| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going
concern The
Company had an accumulated deficit of approximately $ 677 9.4 approximately
$ 2.8 With
the restructuring of the board and management in the second half of 2022, the Company secured new financing and clarified new business
plans. The Company received $ 3.15 5 5 9 6 The
current and anticipated future businesses of the Company include:
1) Business
and financial consultation services: We provide comprehensive business and financial consulting
services and industry resource support to global corporate clients based on the resource
advantages we have accumulated over the years. From August 2022 to the end of 2023, we have
signed two clients and generated accumulated revenue of $ 240,000
2) Financial
advisory services and Brokerage services: a) Financial advisory services, focus on providing
comprehensive professional services to corporate clients in emerging countries and regions
planning to enter the US capital markets, such as helping the clients improve operations
and compliance, achieving market entry and expansion, introducing and coordinating professional
service institutions, and providing capital operation plans, private equity financing services,
investment consulting services, and mergers and acquisitions services. b) Brokerage services,
including securities underwriting, securities brokerage, asset management, etc. It should
be emphasized that our financial advisory services businesses (excluding business consultation
services such as introducing professional service institutions to the clients who want to
become publicly traded in the United States, and helping them coordinate the progress of
each professional service institution’s work.) and brokerage services (securities underwriting
and other brokerage services) can only be carried out after we have completed the acquisition
of J.V. Delaney & Associates and obtained the financial license required for brokerage
services business. In August 2023, we entered the Continued Membership Application process
with FINRA. Ideally, we anticipate receiving approval in the first half of 2024.
3) Distributed
storage and computing services, including cryptocurrency mining and cloud storage services
for other decentralized platform operators. In December 2022, the Company purchased a series
of Web3 decentralized storage infrastructure, including cryptocurrency mining servers, cables,
and other electronic devices, for an aggregate consideration of USD$ 5,980,000 286,276 Although
the Company did not achieve ideal results in 2023, the management believes that the Company is about to embark on a period of improvement.
As a result, the consolidated financial statements have been prepared assuming the Company will continue as a going concern. The accompanying
consolidated financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities
as that might be necessary if the Company is unable to continue as a going concern. Basis
of presentation and use of estimates The
accompanying consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles
(“U.S. GAAP”). The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and
the reported amounts of Revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s
consolidated financial statements include, but are not limited to, allowance for credit losses, useful lives of property and equipment
and intangible assets, impairment of long-lived assets, long-term investments and goodwill, the valuation of cryptocurrencies, realization
of deferred tax assets, uncertain income tax positions, share-based compensation, valuation of contingent consideration from business
combination and purchase price allocation for business combinations and assets acquisition. Actual results could materially differ from
those estimates. Principle
of consolidation The
consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries and VIEs in which it
has a controlling financial interest. The results of the subsidiaries and VIEs are consolidated from the date on which the Group obtained
control and continue to be consolidated until the date that such control ceases. A controlling financial interest is typically determined
when a company holds a majority of the voting equity interest in an entity. Furthermore, if the Company demonstrates that it has ability
to control the VIEs through its rights to all the residual benefits of the VIEs and its obligation to fund losses of the VIEs then the
entity is consolidated. All significant intercompany balances and transactions among the Company, its subsidiaries and VIEs have been
eliminated on consolidation. Reclassification Certain
prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net
earnings and financial position. Business
combinations The
Group accounts for its business combinations using the purchase method of accounting in accordance with ASC 805 (“ASC 805”),
“Business Combinations”. The purchase method of accounting requires that the consideration transferred to be allocated to
the assets, including separately identifiable assets and liabilities the Group acquired, based on their estimated fair values. The consideration
transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities
incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition
date. Contingent consideration is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration
is remeasured to fair value as of each reporting date until the contingency is resolved, and subsequent changes in fair value are recognized
in earnings. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent
liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of
any non-controlling interests. The excess of (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition
date fair value of any previously held equity interest in the acquiree over, (ii) the fair value of the identifiable net assets of the
acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired,
the difference is recognized directly in earnings. If
investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is
accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does
not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of relative fair
values. Discontinued
operations A
disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if the disposal
represents a strategic shift that has (or will have) a major effect on an entity’s operations. Classification as a discontinued
operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. Where an operation
is classified as discontinued, a single amount is presented on the face of the consolidated statements of operations. The amount of total
current assets, total non-current assets, total current liabilities and total noncurrent liabilities are presented separately on the
consolidated balance sheets. Use
of estimates The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of Revenue and expenses during the period. Areas where management uses subjective judgment include,
but are not limited to, provision for other receivables, estimating useful lives and impairment for intangible assets, impairment of
goodwill, valuation allowance for deferred tax assets and share-based compensation. Changes in facts and circumstances may result in
revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial
statements. Foreign
currency The
functional and reporting currency of the Company is the United States dollar (“U.S. dollars”, “US$” or “$”).
