What changed in this filing

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Item 1. Financial Statements

2020-11-16 compared with 2020-08-14 · 1024 added, 1236 removed, 377 unchanged (86% of the section changed)

Financial Statements

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

FINTECH GROUP INC.

CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

4 unchanged sentences

Loan receivables

Assets related to discontinued operation

Assets related to discontinued operations

TOTAL CURRENT ASSETS

$ 100,345,801

Property, plant and equipment, net

Right of use assets

Intangible assets, net

6 unchanged sentences

Advances from customers

Short-term bank loans

Loans payable

Advances from issuance of the Company’s Common Stock

Convertible loan payables

Loans payables

Lease liability-current

Liabilities related to discontinued operations

3 unchanged sentences

Amount due to related parties

Lease liability-non-current

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

4 unchanged sentences

Common stock, $0.001 par value;

60,000,000 shares authorized and 38,494,063 shares issued and outstanding as of June 30, 2020 and 33,810,416 shares issued and outstanding as of December 31, 2019, respectively

60,000,000 shares authorized and 41,959,545 shares issued and outstanding as of September 30, 2020 and 33,810,416 shares issued and outstanding as of December 31, 2019, respectively

Additional paid-in capital

11 unchanged sentences

$ 115,980,570

The accompanying notes are an integral part

of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

accompanying notes are an integral part of these condensed consolidated financial statements.

FINTECH GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of goods sold

8 unchanged sentences

Interest expenses

Other income (expenses)

Loss on debt settlement

Other income (expenses), net

Total other income (expenses)

9 unchanged sentences

Common Shareholders

$ (1,589,853 )

$ 116,677,995

$ (2,918,509 )

Comprehensive income (loss):

Net income (loss)

$ (1,972,171 )

$ 116,669,355

$ (3,624,472 )

Foreign currency translation

3 unchanged sentences

Common Shareholders

$ 118,128,945

Basic Earnings (Loss) per Share:

7 unchanged sentences

Weighted average number of shares outstanding

* Reclassification - certain reclassifications have

been made to the financial statements for the period ended June 30, 2019 to conform to the presentation for the period ended June

30, 2020, with no effect on previously reported net income (loss).

The accompanying notes are an integral part

of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF

For the Six Months Ended

Reclassification -

certain reclassifications have been made to the financial statements for the period ended September 30, 2019 to conform to

the presentation for the period ended September 30, 2020, with no effect on previously reported net income (loss).

accompanying notes are an integral part of these condensed consolidated financial statements.

FINTECH GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Depreciation and amortization

Bad debt expenses

Gain on sale of discontinued operations

(119,582,658 )

Loss on debt settlement

Share based compensation

Interest converted to convertible note

Changes in operating assets and liabilities

9 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for short-term loan investment

Purchase of property and plant

Purchase of intangible assets

Payments for loan receivables

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Advances from issuance of the Company’s Common Stock

Proceeds from loans from related parties

Repayment of amount due to related parties

Proceeds from issuance of common stock

Proceeds from amount due from related parties, net

Proceeds from secured convertible promissory note

Changes in net assets related to discontinued operations

Proceeds from loans

Repayment of loans

Proceeds from sale of discontinued operations

8 unchanged sentences

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Conversion of convertible notes

● Reclassification- certain reclassifications have been made

to the statements of cash flow for the period ended June 30, 2019 to conform to the presentation for the period ended June 30,

The accompanying notes are an integral part

of these condensed consolidated financial statements.

FUTURE FINTECH GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’

Three Months ended June 30, 2019

Debt settlement by issuance of Common Stock

Reclassification-

certain reclassifications have been made to the statements of cash flow for the period ended September 30, 2019 to conform

to the presentation for the period ended September 30, 2020.

accompanying notes are an integral part of these condensed consolidated financial statements.

FINTECH GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Months ended September 30, 2019

comprehensive

Balance at March 31, 2019

$ 115,336,056

$ (189,414,336 )

$ (9,877,494 )

$ (79,673,778 )

Issuance of common stocks as compensation

Foreign currency translation adjustment

Balance at June 30, 2019

$ 115,335,406

$ (191,004,189 )

of common stocks

currency translation adjustment

Balance at September 30, 2019

Months ended September 30, 2020

comprehensive

Balance at June 30, 2020

$ 109,739,379

$ (96,636,617 )

Three Months ended June 30, 2020

comprehensive

Balance at March 31, 2020

$ (2,097,523 )

Issuance of common stocks-conversion of debt

Loss on debt settlement

Issuance of common stocks-cash

$ (2,425,017 )

$ (2,438,927 )

Issuance of common stocks for conversion of debts

Foreign currency translation adjustment

Balance at June 30, 2020

Balance at September 30, 2020

$ 117,562,942

1 unchanged sentence

$ (2,029,347 )

Six Months ended June 30, 2019

accompanying notes are an integral part of these condensed consolidated financial statements.

Months ended September 30, 2019

comprehensive

4 unchanged sentences

$ (86,677,835 )

Issuance of common stocks for conversion of debts

Foreign currency translation adjustment

Balance at June 30, 2019

Issuance of common stocks

Foreign currency translation

Balance at September 30, 2019

$ 115,334,756

2 unchanged sentences

$ (74,778,139 )

Six Months ended June 30, 2020

Months ended September 30, 2020

comprehensive

3 unchanged sentences

$ (88,077,206 )

Issuance of common stocks for conversion of debts

Issuance of common stocks-conversion of debt

Loss on debt settlement

Issuance of common stocks-cash

Net income (loss)

4 unchanged sentences

(15,092,336 )

Balance at June 30, 2020

Balance at September 30, 2020

$ 117,562,942

1 unchanged sentence

$ (2,029,347 )

The accompanying notes are an integral part

of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

$ 19,951, 801

accompanying notes are an integral part of these condensed consolidated financial statements.

FINTECH GROUP INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS DESCRIPTION

Future FinTech Group Inc.

(together with

our direct or indirect subsidiaries, “we,”

FinTech Group Inc.

(together with our direct or indirect subsidiaries, “we,”

“us,”

“our”

or “the Company”) is a holding

company incorporated under the laws of the State of Florida.

The main business of the Company includes an online shopping platform,

Chain Cloud Mall (CCM), which is based on blockchain technology;

a cross-border e-commerce platform (NONOGIRL) which started

its trial operation in March 2020 and formally launched in July 2020;

a blockchain-based application incubator and a digital payment

system (DCON);

“the Company”) is a holding company incorporated under the laws of the State of Florida.

The main business of the

Company includes an online shopping platform, Chain Cloud Mall (CCM), which is based on blockchain technology;

a cross-border

e-commerce platform (NONOGIRL) which started its trial operation in March 2020 and formally launched in July 2020;

a blockchain-based

application incubator and technical service and support for real name and blockchain based assets and their operating entities

and the application and development of blockchain-based e-commerce technology and financial technology.

Prior to 2019, the Company engaged in

the production and sales of fruit juice concentrates, fruit juice beverages and other fruit-related products in the People’s

Prior to 2019, the Company engaged in the

production and sales of fruit juice concentrates, fruit juice beverages and other fruit-related products in the People’s

Republic of China (“PRC”, or “China”), and overseas markets.

2 unchanged sentences

to a real-name blockchain e-commerce platform that integrates blockchain and internet technology from the end of 2018.

27, 2020 pursuant to a Share Transfer Agreement entered into by the Company’s subsidiary, HeDeTang Holdings (HK) Ltd (“HeDeTang

27, 2020 pursuant to a Share Transfer Agreement entered by the Company’s subsidiary, HeDeTang Holdings (HK) Ltd (“HeDeTang

HK”), and New Continent International Co., Ltd.

1 unchanged sentence

which mainly engaged in fruit juice related business, to New Continent International Co., Ltd.

On April 23, 2020, Future FinTech (Hong

Kong) Limited registered GuangChengJi (Shanghai) Industrial Co., Ltd.

(“Guangchengji”) with a registered capital of

$30 million in Shanghai, China, which needs to be paid before April 22, 2049 when the business license will expire.

scope of Guangchengji includes wholesaling of electronic components and equipment, metal materials, petroleum products, import

and export business, computer software development, information technology, technology consulting and services, business management

consulting and supply chain management.

The Company’s activities are principally conducted by

its subsidiaries operating in the PRC.

April 23, 2020, Future FinTech (Hong Kong) Limited registered GuangChengJi (Shanghai) Industrial Co., Ltd.

(“Guangchengji”)

with a registered capital of $30 million in Shanghai, China, which needs to be paid before April 22, 2049 when the business license

The business scope of Guangchengji includes wholesaling of electronic components and equipment, metal materials,

petroleum products, import and export business, computer software development, information technology, technology consulting and

services, business management consulting and supply chain management.

July 22, 2020, the Company established Future Commercial Management (Beijing) Co., Ltd.

Its scope of business includes management

and consulting services.

Company’s activities are principally conducted by its subsidiaries operating in the PRC.

BASIS OF PRESENTATION

The unaudited condensed consolidated financial

statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial

information and the rules and regulations of the Securities and Exchange Commission.

In the opinion of management, the unaudited

financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which

include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2020 and the results

of operations and cash flows for the periods ended June 30, 2020 and 2019.

The financial data and other information disclosed in

these notes to the interim financial statements related to these periods are unaudited.

The results for the three and six months

ended June 30, 2020 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year

ending December 31, 2020.

The balance sheet at December 31, 2019 has been derived from the audited financial statements at that

Our contractual arrangements with our VIE

and their respective shareholders allow us to (i) exercise effective control over our VIE, (ii) receive substantially all of the

economic benefits of our VIE, and (iii) have an exclusive option to purchase all or part of the equity interests in our VIE when

and to the extent permitted by PRC law.

unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission.

In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial

statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial

position as of September 30, 2020 and the results of operations and cash flows for the periods ended September 30, 2020 and 2019.

The financial data and other information disclosed in these notes to the interim financial statements related to these periods

are unaudited.

The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results

to be expected for any subsequent periods or for the entire year ending December 31, 2020.

The balance sheet at December 31, 2019

has been derived from the audited financial statements at that date.

contractual arrangements with our VIE and their respective shareholders allow us to (i) exercise effective control over our VIE,

(ii) receive substantially all of the economic benefits of our VIE, and (iii) have an exclusive option to purchase all or part

of the equity interests in our VIE when and to the extent permitted by PRC law.

As a result of our direct ownership in

2 unchanged sentences

have consolidated the financial results of our VIE in our condensed consolidated financial statements in accordance with U.S.

