Next Technology: All Bitcoin, No Backstop

Summary Next Technology’s valuation is driven by Bitcoin holdings but lacks any real operating business or cash flow to support its premium. The company issued over 400 million shares and warrants in Q1 to acquire 5,000 BTC, resulting in extreme dilution without the guardrails of a functioning business. BTC per share sits at ~$1.42, while the stock trades at $2.32, implying a speculative premium of ~40%. Given the absence of credible operations, poor digital infrastructure, and unsustainable capital structure, I rate NXTT a Strong Sell until fundamentals improve. Next Technology Holding (NASDAQ: NXTT ) is a Chinese tech company that markets itself as an AI-enabled software services provider and is also involved in other tech verticals like blockchain and new energy. The company was originally known as WeTrade Technology Co. but rebranded last year. Last year, the company also pivoted to being a Bitcoin ( BTC-USD ) treasury company, though it has held BTC since 2023. NXTT has surged lately following the Bitcoin corporate treasury strategy pivot and recent Bitcoin purchase. Bitcoin adoption has accelerated greatly on the corporate level. Publicly traded companies are increasingly modeling their approach on Strategy’s ( MSTR ) aggressive Bitcoin buy playbook, raising funds through debt or equity to purchase Bitcoin for treasury allocation or long-term strategic reserve purposes. Companies purchasing Bitcoin at scale do so in the hopes that their dollar-cost average, or cost basis as it’s formally known, will appreciate over time, and the value of their holdings will compound, creating value for shareholders via an increase in BTC per share. Investors are also exposed to the underlying operating business of these companies – whether good or bad-which may amplify or diminish the appeal of the Bitcoin strategy; though for now, companies with bad underlying operating businesses still enjoy inflated valuations under the cloak of the Bitcoin narrative, and the market still assigns generous multiples despite ongoing operating losses, I believe this will normalize over time as the market reaches a more rational equilibrium between hype and fundamentals. I believe at some point, the market will recalibrate; and when it does, Bitcoin alone won’t be enough to justify the premium on companies pursuing corporate treasury strategy. Companies with no real operating strength face the risk of eventually being forced to sell what they hold as long-term reserves. Their reserve assets could easily become “fire sale” assets. And at that point, the market will price them for what they are, not for what they hold. The market has seen this movie before, with the COVID-era SPAC mania , for example, which resulted in massive write-downs, and liquidations. While Bitcoin is different in the sense that it is liquid, scarce, and now globally adopted, it still tied to the same pattern of speculative capital chasing narrative premiums, often detached from fundamental performance. I believe at this juncture of early-stage but accelerating experimentation in Bitcoin corporate treasury strategy, it is imperative for investors to begin scrutinizing early the capital structure of the companies pursuing these BTC-overlay models. The reality is that virtually every company pursuing a Bitcoin (or other crypto) corporate strategy has or faces a highly dilutive or structurally fragile capital structure (in the traditional sense, and only propped up by the crypto holdings in most cases). If a business pursuing a crypto treasury strategy is using excess free cash flow for purchases, then that’s an entirely different and easier conversation. In the context of Next Technology, which reported no revenue from its underlying business in Q1, Strategy is the reference model here to benchmark Next Technologies against in this piece. Strategy has engineered a capital structure around its corporate treasury strategy that amplified shareholder exposure to the underlying asset without compromising long-term integrity. I’ll be unpacking the nuances between NXTT’s and MSTR’s strategies, poking necessary holes where warranted, and highlighting structural strengths for NXTT where deserved. Next’s Q1 and Capital Structure Under the Lens Looking at Next Technology’s latest 10-Q filing (Q1 2025), the first reality check for investors sizing up NXTT is that there was no revenue from its AI SaaS business in Q1, despite the headline of $193.4 million in net income driven entirely by unrealized Bitcoin gains (thanks to FASB accounting rules). Income statement (10 Q) Next Technology’s rebranding from WeTrade last year and the subsequent dissolution of its subsidiary, WeTrade Technology Co. last year offered no operational income as we see on the income statement above, as the net income from discontinued operations was “nil”, meaning even before dissolution there was no active sales generation or service revenue from its SaaS business. This lack of an operational backstop business for Next Technology is a glaring concern. Almost every publicly traded company can more accessibly engineer a capital injection through direct equity or warrants via a single or few PIPE investors to finance treasury asset purchases, but gaining the trust of institutional investors to underwrite a hybrid of strategic capital, like the convertible notes with low to zero interest which comes with a more measured and deferred dilution schedule that makes MSTR standout, requires the type of foundational confidence that at least sales