SGRX 6-K
Sangrix Inc. (SGRX)
Exhibit 99.2
BIT ORIGIN LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | June 30, | ||||
| 2025 | | 2025 | |||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | | $ | | ||
Cryptocurrencies |
| |
| — | ||
Other receivables, net |
| |
| | ||
Prepayments, net |
| |
| | ||
Loans receivable, net |
| |
| | ||
Total current assets |
| |
| | ||
NONCURRENT ASSETS | ||||||
Deposit for long-term investment | | — | ||||
Total other assets | | — | ||||
Total assets | $ | | $ | | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Other payables and accrued liabilities | $ | | $ | | ||
Total current liabilities | | | ||||
NONCURRENT LIABILITIES | ||||||
Convertible debentures | | — | ||||
Total other liabilities | | — | ||||
Total liabilities | | | ||||
COMMITMENTS AND CONTINGENCIES (Note 11) | ||||||
SHAREHOLDERS’ EQUITY / (DEFICIT) | ||||||
Class A Ordinary Share (par value $ | | | ||||
Class B Ordinary Share (par value $ | | | ||||
Additional paid-in capital | | | ||||
Accumulated deficit | ( | ( | ||||
Other comprehensive loss | ( | — | ||||
Total Bit Origin Ltd shareholders’ (deficit) / equity | ( | | ||||
NONCONTROLLING INTERESTS | ( | ( | ||||
Total (deficit) / equity | ( | | ||||
Total liabilities and shareholders’ (deficit) / equity | $ | | $ | | ||
* |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-1
BIT ORIGIN LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Six Months Ended December 31, | ||||||
| 2025 | | 2024 | |||
REVENUES | ||||||
Cryptocurrencies mining revenue | $ | — | $ | — | ||
Cryptocurrency miner sales net revenue | — | — | ||||
Total revenues |
| — |
| — | ||
COST OF REVENUES |
| |
| | ||
Cost of cryptocurrencies mining revenue | — | — | ||||
Total cost of revenues |
| — |
| — | ||
|
| |||||
GROSS PROFIT / (LOSS) |
| — |
| — | ||
OPERATING EXPENSES: |
| |
| | ||
General and administrative |
| | | |||
Provision for / (recovery of) credit losses | | ( | ||||
Change in fair value of cryptocurrencies | | — | ||||
Total operating expenses |
| |
| | ||
LOSS FROM OPERATIONS |
| ( |
| ( | ||
OTHER INCOME / (EXPENSE): |
| |
| | ||
Interest expense, net | ( | ( | ||||
Other finance expenses |
| ( |
| ( | ||
Change in fair value of convertible debentures |
| |
| — | ||
Total other income (expenses), net |
| |
| ( | ||
LOSS BEFORE INCOME TAXES |
| ( |
| ( | ||
PROVISION FOR INCOME TAXES | — | — | ||||
NET LOSS | ( | ( | ||||
LESS: Net income / (loss) attributable to noncontrolling interests | | ( | ||||
Deemed dividend attributable to down round feature of warrants | | — | ||||
NET LOSS ATTRIBUTABLE TO BIT ORIGIN LTD | ( | ( | ||||
OTHER COMPREHENSIVE INCOME / (LOSS): | ||||||
Effects of credit risk change from liabilities measured at fair value | ( | — | ||||
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO BIT ORIGIN LTD | $ | ( | $ | ( | ||
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES* |
|
| ||||
Basic and diluted | | | ||||
LOSS PER SHARE - BASIC AND DILUTED* | $ | ( | $ | ( | ||
* | Giving retroactive effect to the -for-60 reverse share split effected on January 20, 2026 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
BIT ORIGIN LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Additional | |||||||||||||||||||||||||||||
| Ordinary shares |
| Class A Ordinary Shares | Class B Ordinary Shares | paid-in | Accumulated | Other | Noncontrolling | ||||||||||||||||||||||
| Share | | Amount | | Share | | Amount | | Share | | Amount | | capital | | deficit | | comprehensive loss | | interests | | Total | |||||||||
BALANCE, June 30, 2024* | | $ | | — | $ | — | — | $ | — | $ | | $ | ( | $ | — | $ | ( | $ | | |||||||||||
Conversion of convertible debenture into ordinary shares | | | — | — | — | — | | — | — | — | | |||||||||||||||||||
Exercise of warrants | | | — | — | — | — | ( | — | — | — | | |||||||||||||||||||
Net loss | — | | — | — | — | — | | ( | — | ( | ( | |||||||||||||||||||
BALANCE, December 31, 2024* | | $ | | — | $ | — | — | $ | — | $ | | $ | ( | $ | — | $ | ( | $ | ( | |||||||||||
BALANCE, June 30, 2025* | — | $ | | | $ | | | $ | | $ | | $ | ( | $ | — | $ | ( | $ | | |||||||||||
Exercise of warrants |
| — |
| | | | — | — |
| ( |
| — | — | — |
| | ||||||||||||||
Sales of Class A Ordinary Shares | — | | | | — | — | | — | — | — | | |||||||||||||||||||
Additional Class A Ordinary Shares of round-up adjustment for reverse share split | — | | | — | — | — | | — | — | — | | |||||||||||||||||||
Deemed dividend attributable to down round feature of warrants | — | | — | — | — | — | | ( | — | — | | |||||||||||||||||||
Effects of credit risk change from liabilities measured at fair value | — | | — | — | — | — | | — | ( | — | ( | |||||||||||||||||||
Net loss |
| — |
| | — | — | — | — |
| |
| ( | — | |
| ( | ||||||||||||||
BALANCE, December 31, 2025* |
| — | $ | | | $ | | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||
* | Giving retroactive effect to the -for-60 reverse share split effected on January 20, 2026 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