Certain information and footnote disclosures

normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States

have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations.

These unaudited

financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December

31, 2019 as included in our Annual Report on Form 10-K.

Going Concern

The Company’s financial statements

are prepared assuming that the Company will continue as a going concern.

The Company incurred operating losses and

had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements

its future business plan.

In order to meet its working capital needs through the next twelve months and to fund the growth of the

Company, the Company may consider plans to raise additional funds through the issuance of equity or debt.

Although the Company

intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional financing on

terms that are favorable or acceptable to it, if at all.

The ability of the Company to continue

as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable

The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable

to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING

For a detailed discussion about the Company

significant accounting policies, refer to Note 2 —

“Summary of Significant Accounting Policies,”

in the Company’s

consolidated financial statements included in Company’s 2019 Form 10-K.

During the three months ended June 30, 2020, there

were no significant changes made to the Company’s significant accounting policies.

Uses of Estimates in the Preparation

of Financial Statements

The Company’s condensed consolidated

financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period.

The significant

areas requiring the use of management estimates include, but not limited to, the allowance for doubtful receivable, estimated useful

life and residual value of property, plant and equipment, impairment of long-lived assets provision for staff benefit, recognition

and measurement of deferred income taxes and valuation allowance for deferred tax assets.

Although these estimates are based on

management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately

differ from those estimates and such differences may be material to our condensed consolidated financial statements.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting

Standards Update No.

information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles

generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s

rules and regulations.

These unaudited financial statements should be read in conjunction with our audited financial statements

and notes thereto for the year ended December 31, 2019 as included in our Annual Report on Form 10-K.

Company’s financial statements are prepared assuming that the Company will continue as a going concern.

Company incurred operating losses and had negative operating cash flows, which raised substantial doubts about its ability to

continue as a going concern.

The Company may continue to incur operating losses and generate negative cash flows as the Company

implements its future business plan.

In order to meet its working capital needs through the next twelve months and to fund the

growth of the Company, the Company may consider plans to raise additional funds through the issuance of equity or debt.

the Company intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional

financing on terms that are favorable or acceptable to it, if at all.

ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy

and eventually attain profitable operations.

The accompanying financial statements do not include any adjustments that may be

necessary if the Company is unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a detailed discussion about the Company significant accounting policies, refer to Note 2 —

“Summary of Significant

Accounting Policies,”

in the Company’s consolidated financial statements included in Company’s 2019 Form 10-K.

During the nine months ended September 30, 2020, there were no significant changes made to the Company’s significant

accounting policies.

of Estimates in the Preparation of Financial Statements

Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP and this requires management

to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets

and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during

the reporting period.

The significant areas requiring the use of management estimates include, but not limited to, the allowance

for doubtful receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets

provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets.

Although these estimates are based on management’s knowledge of current events and actions management may undertake in the

future, actual results may ultimately differ from those estimates and such differences may be material to our condensed consolidated

financial statements.

Accounting Pronouncements

June 2016, the FASB issued Accounting Standards Update No.

2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic

Measurement of Credit Losses

on Financial Instruments”

which requires the measurement and recognition of expected credit losses for financial assets held

at amortized cost.

ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires

the use of forward-looking information to calculate credit loss estimates.

It also eliminates the concept of other-than-temporary

impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit

losses rather than as a reduction in the amortized cost basis of the securities.

These changes will result in earlier recognition

of credit losses.

Measurement of Credit Losses on Financial Instruments”

which requires the measurement and recognition of expected

credit losses for financial assets held at amortized cost.

ASU 2016-13 replaces the existing incurred loss impairment model with

an expected loss model which requires the use of forward-looking information to calculate credit loss estimates.

It also eliminates

the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be

recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

changes will result in earlier recognition of credit losses.

ASU 2016-13 will be effective on January 1, 2023.

We are currently evaluating the effect of the adoption of ASU

2016-13 and believe it does not have any material impact on our results of operations

We are currently

evaluating the effect of the adoption of ASU 2016-13 and believe it does not have any material impact on our results of operations

or financial.

In August 2020, the FASB issued Accounting

Standards Update No.

2020-06 (ASU 2020-06) “Accounting for Convertible Instruments and Contracts in an Entity’s Own

Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity,

including convertible instruments and contracts on an entity’s own equity.

For public business entities that are not smaller

reporting companies, ASU 2020-6 effective fiscal years beginning after December 15, 2021, and interim periods within those fiscal

We are currently evaluating the effect of the adoption of ASU 2020-06 and believe it does not have any material impact

on our results of operations or financial.

We have reviewed all the recently issued,

but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact

on the Company.

August 2020, the FASB issued Accounting Standards Update No.

2020-06 (ASU 2020-06) “Accounting for Convertible Instruments

and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics

of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

For public business

entities that are not smaller reporting companies, ASU 2020-6 effective fiscal years beginning after December 15, 2021, and interim

periods within those fiscal years.

We are currently evaluating the effect of the adoption of ASU 2020-06 and believe it does not

have any material impact on our results of operations or financial.

have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements

will have a material impact on the Company.

LOAN RECEIVABLES

As of June 30, 2020, the balance of loan receivables was $0.21

million, which was from Shenzhen Tiantian Haodian Technology Co., Ltd.

(“Tiantian Haodian”) On June 28, 2020, Guangchengji,

a wholly owned subsidiary of Future FinTech (Hong Kong) Limited, entered into a “Loan Agreement”

As of September 30, 2020, the balance of loan receivables was

from Shenzhen Tiantian Haodian Technology Co., Ltd.

(“Tiantian Haodian”).

On June 28, 2020, Guangchengji, a wholly

owned subsidiary of the Company, entered into a “Loan Agreement”

with Tiantian Haodian.

Pursuant to the Loan Agreement, Guangchengji agrees to lend cash up to but not greater than $5 million with Tiantian Haodian at

Pursuant to the Loan Agreement,

the Company agrees to lend cash up to but not greater than RMB35 million (approximately $5.14 million) with Tiantian Haodian at

the annual interest rate of 10% from June 28, 2020 to June 27, 2021.

2 unchanged sentences

guarantee provided by Tiantian Haodian.

During the nine months ended September 30, 2020, the Company recorded an interest income

of $99,027 from the loan receivables, which was not paid by Tiantian Haodian as of the date of this report.

Management of

the Company believes that the balance of the loan receivables is recoverable as of September 30, 2020.

RELATED PARTY TRANSACTION

The Company did not have any sales to related

parties for the six months ended June 30, 2020 and June 30, 2019, respectively.

The amount due to the related parties was

$1.60 million as of June 30, 2020, which consisted of the followings:

Name of Related Party from Whom Amounts were Received

amount due to the related parties of September 30, 2020, which consisted of the followings:

Legal representative of Guangchengji

Shanchun Huang

Chief Executive Officer of the Company

Shaanxi Fullmart Convenient Chain Supermarket Co., Ltd.

(“Fullmart”)

Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd.

was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.

Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd.

holds 16.67% equity of Fullmart.

Accounts payables

Shaanxi Fullmart Convenient Chain Supermarket Management Co., Ltd.

(“Fullmar Management”)

83.33% of the equity share of Fullmart management is owned by Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd., which is owned 100% by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.

Accounts payables

Chief Operating Officer of the Company

5 unchanged sentences

Chief Technology Officer of the Company

Payable to employee

Chief Financial Officer of the Company

Payable to employee

Son of the Chairman of the Company and a major shareholder of the Company of the Company

Shenzen TianShunDa Equity Investment Fund Management Co., Ltd.

Chairman of the Company

Shenzen TianShunDa Equity

Investment Fund Management Co., Ltd.

(the “TSD”)

TSD holds 26.36% of the equity interest of SkyPoeple (China), a subsidiary of the Company, which was sold to New Continent International Co., Ltd.

TSD holds 26.36% of the equity interest of SkyPoeple (China),

a former subsidiary of the Company, which was sold to New Continent International Co., Ltd.

on February 27, 2020.

Accounts payables

Legal representative of GuangChengJi (Shanghai) Co., Ltd., a subsidiary of Future Fintech (Hong Kong) Limited

The amount due from the related parties

was $3.09 million as of June 30, 2020, which consisted of the followings:

Name of Related Party to Whom the Amounts were Paid

Shaanxi Chunlv Ecological Agriculture Co., Ltd.

Holds 20.0% interest in CCM logistics

Including creditor’s rights of Shaanxi Youyi Co., Ltd of $3.24 million, which is partially offset by $0.24 million payable to the Company

Shaanxi Fullmart Commercial Holdings (Xi’an) Co., Ltd.

Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd.

was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.

amount due from the related parties as of September 30, 2020, which consisted of the followings:

Wealth Index (Beijing)

Fund Management Co.

The Company’s CEO is

the legal representative of this company

Interest free loan*

Shaanxi Chunlv Ecological

Agriculture Co., Ltd.

Holds 20.0% interest in Chain Cloud Mall

Logistics Center (Shaanxi) Co., Limited (CCM Logistics)

Including creditor’s rights of Shaanxi Youyi Co., Ltd of $3.24 million,

which is partially offset by $0.24 million payable to the Company

Shaanxi Fullmart Commercial

Holdings (Xi’an) Co., Ltd.

(“Fullmart Commercial”)

Fullmart Commercial was 100% owned by Xiu

Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.

Service fee due

Shaanxi Quangou Convenient Island Co., Ltd.

Fullmart holds 33.33% its equity

Shaanxi Quangou Convenient

Island Co., Ltd.

Fullmart Commercial holds 33.33%

Interest free loan*

Chairman of the Company

Son of the Chairman of the Company and

a major shareholder of the Company of the Company

Interest free loan*

The interest free loans have been approved by the Company’s Audit Committee.

The interest free loans and other related party transactions have been approved by the Company’s Audit Committee.

INTANGIBLE ASSETS

On May 1, 2020, the Company launched CCM

v3.0, which creates a new value cycle system of online shopping malls with a real-name blockchain system.

After the launch of CCM

v3.0, the Company reclassified this prepaid asset into intangible assets in the second quarter of 2020, which will be amortized

over 10 years.

On May 1, 2020, the Company launched CCM v3.0,

an on-line shopping mall platform, which creates a new value cycle system of online shopping malls with a real-name blockchain

After the launch of CCM v3.0, the Company reclassified this asset, which the Company prepaid to the software developer

in fiscal year 2019, into intangible assets in the second quarter of 2020, which will be amortized over 10 years.

