Note 1 — Organization and Principal Activities

Lion Group Holding Ltd. (the “Company”, “Lion” or “LGHL”) is a company with limited liability registered as an exempted company in the Cayman Islands.

The Company and its subsidiaries (collectively referred to as the “Group”) provide securities, futures and derivatives brokerage services, insurance brokerage services, total return swap trading services, and market maker trading services. As a result of the consummation of a business combination (the “Closing”) with Proficient Alpha Acquisition Corp., a Nevada corporation (“PAAC”) which was accounted for as a reverse recapitalization, the Company’s ordinary shares and warrants started to be traded on the NASDAQ Capital Market under the ticker symbols LGHL and LGHLW, respectively on June 17, 2020. Each American Depositary Shares (“ADSs”) of the Company represented one Class A ordinary share upon the Closing. On July 13, 2023 and March 26, 2025, the ADS ratio was changed from one (1) ADS representing one (1) Share to one (1) ADS representing fifty (50) Shares, and further to one (1) ADS representing two thousand and five hundred (2,500) shares, respectively. The number of ADSs and the price per ADS prior to the ratio change event herein have been retrospectively adjusted for its effect.

Principal Activities

The Group earns income and fees from the following streams:

The Group’s trading customers consist of corporate clients, individual traders and retail investors primarily located in the People’s Republic of China (“PRC”) and Southeast Asia, although its trading platform allows it to serve customers worldwide. The Group also generated commission revenues by providing insurance brokerage services to high-net-worth individuals primarily located in the PRC.

During the second half of 2024, the Group returned Type 1 License for Dealing in Securities, Type 4 License for Advising on Securities and Type 9 Asset Management to Hong Kong Securities and Futures Commission (“HKSFC”). In the beginning of 2025, the Group withdrew the trading member of Singapore Exchange Derivative Trading Limited (“SGX DT”). Subsequently in 2025, the Group cancelled the Capital Markets Service License (“CMS License”) issued by the Monetary Authority of Singapore and returned the license Type 2 License for Dealing in Futures Contracts and Type 5 License for Advising on Futures Contracts to HKSFC.

As of June 30, 2025, the Company, through a subsidiary, possesses the full license issued by Cayman Islands Monetary Authority (“CIMA”) to carry out securities investment business including Broker Dealer and Market Maker.

In July 2025, the Group collaborates with Autonomous Holdings (“Autonomous”), a leading digital asset investment platform known for its innovative products and solutions, and Galaxy Digital Holdings Ltd. (NASDAQ/TSX: GLXY) (“Galaxy Digital”) to advance digital asset treasury strategies. This initiative positions the Group as a cutting-edge digital asset company, leveraging institutional-grade expertise to enhance shareholder value. As part of this collaboration, Autonomous will act as a strategic advisor for the Group’s digital asset treasury allocation process. Additionally, Galaxy Digital will facilitate trading and execution, providing access and liquidity through its institutional-grade global markets platform. The treasury strategy aims to target high-potential blockchain ecosystems, primarily Hyperliquid (HYPE), thereby gaining exposure to next-generation DeFi, scalability, and Web3 infrastructure.

Note 2 — Significant Accounting Policies

Note 3 — Revenue Recognition

Under ASC Topic 606 Revenue from Contracts with Customers, revenues are recognized when control of the promised goods or services is transferred to customers in exchange for an amount that reflects the consideration the Group expects to be entitled to and in return for transferring those goods or services.

Significant Judgments

Revenue from contracts with customers includes commission income from securities, futures and derivative brokerage, market making trading and insurance brokerage. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events.

Commissions and Fees

The Group earns fees and commissions from securities, futures and derivatives brokerage services (including commissions and fees related to TRS trading business and CFD trading services when the Group acts as a market maker). Each time a customer executes a securities, futures, derivative or CFD transaction, commissions and fees are earned. Commissions and related clearing fees and expenses are recorded on the trade date. The performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership are transferred to/from the customer. The Group charges securities brokerage commissions and market making commissions based on the amount of transaction volume, or the number of shares, lots of contracts executed in each order, which generally vary in accordance with the type of products or services the Group offers.

The Group also earns commission income arising from insurance brokerage services which are recognized at a point in time when the performance obligation has been satisfied by successfully referring an insurance client to an insurer in accordance with the relevant broker contract. The commission earned is equal to a percentage of the premium paid to the insurance provider.

All of the Group’s revenues from contracts with customers are recognized at a point in time.

