This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations for the three and six months ended June 30, 2026 and 2025. This section should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report. See Unaudited Condensed Consolidated Financial Statements of Chaince Digital Holdings Inc. (formerly known as Mercurity Fintech Holding Inc.) as of December 31, 2026 and June 30, 2025, and for the three and six months ended June 30, 2026 and 2025. We also recommend that you read our management’s discussion and analysis and our audited consolidated financial statements for the fiscal year ended December 31, 2025, and the notes thereto, which appear in our Annual Report on Form 10-K for the year ended December 31, 2025, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or the SEC, on March 26, 2026. Unless otherwise indicated or the context otherwise requires, all references to “our company,” “we,” “our,” “ours,” “us” or similar terms refer to Chaince Digital Holdings Inc. (formerly known as Mercurity Fintech Holding Inc.), its predecessor entities, its subsidiaries and consolidated affiliated subsidiaries. All such financial statements were prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. We have made rounding adjustments to some of the figures included in this management’s discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors. RECENT DEVELOPMENTS During the six months ended June 30, 2026, the Company continued to focus on its financial services and advisory businesses as its primary line of business. No material change occurred in the Company’s principal business strategy during the period. The Company conducts its financial services operations primarily through Chaince Securities, Inc. and its affiliated entities. Chaince Securities, LLC, a subsidiary of Chaince Securities, Inc., is a FINRA-registered broker-dealer and registered investment advisor (“RIA”), and continues to provide investment banking, transaction execution, brokerage-related, and other financial advisory services to clients participating in the U.S. capital markets. In addition, Ucon Capital (HK) Limited, together with its PRC subsidiary, Chaince (Shenzhen) Consulting Co., Ltd., continued to provide business consulting and advisory services to clients in the Asia-Pacific region during the quarter. These operations remain focused on capital markets advisory, corporate consulting, and related professional services. For the six months ended June 30, 2026, the Company’s overall business operations remained consistent with the strategic direction established in 2025. Management continued to focus on expanding the Company’s financial services platform, developing its client base, and increasing revenue contribution from both IPO-related and non-IPO-related financial services engagements. Looking ahead, the Company expects to continue pursuing growth in its financial services and advisory businesses while maintaining operational discipline and supporting the expansion of its customer base across multiple service lines. As of August 11, 2026, the Company had a total of 110,003,800 ordinary shares issued and outstanding, including 109,993,800 ordinary shares held by non-affiliates. The aggregate market value of the registrant’s ordinary shares held by non-affiliates (or “Public Float”) as of August 11, 2026 was $337,680,966. This amount is based on the closing price of the ordinary shares on Nasdaq of $3.07 per share on August 11, 2026. Ordinary shares held by executive officers, directors and 10% or greater stockholders have been excluded since such persons may be deemed affiliates. As of August 11, 2026, 86,569,508 ordinary shares of the Company were freely tradable without contractual lock-up restrictions or other resale restrictions. The number of freely tradable ordinary shares differs from the Company’s Public Float because Public Float excludes shares held by affiliates, while freely tradable shares are determined based on applicable contractual and regulatory transfer restrictions. Overview The Company’s continuing operations are focused on its financial services and advisory businesses, which are conducted primarily through its wholly owned subsidiary, Chaince Securities, Inc., together with Chaince Securities, LLC and Ucon Capital (HK) Limited and its subsidiaries in China. These entities are engaged in investment banking, capital markets advisory, transaction execution, brokerage-related services, and related business consulting services. Set forth below is an update of the Company’s business lines as presented in the accompanying condensed consolidated financial statements for the six months ended June 30, 2026. 47 Financial services and advisory businesses Since August 2022, the Company has operated in the financial services and advisory sector. Following FINRA’s approval of Chaince Securities, LLC’s Continuing Membership Application (“CMA”) in March 2025, the financial services and advisory business became the Company’s primary operating focus and remains its sole continuing business line as of June 30, 2026. These activities are conducted primarily through the Company’s wholly owned subsidiary, Chaince Securities, Inc., and its affiliated entities. Chaince Securities, LLC, a subsidiary of Chaince Securities, Inc., is a FINRA-registered broker-dealer and registered investment advisor (“RIA”). Chaince Securities, LLC provides investment banking, transaction execution, brokerage-related, and other business consulting services to companies pursuing securities offerings in the U.S. capital markets, as well as investment-related solutions to institutional investors, high-net-worth individuals, and emerging issuers. Its operations team is based in New York and primarily conducts business with clients located in the United States. In addition, Ucon Capital (HK) Limited (“Ucon”), together with its wholly owned subsidiary in the People’s Republic of China, Chaince (Shenzhen) Consulting Co., Ltd., provides business consulting and advisory services to clients in the Asia-Pacific region, with a focus on capital markets advisory, corporate restructuring, and related