{"url_path":"/sec/sos/10-k/2026/item-18","section_key":"item-18","section_title":"Item 18 FINANCIAL STATEMENTS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1346610/0001213900-26-057725-index.html","accession_number":"0001213900-26-057725","cik":"0001346610","ticker":"SOS","issuer_name":"SOS Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1346610/0001213900-26-057725-index.html","primary_entity_key":"0001346610","primary_entity_name":"SOS Ltd"},"word_count":22023,"has_tables":true,"body_markdown":"**ITEM\n18. FINANCIAL STATEMENTS**\n\n \n\nSee\npages F-1 through F-42.\n\n \n\n91\n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\nTo\nThe Shareholders and the Board of Directors of SOS Limited\n\n** **\n\n**Opinion\non the Financial Statements**\n\n \n\nWe\nhave audited the accompanying consolidated balance sheet of SOS Limited and its subsidiaries (collectively, the “Company”)\nas of December 31, 2025, and the consolidated statements of profit and other comprehensive income, consolidated statements of equity\nand cash flows for the year ended December 31, 2025 and the related notes (collectively referred to as the “financial statements”).\nIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December\n31, 2025 and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles\ngenerally accepted in the United States of America.\n\n \n\n**Restatement\nof 2025 Financial Statements**\n\n \n\nAs\ndiscussed in Note 2.1 to the consolidated financial statements, the Company has restated certain prior year presentation amounts in the\nconsolidated balance sheets as of December 31, 2024 to conform to the current year presentation. Certain amounts previously presented\nas “Cash and cash equivalents” and “Investment securities” were reclassified to “Trading financial assets”\nbased on the nature of the underlying assets and management’s reassessment of the classification. This reclassification had no\nimpact on the Company’s total assets, total liabilities, shareholders’ equity, or net loss previously reported in the consolidated\nfinancial statements.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or\nfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits\nprovide a reasonable basis for our opinion.\n\n \n\n**Critical\nAudit Matters**\n\n \n\nCritical\naudit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial\nstatements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial\nstatements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.\n\n \n\n**Recoverability\nand Classification of Receivables, Advances, Prepayments and Related Party Balances**\n\n \n\nAccounts\nreceivable, other receivables, prepayments, and related party balances represented a significant portion of the Company’s assets\nas of December 31, 2025. These balances included trade receivables, supplier advances, loan receivables, deposits, related party balances,\nand other non-trade receivables.\n\n \n\nAs\ndescribed in Notes 3, 4 and 5 to the consolidated financial statements, management applied significant judgment in assessing the classification\nand recoverability of these balances, including determining whether amounts should be classified as prepayments, loans, receivables,\nor related party balances, and in estimating the related allowance for expected credit losses.\n\n \n\nThese\nbalances arose primarily from commodity trading, service arrangements, supplier advance arrangements, financing-type transactions, and\nrelated party activities. The assessment of recoverability and classification was closely linked to the underlying commercial substance,\nsettlement arrangements, and collection cycle associated with these transactions.\n\n  \n\nF-1\n\n \n\n \n\nWe\nidentified this as a critical audit matter due to the significant increase in supplier advances and prepayments during the year, the\nexistence of long-outstanding and aged balances, the presence of loan-type and non-routine arrangements, balances involving related parties,\nsignificant manual reclassifications and adjustments, and the significant auditor judgment required to evaluate recoverability, commercial\nsubstance, and the adequacy of expected credit loss allowances.\n\n \n\nOur\naudit procedures included, among others, evaluating the design and implementation of controls over classification and allowance estimation;\ninspecting agreements, contracts, settlement arrangements, and supporting documentation; performing aging analysis and testing underlying\ntransaction data; assessing subsequent settlements, collections, and offsetting arrangements; obtaining and evaluating third-party confirmations,\nwhere applicable; performing counterparty and related party due diligence on selected balances; evaluating the reasonableness of management’s\nallowance for expected credit losses; and assessing the appropriateness of classification between receivables, prepayments, loans, advances,\nand related party balances. \n\n \n\n**Inventory\nValuation**\n\n** **\n\nAs\ndescribed in Note 6 to the consolidated financial statements, the Company’s inventories primarily consist of commodity trading\ngoods and are measured at the lower of cost and net realizable value (“NRV”). As of December 31, 2025, the Company recorded\ninventories of $23.9 million, net of inventory write-downs of $8.6 million.\n\n \n\nInventory\nbalances are directly linked to the Company’s commodity trading revenue, as revenue is recognized at a point in time upon transfer\nof control of goods. Accordingly, the valuation and existence of inventory also impact the timing and recognition of related revenue\ntransactions.\n\n \n\nWe\nidentified the evaluation of inventory valuation as a critical audit matter due to the significant judgment required by management in\nestimating NRV, particularly in light of commodity price volatility, the use of assumptions such as pricing coefficients with limited\nobservable market data, the existence of aged inventory balances, and the sensitivity of valuation to changes in key assumptions.\n\n \n\nOur\naudit procedures included, among others, evaluating the appropriateness of management’s NRV methodology; testing key inputs such\nas commodity prices, product characteristics, and pricing coefficients by reference to external data and supporting documentation; assessing\nwhether estimated costs to complete and sell were appropriately incorporated; performing sensitivity analyses; evaluating the impact\nof inventory aging; and assessing the consistency of management’s conclusions with the amounts recorded and disclosed in the financial\nstatements.\n\n \n\nLimited\nobservable market evidence was available for certain inventory items, which increased estimation uncertainty.\n\n \n\n**Valuation\nof Crypto-Related Assets (Property, Plant and Equipment and Digital Assets)**\n\n \n\nAs\ndescribed in Notes 8 and 9 to the consolidated financial statements, the Company’s assets include cryptocurrency mining equipment\nclassified within property, plant and equipment, as well as digital assets such as Bitcoin (“BTC”) and Ethereum (“ETH”).\n\n \n\nThese\nassets involve significant valuation and impairment considerations. Mining equipment is evaluated for impairment based on estimated future\ncash flows, while digital assets are measured at fair value based on quoted market prices in active markets.\n\n \n\nWe\nidentified the valuation of crypto-related assets as a critical audit matter due to the significant judgment required by management and\nthe sensitivity of valuations to changes in underlying economic factors, including cryptocurrency prices, mining difficulty, energy costs,\nand expected utilization.\n\n \n\nThe\nprincipal considerations for our determination included the significant judgment involved in estimating future cash flows for impairment\nassessments, the high sensitivity of valuations to cryptocurrency price fluctuations and market conditions, the complexity of assessing\nrecoverability of mining equipment in light of changing mining economics, and the need to evaluate the existence and ownership of digital\nassets.\n\n \n\nOur\naudit procedures included, among others, evaluating the appropriateness of management’s methodologies for impairment testing and\nfair value measurement; testing key assumptions such as cryptocurrency prices, mining difficulty, energy costs, and utilization rates;\nperforming sensitivity analyses; comparing selected inputs to observable market data; verifying the existence and ownership of digital\nassets through wallet inspection and blockchain validation; and assessing the consistency of management’s conclusions with the\namounts recorded and disclosed in the financial statements.\n\n \n\n/s/\nAssentsure PAC\n\n \n\nAssentsure\nPAC\n\n \n\nWe\nhave served as the Company’s auditor since 2026.\n\n \n\nSingapore\n\n \n\nMay\n15, 2026 \n\nPCAOB\nID Number 6783\n\n \n\nF-2\n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\nTo\nThe Shareholders and the Board of Directors of SOS Limited\n\n** **\n\n**Opinion\non the Financial Statements**\n\n \n\nWe\nhave audited the accompanying consolidated balance sheets of SOS Limited and its subsidiaries (collectively, the “Company”)\nas of December 31, 2024 and 2023, and the consolidated statements of profit and other comprehensive income, consolidated statements of\nequity and cash flows for each of the two years in the period ended December 31, 2024 and the related notes (collectively referred to\nas the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial\nposition of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the three years\nin the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error\nor fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits\nprovide a reasonable basis for our opinion.\n\n \n\n**Critical\nAudit Matters**\n\n \n\nThe\ncritical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated\nor required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial\nstatements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters\ndoes not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit\nmatters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\n \n\n**Allowance\nfor current expected credit losses (“CECL”) on Accounts Receivables and Other Receivables**\n\n** **\n\nAs\ndescribed in Note 4 and Note 5 to the financial statements, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (codified\nas Accounting Standard Codification Topic 326), since January 1, 2020, which requires measurement and recognition of current expected\ncredit losses for financial assets held at amortized cost.\n\n \n\nThe\nCompany estimated the allowance for credit losses based on historical credit loss experience, current economic conditions, supportable\nforecasts of future economic conditions, and any expected recoveries. Additional considerations included customer payment history, payment\nterms offered in the normal course of business, and industry-specific factors that may affect the collectability of the receivables as\nof the reporting date. Professionals with specialized skills were engaged by the Company to assist in the estimation process.\n\n \n\nWe\nidentified the allowance for current expected credit losses on accounts receivables and other receivables as a critical audit matter\ndue to the involvement of significant management judgment and estimation uncertainty in evaluating credit risk, as well as the materiality\nof the balances to the financial statements.\n\n \n\nF-3\n\n \n\n \n\nAddressing\nthe matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial\nstatements. These procedures included: (1) obtaining an understanding and assessing management’s method for developing the allowance\nfor credit losses; (2) evaluating the competence, capabilities and objectivity of the professionals engaged by the Company; (3) independently\nevaluating the appropriateness of the valuation model, by reviewing the valuation report and the calculation schedules prepared by the\nmanagement and third party valuation specialists engaged by the Company; (4) testing the accuracy of management’s basic input in\ncalculating CECL including aging report, historical write-offs and recoveries, on a sample basis; (5) sending confirmations to debtors\nto confirm the accuracy of the basic information and terms of the loan receivables and other receivable accounts; and (6) performing\ncredit reviews on significant receivable balances, including assessments of the counterparties’ financial condition and willingness\nto repay.\n\n** **\n\n**Impairment\nof Inventories**\n\n \n\nAs\ndescribed in Note 6 to the financial statements, the Company assessed impairment on inventories.\n\n \n\nThe\nCompany reviews inventory for impairment when events or changes in circumstances indicate that the carrying amount of an asset may no\nlonger be recoverable. The recoverability of inventory is evaluated by initially comparing its carrying amount to the estimated undiscounted\nfuture cash flows expected to be generated. If it is determined that the inventory is not recoverable, an impairment loss is recognized\nin the amount by which the carrying value exceeds its fair value.\n\n \n\nWe\nidentified inventory impairment as a critical audit matter due to the involvement of significant management judgment in evaluating whether\nan impairment indicator exists and in estimating the recoverable value. Auditing this area involved subjectivity in assessing assumptions\nand estimates used by management in determining the impairment.\n\n \n\nAddressing\nthe matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial\nstatements. These procedures included: (1) Observing the condition of inventory during inventory counts; (2) Understanding and evaluating\nCompany’s accounting policy on the valuation of its inventories and management’s basis in determining the inventories reserve;\n(3) Testing the accuracy and completeness of management’s calculation and the underlying data that served as the basis for the\ncalculation of inventory reserve; (4) Evaluating and assessing the reasonableness of the inventory reserve assumptions.\n\n \n\nAddressing\nthe matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial\nstatements. These procedures included: (1) Observing the condition of inventory during inventory counts; (2) Understanding and evaluating\nCompany’s accounting policy on the valuation of its inventories and management’s basis in determining the inventories reserve;\n(3) Testing the accuracy and completeness of management’s calculation and the underlying data that served as the basis for the\ncalculation of inventory reserve; (4) Evaluating and assessing the reasonableness of the inventory reserve assumptions.\n\n \n\n/s/ Audit\nAlliance LLP\n\n \n\nWe\nhave served as the Company’s auditor since 2020.\n\n \n\nSingapore\n\n \n\nMay\n15, 2025\n\nPCAOB\nID Number 3487\n\n \n\nF-4\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**CONSOLIDATED\nBALANCE SHEETS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n  \nDecember 31,  \nDecember 31, \n\n  \n2025  \n2024 \n\nASSETS \n   \n  \n\nCurrent assets: \n   \n  \n\nCash and cash\nequivalents \n$3,232  \n$228,131 \n\nTrading financial assets \n 2,182  \n 9,553 \n\nAccounts receivable, net \n 3,158  \n 2,630 \n\nInventories \n 23,982  \n 33,011 \n\nOther receivables, net \n 310,393  \n 150,281 \n\nAmount due from related\nparties \n 39,474  \n 9,837 \n\nIntangible assets \n 79,099  \n 29,873 \n\nTax\nrecoverable \n 1,871  \n 1,823 \n\nTotal current assets \n 463,391  \n 465,139 \n\nNon-current assets: \n    \n   \n\nOperating lease, right-of-use\nassets \n 2  \n - \n\nProperty, plant and equipment,\nnet \n 1,590  \n 17,143 \n\nGoodwill \n 72  \n 72 \n\nTotal non-current assets \n 1,664  \n 17,215 \n\nTotal assets \n$465,055  \n$482,354 \n\n  \n    \n   \n\nLIABILITIES AND EQUITY \n    \n   \n\nCurrent liabilities: \n    \n   \n\nAccrued liabilities \n$16,824  \n$21,498 \n\nAccounts payable \n 19,347  \n 12,511 \n\nAmount due to related parties \n 1,642  \n 642 \n\nOperating lease liabilities \n 2  \n - \n\nTax payable \n 182  \n 169 \n\nOther\npayables \n 3,940  \n 11,844 \n\nTotal current liabilities \n 41,937  \n 46,664 \n\nTotal liabilities \n$41,937  \n$46,664 \n\n  \n    \n   \n\nShareholders’ equity Ordinary shares, $0.75 par value, 6,000,000,000 shares authorized, 13,235,873 Class A shares and 2,934,447 Class B shares issued and outstanding as of December 31, 2025, 2,964,518 Class A shares and 163,210 Class B shares issued and outstanding as of December 31, 2024, respectively \n$5,055  \n$2,191 \n\nStatutory reserve \n 161  \n 161 \n\nAdditional paid-in capital \n 781,484  \n 761,391 \n\nAccumulated deficit \n (337,870) \n (290,261)\n\nAccumulated other comprehensive\nloss \n (25,691) \n (31,557)\n\nNon-controlling\ninterests \n (21) \n (6,235)\n\nTotal shareholders’\nequity \n$423,118  \n$435,690 \n\nTotal liabilities and\nshareholders’ equity \n$465,055  \n$482,354 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-5\n\n \n\n \n\n**SOS\nLIMITED**\n\n \n\n**CONSOLIDATED\nSTATEMENTS OF PROFIT AND OTHER COMPREHENSIVE INCOME**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n  \nFor\nthe Years Ended December 31, \n\n  \n2025  \n2024  \n2023 \n\nREVENUES \n$154,290  \n 231,424  \n$92,416 \n\nCOST OF REVENUES \n (152,034) \n (224,383) \n (78,234)\n\nGROSS PROFIT \n 2,256  \n 7,041  \n 14,182 \n\nOPERATING EXPENSES: \n    \n    \n   \n\nGeneral and administrative\nexpenses \n (88,407) \n (18,136) \n (11,058)\n\nSelling expenses \n (5,278) \n (2,774) \n (672)\n\nShare-based\ncompensation \n (7,170) \n (7,735) \n (7,264)\n\nTotal\noperating expenses \n (100,855) \n (28,645) \n (18,994)\n\nLOSS FROM OPERATIONS \n (98,599) \n (21,604) \n (4,812)\n\nOTHER (EXPENSE)/INCOME \n    \n    \n   \n\nOther (expense)/income,\nnet \n 1,254  \n 5,619  \n (978)\n\nTotal\nother (expenses) \n 1,254  \n 5,619  \n (978)\n\nLOSS BEFORE INCOME TAXES \n (97,345) \n (15,985) \n (5,790)\n\nINCOME\nTAXES \n 1  \n (242) \n (631)\n\nNET LOSS FROM CONTINUING\nOPERATION \n (97,344) \n (16,227) \n (6,421)\n\nNet income attributable\nto non-controlling interests \n 25  \n 2,621  \n 2,770 \n\nNET LOSS ATTRIBUTABLE TO\nSHAREHOLDERS \n (97,319) \n (13,606) \n (3,651)\n\n  \n    \n    \n   \n\nDISCONTINUED OPERATIONS \n    \n    \n   \n\nGain on disposal of discontinued operations \n -  \n 1  \n - \n\ngain\nFROM DISCONTINUED OPERATIONS \n -  \n 1  \n - \n\n  \n    \n    \n   \n\nNET\nLOSS ATTRIBUTABLE TO SOS LIMITED \n$(97,319) \n$(13,605) \n$(3,651)\n\n  \n    \n    \n   \n\nOTHER COMPREHENSIVE (LOSS)/INCOME \n    \n    \n   \n\nForeign currency translation \n (5,866) \n 3,028  \n 5,112 \n\nTOTAL\nCOMPREHENSIVE (LOSS)/INCOME \n$(103,185) \n$(10,577) \n$1,461 \n\n  \n    \n    \n   \n\nWeighted average number of ordinary shares \n    \n    \n   \n\n  \n    \n    \n   \n\nBasic \n 16,170,320  \n 3,034,821  \n 906,423 \n\nDiluted \n 16,170,320  \n 3,034,821  \n 906,423 \n\nLOSS PER SHARE \n    \n    \n   \n\nBasic \n$(6.0184) \n$(4.4850) \n$(4.0350)\n\nDiluted \n$(6.0184) \n$(4.4850) \n$(4.0350)\n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-6\n\n \n\n \n\n**SOS\nLIMITED**\n\n \n\n**CONSOLIDATED\nSTATEMENTS OF EQUITY**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n  \nOrdinary\nshares  \nAdditional  \n   \n   \nAccumulated\n\nother  \nNon-  \nTotal \n\n  \nClass\nA\nshares  \nClass\nB\nshares  \nTreasury\n\nstock  \nTotal\n\nshares  \nPar\n\nvalue  \nPaid-in\n\ncapital  \nAccumulated\n\ndeficits  \nStatutory\n\nReserve  \ncomprehensive\n\nloss  \ncontrolling\n\ninterests  \nshareholders’\n\nequity \n\nBalance,\nDecember 31, 2022 \n 490,983  \n 26,422  \n (92,907) \n 424,498  \n 374  \n 705,488  \n (272,919) \n 59  \n (23,400) \n (826) \n 408,776 \n\nShare-based\ncompensation \n 61,154  \n 66,720  \n -  \n 127,874  \n 95  \n 7,169  \n -  \n -  \n -  \n -  \n 7,264 \n\nIssuance\nof Class A Ordinary Shares and warrant \n 261,144  \n -  \n -  \n 261,144  \n 196  \n 17,688  \n -  \n -  \n -  \n -  \n 17,884 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n (3,651) \n -  \n -  \n (2,770) \n (6,421)\n\nDisposition\nof continued operation \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (18) \n (18)\n\nAppropriation\nof statutory reserve \n -  \n -  \n -  \n -  \n -  \n -  \n (102) \n 102  \n -  \n -  \n - \n\nForeign\ncurrency translation adjustments \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (5,112) \n -  \n (5,112)\n\nBalance,\nDecember 31, 2023 \n 813,281  \n 93,142  \n (92,907) \n 813,516  \n 665  \n 730,345  \n (276,672) \n 161  \n (28,512) \n (3,614) \n 422,373 \n\nShare-based\ncompensation \n 537,269  \n 70,068  \n -  \n 607,337  \n 456  \n 7,279  \n -  \n -  \n -  \n -  \n 7,735 \n\nIssuance\nof Class A Ordinary Shares and warrant \n 1,613,968  \n -  \n -  \n 1,613,968  \n 1,070  \n 23,767  \n -  \n -  \n -  \n -  \n 24,837 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n (13,606) \n -  \n    \n (2,621) \n (16,227)\n\nDisposition\nof discontinued operation \n -  \n -  \n -  \n -  \n -  \n -  \n 17  \n -  \n (17) \n -  \n - \n\nForeign\ncurrency translation adjustments \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (3,028) \n -  \n (3,028)\n\nBalance,\nDecember 31, 2024 \n 2,964,518  \n 163,210  \n (92,907) \n 3,034,821  \n 2,191  \n 761,391  \n (290,261) \n 161  \n (31,557) \n (6,235) \n 435,690 \n\nShare-based\ncompensation \n 1,233,336  \n 33,360  \n -  \n 1,266,696  \n 18  \n 2,569  \n -  \n -  \n -  \n -  \n 2,587 \n\nIssuance\nof Class A Ordinary Shares and warrant \n 9,038,019  \n -  \n -  \n 9,038,019  \n 2,832  \n 12,956  \n -  \n -  \n -  \n -  \n 15,788 \n\nIssuance\nof Class B Ordinary Shares and Share-based compensation \n    \n 2,737,877  \n    \n 2,737,877  \n 14  \n 4,568  \n    \n    \n    \n    \n 4,582 \n\nNet\nloss \n -  \n -  \n -  \n -  \n -  \n -  \n (103,558) \n -  \n \n \n  \n 6,214  \n (97,344)\n\nCumulative\neffect upon adoption of ASU 2023-08 \n -  \n -  \n -  \n -  \n -  \n -  \n 55,949  \n -  \n -  \n -  \n 55,949 \n\nForeign\ncurrency translation adjustments \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 5,866  \n -  \n 5,866 \n\nBalance,\nDecember 31, 2025 \n 13,235,873  \n 2,934,447  \n (92,907) \n 16,077,413  \n 5,055  \n 781,484  \n (337,870) \n 161  \n (25,691) \n (21) \n 423,118 \n\n \n\n*\nOn September\n8, 2025, in connection with a 150-for-one consolidation of the Company’s ordinary shares approved by shareholders at an extraordinary\ngeneral meeting held on August 11, 2025, the Company terminated its ADS program and the Deposit Agreement with Citibank, N.A., as\ndepositary. All outstanding ADSs were automatically cancelled, and each ADS holder receive one (1) Class A Ordinary Share, per value\nUS$0.75 per share, for each ADS cancelled. Following the termination, the Company’s Class A Ordinary Shares commenced direct\ntrading on the New York Stock Exchange.\n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-7\n\n \n\n \n\n**SOS\nLIMITED**\n\n \n\n**CONSOLIDATED\nSTATEMENTS OF CASH FLOWS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n  \nYear ended  \nYear ended  \nYear ended \n\n  \nDecember 31,  \nDecember 31,  \nDecember 31, \n\n  \n2025  \n2024  \n2023 \n\nCASH FLOWS FROM OPERATING ACTIVITIES: \n   \n   \n  \n\nNet\nloss \n$(97,319) \n$(13,605) \n$(3,651)\n\nNet\nloss from continuing operation \n (97,319) \n (13,606) \n (3,651)\n\nNet\ngain from discontinued operation \n -  \n 1  \n - \n\nAdjustments\nfor: \n    \n    \n   \n\nDepreciation\nof property, plant and equipment \n 8,706  \n 10,904  \n 4,975 \n\nDepreciation\nof right-of-use assets \n 2  \n 377  \n 800 \n\nShare-based\ncompensation \n 7,170  \n 7,735  \n 7,264 \n\nAccretion\nof finance leases \n -  \n 6  \n 32 \n\nAllowance\nfor credit losses - accounts receivable \n 1,554  \n 196  \n 451 \n\nAllowance\nfor credit losses - other receivables \n 51,178  \n (1,044) \n 228 \n\nImpairment\nof intangible assets \n 6,723  \n 781  \n 970 \n\nImpairment\nof mining equipment \n 5,861  \n -  \n 4,455 \n\nImpairment\nof property plant and equipment \n 1,025  \n -  \n - \n\nInventory\nimpairment \n 5,579  \n 2,571  \n 194 \n\nAdjustments,\ntotal \n 87,798  \n 21,526  \n 19,369 \n\n  \n    \n    \n   \n\nChanges\nin operating assets and liabilities: \n    \n    \n   \n\nAccounts\nreceivable \n (2,082) \n (2,017) \n 1,172 \n\nInvestment\nsecurities \n 7,371  \n (9,353) \n (307)\n\nOther\nreceivables \n (211,290) \n (69,267) \n (25,194)\n\nAmount\ndue from related parties \n (29,637) \n 29,745  \n 29,456 \n\nInventories \n 3,450  \n (5,283) \n 13,204 \n\nIntangible\nassets \n -  \n (9,258) \n (15,960)\n\nAccrued\nliabilities \n (4,674) \n 6,306  \n (5,193)\n\nTax\n(recoverable)/payable \n (35) \n (452) \n 1,247 \n\nAccounts\npayable \n 6,836  \n (24,229) \n (94)\n\nOther\npayables \n (7,904) \n 4,352  \n (4,795)\n\nAmount\ndue to related parties \n 1,000  \n (999) \n 998 \n\nLease\nliabilities \n 2  \n (377) \n (544)\n\nNet\ncash generated from/(used in) operating activities from continuing operations \n (246,484) \n (72,911) \n 9,708 \n\nNet\ncash generating from discontinued operating activities \n -  \n 1  \n - \n\nNet\ncash generated from/(used in) operating activities \n (246,484) \n (72,910) \n 9,708 \n\n  \n    \n    \n   \n\nCASH\nFLOWS FROM INVESTING ACTIVITIES: \n    \n    \n   \n\nPurchases\nof property, plant and equipment \n (38) \n -  \n - \n\nNet\ncash used in investing activities from continuing operations \n (38) \n -  \n - \n\nNet\ncash used in investing activities from discontinued operation \n -  \n -  \n - \n\nNet\ncash used in investing activities \n (38) \n -  \n - \n\n  \n    \n    \n   \n\nCASH\nFLOWS FROM FINANCING ACTIVITIES: \n    \n    \n   \n\nRepayment\nof principle portion of lease liabilities \n 2  \n (288) \n (288)\n\nProceed\nfrom share issuance, net of issuance costs \n 15,788  \n 24,838  \n 17,884 \n\nNet\ncash generated from financing activities \n 15,790  \n 24,550  \n 17,596 \n\n  \n    \n    \n   \n\nEFFECT\nOF EXCHANGE RATES ON CASH \n 5,833  \n (2,685) \n (7,619)\n\n  \n    \n    \n   \n\nNET\nCHANGES IN CASH AND CASH EQUIVALENTS \n (224,899) \n (51,046) \n 19,685 \n\nCASH\nAND CASH EQUIVALENTS, BEGINNING OF YEAR \n 228,131  \n 279,177  \n 259,492 \n\nCASH\nAND CASH EQUIVALENTS, END OF YEAR \n$3,232  \n$228,131  \n$279,177 \n\nLESS:\nCASH AND CASH EQUIVALENTS, FROM THE DISCONTINUED OPERATIONS \n$-  \n$-  \n$- \n\n  \n    \n    \n   \n\nSupplemental\ncash flow information \n    \n    \n   \n\nCash\npaid for income tax \n 6  \n 12  \n 684 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-8\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n1.\nORGANIZATION\nAND PRINCIPAL ACTIVITIES\n\n \n\nWe\nare an emerging blockchain-based and big data-driven marketing solution provider, also engaged in blockchain and cryptocurrency operations,\nwhich currently include cryptocurrency mining and may expand into cryptocurrency security and insurance in the future. Since April 2021,\nwe launched commodity trading via our subsidiary SOS International Trading Co. Ltd and Weigou International Trading Co Ltd. Major trading\ncommodity includes mineral resin, soy bean, wheat, sesame, liquid sulfur, petrol coke and latex etc. \n\n \n\nWe\nwere formed in Delaware on July 12, 2004 as China Risk Finance LLC. We began our credit analytics service provider business in 2001.\nWe developed our proprietary, advanced technology over the past 18 years, during which our founders and management team advised many\nof China’s largest banks in analyzing consumer credit to issue over one hundred million credit cards to consumers. On\nApril 28, 2017, our ADSs commenced trading on the NYSE under the symbol “XRF.” In May 2017, we completed our IPO in which\nwe sold a total of 11,500,000 of our ADSs, each representing ten Class A Ordinary Shares and listing of our ADSs on the NYSE.\nIn the third quarter 2018, due to regulatory changes that made it cost-prohibitive, and in some ways very risky from the regulatory compliance\nperspective, to own and operate our legacy marketplace lending platform, we decided to cease the customer acquisition and loan facilitation\nat our legacy marketplace lending platform and started to transition our business to other industries.\n\n \n\nOn\nMay 5, 2020, we entered into a set of agreements with Yong Bao Two Limited (“YBT”), the shareholders of YBT (the “YBT\nShareholders”), eight individual investors introduced by YBT (collectively with the YBT Shareholders, the “Investors”)\nand True North Financial, LLC to acquire YBT, which controls its variable interest entity SOS Information Technology Co., Ltd.. The transaction\nwas consummated on May 15, 2020. As a result, we now own 100% of YBT, which controls its variable interest entity, SOS Information\nTechnology Co., Ltd.. The shares issued to the Investors were relied on exemption from registration in accordance with Regulation S and/or\nRule 4(a)(2) under the Securities Act of 1933, as amended. Accordingly, we started our newly acquired data mining and targeted marketing\nservices business through SOS Information.\n\n \n\nOn\nAugust 3, 2020, we entered into certain share purchase agreement (the “Disposition SPA”) with Hantu (Hangzhou) Asset Management\nCo., Ltd. (the “Purchaser”). Pursuant to the Disposition SPA, the Purchaser agreed to purchase CRF China Holding Co. Limited,\na Hong Kong limited company, China Capital Financial LLC, a Delaware limited liability company, CRF China Limited, a British Virgin Islands\ncompany, CRF Technology LLC, a California limited liability company, and HML China LLC, a Delaware limited liability company (collectively,\nthe “XRF Subsidiaries”) in exchange for cash consideration of $3.5 million. Upon the closing of the transaction (the\n“Disposition”) contemplated by the Disposition SPA, the Purchaser will become the sole shareholder of the XRF Subsidiaries\nand as a result, assume all assets and liabilities of all the subsidiaries and variable interest entities owned or controlled by the\nXRF Subsidiaries. The Disposition closed on August 6, 2020. As a result of the Disposition, we ceased our legacy peer-to-peer lending\nbusiness and have since focused on becoming a leading high-technology services business with services including marketing data, technology\nand solutions for insurance companies and emergency rescue services in China. We also changed our trading symbol to “SOS.”\n\n \n\nIn\n2020, we have launched our crypto mining business, and aim to start infrastructure services in blockchain security for our big data insurance\nmarketing as well as provide insurance and banking services for digital assets and cryptocurrencies. The company temporarily shut down mining operations in 2025, as electricity price keep staying high causing cryptocurrency\nmining to no longer be cost-effective.\n\n \n\nOn May 5, 2020, we acquired data marketing\nbusiness by entering into a set of agreements with YBT (Yongbao Two Ltd.), the shareholders of YBT (the “YBT Shareholders”),\neight individual investors introduced by YBT (collectively with the YBT Shareholders, the “Investors”) and True North Financial,\nLLC to acquire YBT, which controls its variable interest entity SOS Information. The transaction was consummated on May 15, 2020. As a\nresult, we now own 100% of YBT, which controls its variable interest entity, SOS Information Technology Co., Ltd (“SOS Information”).\nThe shares issued to the Investors were relied on exemption from registration in accordance with Regulation S and/or Rule 4(a)(2) under\nthe Securities Act of 1933, as amended. Accordingly, we started our newly acquired data mining and targeted marketing services business\nthrough SOS Information.\n\n \n\nWe purchase data from our suppliers,\nincluding Shandong Subao IT Ltd., Jiangxi Chacha IT Ltd. and Liaoning Tianzheng Ltd. With a stable supply of data, we use data mining\nand analytics technologies to find patterns and valuable data within the large amounts of data we collect. We then provide specific data\npoint recommendations to our clients.\n\n \n\nOn November 2, 2022, the Company disposed\nit off by entering into a certain share purchase agreement (the “Disposition SPA”) with S International Holdings Limited (the\n“Purchaser”), a Cayman Islands exempt company, and S International Group Limited (“S International” or the “Target”),\na British Virgin Islands company and the Company’s wholly owned subsidiary prior to the Disposition. Pursuant to the Disposition\nSPA, the Purchaser agreed to purchase S International in exchange for cash consideration of $17,000,000. Upon the closing of the transaction\n(the “Disposition”) contemplated by the Disposition SPA on November 2, 2022 (the “Closing Date”) , the\nPurchaser became the sole shareholder of S International and as a result, assume all assets and liabilities of all the subsidiaries and\nVIE entities owned or controlled by S International. S International owns 100% of the issued shares in S International Holdings Limited,\nwhich owns 100% of the issued shares in Qingdao S Investment. Qingdao S Investment controls Qingdao SOS Industrial, the former VIE, through\na series of contractual agreements with the former VIE and the shareholders of the former VIE dated November 2, 2022. The former VIE owns\n100% of the equity interests in each of SOS Information Technology Co., Ltd. and Qingdao SOS Digital Technologies Inc.\n\n \n\nThe Company re-classified revenue generated\nfrom incomplete data marketing contract into “Other” in FY2022 and FY2023 annual reporting respectively. All such contracts\nwere completed during FY 2024. Legacy business ended thereafter.\n\n \n\nF-9\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n1.\nORGANIZATION\nAND PRINCIPAL ACTIVITIES - continued\n\n \n\nThe\naccompanying consolidated financial statements reflect the activities of SOS Limited and each of the following entities:\n\n \n\n**Name**   **Background**   **Abbreviation**\n\nSOS Information Technology New York Inc.   A New York company Incorporated on July 15, 2020 A holding company   SOS NY\n\n         \n\nYong Bao Two Ltd.   A British Virgin Island company Incorporated on February 29, 2020 A holding company   YBT\n\n         \n\nCanada XX Exchange Ltd.   Digital asset exchange platform   Canada XX\n\n         \n\nUS XX Exchange Ltd.   Digital asset exchange platform   US XX\n\n         \n\nFuture Technology Global Ltd. (HK)   A 100% subsidiary of SOS Information Technology Co., Ltd.   Future Technology\n\n         \n\nFDW Limited   A 100% subsidiary of SOS Ltd.   FDW Limited\n\n         \n\nChina SOS Ltd.   A Hong Kong limited liability company Incorporated on June 19, 2019 A holding company   China SOS\n\n         \n\nFD LLC   A 51% owned JV with Niagara Development LLC   FD LLC\n\n         \n\nQingdao SOS Investment Management Co., Ltd.   A 100% subsidiary of China SOS Limited, a WOFE   WFOE\n\n         \n\nQingdao SOS Investment LLP   A 99% subsidiary of Qingdao SOS Investment Management Co., Ltd.(PRC)   Qingdao SOS\n\n         \n\nSOS Auto Service Co., Ltd.   A 99% subsidiary of Qingdao SOS Investment Management Co., Ltd.(PRC)   NA\n\n         \n\nInner Mongolia SOS Insurance Agency Co., Ltd.   A 100% subsidiary of SOS Information Technology Co., Ltd, which operates insurance brokerage business within Inner Mongolia region    NA\n\n         \n\nCommon Prosperity Technology Co., Ltd.   A 99% subsidiary of SOS International Trading Co., Ltd.   NA\n\n         \n\nSOS International Trading Co., Ltd.   A 100% subsidiary of SOS Information Technology Co., Ltd.   NA\n\n         \n\nS International Trading Co Limited   A 100% subsidiary of SOS International Trading Co., Ltd.   NA\n\n         \n\nWeigou International Trading Co., Ltd.   A 99% subsidiary of Qingdao Investment LLP    NA\n\n         \n\nShuyun International Trading Co., Ltd.   A 99% subsidiary of Qingdao Investment LLP    NA\n\n         \n\nChexiaoer Technology Co., Ltd.   A 25% subsidiary of Qingdao Investment LLP and A 30% owned by SOS Auto Service Co., Ltd.   NA\n\n         \n\nHebei S Cloud Enterprise Management Co., Ltd.   A 99% subsidiary of Future Digital Investment Ltd.(Hong Kong)   NA\n\n         \n\nSOS Rescue Service LLC   A 100% owned subsidiary of SOS Emergency Rescue Service Ltd   NA\n\n         \n\nSOS Emergency Rescue Service Ltd.   A 100% owned subsidiary of SOS Ltd.   NA\n\n         \n\nFuture Digital Investment Ltd.   A 100% owned subsidiary of SOS Ltd.   NA\n\n         \n\nQingdao Zhonghai Venture Capital Management Co., Ltd.   A 100% owned subsidiary of Future Digital Investment Ltd.   NA\n\n         \n\nChexiaoer (Tianjin Automobile) Management Co., Ltd.   A 70% owned subsidiary of Chexiaoer Technology Co Ltd.   