Note 4 — Fair Value

Fair Value Hierarchy

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy of fair value inputs. Fair value is 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. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

A description of the valuation techniques applied to the Group’s major categories of assets and liabilities measured at fair value on a recurring basis follows.

Exchange-traded equity securities and futures are generally valued based on quoted prices at the close of trading on the period end date. To the extent these securities and futures are actively traded, valuation adjustments are not applied, and they are categorized in level 1 of the fair value hierarchy; otherwise, they are categorized in level 2 or level 3 of the fair value hierarchy.

Listed derivatives that are actively traded are valued based on quoted prices at the close of trading on the period end date and are categorized in level 1 of the fair value hierarchy. Listed derivatives that are not actively traded are valued using the same approaches as those applied to over-the-counter (“OTC”) derivatives; they are generally categorized in level 2 of the fair value hierarchy.

Depending on the product and the terms of the transaction, the fair value of OTC derivative products can be either observed or modeled using a series of techniques and model inputs from comparable benchmarks. Substantially all of the Group’s OTC derivatives were carried at fair value based on spot exchange rates broadly distributed in active markets, or amounts approximating fair value. Such values are categorized as level 2 of the fair value hierarchy.

Digital assets and obligation to deliver digital assets are classified as level 1 financial instruments, as their value is derived using quoted prices from its principal market as of the measurement date.

Note 5 — Fixed Assets, Net

Depreciation expense was $1,195,686, and $1,224,133 for the six months ended June 30, 2025 and 2024, respectively, and are included in operating expenses.

Note 6 — Digital Assets

For the six months ended June 30, 2025, the Group purchased 79,777 tokens of HYPE, 6,629 tokens of SOL and 356,129 tokens of SUI at cost of $3,000,000, $1,000,000 and $1,000,000, respectively, from open market. The Group deposited all these digital assets with the custodian in the blocked custodial control account and staked in accordance with the Security and Pledge Agreement (the “S&PA”) entered into between the Company and the investor of June 2025 Convertible Debenture (see Note 9). The digital assets purchased out of the proceeds from the debentures served as the security interests to the convertible debentures, and can be transferred out of custodial control account and/or exchanged into cash when the Obligations (as defined in the S&PA) are paid in full, including that no principal amount in respect of any debenture issued pursuant to the June 2025 SPA (see Note 9) remains outstanding. Therefore the Company classified digital assets as non-current assets on the unaudited condensed consolidated balance sheets. For the six months ended June 30, 2025, the Group did not sell digital assets or realize gains or losses from trading digital assets.

For the six months ended June 30, 2025, the Company recognized an increase in fair value of digital assets of $157,645 in the “changes in fair value of digital asses” on the unaudited condensed consolidated statements of operations and comprehensive loss.

Additional information about digital assets

Note 7 — Obligation to Deliver Digital Assets

In connection with the issuance of June 2025 Convertible Debenture (See Note 9), the Company entered into a Right to Receive Tokens agreement on June 23, 2025 (“Right to Receive Tokens”), pursuant to which the counterparty of the Right to Receive Tokens was entitled to receive from the Company, upon exercise of this Right to Receive Tokens at any time on or after the two-year anniversary of the applicable closing in respect of June 2025 SPA, 24% of each type of Tokens purchased with the net proceeds of such closings. If the Company fails to deliver the Tokens, the Company will be required to pay in cash to the counterparty of the Right to Receive Tokens an amount calculated based on the number of Tokens and the Tokens’ trading price prevailing on the date of exercising the right to receive tokens.

Upon issuance of convertible debenture on June 23, 2025, an aggregate of $1,560,000, representing 24% of the purchase cost of digital assets at $6,500,000 was initially assigned to the Company’s obligation to deliver the digital assets in connection with the Right to Receive Tokens and recorded in the account of “Obligation to deliver digital assets” on the unaudited consolidated balance sheets. For the six months ended June 30, 205, the Company also recognized an increase in fair value of obligation to deliver digital assets of $37,835 in the account of “changes in fair value of digital asses” on the unaudited condensed consolidated statements of operations and comprehensive loss.

Note 8 — Short-term Borrowings

In April 2025, the subsidiary of the Company borrowed a short-term revolving loan in a principal of approximately $385,000 (HKD 3 million) from a third-party lender, due on July 31, 2025 at the interest rate of 8.00% per annum. The Company's CEO provided personal guarantee as collateral. In June 2025, the outstanding principal, together with accrued interest of approximately $37,500 were fully settled. This loan was subsequently reborrowed for the same amount in July 2025.