The functional currency of the Company’s subsidiary, Mercurity Limited, is U.S. dollars. The functional currency of the Company’s
HK subsidiaries, Ucon, is the United States dollar (“U.S. dollars”, “US$” or “$”). The functional
currency of NBPay Investment limited is the United States dollar (“U.S. dollars”, “US$” or “$”).
The functional currency of NBPay Fintech Pte Ltd is the United States dollar (“U.S. dollars”, “US$” or “$”).
The financial records of the Group’s subsidiary and VIE located in the PRC are maintained in their local currencies, the Renminbi
(“RMB”), respectively, which are also the functional currencies of these entities. Transactions
denominated in currencies other than the respective entities’ functional currencies are re-measured into the functional currencies,
in accordance with Accounting Standards Codification (“ASC”) 830 (“ASC 830”) Foreign Currency Matters, at the
exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured
into the functional currencies at the exchange rates prevailing at the balance sheet date. All foreign exchange gains or losses are included
in the consolidated statements of operations. Assets
and liabilities are translated to the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated
at historical exchange rates and Revenue, expenses, gains and losses are translated using the average rate for the year. Translation
adjustments are reported as cumulative translation adjustments and are shown as a separate component of consolidated statements of comprehensive
loss. Cash
and cash equivalents Cash
and cash equivalents consist of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted
as to withdrawal and use and have original maturities less than three months. Security
Deposit Security
deposit is money that is given to a landlord, lender, or seller of a home or apartment as proof of intent to move in and care for the
domicile. The
security deposits of the Company on the balance sheet for the year ended December 31, 2022 are the frozen funds deposited in the Company’s
bank account in accordance with the office rental contract, including $ 33,909 57,300 Short-term
Investment Short-term
investment represents certificates of deposits and fixed coupon notes with original maturities of greater than three months but less
than a year, as well as stocks and ETFs held in the short term and readily available for sale. Accounts
receivable, net of allowance Since
January 1, 2020, the company adopted the new Current Expected Credit loss rule (“CECL” standard) and recognizes its estimate
of expected credit losses as an allowance to its account receivable. The
Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements. The Company
maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments.
The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable
considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing
evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Changes in the
allowance for credit losses are recognized in general and administrative expenses. Accounts receivable are written-off against the allowance
for credit losses when management deems the accounts are no longer collectible. Allowance
for credit losses related to the Company’s accounts receivable was $ 1,147,131 1,092,208 54,923 Property
and equipment, net Property
and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, as follows: SCHEDULE
OF PROPERTY, PLANT AND EQUIPMENT USEFUL LIFE
Category Estimated Useful Life Estimated Residual
Machinery and equipment 6 10 %
Electronics and office equipment 5 5 % Repair
and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extend the useful lives of
property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by
removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected
in the consolidated statements of comprehensive loss. Intangible
Assets We
classify the cryptocurrencies the Company hold as indefinite-lived intangible assets. Intangible
assets with indefinite useful life are not amortized and are tested for impairment annually or more frequently, if events or changes
in circumstances indicate that they might be impaired in accordance with ASC Subtopic 350-30, Intangibles-Goodwill and Other: General
Intangibles Other than Goodwill (“ASC 350-30”). The
intangible assets of the Company are cryptocurrencies which are measured at cost less impairment. The cryptocurrencies received from
cryptocurrency mining operations recognize the cost of intangible assets based on the market price at the time of acquisition. Due
to the price crash of Bitcoin in 2022, the Company, out of caution, decided to change the impairment test method of Bitcoin and other
cryptocurrencies from testing once or twice a year by calculating the fair value based on the average daily closing price of the past
12 months to testing every day by calculating the fair value based on the intraday low price. ASC 350-30-35-18 and ASC 350-30-35-19 call
for us to consider all circumstances that could lead to impairment of the intangible assets, take a more cautious method to test whether
impairment of the intangible assets is likely to occur, and test more frequently. The intraday low price of cryptocurrencies to be utilized
in calculating impairment of our cryptocurrencies held as that metric is the most accurate indicator of whether it is more likely than
not that the asset is impaired. We
estimated the fair values of the Filecoins based on the intraday low price of the Coinbase platform every day, and we recognized $ 303,276 3,944,809 We
estimated the fair values of the cryptocurrencies based on the intraday low price of the Feixiaohao platform every day, and we recognized
$ 3,144,053 We
recognized $ 1,292,568 Impairment