NA\n\n         \n\nHebei Chexiaoer Technology Co., Ltd.   A 70% owned subsidiary of Chexiaoer Technology Co Ltd.   NA\n\n         \n\nZhongjian Tianxia(Beijing) Investment Co., Ltd.   A 65% owned subsidiary of Xinxin Ranran International Trading Co Ltd.   NA\n\n         \n\nXinxin Ranran International Trading Co. Ltd   A 99% owned subsidiary of SOS International Trading Co Ltd.   NA\n\n         \n\nFuture Digital Trading Ltd.   100% owned subsidiary of SOS Ltd   NA\n\n         \n\nQingdao Yonbao Ronghe International Trading Co Ltd.   A 90% owned subsidiary of Future Digital Trade Ltd   NA\n\n         \n\nFuture Digital Trading Pte. Ltd.   A 100% owned subsidiary of Future Digital Trade Ltd   NA\n\n  \n\nF-10\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES\n\n \n\n**Basis\nof presentation**\n\n \n\nThe\naccompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the\nUnited States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the SEC.\n\n \n\n**Principles\nof consolidation**\n\n \n\nThe\nconsolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly- foreign\nowned enterprise (“WFOE”) over which the Company exercises control and,\nwhen applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions\nand balances among the Company and its subsidiaries have been eliminated upon consolidation.\n\n \n\n**Variable\nInterest Entity Agreement**\n\n \n\nOn\nMay 14, 2020, Weibao Enterprise Management Consulting (Shijiazhuang) Co., Ltd. (“Weibao Enterprise”), Guian New Area Zhongyuan\nTechnology Co., Ltd. (“Zhongyuan Technology”), and Messrs. Yilin Wang, Weidong Feng, and Xianlong Wu, citizens of China and\nshareholders of Zhongyuan Technology, entered into the following agreements, or collectively, the “Variable Interest Entity Agreements”\nor “VIE Agreements,” pursuant to which Weibao Enterprise has contractual rights to control and operate the business of Zhongyuan\nTechnology (the “VIE”). Therefore, pursuant to ASC 810, Zhongyuan Technology has been included in the Company’s consolidated\nfinancial statements since then.\n\n  \n\nThe\nVIE Agreements are as follows:  \n\n \n\n  1) Technical Consulting and Service Agreement by and between Weibao Enterprise and Zhongyuan Technology. Pursuant to the Exclusive Technical Consulting and Service Agreement, Weibao Enterprise agreed to act as the exclusive consultant of Zhongyuan Technology and provide technical consulting and services to Zhongyuan Technology. In exchange, Zhongyuan Technology agreed to pay Weibao Enterprise a technical consulting and service fee, the amount of which is to be equivalent to the amount of net profit before tax of Zhongyuan Technology, payable on a quarterly basis after making up losses of previous years (if necessary) and deducting necessary costs, expenses and taxes related to the business operations of Zhongyuan Technology. Without the prior written consent of Weibao Enterprise, Zhongyuan Technology may not accept the same or similar technical consulting and services provided by any third party during the term of the agreement. All the benefits and interests generated from the agreement, including but not limited to intellectual property rights, know-how and trade secrets, will be Weibao Enterprise’s sole and exclusive property. This agreement has a term of 20 years and may be extended unilaterally by Weibao Enterprise with Weibao Enterprise’s written confirmation prior to the expiration date. Zhongyuan Technology cannot terminate the agreement early unless Weibao Enterprise commits fraud, gross negligence or illegal acts, or becomes bankrupt or winds up.\n\n \n\n \n2)\nEquity Interest Purchase\nOption Agreement by and among Weibao Enterprise, Zhongyuan Technology, and Messrs. Yilin Wang, Weidong Feng and Xianlong Wu. Pursuant\nto the Exclusive Purchase Option Agreement, Messrs. Yilin Wang, Weidong Feng and Xianlong Wu granted to Weibao Enterprise and any\nparty designated by Weibao Enterprise the exclusive right to purchase, at any time during the term of this agreement, all or part\nof the equity interests in Zhongyuan Technology, or the “Equity Interests,” at a purchase price equal to the registered\ncapital paid by Messrs. Yilin Wang, Weidong Feng and Xianlong Wu for the Equity Interests, or, in the event that applicable law requires\nan appraisal of the Equity Interests, the lowest price permitted under applicable law. Pursuant to powers of attorney executed by\nMessrs. Yilin Wang, Weidong Feng and Xianlong Wu, they irrevocably authorized any person appointed by Weibao Enterprise to exercise\nall shareholder rights, including but not limited to voting on their behalf on all matters requiring approval of Zhongyuan Technology’s\nshareholders, disposing of all or part of the shareholders’ equity interest in Zhongyuan Technology, and electing, appointing\nor removing directors and executive officers. The person designated by Weibao Enterprise is entitled to dispose of dividends and\nprofits on the equity interest without reliance on any oral or written instructions of Messrs. Yilin Wang, Weidong Feng and Xianlong\nWu. The powers of attorney will remain in force for so long as Messrs. Yilin Wang, Weidong Feng and Xianlong Wu remain the shareholders\nof Zhongyuan Technology. Messrs. Yilin Wang, Weidong Feng and Xianlong Wu have waived all the rights which have been authorized to\nWeibao Enterprise’s designated person under the powers of attorney.\n\n \n\nF-11\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n \n3)\nEquity Pledge Agreement\nby and among Weibao Enterprise, Zhongyuan Technology, and Messrs. Yilin Wang, Weidong Feng and Xianlong Wu. Pursuant to the Equity\nPledge Agreement, Mr. Messrs. Yilin Wang, Weidong Feng and Xianlong Wu pledged all of the Equity Interests to Weibao Enterprise to\nsecure the full and complete performance of the obligations and liabilities on the part of Zhongyuan Technology and them under this\nand the above contractual arrangements. If Zhongyuan Technology, Messrs. Yilin Wang, Weidong Feng or Xianlong Wu breaches their contractual\nobligations under these agreements, then Weibao Enterprise, as pledgee, will have the right to dispose of the pledged equity interests.\nMessrs. Yilin Wang, Weidong Feng and Xianlong Wu agree that, during the term of the Equity Pledge Agreements, they will not dispose\nof the pledged equity interests or create or allow any encumbrance on the pledged equity interests, and they also agree that Weibao\nEnterprise’s rights relating to the equity pledge should not be interfered with or impaired by the legal actions of the shareholders\nof Zhongyuan Technology, their successors or designees. During the term of the equity pledge, Weibao Enterprise has the right to\nreceive all of the dividends and profits distributed on the pledged equity. The Equity Pledge Agreement will terminate as soon as\nreasonably practical when Zhongyuan Technology, Messrs. Yilin Wang, Weidong Feng and Xianlong Wu have completed all their obligations\nunder the contractual agreements described above.\n\n \n\n \n4)\nVoting Rights Proxy and\nFinancial Support Agreement by and among Weibao Enterprise, Zhongyuan Technology, and Messrs. Yilin Wang, Weidong Feng and Xianlong\nWu. Pursuant to the Voting Rights Proxy and Financial Support Agreement, Messrs. Yilin Wang, Weidong Feng and Xianlong Wu entrusts\nWeibao Enterprise or Weibao Enterprise’s designee to vote on their behalf at the shareholder meetings of Zhongyuan Technology.\nAs consideration for the entrustment of the voting rights of Messrs. Yilin Wang, Weidong Feng and Xianlong Wu at Zhongyuan Technology’s\nshareholder meetings to Weibao Enterprise, Weibao Enterprise agreed to arrange for funds to be provided as necessary in connection\nwith the business operations of Zhongyuan Technology. Weibao Enterprise further agreed that if the business were to fail in the ordinary\ncourse of business, none of Messrs. Yilin Wang, Weidong Feng and Xianlong Wu shall have any obligation to repay the financial support\nprovided by Weibao Enterprise.\n\n** **\n\nOn\nNovember 2, 2022, pursuant to the terms of the Qingdao SOS Investment VIE Agreements, Qingdao SOS Investment, Qingdao SOS Industrial,\nand shareholders of Qingdao SOS Industrial unanimously agreed to terminate the Qingdao SOS Investment VIE Agreements. The termination\nof the VIE contractual arrangements were effective on November 2, 2022.\n\n \n\nOn\nNovember 2, 2022, Qingdao S Investment Holding Limited (“Qingdao S Investment”), Qingdao SOS Industrial Holding Co., Ltd.\n(“Qingdao SOS Industrial”), and Messrs. Yilin Wang, Weidong Feng, and Xianlong Wu, citizens of China and shareholders of\nQingdao SOS Industrial, entered into a series of contractual arrangements, including\n\n** **\n\nEquity\nPledge Agreement, Exclusive Management Consultation and Business Cooperation Agreement, Exclusive Purchase Option Agreement and Power\nof Attorney, collectively, the “Qingdao S Investment VIE Agreements,” pursuant to which Qingdao S Investment has contractual\nrights to exercise control over the Qingdao S Industrial.\n\n \n\nTherefore,\nQingdao SOS Industrial and its subsidiaries’ financial results had been consolidated by the Company in accordance with U.S. GAAP\ndue to the Company being the primary beneficiary of these companies prior to the Disposition (as defined below) in November 2022.\n\n \n\nOn\nNovember 2, 2022, the Company entered into a certain share purchase agreement (the “Disposition SPA”) with S International\nHoldings Limited (the “Purchaser”), a Cayman Islands exempt company, and S International Group Limited (“S International”\nor the “Target”), a British Virgin Islands company and the Company’s wholly owned subsidiary prior to the Disposition.\nPursuant to the Disposition SPA, the Purchaser agreed to purchase S International in exchange for cash consideration of $17,000,000.\nUpon the closing of the transaction (the “Disposition”) contemplated by the Disposition SPA on November 2, 2022 (the\n“Closing Date”) , the Purchaser became the sole shareholder of S International and as a result, assume all assets and\nliabilities of all the subsidiaries and VIE entities owned or controlled by S International. S International owns 100% of the issued\nshares in S International Holdings Limited, which owns 100% of the issued shares in Qingdao S Investment. Qingdao S Investment controls\nQingdao SOS Industrial, the former VIE, through a series of contractual agreements with the former VIE and the shareholders of the former\nVIE dated November 2, 2022. The former VIE owns 100% of the equity interests in each of SOS Information Technology Co., Ltd. and Qingdao\nSOS Digital Technologies Inc.\n\n \n\nAs\nthe VIE structure has been unwound,  the financial results of the former VIE and its subsidiaries are no longer consolidated into\nthe Company’s financial statements after the Closing Date. As of the date of this annual report, our current corporate structure\ndoes not contain any VIE in mainland China and neither we nor our subsidiaries has intention establishing any VIEs in mainland China\nin the future.\n\n** **\n\nF-12\n\n \n\n** **\n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n** **\n\n**Reverse\nAcquisitions of China Rapid Finance by SOS**\n\n \n\nOn\nMay 18, 2020, the Company completed the reverse acquisition with Yong Bao Two Ltd. (“YBT”), the parent company of SOS Information\nTechnology Co., Ltd. (“SOS”), acquiring 37,985,203 Class A ordinary shares, and 3,465,574 Class B ordinary\nshares, par value $0.193 per ordinary share, for its SOS’s asset injection and private placement transactions.\n\n \n\nFollowing\nthe completion of the acquisition, the operations of the Company were primarily comprised of the operations of SOS.\n\n \n\nSOS\nwas determined to be the accounting acquirer of the Company. As such, the historical financial statements are those of SOS, and SOS’s\nequity has been re-cast to reflect the equity structure of the Company and the shares of common stock received.\n\n \n\nThe\nreverse acquisition was accounted for as asset acquisitions. The purchase price for China Rapid Finance (“CRF”) was\n$9.7 million. The transaction price of CRF includes 100% of all outstanding stock valued at net $9.7 million. The stock exchanged equal\nto the 72,636,230 shares of CRF outstanding prior to the issuance of additional shares in the acquisition, at the market price of $0.133\nper share. The total purchase price has been allocated based on an estimate of the fair value of CRF’s assets acquired and\nliabilities assumed with the remainder recorded as an expense.\n\n \n\nOn\nMay 18, 2020, the fair value of the following assets and liabilities were acquired resulting in the total loss of approximately $5.7 million:\n\n \n\nDollars in thousands \n  \n\nTotal\nPurchase Price \n$9,660 \n\nNet\nAssets Acquired: \n   \n\nAssets \n   \n\nCash and\ncash equivalents \n 13,664 \n\nRestricted\ncash \n 26,524 \n\nAccounts\nreceivable \n 7,462 \n\nInventories \n 8 \n\nPrepaid\nexpenses and other current assets \n 110 \n\nIntangible\nassets \n 2,969 \n\nOther\nassets \n 2,682 \n\nTotal\nAssets \n 53,419 \n\nLiabilities \n   \n\nAccounts\npayable and accrued liabilities \n (49,438)\n\nTotal\nLiabilities \n (49,438)\n\nNet\nAssets Acquired \n 3,981 \n\nLoss\non Acquisition \n$5,679 \n\n** **\n\nF-13\n\n \n\n**  **\n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\nOn\nAugust 3, 2020, SOS Limited (the “Company,” previously known as China Rapid Finance Limited) and Hantu (Hangzhou) Asset Management\nCo., Ltd. (the “Purchaser”) entered into certain share purchase agreement (the “Disposition SPA”). Pursuant to\nthe Disposition SPA, the Purchaser agreed to purchase CRF China Holding Co. Limited, a Hong Kong limited company (“CRF China”),\nChina Capital Financial LLC, a Delaware limited liability company (“China Capital”), CRF China Limited, a British Virgin\nIslands company (“CRF BVI”), CRF Technology LLC, a California limited liability company (“CRF Technology”), and\nHML China LLC, a Delaware limited liability company (“HML”) (collectively, the “Subsidiaries”) in exchange for\ncash consideration of $3.5 million (the “Purchase Price”). Upon the closing of the transaction (the “Disposition”)\ncontemplated by the Disposition SPA, the Purchaser will become the sole shareholder of the Subsidiaries and as a result, assume all assets\nand liabilities of all the subsidiaries and variable interest entities owned or controlled by the Subsidiaries.\n\n \n\nOn\nAugust 3, 2020, the fair value of the following assets and liabilities were disposed of resulting in the total gain of approximately\n$0.063 million:\n\n \n\nDollars in thousands \n  \n\nTotal Selling Price \n$3,500 \n\nNet Assets Disposed: \n   \n\n  \n   \n\nTotal Assets \n 53,654 \n\nTotal Liabilities \n (50,217)\n\nNet\nAssets Disposed \n 3,437 \n\nIncome\nfrom disposal of discontinued operations \n$63 \n\n \n\nLoss\non discontinued operations for the year ended December 31, 2020 was as follows:\n\n \n\nDollars in thousands \n  \n\nRevenue \n$453 \n\nExpenses \n (998)\n\nLoss\non discontinued operations \n$(545)\n\n \n\nOn\nNovember 2, 2022, the fair value of the following assets and liabilities were disposed of resulting in the total loss of approximately\n$0.8 million:\n\n \n\nDollars in thousands \n  \n\nTotal\nSelling Price \n$17,000 \n\nNet\nAssets Disposed: \n   \n\n  \n   \n\nTotal\nAssets \n 110,201 \n\nTotal\nLiabilities \n (94,012)\n\nNet\nAssets Disposed \n 16,189 \n\nIncome\nfrom disposal of discontinued operations \n$811 \n\n \n\nLoss\non discontinued operations for the year ended December 31, 2022 was as follows:\n\n \n\nDollars in thousands \n  \n\nRevenue \n$81,977 \n\nExpenses \n (83,049)\n\nLoss\non discontinued operations \n$(1,072)\n\n \n\nF-14\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\nDisposal\nloss from selling off insurance marketing business segment\n\n \n\nPursuant\nto the Share Purchase Agreement (this “Agreement”) is made and entered into as of  November 2, 2022 by and\namong (i) S International Holdings Limited, a Cayman Islands exempt company (the “Purchaser”), (ii) S International\nGroup Limited, a British Virgin Islands company (the “Company”), and (iii) SOS Limited, a Cayman Islands exempt company\n(“SOS” or the “Seller” of disposed asset group in insurance marketing). The Purchaser, the Company and the Seller\nare sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”.\n\n \n\nAs\nat the date hereof, (i) SOS owns 100% of the issued shares in the Company, the Company owns 100% of the issued shares in S International\nHoldings Limited (“S International HK”), S International HK owns 100% of the issued shares in Qingdao S Investment Holding\nLimited (“WFOE”), and WFOE controls Qingdao SOS Industrial Holding Co., Ltd. through a series of contractual agreements with\nthe Company and the shareholders of the Company dated November 2, 2022 (the “VIE Agreements”); and (ii) Qingdao\nSOS Industrial Holding Co., Ltd owns 100% of the equity interests in each of SOS Information Technology Co., Ltd. and Qingdao SOS Digital\nTechnologies Inc.;\n\n \n\nThe\nSeller desires to sell to the Purchaser, and the Purchaser desire to purchase from the Seller, all of the Purchased Shares (as hereinafter\ndefined) in exchange for US$ 17.0 million (the “Purchase Price”), subject to the terms and conditions set forth herein (the\n“Transaction”).\n\n \n\nDollars in thousands \n  \n\nTotal\nPurchase Price \n 17,000 \n\nNet Assets\nAcquired: \n   \n\nAssets \n   \n\nCash\nand cash equivalents \n 4,942 \n\nAccounts\nreceivable \n 2,509 \n\nInventories \n 16,424 \n\nPrepaid\nexpenses and other current assets \n 82,660 \n\nFixed\nassets \n 3,059 \n\nLong term\ninvestment \n 607 \n\nTotal\nassets \n 110,201 \n\nLiabilities \n   \n\nAccounts\npayable and accrued liabilities \n (94,644)\n\nTax recovery \n 972 \n\nLeasing\nliabilities \n (1,774)\n\nTotal\nLiabilities \n (95,446)\n\nAccumulated\nOther Comprehensive Income \n 1,434 \n\nNet\nAssets Sold: \n 16,189 \n\nGain\non disposal \n 811 \n\n \n\nF-15\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Use\nof estimates and assumptions**\n\n \n\nThe\npreparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the balance sheet\ndate, and the reported amounts of revenues and expenses during the reporting period.