Note 9 — Convertible Debentures

January 2024 Convertible Debentures, under August 2022 SPA

As of December 31, 2024, the carrying amount of the hybrid January 2024 Convertible Debenture was approximately $54,000, including its embedded derivative liability of approximately $18,000. In March 2025, the remaining debenture was fully converted into an aggregate of 56,337,500 Class A ordinary shares. The Company recognized interest expense aggregating approximately $2,000 and $198,000 for the six months ended June 30, 2025 and 2024, respectively, resulting from the amortization of the debt discounts in connection with the debentures issued under August 2022 SPA.

August 2024, January 2025 and May 2025 Convertible Debentures, under August 2024 SPA

On August 9, 2024, the Company entered into a Securities Purchase Agreement (the “August 2024 SPA”) with a purchaser (the “Purchaser”), pursuant to which the Company received net proceeds of $1,400,000 on the same date (the “First Closing”) in consideration of the issuance of Convertible Debenture (the “August 2024 Convertible Debenture”) in the principal amount of $1,500,000 and the issuance of warrant (the “Series J Warrant”) to purchase 80,357 ADSs of the Company with an exercise price equal to $14.00 per ADS and having a term of exercise expiring on August 9, 2031. August 2024 Convertible Debenture is convertible into ADSs at the option of the holder, beginning after its original date of issuance at a conversion price that is the lesser of $14.00 or 90% of the lowest daily VWAP for the ten (10) trading days immediately prior to conversion, in no event that the conversion price shall be lower than $1.78, subject to adjustment, per ADS. The Company also granted the Purchaser the right to purchase an additional $23,750,000 of Debentures within 24-month anniversary of the First Closing Date.

On January 23, 2025, the Purchaser exercised its subsequent closing right and purchased an additional debenture (the “January 2025 Convertible Debenture”) having a principal balance of $2,135,000, pursuant to which the Company received net proceeds of $2,000,000 on the same date (the “Second Closing”). January 2025 Convertible Debenture is convertible into ADSs, beginning after its original date of issuance at a conversion price at the lower of $8.00 and 90% of the lowest daily VWAP for the ten (10) trading days immediately prior to the conversion date, in no event that the conversion price shall be lower than $1.60, subject to adjustment, per ADS. The Company also issued a Series K Warrant (the “Series K Warrant”) to purchase up to 200,156 ADSs, with an exercise price equal to $8.00 per ADS and having a term of exercise expiring on January 23, 2032.

On May 23, 2025, the Purchaser exercised its subsequent closing right and purchased an additional debenture (the “May 2025 Convertible Debenture”) having a principal balance of $750,000, pursuant to which the Company received net proceeds of $705,000 on the same date (the “Third Closing”). May 2025 Convertible Debenture is convertible into ADSs, beginning after its original date of issuance at a conversion price at the lower of $2.71 and 90% of the lowest daily VWAP for the ten (10) trading days immediately prior to the conversion date, in no event that the conversion price shall be lower than $0.54, subject to adjustment, per ADS. The Company also issued a Series L Warrant (the “Series L Warrant”) to purchase up to 140,625 ADSs, with an exercise price equal to $4.00 per ADS and having a term of exercise expiring on May 23, 2032.

Note 10 — Convertible Preferred Shares and Attached Warrants

Subsequent Changes to February 2021 and December 2021 Warrants in 2025

On January 9, 2025, the Company entered into an amendment to the Series E Warrant with the holder. Pursuant to the amendment, the parties agreed to amend the exercise price of the Warrant from $56.50 per ADS to the lower of (x) $56.50 and (y) 90% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date (“Market Exercise Price”), provided that the aggregate exercise price under the Market Exercise Price shall not exceed $10,000,000. The parties also agreed to extend the termination date of Series E Warrant from February 18, 2027 to January 9, 2028. In accordance with paragraph ASC 815-40-35-17(d), the Company recognized the incremental fair value of the warrants aforementioned as a dividend and a reduction to income available to ordinary shareholders in the basic EPS calculation for the six months ended June 30, 2025, in an amount of approximately $612,000. The fair value of Series E Warrants immediately before the modification is estimated to be at $0.305 per ADS, by using Binomial Option Pricing Model with an expected term of 2.11 years, a stock price of $8.90 per ADS, volatility of 100.16%, a risk free rate of 4.02% and an expected dividend yield of 0%. The fair value of Series E Warrants after the modification is estimated to be at $1.19 per ADS, by using Monte Carlo simulation with an expected term of 3.0 years, a stock price of $8.90 per ADS, volatility of 96.92%, a risk free rate of 4.02%, and an expected dividend yield of 0%.