BIT ORIGIN LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended December 31, | |||||
| 2025 | | 2024 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
| |||||
Net loss | $ | ( |
| $ | ( | |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
| ||||
Provision for (recovery of) credit losses |
| |
| ( | ||
Change in fair value of cryptocurrencies | | — | ||||
Issuance costs and discounts of convertible debentures |
| |
| | ||
Change in fair value of convertible debentures |
| ( |
| — | ||
Changes in operating assets and liabilities |
| |||||
Other receivables | ( | | ||||
Prepayments |
| ( |
| ( | ||
Other payables and accrued liabilities | ( | ( | ||||
Net cash used in operating activities | ( | ( | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Advance for long-term investment | ( | — | ||||
Purchase of cryptocurrencies |
| ( |
| — | ||
Repayments from loans to third parties | — | | ||||
Net cash (used in) provided by investing activities |
| ( |
| | ||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
| ||||
Proceeds from convertible debentures, net of issuance costs | | — | ||||
Payment of equity issuance costs | ( | — | ||||
Net cash provided by financing activities | | — | ||||
CHANGES IN CASH AND CASH EQUIVALENTS |
| |
| ( | ||
CASH AND CASH EQUIVALENTS, beginning of period |
| |
| | ||
CASH AND CASH EQUIVALENTS, end of period | $ | | $ | | ||
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
| ||||
Cash paid for income tax | $ | — | $ | — | ||
Cash paid for interest | $ | | $ | — | ||
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES |
|
| ||||
Conversion of convertible debenture into ordinary shares | $ | — | $ | | ||
Issuance of convertible debenture in exchange for cryptocurrencies | $ | | $ | — | ||
Issuance of Class A Ordinary Shares in exchange for cryptocurrencies | $ | | $ | — | ||
Settlement of equity issuance costs using cryptocurrencies | $ | | $ | — | ||
Deemed dividend attributable to down round feature of warrants | $ | | $ | — | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
BIT ORIGIN LTD AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FLOWS
Note 1 – Nature of business and organization
Organization
Bit Origin Ltd (“Bit Origin” or the “Company”) is a company incorporated on January 23, 2018 under the laws of the Cayman Islands. Bit Origin holds all of the outstanding share capital of the following entities: SonicHash Inc, (“SonicHash Canada”), SonicHash Pte. Ltd. (“SonicHash Singapore”), SonicHash LLC (“SonicHash US”) and Bit Origin Pte. Ltd. (“Bit Origin Singapore”), and holds
On December 14, 2021, the Company formed SonicHash Canada, a company incorporated under the laws of Alberta, Canada. On December 16, 2021, the Company formed SonicHash Singapore, a company incorporated under the laws of Singapore, which was struck off on September 4, 2024. On December 17, 2021, the Company formed SonicHash US under the laws of the State of Delaware. Sonic Auspice was formed by a third party under the laws of the State of Delaware on November 30, 2023. The Company purchased
Business overview
The Company and its subsidiaries (“the Group”) is focused on the cryptocurrency related operations and management. The Group started Bitcoin mining business in May 2022. In December 2023, the Group temporarily suspended the Bitcoin mining operations due to the high operating costs in the United States (the “U.S.”). Starting from June 2024, Bit Origin directly enters into the purchase and sale of miners under a sales representative arrangement to support its treasury and operational activities. The Group did
Consolidation scope
The accompanying unaudited condensed consolidated financial statements reflect the activities of Bit Origin and each of the following entities as of December 31, 2025:
Name | | Background | | Ownership |
SonicHash Canada | · A Canada company | |||
· It was established to explore potential mining site operation opportunities but has not commenced any business operations as of the date of this report | ||||
SonicHash US | · A U.S. company of the State of Delaware | |||
· It operates the Bitcoin mining business | ||||
Sonic Auspice | · A U.S. company of the State of Delaware | |||
· It was established to explore potential mining site operation opportunities but has not commenced any business operations but has undertaken limited financing and investment activities to third parties as of the date of this report | ||||
Bit Origin Singapore | · A Singapore company | |||
· It was established to engage in venture capital investment activities in the cryptocurrency industry but has not commenced any business operations as of the date of this report |
Liquidity and going concern
In assessing the Group’s liquidity, management monitors and analyzes the cash on-hand and its operating expenditure commitments. The Group’s primary liquidity needs are to meet its working capital requirements and operating expenses obligations for the next twelve months from the issuance date of these unaudited condensed consolidated financial statements.
