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Balance Sheets

From 2024-02-01 To 2024-03-01


CONTENT

  • Balance Sheets
  • Note To Balance Sheets

Balance Sheets

Summary of Risk Factors

Our business is subject to various risks and uncertainties, including those detailed below. The most significant risks include:

  • Our total revenue largely depends on the prices of cryptocurrencies and the volume of transactions on our platform. A decline in these could negatively affect our business, operating results, and financial condition.
  • Our net revenue may be concentrated in a few areas. A significant portion comes from transactions in Bitcoin and Ethereum and interest income from USDT. If these revenue sources decline and are not replaced by new demand, our business could be negatively affected.
  • We have formed, and may form in the future, partnerships or strategic alliances with third parties. If these relationships are unsuccessful or these third parties fail to deliver certain services, our business could be negatively affected.
  • Fluctuations in interest rates could have a negative impact on us.
  • The future growth of cryptocurrency is subject to unpredictable factors. If crypto doesn't grow as we expect, our business could be negatively affected.
  • Cyberattacks and security breaches could harm our brand and reputation and negatively affect our business.
  • We operate in a complex and uncertain regulatory landscape. Any adverse changes or failure to comply with laws and regulations could negatively affect our business.
  • We operate in a highly competitive industry and compete against unregulated companies and companies with greater resources. If we can't effectively respond to our competitors, our business could be negatively affected.
  • We compete against a growing number of decentralized and noncustodial platforms. Failure to compete effectively against them could negatively affect our business.
  • As we expand internationally, our obligations to comply with various jurisdictions' laws will increase, and we may be subject to inquiries, investigations, and enforcement actions.
  • We are subject to material litigation, including individual and class action lawsuits, as well as investigations and enforcement actions. These matters can be expensive and time-consuming, and if resolved adversely, could harm our business.
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  • If we can't keep pace with rapid industry changes to provide new and innovative products and services, our net revenue could decline, negatively impacting our business.
  • The status of a particular cryptocurrency as a "security" is highly uncertain. If we incorrectly characterize a cryptocurrency, we may face regulatory scrutiny, investigations, fines, and other penalties.
  • We rely on third-party service providers for certain operations. Any service interruptions from these third parties may impair our ability to support our customers.
  • Loss of a critical banking or insurance relationship could negatively affect our business.
  • Any significant disruption in our products, services, IT systems, or any of the blockchain networks we support could result in a loss of customers or funds and negatively impact our brand and reputation.
  • Our failure to safeguard and manage our and our customers' fiat currencies and cryptocurrencies could negatively impact our business.
  • The theft, loss, or destruction of private keys required to access any cryptocurrencies held in custody for our own account or for our customers may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss, it could cause regulatory scrutiny, reputational harm, and other losses.
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Balance Sheets

Balance Sheets

Balance Sheets - USD ($)
$ in ThousandsMar. 1, 2024Feb. 1, 2024
Assets
Current assets:
A019 Cash and cash equivalents$ —$ —
A001 Cryptocurrencies
A020 Accounts receivable
A004 Total current assets
Non-current assets:
A021 Total non-current assets
A005 Total assets$ —$ —
Liabilities and Stockholders' Equity
Current liabilities:
A006 User deposits$ —$ —
A031 Accounts payable
A009 Total liabilities
Stockholders' equity
A022 Capital
A010 Retained earnings
A052 Other capital reserve
A013 Total stockholders' equity
A014 Total liabilities and stockholders' equity$ —$ —
03

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Notes to Balance Sheets

1. Nature of Operations

TideBit DeFi is a decentralized financial exchange that provides accessible financial services to a broad range of users. As a part of the burgeoning decentralized finance (DeFi) sector, TideBit DeFi leverages blockchain technology to offer financial services that are open, transparent, and free from the control of traditional financial intermediaries like banks and brokerages.

Operating on a global scale, TideBit DeFi's platform allows users to trade a variety of digital assets in a secure and decentralized manner. This means that rather than relying on a central authority to facilitate transactions, trades are executed directly between users through smart contracts on the blockchain. This not only enhances security but also increases transaction speed and reduces costs.

By harnessing the power of blockchain technology and the principles of decentralization, TideBit DeFi is democratizing access to financial services and providing users with greater control over their financial destiny.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Foundation for Presentation and Consolidation Principles

The attached financial statements of the Company are not audited. These non-audited financial statements are prepared following the United States Generally Accepted Accounting Principles ("GAAP") in the same manner as the audited financial statements. In the management's view, they include all necessary adjustments, which are only regular, recurring adjustments, for a fair representation of the Company's financial statements for the periods shown. The non-audited operational results for the 30 days ending March 1, 2024, may not necessarily predict the results for the full year or any other period.

Use of estimates

The creation of these financial statements in accordance with GAAP requires management to make estimates and assumptions. Significant estimates and assumptions include the

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fair value of customer cryptocurrencies and liabilities.

User deposits

User deposits represent cryptocurrencies maintained on BOLT VAULT that are held for the exclusive benefit of customers and deposits in transit from payment processors and financial institutions. User deposits represent the obligation to return cryptocurrencies deposits held by customers on TideBit DeFi and unsettled crypto deposits and withdrawals. The Company restricts the use of the assets underlying the user deposits to meet regulatory requirements and classifies the assets as current based on their purpose and availability to fulfill the Company's direct obligation under user deposits. As of March 1, 2024 and February 1, 2024, the Company's eligible liquid assets were greater than the aggregate amount of user deposits.

