Mercurity Fintech Holding Inc. (the "Company," "we," "us," "our
company," or "MFH") (Nasdaq: MFH), a digital fintech group powered
by blockchain technology, today announced its unaudited financial
results for the six months ended June 30, 2022.
First Half 2022 Financial and Operating
Highlights
- GAAP revenue - First half 2022 GAAP
revenues of USD$783,089, compared to revenues of USD$5,864 in first
half 2021, reflecting an increase of 13254.18% in GAAP revenue and
demonstrating the Company’s enhanced profitability and diversified
revenue stream in the six months ended June 30, 2022.
- GAAP gross loss - First half 2022
GAAP gross loss of USD$508,695, compared to gross profit of
USD$5,864 in first half 2021, reflecting an increase of 8774.88% in
GAAP gross loss.
- GAAP net loss - First half 2022
GAAP net loss of USD$2,368,573, compared to net loss of
USD$15,295,667 in first half 2021, reflecting a decrease of 84.51%
in GAAP net loss and demonstrating the Company’s cost management
improvement.
- Non-GAAP net loss - First half 2022
Non-GAAP net loss of USD$1,439,610, compared to net loss of
USD$689,786 in first half 2021, reflecting an increase of 108.70%
in non-GAAP net loss.
Mr. Shi Qiu, the Chief Executive Officer
(“CEO”), commented, “MFH has reinvented itself in the first half of
2022 with the changes of our Board of Directors (the “Board” or the
“Board of the Company” or the “Board of Directors”) and the
management team, and has focused on setting the foundations for
future business opportunities. Specifically, we have been
divesting certain operations in Asia and moving toward global
operations focusing on the United States. These are
significant changes and as our Company continues to evolve with the
future blockchain technologies, we expect to profit considerably in
years to come. Despite the crypto winter and unpredictable
capital markets, we are satisfied with how our Company has
navigated these difficult market conditions; having increased
revenue, cut overhead costs, and received significant investments
through three rounds of financing in the fourth quarter of
2022. Through the capital raises and recent management
restructuring, we have reaffirmed our Company’s core values with a
focus on our shareholders and have set the foundations for robust
future growth opportunities in 2023.”
RECENT DEVELOPMENTS
Dismantling of the VIE structure and
divestment in companies in mainland China controlled by VIE
agreements
On January 15, 2022, the Company disposed two of
its variable interest entities, Beijing Lianji Technology Co., Ltd.
(“Beijing Lianji”) and Beijing Mercurity Technology Co., Ltd.
(“Beijing Mercurity”), both of which were under the control by
Beijing Lianji Future Technology Co., Ltd. (“Lianji Future”), a
wholly foreign owned subsidiary of the Company. On January 15,
2022, Lianji Future, Beijing Mercurity and Zhiyou Wang entered into
a VIE termination agreement (the “Beijing Mercurity VIE Termination
Agreement”) pursuant to which the parties thereto have agreed to
terminate any and all of the control agreements among the parties
and terminate the stock pledge on the shares of Beijing Mercurity
held by Zhiyou Wang. In connection with the Beijing Mercurity VIE
Termination Agreement, on January 15, 2022, Lianji Future, Beijing
Mercurity, Ucon Capital (HK) Limited (“Ucon”), Mercurity Limited
(“Mercurity BVI”) and the Company entered into a credit transfer
agreement (the “Beijing Mercurity Credit Transfer Agreement”),
whereby Beijing Mercurity transferred its right to receive RMB
3,543,697 Chinese Yuan (the “Beijing Mercurity Receivable”) from a
third party to Lianji Future, effective immediately. Zhiyou Wang
was a shareholder of the Company. Other than the Beijing Mercurity
Receivable, as of January 15, 2022, the Company has divested all
the other assets and liabilities of Beijing Mercurity, which was
not material due to the decline and suspension of Beijing
Mercurity’s defi platform business.
Additionally, on January 15, 2022, Lianji
Future, Beijing Lianji, Jie Zhou and Zhiyou Wang entered into a VIE
termination agreement (the “Beijing Lianji VIE Termination
Agreement”) pursuant to which the parties thereto have agreed to
terminate any and all of the control agreements among the parties
and terminate the stock pledge on the shares of Beijing Lianji held
by Zhiyou Wang (95% shareholder of Beijing Lianji) and Jie Zhou (5%
shareholder of Beijing Lianji). In connection with the Beijing
Lianji VIE Termination Agreement, on January 15, 2022, Lianji
Future, Beijing Lianji, Ucon, Mercurity BVI and the Company entered
into a credit transfer agreement (the “Beijing Lianji Credit
Transfer Agreement”), whereby Beijing Lianji transferred its right
to receive RMB 350,000 Chinese Yuan (the “Beijing Lianji
Receivable”) from a third party to Lianji Future, effective
immediately. Jie Zhou was a beneficial shareholder of the Company.