For the six months ended December 31, 2025 and 2024, the Group incurred net losses of $
F-5
accumulated deficit amounted to $
To address these conditions, management has developed and executed the following measures.
| ● | On July 13, 2025, the Company entered into an equity purchase facility agreement (“EPFA”) with an accredited investor, committing the investor to purchase up to $ |
| ● | On April 16, 2026, the Company entered into a new securities purchase agreement for up to $ |
| ● | Management is focused on optimizing the Group’s cost structure by streamlining the corporate hierarchy and overall business processes. This strategic focus on operational efficiencies is expected to result in a sustainable reduction in operating expenses, thereby increasing its liquidity period. |
| ● | Management is actively building and managing a Dogecoin treasury as part of the Group’s digital-asset strategy. The Group holds this treasury as a source of liquidity that management may monetize through sales of Dogecoin when market conditions are favorable, thereby generating cash inflows to support working capital. Other than the Dogecoins acquired with the proceeds of the Group’s convertible debentures, which is subject to the contractual transfer restrictions described in Note 3, the treasury requires no significant capital commitments. Additional information regarding the Group’s broader Dogecoin ecosystem strategy is included in the Group’s annual report on Form 20-F for the year ended June 30, 2025. |
Management believes that the successful execution of these plans, in particular the Group’s ability to issue additional Class A Ordinary Shares under the $
Note 2 – Summary of significant accounting policies
Basis of presentation
The accompanying unaudited condensed consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operation results. The results of operations for the six months ended December 31, 2025 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2026. Accordingly, these statements should be read in conjunction with the Group’s audited financial statements as of and for the years ended June 30, 2025 and 2024.
Principles of consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation.
F-6
Use of estimates and assumptions
In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management make estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgement and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Group to revise its estimates. The Group bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates are used when accounting for items and matters including determinations of the useful lives and impairment of long-lived assets, determination of fair value of cryptocurrencies, allowances for credit losses and doubtful accounts, and realization of deferred tax assets and uncertain tax position. Significant judgment is also involved in the determination of the fair value of financial instruments, particularly the Group’s convertible debentures measured under the fair value option, which requires the use of valuation models and significant assumptions, including expected volatility, credit risk, discount rates, and other unobservable inputs. These assumptions are inherently subjective and may result in significant variability in the reported fair value.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and highly liquid deposits placed with banks or other financial institutions which are unrestricted as to withdrawal or use.
Cryptocurrencies
The Group adopted Accounting Standard Update (“ASU”) 2023-08 on July 1, 2025, which requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The amendments also require that an entity provide disclosures about significant holdings, contractual sale restrictions, and changes during the reporting period.
