Next Technology Holding Inc.

Previous wording

We provide AI-enabled software development services to our potential customers in USA, Hong Kong, Singapore, Malaysia, Japan and other Asian markets, which included developing, designing and implementing various SaaS software solutions for business of all types, including industrials and other businesses.

Current wording

We provide AI-enabled software development services to our potential customers in USA, Hong Kong, Singapore, Malaysia, Japan and other Asian markets, which included developing, designing and implementing various SaaS software solutions for business of all types, including industrials and other businesses. In addition, we also provide AI-related customization services to further address specific client requirements.

Previous wording

Digital Asset Exchanges. Digital asset exchanges provide trading venues for purchases and sales of Bitcoin in exchange for fiat or other digital assets. Bitcoin can be exchanged for fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on Bitcoin trading platforms, which are not regulated in the same manner as traditional securities exchanges. In addition to these platforms, over-the-counter markets and derivatives markets for Bitcoin also exist. The value of Bitcoin within the market is determined, in part, by the supply of and demand for Bitcoin in the global Bitcoin market, market expectations for the adoption of Bitcoin as a store of value, the number of merchants that accept Bitcoin as a form of payment, and the volume of peer-to-peer transactions, among other factors. For a discussion of risks associated with digital asset exchanges, see “Item 1A. Risk Factors—Risks Related to Our Bitcoin Acquisition Strategy and Holdings—Due to the unregulated nature and lack of transparency surrounding the operations of many Bitcoin trading venues, Bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in Bitcoin trading venues and adversely affect the value of our Bitcoin.”

Current wording

Digital Asset Exchanges. Digital asset exchanges provide trading venues for purchases and sales of Bitcoin in exchange for fiat or other digital assets. Bitcoin can be exchanged for fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on Bitcoin trading platforms, which are not regulated in the same manner as traditional securities exchanges. In addition to these platforms, over-the-counter markets and derivatives markets for Bitcoin also exist. The value of Bitcoin within the market is determined, in part, by the supply of and demand for Bitcoin in the global Bitcoin market, market expectations for the adoption of Bitcoin as a store of value, the number of merchants that accept Bitcoin as a form of payment, and the volume of peer-to-peer transactions, among other factors.

Previous wording

The following tables provide a comparison of a summary of our results of operations for the three months ended March 31, 2026 and 2025.

Current wording

The following tables provide a comparison of a summary of our results of operations for the six months ended June 30, 2026 and 2025. We are a “smaller reporting company” as defined by Item 10(f)(1) of Regulation S-K, and are providing scaled MD&A disclosures pursuant to Regulation S-K. Management has determined that the comparison of operating results for the six-month period ended June 30, 2026, with the corresponding period of the prior fiscal year, provides sufficient and representative information regarding changes in the Company’s operations. The Company’s operating results did not vary materially between the first and second quarters of the six-month period, and no unusual or infrequent events occurred during either quarter that would warrant separate quarterly discussion. Accordingly, a separate narrative discussion of the three-month period has not been included.

Previous wording

For the three months ended March 31, 2026 and 2025, we generated total revenue of $0.47 million and nil, respectively. The increase in the 2026 period primarily reflects revenue recognized under a single commercial customer agreement with a customer in the smart water-system management sector. We had no commercial contracts in the comparable 2025 period.

Current wording

For the six months ended June 30, 2026 and 2025, we generated total revenue of $1.3 million and nil, respectively. This increase was primarily attributable to revenue recognized from two commercial customer agreements during the period, covering the smart water-system management sector and AI-related customization services (including robot task training and validation services), respectively. In the comparable 2025 period, we had no commercial contracts in place.

Previous wording

For the three months ended March 31, 2026, our cost of revenue was $0.39 million, compared to nil for the three months ended March 31, 2025. The notable rise of $0.39 million was mainly driven by increased utilization of external vendors and outsourced development resources, as well as higher personnel expenses resulting from an increase in headcount to support revenue growth.