\n\n \n\nSignificant\nestimates and judgments reflected in the Company’s consolidated financial statements include, but are not limited to:\n\n \n\n●the\nallowance for expected credit losses on accounts receivable, other receivables, prepayments,\nand amount due from related parties;\n\n \n\n●the\nvaluation of inventories at the lower of cost and net realizable value;\n\n \n\n●the\nassessment of impairment of property, plant and equipment and other long-lived assets;\n\n \n\n●the\nfair value measurement of digital assets;\n\n \n\n●the\ntiming and recognition of revenue, including the identification of performance obligations\nand transfer of control;\n\n \n\n●the\nrecoverability of deferred tax assets and related valuation allowance; and\n\n  \n\nThese\nestimates are based on historical experience, current market conditions, and various other assumptions that management believes to be\nreasonable under the circumstances. However, actual results could differ materially from those estimates.\n\n \n\nThe\nCompany’s estimates are subject to a higher degree of uncertainty due to the nature of its operations, including commodity trading\nactivities, digital asset exposure, and evolving business strategies.\n\n \n\n**Foreign\ncurrency translation and transaction**\n\n \n\nThe\nreporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB),\nas its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of\nChina at the end of the period. The statement of income accounts is translated at the average translation rates and the equity accounts\nare translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive\nincome. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than\nthe functional currency are included in the results of operations as incurred.\n\n \n\nTranslation\nadjustments included in accumulated other comprehensive loss amounted to $21,304,430 and $28,511,734, as of December 31, 2025, 2024,\nrespectively. The balance sheet amounts, with the exception of shareholders’ equity at December 31, 2024, 2023 were translated\nat 7.2993, 7.0999 RMB, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation\nrates applied to statement of income accounts for the years ended December 31, 2025, 2024 and 2023 were 7.1875 RMB, 7.1957 RMB and 7.0809\nRMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported\non the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.\n\n \n\nF-16\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Cash\nand cash equivalents**\n\n \n\nCash\nand cash equivalents consist of cash on hand; demand deposits and time deposits placed with banks or other financial institutions and\nhave original maturities of less than three months.\n\n \n\n**Derivative\nInstruments and Trading Activities**\n\n** **\n\nThe\nCompany engages in futures trading activities through accounts held with a licensed futures broker. These activities are classified as\ntrading activities and are not designated as hedging instruments.\n\n \n\nFunds\nheld in futures trading accounts primarily represent margin deposits and settlement balances and are not classified as cash and cash\nequivalents due to their restricted nature and exposure to market risk.\n\n \n\nThe\nCompany accounts for its futures contracts as derivative instruments in accordance with applicable accounting guidance. Derivatives are\nrecognized as either assets or liabilities in the consolidated balance sheets and are measured at fair value.\n\nChanges\nin the fair value of derivative instruments, including both realized and unrealized gains and losses, are recognized in earnings in the\nperiod in which they arise.\n\n \n\nAs\nof December 31, 2025, the Company held open futures positions with associated margin deposits. The Company recorded realized and unrealized\ngains and losses related to these activities in the consolidated statements of operations.\n\n \n\n**Accounts\nreceivable, net**\n\n \n\nAccounts\nreceivable represent amounts due from customers for goods delivered or services rendered for which the Company has an unconditional right\nto consideration. Accounts receivable are recognized when control of goods or services has been transferred to the customer and are recorded\nat the invoiced amount, net of an allowance for expected credit losses.\n\n \n\nThe\nCompany maintains an allowance for expected credit losses in accordance with ASC 326. The allowance is based on management’s estimate\nof lifetime expected credit losses inherent in the accounts receivable balance. In estimating expected credit losses, the Company considers\na combination of factors, including the aging of receivables, historical collection experience, current economic conditions, industry\ntrends, and forward-looking information, as well as specific customer credit risk characteristics.\n\n \n\nThe\nCompany also evaluates subsequent cash collections, customer payment history, and the financial condition of significant customers in\nassessing the adequacy of the allowance. Receivables are assessed on a collective basis when similar risk characteristics exist and on\nan individual basis for customers with elevated credit risk or significant outstanding balances.\n\n \n\nA\nsignificant portion of the Company’s accounts receivable is generated from commodity trading transactions and service arrangements\nwith a limited number of counterparties. These balances may be subject to increased credit risk due to the nature of the transactions\nand the financial condition of the customers.\n\n \n\nThe\ndetermination of the allowance for expected credit losses requires significant judgment and is sensitive to changes in economic conditions,\ncustomer creditworthiness, and other factors. If actual collections differ from management’s estimates, the Company may be required\nto record additional provisions in future periods.\n\n \n\nReceivables\nare written off when management determines that collection is not probable after all reasonable collection efforts have been exhausted.\n\n \n\nIn\ncertain arrangements, customers may make advance payments or balances may be settled through offsetting transactions. The Company evaluates\nthe substance of these arrangements to determine whether amounts should be classified as accounts receivable or contract liabilities\nbased on the timing of revenue recognition and the Company’s right to consideration.\n\n \n\nF-17\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Other\nreceivables and prepayments**\n\n** **\n\nOther\nreceivables and prepayments include advances to suppliers, deposits, loans to third parties and employees, and other non-trade receivables\narising from the Company’s operations.\n\n \n\nPrepayments\nprimarily represent amounts advanced to suppliers in connection with commodity trading transactions and are expected to be settled through\ndelivery of goods or services.\n\n \n\nOther\nreceivables include, among others, loan receivables, refundable deposits, advances, and other non-operating receivables.\n\n \n\nThe\nCompany evaluates the classification of balances based on the underlying nature of the transaction, including whether amounts represent\nprepayments for goods or services, financing arrangements, or other receivable balances.\n\n \n\nAllowance\nfor credit losses\n\n \n\nThe\nCompany recognizes an allowance for expected credit losses on other receivables and certain prepayments where recovery is uncertain.\nThe allowance is determined based on:\n\n \n\n●aging\nof balances;\n\n \n\n●historical\ncollection experience;\n\n \n\n●specific\nidentification of high-risk balances;\n\n \n\n●counterparty\ncreditworthiness;\n\n \n\n●existence\nof supporting agreements and collateral;\n\n \n\n●subsequent\nsettlement or recovery;\n\n \n\n●macroeconomic\nand industry conditions.\n\n \n\nFor\ncertain balances, particularly long-outstanding advances or loans, the Company applies a specific assessment approach, whereby additional\nallowance is recognized based on management’s assessment of expected recoverability.\n\n \n\nBalances\ndeemed uncollectible are written off against the allowance when all reasonable collection efforts have been exhausted.\n\n \n\n**Inventories**\n\n \n\nThe\navailability and prices of inventories are subject to wide fluctuations due to factors such as changes in weather conditions, government\nprograms and policies, competition, changes in customer preferences. Currently, the Company entered into non-derivative contracts. The\ninventories are valued at the lower of cost or market. The Company determines cost based on the first-in, first-out method. Net realizable\nvalue represents the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal,\nand transportation.\n\n \n\nThe\nCompany’s inventories primarily consist of commodities and trading goods, including sesame, gold concentrate powder, sulfur, coal,\ndiluted asphalt, servers, mining machines, and other related products.\n\n \n\nThe\nCompany performs periodic reviews of inventory to identify slow-moving, excess, or obsolete items. Such reviews consider inventory ageing,\nhistorical turnover, current market conditions, expected selling prices, and estimated costs to sell. Where the carrying value of inventory\nexceeds its net realizable value, an impairment loss is recognized in cost of revenues.\n\n \n\nFor\ncertain commodity-based inventories, including metal-related products, the Company estimates NRV based on observable market prices of\nunderlying commodities (e.g., gold and silver), product-specific characteristics such as grade or metal content, and applicable pricing\nor recovery coefficients. Estimated costs to complete and sell, including processing, refining, and logistics costs, are also considered\nin determining NRV.\n\n \n\nThe\nCompany applies additional scrutiny to inventories held for extended periods, as such inventories may be subject to increased uncertainty\nregarding realizability and timing of sale.\n\n \n\nInventory\nwrite-downs establish a new cost basis and are not subsequently reversed in future periods under U.S. GAAP. Value-added taxes (“VAT”)\nrelated to inventory purchases are recorded separately and are not included in inventory cost.\n\n \n\nThe\ndetermination of NRV involves significant judgment and estimates, particularly in relation to market price volatility, expected selling\nprices, and costs to sell.\n\n \n\nF-18\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Property,\nplant and equipment, net**\n\n \n\nProperty,\nplant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the\nestimated useful lives of the assets. The estimated useful lives are as follows:\n\n \n\n**Category**\n \n**Depreciation\nmethod**\n \n**Estimated\nuseful lives**\n\nOffice equipment, fixtures\nand furniture\n \nStraight-line\n \n5 years\n\nMining equipment\n \nStraight-line\n \n3-5 years\n\nComputer\n \nStraight-line\n \n3 years\n\nMotor vehicles\n \nStraight-line\n \n5 years\n\n \n\nThe\ncost and accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included\nin the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as\nincurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company\nalso re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful\nlives.\n\n \n\n**Intangible\nassets**\n\n \n\nIntangible\nassets consist primarily of digital assets, including Bitcoin (“BTC”) and Ethereum (“ETH”).\n\n \n\nEffective\nJanuary 1, 2025, the Company adopted ASU 2023-08, *Accounting for and Disclosure of Crypto Assets*, which requires qualifying digital\nassets to be measured at fair value, with changes in fair value recognized in earnings.\n\n \n\nDigital\nassets are initially recognized at fair value at the time of receipt or acquisition. Subsequent to initial recognition, digital assets\nare remeasured at fair value at each reporting date using quoted prices in active markets for identical assets.\n\n \n\nChanges\nin fair value are recognized in earnings within other income (expense) in the consolidated statements of operations.\n\n \n\nThe\nCompany determines fair value based on observable market prices from major cryptocurrency exchanges, which represent the principal market\nfor these assets. Digital assets are classified as Level 1 within the fair value hierarchy under ASC 820.\n\n \n\nThe Company has designated Blockchain.com (www.blockchain.com)\nas its principal active market for the trading of crypto assets, including BTC and ETH.\n\n \n\nThe Company has determined that Blockchain.com constitutes\nthe principal active market for its crypto asset holdings based on the following selection factors set forth under US GAAP, in particular\nASC 820 (Fair Value Measurement) and ASC 350-60 (Intangible Assets — Crypto Assets). Under ASC 820-10-20, fair value is defined\nas the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Among\nmarkets accessible to the Company, Blockchain.com exhibits characteristics that support its designation as the principal market:\nconsistent and accessible trading volume enabling price discovery, established global recognition as a leading digital asset platform,\npublicly verifiable and real-time quoted prices, and substantive regulatory compliance facilitating reliable valuation inputs.\n\n \n\nThe\nCompany adopted this standard using the modified retrospective method, with a cumulative effect adjustment recorded to retained earnings\nas of January 1, 2025.\n\n \n\nPrior\nto adoption, digital assets were accounted for as indefinite-lived intangible assets and measured at cost less impairment.\n\n \n\n**Digital\nasset mining**\n\n \n\nThe\nCompany has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power\nto the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation\nonly begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company\nis entitled to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block\nto the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the\nmining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.\n\n \n\nProviding\ncomputing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision\nof such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction\nconsideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received,\nwhich is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools.\nThe consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration\nis constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company\nreceives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component\nin these transactions.\n\n \n\nF-19\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\nThe\nCompany participates in digital asset mining activities by providing computing power to mining pool operators in exchange for digital\nasset rewards.\n\n \n\nThese\narrangements are accounted for as contracts with customers under ASC 606. The Company has a single performance obligation, which is to\nprovide computing power to the mining pool operator.\n\n \n\nThe\nperformance obligation is satisfied at a point in time when the mining pool operator successfully validates a block and the Company becomes\nentitled to its share of the reward.\n\n \n\nThe\nconsideration received is noncash and is measured at fair value at the time control of the digital assets is transferred to the Company.\nThe transaction price is variable and is constrained until it is probable that a significant reversal of cumulative revenue will not\noccur, which is generally when the reward is confirmed by the mining pool operator.\n\n \n\nRevenue\nis recognized at that point in time based on the fair value of the digital assets received.\n\n \n\nThe\nCompany did not generate revenue from digital asset mining during the year ended December 31, 2025.\n\n \n\n**Goodwill**\n\n** **\n\nGoodwill\nof $71,977 was recognized as of December 31, 2020 in connection with the transaction of SOS IT acquiring Inner Mongolia SOS Agency\nCo. Ltd. In future years, the Company will complete an annual impairment test for goodwill that includes an assessment of qualitative\nfactors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as\nstrategies and financial performance. The Company will perform annual impairment tests as of December 31, 2025 or earlier if indicators\nof impairment exist. There were no indicators of goodwill impairment as of December 31, 2025.\n\n \n\n**Impairment\nfor long-lived assets**\n\n \n\nLong-lived\nassets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes\nin circumstances indicate that the carrying value of an asset may not be recoverable. \n\n \n\nSuch\nevents or changes in circumstances include, but are not limited to:\n\n \n\n●significant\nadverse changes in market conditions;\n\n \n\n●declines\nin cryptocurrency prices;\n\n \n\n●reduced\nmining output or utilization;\n\n \n\n●technological\nobsolescence of mining equipment; and\n\n \n\n●changes\nin the expected use of the assets.\n\n \n\nThe\ndetermination of impairment involves significant judgment and estimates, including assumptions related to future cash flows, expected\nutilization of assets, cryptocurrency market conditions, and discount rates.\n\n \n\nThe\nCompany has recognized significant impairment losses on mining equipment and related infrastructure in prior periods and in the current\nyear, reflecting changes in market conditions and expected economic benefits.\n\n \n\nAs\ndisclosed in Note 8, impairment losses recognized during the years ended December 31, 2025, 2024 and 2023 amounted to $6.8 million, $nil\nand $4.5 million, respectively, primarily relating to cryptocurrency mining equipment.\n\n \n\nF-20\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Other\npayables**\n\n** **\n\nOther\npayables primarily consist of non-trade operating liabilities, including deposits received under hosting arrangements, freight and logistics-related\nbalances, rental and service-related payables, and other operational settlement obligations.\n\n \n\nOther\npayables are initially recognized at the invoiced or contractual amount and subsequently measured at amortized cost, which approximates\nfair value due to the short-term nature of the balances.\n\n \n\nDeposits\nreceived under hosting and operational agreements are recognized as liabilities until the related contractual obligations are fulfilled,\nsettled, refunded, or otherwise extinguished in accordance with the underlying agreements.\n\n \n\nThe\nCompany periodically evaluates long-outstanding balances to assess settlement expectations, contractual obligations, and appropriate\nfinancial statement classification.