The Group’s holdings of Dogecoin meet the scope criteria in ASC 350-60 to be accounted for as crypto assets (fungible intangible assets that reside on a distributed ledger, are secured through cryptography, convey no enforceable rights to underlying goods or services, and were not issued by the Group or a related party). They are initially recognized at fair value on the date of acquisition and subsequently remeasured at fair value at each reporting period, with changes in fair value recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Fair value is determined using the closing price from the principal market for Dogecoin, which the Group has identified, in accordance with ASC 820, as the active market it has access to and normally uses to transact in Dogecoin. Because this is a quoted price in an active market for an identical asset, the Group’s Dogecoin is classified within Level 1 of the ASC 820 fair value hierarchy. The Group’s Dogecoins are held in custody by BitGo Trust Company, Inc. (“BitGo”), a regulated institutional digital asset custodian. Contractual restrictions on the sale of Dogecoin are not considered in measuring its fair value; the fair value of any restricted Dogecoin and the nature and remaining term of such restrictions are disclosed in Note 3. For dispositions, the Group accounts for realized gains or losses using the first-in-first-out (“FIFO”) method. The classification of cryptocurrencies as current or non-current is determined solely by management’s intent and ability with respect to holding the asset.
Other receivables, net
Other receivables include advances to third parties or employees and interest receivable. Management regularly reviews the adequacy of the allowance for credit losses on an ongoing basis and considers factors such as the aging of receivables and changes in payment trends, creditworthiness, current economic trend as well as other supportable forward-looking factors. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. During the six months ended December 31, 2025 and 2024, $
Loans receivable, net
Loans receivable are recorded at the cash amount disbursed to originate the loans, net of allowance that estimated on a regular basis based on an assessment of historical collection experience, adjusted for loan balance aging, credit quality and specific risk characteristics of the borrowers and prevailing economic conditions. The Group continues to evaluate the reasonableness of the allowance policy and update if necessary. During the six months ended December 31, 2025 and 2024, recovery of allowance for credit losses was
F-7
Allowance for credit losses
Allowance for credit losses represents management’s best estimate of probable losses inherent in the portfolio. The Group adopted Accounting Standard Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.
Under ASU 2016-13, the Group has exposure to credit losses for financial assets, which are other receivables and loans receivable. The Group considered various factors, including nature, historical collection experience, the age of the receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. The Group has adopted loss rate method to calculate the credit loss and considered the reverent factors of the historical and future conditions of the Group to make reasonable estimation of the risk rate.
Financial assets are presented net of the allowance for credit losses in the unaudited condensed consolidated balance sheets. The measurement of the allowance for credit losses is recognized through current expected credit loss expense. Current expected credit loss expenses are included as a component of general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. Write-offs are recorded in the period in which the asset is deemed to be uncollectible.
Prepayments
Prepayments are cash advanced to service providers for future services. This amount is refundable and bears no interest. During the six months ended December 31, 2025 and 2024,
Long term investment
The Group’s long-term investment relates to a minority equity interest in a privately held entity over which the Group has neither control nor significant influence; accordingly, the interest is not consolidated or accounted for under the equity method. Because the equity interest does not have a readily determinable fair value, the Group accounts for it using the measurement alternative under ASC Topic 321, Investments — Equity Securities, under which it is carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments, if any. As of December 31, 2025, the Group had advanced consideration toward this investment but had not yet legally obtained the equity interest; accordingly, the amount is presented as an advance toward the investment and will be reclassified and measured as described above upon completion of the transaction.
At each reporting date, the Group assesses whether events or changes in circumstances indicate that the investment is impaired. If qualitative factors indicate that the fair value of the investment is less than its carrying amount, the Group estimates the fair value of the investment. When the fair value is determined to be less than the carrying amount, an impairment loss is recognized in earnings equal to the difference between the two amounts.
Fair value measurement
The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Group.
ASC 820-10-20 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The accounting standards establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
F-8
The following table presents the Group’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis on December 31, 2025 and June 30, 2025:
| | | | | | Total | |||||||||
December 31, | June 30, | ||||||||||||||
| Level 1 | | Level 2 | | Level 3 | | 2025 | | 2025 | ||||||
(unaudited) | |||||||||||||||
Assets | |||||||||||||||
Cryptocurrencies | $ | | $ | — | $ | — | $ | | $ | — | |||||
Liabilities | |||||||||||||||
Convertible debentures | $ | — | $ | — | $ | ( | $ | ( | $ | — | |||||
Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. The Group noted
Convertible debentures and derivatives
For instruments accounted for as a single liability, debt issuance costs are recorded as a direct deduction from the carrying amount and are amortized to interest expense over the term of the debt using the effective interest method. Upon conversion into shares in accordance with the original contractual terms, the carrying amount of the debt is reclassified to equity, and no gain or loss is recognized in the income statement.