Other than the Beijing Lianji Receivable, as of January 15, 2022,
the Company has divested all the other assets and liabilities of
Beijing Lianji, which was not material due to the decline and
suspension of Beijing Lianji’s defi platform business.
Since January 15, 2022, the Company has neither
controlled nor owned Beijing Lianji or Beijing Mercurity and the
Company no longer owns any companies controlled by any VIE
agreement as of the date herein.
Efforts to recover the Company’s
misplaced digital assets (the “Recovery Proceeding”)
In late February 2022, it came to the Company’s
attention that the Company could not reach Wei Zhu (“Zhu”), the
Company’s former acting Chief Financial Officer, former Co-Chief
Executive Officer, and a former member and Co-Chairperson of the
Board, and Minghao Li (“Li”), a former member of the Board. Around
that time, the Company realized that it temporarily lost control of
all cryptocurrencies attributed to the Company. The book value on
June 30, 2022 of the Bitcoins and USD Coins stored in the
out-of-control wallets was USD$7,408,688. Later, the Company was
informed that Zhu and Li were suspected of certain criminal
offenses unrelated to the Company's operations and had been
detained by the Economic Crime Investigation Detachment of Sheyang
County Public Security Bureau, Yancheng City, Jiangsu Province,
People’s Republic of China (the “Public Security Bureau”), leading
to that the Company’s hardware cold wallet and all cryptocurrencies
held by Zhu, the former acting Chief Financial Officer, were seized
and impounded by the Public Security Bureau. The Company verified
that Bitcoins and USD Coins with a book value as of June 30, 2022
of USD$6,093,621 stored in the out-of-control wallet had been
transferred to other unknown wallets.
PRC law firm Deheng Law Office (“Deheng”) has
been representing the Company in their efforts to recover the
seized cold wallet and cryptocurrencies from the Public Security
Bureau. On November 21, 2022, Deheng submitted the complaint and
evidentiary materials to the Public Security Bureau according to
the Criminal Procedure Law and the Provisions on Procedures of
Handling Criminal Cases by Public Security Organs (the “Law”). As
of December 23, 2022, the Company and Deheng had not received any
definitive response from the Public Security Bureau. The Company
together with its PRC counsel will continue to vigorously pursue
the Recovery Proceeding, attempting to regain its cold wallet and
cryptocurrencies contained therein, which the Company believes were
wrongfully seized and impounded by the Public Security Bureau.
As the Recovery Proceeding has not yet
concluded, the Company’s financial statements for the first half of
2022 does not reflect the digital assets currently being held
temporarily by the Chinese authorities.
Overview of business development for the
first half of 2022
In the second half of 2021, the Company added
cryptocurrency mining as one of the main businesses going forward.
The Company has entered into digital asset mining pools by
executing a business contract with a collective mining service
provider to provide computing power to the mining pool and derived
USD$664,307 related revenue in 2021 and USD$783,089 related revenue
in the first half of 2022.
According to the Company's five-year business
plan laid out in the second half of 2021, the Company had
originally planned to start physical cryptocurrency mining
operations in the United States on a large scale in March 2022, but
due to the Recovery Proceeding and the Bitcoin market price crash,
the Company has delayed the implementation of some of these
projects.
The Company also has focused on blockchain
technology services since the second half of 2021, including
designing and developing digital asset transaction platforms,
digital asset quantitative investment software and other innovative
and derivative services based on blockchain technologies, but in
the first half of 2022, due in large part to the sustained
cryptocurrency bear market and the time it takes for new
technologies to achieve mass adoptions, the Company had yet to
generate significant revenue from its blockchain technology
services.
In the first half of 2022, the Company completed
a novel software for the quantitative trading of digital assets
through independent research and development. The software will
first be implemented internally to enhance the quantitative
cryptocurrency investment business before it will be made available
to the public.