Also included in the intangible assets

is land use right.

The government of the PRC, its agencies and collectives hold all land ownership.

Companies or individuals are

authorized to use the land only through land usage rights granted by the PRC government.

Land usage rights can be transferred upon

approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land

transfer fee.

Accordingly, the Company paid in advance for land usage rights.

Prepaid land usage rights are being amortized and

recorded as lease expenses using the straight-line method over the terms of the leases, which range from 40 to 50 years.

The amortization

expense was $0.09 million and $0.59 million for the six months ended June 30, 2020.

The following table sets intangible assets

of the Company as of June 30, 2020 and December 31, 2019, respectively.

Land Use Right

is accounting software.

The accounting software will be amortized over 10 years.

The amortization expense was $0.19 million and

$0.59 million for the nine months ended September 30, 2020.

following table sets intangible assets of the Company as of September 30, 2020 and December 31, 2019, respectively.

Accounting Software

September 30,

Accumulated amortization

Balance as of June 30, 2020

The following table summarizes the expected

amortization expense for the following years (in thousands):

Balance as of September 30, 2020

following table summarizes the expected amortization expense for the following years (in thousands):

Year ending December 31,

2020 (excluding the six months ended March 31, 2020)

2020 (excluding the nine months ended September 30, 2020)

2025 and thereafter

LONG TERM INVESTMENT

On June 22, 2018, Digipay Fintech Limited

(“Digipay”), a wholly-owned subsidiary of the Company acquired 10% ownership interest in InUnion

(“InUnion”) for an aggregate purchase price of $15 million (the “Purchase Price”) pursuant

to a Shares Transfer and IUN Digital Assets Investment Agreement signed with Lake Chenliu,

who are the sole owner of InUnion (the “Seller”).

The Company issued 5 million of its Common Stock to the Seller

on October 19, 2018.

On June 22, 2018, Digipay Fintech Limited (“Digipay”),

a wholly-owned subsidiary of the Company acquired 10% ownership interest in InUnion Chain Ltd.

(“InUnion”) for an aggregate

purchase price of $15 million (“Purchase Price”), pursuant to a Shares Transfer and IUN Digital Assets Investment Agreement

signed with Lake Chenliu, who are the sole owner of InUnion.

The Company issued 5 million of its Common Stock to the InUnion on

October 19, 2018 as the payment for Purchase Price.

Upon acquiring the InUnion Shares, Digipay

have access to, and the use of, certain software, technology and related intellectual property of InUnion without further payment.

Digipay also have the right to designate a director nominee to the board of directors of InUnion.

As of December 31, 2019, management assessed

the value of the above investment, and recorded an impairment loss of $2.5 million.

As of June 30, 2020, the balance of this long-term

investment was $12.25 million.

COMMON STOCKS ISSUED

On May 13, 2019, the Company issued 500,000

of its Common Stock to two employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Company’s

2017 Omnibus Equity Plan (the “Plan”).

On June 5, 2019, the Company issued 150,000 shares of its Common Stock to three

employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Plan .

Common stocks issued in connection with the convertible notes

On January 6, 2020, the Company entered

into the Eighth Exchange Agreement (the “Eighth Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah

limited partnership (the “Lender”).

Pursuant to the Eighth Exchange Agreement, the Company and Lender agreed to partition

a new Secured Convertible Promissory Note in the original principal amount of $145,000 (the “Eighth Partitioned Note”)

from a Secured Convertible Promissory Note (the “Note”) issued by the Company on March 26, 2019.

The outstanding balance

of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note.

The Company and Lender further

agreed to exchange the Eighth Partitioned Note for the delivery of 193,333 shares of the Company’s Common Stock, according

to the terms and conditions of the Exchange Agreement.

On January 15, 2020, the Company entered

into the Ninth Exchange Agreement (the “Ninth Exchange Agreement”) with the Lender.

Pursuant to the Exchange Agreement,

the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $140,000

(the “Ninth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding balance of the

Note shall be reduced by an amount equal to the outstanding balance of the Ninth Partitioned Note.

The Company and Lender further

agreed to exchange the Partitioned Note for the delivery of 186,666 shares of the Company’s Common Stock, according to the

terms and conditions of the Exchange Agreement.

On March 11, 2020, the Company entered

into the Tenth Exchange Agreement (the “Tenth Exchange Agreement”) with the Lender.

Pursuant to the Tenth Exchange Agreement,

the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $150,000

(the “Tenth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding balance of the

Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note.

The Company and Lender further agreed

to exchange the Partitioned Note for the delivery of 200,000 shares of the Company’s Common Stock, according to the terms

and conditions of the Exchange Agreement.

On April 17, 2020, the Company entered

into the Eleventh Exchange Agreement (the “Eleventh Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah

limited partnership (the “Lender”).

Pursuant to Eleventh Exchange Agreement,

the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $153,750

(the “Eleventh Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the

Company on March 26, 2019.

The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of

the Eleventh Partitioned Note.

The Company and Lender further agreed to exchange the Eleventh Partitioned Note for the delivery

of 205,000 shares of the Company’s Common Stock, according to the terms and conditions of the Eleventh Exchange Agreement.

On June 10, 2020, the Company entered into

the Twelfth Exchange Agreement (the “Twelfth Exchange Agreement”) with the Lender.

Pursuant to the Twelfth Exchange Agreement,

the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $111,486

(the “Twelfth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding balance of

the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note.

The Company and Lender further

agreed to exchange the Twelfth Partitioned Note for the delivery of 148,648 shares of the Company’s Common Stock, according

to the terms and conditions of the Twelfth Exchange Agreement.

Consulting Service Agreement

has access to, and the use of, certain software, technology and related intellectual property of InUnion without further payment.

Digipay also has the right to designate a director nominee to the board of directors of InUnion.

The Company has appointed

a director to the Board of Director of InUnion.

Pursuant to the agreement, Digipay shall also purchase 20,000,000 of the INU tokens

issued by InUnion (the “INU Tokens”) for an aggregate purchase price of $1,000,000, which such amount shall be paid

in immediately available funds within 180 days of the date of the agreement.

Digipay has reached an agreement with InUnion to waive

the purchase of the INU Token.

As a result, no INU Token was acquired by Digipay.

of December 31, 2019, management assessed the value of the above investment, and recorded an impairment loss of $2.75 million.

SHARE BASED COMPENSATION

On January 25, 2020, the Company entered

7 unchanged sentences

new lines of business and associated growth strategies;

and (iv) conduct market research and evaluating variable projects and providing

feasibility studies per Company’s request from time to time.

and (iv) conduct market research and evaluating variable projects and

providing feasibility studies per Company’s request from time to time.

The term of the Agreement is three years.

In consideration of

the services to be provided by Consultant to the Company, the Company agrees to pay the Consultant a three-year consulting fee

totaling $3 million.

In consideration

of the services to be provided by Consultant to the Company, the Company agrees to pay the Consultant a three-year consulting

fee totaling $3 million.

The Company shall issue a total of 3,750,000 restricted shares of the Company Common Stock (the “Consultant

10 unchanged sentences

of 1933, as amended.

For the six months ended June 30, 2020, the Company recorded stock related compensation of $1.19 million,

For the nine months ended September 30, 2020, the Company recorded stock related compensation of $1.19 million,

based on the stock closing price of $0.794 on the Agreement date, for the 1,500,000 shares which were released to the Consultant

immediately upon issuance.

The Company will recognize stock related compensation of $1.79 million for the 2,250,000 shares in the

future when they are released to the Consultant pursuant to the Agreement.

The Company will recognize stock related compensation of $1.79 million for the 2,250,000 shares in

the future when they are released to the Consultant pursuant to the Agreement.

On May 13, 2019, the Company issued 500,000

of its Common Stock to two employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Company’s

2017 Omnibus Equity Plan (the “Plan”).

On June 5, 2019, the Company issued 150,000 shares of its Common Stock to three

employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Plan.

On February 26, 2020, the Company’s

shareholders approved the 2019 Omnibus Equity Plan at a Special Meeting of shareholder, which permits the grant of incentive stock

options (“ISOs”), nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”),

restricted stock, unrestricted stock and restricted stock units (“RSUs”) to its employees, officers and directors of

up to 3,000,000 shares of Common Stock.

The Company has not issued any stock under the 2019 Omnibus Equity Plan.

On October 27, 2020, the Company’s board

of directors approved the 2020 Omnibus Equity Plan, which permits the grant of incentive stock options (“ISOs”), nonqualified

stock options (“NQSOs”), stock appreciation rights (“SARs”), restricted stock, unrestricted stock and restricted

stock units (“RSUs”) to its employees, officers and directors of up to 5,000,000 shares of Common Stock.

The 2020 Omnibus

Equity Plan is subject to the shareholders’

approval on the annual shareholders’

meeting, which will be held on December

The Company has not issued any stock under the 2020 Omnibus Equity Plan.

The Company did not grant any stock

options during the nine months ended September 30, 2020 and September 30, 2019.

OPERATING LEASE

In August 2020, the Company signed an operating

lease agreement for its office in Beijing.

The Company recognized operating lease liabilities and operating lease right-of-use

assets on its balance sheets.

Right of use assets represent the right to use an underlying asset for the lease term, and lease

liabilities represent the obligation to make lease payments arising from the lease.

Right of use assets and liabilities are recognized

at the lease commencement date based on the estimated present value of lease payments over the lease term.

The company has leases

with fixed payments for office rental in Beijing, which are classified as operating leases.

Options to extend or renew are recognized

as part of the lease liabilities and recognized as right of use assets.

There are no residual value guarantees and no restrictions

or covenants imposed by the leases.

The weighted average remaining lease term

is 2 years and the weighted average discount rate is 6%.

In the nine months ended September 30,

2020, the costs of the leases recognized in general administrative expenses are $13,000.

Cash paid for the operating leases including

in the operating cash flows was $15,038.

Future minimum lease payments for leases

with initial or remaining noncancelable lease terms in excess of one year are as follows:

Year ending December 31, (In thousands of U.S.

CONVERTIBLE LOAN PAYABLE

On December 19, 2019, Company entered into

a Note Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (“Iliad”), pursuant to

which the Company sold and issued to Iliad a Secured Promissory Note in the principal amount of $1.06 million.

Iliad purchased

the Note with an original issue discount of $0.05 million, and the Company agreed to pay to Iliad $0.01 million for fees and costs

incurred by Iliad in connection with the consummation of the Purchase Agreement.