On May 23, 2025, as a result of the issuance of Series L Warrants (as discussed in Note 9), the fixed exercise price of the Series D/E/F/G Warrants was further adjusted from $56.50 to $4.00 per ADS. The ADSs issuable upon exercise of the Series D/E/F/G Warrants were adjusted to 1,750,000, 9,810,000, 10,000,000, and 1,428,572, respectively for the aggregate exercise price to remain unchanged. In accordance with ASC 260-10-25-1, the Company recognized the effect of such reprice event for February 2021 and December 2021 Warrants in an aggregate of approximately $2,916,000, and the effect is treated as a dividend and a reduction to income available to ordinary shareholders in the basic EPS calculation for the six months ended June 30, 2025. The fair value of Series D, F(vested) and G Warrants immediately before the reprice is estimated to be at $0.45, $0.45 and $0.65 per ADS, respectively and the fair value of Series D, F(vested) and G Warrants after the reprice is estimated to be at $0.19, $0.19 and $0.21 per ADS, respectively, by using Binomial Option Pricing Model with an expected term of 4.74, 4.74 and 5.56 years, respectively, a stock price of $2.76 per ADS, volatility of 99.36%, 99.36%, and 103.70%, respectively, a risk free rate of 3.62%, 3.62% and 3.65%, respectively, and an expected dividend yield of 0% for both before and after the reprice. The fair value of Series E Warrants (subject to Market Exercise Price) before the reprice is estimated to be at $0.62 per ADS and after the reprice is estimated to be at $0.16 per ADS, by using Monte Carlo simulation with an expected term of 2.63 years, a stock price of $2.76 per ADS, volatility of 99.99%, a risk free rate of 3.63%, and an expected dividend yield of 0%. The fair value of Series E Warrants (subject to fixed exercise price) after the reprice is estimated to be at $0.14 per ADS, by using Binomial Option Pricing Model with the same other inputs as Series E Warrants (subject to Market Exercise Price).

In June 2025, the Company received an aggregate of net proceeds of approximately $2.9 million in exchange for the issuance of 3,250,000,000 Class A ordinary shares, as a result of the partial exercise of 1.3 million Series E Warrants at Market Exercise price.

Note 11— Related Parties

During the year of 2024, the Company’s Chief Executive Officer (“CEO”) registered a TRS trading account with the Group and became a customer of the Group’s TRS trading service.

As of June 30, 2025, the Group had extended margin financing totaling approximately $208,000 to the CEO and the underlying securities held in the account had a fair value of approximately $224,000, resulting in a net payable of $16,000 due to the CEO. This payable balance was recorded under " Accrued expenses and other payables " in the Group’s unaudited condensed consolidated balance sheets. As of December 31, 2024, the Group had extended margin financing totaling approximately $330,000 to the CEO and the underlying securities held in the account had a fair value of approximately $324,000, resulting in a net receivable of $5,000 due from the CEO. This receivable balance was recorded under "Prepaid expenses, deposits and other current assets" in the Group’s unaudited condensed consolidated balance sheets.

During the six months ended June 30, 2025 and 2024, the Group recognized approximately $51 and $nil in interest income from margin financing provided for the CEO's TRS trading activities. This amount has been recorded in the Group’s unaudited condensed consolidated financial statements as interest income. This transaction was conducted with terms and conditions consistent with those that would be provided to unrelated parties in normal market conditions. All margin financing activities with the CEO were executed at prevailing market rates, with no preferential terms granted to either party.

As of June 30, 2025 and December 31, 2024, Lion Metaverse Limited recorded payable to DAWA for research and development expenses in the amount of approximately $800,000 and $800,000, respectively. The amount was included in the line item “accrued expenses and other payables” in the unaudited condensed consolidated balance sheets.