The Group elects to apply the fair value option (“FVO”) pursuant to ASC 825-10-25-4 after it considers the overall value of the embedded features to the instrument, whether the bifurcation provides a more faithful presentation of the instrument’s overall economics, and the applicability of selecting the FVO if such election is more appropriate. Under this election, the convertible debentures and derivatives are measured in their entirety at fair value, with changes in fair value recognized in earnings, except for the portion attributable to instrument-specific credit risk, which is recognized in other comprehensive income (“OCI”) in accordance with ASC 825-10-45-5. Transaction costs incurred in connection with the issuance of the convertible debentures are expensed as incurred in the period of issuance, consistent with ASC 825-10-25-3, which indicates that such costs are not included in the initial measurement of financial instruments measured at fair value. Changes in fair value attributable to factors other than instrument-specific credit risk are recognized in earnings; and changes in fair value attributable to the Group’s own credit risk are recognized in OCI and are not reclassified to earnings upon settlement, but instead are transferred within equity.
Warrants
The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Distinguishing Liabilities from Equity (“ASC 480”) and Derivatives and Hedging (“ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments, meeting the definition of a liability under ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. This includes determining whether the warrants are indexed to the Group’s own ordinary share and whether the warrant holders could potentially require net cash settlement in a circumstance outside of the Group’s control. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and is reassessed at each subsequent reporting date while the warrants are outstanding.
Warrants that meet all of the criteria for equity classification are recorded as a component of equity at fair value at the time of issuance and not subsequently remeasured. Warrants that do not meet the criteria for equity classification are recorded as liabilities, measured at fair value at issuance and subsequently remeasured to fair value at each reporting period, with changes in fair value recognized in earnings.
The Group recognizes on a prospective basis the value of the effect of the down-round feature in the warrants when the feature is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature will be treated as a deemed dividend and a reduction to income available to ordinary shareholders in the basic earnings per share (“EPS”) calculation.
F-9
Revenue recognition
The Group recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: (i) identifies the contract with the customer, (ii) identifies the performance obligations in the contract, (iii) determines the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the contract, and (v) recognizes revenue when (or as) the Group satisfies the performance obligation.
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
| ● | Variable consideration |
| ● | Constraining estimates of variable consideration |
| ● | The existence of a significant financing component in the contract |
| ● | Noncash consideration |
| ● | Consideration payable to a customer |
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Group did
Income taxes
The Group accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
F-10
Loss per share
Basic loss per share is computed using the two-class method pursuant to ASC 260, as the Company has two classes of ordinary shares with different dividend rights — Class B Ordinary Shares have no distribution right. Under the two-class method, net loss for the period is allocated between Class A and Class B Ordinary Shares based on their respective participation rights in undistributed earnings, and basic loss per share is computed by dividing loss available to holders of Class A Ordinary Shares by the weighted average number of Class A Ordinary Shares outstanding during the period. Diluted loss per share takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares, using the treasury stock method. Ordinary share equivalents having an anti-dilutive effect on loss per share are excluded from the calculation of diluted loss per share. For the six months ended December 31, 2025 and 2024, the Company was in a net loss position; accordingly, all potential ordinary shares were anti-dilutive and excluded from the calculation. Therefore, basic and diluted loss per share are the same for each class presented.
The following table presents the EPS of the Company for the six months ended December 31, 2025 and 2024, respectively:
| For the six months | | For the six months | |||
ended | ended | |||||
December 31, 2025 | December 31, 2024 | |||||
(unaudited) | (unaudited) | |||||
Net loss | $ | ( | $ | ( | ||
Basic and diluted loss per Ordinary Share |
| ( |
| ( | ||
Weighted average number of Class A Ordinary Shares outstanding - basic and diluted |
| |
| | ||
Segment reporting
ASC 280, Segment Reporting, (“ASC 280”), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, the chief operating decision maker (“CODM”) has been identified as the Group’s Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. As a whole, the Group has
The Group adopted ASU 2023-07, Improvements to Reportable Segment Disclosures, effective January 1, 2024, and applied the amendments retrospectively to all periods presented. The adoption did not impact the Group’s determination of its reportable segments.
Recent accounting pronouncements
New accounting pronouncements adopted
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. The Group adopted ASU 2023-09 on July 1, 2025, and the adoption of this ASU did not have a material effect on the Group’s unaudited condensed consolidated financial statements and related disclosures.