professional services. Discontinued Filecoin mining business Historically, the Company also conducted blockchain and digital asset-related activities through Mercurity Fintech Technology Holding Inc. (“MFH Tech”), including distributed storage and computing services consisting primarily of Filecoin (“FIL”) mining operations. In December 2025, the Company’s Board of Directors approved a strategic decision to discontinue the Filecoin mining business, as such operations were no longer aligned with the Company’s long-term business strategy and capital allocation priorities. Following this decision, the Company ceased making new investments in Filecoin mining activities and initiated an orderly wind-down of that business. On December 12, 2025, the Company entered into a comprehensive agreement pursuant to which substantially all Filecoin mining equipment was sold to a third party. Under the terms of that agreement, the Company leased back the equipment through April 30, 2026 solely to allow existing Filecoin mining nodes to naturally expire. All of the mining nodes had ceased operations by June 30, 2026. The results of the Filecoin mining business have been classified as discontinued operations in accordance with ASC 205-20 and are presented separately from continuing operations in the accompanying condensed consolidated financial statements. Prior-period financial information has been reclassified to conform to the current period presentation. MFH Tech continues to exist as a legal entity following the Company’s decision to discontinue the Filecoin mining business and may be used for other digital asset-related or technology-enabled activities in the future. The discontinuation relates solely to the Filecoin mining business and does not represent a liquidation or dissolution of MFH Tech. As of June 30, 2026, the Company’s subsidiaries are as follows: Date of Place of Percentage acquisition/ establishment/ of legal registration incorporation ownership Subsidiaries: Chaince Securities, Inc. April 12, 2023 United States 100 % Chaince Securities, LLC December 6, 2024 United States 100 % Ucon Capital (HK) Limited May 21, 2019 Hong Kong 100 % Chaince (Shenzhen) Consulting Co., Ltd. July 23, 2025 China 100 % Mercurity Fintech Technology Holding Inc. July 15, 2022 United States 100 % 48 Results of Operations Comparison of Results of Operations for the three and six months ended June 30, 2026 and 2025 The following summary of the unaudited consolidated financial data for the periods and as of the dates indicated is qualified by reference to, and should be read in conjunction with, our unaudited consolidated financial statements and related notes. Our historical results do not necessarily indicate our results to be expected for any future period. (Amounts expressed in U.S. dollars, except share data and per share data, or otherwise noted) For the three months ended June 30, Variance in 2026 2025 Amount % Revenue 463,206 233,504 229,702 98.37 % Cost of revenue (240,651 ) (93,139 ) (147,512 ) 158.38 % Gross profit $ 222,555 $ 140,365 $ 82,190 58.55 % Selling and marketing expenses (12,918 ) (29,065 ) 16,147 -55.55 % General and administrative expenses (1,482,328 ) (984,740 ) (497,587 ) 50.53 % Research and development (83,542 ) — (83,542 ) — Provision for doubtful accounts (41,853 ) — (41,853 ) — Operating loss $ (1,398,086 ) $ (873,440 ) $ (524,646 ) 60.07 % Interest income/(expenses), net 273,978 120,250 153,728 127.84 % Other (expenses)/income, net 3 — 3 — Gain/loss on share-based payment liability — (73,500 ) 73,500 -100 % Gain/loss on market price of stablecoins and digital assets (110,597 ) (13,831 ) (96,766 ) 699.63 % Gain/(Loss) from market price of short-term investment 82,191 315 81,876 25992.38 % Loss before provision for income taxes $ (1,152,511 ) $ (840,206 ) $ (312,305 ) 37.17 % Income tax benefits 103,779 58,786 44,993 76.54 % Loss from continuing operations $ (1,048,732 ) $ (781,420 ) $ (267,312 ) 34.21 % Loss from discontinued operations (56,268 ) (764,932 ) 708,664 -92.64 % Net loss $ (1,105,000 ) $ (1,546,352 ) $ 441,352 -28.54 % For the six months ended June 30, Variance in 2026 2025 Amount % Revenue 970,752 258,569 712,183 275.43 % Cost of revenue (530,172 ) (160,551 ) (369,621 ) 230.22 % Gross profit $ 440,580 $ 98,018 $ 342,562 349.49 % Selling and marketing expenses (34,066 ) (58,131 ) 24,065 -41.40 % General and administrative expenses (2,626,440 ) (1,698,162 ) (928,278 ) 54.66 % Research and development (167,084 ) — (167,084 ) — Provision for doubtful accounts (40,795 ) — (40,795 ) — Operating loss $ (2,427,805 ) $ (1,658,275 ) $ (769,530 ) 46.41 % Interest income/(expenses), net 525,891 171,431 354,460 206.77 % Other (expenses)/income, net (111 ) 15 (126 ) -840.00 % Gain/loss on share-based payment liability — (73,500 ) 73,500 -100 % Loss on market price of stablecoins and digital assets (388,967 ) (82,423 ) (306,544 ) 371.92 % Gain/(Loss) from market price of short-term investment 19,119 3,474 15,645 450.35 % Loss before provision for income taxes $ (2,271,873 ) $ (1,639,278 ) $ (632,595 ) 38.59 % Income tax benefits 136,488 154,096 (17,608 ) -11.43 % Loss from continuing operations $ (2,135,385 ) $ (1,485,182 ) $ (650,203 ) 43.78 % Loss from discontinued operations (322,059 ) (1,362,648 ) 1,040,589 -76.37 % Net loss $ (2,457,444 ) $ (2,847,830 ) $ 390,386 -13.71 % Revenue Our revenues mainly represent revenues from financial services and advisory activities. Revenue previously generated from distributed storage and computing services, consisting of Filecoin mining operations, has been classified as discontinued operations and is excluded from the Company’s continuing revenue recognition policies. The following table sets forth the revenues of our different types of businesses: For the three months ended June 30, Variance in 2026 2025 Amount % Revenue Financial services and advisory businesses 463,206 233,504 229,702 98.37 % Total revenue $ 463,206 $ 233,504 $ 229,702 98.37 % For the six months ended June 30, Variance in 2026 2025 Amount % Revenue Financial services and advisory businesses 970,752 258,569 712,183 275.43 % Total revenue $ 970,752 $ 258,569 $ 712,183 275.43 % For the three months ended June 30, 2026 and 2025, total revenue from financial services and advisory businesses was $463,206 and $233,504, respectively, representing an increase of $229,702, or 98.37%. For the six months ended June 30, 2026 and 2025, total revenue from financial services and advisory businesses was $970,752 and $258,569, respectively, representing an increase of $712,183, or 275.43%. 