\n\n \n\n**Accounts\npayable**\n\n** **\n\nAccounts\npayable primarily represent obligations arising from purchases of inventory, commodity trading goods, equipment, logistics services,\nand other operating expenditures incurred in the ordinary course of business.\n\n \n\nCertain\nbalances classified within accounts payable relate to advances received from customers in connection with commodity trading arrangements.\nSuch balances primarily represent customer prepayments received prior to delivery of goods and are recognized as contract liabilities\nuntil the related performance obligations are satisfied in accordance with ASC 606.\n\n \n\nThe\nCompany’s trading activities may also involve advances paid to suppliers and settlement arrangements associated with commodity\ntransactions. Management evaluates the nature and classification of balances based on the underlying contractual arrangements and transaction\nsubstance.\n\n \n\nAccounts\npayable are initially recognized at the invoiced amount and subsequently measured at amortized cost, which approximates fair value due\nto the short-term nature of the balances.\n\n \n\nThe\nCompany periodically evaluates long-outstanding balances to assess:\n\n \n\n●commercial\nsubstance;\n\n \n\n●legal\nenforceability;\n\n \n\n●settlement\nexpectations;\n\n \n\n●related-party\nconsiderations; and\n\n \n\n●whether\nreclassification or additional disclosure is required.\n\n \n\nThe\ndetermination of appropriate classification and settlement assessment involves management judgment, particularly for balances\narising from commodity trading arrangements and long-outstanding transactions.\n\n** **\n\n**Fair\nvalue measurement**\n\n \n\nThe\nCompany measures certain financial assets at fair value in accordance with ASC 820, *Fair Value Measurement*. Fair value is defined\nas the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants\nat the measurement date.\n\n \n\nThe\nCompany uses a three-level hierarchy to prioritize inputs used in measuring fair value:\n\n \n\n●**Level\n1** — quoted prices (unadjusted) in active markets for identical assets;\n\n \n\n●**Level\n2** — observable inputs other than quoted prices included in Level 1;\n\n \n\n●**Level\n3** — unobservable inputs.\n\n \n\nF-21\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\nDigital\nAssets\n\n \n\nThe\nCompany accounts for its digital assets, including Bitcoin (“BTC”) and Ethereum (“ETH”), in accordance with ASU\n2023-08. Digital assets are measured at fair value with changes in fair value recognized in earnings in the period in which they occur.\n\n \n\nFair\nvalue is determined based on quoted market prices in active markets for identical assets and is classified as Level 1 in the fair value\nhierarchy.\n\n \n\nAs\nof December 31, 2025 and 2024, the carrying value of digital assets approximated their fair value.\n\n \n\n**Fair\nvalue measurement of digital assets**\n\n** **\n\nEffective\nJanuary 1, 2025, the Company adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets, which requires qualifying crypto assets\nto be subsequently measured at fair value with changes in fair value recognized in earnings.\n\n \n\nThe\nCompany’s digital assets consist primarily of Bitcoin (“BTC”) and Ethereum (“ETH”). Digital assets are\nmeasured at fair value at each reporting date using quoted prices in active markets for identical assets and are classified as Level\n1 fair value measurements under ASC 820, Fair Value Measurement.\n\n \n\nAs\nof December 31, 2025, the Company held approximately: 802.77 units of BTC with a fair value of approximately $70.3 million; and 2,949.79\nunits of ETH with a fair value of approximately $8.8 million.\n\n \n\nDuring\nthe year ended December 31, 2025, the Company recognized net unrealized fair value losses on digital assets of approximately $6.7 million\nin earnings.\n\n \n\nPrior\nto adoption of ASU 2023-08, digital assets were accounted for as indefinite-lived intangible assets under ASC 350 and measured at cost\nless impairment.\n\n \n\n**Revenue\nRecognition**\n\n** **\n\nThe\nCompany recognizes revenue in accordance with ASC 606, *Revenue from Contracts with Customers*, using the five-step model: (i) identify\nthe contract, (ii) identify performance obligations, (iii) determine transaction price, (iv) allocate transaction price, and (v) recognize\nrevenue when or as performance obligations are satisfied. The Company’s revenue streams primarily consist of (i) commodity trading\nrevenue and (ii) hosting and technology service revenue.\n\n \n\n**(a)****Commodity\nTrading Revenue**\n\n \n\nThe\nCompany generates revenue from the purchase and sale of commodities (including agricultural products, coal, and other materials).\n\n \n\nRevenue\nis recognized **at a point in time** when control of the goods is transferred to the customer. Control is generally considered transferred\nwhen:\n\n \n\n●the\ngoods have been delivered to the customer or designated third-party warehouse;\n\n \n\n●legal\ntitle has passed to the customer;\n\n \n\n●the\ncustomer has assumed the significant risks and rewards of ownership; and\n\n \n\n●the\nCompany has a present right to payment.\n\n \n\nThe\nCompany enters into back-to-back purchase and sales arrangements and acts as a **principal** in these transactions, as it controls\nthe goods prior to transfer and is primarily responsible for fulfillment. Accordingly, revenue is recognized on a **gross basis**.\n\n \n\nF-22\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**(b)****Service\nRevenue (Data Marketing and Technology Services)**\n\n** **\n\nThe\nCompany provides data marketing and technology services, including insurance marketing and customer data processing.\n\n \n\nRevenue\nis recognized **over time**, as services are rendered, based on monthly service periods. The Company typically:\n\n \n\n●provides\nservices continuously over the contract period; and\n\n \n\n●recognizes\nrevenue based on **monthly service settlement statements** agreed with customers.\n\n \n\nRevenue\nis recognized when:\n\n \n\n●services\nhave been performed;\n\n \n\n●the\ncustomer has acknowledged or accepted the services; and\n\n \n\n●the\nCompany has an enforceable right to payment.\n\n \n\n**(c)****Hosting\nServices Revenue**\n\n \n\nThe\nCompany provides cryptocurrency mining hosting services, including electricity supply, infrastructure support, and equipment maintenance.\n\n \n\nRevenue\nis recognized **over time** as the services are provided, as customers simultaneously receive and consume the benefits of the services.\n\n \n\nService\nfees are typically based on agreed rates (e.g., power usage or hosting capacity) and are recognized in the period the services are rendered.\n\n \n\n**(d)****Cryptocurrency Mining Revenue**\n\n \n\nIn prior periods, the Company generated revenue from cryptocurrency\nmining. During 2025, the Company did not engage in cryptocurrency mining activities due to economic factors and the lack of suitable mining\nequipment. Accordingly, no mining revenue was recognized during the year. The Company is currently focused on hosting service activities\nand may resume mining operations upon acquisition of new equipment.\n\n \n\n**Transaction\nPrice and Variable Consideration**\n\n \n\nThe\ntransaction price is based on contractual consideration and excludes value-added taxes (“VAT”), which are presented as a\nreduction of revenue.\n\n \n\nVariable\nconsideration is included only to the extent that it is probable that a significant reversal will not occur. Variable consideration is\ngenerally not significant for the Company’s current revenue streams.\n\n \n\n**Significant\nJudgments**\n\n \n\nSignificant\njudgments applied by management include:\n\n \n\n●determining\nwhether the Company acts as principal or agent in commodity trading transactions;\n\n \n\n●assessing\nthe timing of transfer of control for commodity sales;\n\n \n\n●determining\nthe appropriate pattern of revenue recognition for service arrangements; and\n\n \n\n●evaluating\ncollectability and whether it is probable that consideration will be received.\n\n \n\nManagement\nconsiders contractual terms, delivery documentation, customer acceptance, and historical collection experience in making these judgments.\n\n \n\nF-23\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.SUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Operating\nlease**\n\n \n\nWe\nadopted ASU No. 2016-02, Leases (Topic 842), or ASC 842, from January 1, 2020. We determine if an arrangement is a lease or contains\na lease at lease inception. For operating leases, we recognize a right-of-use (“ROU”) asset and a lease liability based on\nthe present value of the lease payments over the lease term on the consolidated balance sheets at commencement date. As most of our leases\ndo not provide an implicit rate, we estimate our incremental borrowing rate based on the information available at the commencement date\nin determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a\ncollateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets\nalso include any lease payments made, net of lease incentives. Lease expense is recorded on a straight-line basis over the lease term.\nOur leases often include options to extend and lease terms include such extended terms when we are reasonably certain to exercise those\noptions. Lease terms also include periods covered by options to terminate the leases when we are reasonably certain not to exercise those\noptions.  \n\n \n\n**Value\nadded taxes**\n\n \n\nRevenue\nis presented net of value-added taxes (“VAT”). VAT is levied on the Company’s sales of goods and services in the PRC\nat applicable rates ranging primarily from 6% to 13%, depending on the nature of the underlying transactions.\n\n \n\nEntities\nthat are general VAT taxpayers are permitted to offset qualified input VAT paid to suppliers against output VAT on sales. The net amount\nof VAT payable or recoverable is recorded within “taxes payable” or “other receivables,” as appropriate.\n\n \n\nInput\nVAT that has not yet been certified or is pending verification by tax authorities (“uncertified input VAT”) is recorded separately\nand is not available for offset until certification is completed.\n\n \n\nExcess\ninput VAT may be carried forward to future periods for offset against output VAT. The Company assesses the recoverability of input VAT\nbalances based on expected future taxable sales.\n\n \n\nCertain\ngold and gold concentrate transactions may qualify for VAT exemption under applicable PRC tax regulations.\n\n \n\nVAT\nreturns filed by the Company’s subsidiaries in the PRC are subject to examination by the tax authorities for a period of up to\nfive years from the date of filing.\n\n \n\n**Income\ntaxes**\n\n \n\nThe\nCompany accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based\non the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that\nhave been enacted or substantively enacted by the balance sheet date.\n\n \n\nDeferred\ntaxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the\ncarrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation\nof assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets\nare recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences\ncan be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the\nliability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged\ndirectly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance\nwhen, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.\nCurrent income taxes are provided for in accordance with the laws of the relevant taxing authorities.\n\n \n\nF-24\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n2.\nSUMMARY\nOF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES -\ncontinued\n\n \n\n**Other\ncomprehensive income**\n\n \n\nComprehensive\nincome consists of two components, net income and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue,\nexpenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income.\nOther comprehensive (loss) income consists of a foreign currency translation adjustment resulting from the Company not using the U.S.\ndollar as its functional currencies.\n\n \n\n**Losses\nper share**\n\n \n\nThe\nCompany computes losses per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires\ncompanies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share\noutstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g.,\nconvertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance\ndate, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease\nloss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2025, 2024 and 2023, there\nare 16,170,320, 3,034,821 and 906,423 dilutive shares, respectively.\n\n \n\n**Share-based\ncompensation**\n\n \n\nThe\nCompany recognizes compensation expense for all share–based payments in accordance with FASB ASC Topic 718, Compensation –\nStock Compensation. The Company follows the fair value method of accounting for awards granted to employees, directors, officers and\nconsultants. Share-based awards are measured at their estimated fair value on each respective grant date. The Company recognizes share-based\npayment expenses over the vesting period. The Company’s share-based compensation awards are subject only to service-based vesting\nconditions. Forfeitures are accounted for as they occur. The fair value of an option award is estimated on the date of grant using the\nBlack–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that\nare inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life\nof the option and the expected dividend yield which is based on the historical dividends issued by the Company. The Company has never\npaid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Expected volatility is calculated based\non the analysis of other public companies. Risk–free interest rates are calculated based on risk–free rates for the appropriate\nterm. The expected life is calculated as (i) the mid-point between the average vested date and the contractual expiration of the option\nfor executives and directors and (ii) three years from the average vesting date for all others due to limited exercise history. Determining\nthe appropriate fair value model and calculating the fair value of equity–based payment awards require the input of the subjective\nassumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s\nbest estimates, which involve inherent uncertainties and the application of management’s judgment.\n\n \n\n**Employee\nbenefits**\n\n \n\nThe\nfull-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment\ninsurance and other welfare, which are government mandated defined contribution plans by law. The Company is required to accrue for these\nbenefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the\nrelevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued.\n\n \n\n**Impact\nof Recently Issued Accounting Pronouncements**\n\n** **\n\nIn\nJune 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326):\nMeasurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 added a new impairment model (known as\nthe CECL model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance\nits estimate of expected credit losses. The CECL model applies to financial assets measured at amortized costs, including loans and accounts\nreceivable. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected\ncredit losses on assets that have a low risk of loss. As an emerging growth company, the Company was permitted to adopt the new\nstandard for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The\nCompany has early adopted the new standard effective January 1, 2025, which didn’t have a material impact on the consolidated\nfinancial statements.\n\n \n\n**Impact\nof Recently Issued Accounting Pronouncements Not Yet Effective**\n\n**  **\n\n*Income\nTaxes (Topic 740)*\n\n* *\n\nIn\nDecember 2023, the FASB issued ASU No. 2023-09, *Income Taxes (Topic 740)*. ASU No. 2023-09 requires disaggregated information\nabout a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The guidance\nis effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company does\nnot expect to adopt ASU No. 2023-09 early and is currently evaluating the impact of adopting this standard on its consolidated financial\nstatements.\n\n \n\n**2.1 Restatement of Consolidated\nFinancial Statements**\n\n \n\nThe Company has restated the accompanying\nconsolidated financial statements and related disclosures for the year ended December, 31, 2024, 20-F filed on May. 15 2025, in order\nto restate the accounts held with a licensed futures broker from Cash and Cash Equivalents to Trading Financial Assets in the statement\nof consolidated balance sheet These activities were conducted to facilitate the Company’s commodity trading operations and were not designated\nas hedging instruments for accounting purposes. \n\n \n\nF-25\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n3.\nTrading\nFinancial Assets and Futures Trading Activities\n\n \n\nDuring\n2025, the Company engaged in speculative futures trading activities through accounts held with a licensed futures broker in the PRC.\nThese activities were conducted to facilitate the Company’s commodity trading operations and were not designated as hedging instruments\nfor accounting purposes.\n\n \n\nBalances\nheld within futures trading accounts, including margin deposits and settlement balances, are classified as trading financial assets and\nare measured at fair value.\n\n \n\nAs\nof December 31, 2025 and 2024, trading financial assets primarily consisted of balances held with a licensed futures broker related to\ncommodity futures trading activities.\n\n \n\nFor\nthe year ended December 31, 2025, the Company recognized:\n\n \n\n●realized trading gains of approximately RMB8.1 million; and\n\n \n\n●unrealized gains on open futures positions of approximately RMB2.1 million, which were recognized within investment income in the consolidated statements of operations.\n\n \n\nAs\nof December 31, 2025, the Company held open futures positions primarily relating to rubber futures contracts.\n\n \n\nThe\nCompany’s futures trading activities expose it to market price risk associated with fluctuations in commodity prices.