Canton Strategic Holdings, Inc. New Standards Disclosure

Recent Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. This standard requires certain crypto assets meeting defined criteria to be measured at fair value each reporting period with changes in fair value recognized in net income, presented separately from other intangible assets and accompanied by enhanced disclosures. This standard was effective for fiscal years beginning after December 15,2024, with early adoption permitted. The Company adopted this standard during the year ended December 31, 2025 in conjunction with its new treasury strategy. Since the Company held no digital assets until November 2025, the adoption of this standard had no impact to prior reported financial statements and no cumulative adjustment to retained earnings was required or recorded.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires expanded segment reporting and disclosure and is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance in the year ended December 31, 2025 as it previously did not have multiple reportable segments. This standard did not have a material impact on its financial statements other than enhanced disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which expands income tax footnote disclosure requirements, including rate reconciliation and income taxes paid disclosures. The standard is effective for fiscal years beginning after December 15, 2024. The ASU affects disclosure only and does not impact the recognition or measurement of income taxes under ASC 740. Accordingly, adoption of ASU 2023-09 had no impact on the Company’s current year income tax provision.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03 for non-calendar year-end companies. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the consolidated statements of operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 31, 2027. The Company is currently evaluating the effects of the pronouncement on its consolidated financial statements.