| SUMMARIZES THE ASSETS AND LIABILITIES DISCONTINUED OPERATIONS |
The
following table summarizes the assets and liabilities associated with the Company’s discontinued operations:
SUMMARIZES
THE ASSETS AND LIABILITIES DISCONTINUED OPERATIONS
| | |
March 31, 2026 | | |
December 31, 2025 | |
| Consolidated Balance Sheets | |
US$ | | |
US$ | |
| Prepaid expenses and other current assets, net (i) | |
| 1,526,226 | | |
| 1,603,341 | |
| Digital assets (ii) | |
| 517,145 | | |
| 762,991 | |
| Current assets of discontinued operations | |
$ | 2,043,371 | | |
$ | 2,366,332 | |
| | |
| | | |
| | |
| Accrued expenses and other current liabilities (iii) | |
| 277,899 | | |
| 457,985 | |
| Current liabilities of discontinued operations | |
$ | 277,899 | | |
$ | 457,985 | |
| (i) | As
of March 31, 2026, prepaid expenses and other current assets associated with the Company’s
discontinued operations primarily consisted of: (a) a collateral deposit of $1.5 million
paid to Huangtong International Co., Ltd. in connection with the borrowing of Filecoins used
to support the Company’s Filecoin mining operations, which is expected to be settled
together with the related assets and liabilities upon completion of the wind-down of the
Filecoin mining business by the end of May 2026; (b) $25,000 of prepaid custody and operational
service fees related to the Filecoin mining business, which are expected to be recognized
as costs of discontinued operations prior to the full termination of the mining activities;
(c) $1,690 of Filecoin joint mining sharing costs overpaid to HDP Capital Management Limited;
and (d) $1,651 of temporary Filecoin transfer balances between the Company and the technology
service provider, Origin Storage Pte Ltd. |
As
of December 31, 2025, prepaid expenses and other current assets associated with the Company’s discontinued operations primarily
consisted of: (a) a collateral deposit of $1.5 million paid to Huangtong International Co., Ltd. in connection with the borrowing of
Filecoins used to support the Company’s Filecoin mining operations, which is expected to be settled together with the related assets
and liabilities upon completion of the wind-down of the Filecoin mining business by the end of May 2026; (b) $100,000 of prepaid custody
and operational service fees related to the Filecoin mining business, which are expected to be recognized as costs of discontinued operations
prior to the full termination of the mining activities; (c) $158 of Filecoin joint mining sharing costs overpaid to HDP Capital Management
Limited; and (d) $1,068 of temporary Filecoin transfer balances between the Company and the technology service provider, Origin Storage
Pte Ltd.
| (ii) | Digital
assets primarily represent Filecoins (“FIL”) generated from or used in the Company’s
cryptocurrency mining operations and held in the Filecoin node accounts of the Company’s
subsidiary, MFH Tech. Following the Company’s decision to discontinue its distributed
storage and computing services (Filecoin mining) business, all Filecoins held in the mining
node accounts were reclassified as assets associated with discontinued operations. |
A
substantial portion of these Filecoins were pledged or locked as collateral within the Filecoin network to support mining activities.
As of March 31, 2026, the Company expects that the majority of the pledged Filecoins will be released upon the expiration of the related
mining nodes by the end of May 2026. Accordingly, these digital assets were classified as current assets of discontinued operations,
as they are expected to be available for sale or used to settle outstanding obligations within the next twelve months.
| (iii) | As
of March 31, 2026, accrued expenses and other current liabilities associated with the Company’s
discontinued operations primarily consisted of: (a) $5,812 of accounts payable related to
the Company’s Filecoin mining activities; (b) $149,987 representing the outstanding
principal balance of Filecoins borrowed from Huangtong International Co., Ltd. to satisfy
collateral requirements for the Company’s mining operations; and (c) $122,100 representing
Filecoins provided by HDP Capital Management Limited as collateral in connection with the
Company’s joint Filecoin mining arrangements with HDP. |
As
of December 31, 2025, accrued expenses and other current liabilities associated with the Company’s discontinued operations primarily
consisted of: (a) $37,486 of accounts payable related to the Company’s Filecoin mining activities; (b) $231,799 representing the
outstanding principal balance of Filecoins borrowed from Huangtong International Co., Ltd. to satisfy collateral requirements for the
Company’s mining operations; and (c) $188,700 representing Filecoins provided by HDP Capital Management Limited as collateral in
connection with the Company’s joint Filecoin mining arrangements with HDP.
CHAINCE
DIGITAL HOLDINGS INC.
(FORMERLY
KNOWN AS MERCURITY FINTECH HOLDING INC.)
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In
U.S. dollars, except for number of shares and per share data)
The
following table summarizes the results of the Company’s discontinued operations for the periods presented:
| | |
2026 | | |
2025 | |
| | |
For the three months ended March 31, | |
| | |
2026 | | |
2025 | |
| Consolidated Statements of Operations | |
US$ | | |
US$ | |
| Revenue | |
| 37,727 | | |
| 116,333 | |
| Cost of revenue | |
| (175,668 | ) | |
| (248,793 | ) |
| General and administrative expenses | |
| (1,134 | ) | |
| — | |
| Loss on market price of digital assets | |
| (126,716 | ) | |
| (465,256 | ) |
| Loss from discontinued operations | |
$ | (265,791 | ) | |
$ | (597,716 | ) |
The
following table summarizes the cash flows attributable to discontinued operations:
| | |
2026 | | |
2025 | |
| | |
For the three months ended March 31, | |
| | |
2026 | | |
2025 | |
| Consolidated Statements of Cash Flows | |
US$ | | |
US$ | |
| Net loss from discontinued operations | |
| (265,791 | ) | |
| (597,716 | ) |
| Loss on market price of digital assets | |
| 126,716 | | |
| 465,256 | |
| Non-cash revenue of Filecoin mining | |
| (37,727 | ) | |
| (116,333 | ) |
| Non-cash costs and expenses | |
| 9,182 | | |
| 167,626 | |
| Prepaid expenses and other current assets | |
| 76,532 | | |
| — | |
| Accounts payable | |
| (31,829 | ) | |
| 21,386 | |
| Net cash used in discontinued operations | |
$ | (122,917 | ) | |
$ | (59,781 | ) |
|