Changes in the Board and Management in
the Six Months Ended June 30, 2022
There is no denying that the Recovery Proceeding
has created some challenges regarding the Company’s daily
operations in 2022. In response to the Recovery Proceeding, the
Company underwent a series of significant changes in the Board of
Directors and the management team.
On March 28, 2022, Mr. Wei Zhu resigned from the
Director, the Co-Chairperson, the Acting Chief Financial Officer,
and the Co-Chief Executive Officer positions from the Board and the
Company, and Mr. Minghao Li resigned from the Director position
from the Board of the Company on the same day. On April 7, 2022,
the Board of the Company appointed Mr. Xuehui He and Mr. Yunhui Jin
as Independent Directors of the Board, and Mr. Wenjie Han, and Mr.
Junjie (Keith) Tan as Directors of the Board.
On April 13, 2022, Samuel Shen, Tony C. Luh, and
Paul L. Gillis, each an Independent Director of the Company (each
“Departing Director”), resigned from the Board of the Company
because each Departing Director did not agree with certain other
members of the Board regarding their requests for an internal
inquiry and confirmation of certain events disclosed in the
Company’s current reports on Form 6-K filed on April 11, 2022 and
April 13, 2022.
On May 6, 2022, Mr. Laibin Ding, Mr. Wenjie Han,
and Mr. Yunhui Jin resigned from the Directors positions of the
Board of the Company for their personal reasons. On May 7, 2022,
Mr. Xuehui He resigned from the Director position from the Board of
the Company due to personal reasons.
On May 7, 2022, the Board of the Company elected
Shi Qiu, Xiang Qu, and Er-Yi Toh as new Directors of the Company,
among whom Xiang Qu and Er-Yi Toh are deemed Independent Directors,
and the Board removed Hua Zhou as the Chairperson of the Board and
elected Huahui Deng as the Chairman of the Board. The Board also
removed Hua Zhou as the Chief Executive Officer of the Company and
appointed Shi Qiu as the new Chief Executive Officer of the
Company, and appointed Cheng Hock Phuah as the new Chief Financial
Officer of the Company.
In connection with the changes of the Board of
Directors and the management team, the Company has been shifting
directions and focusing on finding new funds and new business
opportunities particularly related to its global business
operations.
On June 13, 2022, the Company issued a
promissory note (the “Note”) to Ying Wang (the “Noteholder”), a
Singapore resident, in the principal amount of up to USD$5,000,000
to provide for the Company’s working capital. The Note has a term
of one year with the maturity date on June 1, 2023 (the “Maturity
Date”) and bears no interest other than any applicable imputed
interest charged by the appropriate government authority. The
balance of the Note may be prepaid at any time before the Maturity
Date. As of June 30, 2022, the Company has received USD$0.4 million
(the “Outstanding Loan Amount”) of the Note from the Noteholder. On
August 29, 2022, the Noteholder sold, assigned, transferred, and
conveyed unto Aiming Jumbo Limited (the “Purchaser”) the
Noteholder’s rights and interests to receive payments from the
Company in connection with the Note in exchange for the repayment
of the Outstanding Loan Amount.
FINANCIAL RESULTS
For the First Half Ending June 30,
2022:
Revenues were USD$783,089 in the first half of
2022, all of which derived from digital asset mining business,
compared to USD$5,864 in the first half of 2021, all of which
derived from technical services business. This represents an
increase of 13254.18% in the Company’s revenue during the same
period in 2021.
General and administrative
expenses were USD$1,247,344 for the first half of 2022,
compared to USD$6,612,154 in the same period of 2021. General and
administrative expenses consisted primarily of USD$356,173 in
stock-based compensation costs, USD$500,196 in employment costs,
USD$365,613 in professional fees, and USD$25,352 in other office
expenses. The increase in stock-based compensation expenses was
primarily due to the vesting of previously granted Restricted Stock
Units according to 2021 Share Incentive Plan. This represents
an annual decrease in general and administrative expenses of
81.14%.
Impairment
loss of intangible assets for the
first half of 2022 was USD$572,790 due to the market wide decrease
in fair value of digital assets the Company held, compared to an
impairment loss of intangible assets from operations of USD$372,995
in the same period during 2021.
Loss from operations in the
first half of 2022 was USD$2,363,262 compared to a loss from
operations of USD$6,979,266 in the same period of year 2021,
representing a 66.14% decrease in loss from operations. Without the
intangible asset impairment and the adjustment to the stock option
incentive expenses, the Company had an operating loss of
USD$1,434,299 in the first half of 2022.