\n\n \n\nFutures\ntrading balances and open positions are measured using observable market prices and classified within Level 1 of the fair value hierarchy.\n\n \n\nInvestment\nincome for the year ended December 31, 2025 primarily consisted of realized and unrealized gains and losses arising from futures trading\nactivities.\n\n \n\nCertain\nprior-year balances have been reclassified to conform to the current-year presentation. Specifically, balances previously presented within\ncash and cash equivalents relating to futures trading margin deposits and settlement balances have been reclassified to trading financial\nassets.\n\n \n\nCommodity\nPrice Risk\n\n \n\nThe\nCompany is exposed to commodity price risk arising from fluctuations in market prices of commodities underlying its futures trading activities,\nincluding rubber-related futures contracts.\n\n \n\nThe\nCompany engages in speculative futures trading activities through a licensed futures broker to facilitate its commodity trading operations\nand market activities. Changes in commodity prices may result in realized and unrealized gains or losses recognized in earnings.\n\n \n\nAs\nof December 31, 2025, the Company held open futures positions that were subject to market price fluctuations. The Company monitors market\nconditions and margin requirements on an ongoing basis.\n\n \n\nF-26\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n4.\nACCOUNTS\nRECEIVABLE, NET\n\n \n\nAccounts\nreceivable represent amounts due from customers for goods delivered or services rendered for which the Company has an unconditional right\nto consideration. Accounts receivable are recorded net of an allowance for credit losses in accordance with ASC 326.\n\n \n\nAccounts\nreceivable, net consist of the following:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nAccounts receivable \n$5,034  \n$2,938 \n\nAllowance for credit\nlosses \n (1,876) \n (308)\n\nTotal accounts receivable,\nnet \n$3,158  \n$2,630 \n\n  \n    \n   \n\nMovements of allowance for credit losses are\nas follows: \n    \n   \n\n  \n    \n   \n\nBeginning balance \n$308  \n$121 \n\nAddition \n 1,554  \n 187 \n\nForeign exchange translation \n 14  \n - \n\nEnding balance \n$1,876  \n$308 \n\n \n\nThe\nCompany estimates expected credit losses using a combination of aging analysis, historical loss experience, and forward-looking information,\nincluding current economic conditions, industry trends, and specific customer credit risk factors. Management also considers subsequent\ncash collections, customer payment history, and the financial condition of significant customers in evaluating the adequacy of the allowance.\n\n \n\nThe\ndetermination of the allowance for expected credit losses requires significant judgment. Changes in assumptions regarding customer credit\nrisk, economic conditions, and collectability could materially affect the amount of the allowance recorded.\n\n \n\nGiven\nthe concentration of receivables and limited collection history for certain customers, actual collections may differ from management’s\ncurrent estimates and assumptions used in determining the allowance for expected credit losses.\n\n \n\n**Credit\nRisk and Concentration**\n\n** **\n\nThe\nCompany’s accounts receivable are primarily generated from its commodity trading business and service arrangements. These receivables\nare concentrated among a limited number of customers.\n\n \n\nAs\nof December 31, 2025, a significant portion of accounts receivable was due from a small number of counterparties. The financial condition\nof these customers and their ability to make timely payments may be affected by market conditions, which could adversely impact the Company’s\nability to collect outstanding balances.\n\n \n\n**Collectability\nand Subsequent Receipts**\n\n** **\n\nAs\nof December 31, 2025, certain accounts receivable balances remained outstanding beyond their contractual payment terms, and collections\nsubsequent to year-end were limited for certain customers. These factors indicate an increased level of estimation uncertainty in determining\nthe allowance for expected credit losses.\n\n \n\nThe\nCompany monitors the collectability of its receivables on an ongoing basis and records additional allowances when necessary. Receivables\nare written off when all reasonable collection efforts have been exhausted.\n\n \n\n**Classification\nand Presentation**\n\n** **\n\nCertain\ncustomer arrangements may involve advance payments, offsetting transactions, or settlement through non-standard payment terms. The Company\nevaluates these arrangements to determine whether balances should be presented as accounts receivable or contract liabilities based on\nthe underlying contractual terms and the timing of revenue recognition.\n\n \n\nManagement\napplies judgment in determining the appropriate classification of such balances. Management applies judgment in determining the appropriate\nclassification of such balances based on the underlying contractual arrangements and settlement terms.\n\n \n\nF-27\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n5.\nOTHER\nRECEIVABLES, NET\n\n \n\nOther\nreceivables consist of the following:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nDeposit to non-trade suppliers \n$77,175  \n$71,326 \n\nLoan receivable \n 18,553  \n 18,553 \n\nPrepayments \n 427,824  \n 222,022 \n\nAllowance for credit\nlosses \n (213,159) \n (161,620)\n\nTotal other receivables,\nnet \n$310,393  \n$150,281 \n\n  \n    \n   \n\nMovements of allowance for credit losses   are\nas follows: \n    \n   \n\n  \n    \n   \n\nBeginning balance \n$161,620  \n$162,894 \n\nAddition \n 51,178  \n 2,014 \n\nReverse \n -  \n (3,288)\n\nForeign exchange translation \n 361  \n - \n\nEnding balance \n$\n213,159\n  \n$161,620 \n\n \n\nPrepayments\nprimarily represent advances to suppliers in connection with commodity trading transactions. These balances are generally expected to\nbe settled through delivery of goods.\n\n \n\nOther\nreceivables include loans to third parties and employees, refundable deposits, and other advances. Certain balances relate to non-operating\nor financing-type arrangements and are subject to separate recoverability assessment.\n\n \n\nCredit\nrisk and aging\n\n \n\nA\nportion of the Company’s other receivables and prepayments has been outstanding for extended periods. Long-aged balances are subject\nto increased uncertainty regarding recoverability, particularly where:\n\n \n\n●no\nrecent settlement activity exists;\n\n \n\n●contractual\nterms have expired or are unclear; or\n\n \n\n●counterparties\nare experiencing financial difficulty.\n\n \n\nManagement\nperforms specific assessments for such balances and records allowances where appropriate.\n\n \n\nDuring\nthe year ended December 31, 2025, the Company recognized impairment losses of approximately US$51.2 million on other receivables.  \n\n \n\nThese\nimpairments primarily relate to:\n\n \n\n●long-outstanding\nadvances to suppliers;\n\n \n\n●balances\nwhere delivery of goods or services is uncertain or no longer expected; and\n\n \n\n●receivables\nwhere recovery is uncertain due to counterparty-specific factors.\n\n \n\n**Significant\njudgment and estimation uncertainty**\n\n** **\n\nThe\ndetermination of recoverability involves significant judgment, particularly for:\n\n \n\n●long-aged\nbalances;\n\n \n\n●advances\nsubject to extended settlement periods or non-standard contractual arrangements;\n\n \n\n●loan-type\narrangements with third parties; and\n\n \n\n●balances\nsubject to dispute or restructuring.\n\n \n\nChanges\nin assumptions or future collection outcomes could result in material adjustments to the carrying amounts.\n\n \n\nF-28\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n6.\nINVENTORIES\n\n \n\nInventories\nconsist of the following:\n\n \n\n  \nDecember 31,  \nDecember 31, \n\n  \n2025  \n2024 \n\nCommodity inventories and trading\ngoods \n$32,602  \n$35,776 \n\nAllowance for inventory obsolescence \n (8,620) \n (2,765)\n\nTotal Inventory, net \n 23,982  \n 33,011 \n\n \n\nThe\nCompany’s inventories primarily consist of commodity trading goods, including metal-related products, agricultural commodities,\nand other materials.\n\n \n\nInventory\nis stated at the lower of cost or net realizable value. During the year ended December 31, 2025, the Company recorded inventory write-downs\nof $8,620 (2024: $2,765) primarily related to obsolete or slow-moving inventory and declines in estimated realizable value for certain\ninventory categories.\n\n \n\nThe\ndetermination of NRV involves significant judgment and estimates, particularly for inventories held for extended periods and inventories\nsubject to commodity price volatility. In estimating NRV, the Company considers factors including observable commodity prices, inventory\nage, expected selling prices, estimated recoverable value, historical transaction experience, market conditions, and estimated costs\nto complete and sell inventory.\n\n \n\nCertain\ncommodity inventories are held as part of the Company’s trading strategy and may remain in inventory for extended periods pending\nfavorable market conditions. Accordingly, actual realizable values may differ from estimates and may be affected by future changes in\ncommodity prices, market liquidity, customer demand, and timing of sale.\n\n \n\n7.\nOPERATING\nLEASE LIABILITIES\n\n \n\nThe\nCompany adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance,\non January 1, 2019 using the modified retrospective method of adoption. The Company elected the transition method expedient which allows\nentities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings\nin the period of adoption. As a result of electing this transition method, prior periods have not been restated.\n\n \n\nOperating\nlease expense for the years ended December 31, 2025, 2024 and 2023 was $193,604, $384,000, and $551,041, respectively.\n\n \n\nOn\nFebruary 5, 2025, the Company entered into a virtual office lease agreement with a monthly lease payment of $189.60, effective through\nFebruary 28, 2027.\n\n \n\nSupplemental\nbalance sheet information related to leases is as follows:\n\n \n\n   Location on Face of\nBalance Sheet  December 31,\n2025   December 31,\n2024 \n\nOperating leases:           \n\nOperating lease right of use assets  Operating lease, right-of-use assets  $2   $      - \n\n              \n\nCurrent operating lease liabilities  Operating lease liabilities - current  $2   $- \n\nNon-current operating lease liabilities  Operating lease liabilities   -    - \n\nTotal operating lease liabilities     $2   $- \n\n \n\nF-29\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n8.\nPROPERTY,\nPLANT AND EQUIPMENT, NET\n\n \n\nProperty,\nplant and equipment consist of the following:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nOffice equipment, fixtures and\nfurniture \n$8,806  \n$8,799 \n\nMining equipment \n 63,672  \n 63,672 \n\nMotor vehicle \n 208  \n 170 \n\nLess: Accumulated depreciation \n (37,507) \n (28,795)\n\nLess: Impairment \n (33,589) \n (26,703)\n\nTotal \n$1,590  \n$17,143 \n\n \n\nThe\ndepreciation expenses for the years ended December 31, 2025, 2024 and 2023 was $8.7 million, $10.9 million and $5.0 million, respectively.\n\n \n\nThe\nCompany’s mining equipment primarily consists of cryptocurrency mining machines and related infrastructure used in digital asset\nmining operations. Due to significant changes in market conditions in recent years, including declines in cryptocurrency mining profitability,\nincreases in mining difficulty, technological obsolescence of mining equipment, reduced mining output, and changes in expected future\neconomic benefits, the Company recognized substantial impairment losses on certain mining equipment assets in prior periods.\n\n \n\nDuring\nthe year ended December 31, 2025, the Company recognized additional impairment losses of approximately $5.9 million, primarily related\nto mining equipment held by FDW Limited, as management concluded that certain mining assets were no longer recoverable based on updated\nassessments of expected future cash flows, operational utilization, and economic viability.\n\n \n\nThe\ndetermination of impairment involves significant judgment and estimates, including assumptions regarding future mining output, cryptocurrency\nmarket conditions, expected utilization, useful lives, residual values, and estimated future cash flows. Actual results could differ\nmaterially from those estimates.\n\n \n\nThe\nCompany continues to evaluate the remaining useful lives, utilization, and recoverability of mining equipment in light of evolving market\nconditions and operational performance.\n\n \n\n9.\nINTANGIBLE ASSETS\n\n \n\nThe\nCompany’s intangible assets consist primarily of digital assets, including Bitcoin (“BTC”) and Ethereum (“ETH”).\n\n \n\nBalance\nas of December 31, 2021 \n$14,502 \n\nAdditions\nof intangible assets \n 329 \n\nLess:\nImpairment losses \n (8,425)\n\nBalance\nas of December 31, 2022 \n 6,406 \n\nAdditions\nof intangible assets \n 16,025 \n\nLess:\nImpairment losses \n (1,035)\n\nBalance\nas of December 31, 2023 \n$21,396 \n\nAdditions\nof intangible assets \n 9,258 \n\nLess:\nImpairment losses \n (781)\n\nBalance\nas of December 31, 2024 \n 29,873 \n\nCumulative\neffect upon adoption of ASU 2023-08 \n 55,949 \n\nLess:\nChange in fair value recognized in earnings \n (6,723)\n\nBalance\nas of December 31, 2025 \n 79,099 \n\n \n\nF-30\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n9.\nINTANGIBLE\nASSETS - continued\n\n \n\n**Adoption\nof ASU 2023-08**\n\n** **\n\nEffective\nJanuary 1, 2025, the Company adopted ASU 2023-08, which requires digital assets to be measured at fair value, with changes in fair value\nrecognized in earnings.\n\n \n\nUpon\nadoption, the Company recorded a cumulative effect adjustment of approximately $55.9 million to retained earnings, representing the difference\nbetween the carrying value under the previous cost-less-impairment model and fair value at the adoption date.\n\n \n\n**Bitcoin\nProduction**\n\n \n\nThe\nfollowing table presents our Bitcoin  mining activities for the year ended December 31, 2025.\n\n \n\n  \nNumber\nof\nBitcoins  \nAmount \n\n  \n   \n  \n\nBalance as of December 31, 2024 \n 802.77  \n$26,348 \n\nReceipt of BTC from mining services and investment\nincome \n -  \n - \n\nCumulative effect upon adoption of ASU 2023-08 \n -  \n 49,562 \n\nChange in fair value recognized in earnings \n -  \n (5,577)\n\nBalance as of December\n31, 2025 \n 802.77  \n 70,333 \n\n \n\nThe\nfollowing table presents our Ethereum  mining activities for the year ended December 31, 2025.\n\n \n\n  \nNumber\nof\nEthereum  \nAmount \n\n  \n   \n  \n\nBalance as of December 31, 2024 \n 2,949.79  \n$3,525 \n\nReceipt of ETH from mining services and investment\nincome \n -  \n - \n\nCumulative effect upon adoption of ASU 2023-08 \n -  \n 6,387 \n\nChange in fair value\nrecognized in earnings \n -  \n (1,146)\n\nBalance as of December\n31, 2025 \n 2,949.79  \n 8,766 \n\n \n\n**Fair\nValue Measurement**\n\n \n\nDigital\nassets are measured at fair value using quoted prices in active markets for identical assets.\n\n \n\nThe\nCompany uses observable market prices from major cryptocurrency exchanges (e.g., Investing.com historical cryptocurrency data. ) as of\nDecember 31, 2025, based on a consistent pricing methodology.\n\n \n\nDigital\nassets are classified as **Level 1** within the fair value hierarchy under ASC 820.\n\n \n\nThere\nwere no transfers between levels during the year.\n\n** **\n\n**Impact\non Earnings**\n\n \n\nFor\nthe year ended December 31, 2025, the Company recognized a net loss of approximately $6.7 million related to changes in the fair value\nof digital assets.\n\n \n\n**Digital\nAsset Activity**\n\n \n\nThe\nCompany did not engage in digital asset mining activities during the year ended December 31, 2025, and no digital assets were generated\nduring the year.\n\n \n\nF-31\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n9.\nINTANGIBLE ASSETS - continued\n\n \n\n**Significant\nJudgment**\n\n \n\nThe\ndetermination of fair value requires judgment in selecting:\n\n \n\n●the\nprincipal market;\n\n \n\n●pricing\nsources; and\n\n \n\n●timing\nof measurement.\n\n \n\nIn\naddition, the Company applies judgment in assessing control over digital assets, including evaluation of wallet ownership and access.\n\n \n\n10.\naccount\nPAYABLE\n\n   \n\nTrade\naccounts payable primarily relate to:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nCommodity trading purchases \n$7,336  \n$769 \n\nServer and equipment purchases \n 11,359  \n 11,359 \n\nOperating service arrangements \n 652  \n 383 \n\n  \n$19,347  \n$12,511 \n\n \n\n●commodity\ntrading purchases;\n\n \n\n●gold\nconcentrate and sesame trading transactions;\n\n \n\n●server\nand equipment purchases; and\n\n \n\n●operating\nservice arrangements.\n\n \n\n11.\nACCURED\nLIABILITIES\n\n \n\nAdvances\nfrom customers primarily represent customer prepayments received in connection\nwith commodity trading transactions, including rubber and other trading arrangements for which performance obligations had not yet been\nsatisfied as of year end.\n\n \n\n**Long-outstanding\nbalances**\n\n \n\nCertain\nbalances within accounts payable originated from transactions entered into during 2021 and 2022 and remained unsettled as of December\n31, 2025.\n\n \n\nThe\nmost significant long-outstanding payable relates to a supercomputing server purchase agreement entered into in April 2021 with an outstanding\nbalance of approximately $11.4 million as of December 31, 2025. Management represented that the balance remains payable and enforceable\nand that settlement discussions with the counterparty remain ongoing.\n\n \n\nManagement\nevaluated the long-outstanding balances as of December 31, 2025 and concluded that no derecognition adjustment\nwas required. However, the assessment involves significant judgment regarding:\n\n \n\n●enforceability\nof contractual obligations;\n\n \n\n●settlement\nexpectations;\n\n \n\n●underlying\ncommercial substance; and\n\n \n\n●classification\nof balances arising from trading arrangements.\n\n \n\nThe\nCompany’s trading activities involve substantial advances received and settlement balances as part of ordinary commodity trading\npractices. Accordingly, certain balances may remain outstanding for extended periods depending on shipment timing, contract settlement,\nlogistics arrangements, and commercial negotiations\n\n \n\nF-32\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n12.