DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2026

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

5. DISCONTINUED OPERATIONS

In December 2025, the Company’s Board of Directors approved a strategic decision to discontinue its distributed storage and computing services business, which consisted entirely of Filecoin (“FIL”) mining operations. The Company determined that continuing the Filecoin mining business was no longer aligned with its long-term strategic direction and capital allocation priorities. This decision represents a strategic shift that is expected to have a major effect on the Company’s operations and financial results.

The Filecoin mining operations were conducted through the Company’s wholly owned U.S. subsidiary, Mercurity Fintech Technology Holding Inc. (“MFH Tech”). Following the Board’s approval, the Company ceased making new investments in mining activities and initiated an orderly wind-down of the business.

On December 12, 2025, the Company entered into a comprehensive agreement pursuant to which substantially all mining equipment previously used in the Filecoin mining operations was sold to a third party. Under the terms of the agreement, the Company leased back the equipment through April 30, 2026 solely to allow existing mining nodes to naturally expire. All of the mining nodes had ceased operations by June 30, 2026.

Accordingly, the results of operations of the Filecoin mining business have been classified as discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements—Discontinued Operations, and are presented separately from continuing operations in the consolidated statements of operations and cash flows for all periods presented. Assets and liabilities directly associated with the discontinued operations are presented separately in the consolidated balance sheets. Prior period financial information has been reclassified to conform to the current period presentation.

CHAINCE DIGITAL HOLDINGS INC.

(FORMERLY KNOWN AS MERCURITY FINTECH HOLDING INC.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In U.S. dollars, except for number of shares and per share data)

The following table summarizes the assets and liabilities associated with the Company’s discontinued operations:

SCHEDULE OF DISCONTINUED OPERATIONS

		June 30, 2026				December 31, 2025
Consolidated Balance Sheets		US$				US$
Other receivables			—				1,501,651
Prepaid expenses and other current assets, net			—				101,690
Digital assets (i)			19,195				762,991
Current assets of discontinued operations		$	19,195			$	2,366,332

Accrued expenses and other current liabilities			—				457,985
Current liabilities of discontinued operations		$	—			$	457,985

(i)

Digital assets primarily represent Filecoin (“FIL”) generated from or used in connection with the Company’s discontinued Filecoin mining operations and held in the Filecoin node accounts of the Company’s subsidiary, MFH Tech. Following the Company’s decision in December 2025 to discontinue its distributed storage and computing services (Filecoin mining) business, FIL directly associated with the mining operations, including FIL pledged or otherwise locked in connection with the mining nodes, was classified as assets associated with discontinued operations.

As of June 30, 2026, the majority of the FIL previously pledged or locked in connection with the mining nodes had been released following the expiration of the related mining nodes on or around April 30, 2026, and a substantial portion of the released FIL had been sold and converted into cash. The remaining pledged or locked FIL is expected to be released by the end of 2026. Accordingly, the remaining digital assets associated with the discontinued Filecoin mining operations are classified as current assets of discontinued operations as of June 30, 2026, as such assets are expected to be released and available for disposition within the next twelve months.

The following table summarizes the results of the Company’s discontinued operations for the periods presented:

			2026				2025				2026			2025
			For the three months ended June 30,							For the six months ended June 30,
			2026				2025				2026			2025
Consolidated Statements of Operations
Revenue			11,275				91,675				49,002			208,009
Cost of revenue			(93,995	)			(246,428	)			(269,663	)		(495,221)
General and administrative expenses			(290	)			—				(1,424	)		—
Gain/(loss) on market price of digital assets			26,742				(105,486	)			(99,974	)		(570,742)
Impairment of Fixed assets			—				(504,693	)			—			(504,693)
Loss from discontinued operations		$	(56,268	)		$	(764,932	)		$	(322,059	)		$(1,362,647)

The following table summarizes the cash flows attributable to discontinued operations for the periods presented:

		2026				2025				2026				2025
		For the three months ended June 30,								For the six months ended June 30,
		2026				2025				2026				2025
Consolidated Statements of Cash Flows
Net loss from discontinued operations			(56,268	)			(764,932	)			(322,059	)			(1,362,647	)
(Loss)/gain on market price of digital assets			(26,742	)			105,486				99,974				570,742
Impairment loss of property and equipment			—				504,693				—				504,693
Depreciation of property and equipment			—				125,903				—				125,903
Non-cash revenue of Filecoin mining			(11,275	)			(91,675	)			(49,002	)			(208,008	)
Non-cash costs and expenses			2,524				84,566				11,706				252,192
Prepaid expenses and other current assets			—				—				76,532				—
Other payables			—				(180,077	)			—				(180,077	)
Accounts payable			(157	)			(21,370	)			(31,986	)			15
Net cash used in discontinued operations		$	(91,918	)		$	(237,406	)		$	(214,835	)		$	(297,187	)

CHAINCE DIGITAL HOLDINGS INC.

(FORMERLY KNOWN AS MERCURITY FINTECH HOLDING INC.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In U.S. dollars, except for number of shares and per share data)