The Note was sold to Iliad pursuant to an exemption

from registration under Regulation D, promulgated under the Securities Act of 1933, as amended.

The Note is one-year term with

an interest rate of 8%.

There was no fixed conversation price to the Company’s Common Stock in the agreement.

Iliad has converted

all the Note Purchased in fiscal year 2019 to the Company’s Common Stock based on the market date on the conversion date.

The Company believes that this Note will also be converted into the Company’s Common Stock in future.

The Company received

proceeds of $0.53 from Iliad on December 23, 2019, and the balance of $0.53 million on January 17, 2020.

On July 28, 2020, the Company, entered into

a Standstill Agreement with the Iliad.

Pursuant to the Standstill Agreement, Iliad agreed to refrain and forbear temporarily from

making redemptions for the Note that was sold and issued by the Company on December 19, 2019 in the original principal amount of

$1.06 million.

Iliad agreed not to redeem any portion of the Note (the “Standstill”) for a period beginning on the

date of the Agreement and ending on the date that is ninety (90) days from the date of the Agreement.

As a material inducement

and partial consideration for Iliad’s agreement to enter into the Agreement, the Company agreed that the outstanding balance

of the Note shall be increased by nine percent (9%), or $0.10 million, on the date of the Agreement (the “Standstill Fee”).

The Company recorded the Standstill Fee of $0.10 million as interest expenses during the third quarter of 2020.

As of September 30, 2020, the balance of the

convertible note payable was $1.16 million.

Common stocks issued in connection with the convertible

On January 6, 2020, the Company entered

into the Eighth Exchange Agreement (the “Eighth Exchange Agreement”) with Iliad.

Pursuant to the Eighth Exchange Agreement,

the Company and Iliad agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $145,000

(the “Eighth Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the Company

on March 26, 2019.

The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned

The Company and Iliad further agreed to exchange the Eighth Partitioned Note for the delivery of 193,333 shares of the Company’s

Common Stock, according to the terms and conditions of the Exchange Agreement.

On January 15, 2020, the Company entered

into the Ninth Exchange Agreement (the “Ninth Exchange Agreement”) with the Iliad.

Pursuant to the Exchange Agreement,

the Company and Iliad agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $140,000

(the “Ninth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding balance of the

Note shall be reduced by an amount equal to the outstanding balance of the Ninth Partitioned Note.

The Company and Iliad further

agreed to exchange the Partitioned Note for the delivery of 186,666 shares of the Company’s Common Stock, according to the

terms and conditions of the Exchange Agreement.

On March 11, 2020, the Company entered

into the Tenth Exchange Agreement (the “Tenth Exchange Agreement”) with the Iliad.

Pursuant to the Tenth Exchange Agreement,

the Company and Iliad agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $150,000

(the “Tenth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding balance of the

Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note.

The Company and Iliad further agreed

to exchange the Partitioned Note for the delivery of 200,000 shares of the Company’s Common Stock, according to the terms

and conditions of the Exchange Agreement.

On April 17, 2020, the Company entered

into the Eleventh Exchange Agreement (the “Eleventh Exchange Agreement”) with Iliad.

Pursuant to Eleventh Exchange

Agreement, the Company and Iliad agreed to partition a new Secured Convertible Promissory Note in the original principal amount

of $153,750 (the “Eleventh Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued

by the Company on March 26, 2019.

The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance

of the Eleventh Partitioned Note.

The Company and Iliad further agreed to exchange the Eleventh Partitioned Note for the delivery

of 205,000 shares of the Company’s Common Stock, according to the terms and conditions of the Eleventh Exchange Agreement.

On June 10, 2020, the Company entered into

the Twelfth Exchange Agreement (the “Twelfth Exchange Agreement”) with the Iliad.

Pursuant to the Twelfth Exchange

Agreement, the Company and Iliad agreed to partition a new Secured Convertible Promissory Note in the original principal amount

of $111,486 (the “Twelfth Partitioned Note”) from the Note issued by the Company on March 26, 2019.

The outstanding

balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note.

The Company and Iliad

further agreed to exchange the Twelfth Partitioned Note for the delivery of 148,648 shares of the Company’s Common Stock,

according to the terms and conditions of the Twelfth Exchange Agreement.

COMMON STOCKS ISSUED

Debt Repayment Agreement

In July 2020, the Company entered a series

of loan agreements with fourteen individuals for a total amount of $4.96 million.

On August 4, 2020, the Company entered into a

Debt Repayment Agreement with these individuals (the “Creditors”), pursuant to which the Company agreed to repay $4,961,000

debt owed to the Creditors in the form of shares of Common Stock of the Company for an aggregate of 2,740,883 shares at a price

of $1.81 per share (the “Debt Repayment”).

As the closing price of the Company stock was $2.52 on August 4, 2020, the

Company recognized loss of $1.95 million in loss on debt settlement during the third quarter of 2020 .

The Debt Repayment will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the

Securities Act of 1933, as amended.

The Company issued 2,740,883 shares of its Common Stock to the Creditors on August 12, 2020.

Securities Purchase Agreement

On June 16, 2020, the Company entered into

a Securities Purchase Agreement with Qun Xie, pursuant to which the Company agreed to sell to the Qun Xie in a private placement

500,000 shares of the Company’s Common Stock, purchase price of $1.00 per share for an aggregate offering price of $500,000.

The Private Placement will be completed pursuant to the exemption from registration provided by Regulation S promulgated under

the Securities Act of 1933, as amended.

On June 30, 2020, Qun Xie paid $500,000, and on August 7, 2020, the Company issued 500,000

Shares pursuant to this Agreement.

On September 16, 2020, the Company entered

into a Securities Purchase Agreement with Houwu Huang, pursuant to which the Company agreed to sell to Houwu Huang in a private

placement 224,599 shares of the Company’s common stock, at a purchase price of $1.87 per share for an aggregate offering

price of $420,000.

The Private Placement will be completed pursuant to the exemption from registration provided by Regulation S

promulgated under the Securities Act of 1933, as amended.

The Company issued 224,599 shares of its Common Stock to the Purchaser

on September 24, 2020.

DISCONTINUED OPERATIONS

On September 18, 2019, HeDeTang HK entered into a Share Transfer Agreement (the “Agreement”) with New Continent

International Co., Ltd., (the “Buyer”) a company incorporated in the British Virgin Islands.

Pursuant to the terms

of the Agreement, the Buyer purchased 100% ownership of HeDeTang HK, which value is primarily derived from HeDeTang HK’s

wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd.

and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total

price of RMB 600,000 (approximately $85,714) (the “Sale Transaction”).

The following table listed the total assets

and liabilities of the discontinued operation as of September 30, 2020 and December 31, 2019:

September 30, 2020

December 31, 2019

Hedetang Farm (1)

Zhonglian Hengxin (1)

CCM Logistics (1)

Digital Online Marketing Limited (1)

SkyPeople Foods Holding Ltd.

HeDeTang HK (2)

$ 199,595,785

(1) On March 11, 2020, the Company’s

Board of Directors passed a resolution to sell the operation of Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian

Hengxin”) and close the operation of Digital Online Marketing Limited, and SkyPeople Foods Holding Ltd.

On July 24, 2020, the Company’s Board of Directors passed

a resolution to close the operation of Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited (“CCM Logistics”),

a subsidiary located in the national kiwifruit Industrial Park of Baoji City and Hedetang Farm Products Trading Markets (Mei County)

(“Hedetang Farm”).

The Company has established a winding-down

plan to close these operations.

Based on the restructuring plan and in accordance with ASC 205-20, the Company presented the operating

results from these operations.

as a discontinued operation, as the Company believed that no continued cash flow would be generated

by these operations.

and that the Company would have no significant continuing involvement in the discontinued entity.

In the second quarter of 2020, the Company

signed an Equity Transfer Agreement with Shaanxi Yinlian Huijin Asset Management Co.

to transfer 65% of the equity shares

of Zhonglian Hengxin at zero consideration.

The net liabilities of Zhonglian Hengxin are $0.15 million.

The Company recorded a

gain on sale of subsidiary of $0.15 million in the third quarter of 2020.

November 12, 2020, CCM Tianjin, a wholly owned subsidiary of the Company entered into an Equity Transfer Agreement with Xi’an

Yishengkang Information Technology, Ltd.

(“Xi’an Yishengkang”), an unrelated third party, pursuant to which the

Company agreed to sell 90% of total issued and outstanding capital stock of Hedetang Farm that it owns to Xi’an Yishengkang

at RMB9,000 (approximately $1,324).

On the same date, CCM Logistics entered

into another Equity Transfer Agreement with an individual and unrelated third party, Liyuan Ying, pursuant to which the Company

agreed to sell 10% of its shares of total issued and outstanding capital stock of Hedetang Farm that it owns to Liyuan Ying for

RMB1,000 (approximately $147).

(2) HeDeTang HK

On September 18, 2019, HeDeTang HK entered

into a Share Transfer Agreement (the “Agreement”) with New Continent International Co., Ltd., (the “Buyer”)

a company incorporated in the British Virgin Islands.

Pursuant to the terms of the Agreement, the Buyer purchased 100% ownership

of HeDeTang HK, which value is primarily derived from HeDeTang HK’s wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd.

and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total price of RMB 600,000 (approximately $85,714) (the “Sale

Transaction”).

The Sale Transaction was closed on February 27, 2020.

In accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC

Topic 205”), the Company presented the operation results from HeDeTang HK’s and subsidiaries as a discontinued operation,

as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would

have no significant continuing involvement in the operations of the discontinued component.

The total assets of HeDeTang HK were

$106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020,

resulting in a gain on disposal of $123.69 million.

There was no income or loss from HeDeTang HK from January 1, 2020 to the

Huludao Wonder

The discontinued operation presented in

the financial statement for the period ended June 30, 2019 includes Huludao Wonder operation, a subsidiary which produces concentrated

In December 2016, the Company established a winding-down plan to close this operation.

Based on the restructuring

plan and in accordance with ASC 205-20, the Company presented the operating results from Huludao Wonder as a discontinued operation,

as the Company believed that no continued cash flow would be generated by the disposed component (Huludao Wonder) and that the

Company would have no significant continuing involvement in the operation of the discontinued component.

Management of the Company

initiated a plan to sell the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance

with ASC 205-20.

In accordance with the restructuring plan, the Company intended to transfer the concentrated fruit juice production

equipment in Huludao Wonder to another subsidiary and to sell the land use right and facilities upon favorable circumstances.

