Revision of Previously Issued Financial Statements

3 Months Ended

Mar. 31, 2024

Revision of Previously Issued Financial Statements [Abstract]

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

3. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has noted the following matters in relation to its consolidated financial statements for the three months ended March 31, 2023 that had been filed on May 12, 2023. The matter  related to the adoption of fair value to measure digital assets, reclassification digital assets and stable coins, and reclassification of other income.

a. Adoption of fair value method to measure digital assets

The Company measures the fair value of digital assets on a daily basis, and refers to the daily closing prices published by Matrixport Cactus Custody as the fair value. As of January 1, 2023, the Company recorded a cumulative-effect adjustment of $30,600 to accumulated deficits. The adoption of fair value measure caused a reversal of impairment of digital assets of $223,000, recognition of increase in fair value of digital assets of $215,400 and reversal of exchange gains of $14,000.

b. Reclassification of digital assets and stablecoins

As Tether reserves the right under its user agreement to redeem USDT by in-kind redemptions of other assets it holds in its reserves and as Tether has held precious metals and other non-financial assets in its reserves, it does not appear that USDT meets the definition of a financial instrument under ASC 825-10-20. The Company reclassified USDT, amounting $2,300 as of March 31, 2023, from stable coins to digital assets. The reclassification had no impact on net assets as of December 31, 2022, and revenues and net loss for the three months ended March 31, 2023.

c. Reclassification of revenue and cost of revenues

The Company ceased solo-staking business in March 2024, and accordingly the Company reclassified revenues from solo-staking business to other income, net, and cost of revenues to general and administrative expenses. For comparison purpose, the Company reclassified revenues to other income, net, and reclassified cost of revenues to general and administrative expenses for the three months ended March 31, 2023.

The following tables present the effects of revisions on the Company’s financial statements as of March 31, 2023, and for the three months ended March 31, 2023: 

	March 31, 2023
Consolidated balance sheet	As previously reported			Adjustments			As Revised
Stable coins		2,510,400			(2,300	)		2,508,100
Digital assets		403,300			457,300			860,600
Accumulated deficits		(14,934,300	)		455,000			(14,479,300	)

	For the Three Months Ended March 31, 2023
Consolidated statements of operations	As previously reported			Adjustments			As Restated
Revenues		8,500			(8,500	)		-
Cost of revenues		(229,800	)		229,800			-
Gross loss		(221,300	)		221,300			-
General and administrative expenses		1,496,000			20,800			1,516,800
Total operating expenses		1,501,300			20,800			1,522,100
Other income, net		-			223,900			223,900
Loss from operations before income tax expenses		(1,722,600	)		424,400			(1,298,200	)
Net loss		(1,661,300	)		424,400			(1,236,900	)