\nOTHER\nPAYABLES\n\n \n\nOther\npayables consist of the following:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nPayables to non-trade vendors and\nservice providers \n$3,918  \n$11,823 \n\nAccrued salary \n 22  \n 21 \n\n  \n$3,940  \n$11,844 \n\n \n\nOther\npayables primarily consist of:\n\n \n\n●deposits\nreceived under hosting and operational arrangements;\n\n \n\n●freight,\nlogistics, and warehouse-related balances;\n\n \n\n●rental\nand service-related payables; and\n\n \n\n●other\nnon-trade operating obligations.\n\n \n\nDuring\n2025, the Company performed a review and reclassification of certain balances previously recorded within other payables, including intercompany\nand related-party balances, to conform to the appropriate financial statement presentation.\n\n \n\nManagement\nevaluated the remaining balances as of December 31, 2025 and concluded that liability classification remained appropriate.\n\n \n\n13.\nRELATED\nPARTY BALANCES AND TRANSACTIONS\n\n \n\n**Amount\ndue from related parties**\n\n \n\nName of Related Party  Relationship  Nature  Repayment terms  December 31,\n2025   December 31,\n2024 \n\nYongbao Insurance Agency Co., Ltd. and subsidiaries  Common shareholder  Inter-transaction  Repayment on demand  $14   $493 \n\nWang Yaxian  Shareholder of the Company  Other receivables  Repayment on demand   3,550    3,550 \n\nFeng Weidong  CTO of the Company  Other receivables  Repayment on demand   3,550    3,550 \n\nWu Xianlong  Director of a subsidiary  Account receivables & Other receivables  Repayment on demand   1,900    1,900 \n\nQingdao SOS Industry Holding Co, Ltd  Related Party  Other receivables  Repayment on demand   30,460    344 \n\n            $39,474   $9,837 \n\n  \n\n**Amount\ndue to related parties**\n\n \n\n**Name of Related Party**   **Relationship**   **Nature**   **Repayment terms**   **December 31, 2025**     **December 31, 2024**  \n\nWang Yilin   Director of China SOS   Account payables   Repayment on demand     1       1  \n\nWu Wenbin   Non-executive director   Account payables   Repayment on demand     25       25    \n\nLi Sing Leung   CFO of the Company   Other payables   Repayment on demand     9       9  \n\nWang Yaxian   Shareholder of the Company   Other payables   Repayment on demand     1,000       -  \n\nQingdao SOS Industry Holding Co, Ltd.   Related Party   Other payables   Repayment on demand     607       607  \n\n                             \n\n                $ 1,642     $ 642  \n\n \n\nF-33\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n14.\nTAXES\n\n \n\n**Income\ntax**\n\n \n\n*Cayman\nIslands*\n\n \n\nUnder\nthe current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends\nto the shareholders, no Cayman Islands withholding tax will be imposed.\n\n  \n\n*British\nVirgin Islands*\n\n \n\nYBT\nis incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands\nlaw. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will\nbe imposed.\n\n \n\n*Hong\nKong*\n\n \n\nChina\nSOS is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial\nstatements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did\nnot make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception.\nUnder Hong Kong tax law, China SOS is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong\nKong on remittance of dividends.\n\n \n\n*PRC*\n\n \n\nThe\nsubsidiaries including WOFE, Qingdao SOS, VIE, SOS IT, SOS Mongolia and SOS Trading are governed by the income tax laws of the PRC\nand the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for\nthe periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of\nthe PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject\nto a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on\ncase- by-case basis.\n\n \n\nSOS\nIT obtained the “high-tech enterprise” tax status since 2020, which reduced its statutory income tax rate to 15% in\n2020.\n\n \n\nSignificant\ncomponents of the provision for income taxes are as follows:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024  \nDecember 31,\n\n2023 \n\nCurrent \n$(1) \n$242  \n$631 \n\nIncome tax expenses \n$(1) \n$242  \n$631 \n\n \n\nThe\nfollowing table reconciles China statutory rates to the Company’s effective tax rate:\n\n \n\n  \nYear ended\n\nDecember 31,  \nYear ended\n\nDecember 31, \n\n  \n2025  \n2024 \n\nChina statutory income tax rate \n 25% \n 25%\n\nChange in valuation allowance \n (25) \n (25)%\n\nEffective tax rate \n -  \n - \n\n  \n\nThe\nCompany has incurred tax losses in certain jurisdictions. While these losses may be available for carryforward, management has determined\nthat it is not more likely than not that sufficient taxable income will be available to realize the related deferred tax assets. Accordingly,\nno deferred tax assets have been recognized.\n\n \n\nF-34\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n14.\nTAXES -\ncontinued\n\n \n\n**Uncertain\ntax positions**\n\n \n\nThe\nCompany evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical\nmerits and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and 2024, the Company did not\nhave any significant unrecognized uncertain tax positions.\n\n \n\nThe\nCompany did not incur any interest and penalties tax for the years ended December 31, 2025 and 2024. The Company does not anticipate\nany significant increases or decreases in unrecognized tax benefits in the next twelve months from December 31, 2025.  \n\n \n\n**Value\nadded tax**\n\n \n\nAll\nof the Company’s service revenues that are earned and received in the PRC are subject to a Chinese VAT. The rate of Chinese VAT\nis 6%.\n\n \n\nTaxes\nrecoverable consisted of the following:\n\n \n\n  \nDecember 31,\n\n2025  \nDecember 31,\n\n2024 \n\nVAT taxes recoverable \n$(1,855) \n$(1,807)\n\nCorporate income tax recoverable \n 95  \n 90 \n\nOther taxes payable \n 71  \n 63 \n\nTotal \n$(1,689) \n$(1,654)\n\n \n\n15.\nCONCENTRATION\nOF RISK\n\n \n\n**Credit\nrisk**\n\n \n\nThe\nCompany is exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance\nhas been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current\neconomic environment.\n\n \n\nA\nsignificant portion of the Company’s receivables and prepayments is concentrated among a limited number of counterparties. In addition,\ncertain balances have been outstanding for extended periods, which increases the uncertainty regarding recoverability. The Company monitors\nthese exposures on an ongoing basis and records allowances where appropriate.\n\n \n\nThe\nCompany also maintains deposits and engages in transactions with various financial institutions and counterparties. To manage this risk,\nthe Company performs ongoing evaluations of counterparty creditworthiness; however, there can be no assurance that these counterparties\nwill be able to meet their obligations.\n\n \n\nA\nmajority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’\nassets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange\ntransactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s\nBank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC\nor other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.\n\n \n\nOur\nfunctional currency is the RMB, and our financial statements are presented in U.S. dollars. It is difficult to predict how market forces\nor PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value\nof the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any\nunderlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in\nRMB.\n\n \n\nTo\nthe extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes,\nappreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion.\nConversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition\nor investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount\navailable to the Company.\n\n \n\nF-35\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n15.\nCONCENTRATION\nOF RISK - continued\n\n \n\n**Liquidity\nand treasury risk**\n\n** **\n\nThe\nCompany is exposed to risks related to the management of cash and liquidity, including large or unusual cash inflows and outflows and\ntransactions with multiple counterparties across different jurisdictions. These activities may involve increased operational and counterparty\nrisks. Management monitors cash flows and transaction activity on an ongoing basis to manage such risks.\n\n \n\n**Commodity\nprice risk**\n\n** **\n\nThe\nCompany’s operations involve trading of commodities and products whose values are subject to market price fluctuations. Changes\nin commodity prices may affect the net realizable value of inventory and the Company’s operating results.\n\n \n\n**Digital\nasset risk**\n\n** **\n\nThe\nCompany holds digital assets that are subject to significant price volatility. The value of these assets may fluctuate materially based\non market conditions. In addition, the Company is exposed to risks related to custody, security, and regulatory developments associated\nwith digital assets.\n\n \n\nManagement\nbelieves that the above measures mitigate, but do not eliminate, the Company’s exposure to these risks.\n\n \n\n16.\nSHAREHOLDERS’\nEQUITY\n\n \n\n**Ordinary\nshares**\n\n \n\nSOS\nLimited was established under the laws of Cayman Islands on August 18, 2015. The authorized number of ordinary shares is 6,000,000,000,\ncomprising of 6,099,608,450 Class A ordinary shares with a par value of $0.0001 per Class A ordinary share, and 698,562,525 Class\nB ordinary shares with a par value of $0.0001 per Class B ordinary share.\n\n \n\n**Common\nstock**\n\n \n\nSecurities\nPurchase Agreement\n\n \n\n*Registered\nDirect Offering in December 2020*\n\n** **\n\nOn\nDecember 22, 2020, the Company entered into certain securities purchase agreement (the “December SPA”) with the Purchasers\npursuant to which the Company agreed to sell 2,600,000 of its ADSs and warrants (“December Warrants”) to purchase 2,600,000 ADSs\n(the “December Offering”), for gross proceeds of approximately $4 million. The December Warrants will be exercisable\nimmediately following the date of issuance for a period of five years at an initial exercise price of $1.55. The purchase price\nfor each ADS and the corresponding December Warrant is $1.55. Each December Warrant is subject to anti-dilution provisions to reflect\nstock dividends and splits, subsequent rights offerings or other similar transactions, but not as a result of future securities offerings\nat lower prices. The December Warrants contain a mandatory exercise right for the Company to force exercise of the December Warrants\nif the Company’s ADSs trade at or above $4.65 for ten (10) consecutive trading days and when certain other conditions are\nmet. Upon the occurrence of a Fundamental Transaction (as defined in the December Warrants), the December Warrants are subject to mandatory\nredemption for cash consideration equal to the Black Scholes Value (as defined in the December Warrants) of such portion of such December\nWarrant to be redeemed. The December Offering closed on December 24, 2020. \n\n \n\n*Registered\nDirect Offering in January 2021*\n\n \n\nOn\nJanuary 7, 2021, the Company entered into certain securities purchase agreement (the “January SPA”) with the Purchasers pursuant\nto which the Company agreed to sell 13,525,000 of its ADSs and warrants (“January Warrants”) to purchase 13,525,000 ADSs\n(the “January Offering”), for gross proceeds of approximately $25 million. The January Warrants will be exercisable\nimmediately following the date of issuance for a period of five years at an initial exercise price of $1.85. The purchase price\nfor each ADS and the corresponding January Warrant is $1.85. Each January Warrant is subject to anti-dilution provisions to reflect stock\ndividends and splits, subsequent rights offerings or other similar transactions, but not as a result of future securities offerings at\nlower prices. The January Warrants contain a mandatory exercise right for the Company to force exercise of the January Warrants if the\nCompany’s ADSs trade at or above $5.55 for ten (10) consecutive trading days and when certain other conditions are met. Upon\nthe occurrence of a Fundamental Transaction (as defined in the January Warrants), the January Warrants are subject to mandatory redemption\nfor cash consideration equal to the Black Scholes Value (as defined in the January Warrants) of such portion of such January Warrant\nto be redeemed. The January Offering closed on January 12, 2021.\n\n \n\n*January\n2021 Warrant Solicitation*\n\n \n\nOn\nJanuary 15, 2021, the Company entered into a letter agreement (the “January Letter Agreement”) with certain holders of Company’s\nwarrants, pursuant to which the holders of Company’s warrants exercised all of the unexercised December Warrants and January Warrants\n(collectively, the “Existing Warrants”) to purchase up 14,925,000 of the Company’s ADSs. Pursuant to the\nJanuary Letter Agreement, each holder received new warrants (the “January Inducement Warrants”) to purchase up to 23,880,000 ADSs\nin exchange for their exercise of all of the unexercised Existing Warrants with cash. The gross proceeds to the Company from the exercise\nof the unexercised Existing Warrants were approximately $27.1 million, prior to deducting placement agent fees and estimated offering\nexpenses.\n\n \n\nF-36\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n16.\nSHAREHOLDERS’\nEQUITY - continued\n\n \n\nThe\nJanuary Inducement Warrants have substantially the same terms as the Existing Warrants, except for having (i) provisions customary for\nan unregistered warrant, including a restrictive legend, (ii) registration rights whereby the Company agreed to register the ADSs underlying\nthe January Inducement Warrants within fifteen (15) days of closing, (iii) being exercisable immediately upon issuance, (iv) having a\nterm of five (5) years from the date of issuance, and (v) having an exercise price of $2.00 per ADS.\n\n \n\n*February\n2021 Warrant Solicitations*\n\n \n\nOn\nFebruary 9, 2021, the Company entered into a letter agreement (the “February Letter Agreement”) with certain holders of the\nCompany’s warrants, pursuant to which the holders of the Company’s warrants exercised all of the January Inducement Warrants\nto purchase up to 23,880,000 of the Company’s ADSs. Pursuant to the February Letter Agreement, each holder received new\nwarrants (the “February Inducement Warrants”) to purchase up to 23,880,000 ADSs in exchange for their exercise\nof all of the January Inducement Warrants with cash. The gross proceeds to the Company from the exercise of the January Inducement Warrants\nwere approximately $48 million, prior to deducting placement agent fees and estimated offering expenses.\n\n \n\nThe\nFebruary Inducement Warrants have substantially the same terms as the January Inducement Warrants, except for having (i) registration\nrights whereby the Company agreed to register the ADSs underlying the February Inducement Warrants within twenty-one (21) days of closing,\nand (ii) an exercise price of $4.05 per ADS.\n\n \n\nOn\nFebruary 24, 2021, the Company entered into a letter agreement (the “Second February Letter Agreement”) with certain holders\nof the Company’s warrants, pursuant to which the holders of the Company’s warrants exercised all of the February Inducement\nWarrants to purchase up to 23,880,000 of the Company’s ADSs. Pursuant to the Second February Letter Agreement, each holder\nreceived new warrants (the “Second February Inducement Warrants”) to purchase up to 23,880,000 ADSs in exchange\nfor their exercise of all of the February Inducement Warrants with cash. The gross proceeds to the Company from the exercise of the February\nInducement Warrants were approximately $96.7 million, prior to deducting placement agent fees and estimated offering expenses.\n\n \n\nThe\nSecond February Inducement Warrants have substantially the same terms as the February Inducement Warrants, except for having (i) registration\nrights whereby the Company agrees to register the ADSs underlying the Second February Inducement Warrants within eight (8) days of closing,\nand (ii) an exercise price $7.00 per ADS.\n\n \n\n*Registered\nDirect Offerings in February 2021*\n\n \n\nOn\nFebruary 11, 2021, the Company entered into certain securities purchase agreement (the “February SPA”) with the Purchasers\npursuant to which the Company agreed to sell 22,000,000 of its ADSs and warrants (“February Warrants”) to purchase 16,500,000 ADSs\n(the “February Offering”), for gross proceeds of approximately $110 million. The February Warrants will be exercisable\nimmediately following the date of issuance for a period of five years at an initial exercise price of $5.00. The purchase price\nfor each ADS and the corresponding February Warrant is $5.00. Each February Warrant is subject to anti-dilution provisions to reflect\nstock dividends and splits, subsequent rights offerings or other similar transactions, but not as a result of future securities offerings\nat lower prices. The February Warrants contain a mandatory exercise right for the Company to force exercise of the February Warrants\nif the Company’s ADSs trade at or above $15.00 for ten (10) consecutive trading days and when certain other conditions are\nmet. Upon the occurrence of a Fundamental Transaction (as defined in the February Warrants), the February Warrants are subject to mandatory\nredemption for cash consideration equal to the Black Scholes Value (as defined in the February Warrants) of such portion of such February\nWarrant to be redeemed. The February Offering closed on February 17, 2021.\n\n \n\nF-37\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n16.\nSHAREHOLDERS’\nEQUITY - continued\n\n \n\nOn\nFebruary 18, 2021, the Company entered into certain securities purchase agreement (the “Second February SPA”) with the Purchasers\npursuant to which the Company agreed to sell 8,600,000 of its ADSs and warrants (“Second February Warrants”) to\npurchase 4,300,000 ADSs (the “Second February Offering”), for gross proceeds of approximately $86 million.