Current wording

For the six months ended June 30, 2026, our cost of revenue was $0.9 million, compared to nil for the six months ended June 30, 2025. The notable rise of $0.9 million was mainly driven by increased utilization of external vendors and outsourced development resources, as well as higher personnel expenses resulting from an increase in headcount to support revenue growth.

Previous wording

For the three months ended March 31, 2026, our gross profit was $0.08 million, compared to nil for the three months ended March 31, 2025. For the three months ended March 31, 2026, our gross margin was 16.7%, compared to nil for the three months ended March 31, 2025. Gross margin for the three months ended March 31, 2026 reflects our revenue mix and early commercialization and may fluctuate with the mix of software, hardware, and services.

Current wording

For the six months ended June 30, 2026, our gross profit was $0.4 million, compared to nil for the six months ended June 30, 2025. For the six months ended June 30, 2026, our gross margin was 33.1%, compared to nil for the six months ended June 30, 2025. Gross margin for the six months ended June 30, 2026 reflects our revenue mix and early commercialization and may fluctuate with the mix of software, hardware, and services.

Previous wording

For the three months ended March 31, 2026, research and development expenses was $2.12 million, compared to nil for the three months ended March 31, 2025. The notable increase of $2.12 million is primarily attributed to: (i) share-based compensation expenses of $0.65 million, reflecting equity incentives granted to attract and retain key technical personnel; and (ii) Professional service fees of $1.44 million, mainly related to outsourced software development and technical consulting services.

Current wording

For the six months ended June 30, 2026, research and development expenses was $3.0 million, compared to nil for the six months ended June 30, 2025. The notable increase of $3.0 million is primarily attributed to: (i) share-based compensation expenses of $1.3 million, reflecting equity incentives granted to attract and retain key technical personnel; and (ii) Professional service fees of $1.7 million, mainly related to outsourced software development and technical consulting services.

Previous wording

For the three months ended March 31, 2026, selling and marketing expenses was $0.34 million, compared to nil for the three months ended March 31, 2025. The increase was primarily attributable to:(i) higher payroll and bonus expenses, as we recorded performance-based bonuses for sales management personnel in line with the significant increase in sales revenue and cash collections during the year; and (ii) increased advertising and promotional expenses, reflecting expanded marketing activities to support revenue growth and customer acquisition.

Current wording

For the six months ended June 30, 2026, selling and marketing expenses was $0.7 million, compared to nil for the six months ended June 30, 2025. The increase was primarily attributable to:(i) higher payroll and bonus expenses, as we recorded performance-based bonuses for sales management personnel in line with the significant increase in sales revenue and cash collections during the period; and (ii) increased advertising and promotional expenses, reflecting expanded marketing activities to support revenue growth and customer acquisition.

Previous wording

For the three months ended March 31, 2026, general and administrative expenses was $4.3 million, compared to $0.5 million for the three months ended March 31, 2025. The significant increase was primarily attributable to:

Current wording

For the six months ended June 30, 2026, general and administrative expenses was $8.1 million, compared to $0.7 million for the six months ended June 30, 2025. The significant increase was primarily attributable to:

Previous wording

We believe that these expenditures were necessary to strengthen our governance structure, enhance capital market readiness, and support its long-term strategic objectives. While such expenses materially increased operating costs for the three months ended March 31, 2026, they reflect the Company’s continued investment in organizational capability and capital formation efforts.

Current wording

We believe that these expenditures were necessary to strengthen our governance structure, enhance capital market readiness, and support its long-term strategic objectives. While such expenses materially increased operating costs for the six months ended June 30, 2026, they reflect the Company’s continued investment in organizational capability and capital formation efforts.

Previous wording

For the three months ended March 31, 2026, other expenses were $126.5 million, compared to other income of $245.3 million for the three months ended March 31, 2025, an unfavorable change of $371.8 million. The year-over-year change was primarily driven by a decline in the fair value of our Bitcoin holdings, resulting in recognition of an unrealized loss for the three months ended March 31, 2026. Fluctuations in Bitcoin market prices materially affect our reported results of operations, and we expect such volatility to continue to impact our financial performance in future periods. Changes in fair value are non-cash until realized through sale.