In March 2025, the FASB issued ASU 2025-02, “Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122” (“ASU 2025-02”), which rescinds the embedded SEC guidance in Topic S-99-1 of ASC 450 related to obligations to safeguard crypto assets under SAB 121. The amendments require entities with obligations to safeguard crypto assets to assess whether a contingent liability exists under ASC 450-20, “Loss Contingencies.” This guidance is effective for annual periods beginning after December 15, 2024, including interim periods, with early adoption permitted. The Group adopted ASU 2025-02 on July 1, 2025, and the adoption of this ASU did not have a material effect on the Group’s unaudited condensed consolidated financial statements and related disclosures.
F-11
New accounting pronouncements yet to be adopted
On January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 (disaggregation of income statement expenses) for non-calendar year-end entities. The clarification ensures that initial adoption is required in an annual reporting period (rather than unintentionally in an interim period) for entities with non-calendar year ends. The amendments align with the effective dates stated in ASU 2024-03 (annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027) and early adoption is permitted. The Group is currently evaluating the potential impact of ASU 2024-03 (as clarified by ASU 2025-01) on its unaudited condensed consolidated financial statements and related disclosures.
Except as mentioned above, the Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Group’s unaudited condensed consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.
Note 3 – Cryptocurrencies
Cryptocurrencies consisted of the following:
| December 31, | | June 30, | |||||||
2025 | 2025 | |||||||||
(unaudited) | ||||||||||
| Quantity | | Amount | | Quantity | | Amount | |||
| (unaudited) | |||||||||
Cryptocurrencies, current |
| |
| |
| |
| | ||
Dogecoin |
| | $ | |
| — | $ | — | ||
Cryptocurrencies, non-current |
| |
| |
| |
| | ||
Dogecoin |
| — | $ | — |
| — | $ | — | ||
The following table presents additional information about Dogecoins for the six months ended December 31, 2025:
December 31,2025 | |||||
Quantity | Value | ||||
| (unaudited) | | (unaudited) | ||
Opening balance |
| — | $ | — | |
Issuance of convertible debentures in exchange for Dogecoins (see Note 9 for details) |
| |
| | |
Issuance of Class A Ordinary Shares in exchange for Dogecoins (see Note 10 for details) |
| |
| | |
Change in fair value |
| — |
| ( | |
Ending balance |
| | $ | | |
A portion of the Group’s Dogecoin holdings, amounting to
The following table presents additional information about USDT for the six months ended December 31, 2025:
| December 31, 2025 | ||||
Quantity | Amount | ||||
| (unaudited) | | (unaudited) | ||
Opening balance |
| — | $ | — | |
Purchases of USDT |
| |
| | |
Offering expenses settled in USDT |
| ( |
| ( | |
Change in fair value |
| — |
| — | |
Ending balance |
| — | $ | — | |
F-12
Note 4 – Other receivables, net
Other receivables, net consist of the following:
December 31, | June 30, | |||||
| 2025 | | 2025 | |||
(unaudited) | ||||||
Advances to third parties[1] or employees | $ | | $ | | ||
Interest receivables |
| |
| | ||
Total other receivables | | | ||||
Less: allowance for credit losses | ( | ( | ||||
Total other receivables, net | $ | | $ | | ||
[1] Non-trade advances to third parties are short term in nature and are due on demand with no interest bearing. These advances were refundable and made in relation to establishing relationship for potential service providers of cryptocurrency operations.