Loss before provision for income
taxes in the first half of 2022 was USD$2,368,573 compared
to a loss before provision for income taxes of USD$6,978,572 in the
same period of year 2021. Without the intangible asset impairment
and the adjustment to the stock option incentive expenses, the
Company had a loss before provision for income taxes of
USD$1,439,610 in the first half of 2022.
Non-GAAP net (loss)/income attributable
to Mercurity Fintech Holding Inc. is a non-GAAP measure
which excludes amortization of acquired intangible assets,
impairment loss, share-based compensation, and related provision
for income tax expenses. Non-GAAP net loss attributable to
Mercurity Fintech Holding Inc. was USD$1,439,610 in the first half
of 2022 and non-GAAP net loss attributable to Mercurity Fintech
Holding Inc. was USD$689,786 in the same period of year 2021.
Cash and cash equivalents were
USD$204,587 as of June 30, 2022, compared to USD$440,636 as of
December 31, 2021. Total shareholder equity as of June 30, 2022 was
USD$6.6 million, compared to total shareholder equity of USD$8.6
million as of December 31, 2021.
Intangible assets,
net were USD$7,408,688 as of June 30, 2022,
compared to USD$8,197,290 as of December 31, 2021. As of June 30,
the intangible assets of the Company are all cryptocurrencies,
including 125.85847973 Bitcoins and 2,005,537.5 USD Coins. Due to
the significant decline in BTC market prices during the first half
of 2022, the Company calculated the fair value of BTC based on the
average price of BTC market prices over the most recent 12 months
and recognized an impairment loss of USD$566,926. As of June 30,
2022, the Company still had not regained control of all
cryptocurrencies attributed to the Company.
Non-GAAP Measures
To supplement the Company's consolidated
financial statements presented in accordance with U.S. generally
accepted accounting principles ("U.S.GAAP"), the Company uses
non-GAAP financial measures, including Non-GAAP loss/income from
continuing operations and Non-GAAP net loss/income attributable to
the Company, that are adjusted from results based on U.S. GAAP to
exclude amortization of acquired intangible assets, impairment
loss, share-based compensation and related provisions for income
tax expenses. The non-GAAP financial information is provided as
additional information to help investors compare business trends
among different reporting periods on a consistent basis and to
enhance investors' overall understanding of the historical and
current financial performance of the Company's operations and
prospects for the future. The non-GAAP financial information should
be considered in addition to results prepared in accordance with
U.S. GAAP but should not be considered a substitute for or superior
to U.S. GAAP financial results. In addition, the Company's
calculations of this non-GAAP financial information may be
different from the calculations used by other companies, and
therefore comparability may be limited. A limitation of using these
non-GAAP financial measures is that amortization of acquired
intangible assets, impairment of goodwill, share-based compensation
and related provision for income tax benefits have been and may
continue to be for the foreseeable future significant recurring
expenses in the Company's results of operations. The Company
compensates for these limitations by providing reconciliations of
non-GAAP financial measures to U.S. GAAP financial measures. Please
see the reconciliation tables at the end of this earnings
release.
BUSINESS OUTLOOK
On July 15, 2022, the Company incorporated
Mercurity Fintech Technology Holding Inc. (the “Consultant”), which
plans to develop cryptocurrency consultation services, including
business and financial advisory services for small-scale
enterprises in the cryptocurrency industry. On August 23, 2022, the
Consultant signed a Consulting Agreement with a Chinese media
company (the “Client”), pursuant to which the Consultant will serve
as an independent contractor in order to facilitate the Client to
conduct its initial public offering (the “IPO”). The Consulting
Agreement shall continue until December 31, 2024 unless terminated
earlier by both parties. In accordance with the Consulting
Agreement, the total cash payment for the Consultant’s services
shall be USD$160,000, and upon completion of the IPO, the Client
shall issue its equity securities worth of USD$3,000,000 as the
remainder of the compensation.
On October 9, 2022, the Board of the Company
appointed Lynn Alan Curtis, Daniel Kelly Kennedy, Zheng Cui, Qian
Sun, and Hui Cheng as new Directors of the Company, among whom Lynn
Alan Curtis, Zheng Cui, and Hui Cheng are deemed independent. On
October 9, 2022, the Company appointed Qian Sun to be the Chief
Executive Officer and Director of Mercurity Fintech Technology
Holding Inc. (the “U.S. Subsidiary”).