Current wording

For the six months ended June 30, 2026, other expenses were $164.6 million, compared to other income of $395.7 million for the six months ended June 30, 2025, an unfavorable change of $560.3 million. The year-over-year change was primarily driven by a decline in the fair value of our Bitcoin holdings, resulting in recognition of an unrealized loss for the six months ended June 30, 2026. Fluctuations in Bitcoin market prices materially affect our reported results of operations, and we expect such volatility to continue to impact our financial performance in future periods. Changes in fair value are non-cash until realized through sale.

Previous wording

For the three months ended March 31, 2026, our income tax benefits was $27.3 million, compared to income tax expenses of $51.4 million for the three months ended March 31, 2025. The year-over-year change primarily reflects a significant decrease in pre-tax income, driven mainly by lower other income (i.e., an unrealized loss) associated with changes in the fair value of our Bitcoin holdings in 2026. Our income tax (benefit) expense may continue to fluctuate in future periods based on our profitability, movements in the fair value of digital assets, and changes in applicable tax regulations.

Current wording

For the six months ended June 30, 2026, our income tax benefits was $40.5 million, compared to income tax expenses of $82.9 million for the six months ended June 30, 2025. The year-over-year change primarily reflects a significant decrease in pre-tax income, driven mainly by lower other income (i.e., an unrealized loss) associated with changes in the fair value of our Bitcoin holdings in 2026. Our income tax (benefit) expense may continue to fluctuate in future periods based on our profitability, movements in the fair value of digital assets, and changes in applicable tax regulations.

Previous wording

As a result of the factors described above, for the three months ended March 31, 2026 and 2025, there was a net loss of $105.9 million and a net income of $193.4 million, respectively. The decrease is mainly due to loss in fair value in digital assets and offset by decrease in income tax expenses.

Current wording

As a result of the factors described above, for the six months ended June 30, 2026 and 2025, there was a net loss of $135.6 million and a net income of $312.0 million, respectively. The decrease is mainly due to loss in fair value in digital assets and offset by decrease in income tax expenses.

Previous wording

As of March 31, 2026, we had total assets of $551.2 million, which mainly consisted of $159.7 million in cash and cash equivalents, $389.6 million in digital assets, $0.4 million in accounts receivable, net and $1.5 million in prepaid expenses; we had total liabilities of $40.4 million which consisted of $1.6 million in accounts payable, $0.6 million in amount due to related parties, $0.1 million in income tax payable, $0.8 million in accrued expense and other payable and $37.3 million in deferred tax liabilities; we had total stockholders’ equity of $510.8 million.

Current wording

As of June 30, 2026, we had total assets of $512.4 million, which mainly consisted of $159.0 million in cash and cash equivalents, $351.5 million in digital assets, $0.1 million in accounts receivable, net and $1.7 million in prepaid expenses; we had total liabilities of $27.0 million which consisted of $1.3 million in accounts payable, $0.7 million in amount due to related parties, $0.1 million in income tax payable, $0.8 million in accrued expense and other payable and $24.1 million in deferred tax liabilities; we had total stockholders’ equity of $485.4 million.

Previous wording

As of December 31, 2025, we had total assets of $524.1 million, which mainly consisted of $5.6 million in cash, $516.2 million in digital assets, and $2.3 million in other receivables and prepayments; we had total liabilities of $68.5 million which consisted of $0.7 million in accounts payable, $0.7 million in amount due to related parties,$0.1 million in income tax payable, $2.4 million in accrued expense and other payables and $64.6 million in deferred tax liabilities; we had total stockholders’ equity of $455.6 million.

Current wording

As of December 31, 2025, we had total assets of $524.1 million, which mainly consisted of $5.6 million in cash and cash equivalents, $516.2 million in digital assets, $0.4 million in accounts receivable, net and $2.0 million in prepaid expenses; we had total liabilities of $68.5 million which consisted of $0.7 million in accounts payable, $0.7 million in amount due to related parties,$0.1 million in income tax payable, $2.4 million in accrued expense and other payables and $64.6 million in deferred tax liabilities; we had total stockholders’ equity of $455.6 million.