Movements of allowance for credit losses are as follows:
| December 31, | | June 30, | |||
2025 | 2025 | |||||
(unaudited) | ||||||
Beginning balance | $ | | $ | | ||
Addition |
| |
| | ||
Write-off |
| — |
| ( | ||
Ending balance | $ | | $ | | ||
Note 5 – Loans receivable, net
Outstanding balances on loans receivable consist of the following as of December 31, 2025 and June 30, 2025:
December 31, | June 30, | |||||||||||
| Maturity | | Interest rate | | Collateral/Guarantee | | 2025 | | 2025 | |||
(unaudited) | ||||||||||||
Third party A |
| January 5, 2026 (Extended to January 5, 2027 on January 5, 2026) |
| % | None | $ | | $ | | |||
Third party A |
| April 30, 2025 (Extended to April 30, 2027 on April 30, 2026) |
| % | None |
| |
| | |||
Loans receivable from a third party | |
| |
| |
| | |||||
Allowance for credit losses | |
| |
| ( |
| ( | |||||
Loans receivable, net | |
| | $ | | $ | | |||||
Movements of allowance for credit losses are as follows:
| December 31, | | June 30, | |||
2025 | 2025 | |||||
(unaudited) | ||||||
Beginning balance | $ | | $ | | ||
(Recovery) addition |
|
| ( | |||
Ending balance | $ | | $ | | ||
Interest income of the above loans receivable for both the six months ended December 31, 2025 and 2024 amounted to $
F-13
Note 6 – Deposit for long-term investment
On September 5, 2025, the Group entered into an agreement to acquire a
Note 7 – Taxes
Income tax
Cayman Islands
Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders,
Canada
SonicHash Canada is incorporated in Canada and is subject to both federal and provincial income taxes for its business operation in Canada. The applicable tax rate is
United States
SonicHash US and Sonic Auspice are incorporated in the U.S. and are only subject to federal income taxes but no state income taxes as they did not conduct any business operation in Delaware. The applicable tax rate is
Singapore
SonicHash Singapore and Bit Origin Singapore are incorporated in Singapore and are subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. SonicHash Singapore was struck off on September 4, 2024 and had
Gain (loss) before provision for income taxes consisted of:
| For the six months | | For the six months | |||
ended | ended | |||||
December 31, 2025 | December 31, 2024 | |||||
(unaudited) | (unaudited) | |||||
Cayman | $ | ( | $ | ( | ||
United States |
| |
| ( | ||
Canada | — | — | ||||
Singapore | — | — | ||||
$ | ( | $ | ( | |||
F-14
Significant components of deferred tax assets were as follows:
| December 31, | | June 30, | |||
2025 | 2025 | |||||
(unaudited) | ||||||
Deferred tax assets | ||||||
Net operating loss carryforward in the U.S. |
| |
| | ||
Net operating loss carryforward in Canada | | | ||||
Net operating loss carryforward in Singapore | — | — | ||||
Valuation allowance | ( | ( | ||||
Total net deferred tax assets | $ | — | $ | — | ||
As of December 31, 2025, the Group’s net operating loss carry forward was approximately $
Uncertain tax positions
The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2025 and June 30, 2025, the Group did
Note 8 – Concentration of risks
Credit risk
Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash. The Group maintains its cash balances in various financial institutions located in different jurisdictions, including the United States and the Cayman Islands. In the U.S., the insurance coverage of each bank is $
There is a risk that some or all of the Group’s Dogecoins could be lost, stolen, or otherwise become inaccessible. The Group stores its Dogecoins in both hot and cold wallets with BitGo. Hot wallets, which are connected to the Internet, facilitate transactions but are more vulnerable to hacking and other cyber incidents. Cold wallets, which are kept offline, provide greater protection from external attacks but may result in delayed access to assets during market volatility and carry risks of internal error or misappropriation. The Group may maintain limited amounts of Dogecoin in internal operational wallets for transaction- processing purposes; however, the substantial majority of our digital-asset holdings are maintained in BitGo cold storage. BitGo also maintains commercial crime insurance covering certain losses relating to digital assets custodied with BitGo, subject to policy limits, conditions, and exclusions, which may not cover all potential losses.
The Group is also exposed to risk from its other receivables and loans receivable. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.
F-15
Note 9 – Convertible debentures
The Company has issued various convertible debentures in prior periods. Detailed terms of the 2022 and 2023 convertible debentures, including conversion features and associated warrants, are disclosed in the Company’s audited consolidated financial statements included in its Form 20-F for the year ended June 30, 2025. There have been no significant changes to those terms during the current interim period, except as noted below.
In July 2025, the Company entered into a series of securities purchase agreements with certain investors for the issuance of senior secured convertible notes (the “2025 Notes”) in
The Notes contain various embedded features, including conversion options, anti-dilution provisions, alternative conversion rights, and redemption features. The Company elected the fair value option under ASC 825-10 to account for the Notes. Accordingly, the Notes are measured at fair value in their entirety, with changes in fair value recognized in earnings, except for the portion attributable to instrument-specific credit risk, which is recognized in OCI.
Upon initial recognition, the 2025 Notes were recorded at fair value in accordance with the fair value option under ASC 825-10, with the resulting difference recognized in earnings. Issuance costs associated with the 2025 Notes are expensed as incurred in accordance with ASC 825-10-25-3.