generation from a backstop business gives institutional investors. That sales generation from a backstop business is missing in Next Technology’s case. This hybrid of strategic, deferred capital is particularly important for a company pursuing a crypto treasury strategy, especially in the absence of core operational profitability and free cash flow because a sole reliance on equity means dilution happens faster than appreciation, and what happens to the BTC-per-share metric, which is a measure of investor exposure to the reserve asset, is that it also gets diluted. Cash flow (10 Q) The story of Next Technology’s cash flow is similar to its income. Just as revenue was zero, operational cash flow was at a critical “nil” for both Q1 2025 and Q1 2024 (as shown in the cashflow statement above). There is no cash from core operations, and Next Technology relies on unsecured, interest-free loans from former execs and other third parties to cover operating expenses, posing a potential related-party risk. As of Q1, these short-term loans from former execs and third parties who are likely related parties amounted to $1.63 million and rose from $760k as of Q4 end (as shown in the next table from the Q1 10-Q). Other payables (10 Q) Though the payments due to related parties were recorded as $221,000 in the balance sheet (see the table below), a closer look at the 10-Q and the disaggregation of the Other Payables line items (seen in the preceding table) shows that the $2.06 million Other Payables balance includes $1.63 million in short-term loans from Next Technology’s former executives and from other third parties, alongside $427,574 in professional fees and operating expenses (as seen in the preceding table). Balance sheet (10 Q) Next Technology is missing any type of sales generation from a backstop business and also faces structural risks from these related parties because they are essentially funding the company’s ongoing OpEx, which creates an unsustainable reliance. In my view, the inability to raise funds from truly independent third parties implies a profound lack of external confidence in the company’s fundamentals, and I believe institutions also think along the same lines. This persistent lack of sales, coupled with the inherent related party risks, both stand as glaring red flags, in my view. The Stockholders’ Equity also paints a clearer picture of dilution. The common stock saw an extraordinary increase in value from $71,718,790 to $217,676,957. More critically, the number of shares issued and outstanding skyrocketed from 6,976,410 as of Q4 last year, to a staggering 436,265,135 by Q1. This massive increase is directly attributable to the issuance of hundreds of millions of shares and warrants for the 5,000 Bitcoin purchase in March. As I mentioned earlier, dilution is nothing new to Bitcoin treasury companies; however, what makes it particularly troubling in Next Technology’s case is that it was done without the guardrails of a functioning business, institutional oversight, or capital structure discipline, leaving investors exposed to unchecked equity issuance without any offsetting operating value. Equity dilution (10 Q) So while the company boasts holding 5,833 BTC as of Q1 end, the real picture becomes clearer when you look at it on a per-share basis. With 436,265,135 shares outstanding, that translates to 5,833 BTC ÷ 436,265,135 shares = ~0.00001337 BTC per share. At BTC’s current price of $106,000, the implied BTC value per share is $1.42. NXTT currently trades at $2.32. And at $2.32 per share, only ~$1.42 of that is backed by the actual Bitcoin holding. The premium to NAV baked into NXTT’s valuation is about $0.90 per share, which is arguably speculative, especially given the company has no revenue, sees no cash flow, and has a highly dilutive capital formation. Takeaway Right now, the market is pricing in a ~60% Bitcoin backing per share and ~40% is purely narrative-driven. That’s a very generous premium for a company with no operating business, no free cash flow, and heavy reliance on dilution. The moment the market starts discounting these risks or BTC sees downward price movement for macro or other reasons, the BTC premium on NXTT could evaporate – very fast. Next Technology official website as of June 25, 2025 (Next Technology) Trading at a premium to NAV is nothing new for Bitcoin treasury companies. However, Next Technology’s premium feels particularly fragile given the lack of operating business, aggressive dilution, and speculative structure behind it. I’d close this piece with an extra, perhaps trivial, detail that may seem unconventional for Seeking Alpha, but I believe it’s vital context. A thorough perusal of Next Technology’s website shows no functional demonstration or documentation of any products across its claimed verticals-SaaS, Blockchain, New Energy, or Digital Assets. The website has no SSL certificate either. A public company with non-secure HTTP pages and non-functional product links reflects very poor digital infrastructure and a lack of execution, particularly for a tech firm touting blockchain and AI products. In a market where Bitcoin treasury strategies are gaining interest, NXTT is an example of what happens when form outruns substance. The company’s Bitcoin holdings may look impressive at a glance, but everything else-the dilution, the lack of business fundamentals, the speculative capital structure, and the absence of execution-screams caution. For me, this is a Strong Sell until a credible business model emerges.

Source: Seeking Alpha