Note 12 — Commitments and Contingencies

Contingencies

Occasionally, the Group is a party to certain legal cases arising in the ordinary course of business. The Group accrues loss contingency associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. In the first half of 2024, a client (the “Plaintiff”) filed a statement of claim with the High Court of Hong Kong claiming an amount of HK$91,599,433 (approximately US$11,730,000), which LBL, a subsidiary of the Company has failed to transfer the said sum under the Plaintiff’s securities account to the plaintiff (the “Civil Case”). In July 2024, LBL filed a defense with the High Court of Hong Kong to dispute the claim and stated no outstanding sum owed to the Plaintiff. The Civil Case is currently in early stage and LBL will continue to vigorously defend against the case. The Group’s management does not expect it is probable that the disposition of such claim will have a material adverse impact on the Group’s unaudited condensed consolidated financial position, results of operations and cash flows. Among the amount claimed, the Group recorded in “Accrued expenses and other payables” a balance of approximately $2,663,000 (HK$20,791,761) as of December 31, 2024, resulting from an investment profits sharing agreement with the Plaintiff, as the transaction is in dispute. As of June 30, 2025, such amount was reclassified to “other non-current liabilities” in a balance of approximately $2,649,000 as the Company assessed the case would not be resolved in a year.

Note 13 — Stockholders’ Equity

Ordinary Shares and Preferred Shares

The Company was initially authorized to issue (i) 450,000,000 ordinary shares, $0.0001 par value per share, divided into 300,000,000 Class A ordinary shares and 150,000,000 Class B ordinary shares, and (ii) 50,000,000 preferred shares, $0.0001 par value per share. On October 6, 2023, the Company held the 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”). The 2023 Annual Meeting approved the increase of the Company’s authorized share capital from US$50,000 divided into 500,000,000 shares of a par value of US$0.0001 each, comprising of 300,000,000 Class A ordinary shares, 150,000,000 Class B ordinary shares, and 50,000,000 preferred shares of a par value of US$0.0001 each, to US$5,000,000 divided into 50,000,000,000 shares of a par value of US$0.0001 each, comprising of 40,000,000,000 Class A ordinary shares, 7,500,000,000 Class B ordinary shares, and 2,500,000,000 preferred shares of a par value of US$0.0001 each. On March 7, 2025, the Company held the Extraordinary Meeting of Shareholders (the “2025 EGM”). The 2025 EGM approved the increase of the Company’s authorized share capital to US$20,000,000, with a nominal value of US$0.0001 each, comprising (a) 190,000,000,000 Class A Ordinary Shares of a par value of US$0.0001 each; (b) 7,500,000,000 Class B Ordinary Shares of a par value of US$0.0001 each; and (c) 2,500,000,000 preferred Shares of a par value of US$0.0001 each. On September 29, 2025, the Company held the 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”). The 2025 Annual Meeting approved the increase of the Company’s authorized share capital to US$20,000,000,000 divided into 200,000,000,000,000 shares with a nominal or par value of US$0.0001 each, comprising (a) 192,497,500,000,000 Class A Ordinary Shares of a par value of US$ 0.0001 each; (b) 7,500,000,000,000 Class B Ordinary Shares of a par value of US$0.0001 each; and (c) 2,500,000,000 preferred Shares of a par value of US$0.0001 each.

As of June 16, 2020, subsequent to the Closing of the business combination, there were 17,399,176 ordinary shares outstanding, including 7,647,962 Class A ordinary shares and 9,751,214 Class B ordinary shares, and no preferred shares outstanding. On November 12, 2020, as a result of post-merger consideration adjustment, additional 121,473 ordinary shares were issued to Lion’s original shareholders, including 29,591 Class A ordinary shares and 91,882 Class B ordinary shares. An aggregate of 1,933,740 Class B ordinary shares set aside as the indemnity escrow shares following the closing of the business combination was no longer subject to forfeiture in June 2023. An aggregate of 3,876,481 Class B ordinary shares set aside as the earnout escrow shares was to be forfeited as the 2021 net income and 2022 net income targets were not met.

The shareholders of Class A and Class B ordinary shares have the same rights except for the voting and conversion rights. Each Class A ordinary share was initially entitled to one vote, and is not convertible into Class B ordinary share under any circumstance; and each Class B ordinary share is initially entitled to ten votes, and is convertible into one Class A ordinary share at any time by the holder thereof, subject to adjustments for any subdivision or combination. On February 16, 2022, January 13, 2023 and December 23, 2024, the Company held the annual General Meetings of Shareholders that approved the increase by the number of votes attached to Class B Ordinary Shares from ten (10) votes per Class B Ordinary Share to twenty five (25) votes per Class B Ordinary Share, from twenty five (25) votes per Class B Ordinary Share to one hundred (100) votes per Class B Ordinary Share, and from one hundred (100) votes per Class B Ordinary Share to ten thousand (10,000) votes per Class B Ordinary Share, respectively.

