Chaince Digital Holdings Inc. (CD)

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:

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)

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, 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:

[Excerpt truncated for page length; source filing is linked above.]

ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 years ended December 31, 2024 and 2025. This section should be read in conjunction with our audited
consolidated financial statements and the related notes included elsewhere in this Annual Report. See Audited Consolidated Financial
Statements of Chaince Digital Holdings Inc. (formerly known as Mercurity Fintech Holding Inc.) as of December 31, 2024 and 2025 and
for the years ended December 31, 2024 and 2025.

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

The
financial services business line has become the Company’s primary focus since March 2025, following FINRA’s approval for
Chaince Securities, LLC’s Continuing Membership Application (“CMA”), and now constitutes the Company’s primary
business segment.

Since
the commencement of its operations, Chaince Securities, Inc. has primarily focused on providing financial services. Its subsidiary, Chaince
Securities, LLC, is a FINRA-registered broker-dealer and registered investment advisor (RIA), offering investment banking and related
business consulting services to companies conducting securities offerings in the U.S. capital markets, as well as investment solutions
for institutions, high-net-worth individuals, and emerging issuers worldwide. The operations team is based in New York and actively conducts
business with clients based in the U.S.

Ucon
Capital (HK) Limited (“Ucon”), together with its PRC subsidiary, Chaince (Shenzhen) Consulting Co., Ltd., provides business
consulting services targeting clients in the Asia-Pacific region. Chaince (Shenzhen) Consulting Co., Ltd. was established in August 2025,
maintains an office in Shenzhen, and employs a full operations team locally.

21

Looking
ahead, the Company’s primary objective for the next one to two years remains focused on the financial services sector, with the
goal of expanding its customer base, growing revenue, narrowing operating losses, and working toward profitability, although there can
be no assurance that these objectives will be achieved within the anticipated timeframe.

On
November 12, 2025, the Company announced that it would rebrand from Mercurity Fintech Holding Inc. to Chaince Digital Holdings Inc. The
new corporate name, ticker symbol “CD,” and website at www.chaincedigital.com went live on November 13, 2025 at the opening
of trading on the Nasdaq Global Market. The rebranding was approved by the Company’s shareholders at its 2025 Annual General Meeting
held on September 15, 2025.

As
of March 20, 2026, the Company had a total of 79,409,800 ordinary shares issued and outstanding, of which 65,066,254 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 March 20, 2026 was $260,915,679. This amount is based on the closing price of the ordinary shares on Nasdaq of $4.01
per share on that date. Ordinary shares held by executive officers, directors and 10% or greater stockholders have been excluded since
such persons may be deemed affiliates.

Overview

The
Company’s current continuing operations are focused on financial services and advisory businesses. These activities are conducted
primarily through the Company’s wholly owned subsidiary, Chaince Securities, Inc., together with Chaince Securities, LLC and Ucon
Capital (HK) Limited and its subsidiaries. Through these entities, the Company provides capital markets advisory, investment banking,
brokerage-related, and business consulting services to corporate clients and institutional counterparties in the United States and Asia-Pacific
region.

Set
forth below is an overview of the Company’s current continuing operations and a summary of its discontinued operations.

Financial
services and advisory businesses

Since
August 2022, the Company has operated in the financial services and advisory sector. Following the approval of Chaince Securities, LLC’s
Continuing Membership Application (“CMA”) by the Financial Industry Regulatory Authority (“FINRA”) in March 2025,
the financial services and advisory business has become the Company’s primary operating focus and a core component of its long-term
strategy.

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 services and related business consulting services to
companies pursuing securities offerings in the U.S. capital markets, as well as investment solutions to institutional investors, high-net-worth
individuals, and emerging issuers globally. The operations team is based in New York, United States, and actively conducts business with
clients primarily 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
operations

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. 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 the agreement, the Company leased back the equipment through April 30, 2026 solely to allow existing
mining nodes to naturally expire. Upon expiration of the mining nodes, the Company expects to fully exit Filecoin mining operations and
settle all remaining obligations related to such activities.

22

MFH
Tech will continue to exist as a legal entity following completion of the wind-down process and may be used to conduct other digital
asset-related or technology-enabled businesses in the future. The discontinuation relates solely to the Filecoin mining business and
does not represent a liquidation or dissolution of MFH Tech.

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 consolidated statements of operations and cash flows for all periods presented. Prior period
financial information has been reclassified to conform to the current period presentation.

As
of December 31, 2025, the Company’s subsidiaries are as follows:

Results
of Operations

Comparison
of Results of Operations for the years ended December 31, 2025 and 2024

The
following summary of the audited 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 audited 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)

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]