49 As disclosed in the consolidated financial statements, the Company’s revenues for 2026 and 2025 were derived entirely from financial services and advisory businesses. Revenue previously generated from distributed storage and computing services (Filecoin mining operations) has been classified as discontinued operations and is presented separately from continuing operations. Revenue Composition Revenue for the three months ended June 30, 2026 was diversified across multiple service categories, as follows: ● Industry Advisory & Consulting services: $354,582 ● IPO-related financial advisory and consulting services: $60,000 ● Transaction execution and brokerage services: $48,008 ● Other services – referral services: $616 Revenue for the six months ended June 30, 2026 was diversified across multiple service categories, as follows: ● Industry Advisory & Consulting services: $691,187 ● IPO-related financial advisory and consulting services: $173,948 ● Transaction execution and brokerage services: $105,001 ● Other services – referral services: $616 In contrast, revenue for the three months ended June 30, 2025 was primarily concentrated in: ● Industry Advisory & Consulting services: $75,676 ● IPO-related financial advisory and consulting services: $157,828 Revenue for the six months ended June 30, 2025 was primarily concentrated in: ● Industry Advisory & Consulting services: $75,676 ● IPO-related financial advisory and consulting services: $167,893 ● Other services – referral services: $15,000 The increase in revenue during 2026 was primarily attributable to: (a) a higher volume of advisory and consulting engagements; (b) increased transaction execution activities. Revenue growth reflects an expansion in both the number of engagements and the diversity of services provided during 2026 compared to 2025. Revenue Recognition Characteristics Revenue from financial services and advisory businesses is recognized in accordance with ASC 606 when performance obligations are satisfied. Depending on the nature of the engagement: ● IPO-related advisory and industry consulting services are generally recognized over time as services are performed; ● PIPE advisory and transaction execution services are generally recognized at a point in time upon completion of the relevant transaction milestone; ● Referral services are recognized when the referral obligation is fulfilled; ● Certain brokerage-related services may be presented on either a gross or net basis depending on the Company’s role in the transaction. Changes in revenue mix between 2026 and 2025 reflect an increased contribution from advisory and consulting engagements relative to referral-based activities. Cost of revenue The following table sets forth the cost of revenue of our different types of businesses: For the three months ended June 30, Variance in 2026 2025 Amount % Cost of revenue Financial services and advisory businesses (240,651 ) (93,139 ) (147,512 ) 158.38 % Total cost of revenue $ (240,651 ) $ (93,139 ) $ (147,512 ) 158.38 % For the six months ended June 30, Variance in 2026 2025 Amount % Cost of revenue Financial services and advisory businesses (530,172 ) (160,551 ) (369,621 ) 230.22 % Total cost of revenue $ (530,172 ) $ (160,551 ) $ (369,621 ) 230.22 % For the three months ended June 30, 2026 and 2025, total cost of revenue from financial services and advisory businesses was $240,651 and $93,139, respectively, representing an increase of $147,512, or 158.38%. For the six months ended June 30, 2026 and 2025, total cost of revenue from financial services and advisory businesses was $530,172 and $160,551, respectively, representing an increase of $369,621, or 230.22%. 50 The increase in cost of revenue was primarily attributable to the expansion of revenue-generating activities during 2026. As disclosed above, total revenue increased by $712,183 for the six months ended June 30, 2026, compared with the six months ended June 30, 2025, driven by growth in IPO-related financial advisory services, industry advisory and consulting services, and transaction execution and brokerage services engagements. The increase in cost of revenue is consistent with the higher level of transaction volume and consulting activity during the period. Cost of revenue for financial services and advisory businesses primarily consists of: (a) salaries and benefits of advisory and project execution personnel directly involved in revenue-generating activities; (b) transaction-based compensation arrangements; (c) brokerage clearing fees and execution-related charges; and (d) directly attributable professional service costs. Gross profit/(loss) and gross profit/(loss) margin Gross profit/(loss) represents our net revenues less cost of revenue. Our gross profit/(loss) margin represents our gross profit/(loss) as a percentage of our net revenues. The following table sets forth the gross profit/(loss) and gross profit/(loss) margin of our different types of businesses: For the three months ended June 30, Variance in 2026 2025 Amount % Gross profit Financial services and advisory businesses 222,555 140,365 82,190 58.55 % Total gross profit $ 222,555 $ 140,365 $ 82,190 58.55 % Gross profit margin Financial services and advisory businesses 48.05 % 60.11 % -12.07 % -20.07 % Overall gross profit margin 48.05 % 60.11 % -12.07 % -20.07 % For the six months ended June 30, Variance in 2026 2025 Amount % Gross profit Financial services and advisory businesses 440,580 98,018 342,562 349.49 % Total gross profit $ 440,580 $ 98,018 $ 342,562 349.49 % Gross profit margin Financial services and advisory businesses 45.39 % 37.91 % 7.48 % 19.73 % Overall gross profit margin 45.39 % 37.91 % 7.48 % 19.73 % For the three months ended June 30, 2026 and 2025, gross profit from financial services and advisory businesses was $222,555 and $140,365, respectively. The Company’s results improved by $82,190, or 58.55%. For the six months ended June 30, 2026 and 2025, gross profit from financial services and advisory businesses was $440,580 and $98,018, respectively. The Company’s results improved by $342,562 for the six months ended June 30, 2026, demonstrating year-over-year improvement in profitability. Gross profit margin was 48.05% for the three months ended June 30, 2026, compared to 60.11% for the three months ended June 30, 2025. This represented a decrease of 12.07 percentage points, primarily due to a larger increase in cost of revenue. Gross profit margin was 45.39% for the six months ended June 30, 2026, compared to 37.91% for the six months ended June 30, 2025. This represented an increase of 7.48 percentage points, primarily due to increased revenue scale and improved operating leverage in the Company’s financial services and advisory businesses. The improvement in gross profit and gross margin was primarily driven by higher revenue generated from advisory and consulting engagements during the 2026 period. Although cost of revenue also increased in absolute terms due to higher personnel-related and transaction-related costs, the increase in revenue more than offset the increase in direct costs. Sales and marketing expenses Sales and marketing expenses primarily consist of (i) labor costs of sales personnel, and (ii) referral and promotion fees for businesses. These costs are expensed as incurred. The sales and marketing expenses for the three months ended June 30, 2026 and 2025 amounted to $12,918 and $29,065, respectively, all of which were attributable to labor costs of sales personnel. The sales and marketing expenses for the six months ended June 30, 2026 and 2025 amounted to $34,066 and $58,131, respectively, all of which were attributable to labor costs of sales personnel. The definition of our main business has undergone some restructuring in recent years, and as it becomes more well-defined, and as current structural business investments mature and begin to yield revenue, we have plans to steadily increase our marketing and promotional investment and efforts. 51 General and administrative expenses The Company’s general and administrative expenses consist primarily of (i) salaries and benefits for employees, which are the salaries and benefits for our management, merchant service representatives and general administrative staff, (ii) office expenses, which consist primarily of office rental, maintenance and utilities expenses, depreciation of office equipment and other office expenses, and (iii) professional expenses, which consist primarily of legal expense and audit fees. The Company’s general and administrative expenses for the three months ended June 30, 2026 amounted to $1,482,328, and consisted primarily of $303,496 in employment costs, $838,821 in professional fees, and $340,011 in other office expenses. The Company’s general and administrative expenses for the six months ended June 30, 2026 amounted to $2,626,440, and consisted primarily of $567,433 in employment costs, $1,279,635 in professional fees, and $779,372 in other office expenses. The Company’s general and administrative expenses for the three months ended June 30, 2025 amounted to $984,740, consisting primarily of $667,979 in employment costs, $222,136 in professional fees, and $94,625 in other office expenses. The Company’s general and administrative expenses for the six months ended June 30, 2025 amounted to $1,698,162, consisting primarily of $893,372 in employment costs, $464,012 in professional fees, and $340,778 in other office expenses. Due to the expansion of the Company’s financial services and advisory business teams, all employee salaries and benefits, professional expenses, and office and other miscellaneous expenses have increased significantly compared to the same period in the previous year. Research and development expenses Research and development expenses consist primarily of costs incurred in connection with the development of the Company’s tokenization platform network and related blockchain infrastructure initiatives. For the three and six months ended June 30, 2026, research and development expenses were $83,542 and $167,084, respectively, compared to nil for both the three and six months ended June 30, 2025. The increase was primarily attributable to equity-based compensation recognized in connection with system development services provided under the Comprehensive Technology Services Agreement entered into on July 23, 2025 with Palantir Innovation Technologies Corporation. Pursuant to the agreement, the Company engaged the service provider to assist with the development and implementation of a tokenization platform network, including blockchain architecture design, RWA (Real World Assets) tokenization framework development, smart contract advisory, and related compliance-supporting technical systems. As consideration, the Company issued ordinary shares to the service provider, which are accounted for under ASC 718, Compensation—Stock Compensation. The equity awards granted under the agreement have a three-year service period. Accordingly, the total grant-date fair value of the shares issued is being recognized as an expense on a straight-line basis over the requisite service period. During the three and six months ended June 30, 2026, the Company recognized $83,542 and $167,084, respectively, of share-based compensation expense attributable to development-related services, which has been classified within research and development expenses in the consolidated statements of operations. The Company did not incur material research and development expenses in 2025, as no comparable system development agreements were in effect during that period. Management believes that continued investment in technology infrastructure and tokenization-related development initiatives is strategically important to support potential future blockchain- and digital asset–enabled service offerings. However, the Company will continue to evaluate the scope and pace of such investments in light of its broader capital allocation priorities and financial performance objectives. Loss on market price of stablecoins and digital assets Loss on market price of stablecoins and digital assets represents changes in the fair value of the Company’s digital assets holdings and certain cryptocurrency-denominated balances recognized in earnings during the reporting period. Effective January 1, 2024, the Company adopted ASU 2023-08, which requires in-scope digital assets to be measured at fair value at each reporting date, with changes in fair value recognized in net income. Accordingly, changes in fair value are recognized in net income in the period in which they arise. 