On November 11, 2022, the Company entered into a
Securities Purchase Agreement in connection with a private
investment in public equity (the “PIPE”) financing with certain
non-U.S. investors to offer and sell the Company’s units, each
consisting of one ordinary share and three warrants for total gross
proceeds of USD$3.15 million (the “First PIPE Proceeds”). Net
proceeds from the PIPE financing are expected to be used to advance
the Company’s business development activities for working capital
and other general corporate purposes. Among other purposes, the
Company intends to use part of the First PIPE Proceeds to grow its
cryptocurrency consultation services in the U.S., including
obtaining the “BitLicense” from New York State Department of
Financial Services for digital currency related activities although
the Company cannot provide any assurances on obtaining the
“BitLicense” in the immediate future or at all.
On November 11, 2022, Cheng Hock Phuah resigned
the Chief Financial Officer position of the Company without any
disagreement from the Company on any matter relating to its
operations, accounting policies, or practices. On November 13,
2022, the Board of Directors of the Company appointed Yukuan Zhang,
previously served as the Chief Accountant of the Company, as the
new Chief Financial Officer to fill the vacancy created by Mr.
Phuah’s resignation.
On November 21, 2022, the Company held a
shareholders' meeting, the proposals approved by the requisite
majority of the votes cast by the shareholders that attended the
Meeting by proxy or in person are as follows: 1) Election of Shi
Qiu, Xiang Qu, Er-Yi Toh, Cong Huang, Keith Tan Jun Jie, Lynn Alan
Curtis, Daniel Kelly Kennedy, Zheng Cui, Qian Sun, and Hui Cheng,
to serve the Board of Directors of the Company, until the next
annual shareholders meeting and until their successors are duly
elected and qualified. 2) Approval of the reverse split (the
“Reverse Split”) of the Company’s issued ordinary shares at a ratio
of not less than one (1)-for-three hundred sixty (360) and not more
than one (1)-for-seven hundred twenty (720), with the exact ratio
to be set at a whole number within this range to be determined by
the Company’s Board, or any duly constituted committee thereof, in
its discretion. 3) Suspension of the trading of the Company’s
American Depositary Receipts / Shares (“ADRs”), termination of the
Deposit Agreement for the ADRs among the Company, its depositary
bank, Citibank, N.A., and the holders and beneficial owners of the
Company’s ADRs, the exchange of ADRs for the corresponding ordinary
shares of the Company, and commencement of trading of the Company’s
ordinary shares on the Nasdaq Stock Market upon the effectiveness
of the Reverse Split.
At the annual shareholders’ meeting held on
November 21, 2022 (the “2022 Annual Shareholder Meeting”), the
Board and management of the Company reformulated the Company's
development strategy for the next three years. The Company's
business will include: 1) digital asset business, including
cryptocurrency mining and quantitative investment; 2) Blockchain
technology services business, including designing and developing
digital asset transaction platforms, digital asset quantitative
investment software and other innovative and derivative services
based on blockchain technologies; 3) cryptocurrency consultation
services, providing industry advisory services and financial
advisory services for small-scale enterprises in the cryptocurrency
industry.
The Company is currently creating a digital
report, which it will release publicly in early 2023, detailing
more specific plans related to the three-year growth strategy as
outlined by the Board of Directors and management team at the 2022
Annual Shareholder Meeting. According to Shi Qiu, the
Company’s CEO “It took hundreds of years to build Wall Street, but
with crypto everything is accelerated. We plan to dedicate the next
three years, during fluctuating market conditions, to building the
Web3 and blockchain infrastructure of the future, and we believe
that we will prosper from our business model and steadfast devotion
to this exciting and ever-expanding space.”
On November 30, 2022, the Company entered into a
Securities Purchase Agreement with two investors to offer and sell
the Company’s units, each consisting of one ordinary share and
three warrants for total gross proceeds of USD$5 million (the
“Second PIPE Proceeds”). Net proceeds from the PIPE financing are
expected to be used to advance the Company’s business development
activities for working capital and other general corporate
purposes. Among other purposes, the Company intends to use part of
the Second PIPE Proceeds to grow its cryptocurrency consultation
services in the U.S., including obtaining the “Bit License” from
New York State Department of Financial Services for digital
currency related activities although the Company cannot provide any
assurance on actually obtaining the “Bit License” in the near
future or at all.
