,800,000
85. 104Impairment of the investment (13,396,000 ) (13,396,000 )
86. 105NOTE 9 – ACCRUED EXPENSE AND OTHER PAYABLES
87. 106(a): The professional fees consisted of outstanding legal fees related to shareholder litigation, consulting fees, listing compliance fees payable to professional firms, and operating expenses
88. 107The Company has an unlimited number of authorized ordinary shares and has issued 4,882,556 and 34,882 shares with no par value as of December 31, 2025 and 2024, respectively
89. 108NOTE 10 – SHAREHOLDERS’ EQUITY ( CONTINUED)
90. 109In April 2024, there are 3,940,000 shares issued with the total amount of $13,396,000 for the acquisition of 20% of associate company
91. 110NOTE 10 – SHAREHOLDERS’ EQUITY (CONTINUED)
92. 111For the years ended December 31, 2025 and 2024, total share-based compensation expenses recognized were $76,797,982 and nil, respectively
93. 112Employee wards
94. 113Non-employee award
95. 114Clawback policy
96. 115The Company owns a subsidiary incorporated in the British Virgin Islands (BVI). Under the current tax laws of BVI, the subsidiary’s income tax rate is nil
97. 116NOTE 12 – INCOME TAX EXPENSES (CONTINUED)
98. 117For the years ended December 31, 2025 and 2024, the Company paid $1,904 and nil for income expense, respectively
99. 118Effective Income Tax Rate 28.3 % 27.7 %
100. 119Total deferred tax liabilities $ 64,616,342 $ 8,234,503
101. 120Note 13 – BASIC AND DILUTED NET INCOME PER SHARE
102. 121Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive
103. 122Measure of Segment Profit or Loss
104. 123NOTE 15 – COMMITMENTS AND CONTINGENCIES
105. 124NOTE 16 – SUBSEQUENT EVENTS
106. 125NOTE 17 – DISCONTINUING OPERATIONS
107. 126The transaction qualified as a discontinuing operation under ASC 205-20. The Company retrospectively adjusted the above comparative consolidated financial statements in prior year