52 Classification Between Continuing and Discontinued Operations For presentation purposes, the Company classifies fair value changes based on the operational nature and business association of the underlying digital assets: ● Digital assets held in the wallet of the parent company, Chaince Digital Holdings Inc. (“Chaince Cayman”), are associated with treasury and corporate-level activities and are therefore classified within continuing operations. ● Filecoins held in the mining node accounts of the Company’s wholly owned subsidiary, MFH Tech, which relate directly to the Filecoin mining business, are classified within discontinued operations following the Board’s decision to wind down the distributed storage and computing services business. ● Adjustments arising from FIL-denominated receivables and payables associated with the Filecoin mining business are likewise classified within discontinued operations, as such balances are directly attributable to the mining operations. Continuing Operations For the three months ended June 30, 2026, loss on market price of stablecoins and digital assets from continuing operations totaled $110,597, consisting of: (a) loss on market price of Bitcoin of $88,694; (b) loss on market price of USD Coin of $1,959; (c) loss on market price of Solana (SOL) of $7,900; (d) loss on market price of Filecoin (held outside the mining node structure) of $11,690; and (e) loss on market price of Tether USD of $354. For the six months ended June 30, 2026, loss on market price of stablecoins and digital assets from continuing operations totaled $388,967, consisting of: (a) loss on market price of Bitcoin of $282,124; (b) loss on market price of USD Coin of $1,669; (c) loss on market price of Solana (SOL) of $49,280; (d) loss on market price of Filecoin (held outside the mining node structure) of $55,540; and (e) loss on market price of Tether USD of $354. For the three and six months ended June 30, 2025, loss on market price of stablecoins and digital assets from continuing operations totaled $13,831 and $82,423, respectively, both of which were solely derived from loss on market price of Filecoin (held outside the mining node structure). These losses relate primarily to digital assets held in Chaince Cayman’s corporate wallet and reflect declines in market prices during the period. These amounts are included in “Loss on market price of stablecoins and digital assets” within continuing operations in the consolidated statements of operations. Discontinued Operations For the three months ended June 30, 2026, gain on market price of stablecoins and digital assets from discontinued operations totaled $26,742, consisting of: (a) $25,577 gain attributable to Filecoins held in MFH Tech’s Filecoin mining node accounts; and (b) $1,165 gain arising from fair value adjustments to FIL-denominated receivables and payables associated with the Filecoin mining business. For the six months ended June 30, 2026, loss on market price of stablecoins and digital assets from discontinued operations totaled $99,974, consisting of: (a) $102,109 loss attributable to Filecoins held in MFH Tech’s Filecoin mining node accounts; and (b) $2,135 gain arising from fair value adjustments to FIL-denominated receivables and payables associated with the Filecoin mining business. For the three months ended June 30, 2025, loss on market price of stablecoins and digital assets from discontinued operations totaled $105,486, consisting of: (a) $89,232 loss attributable to Filecoins held in MFH Tech’s Filecoin mining node accounts; and (b) $16,254 loss arising from fair value adjustments to FIL-denominated receivables and payables associated with the Filecoin mining business. For the six months ended June 30, 2025, loss on market price of stablecoins and digital assets from discontinued operations totaled $570,742, consisting of: (a) $576,020 loss attributable to Filecoins held in MFH Tech’s Filecoin mining node accounts; and (b) $5,278 gain arising from fair value adjustments to FIL-denominated receivables and payables associated with the Filecoin mining business. The FIL-denominated receivables and payables were settled or measured in Filecoin and were therefore subject to remeasurement based on changes in FIL market prices. Because these balances are directly related to the mining business, the associated fair value adjustments have been classified within discontinued operations in accordance with ASC 205-20. Overall Volatility Considerations The increase in total fair value losses in 2026 compared to prior periods was primarily driven by declines in Filecoin market prices and continued price volatility in major cryptocurrencies. Under the fair value model required by ASU 2023-08, the Company’s results of operations are subject to increased volatility as both upward and downward market movements are recognized in earnings each reporting period. Interest income/(expenses), net The Company’s interest income/(expenses), net consists of (i) convertible note interest costs, and (ii) interest income from cash deposits and short-term investments. The Company’s interest income/(expenses), net for the three and six months ended June 30, 2026 amounted to $273,978 and $525,891, respectively, and consisted of nil in convertible notes interest costs, and positive $273,978 and $525,891, respectively, in interest income from cash deposits and short-term investments. The Company’s interest income/(expenses), net for the three months ended June 30, 2025 amounted to $120,250, and consisted of negative $43,630 in convertible note interest costs, and positive $163,880 in interest income from cash deposits and short-term investments and providing loans to external parties. The Company’s interest income/(expenses), net for the six months ended June 30, 2025 amounted to $ 171,431, and consisted of negative $103,767 in convertible notes interest costs, and positive $275,198 in interest income from cash deposits and short-term investments and providing loans to external parties. 