On February 27, 2020 pursuant to a Share Transfer Agreement entered into by HeDeTang HKand New Continent International Co., Ltd.

on September 18, 2019, the ownership of Huludao Wonder was transferred as a subsidiary of HeDeTang HK to New Continent International

On March 11, 2020, the Company’s Board of Directors passed

a resolution to sell the operation of Globalkey Supply Chain limited and Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian

Hengxin”) and close the operation of Digital Online Marketing Limited, Future Digital Fintech (Xi’an) Co., Ltd., SkyPeople

Foods Holding Ltd.

and Chain Future Digital Tech (Beijing) Co., Ltd.

Based on the disposal plan and in accordance with ASC 205-20,

the Company presented the operating results from these operations as a discontinued operation.

In accordance with ASC Topic 205, Presentation of

Financial Statement Discontinued Operations (“ASC Topic 205”), the Company presented the operation results from

HeDeTang HK and its subsidiaries as a discontinued operation, as the Company believed that no continued cash flow would be generated

by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued

The total assets of HeDeTang HK were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK

were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $123.69 million.

There was no income or loss from

HeDeTang HK from January 1, 2020 to the sale.

VARIABLE INTEREST ENTITIES

18 unchanged sentences

Xue is a major shareholder of the Company and the son of Mr.

Yongke Xue, our Chairman and Chief Executive Officer.

the Chief Operating Officer of the Company.

Yongke Xue, the Chairman of the Board of Directors of the Company.

Kai Xu is the Deputy General Manager of Future Commercial Management (Beijing) Co., Ltd.

For the details about the VIE agreements,

4 unchanged sentences

The amount of accrued expenses and other

payables were $2.66 million and $2.57 million as of June 30, 2020 and December 31, 2019, respectively, which consisted of the followings:

Construction expenses payable

payables as of September 30, 2020 and December 31, 2019 consisted of the followings:

September 30,

Acquisition of Intangibles

3 unchanged sentences

Accrued tax payable

As of June 30, 2020, loan payable were

$2.25 million, which consisted of the loan payable of $1.84 million to Shaanxi Zhongcai Pawn Co., Ltd., loan payable of $0.20

million to Shaanxi Entai Bio-Technology Co., Ltd and loan payable $0.21 million to Shenzhen Wangjv Trading Co., Ltd.

Hedetang Farm Product Trading Market (Mei County)

(“Hedetang Market”), a subsidiary of GlobalKey Tianjin, entered into a loan agreement with Shaanxi Zhongcai

Pawn Co., Ltd.

("Zhongcai") in February 2015.

Pursuant to the loan agreement, Hedetang Market borrowed $1.84 million

from Zhongcai at the monthly interest rate of 0.4%.

Hedetang Market provided its land use right as a as a pledge for the loan.

Hedetang Market did not return the principal and interest on time pursuant to the loan agreement.

Zhongcai filed an enforcement

request with Xi’an Intermediate People’s Court in July 2015.

In August 2017, the Intermediate Court of Xi’an

issued a verdict to seize the pledged land use rights of Hedetang Market for auction.

As of the date of this report, the auction

sale was successful.

The Company recorded the unpaid amount of $1.84 million as loan payable.

As of September 30, 2020, loan payable

were $0.86 million, which consisted of the loan payable of $0.17 million to Shaanxi Entai Bio-Technology Co., Ltd., loan payable

$5,870 to Shenzhen Wangjv Trading Co., Ltd.

and loan payable of $0.68 million to some individuals creditor.

The loan from Shaanxi Entai Bio-Technology

Co., Ltd of $0.20 million was an interest free loan and there is not assets pledged for this loan.

On June 15, 2020, the Company entered into a loan agreement

with Shenzhen Wangjv Trading Co., Ltd.

Pursuant to the loan agreement, the Company borrowed $0.21 million from Shenzhen Wangjv

Trading Co., Ltd.

of $0.17 million was an interest free loan and there is not assets pledged for this loan.

On June 15, 2020, the Company entered into

a loan agreement with Shenzhen Wangjv Trading Co., Ltd.

Pursuant to the loan agreement, the Company borrowed $0.21 million from

Shenzhen Wangjv Trading Co., Ltd.

at the annual interest rate of 8% for the use of working capital for a year.

ADVANCES FROM ISSUANCE OF COMMON STOCK

On June 16, 2020, the Company entered into a Securities Purchase

Agreement (the “Agreement”) with Qun Xie (the “Purchaser”), pursuant to which the Company agreed

to sell to the Purchaser in a private placement 500,000 shares (the “Shares”) of the Company’s Common Stock,

purchase price of $1.00 per share for an aggregate offering price of $500,000 (the “Private Placement”).

Placement will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities

Act of 1933, as amended.

On June 30, 2020, Qun Xie paid $500,000, and the Company recorded $500,000 as advances from issuance of

the Common Stock in current liability.

On August 7, the Company issued 500,000 Shares pursuant to this Agreement.

On July 6, 2020,

the Company returned $0.20 million to Shenzhen Wangjv Trading Co., Ltd.

During the third quarter of 2020, the Company

entered into a series of interest free loan agreements with some individual creditors ,

borrowing $0.68 million for short-term working capital needs.

The repayment term is one year from the borrowing date.

On October 27, 2020, the Company entered into

a series of Debt Repayment Agreements with some of the individual creditors, pursuant to which the Company agreed to repay $0.32

million debt owed to these individual creditors in the form of shares of Common Stock of the Company for an aggregate of 160,000

shares at a price of $2.00 per share (the “Debt Repayment”).

As the closing price of the Company stock was $2.23 on

October 27, the Company recognized loss of $0.04 million in other expenses during the fourth quarter of 2020.

The Debt Repayment

will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of

1933, as amended.

All of our revenues are generated in China.

The following

table summarizes the Company's revenues disaggregated by revenue source (in thousands).

The revenues are recognized as separate

performance obligations that are satisfied by transferring control of the product or service to the customer.

There was no deferred

Three Months Ended

Nine Months Ended *

September 30,

Sales of Goods

* Certain reclassifications have been made to the financial

statements for the period ended September 30, 2019 to conform to the presentation for the period ended September 30, 2020, with

no effect on previously reported net income (loss).

COMMITMENTS AND CONTINGENCIES

Legal case with Beijing Bank

On June 29, 2015, SkyPeople China entered

into a loan agreement with Beijing Bank.

Pursuant to the loan agreement, SkyPeople China borrowed RMB 30 million (approximately

$4.36 million) from Beijing Bank.

Hongke Xue, Yongke Xue and Xiujun Wang provided guarantees for the loan and Shaanxi Boai Medical

Technology Development Co., Ltd.

(“Shaanxi Boai”) provided certain real estate property as a pledge for the loan.

China did not repay the loan on time and Beijing Bank filed an enforcement request with Xi’an Intermediate People’s

Court in June 2017.

The Xi’an Intermediate People’s Court seized real estate properties pledged by Shaanxi Boai and

In November 2018, the Court sold the real estate property pledged by Xiujun Wang at RMB 1.17 million (approximately

$0.17 million).

Because the real estate property is Xiujun Wang’s primary home, the Court allocated RMB 0.12 million to Xiujun

Wang as transition home leasing fee and deducted outstanding mortgage payments, and the remaining amount was delivered to the Beijing

Bank as the repayment.

The Court has also made inquiries to the Beijing Bank as to whether it is willing to accept the pledged

real estate property of Shaanxi Boai as the repayment of the outstanding loan for the amount of RMB 27.93 million (approximately

$4.06 million) but Beijing Bank has refused to take the real property as repayment of the loan and the enforcement action has been

terminated by the Court on December 18, 2018.

As of June 30, 2020, SkyPeople China still owe the unpaid amount.

China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd.

on February 27,

The creditors have no recourse to the current Company.

Legal case with Ningxia Bank

On March 8, 2016, SkyPeople China entered

into a loan agreement with Ningxia Bank.

Pursuant to the loan agreement, SkyPeople China borrowed RMB 25 million (approximately

$3.63 million) from Ningxia Bank.

Hongke Xue, Yongke Xue, Lake Chen, Shaanxi Boai Medical Technology Development Co., Ltd.

Shaanxi Qiyiwangguo provided guarantees for the loan.

SkyPeople China also pledged 37 pieces of equipment and the related trademarks

to Ningxia Bank for the loan.

SkyPeople China has not repaid the loan and Ningxia Bank filed an enforcement action with Xi’an

Intermediate people’s court in August 2017.

The Court has frozen the assets of SkyPeople China that were pledged as guarantee

for the loan from being transferred to any third-party, but the freeze does not limit or affect the use of these properties by

SkyPeople China for its business.

In July 2018, Shaanxi Qiyiwangguo filed a petition to the Court and requested the termination

of the enforcement action on the basis that its guarantee of the loan was not valid because the seal used on the guarantee agreement

was not authentic and the guarantee was not approved by the shareholders of Shaanxi Qiyiwangguo.

On November 27, 2018, Shaanxi

Qiyiwangguo withdrew its petition.

The Court agreed to such withdrawal and there has been on other progress of this case.

June 30, 2020, SkyPeople China still owe the unpaid amount.

SkyPeople China was one of the subsidiaries transferred along with

HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current

Legal case with China Construction Bank

On December 23, 2015, SkyPeople China entered

into two loan agreements with China Construction Bank.

Pursuant to the loan agreements, SkyPeople China borrowed RMB 13.90 million

(approximately $2.13 million), and RMB 30 million (approximately $4.59 million) from China Construction Bank, respectively.

Boai Medical Technology Development Co., Ltd.

(“Boai”), Hongke Xue, Yongke Xue, Xiujun Wang and Yingkou Trusty Fruits

(“Yingkou”) provided pledges for the loans.

SkyPeople China has not repaid the loans and China Construction

Bank filed an enforcement action with Xi’an Intermediate People’s Court in March 2017.

In December 2017, SkyPeople

China received the enforcement notice from the Court.

The Court has seized certain parking space and land use rights pledged by

Xiujun Wang and Boai and sold the land use right pledged by Boai in auction for approximately RMB 24,835,790 as repayment to China

Construction Bank.

The Court also seized certain land use rights pledged by Yingkou Trusty Fruits Co., Ltd., but the auction sale

for those assets was not successful.

As of June 30, 2020, SkyPeople China still owe the unpaid amount.

SkyPeople China was one

of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

creditors have no recourse to the current Company.

On May 9, 2016, SkyPeople China entered

into loan agreements with China Construction Bank.