3. P3 TECHNOLOGY

TideBit DeFi employs a "P3 (Partial Private-Key Protection)" system of BOLT to safeguard the client's cryptocurrencies, held in digital wallets, alongside essential fragments of cryptographic keys required for accessing these assets on our platform. 'P3 (Partial Private-Key Protection)' protocol allows us to safeguard the user's private key. In the event of a loss of the private key, through user authentication, a new set of authorized private key combinations can be reconstituted from other private key fragments, thereby ensuring the retrieval of the user's assets.

These assets and keys are shielded from loss, theft, or any form of misuse. The Firm diligently records cryptocurrencies owned by clients as well as corresponding client crypto liabilities, adhering to the recently enforced SAB 121. We keep track of all assets in digital wallets and parts or the entirety of private keys, including backup keys, managed on behalf of clients on our platform. Cryptocurrencies for which the TideBit DeFi can't recover a client's access to, are not recorded , as there is no related safeguarding obligation in accordance with SAB 121. TideBit DeFi regularly updates and initially recognizes the assets and liabilities at the fair value of the cryptocurrencies safeguarded for our clients.

During the 30 days ended March 1, 2024, no losses have been incurred in connection with customer deposits.

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User deposits

The following table sets forth the fair value of user deposits, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
USD (A040, A041)$ —— %$ —— %
Bitcoin (A044, A045)— %— %
Ethereum (A042, A043)— %— %
USDT (A007, A008)— %— %
A006 Total user deposits$ —— %$ —— %

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Cryptocurrencies

The following table sets forth the fair value of cryptocurrencies, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
Bitcoin (A046, A047)$ —— %$ —— %
Ethereum (A015, A016)— %— %
USDT (A002, A003)— %— %
A001 Total cryptocurrencies$ —— %$ —— %

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07

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Accounts receivable

The following table sets forth the fair value of accounts receivable, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
USD (A023, A024)$ —— %$ —— %
Bitcoin (A027, A028)— %— %
Ethereum (A029, A030)— %— %
USDT (A025, A026)— %— %
A020 Total accounts receivable$ —— %$ —— %

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08

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Accounts payable

The following table sets forth the fair value of accounts payable, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
USD (A032, A033)$ —— %$ —— %
Bitcoin (A036, A037)— %— %
Ethereum (A038, A039)— %— %
USDT (A034, A035)— %— %
A031 Total accounts payable$ —— %$ —— %

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09

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Retained earnings

The following table sets forth the fair value of retained earnings, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
USD (A050, A051)$ —— %$ —— %
Bitcoin (A048, A049)— %— %
Ethereum (A017, A018)— %— %
USDT (A011, A012)— %— %
A010 Total retained earnings$ —— %$ —— %

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10

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Other capital reserve

The following table sets forth the fair value of other capital reserve, as shown on the condensed consolidated balance sheets (in billions):

Mar. 1, 2024Feb. 1, 2024
AmountFair ValuePercentage of TotalAmountFair ValuePercentage of Total
USD (A053, A054)$ —— %$ —— %
Bitcoin (A059, A060)— %— %
Ethereum (A057, A058)— %— %
USDT (A055, A056)— %— %
A052 Total other capital reserve$ —— %$ —— %
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4. FAIR VALUE MEASUREMENTS

The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):

Mar. 1, 2024

($ in thousands)

AssetsLevel 1Level 2Level 3Total
A019 Cash and cash equivalents$ —$ —
A001 Cryptocurrencies
A020 Accounts receivable
A005 Total assets$ —$ —
Liabilities
A006 User deposits$ —$ —
A031 Accounts payable
A009 Total liabilities$ —$ —

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Feb. 1, 2024

($ in thousands)

AssetsLevel 1Level 2Level 3Total
A019 Cash and cash equivalents$ —$ —
A001 Cryptocurrencies
A020 Accounts receivable
A005 Total assets$ —$ —
Liabilities
A006 User deposits$ —$ —
A031 Accounts payable
A009 Total liabilities$ —$ —

Please note that the values are approximate and may vary slightly due to market fluctuations.

5. Market price risk of cryptocurrencies

Our revenue model primarily hinges on transaction fees, which can be a flat fee or calculated as a percentage of the transaction value. The exact fee may fluctuate depending on the payment type and the transaction value.

However, it's important to be cognizant of the risks associated with cryptocurrency price volatility, which could negatively impact our operational results. Market prices of Bitcoin, Ethereum, and other cryptocurrencies play a crucial role in determining our future profitability. These prices have shown significant fluctuation month over month, matching the pattern of our operational results, and there is no certainty that they will follow historical trends.

A downturn in the market price of Bitcoin, Ethereum, and other cryptocurrencies could negatively affect our earnings, the carrying value of ourcryptocurrencies, and our projected future cash flow. It could also pose a challenge to our liquidity and capability to

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fulfill ongoing obligations.

In terms of accounting procedures, we record impairment charges on our cryptocurrencies when the market prices fall below the assets' carrying value.

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