53 Gain/(loss) from market price of short-term investment The gain from market price of short-term investment for the three and six months ended June 30, 2026 and 2025 consists primarily of the net gain from the market price changes of the common stocks and ETFs held by the Company. Loss before income taxes Loss before income taxes was $1,152,511 for the three months ended June 30, 2026, compared with loss before income taxes of $840,206 for the three months ended June 30, 2025. Loss before income taxes was $2,271,873 for the six months ended June 30, 2026, compared with loss before income taxes of $1,639,278 for the six months ended June 30, 2025. Income tax benefits We recorded income tax benefits of $103,779 for the three months ended June 30, 2026 and income tax benefits of $58,786 for the three months ended June 30, 2025. We recorded income tax benefits of $136,488 for the six months ended June 30, 2026 and income tax benefits of $154,096 for the six months ended June 30, 2025. Loss from continuing operations Loss from continuing operations was $1,048,732 for the three months ended June 30, 2026, compared with loss from continuing operations of $781,420 for the three months ended June 30, 2025. Loss from continuing operations was $2,135,385 for the six months ended June 30, 2026, compared with loss from continuing operations of $1,485,182 for the six months ended June 30, 2025. Loss from discontinued operations For the three months ended June 30, 2026, the Company recognized a loss from discontinued operations of $56,268, compared to $764,932 for the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company recognized a loss from discontinued operations of $322,059, compared to $1,362,648 for the six months ended June 30, 2025. The discontinued operations relate entirely to the Company’s distributed storage and computing services business, which consisted of Filecoin (“FIL”) mining activities conducted through its wholly owned U.S. subsidiary, Mercurity Fintech Technology Holding Inc. (“MFH Tech”). In December 2025, the Company’s Board of Directors approved a strategic decision to discontinue this business, and the results of the Filecoin mining operations have been classified as discontinued operations in accordance with ASC 205-20. Operating Results of the Mining Business For the three months ended June 30, 2026, revenue from the Filecoin mining operations was $11,275, compared to $91,675 in 2025. Revenue fluctuations were primarily driven by changes in mining output and market prices of FIL at the time rewards were received. For the six months ended June 30, 2026, revenue from the Filecoin mining operations was $49,002, compared to $208,008 in 2025. Revenue fluctuations were primarily driven by changes in mining output and market prices of FIL at the time rewards were received. Cost of revenue for the three months ended June 30, 2026 was $93,994, primarily consisting of mining equipment depreciation, facility lease and electricity costs, software-related expenses, and other operational costs necessary to maintain node operations compared to $246,428 in 2025. The mining business continued to generate negative gross margins during the period. Cost of revenue for the six months ended June 30, 2026 was $269,662, primarily consisting of mining equipment depreciation, facility lease and electricity costs, software-related expenses, and other operational costs necessary to maintain node operations, compared to $495,222 in 2025. The mining business continued to generate negative gross margins during the period. Nature of the Loss The 2026 loss from discontinued operations was driven primarily by: (a) ongoing negative operating margins from mining activities; (b) impairment charges recognized in connection with the wind-down decision; and (c) fair value volatility of FIL holdings and FIL-denominated balances. A significant portion of the loss relates to non-cash items, including impairment and fair value adjustments. Following the Board’s approval in December 2025, the Company ceased making new investments in the Filecoin mining business and initiated an orderly wind-down of the related operations. By June 30, 2026, substantially all of the related mining nodes had expired and the majority of the pledged FIL had been released, with a substantial portion of the released FIL subsequently sold and converted into cash. A limited amount of FIL remained pledged in connection with certain remaining nodes as of June 30, 2026 and is expected to be released by the end of 2026. The Company does not intend to make additional investments in or resume its Filecoin mining operations. Net loss As a result of the foregoing factors, we recorded a net loss of $1,105,000 for the three months ended June 30, 2026, as compared to a net loss of $1,546,352 for the three months ended June 30, 2025. As a result of the foregoing factors, we recorded a net loss of $2,457,444 for the six months ended June 30, 2026, as compared to a net loss of $2,847,830 for the six months ended June 30, 2025. 