Pursuant to the loan agreements, SkyPeople China borrowed RMB 22.9 million (approximately

$3.50 million) from China Construction Bank.

Shaanxi Province Credit Reassurance Company (“Credit Reassurance Company”)

provided a guarantee to China Construction Bank for the loan, Hongke Xue and Yongke Xue provided their guarantees, and SkyPeople

China provided an office space that it owned to Credit Reassurance Company as a pledge.

SkyPeople China has not repaid the loan

and Credit Reassurance Company repaid the loan for SkyPeople China.

In June 2017, Credit Reassurance filed an enforcement action

request with Xi’an Intermediate People’s Court (the “Court”) in June 2017.

In December 2017, SkyPeople

China received the enforcement notice from the Court.

The Court issued a verdict to seize the office space of SkyPeople China for

auction sale on December 26, 2017.

In February 2018, the auction sale was conducted but not successful.

In June 2018, the Court

decided to use the pledge property as the repayment for the outstanding loan of RMB 12.21 million (approximately $1.78 million).

Legal case with China Cinda Asset Management

In April 2015, China Cinda Asset Management

Shaanxi Branch (“Cinda Shaanxi Branch”) filed two enforcement proceedings with Xi’an Intermediate People’s

Court (the “Court”) against SkyPeople China for alleged defaults pursuant to guarantees by SkyPeople China to its suppliers

for a total amount of RMB 39.60 million or approximately $5.8 million.

In September 2014, two long term suppliers

of pear, mulberry, and kiwi fruits to SkyPeople China requested that SkyPeople China provide guarantees for their loans with Cinda

Shaanxi Branch.

Considering the long term business relationship and to ensure the timely supply of raw materials, SkyPeople China

agreed to provide guarantees on the value of the raw materials supplied to SkyPeople China.

Because Cinda Shaanxi Branch is not

a bank authorized to provide loans, it eventually provided financing to the two suppliers through the purchase of accounts receivables

of the two suppliers with SkyPeople China.

In July 2014, the parties entered into two agreements –

an Accounts Receivables

Purchase and Debt Restructure Agreement, and Guarantee Agreements for Accounts Receivables Purchase and Debt Restructure.

to the agreements, Cinda Shaanxi Branch agreed to provide a RMB 100 million credit line on a rolling basis to the two suppliers

and SkyPeople China agreed to pay its accounts payables to the two suppliers directly to Cinda Shaanxi Branch and provided guarantees

for the two suppliers.

In April 2015, Cinda Shaanxi Branch stopped providing financing to the two suppliers and the two suppliers

were unable to continue the supply of raw materials to SkyPeople China.

Consequently, SkyPeople China stopped making any payment

to Cinda Shaanxi Branch.

SkyPeople China has responded to the Court

and taken the position that the financings under the agreements are essentially the loans from Cinda Shaanxi Branch to the two

suppliers, and because Cinda Shaanxi Branch does not have permits to make loans in China, the agreements are invalid, void and

had no legal effect from the beginning.

Therefore, SkyPeople China has no obligation to repay the debts owed by the two suppliers

to Cinda Shaanxi Branch.

Upon the Court’s suggestion, the

parties agreed to a settlement discussion in April 2017.

As a part of the settlement discussion, on April 18, 2017, SkyPeople China

withdrew its non-enforcement request with the Court without prejudice.

As of June 30, 2020, SkyPeople China still have liability

of $5.8 million related with these two enforcement proceedings.

SkyPeople China was one of the subsidiaries transferred along with

HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current Company.

On February 21, 2020, the Company received

a subpoena from the SEC’s Division of Enforcement requiring us to produce documents and detailed information relating to,

among other things, the Company’s accounting procedures, management oversight, and the sale of HeDeTang holdings (HK) Ltd.

to New Continent International Co., Ltd.

The subpoena required the Company to produce all responsive documents created during,

or concerning, the period January 1, 2016 to the present, unless otherwise specified.

The Company is cooperating with the SEC’s

investigation and has provided responsive documents and information requested in the subpoena.

In the event the Company locates

additional responsive documents, we expect to produce them promptly to the SEC.

We will also make officers or other employees available

to be interviewed by the SEC with regard to the subject matters identified in the subpoena.

The Company is unable to predict, what

action, if any, might be taken in the future by the SEC or any other governmental authority as a result of the subpoenas.

can be no assurance that the SEC will not commence an enforcement action against us or members of our management, or as to the

ultimate resolution of any enforcement action that the SEC may decide to bring.

Under applicable law, the SEC has the ability to

impose significant sanctions on companies and individuals who are found to have violated the provisions of applicable federal securities

laws, including cease and desist orders, civil money penalties, and barring individuals from serving as directors or officers of

public companies.

We have expended significant financial and managerial resources responding to the SEC subpoena.

Defending any

enforcement action brought by the SEC against us would involve further significant expenditures and the resolution of any such

enforcement action could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Entry into a material Definitive Agreement

On July 13, 2020 ,

the Company and Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company entered into a Share Exchange Agreement

with Nice Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”), which

is licensed under the Security and Futures Commission of Hong Kong for assets management, and Joy Rich Enterprises Limited, a limited

company organized under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich”), pursuant to which the Company

agreed to acquire 90% of the issued and outstanding ordinary shares of Nice (the “Nice Shares”) from Joy Rich in exchange

for the Company’s Common Stock.

Pursuant to the terms of the Share Exchange

Agreement, the parties agreed:

(i) the aggregate purchase price for Nice Shares shall be HK$54 million (approximately $6.97 million,

the “Purchase Price”) and it shall be paid in the Company’s Common Stock;

(ii) 40% of the Purchase Price HK$21.6

million (approximately $2.79 million) shall be paid in the shares of common stock of the Company based on the average closing price

of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to the date of the Agreement

and the foreign exchange rate between HK$ and US$ shall be the rate published by Bloomberg on the date of the Agreement;

30% of Purchase Price shall be paid in the Company Common Stock (the “2020 Earn-Out Shares”) if Nice meets certain

earnings goal for 2020 (the “2020 Earnings Goal”);

(iv) the 2020 Earn-Out Shares shall be issued based upon the average

closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December

31, 2020 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2020;

(v) additional

30% of Purchase Price shall be paid in the shares of common stock the Company (the “2021 Earn-Out Shares”) if Nice

meets certain earnings goal for 2021 (the “2021 Earnings Goal”);

(vi) the 2021 Earn-Out Shares shall be issued based

upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days

prior to December 31, 2021 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2021;

(vii) if Nice does not achieve its earnings goal for a given year, the parties agree to have forbearance clause that the amount

of such year’s earn-out shares shall not be reduced for that year if Nice achieves at least sixty percent (60%) of its given

year earnings goal and if Nice achieves lower than 60% earnings goal for a given year, the amount of such year’s earn-out

shares shall be reduced to zero.

The Company Shares will be issued pursuant to the exemption from registration provided by Regulation

S promulgated under the Securities Act of 1933, as amended.

This transaction is subject to the approval

of the Security and Futures Commission of Hong Kong.

As of the date of this report, the transaction is still pending .

Legal case with Zhongcai

Market, a subsidiary of CCM Tianjin, entered into a loan agreement with Shaanxi Zhongcai Pawn Co., Ltd.

("Zhongcai")

in February 2015.

Pursuant to the loan agreement, Hedetang Market borrowed $1.84 million from Zhongcai at the monthly interest

rate of 0.4%.

Hedetang Market provided its land use right as a pledge for the loan.

Hedetang Market did not return the principal

and interest on time pursuant to the loan agreement.

Zhongcai filed an enforcement request with Xi’an Intermediate People’s

Court in July 2015.

In August 2017, Xi’an Intermediate People’s Court issued a verdict to seize the pledged land use

rights of Hedetang Market for auction.

As of the date of this report, the auction sale was not successful.

The Company recorded

the unpaid amount of $1.84 million as loan payable.

Legal case with Shaanxi Zhongkun Construction

In May 2015, Hedetang Market and Shaanxi

Zhongkun Construction Co., Ltd.

(“Zhongkun”) entered into a construction and decoration agreement.

On September 5,

2018, Zhongkun filed the lawsuit with Mei County People’s Court (the “Court”) for repayment of construction and

decoration fees.

The Court issued a civil judgement in November 2018, ordering Hedetang Market to pay project funds of RMB 1.65

million (approximately $0.24 million) to Zhongkun, plus interest.

On April 19, 2020, the Court issued a verdict to terminate the

enforcement because assets of Hedetang Market had already been seized by Xi’an Yanta District People’s Court and Baoji

Intermediate People’s Court, and there were no other assets for enforcement.

Currently the Company is still liable for the

unpaid amount and the interest.

Legal case with Cinda Capital Financing

4 unchanged sentences

that Lessees repay RMB 50 million (approximately $7.27 million) in capital lease fees, plus interest.

Cinda purchased or paid

for refrigerant warehouse and trading hall to the suppliers and vendors and agreed to lease them to the Lessees for a leasing

fee of RMB 50 million in December 2016.

The capital leasing fee became due on its maturity date of June 2017, with certain land

use rights of Lessees in Mei County and equity of Guoweimei as a pledge.

The Company disputed that the land use rights for the

refrigerant warehouse and trading hall were never sold to or transferred to Cinda, and argues that therefore it is a loan agreement

and not a capital lease agreement among the parties.

Lessees have taken the position that Cinda is not a bank and does not have

government permits required to make loans in China, and the agreements including pledge agreement were invalid, void and without

legal effect from the beginning.

Cinda purchased or paid for

refrigerant warehouse and trading hall to the suppliers and vendors and agreed to lease them to the Lessees for a leasing fee of

RMB 50 million in December 2016.

The capital leasing fee became due on its maturity date of June 2017, with certain land use rights

of Lessees in Mei County and equity of Guoweimei as a pledge.

The Company disputed that the land use rights for the refrigerant

warehouse and trading hall were never sold to or transferred to Cinda, and argues that therefore it is a loan agreement and not

a capital lease agreement among the parties.

Lessees have taken the position that Cinda is not a bank and does not have government

permits required to make loans in China, and the agreements including pledge agreement were invalid, void and without legal effect

from the beginning.

Therefore, the Company only has the obligations to repay principal but not the interest.

In November 2017,

Beijing Intermediate Court ruled in favor of Cinda and the Lessees appealed the case to the Beijing Supreme Court.

6 unchanged sentences

subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda.

As of June 30, 2020, SkyPeople

China has not repaid the amount.

SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent

International Co., Ltd.

As of September 30, 2020,

SkyPeople China has not repaid the amount.

SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to

New Continent International Co., Ltd.

on February 27, 2020.

20 unchanged sentences

the decision to the Beijing Supreme Court.

The Beijing Supreme Court rejected the appeal and upheld the original verdict on

September 7, 2018.

The Beijing Supreme Court rejected the appeal and upheld the original verdict on September

The case is under enforcement procedure and Cinda is in the process of sale the seized properties.

are sold, the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda.

As of June 30, 2020,

Before they are sold,

the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda.

As of September 30, 2020,

SkyPeople China has not repaid the amount.

3 unchanged sentences

The creditors have no recourse to the current Company.

Legal case with Shaanxi Fangtian Decoration

In April 2015, SkyPeople China entered

into a loan agreement with Shaanxi Fangtian Decoration Co., Ltd.

(“Fangtian”).

Pursuant to the loan agreement, SkyPeople

China borrowed RMB 3.5 million (approximately $508,780) from Fangtian.

SkyPeople China has not repaid the loan and Fangtian filed

a lawsuit with Xi’an Yanta District People’s Court (“Yanta District Court”).

On August 10, 2017, Yanta

District Court ruled against SkyPeople China and determined that SkyPeople China must repay the loan of RMB 3.5 million plus interest

RMB of 0.40 million (approximately $585,098).

Fangtian has requested court enter into enforcement procedures for the case.

June 30, 2020, SkyPeople China has not repaid the amount.

SkyPeople China was one of the subsidiaries transferred along with HeDengTang

HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current Company.

Legal case with Shanghai Pudong Development

On May 4, 2015, SkyPeople China and Xi’an

Branch of Shanghai Pudong Development Bank (SPD Bank Xi’an Branch) renewed a Working Capital Loan Contract and Repayment

Schedule, according to which both parties agreed that SPD Bank Xi’an Branch loaned RMB 26.9 million (approximately $3.92

million) to SkyPeople China with a term of one year.

On the signing date of the Loan Contract, Hongke Xue, Yongke Xue, Xiujun Wang

and SPD Bank Xi’an Branch signed a Contract of Guaranty guaranteeing the repayment of loan and undertaking joint liability.

According to a Mortgage Contract of Maximum Amount signed between SkyPeople China and SPD Bank Xi’an Branch on April 2, 2013,

SkyPeople China provided the property and land use rights of Jingyang factory as the pledge.

In October 2015, SPD Bank Xi’an

Branch filed an enforcement request with the Intermediate Court of Xi’an and the Court seized the property and the land use

rights of Jingyang factory.

During the enforcement procedure, SPD Bank Xi’an Branch transferred its creditor’s rights

to China Huarong Asset Management Co., Ltd.

(“China Huarong”).

The Court changed the execution applicant to China Huarong.

In March 2019, the Intermediate Court of Xi’an issued a verdict for the transfer of the pledged property and land use rights

of Jingyang factory to China Huarong as the repayment of the loan.

Legal case with Shaanxi Fangyuan construction

Shaanxi Guoweimei Kiwi Deep Processing

Co., Ltd (“Guoweimei”), entered into a construction agreement with Shaanxi Fangyuan construction co., Ltd.

(“Fangyuan”)

in July 2013.

On October 8, 2018, Fangyuan filed a lawsuit and requested that Guoweimei pay a project construction fee plus penalty

of RMB 56.32 million (approximately $8.22 million).

On June 10, 2019, Baoji Intermediate People’s Court issued a verdict

that Guoweimei must pay RMB 41.58 million (approximately $6.07 million) plus penalty to Fangyuan, and Fangyuan will enjoy preferential

right for the projects in processing zone of National Wholesale and Trading Center in Mei County for Kiwi Fruits developed by

As of June 30, 2020, Guoweimei has not repaid the amount.

Guoweimei was one of the subsidiaries transferred along with

HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current Company.

Legal case with Shaanxi Zhongkun Construction

In May 2015, Hedetang Market and Shaanxi

Zhongkun Construction Co., Ltd.

(“Zhongkun”) entered into a construction and decoration agreement.

On September 5,

2018, Zhongkun filed the lawsuit with Mei County People’s Court (the “Court”) for repayment of construction

and decoration fees.

The Court issued a civil judgement in November 2018, ordering Hedetang Market to pay project funds of RMB

1.65 million (approximately $0.24 million) to Zhongkun, plus interest.

On April 19, 2020, the Court issued a verdict to terminate

the enforcement because assets of Hedetang Market had already been seized by Xi’an Yanta District People’s Court and

Baoji Intermediate People’s Court, and there were no other assets for enforcement.

Currently the Company is still liable

for the unpaid amount and the interest.

Legal case with Xi’an Shanmei

Food Co., Ltd.

On October 31, 2017, Xi’an Shanmei

Food Co., Ltd.

filed a lawsuit against Shaanxi Qiyiwangguo, a majority-owned subsidiary of the Company, with Zhouzhi County People’s

Court in connection with a Land Lease Agreement entered into by the parties on October 1, 2013.

On March 2, 2018, Zhouzhi County

People’s Court issued a verdict that:

(i) the Land Lease Agreement was thereby terminated;

(ii) Shaanxi Qiyiwangguo shall

pay Xi’an Shanmei the outstanding leasing fee RMB 0.21 million (approximately $30,762) and (iii) Shaanxi Qiyiwangguo shall

return the 29.3 mu industrial use land to Xi’an Shanmei.

Shaanxi Qiyiwangguo has appealed the decision to the Xi’an

Intermediate People’s Court on the basis that:

(x) the land use right was a capital contribution by Xi’an Shanmei

for a shareholder of Shaanxi Qiyiwangguo who is also the sole shareholder of Xi’an Shanmei and the Land Lease Agreement

was invalid and has no legal effect;

(y) Zhouzhi Court did not schedule the hearing for the count claims filed by Shaanxi Qiyiwangguo;

and (z) Zhouzhi Court violated certain civil procedures during the trial of the case.

Due to the late notice to Zhouzhi Court,

the case file was not timely transferred to Xi’an Intermediate Court and no appeal hearing was scheduled.

Zhouzhi Court

has issued verdict for enforcement procedure and Qiyiwangguo has filed petition of disagreement for the enforcement which is still

under Zhouzhi Court’s review.

On January 23, 2019, the Court rejected the petition of disagreement and the case has been

under enforcement procedure.

As of June 30, 2020, Shaanxi Qiyiwanggu has not repaid the amount.

Shaanxi Qiyiwanggu was one of

the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors

have no recourse to the current Company.

Legal case with Nanjing Bailuotong Logistics

Services Co., Ltd.

In January 2016 Shaanxi Qiyiwangguo and

Nanjing Bailuotong Logistics Services Co., Ltd (“Bailutong”) entered into a transportation agreement to ship fruit

Bailutong failed to deliver the juice products and held them after their expiration date.

Shaanxi Qiyiwangguo filed a lawsuit

against Bailutongwith Zhouzhi county People’s Court, and the Court issued the verdict in February 2018 that:

(1) the transportation

contract between Shaanxi Qiyiwangguo and Bailutong was terminated, and (2) Bailutong owed RMB0.20 million (approximately $29,715)

to Shaanxi Qiyiwangguo for the loss of Shaanxi Qiyiwangguo.

Bailutong appealed the case to Xi’an Intermediate People’s

Xi’an Intermediate People’s Court rejected the appeal and upheld the original verdict.

As of the date of this

report, Shaanxi Qiyiwangguo has not received the payment of RMB0.20 million from Bailutong.

Legal case with Henan Huaxing Glass

Shaanxi Qiyiwangguo entered into an agreement

with Henan Huaxing Glass Co., Ltd.

(“Huaxing”) in May 2014 for Huaxing to supply glass bottles to Shaanxi Qiyiwangguo.

However, due to the disputes regarding the quality of products supplied by Huaxing, Shaanxi Qiyiwangguo did not pay the prices

for certain glass bottles.

In August 2017, Huaxing filed a lawsuit and the court ruled that Shaanxi Qiyiwangguo owed Huaxing RMB

203,742 (approximately $29,743) in July 2018.

During the enforcement process, the parties reached a settlement agreement but Shaanxi

Qiyiwangguo failed to pay the amount due and now the case is still in the court enforcement process.

As of June 30, 2020, Shaanxi

Qiyiwanggu has not repaid the amount.

Shaanxi Qiyiwanggu was one of the subsidiaries transferred along with HeDengTang HK to New

Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current Company.

Legal case with Huludao Banking Co.,

In September 2016, the Suizhong Branch

of Huludao Banking Co., Ltd.

(“Suizhong Branch”) filed a lawsuit with Huludao Intermediate People’s Court (the

“Huludao Court”) against the Company’s indirectly wholly-owned subsidiary Huludao Wonder Fruit Co., Ltd.

(“Wonder

Fruit”) and requested that Wonder Fruit repay a RMB 40 million (approximately $5.81 million) bank loan, plus interest.

loan became due on its maturity date of December 9, 2016.

On December 19, 2016, the Huludao Court accepted the case.

has been disputing the interest rate of the loan with Suizhong Branch, and has not repaid the loan to date.

Wonder Fruit believes

that the interest charged by Suizhong Branch is 100% higher than the base rate set by People’s Bank of China and is not consistent

with the China People’s Bank’s base interest and floating rate.

The Huludao Court has seized land use rights, buildings

and equipment of Wonder Fruit that were pledged as guarantee for the loan and has organized two auction sales for these assets

in January and February of 2018, but both auction sales have been unsuccessful in finding a buyer.

On July 19, 2018, the Court

issued a verdict ordering Huludao Wonder to transfer its land use rights, building, equipment, electronic and transportation assets

to Zuizhong Branch as payment of the outstanding principal, auction and evaluation fees and some interest of the loan for RMB 42.64

million (approximately $6.22 million).

As of June 30, 2020, there was RMB 11.95 million (approximately $1.74 million) in interest

on the loan unpaid.

Huludao Wonder was one of the subsidiaries transferred along with HeDengTang HK to New Continent International

on February 27, 2020.

The creditors have no recourse to the current Company.

Legal case with Andrew Chien

In September 2017, Andrew Chien, a former

consultant of SkyPeople China, brought a lawsuit against the Company and Mr.

Hongke Xue in the District Court of Connecticut (the

“Court”).

The complaint was not properly served and the Company learned of the litigation in December 2017.

complaint, Mr.