On December 30, 2024, the Group entered into Debt to Equity Agreements with certain customers, under which 496,358,691 Class A ordinary shares were issued to settle the full payables owed to these customer creditors in an aggregate of $26.1 million. As of December 31, 2024, the 496,358,691 Class A ordinary shares were not issued and accordingly, a subscription receivable of approximately $50,000 corresponding to their par value was recorded as contra equity as of December 31, 2024. In April 2025, the Company issued 496,358,691 Class A ordinary shares and reversed subscription receivable with corresponding accounts charged to additional paid-capital.

As of June 30, 2025 and December 31, 2024, there was an aggregate of 6,912,466,090 and 1,777,596,090 Class A ordinary shares issued and outstanding, respectively; and an aggregate of 65,387,845 and 65,387,845 Class B ordinary shares issued and outstanding, respectively. As of June 30, 2025 and December 31, 2024, there was no preferred shares issued and outstanding.

Note 14 — Income Taxes

Management has applied a valuation allowance to the total amount of deferred tax assets based on the determination that it is more likely than not that the deferred tax asset will not be realized. This determination was based on the historic and estimated future profitability of the entities to which the deferred tax assets relate. The tax rules in Hong Kong do not allow the Group to file on a consolidated basis.

Note 15 — Loss per Ordinary Share (“EPS”)

The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share”, which requires earnings per share for each class of stock (ordinary shares and participating securities) to be calculated using the two-class method. The two-class method is an allocation of earnings between the holders of ordinary shares and a company’s participating security holders. Under the two-class method, earnings for the reporting period are allocated between ordinary shareholders and other security holders based on their respective participation rights in undistributed earnings. As the Company’s two classes of ordinary shares have the same dividend rights, loss per share for each class of ordinary shares have the same results.

Basic loss per ordinary share is computed by dividing net income or loss available to ordinary shareholders by the weighted average number of ordinary shares issued and outstanding for the periods.

In accordance with ASC 260-10-45, the 3,867,481 Class B of earnout escrow shares in connection with the business combination closed on June 16, 2020 are considered contingently returnable shares and therefore are excluded from the computation of basic earnings (loss) per share for all periods presented (on a retroactively adjusted basis). Since June 16, 2021, 50% of 1,933,740 Class B of indemnity escrow shares in connection with the Closing of the business combination was included in the computation of basic earnings (loss) per share and the remaining 50% was further included starting from June 16, 2022.

For purposes of determining diluted earnings (loss) per ordinary share, basic earnings (loss) per ordinary share is further adjusted to include the effect of potential dilutive ordinary shares outstanding during the periods. Potential ordinary shares consist of the incremental ordinary shares upon exercise of warrants using the treasury stock method and upon conversion of convertible debt using the if-converted method.

For the six months ended June 30, 2025 and 2024, the following potential dilutive securities denominated in ordinary shares equivalents were excluded for the periods they were outstanding from the computation of diluted earnings loss per share because to do so would have been antidilutive. As a result, diluted loss per ordinary share is the same as basic loss per ordinary share for all periods presented. 

Note 16 — Segment Reporting

ASC 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise which engage in business activities from which they may earn revenues and incur expenses, and about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group (the “CODM”), in deciding how to allocate resources and in assessing performance. Reportable segments are defined as an operating segment that either (a) exceeds 10% of revenue, or (b) reported profit or loss in absolute amount exceeds 10% of profit of all operating segments that did not report a loss or (c) exceeds 10% of the combined assets of all operating segments.

Chief executive officer is determined as the CODM of the Group. The Group has four primary operating segments (1) futures and securities brokerage services; (2) market making (CFD) trading; (3) TRS trading; (4) OTC stock option trading; and (5) others. The Group’s futures and securities brokerage segment generates commission income by enabling customers to trade in futures and securities markets throughout the world. The Group engages in market making (CFD trading) activities where it serves as the counterparty to its customers in derivative transactions. The Group experiences trading gains and losses from such market making (CFD trading) activities. The Group generated income from TRS trading business including the commission income from the securities trading and interest income from the loan to customers. The Group also generated trading gains or losses from the OTC stock options where it serves as the counterparty in the option contracts. Other businesses include the following: (1) insurance brokerage segment which generates commissions by providing insurance brokerage services to high-net-worth individuals; (2) proprietary trading activities in investment securities, futures and derivatives, (3) sale of NFT and development NFT platform and Metaverse games, and (4) executive management functions and corporate overhead.