54 Liquidity and Capital Resources Primary Sources of Liquidity Our primary sources of liquidity consist of existing cash and cash equivalents, cash flows from operating activities, and proceeds from financing activities. As of June 30, 2026, we had cash and cash equivalents of $30,973,382, stablecoins of $562,481, digital assets of $738,653, and total equity of $46,767,178. The decrease in cash during 2026 was primarily driven by outflows from investing activities, partially offset by cash generated from operating and financing activities. Subsequent to June 30, 2026, the closing of the Company’s registered direct offering (the “Offering”) occurred on August 11, 2026. Upon the closing, the Company received aggregate gross proceeds of US$16,196,800 before deducting offering expenses. The Company intends to use the net proceeds from the Offering for its digital asset reserve, working capital and/or general corporate purposes. See Note 17—“Subsequent Events.” Management continuously monitors liquidity levels, operating cash flow trends, capital expenditure requirements, and contractual commitments to assess the Company’s ability to meet its short-term and long-term obligations. Based on current cash balances and expected operating activities, management believes that the Company has sufficient liquidity to fund its operations and anticipated commitments for at least the next twelve months. The Company may, from time to time, pursue additional equity or debt financing to support business expansion, strategic investments, or working capital needs. The availability and terms of such financing are subject to market conditions and the Company’s financial performance. Issuance of additional equity securities may result in dilution to existing shareholders, while the incurrence of debt may require the Company to allocate cash toward debt service and may impose certain operational or financial covenants. Cash Flows Cash Flows for the six months ended June 30, 2026, compared to the six months ended June 30, 2025 The following table sets forth a summary of our cash flows for the periods indicated: For the six months ended June 30, Variance in 2026 2025 Amount % Net cash provided/(used) in operating activities 98,628 (1,328,938 ) 1,427,566 -107.42 % Net cash used in investing activities (6,784,565 ) (1,094,595 ) (5,689,970 ) 519.82 % Net cash provided by financing activities 3,839,040 3,666,900 172,140 4.69 % Effect of exchange rate changes 210 53 157 296.23 % Net change in cash and cash equivalents $ (2,846,687 ) $ 1,243,420 $ (4,090,107 ) -328.94 % Cash and cash equivalents, beginning of the year 33,820,069 24,009,331 9,810,738 40.86 % Cash and cash equivalents, end of the period $ 30,973,382 $ 25,252,751 $ 5,720,631 22.65 % For the six months ended June 30, 2026, the net decrease in cash and cash equivalents amounted to $2,846,687, compared to a net increase of $1,243,420 for the six months ended June 30, 2025. Cash and cash equivalents were $30,973,382 as of June 30, 2026, compared to $25,252,751 as of June 30, 2025. The decrease in cash during the six months ended June 30, 2026 was primarily driven by outflows from investing activities, partially offset by cash generated from operating and financing activities. 55 Operating Activities Net cash provided by operating activities was $98,627 for the six months ended June 30, 2026, compared with net cash used of $1,328,938 for the six months ended June 30, 2025. 2026 Operating Cash Flow For the six months ended June 30, 2026, our net cash provided by operating activities was $98,628, reflecting a combination of net cash provided by continuing operations of $313,463 and net cash used in discontinued operations of $214,835. The net cash provided by continuing operations was primarily attributable to (i) our net loss from continuing operations of $2,135,385, (ii) an adjustment of deducted non-cash profit and loss items of a positive net amount of $1,135,353, mainly provision for doubtful accounts, inclusive of depreciation, loss from selling short-term investments, exchange gains and losses, loss on market price of short-term investment, loss on market price of stablecoins and digital assets, loss on share-based payment liabilities, interest income/(expenses), share-based compensations, gain from debt forgiveness, non-cash revenue or gain, non-cash expenses, gain from deregistration of subsidiaries, and other income or loss, (iii) changes in working capital that positively affected the cash flow from operating activities, primarily including: a decrease of $42,471 in clearing deposits, a decrease of $119,831 in accounts receivable, a decrease of $1,509,409 in other receivable, an increase of $44,621 in prepaid expenses and other current assets, an increase of $215,991 in accounts payable, a decrease of $83,717 in advance from customers and deferred revenues, an increase of $44,137 in other payables, and a decrease of $412,441 in accrued expenses and other current liabilities, and (iv) changes in non-current assets and liabilities negatively affected cash flows from operating activities, primarily as a result of a decrease in right-of-use assets of $160,464, an increase in deferred tax assets of $136,488, partially offset by a decrease in operating lease liabilities of $101,541. Operating cash flows also included the effects of discontinued operations. Cash flows attributable to the Filecoin mining business primarily consisted of operating lease payments, electricity and hosting expenses, and mining-related costs incurred during the wind-down period. Operating cash flow remained positive as the company continued to generate advisory revenue growth in the six months ended June 30, 2026. 