\nThe Second February Warrants will be exercisable immediately following the date of issuance for a period of five years at an\ninitial exercise price of $10.00. The purchase price for each ADS and the corresponding Second February Warrant is $10.00. Each Second\nFebruary Warrant is subject to anti-dilution provisions to reflect stock dividends and splits, subsequent rights offerings or other similar\ntransactions, but not as a result of future securities offerings at lower prices. The Second February Warrants contain a mandatory exercise\nright for the Company to force exercise of the Second February Warrants if the Company’s ADSs trade at or above $30.00 for\nten (10) consecutive trading days and when certain other conditions are met. Upon the occurrence of a Fundamental Transaction (as defined\nin the Second February Warrants), the Second February Warrants are subject to mandatory redemption for cash consideration equal to the\nBlack Scholes Value (as defined in the Second February Warrants) of such portion of such Second February Warrant to be redeemed. The\nSecond February Offering closed on February 22, 2021. \n\n \n\nOn\nMarch 29, 2021, we entered security purchase agreement with certain accredited investors to sell 25,000,000 American Depositary\nShares, representing 250,000,000 Class A Ordinary Shares and Warrants to Purchase up to 25,000,000 American Depositary\nShares Representing Warrants to Purchase up to 250,000,000 Class A Ordinary Share.\n\n \n\nOn\nNovember 9, 2021, the Company entered into certain securities purchase agreement (the “November SPA”) with the purchasers\nparty thereto pursuant to which the Company agreed to sell 51,500,000 of its ADSs, for gross proceeds of approximately $90.1 million.\nThe Offering closed on November 15, 2021.\n\n \n\nOn\nOctober 2, 2023, the Company entered into certain securities purchase agreement with certain non-U.S. Persons as defined in Regulation\nS of the Securities Act of 1933, pursuant to which the Company agreed to sell an aggregate of 39,171,620 units (the “Units”),\neach Unit consisting of one Class A Ordinary Share of the Company, par value $0.005 per share (“Share”) and a warrant to\npurchase one Share (“Warrant”) with an initial exercise price of $0.57069 per Share, or approximately $5.71 per American\ndepositary share of the Company (“ADS”), at a price of 0.45655 per Unit, or approximately $4.57 per ADS, for an aggregate\npurchase price of approximately $17.88 million (the “Offering”). The Offering closed on October 17, 2023.\n\n \n\nOn\nMarch 19, 2025, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined\nin Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell an aggregate of 222,337,500\nunits, each Unit consisting of one Class A Ordinary Share of the Company, par value $0.005 per share and one warrant to purchase three\nShares with an initial exercise price of $0.0398 per Share, or approximately $5.97 per American depositary share of the Company, at a\nprice of $0.034666 per Unit, or approximately $5.2 per ADS unit, for an aggregate purchase price of approximately $7.7 million. The net\nproceeds to the Company from such Offering shall be used by the Company for working capital and general corporate purposes.\n\n \n\nOn\nJuly 31, 2025, the Company entered into certain securities purchase agreement with certain non-affiliated institutional investors pursuant\nto which the Company agreed to sell 2,142,855 American Depositary Shares in a registered direct offering. In a concurrent private placement,\nthe Company also agreed to issue and sell unregistered Warrants to purchase up to an aggregate of 4,285,710 ADSs. The combined effective\noffering price for each ADS and the accompanying Warrants is $3.50. Each Warrant will be immediately exercisable, expire five and one-half\nyears from the initial exercise date and will have an exercise price of $3.50 per share.\n\n \n\nOn\nAugust 11, 2025, the Company held its extraordinary general meeting of shareholders to approve that the authorized share capital of the\nCompany be increased by the creation of an additional 500,000,000 Class B Ordinary Shares of a par value of US$0.005 each to rank pari\npassu in all respects with the existing Class B Ordinary Shares. \n\n \n\nF-38\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n16.\nSHAREHOLDERS’\nEQUITY - continued\n\n \n\nThe\nCompany’s outstanding warrants are classified as equity since they qualify for exemption from derivative accounting as they are\nconsidered to be indexed to the Company’s own stock and require net share settlement. The fair value of the warrants were recorded\nas additional paid-in capital from common stock.  \n\n \n\nFollowing\nis a summary of the status of warrants outstanding and exercisable as of December 31, 2025:\n\n \n\n  \nWarrants  \nWeighted\n\nAverage\nExercise\nPrice \n\nWarrants outstanding, as\nof December 31, 2021 \n$-  \n$- \n\nIssued \n -  \n - \n\nExercised \n -  \n - \n\nRepurchased \n -  \n - \n\nWarrants outstanding,\nas of December 31, 2022 \n$93,224  \n$1,995 \n\nIssued \n$5,223  \n$4,275 \n\nExercised \n -  \n - \n\nRepurchased \n -  \n - \n\nWarrants outstanding, as\nof December 31, 2023 \n$98,447  \n   \n\nPrivate\nplacement issued on June 19, 2024 \n 3,228,642  \n 18.45 \n\nWarrant exercised on November\n17, 2024 \n 697,778  \n 0.10 \n\nExercised \n (230,906) \n - \n\nRepurchased \n    \n   \n\nWarrants outstanding, as\nof December 31, 2024 \n$3,793,860  \n - \n\nWarrants\nissued on July 31,2025 \n 4,285,710  \n 3.50 \n\nWarrants\noutstanding, as of December 31, 2025 \n 8,079,570  \n   \n\n \n\n*\nWarrants in ordinary shares\n\n \n\nWarrants Outstanding  Warrants\nExercisable   Weighted\nAverage\nExercise\nPrice   Average\nRemaining\nContractual\nLife\n\n            \n\nFebruary 24, 2021 Warrants   31,840   $5,250.00   5 years\n\nFebruary 11, 2021 Warrants   22,000   $3,750.00   5 years\n\nFebruary 18, 2021 Warrants   5,733   $7,500.00   5 years\n\nMarch 29, 2021 Warrants   33,333   $3,750.00   5 years\n\nJune 19, 2024 Private Placement   3,228,542   $18.45   5 years\n\nMarch 15, 2024 F1-FO   472,412   $1.50   5 years\n\nWarrants issued on July 31,2025   4,285,710   $3.50   5 years\n\n \n\n*\nWarrants in ordinary shares\n\n \n\nF-39\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n17.\nCOMMITMENTS\nAND CONTINGENCIES\n\n \n\n**Purchase\ncommitments**\n\n \n\nThe\nCompany has entered into one agreement for leasehold improvements on the office premises. As of December 31, 2025, the Company did not\nenter any new lease contract with any parties, the new commitment is nil.\n\n \n\n**Variable\ninterest entity structure**\n\n \n\nIn\nthe opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the\nContractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and\n(iii) the business operations of WFOE and the VIEs are in compliance with existing PRC laws and regulations in all material respects.\n\n \n\nHowever,\nthere are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly,\nthe Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its\nmanagement. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing\nor future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply\nwith changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s\ncurrent corporate structure or the Contractual Arrangements is remote based on current facts and circumstances.\n\n \n\nIn\naddition, due to restrictions on the distribution of share capital from the Group’s PRC subsidiaries and also as a result of these\nentities’ unreserved accumulated losses, total restrictions placed on the distribution of the Group’s PRC subsidiaries’\nnet liabilities were $60.2 million, or 100% of total net assets as of December 31, 2020 and $ 638.6 million, or 100%\nof total net assets as of December 2021.\n\n \n\n*2021\nClass Action Litigation*\n\n* *\n\nOn\nMarch 30, 2021, a purported shareholder Kimberly Beltran filed a securities class action complaint in the United States District Court\nDistrict of New Jersey against the Company, Yandai Wang and Eric H. Yan, the Chief Executive Officer of the Company and President of\nthe Company’s operating subsidiary, respectively. The action, Kimberly Beltran v. SOS Limited, et al., Case No. 1:21-cv-07454 (the\n“Action”), is filed on behalf of a putative class consisting of all persons and entities other than the Company that purchased\nor otherwise acquired SOS American depository shares (“ADSs”) between July 22, 2020 and February 25, 2021 (the “Plaintiffs”),\nboth dates inclusive (the “Class Period”), seeking to recover damages allegedly caused by Company’s violations of the\nfederal securities laws against the Company and certain of its top officials. The Complaint was filed in this Action on March 30, 2021\nand the Action has not advanced beyond that stage. On November 2, 2021, the Court signed as an Order a stipulation entered into between\nthe various Plaintiffs’ counsels appointing a co-lead Plaintiffs’ counsel. The Parties have agreed to, and the Court has\napproved of, a Scheduling Order which provides that Plaintiffs shall file an amended complaint on or before May 13, 2022 and the Company\nshall answer or otherwise respond to the Amended Complaint on or before July 1, 2022. In the interim, Plaintiffs and the Company were\nengaged in settlement discussions.\n\n \n\nOn\nApril 28, 2022, the Plaintiffs and the Company agreed to a settlement in principle that contemplates a $5 million settlement payment\ncovering all administration costs and Plaintiffs’ legal fees. The Company does not admit to any wrongdoing in this settlement and\nin accordance with the settlement there will be a full release of the Company and its officers and directors, for all claims arising\nduring the Class Period that were or could have been asserted in the Action. The Plaintiffs and the Company plan to enter into a full\nsettlement agreement within forty-five (45) days.\n\n \n\nThe\nNew Jersey District Court approved the settlement outside the court system on May 20, 2022 and on August 2 2022, the Company paid $5\nmillion to the plaintiff’ via an escrow account, releasing the Company to the same class action now and possible future allegation.\n\n \n\nF-40\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n \n\n17.\nCOMMITMENTS\nAND CONTINGENCIES  - continued\n\n \n\nAs\nof April 4, 2023, case captioned True North Financial LLF, TNA Capital Inc., TNA Capital LLC, and Michael Jaliman v. SOS Limited, Yandai\nWang, and Zhengyu (Zane) Wang, Case Number 1:23cv02581 has been pending in District Court, Eastern District Court of New. Plaintiffs\nfiled their Complaint on November 21, 2023, alleging claims for breach of contract, fraudulent inducement, tortious interference with\neconomic relations, and breach of fiduciary duty against Defendants in connection with disposing off legacy business of P2P from the\nyear of 2020 onwards.\n\n  \n\nIt\nhas been settled during 2025 with a total payment of US$2.2 million.\n\n \n\n*2022\nLitigation Against Thor Miner*\n\n \n\nSOS\nInformation Technology New York, Inc. (“SOSNY”), a company incorporated under the laws of state of New York and a wholly\nowned subsidiary of the Company, filed a lawsuit on December 9, 2022, against Thor Miner, Inc. (“Thor Miner”), Singularity\nFuture Technology Ltd. (“Singularity,” and, together with Thor Miner, referred to as the “Corporate Defendants”),\nLei Cao, Yang Jie, John F. Levy, Tieliang Liu, Tuo Pan, Shi Qiu, Jing Shan, and Heng Wang (jointly referred to as the “Individual\nDefendants”) (collectively, the Individual Defendants and the Corporate Defendants are the “Defendants”). SOSNY and\nThor Miner entered into a Purchase and Sale Agreement (the “PSA”) on January 10, 2022 for the purchase of $200,000,000 in\ncrypto mining rigs, which was breached by Thor Miner and Singularity.\n\n \n\nSOSNY\nand Defendants entered into a certain settlement agreement and general mutual release on December 28, 2022 (“Settlement Agreement”).\nPursuant to the Settlement Agreement, Thor Miner agreed to pay a sum of thirteen million U.S. dollars ($13,000,000) (the “Settlement\nPayment”) to SOSNY on or before December 23, 2022, and SOSNY agreed that subsequent to its receipt of the Settlement Payment, SOSNY\nshall cause the lawsuit to be dismissed with prejudice as to the settling defendants and without prejudice as to all others. As of the\ndate of this annual report, SOSNY has received the full amount of the Settlement Payment and has caused the lawsuit to be dismissed.\n\n \n\nSingularity\nand Thor Miner further covenanted and agreed that if they receive additional funds from HighSharp (Shenzhen Gaorui) Electronic Technology\nCo., Ltd. (“HighSharp”) related to the PSA, they will promptly transfer such funds to SOSNY in an amount not to exceed forty\nmillion five hundred sixty thousand five hundred sixty-nine dollars ($40,560,569.00) (which is the total amount paid by SOSNY pursuant\nto the PSA less the price of the machines actually received by SOSNY pursuant to the PSA). The Settlement Payment and any payments subsequently\nreceived by SOSNY from HighSharp shall be deducted from the total amount of forty million five hundred sixty thousand five hundred sixty-nine\ndollars ($40,560,569.00) previously paid by, and now due and owed to SOSNY. In further consideration of this Settlement Agreement, Thor\nMiner agreed to execute and provide to SOSNY, within seven (7) business days after the Effective Date (as defined in the Settlement Agreement),\nan assignment of all claims it may have against HighSharp.\n\n \n\n18.\nREVENUE\nANALYSIS AND SEGMENT INFORMATION\n\n \n\nThe Company follows ASC 280, Segment\nReporting, which requires disclosure of segment information based on the manner in which management allocates resources and assesses performance.\nThe chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, evaluates operating\nperformance and allocates resources based on consolidated financial information.\n\n \n\nThe Company determined that it operates\nas a single operating and reportable segment as the CODM reviews consolidated operating results, financial performance and cash flows\non a company-wide basis, and discrete financial information for individual business activities is not regularly reviewed for purposes\nof allocating resources or assessing performance. Although the Company generates revenue from different business activities, substantially\nall of the Company’s revenue and operations are derived from commodity trading, while the remaining activities are ancillary in\nnature and are managed on a consolidated basis.\n\n \n\nDisaggregated revenue information by business line is presented\nbelow in accordance with ASC 606:\n\n \n\n  \nFor\nthe year ended\nDecember 31, 2025  \nFor\nthe year ended\nDecember 31, 2024  \nFor\nthe year ended\nDecember 31, 2023 \n\n  \nAmount  \nPercentage  \nAmount  \nPercentage  \nAmount  \nPercentage \n\nCommodity\ntrading \n 144,974  \n 93.9% \n 214,340  \n 92.6% \n 68,409  \n 74.0%\n\nCryptocurrency mining \n -  \n -% \n 9,258  \n 4.0% \n 18,898  \n 20.4%\n\nHosting\nservice \n 7,501  \n 4.9% \n 6,506  \n 2.8% \n 2,365  \n 2.6%\n\nOther \n 1,815  \n 1.2% \n 1,320  \n 0.6% \n 2,744  \n 3.0%\n\nTotal \n 154,290  \n 100.0% \n 231,424  \n 100.0% \n 92,416  \n 100.0%\n\n \n\nThe\nCompany’s operations and long-lived assets are primarily located in the PRC. Management believes that geographic disaggregation\nwould not provide meaningful additional information to users of the financial statements.\n\n \n\nF-41\n\n \n\n \n\n**SOS\nLIMITED**\n\n** **\n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(US$\nthousands, except share data and per share data, or otherwise noted)**\n\n** **\n\n18.\nREVENUE\nANALYSIS AND SEGMENT INFORMATION  - continued\n\n \n\nThe\nCODM evaluates performance primarily based on consolidated net loss and reviews consolidated operating results, including revenues, cost\nof revenues, selling, general and administrative expenses, depreciation and amortization, impairment charges, and income tax expense.\n\n \n\nAs\nthe Company operates as a single reportable segment and the CODM reviews expense information on a consolidated basis, no additional segment\nexpense disclosures are presented. Revenue information is disaggregated by business line as presented below.\n\n \n\nAnd\nit has to be the same conclusion as on segment otherwise if changes made, need to also disclose.\n\n \n\nCONSOLIDATED\nSTATEMENTS OF INCOME AND COMPREHENSIVE INCOME\n\n(US$\nthousands, except share data and per share data, or otherwise noted)\n\n \n\n \n \nFor\nthe Years Ended December 31,\n \n\n \n \n2025\n \n \n2024\n \n \n2023\n \n\nDisaggregated\nrevenues\n \n$\n154,290\n \n \n$\n231,424\n \n \n$\n92,416\n \n\nRevenue, net – Commodity\ntrading\n \n \n144,974\n \n \n \n214,430\n \n \n \n68,456\n \n\nRevenue, net –Cryptocurrency\nmining\n \n \n-\n \n \n \n9,258\n \n \n \n18,898\n \n\nRevenue, net – Hosting\nservices\n \n \n7,501\n \n \n \n6,506\n \n \n \n2,365\n \n\nRevenue, net – Others\n \n \n1,815\n \n \n \n1,320\n \n \n \n2,744\n \n\nCost of revenues\n \n \n(152,034\n)\n \n \n(224,383\n)\n \n \n(78,234\n)\n\nCost of revenues-Commodity trading\n \n \n(143,569\n)\n \n \n(217,257\n)\n \n \n(68,983\n)\n\nCost of revenues–Cryptocurrency mining\n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nCost of revenues-Hosting services\n \n \n(6,912\n)\n \n \n(5,967\n)\n \n \n(6,593\n)\n\nCost of revenues-Others\n \n \n(1,553\n)\n \n \n(1,250\n)\n \n \n(3,290\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nReconciling Items\n \n \n \n \n \n \n \n \n \n \n \n \n\nSelling, general and administrative\n \n \n(85,426\n)\n \n \n(16,960\n)\n \n \n(7,081\n)\n\nDepreciation and amortization\n \n \n(8,706\n)\n \n \n(10,904\n)\n \n \n(4,975\n)\n\nImpairment of intangible assets\n \n \n(6,723\n)\n \n \n(781\n)\n \n \n(970\n)\n\nInterest income\n \n \n\n \n\n \n \n \n\n \n\n \n \n \n-\n \n\nOther Income/(expense)\n \n \n1,254\n \n \n \n5,619\n \n \n \n(978\n)\n\nCurrent income tax expense\n \n \n1\n \n \n \n(242\n)\n \n \n(631\n)\n\nNet loss\n \n \n(97,344\n)\n \n \n(16,227\n)\n \n \n(6,421\n)\n\n \n\n19.\nSubsequent\nevents\n\n \n\nThe\nCompany has evaluated subsequent events occurring after the balance sheet date through the date the financial statements were authorized\nfor issue. Based on this evaluation, the Company has identified no material subsequent events requiring recognition or disclosure in\nthese financial statements.\n\n \n\n*\n* * * *\n\n \n\nF-42"}