Business Context and Reporting Period
Company: NFT Limited (Ticker: MI, NYSE American)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Jurisdiction: Cayman Islands (incorporated); Operations primarily in Hong Kong and the U.S.
Business Overview: NFT Limited operates an electronic online platform (nftoeo.com) for trading artwork ownership units as Non-Fungible Tokens (NFTs). The company generates revenue primarily through trading commissions. It also provides NFT consulting services and is exploring NFT gaming. The company recently disposed of its legacy subsidiaries (Hong Kong Takung and Hong Kong MQ) in 2023, which are now reported as discontinued operations.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Revenue (Continuing Ops) | $725,781 | $740,701 | $2,153,515 |
| Gross Profit | $533,733 | $548,653 | $1,596,925 |
| Net Loss (Continuing Ops) | $(1,362,270) | $6,296,515 | $(1,704,994) |
| Net Loss (Total) | $(1,362,270) | $6,296,515 | $5,203,564 |
| Cash & Equivalents (Ending) | $2,812,921 | $82,272,479 | $61,750,809 |
| Restricted Cash (Client Funds) | $4,386,659 | $4,351,692 | $4,306,519 |
| Total Current Liabilities | $6,179,939 | $5,724,660 | N/A |
| Working Capital | $99,684,186 | $80,899,511 | N/A |
Note: 2024 Net Profit was significantly influenced by a $6.64M gain on the change in fair value of warrant liabilities. 2023 Net Profit included a $6.93M gain on the disposal of subsidiaries.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased by 2.0% to $725,781 in 2025 compared to $740,701 in 2024, driven by lower trading volumes. This follows a significant drop from 2023 ($2.15M).
- Return to Loss: The company returned to a net loss of $1.36M in 2025, contrasting with the $6.3M net profit in 2024. The 2024 profit was largely non-operational, derived from warrant liability revaluations.
- Significant Prepayment: Current assets increased by $98.7M due to a prepayment for NFT platform software development. Subsequent Event: The filing notes this project failed, and the full amount was refunded in April 2026.
- Cash Position: Cash and cash equivalents dropped significantly from $82.3M in 2024 to $2.8M in 2025. This was primarily due to the $98.7M software prepayment and operating cash outflows of $99.3M, partially offset by $20M in proceeds from convertible notes.
- Discontinued Operations: No discontinued operations activity in 2025 or 2024, following the 2023 disposal of legacy subsidiaries.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary & Outlook
Management is focused on expanding the NFT platform, including gaming and tokenized real-world assets. The company recently completed a registered direct offering in March 2026 raising approximately $2.77M for working capital. A share capital restructuring was approved in April 2026.
Material Risks
- Banking & Liquidity Risk: Approximately $7.1M of cash is deposited with Silkroad International Bank in Djibouti. The filing highlights risks regarding the Central Bank of Djibouti's foreign currency shortages, lack of deposit insurance, and potential inability to repatriate funds.
- Restricted Cash: $4.4M of cash is restricted as client advance payments held in trust; the company cannot use these funds for operations.
- Regulatory Uncertainty: Significant risks exist regarding the evolving regulatory framework for NFTs and cryptocurrencies in the U.S. and internationally (e.g., SEC scrutiny, potential classification as securities). Additionally, risks related to PRC/Hong Kong regulations and the Holding Foreign Companies Accountable Act (HFCA Act) regarding PCAOB inspections are noted.
- Internal Control Weaknesses: Management identified material weaknesses in internal controls over financial reporting, specifically regarding the procurement cycle for the software development project (lack of due diligence, approval procedures, and segregation of duties).
Unusual Items
- Software Prepayment Refund: A $98.7M prepayment recorded in 2025 was fully refunded in April 2026 following the failure of the software development project.
- Convertible Notes: In 2025, the company issued $20M in convertible notes, which were subsequently converted into 9.25M Class A ordinary shares in August 2025.
Investor Verification Checklist
- Bank Solvency & Access: Verify the status of the $7.1M deposit at Silkroad International Bank (Djibouti) and confirm the company's ability to access or repatriate these funds given the cited foreign exchange restrictions.
- Software Project Status: Confirm the receipt of the $98.7M refund for the failed software development project and assess the impact on future platform capabilities.
- Internal Control Remediation: Review the progress of remediation plans for the identified material weaknesses in internal controls, particularly regarding procurement and financial reporting personnel.
- Revenue Sustainability: Analyze the trend of trading volumes and commission revenue, which has declined significantly from 2023 levels, to assess the viability of the core business model without non-operating gains.
- Regulatory Compliance: Monitor developments regarding PCAOB inspection access and potential delisting risks under the HFCA Act, as well as evolving NFT regulations in the U.S. and Hong Kong.