On December 15, 2022, the Company (the
"Purchaser") entered into an asset purchase agreement (the “Asset
Purchase Agreement”) with Huangtong International Co., Ltd. (the
"Vendor" or “Huangtong International”), providing for the
acquisition and purchase of Web3 decentralized storage
infrastructure, including cryptocurrency mining servers, cables,
and other electronic devices (the “Assets”), for an aggregate
consideration of USD$5,980,000, payable in the Company’s ordinary
shares. The investment is made with an aim to own mining machines
capable of gathering, processing, and storing vast amounts of data,
to advance the cryptocurrency mining business, and to further
solidify the Company as a pioneer in the creation of the Web3
framework. Pursuant to the Asset Purchase Agreement, the Company
would make the payment for the aforementioned equipment in the form
of its ordinary shares (the “Purchase Price Shares”), at a
stipulated price of USD$0.0022 per share, in the aggregate amount
of 2,718,181,818 shares. The Company shall issue Huangtong
International certain amount of warrants, with an exercise price of
USD$0.60 per ADR or USD$0.00167 per ordinary share, subject to the
condition that the Assets generate certain amounts of gross revenue
and net income as set forth in the Asset Purchase Agreement.
Huangtong International will remain responsible for the
installation of all mining equipment at sites designated by the
Company and will also undertake routine maintenance of the devices
for one year.
On December 23, 2022, the Company entered into a
Securities Purchase Agreement in connection with a private
investment in public equity (the “PIPE”) financing with an
accredited non-U.S. investor to offer and sell the Company’s units,
each consisting of one ordinary share and three warrants for total
gross proceeds of USD$5 million. The Company expects to use the net
proceeds from the three rounds of PIPE financing to develop its
Web3 and blockchain infrastructure, expand its consultation
services, and pursue the licensure for cryptocurrency
(“BitLicense”) from New York State Department of Financial Services
although the Company cannot provide any assurance on actually
obtaining the “BitLicense” in the near future or at all.
SAFE HARBOR STATEMENT
This announcement contains forward-looking
statements. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "aim," "anticipate," "believe," "estimate,"
"expect," "hope," "going forward," "intend, " "ought to, " "plan, "
"project," "potential," "seek," "may," "might," "can," "could,"
"will," "would," "shall," "should," "is likely to" and the negative
form of these words and other similar expressions. Among other
things, statements that are not historical facts, including
statements about the Company's beliefs and expectations are or
contain forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could
cause actual results to differ materially from those contained in
any forward-looking statement. All information provided in this
press release is as of the date of this press release and is based
on assumptions that the Company believes to be reasonable as of
this date, and the Company does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
CONTACTSKe YangMercurity
Fintech Holding Inc.ir@mercurityfintech.comTel: + 86
18234456883
International Elite Capital Inc. Vicky Chueng Tel:
+1(646)
866-7989 Email: mfhfintech@iecapitalusa.com
MERCURITY FINTECH HOLDING
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(US dollars in thousands, except for
number of shares and per share (or ADS) data)
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Technical services |
|
- |
|
|
6 |
|
Digital asset mining |
|
783 |
|
|
- |
|
Total revenues |
|
783 |
|
|
6 |
|
|
|
|
|
|
Cost
of revenues |
|
(1,292 |
) |
|
- |
|
Gross profit |
|
(509 |
) |
|
6 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
General and administrative |
|
(1,247 |
) |
|
(6,612 |
) |
Provision for doubtful accounts |
|
(4 |
) |
|
- |
|
Loss
on disposal of intangible assets |
|
(30 |
) |
|
- |
|