of goodwill The
Company annually, or more frequently if the Company believes indicators of impairment exist, reviews the carrying value of goodwill to
determine whether impairment may exist. Specifically,
goodwill impairment is determined using a two-step process. The first step compares the fair value of each reporting unit to its carrying
amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired
and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares
the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value
of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value
determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit
over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any
excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various
valuation techniques, with the primary technique being a discounted cash flow. The
Company has determined to perform the annual impairment tests on December 31 of each year. All of the $ 8,107,014 Due
to the extremely adverse regulatory measures taken by the Chinese government in 2021 in the field of digital currency production and
transaction, the Company’s board of Directors decided on December 10, 2021 to divest the China subsidiaries of Mercurity Limited
and NBPay controlled through VIE agreements, and the divestiture was completed on January 15, 2022. The
Company considered that Mercurity Limited and NBPay would no longer be able to carry on their original businesses after the divestiture
of these China subsidiaries, and the present value of Mercurity Limited and NBPay’s reestimated future operating cash flows would
be nil 8,107,014 As
a result, the Company recognized the impairment loss of goodwill of $ 8,107,014 Revenue
recognition On
January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), which supersedes
the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC 605”), using the modified retrospective
transition method applied to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning
after January 1, 2019 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance
with historic accounting under ASC 605. The impact of adopting the new revenue standard was not material to consolidated financial statements
and there was no adjustment to beginning retained earnings on January 1, 2019. Under
ASC 606, an entity recognizes revenue as the Company satisfies a performance obligation when its customer obtains control of promised
goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the
following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii)
determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step
model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods
or services it transfers to the customer. Once
a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which
performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based
on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied
or as it is satisfied. The
Company generates revenue primarily from business consultation services and distributed storage and computing services in the year ended
December 31, 2023. The
Company’s revenue recognition policies effective on the adoption date of ASC 606 are as follows: Business
consultation services The
Company recognized the realization of the consultation service revenue by using Output Methods. According to ASC 606-10-55-17, Output
methods recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date
relative to the remaining goods or services promised under the contract. Output methods include methods such as surveys of performance
completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or units delivered. When an entity
evaluates whether to apply an output method to measure its progress, the entity should consider whether the output selected would faithfully
depict the entity’s performance toward complete satisfaction of the performance obligation. An output method would not provide
a faithful depiction of the entity’s performance if the output selected would fail to measure some of the goods or services for
which control has transferred to the customer. For example, output methods based on units produced or units delivered would not faithfully
depict an entity’s performance in satisfying a performance obligation if, at the end of the reporting period, the entity’s
performance has produced work in process or finished goods controlled by the customer that are not included in the measurement of the
output. The Company calculates the output value and recognizes revenue by evaluating the percentage-of-completion of the contract at
the end of each month. On
August 23, 2022, the Company signed a Consulting Agreement with a Chinese media company, pursuant to which the Company will serve as
a business consultant in order to facilitate the client to establish its operating entity in the United States and related financing
strategy, and the agreed amount of the immutable consideration portion of the agreement is $ 160,000 50 80,000 80,000 On
August 1, 2023, the Company signed a supplementary comprehensive service agreement with the Chinese media company. The Company will continue
to assist the client in providing management consulting services and introducing professional service agency resources. The Company expects
to receive no less than $ 150,000 40 60,000 On
November 1, 2023, the Company signed a financial consulting agreement with a American logistics company. The Company will serve as a
business consultant in order to facilitate introductions between the Company’s clients and esteemed third-party audit firms, legal
representatives, and underwriting entities that are crucial for the clients’ fundraising endeavors within the U.S. capital market.