Previous wording

Our primary sources of liquidity have been through the operation of our business and financing activities, which have historically been sufficient to meet our working capital, our business needs, as well as our capital expenditure requirements. As of March 31, 2026, we had cash and cash equivalents of $159.7 million. As of and for the three months ended March 31, 2026, we had apositive working capital of $548.2 million, net cash used in operating activities of $1.4 million, and a net loss of $105.9 million, with unrealized fair value loss of $126.5 million.

Current wording

Our primary sources of liquidity have been through the operation of our business and financing activities, which have historically been sufficient to meet our working capital, our business needs, as well as our capital expenditure requirements. As of June 30, 2026, we had cash and cash equivalents of $159.0 million. As of and for the six months ended June 30, 2026, we had a positive working capital of $509.4 million, net cash used in operating activities of $2.1 million, and a net loss of $135.6 million, with unrealized fair value loss of $164.6 million.

Previous wording

The following table sets forth a summary of our cash flows for the years indicated:

Current wording

The following table sets forth a summary of our cash flows for the periods indicated:

Previous wording

Our cash flow used in operating activities was $1.4 million for the three months ended March 31, 2026. This resulted from net loss of $105.9 million, adjusted for non-cash and working capital items. Positive adjustments to operating cash flows included $4.2 million of share-based compensation, $126.5 million of non-cash fair value gain on digital assets and changes in operating assets and liabilities of $1.1 million. These were partially offset by a $27.3 million of deferred tax benefits.

Current wording

Our cash flow used in operating activities was $2.1 million for the six months ended June 30, 2026. This resulted from net loss of $135.6 million, adjusted for non-cash and working capital items. Positive adjustments to operating cash flows included $8.4 million of share-based compensation and $164.6 million of non-cash fair value loss on digital assets. These were partially offset by a $40.5 million of deferred tax benefits.

Previous wording

Our cash flow used in operating activities was nil for the three months ended March 31, 2025.

Current wording

Our cash flow used in operating activities was nil for the six months ended June 30, 2025.

Previous wording

Our cash flow used in investing activities was nil for the three months ended March 31, 2026 and 2025.

Current wording

Our cash flow used in investing activities was nil for the six months ended June 30, 2026 and 2025.

Previous wording

Our cash flow generated from financing activities was $155.5 million and nil for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Our cash flow generated from financing activities was $155.5 million and nil for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

There were no capital expenditures during the three months ended March 31, 2026 and 2025. However, future capital expenditures will be made to support the expected growth of the business.

Current wording

There were no capital expenditures during the six months ended June 30, 2026 and 2025. However, future capital expenditures will be made to support the expected growth of the business.

Previous wording

The Company has evaluated subsequent events and transactions that occurred after the balance sheet date through the date these consolidated financial statements were issued and determined that there have been no events that would require adjustment to or disclosure in the consolidated financial statements.

Current wording

The Company has evaluated subsequent events and transactions that occurred after the balance sheet date through the date these unaudited condensed consolidated financial statements were issued and determined that, except as disclosed elsewhere in these financial statements, there have been no events that would require adjustment to or disclosure in the unaudited condensed consolidated financial statements.

Previous wording

For the three months ended March 31, 2026 and 2025, all revenue recognized over time amounted to $0.47 million and nil, respectively. For the three months ended March 31, 2026 and 2025, all revenue from software development services amounted to $0.47 million and nil, respectively.

Current wording

For the six months ended June 30, 2026 and 2025, all revenue recognized over time amounted to $1.3 million and nil, respectively. For the six months ended June 30, 2026 and 2025, all revenue from software development services amounted to $0.9 million and nil, respectively.

Previous wording

As of March 31, 2026 and December 31, 2025, accounts receivable from customers amounted to $370,000 and $354,772, respectively, there is no allowance provided.

Current wording

As of June 30, 2026 and December 31, 2025, accounts receivable from customers amounted to $127,500 and $354,772, respectively, there is no allowance provided.