The fair value of the 2025 Notes is determined using a binomial model and is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs, including expected volatility and assumptions related to the Company’s credit risk. The valuation model includes the following major inputs on the issuance date:
Discount rate | | | % |
Expected terms (in years) |
| | |
Expected volatility |
| | % |
Annual rate of quarterly dividends |
| — | % |
Risk free interest rate |
| | % |
As of December 31, 2025, the aggregate fair value of the Notes was approximately $
During the six months ended December 31, 2025, the Company made
The 2025 Notes were initially issued during the six months ended December 31, 2025 and are accounted for at fair value under the fair value option in accordance with ASC 825-10. As of June 30, 2025, the Company’s previously outstanding convertible debentures were not accounted for on a fair value basis, but rather under their historical accounting model. Accordingly, the June 30, 2025 balances are not directly comparable as a Level 3 fair value rollforward of the 2025 Notes. The table below summarizes the activity of the 2025 Notes during the current period, including principal activity and the related fair value remeasurement, and therefore reflects the substantive fair value rollforward for the six months ended December 31, 2025.
| December 31, | | June 30, | |||
2025 | 2025 | |||||
(unaudited) | ||||||
Principal balance | $ | | $ | | ||
Less: conversions into ordinary shares | — | ( | ||||
Less: repayments in cash | — | ( | ||||
Remaining balance | | — | ||||
Less: fair value adjustment |
| ( |
| — | ||
Total | $ | | $ | — | ||
Less: non-current | ( | — | ||||
Total current | $ | — | $ | — | ||
F-16
During the six months ended June 30, 2026, the holder exercised its right to convert $
Note 10 – Equity
The Company’s equity structure, including its authorized share capital, historical share issuances, and equity-linked instruments, is disclosed in its audited consolidated financial statements included in its Form 20-F for the year ended June 30, 2025. There have been no significant changes to the overall structure during the current interim period, except as described below.
The Company had a share capital of $
On July 25, 2025, the Company completed a par value reduction from $
On July 13, 2025, the Company entered into a securities purchase agreement with an accredited investor for the issuance of Class A ordinary shares. In August 2025, the Company completed a private placement issuing approximately
As of December 31, 2025, after giving effect to the January 2026 reverse share split, the Company had
Warrants
All warrant-related share and per share information, including the number of warrants outstanding, exercise prices, and weighted average exercise prices, have been retrospectively adjusted to reflect the reverse share split in January 2026.
The Company issued warrants in connection with prior financing arrangements. The detailed terms of these warrants, including original contractual provisions, are disclosed in the Company’s audited consolidated financial statements included in its Form 20-F for the year ended June 30, 2025. There have been no significant modifications to the contractual terms of the warrants during the current interim period, except for adjustments arising from anti-dilution provisions and the reverse share split.
Certain warrants contain down-round protection features that provide for adjustments to the exercise price and the number of shares issuable upon exercise if the Company issues equity instruments at a price lower than the then-current exercise price. During the six months ended December 31, 2025, such down-round provisions were triggered, resulting in a reduction in the exercise price (as retrospectively adjusted for the reverse share split) and a corresponding increase in the number of warrants outstanding. The fair value effect of the down-round adjustment was recognized in equity as a reclassification between retained earnings and additional paid-in capital in accordance with ASC 260-10-55-97 and was treated as a deemed dividend for purposes of earnings per share.
During the six months ended December 31, 2025, a significant portion of the warrants were exercised on a cashless basis. As a result, the Company issued Class A Ordinary Shares with no corresponding cash proceeds, and the carrying amount of the related warrants was reclassified within shareholders’ equity. The impact of such exercises has been reflected in the Company’s equity balances as of December 31, 2025.
F-17
Note 11 – Commitments and contingencies
Commitments
As of December 31, 2025, the Group had no material commitments that are required to be disclosed.
Contingencies
From time to time, the Group is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the unaudited condensed consolidated financial statements.
Note 12 – Subsequent events
New issuance of convertible notes - April 2026
On April 16, 2026, the Company entered into a securities purchase agreement for up to $
Settlement of accrued payroll payable
On June 11, 2026, the Company entered into a Debt Settlement and Mutual Release Agreement (the “Agreement”) with Jinghai Jiang, the CEO of the Group. Pursuant to the Agreement, the Company agreed to issue
Asset purchase agreement
On June 28, 2026, the Company entered into an asset purchase agreement with PT Mitra Manunggal Sangkara, an Indonesian limited liability company, pursuant to which the Company purchased certain GPU assets and certain related contractual rights at a purchase price of $
New issuance of convertible notes – June 2026
On June 28, 2026, the Company entered into a securities purchase agreement for up to $
Except as disclosed above, the Group has evaluated subsequent events that occurred after December 31, 2025 through June 30, 2026, and concluded that no other subsequent events occurred that would require recognition or disclosure in the unaudited condensed consolidated financial statements.
F-18