Impairment loss of intangible assets |
|
(573 |
) |
|
(373 |
) |
Total operating expenses |
|
(1,854 |
) |
|
(6,985 |
) |
(Loss)/income from operations |
|
(2,363 |
) |
|
(6,979 |
) |
|
|
|
|
|
Interest income, net |
|
- |
|
|
1 |
|
Other
income/(Expenses), net |
|
(1 |
) |
|
- |
|
Loss
from disposal of VIEs |
|
(5 |
) |
|
- |
|
(Loss)/income before provision for income
taxes |
|
(2,369 |
) |
|
(6,979 |
) |
Income tax benefits |
|
- |
|
|
- |
|
(Loss)/Income from continuing operations |
|
(2,369 |
) |
|
(6,979 |
) |
|
|
|
|
|
Discontinued operations: |
|
|
|
|
Loss
from discontinued operations |
|
- |
|
|
(8,317 |
) |
Net loss |
|
(2,369 |
) |
|
(15,296 |
) |
Net loss per ordinary
share |
|
|
|
|
Basic |
|
(0.00 |
) |
|
(0.00 |
) |
Diluted |
|
(0.00 |
) |
|
(0.00 |
) |
|
|
|
|
|
Weighted average
shares used in calculating net loss per ordinary
share |
|
|
|
|
Basic |
|
5,143,716,229 |
|
|
3,404,459,129 |
|
Diluted |
|
5,143,716,229 |
|
|
3,404,459,129 |
|
MERCURITY FINTECH HOLDING
INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS(US dollars in thousands)
|
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
Net loss |
|
(2,369 |
) |
|
(15,296 |
) |
Other
comprehensive loss |
|
|
|
|
Change in cumulative foreign currency translation adjustment |
|
20 |
|
|
6 |
|
Comprehensive loss |
|
(2,349 |
) |
|
(15,290) |
|
MERCURITY FINTECH HOLDING
INC.CONSOLIDATED BALANCE SHEETS
(US dollars in thousands)
|
|
|
|
|
|
|
June 30, 2022 |
|
December 31, 2021 |
ASSETS: |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
205 |
|
|
441 |
|
Accounts receivable, net |
|
- |
|
|
- |
|
Prepaid expenses and other current assets, net |
|
11 |
|
|
1,295 |
|
Amounts due from related parties |
|
- |
|
|
2 |
|
Current assets of discontinued operations |
|
- |
|
|
4 |
|
Total current assets |
|
216 |
|
|
1,742 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
Intangible assets, net |
|
7,409 |
|
|
8,197 |
|
Goodwill |
|
|
|
|
Deferred tax assets |
|
|
|
|
Total non-current assets |
|
7,409 |
|
|
8,197 |
|
TOTAL ASSETS |
|
7,625 |
|
|
9,939 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY: |
|
|
|
|
Current liabilities: |
|
|
|
|
Accrued expenses and other current liabilities |
|
88 |
|
|
218 |
|
Amounts due to related parties |
|
932 |
|
|
1,123 |
|
Current liabilities of discontinued operations |
|
- |
|
|
31 |
|
Total current liabilities |
|
1,020 |
|
|
1,372 |
|
TOTAL LIABILITIES |
|
1,020 |
|
|
1,372 |
|
Commitments and contingencies |
|
|
|
|
Shareholders' equity: |
|
|
|
|
Ordinary shares |
|
50 |
|
|
49 |
|
Additional paid-in capital |
|
668,539 |
|
|
668,184 |
|
Accumulated deficit |
|
(663,135 |
) |
|
(660,766 |
) |
Accumulated other comprehensive income |
|
1,151 |
|
|
1,100 |
|
Total shareholders' equity |
|
6,605 |
|
|
8,567 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
7,625 |
|
|
9,939 |
|
MERCURITY FINTECH HOLDING
INC.Reconciliation of Non-GAAP financial measures
to comparable GAAP measures(US dollars in
thousands)
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
Loss
from continuing operations |
|
(2,369 |
) |
|
(6,979 |
) |
Net
loss attributable to Mercurity Fintech Holding Inc. |
|
(2,369 |
) |
|
(15,296 |
) |
Amortization of acquired intangible assets (a) |
|
- |
|
|
- |
|
Provision for income tax expenses (b) |
|
- |
|
|
- |
|
Share-based compensation (c) |
|
356 |
|
|
6,126 |
|
Impairment loss from continuing operations (d) |
|
573 |
|
|
373 |
|
Impairment loss attributable to Mercurity Fintech Holding Inc.
(d) |
|
573 |
|
|
8,480 |
|
Non-GAAP (loss)/income from continuing operations (a)(b)(c)(d) |
|
(1,440 |
) |
|
(480) |
Non-GAAP net (loss)/income attributable to Mercurity Fintech
Holding Inc.(a)(b)(c)(d) |
|
(1,440 |
) |
|
(690) |
|
|
|
|
|
Notes: |
|
|
|
|
(a)
Adjustment to exclude amortization of acquired intangible
assets |
|
|
|
|
(b)
Adjustment to exclude provision for income tax expenses |
|
|
|
|
(c)
Adjustment to exclude share-based compensation |
|
|
|
|
(d)
Adjustment to exclude impairment loss |
|
|
|
|
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