The Company expects to receive $ 50,000 40 20,000 Distributed
storage and computing services The
Company’s distributed storage and computing services business includes cryptocurrency mining and cloud storage services for other
decentralized platform operators. From
October 2021 to April 2022, the Company obtained the usage rights of a certain number and specific models of Bitcoin mining machines
and specific business premises by executing contracts with the sharing mining service provider, and registered as users on the mining
pool website, complying with the general terms and conditions required to join the mining pool published on the mining pool website,
to increase computing power to the mining pool. In exchange for providing computing power, the Company was entitled to a fractional share
of the fixed digital asset awards the mining pool operator receives, for successfully adding blocks to the blockchain. The Company’s
fractional share was relative to the proportion of computing power the Company contributed to the mining pool operator toward the total
computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset
transaction verification services was an output of the Company’s ordinary activities. The provision of such computing power was
the only performance obligation in the general terms of the mining pool website. The transaction consideration the Company received,
if any, was noncash consideration, which the Company measured at fair value on the date received, which was not materially different
than the fair value at contract inception or the time the Company had earned the award from the pools. These considerations were all
variable. Since significant reversals of cumulative revenue were possible given the nature of the assets, the consideration was constrained
until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company received confirmation
of the consideration it would receive, at which time revenue was recognized. There was no significant financing component related to
these transactions. Fair value of the digital assets award received was determined using the quoted price of the related digital assets
at the time of receipt. The Company earned $ 783,090 664,307 On
December 15, 2022, the Company entered into an asset purchase agreement with Huangtong International Co., Ltd., providing for the acquisition
and purchase of Web3 decentralized storage infrastructure, including cryptocurrency mining servers, cables, and other electronic devices,
for an aggregate consideration of USD$ 5.98 348 285,928 Cost
of revenue Business
consultation services The
cost of consultation services consists primarily of payroll of the consultation project team. The cost of consultation services was recognized
in the amount of $ 19,000 138,092 Distributed
storage and computing services The
cost of the Bitcoin shared mining operation includes the rental fee of the mining machine and the mine site, electricity and other possible
operation and maintenance expenses. There were no Bitcoin mining operations in the year ended December 31, 2023. The cost of Bitcoin
shared mining operations was recognized in the year ended December 31, 2022 in the amount of $ 1,291,784 1,036,741 255,043 The
cost of the Filecoin physical mining operation includes mining machine depreciation costs, mine site lease costs (including electricity),
direct labor costs and software licensing costs. The cost of Filecoin physical mining operations was recognized in the year ended December
31, 2023 in the amount of $ 1,286,220 897,435 291,347 4,000 93,438 69,817 28,950 22,075 4,000 14,792 Sales
and marketing expenses Sales
and marketing expenses consist primarily of project referral fees for consultation services business. These costs are expensed as incurred. Operating
leases The
Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the
term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor.
The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or
periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by
renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating
or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated
statements of operations over the lease term. For
leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at
lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating
lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs
incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present
value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information
available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s
incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment
of the associated lease. For
the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term.
For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and
are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term
lease exception were insignificant. Variable lease costs are recognized as incurred and primarily consist of common area maintenance
and utility charges not included in the measurement of right of use assets and operating lease liabilities. The
leasing activities of the Company during 2022 and 2023 are all for the Company to lease the office as the lessee and the Company classified
them as operating leases, among which, the Company signed a long-term lease contract with a term of about 35 months for the New York
office. The Company recognized right-of-use assets and lease liabilities on the consolidated balance sheet as of December 31, 2022 and
2023. Income
taxes The
Company follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes.
Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax
bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to
reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The
Company applies the provision of ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty
in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated
financial statements. The
Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income
tax expense in the consolidated statements of operations. Share-based
payments In
the second quarter of 2017, the Company elected to early adopt ASU No. 2016-09, Compensation Stock Compensation (“ASC 718”):
Improvement to Employee Share based Payment Accounting. Share
options and restricted shares granted to employees and directors are accounted for under ASC 718, “Compensation – Stock compensation”.
In accordance with ASC 718, the Company determines whether a share option or restricted shares should be classified and accounted for
as an equity award. All grants of share options and restricted shares to employees and directors classified as equity awards are recognized
in the financial statements based on their grant date fair values. Share-based
payment awards with employees are measured based on the grant date fair value of the equity instrument issued, and recognized as compensation
costs using the straight-line method over the requisite service period, which is generally the vesting period of the options, with a
corresponding impact reflected in additional paid-in capital. The
total amount of compensation cost recognized at the end of the requisite service period for an award of share-based compensation shall
be based on the number of instruments for which the requisite service has been rendered (that is, for which the requisite service period
has been completed). Previously recognized compensation cost shall not be reversed if an employee share option (or share unit) for which
the requisite service has been rendered expires unexercised (or unconverted). To determine the amount of compensation cost to be recognized
in each period, the Company shall make an entity wide accounting policy for all employee share-based payment awards to do the following:
Recognize the effect of awards for which the requisite service is not rendered when the award is forfeited (that is, recognize the effect
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