2025 Operating Cash Flow For the six months ended June 30, 2025, our net cash used in operating activities was $1,328,938, reflecting a combination of net cash used in continuing operations of $1,031,751 and net cash used in discontinued operations of $297,187. The net cash used in continuing operations was primarily attributable to: (i) our net loss from continuing operations of $1,485,182; (ii) an adjustment of deducted non-cash profit and loss items of a positive net amount of $563,499, mainly inclusive of provision for doubtful accounts, depreciation, gain from selling short-term investments, exchange gains and losses, gain from market price of short-term investment, Loss on market price of stablecoins and digital assets, interest income/(expenses), non-cash revenue or gain, non-cash expenses, and other income or loss; (iii) changes in working capital that positively affected the cash flow from operating activities, primarily including: an increase of $100,445 in clearing deposits, an increase of $118,876 in accounts receivable, a decrease of $202,703 in other receivable, a decrease of $172,081 in prepaid expenses and other current assets, an increase of $285,307 in advance from customers and deferred revenues, an increase of $258,740 in other payables and a decrease of $282,926 in accrued expenses and other current liabilities; and (iv) changes in non-current assets and liabilities that negatively affected the cash flow from operating activities, primarily including: a decrease of $158,887 in right-of-use assets, a decrease of $154,096 in deferred tax assets and a decrease of $187,281 in lease liabilities. Operating cash flows in 2025 also included cash outflows related to Filecoin mining activities, which were presented within discontinued operations. The improvement in operating cash flow of continuing operations in 2026 compared to 2025 was primarily attributable to reduced working capital outflows and changes in other receivables. Investing Activities Net cash used in investing activities was $6,784,565 for the six months ended June 30, 2026, compared to net cash used in investing activities of $1,094,595 for the six months ended June 30, 2025. 2026 Investing Cash Flow For the six months ended June 30, 2026, our net cash used in investing activities was $6,784,565, reflecting net cash used in continuing operations of $6,784,565. The net cash used in continuing operations was primarily attributable to cash received from short-term investment interest and dividends of $4,914, cash received from selling short-term investments of $154,871, cash received from selling cryptocurrencies of $ 2,891,714, cash paid for purchasing digital assets of $125,828, cash paid for property and equipment of $11,336, and cash paid for short-term investments of $9,698,900. 2025 Investing Cash Flow For the six months ended June 30, 2025, our net cash used in investing activities was $1,094,595, reflecting net cash used in continuing operations of $1,094,595. The net cash used in continuing operations was primarily attributable to cash received from short-term investment interest and dividends of $301, and cash paid for short-term investments of $1,094,896. 56 Financing Activities Net cash provided by financing activities was $3,839,040 for the six months ended June 30, 2026, compared to net cash provided by financing activities of $3,666,900 for the six months ended June 30, 2025. 2026 Financing Cash Flow For the six months ended June 30, 2026, our net cash provided by financing activities was $3,839,040. This cash flow was solely derived from continuing operations and was primarily attributed to cash received from equity financing of $3,839,040. 2025 Financing Cash Flow For the six months ended June 30, 2025, our net cash provided by financing activities was $3,666,900. This cash flow was solely derived from continuing operations and was primarily attributed to cash received from private placement of $8,041,900, cash paid for repaying the convertible notes of $4,000,000, and cash paid for financing-related financial advisory fees of $375,000. Cash and Cash Equivalents, and Restricted Cash As of June 30, 2026, the Company had cash and cash equivalents of $30,973,382, compared to $33,820,069 as of December 31, 2025. The decrease in cash and cash equivalents in the six months ended June 30, 2026 was primarily driven by outflows from investing activities, partially offset by cash generated from operating and financing activities. Short-term Investments As of June 30, 2026, the Company held short-term investments of $12,803,368, primarily consisting of U.S. Treasury Bills, ETFs, certificates of deposit, and common stock received in exchange for consulting services, compared to $2,243,567 as of December 31, 2025. Stablecoins and Digital Assets As of June 30, 2026, the Company held stablecoins and digital assets from continuing operations with an aggregate fair value of $1,301,134, consisting of USD Coin, Tether USD, Bitcoin, Solana, and Filecoin, compared to $4,027,522 as of December 31, 2025. Effective January 1, 2024, the Company adopted ASU 2023-08, under which digital assets are measured at fair value with changes in fair value recognized in net income. Accordingly, the carrying amounts of digital assets as of June 30, 2026 and December 31, 2025 reflect fair value measurement at the respective reporting dates. As previously disclosed, digital assets associated with the Company’s discontinued Filecoin mining operations are presented separately within discontinued operations in the consolidated financial statements. Contingencies From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. As of June 30, 2026, management is not aware of any pending or threatened claims that, if adversely determined, would have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Capital Expenditures Capital expenditures for the six months ended June 30, 2026 and 2025 were $6,784,565 and $1,094,595, respectively. Capital expenditures in the six months ended June 30, 2026 primarily related to purchases of short-term investments of $9,698,900. Capital expenditures in the six months ended June 30, 2025 were $1,094,896, primarily related to purchases of short-term investments. The Company expects to fund future capital expenditures primarily through existing cash and cash equivalents. The level and timing of future capital expenditures will depend on the Company’s strategic initiatives, operating performance, and market conditions. 57 Contractual Obligations The following table sets forth our contractual obligations as of June 30, 2026: Payment Due by Period Total Less than 1 year 1-3 years More than 3 years Operating lease commitments 1,015,425 190,944 791,046 33,435 Total $ 1,015,425 $ 190,944 $ 791,046 $ 33,435 Other than those shown above, we did not have any significant capital and other commitments as of June 30, 2026. Off-balance Sheet Commitments and Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. ITEM