Chien has made several claims, most of which attempt to hold the Company liable under novel legal theories that

relate back to an alleged breach of a consulting agreement between SkyPeople China and Chien from August 2006.

Chien claimed

approximately $257,000 damages and interest plus 2.00% of the Company’s then-outstanding shares.

Chien has unsuccessfully

attempted to sue the Company on the breach of the same consulting agreement several times in the courts of Connecticut and New

York, and these cases have been dismissed.

The Company has filed a motion to dismiss (“MTD”) and all proceedings are

stayed pending determination of the MTD.

On August 31, 2018, the Court granted our MTD.

On September 10, 2018, Mr.

a motion for reconsideration.

On September 28, 2018, the Court denied Mr.

Chien’s motion for reconsideration.

26, 2018, Mr.

Chien appealed the case to the United States Court of Appeals for the Second Circuit.

The Court of Appeals

affirmed the trial court’s dismissal of the action on January 22, 2020, and denied Mr.

Chien’s petition for en banc

rehearing on March 27, 2020.

Chien’s time to pursue a discretionary appeal to the Supreme Court of the United States

has lapsed and the case is closed.

Legal case with Luwei

Luwei, an individual, filed

a claim for arbitration against SkyPeople China in Xi’an Arbitration Commission for breach of contract pursuant to a new

share purchase agreement and a share redemption agreement.

On April 11, 2019, Xi’an Arbitration Commission made its decision

and ordered SkyPeople China to repay RMB 3 million investment to Luwei.

Luwei applied with Intermediate Court of Xi’an

(the “Court”) for enforcement of the arbitration award which process was terminated by the Court due to no assets for

As of June 30, 2020, SkyPeople China has not repaid the amount.

SkyPeople China was one of the subsidiaries transferred

along with HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors have no recourse to the current

Legal case with Shaanxi Overseas Investment

Development Corp.

In November 2019, Shaanxi Overseas Investment

Development Corp (“Shaanxi Overseas Investment”) filed a lawsuit against SkyPeople China, Hongke Xue and Shenzhen Tian

Shun Da Equity Investment Fund Management Co., Ltd.

(“Shenzhen Tian Shun Da”) pursuant to an investment agreement entered

in March 2016.

According to the agreement, Shaanxi Overseas Investment agreed to invest RMB 5 million for the preferred shares

of SkyPeople China with an annual interest rate of 2.38%.

Shenzhen Tian Shun Da pledged 1.17% of the shares SkyPeople China that

it owned and Hongke Xue provided guarantee for the performance of agreement by SkyPeople China.

SkyPeople China failed to make

the interests payment and Shaanxi Overseas Investment filed the lawsuit for breach of agreement.

On December 26, 2019, Yanta District

Court of Xi’an City (the “Court”) ordered SkyPeople China to pay Shaanxi Overseas Investment the preferred share

redemption amount of RMB 5 million plus penalty which is calculated based upon the RMB 5 million at a rate of 24% a year.

also ruled that Shaanxi Overseas Investment may sell the pledged shares owned by Shenzhen Tianshun Da as the repayment for SkyPeople

China and Hongkong Xue shall also assume the repayment obligation as guarantor.

As of June 30, 2020, SkyPeople China has not repaid

SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co.,

on February 27, 2020.

The creditors have no recourse to the current Company.

Legal case with Shaanxi Wanyuan Construction

In July 2019, Shaanxi Wanyuan Construction

(“Wanyuan) filed a lawsuit with Shaanxi Baoji Municipal Intermediate People’s Court (the “Baoji Court”)

against Guoweimei for repayment of construction and decoration costs of RMB 55.07 million pursuant to a Construction and Decoration

Agreement entered by the parties in May 2017.

In July 2019, the Baoji Court ordered Guoweimei to pay construction and decoration

costs of RMB55.07 million to Wanyuan, plus interest.

As of June 30, 2020, Guoweimei has not repaid the amount.

Guoweimei was one

of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd.

on February 27, 2020.

The creditors

have no recourse to the current Company.

Certain pending legal cases that we previously

disclosed are related to the subsidiaries of HeDengTang HK, which was sold to New Continent International Co., Ltd.

Accordingly, the Company is no longer a party to these legal cases.

RISKS AND UNCERTAINTIES

Impact of COVID 19

December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread

throughout China and other parts of the world.

Substantially all

of our revenues are generated in China.

The Company’s results of operations has affected by the outbreak of COVID-19 in China.

In early 2020, Chinese government took emergency measures to combat the spread of the

virus, including quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China,

which has adversely affected the Company’s business and services and results of operations.

Our suppliers have negatively

been affected, and could continue to be negatively affected in their ability to supply and ship products to our customers.

customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from

us, which may materially adversely impact our revenue.

In December 2019, a novel strain of coronavirus

was reported to have surfaced in Wuhan, China, the pandemic quickly spread to many provinces, autonomous regions, and cities all

over the China and other parts of the world.

Substantially all of our revenues are generated in China.

The Company’s results

of operations have been materially negatively affected by the outbreak of COVID-19 in China, especially during the first half of

In early 2020, Chinese government took emergency measures to combat the spread of the virus, including quarantines, travel

restrictions, and the temporary closure of office buildings and facilities in China, which has materially adversely affected the

Company’s business and services and results of operations.

Our suppliers have negatively been affected, and could continue

to be negatively affected in their ability to supply and ship products to our customers by any further outbreak or resurgence of

COVID-19 in China.

Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase

products and services from us, which may materially adversely impact our revenue.

The business operations of the third parties’

stores on our platform

have been and could continue to be negatively impacted by the outbreak, which may negatively impact their operations and business,

which may in turn adversely affect the business of our platform as a whole as well as our financial condition and operating results.

Some of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which

may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic

conditions, Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to

secure commercial debt financing in the future in the event that we require additional capital.

stores on our platform have been and could continue to be negatively impacted by any further outbreak or resurgence of COVID-19,

which may negatively impact their operations and business, which may in turn adversely affect the business of our platform as a

whole as well as our financial condition and operating results.

Some of our customers, contractors, suppliers and other business

partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be

vulnerable to an epidemic outbreak and slowing macroeconomic conditions.

Further, as we do not have access to a revolving credit

facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we

require additional capital.

The Company’s promotion strategy

of the CCM Shopping Mall previously mainly relied on the training of members and distributors through meetings and conferences

Although China has already begun to recover from the outbreak of COVID-19, the Chinese government still put a restriction

on large gatherings.

before the outbreak.

Although China has already begun to recover from the outbreak of COVID-19, the Chinese government still put

a restriction on large gatherings.

These restrictions made the promotion strategy for CCM Shopping Mall difficult to implement.

Consequently, our results of operations

has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Chinese and global economy.

potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding

the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19

or treat its impact, almost all of which are beyond our control.

Consequently, our results of operations have

been materially adversely affected.

Any potential impact to our results will depend on, to a large extent, future developments

and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities

and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control.

PRC Regulations

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economy to a market oriented economy subject to plans adopted by the government that set national economic development goals.

Policies of the PRC government can have significant effects on economic conditions in the PRC.

of the PRC government can have significant effects on economic conditions in the PRC.

Currency risks

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regulatory bodies which require certain supporting documentation in order to complete the remittance.

The Company extends unsecured credit to

its customers in the normal course of business and generally does not require collateral.

As a result, management performs ongoing

credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging

Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of accounts

In the analysis, management primarily considers the age of the customer’s receivable and also considers the

credit worthiness of the customer, the economic conditions of the customer’s industry, and general economic conditions and

trends, among other factors.

If any of these factors change, the Company may also change its original estimates, which could impact

the level of the Company’s future allowance for doubtful accounts.

If judgments regarding the collectability

of accounts receivables are incorrect, adjustments to the allowance may be required, which would reduce profitability.

SUBSEQUENT EVENTS

In July 2020, the Company entered a series

of loan agreements with fourteen individuals for a total amount of $4.961 million.

On August 4, 2020, the Company entered

into a Debt Repayment Agreement with these individuals (the “Creditors”), pursuant to which the Company agreed to repay

$4,961,000 debt owed to the Creditors in the form of shares of Common Stock of the Company for an aggregate of 2,740,883 shares

at a price of $1.81 per share (the “Debt Repayment”).

The Debt Repayment will be completed pursuant to the exemption

from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

The Company issued 2,740,883

shares of its Common Stock to the Creditors on August 12, 2020.

On June 28, 2020, Guangchengji entered into a “Loan

Agreement”

with Shenzhen Tiantian Haodian.

(Refer to Note 4- “Loan Receivables”).

Pursuant to the Loan Agreement,

Guangchengji transferred $0.21 million to Guangchengji on June 29, 2020 and $4.73 million in July 2020.

On July 13, 2020, the Company and Future

FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company entered into a Share Exchange Agreement with Nice Talent

Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”), which is licensed under

the Security and Futures Commission of Hong Kong for assets management, and Joy Rich Enterprises Limited, a limited company organized

under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich”), pursuant to which the Company agreed to acquire

90% of the issued and outstanding ordinary shares of Nice (the “Nice Shares”) from Joy Rich in exchange for the Company’s

Common Stock.

Pursuant to the terms of the Share Exchange

Agreement, the parties agreed:

(i) the aggregate purchase price for Nice Shares shall be HK$54 million (approximately $6.97 million,

the “Purchase Price”) and it shall be paid in the Company’s Common Stock;

(ii) 40% of the Purchase Price HK$21.6

million (approximately $2.79 million) shall be paid in the shares of common stock of the Company based on the average closing price

of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to the date of the Agreement

and the foreign exchange rate between HK$ and US$ shall be the rate published by Bloomberg on the date of the Agreement;

30% of Purchase Price shall be paid in the Company Common Stock (the “2020 Earn-Out Shares”) if Nice meets certain

earnings goal for 2020 (the “2020 Earnings Goal”);

(iv) the 2020 Earn-Out Shares shall be issued based upon the average

closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December

31, 2020 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2020;

(v) additional

30% of Purchase Price shall be paid in the shares of common stock the Company (the “2021 Earn-Out Shares”) if Nice

meets certain earnings goal for 2021 (the “2021 Earnings Goal”);

(vi) the 2021 Earn-Out Shares shall be issued based

upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days

prior to December 31, 2021 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2021;

(vii) if Nice does not achieve its earnings goal for a given year, the parties agree to have forbearance clause that the amount

of such year’s earn-out shares shall not be reduced for that year if Nice achieves at least sixty percent (60%) of its given

year earnings goal and if Nice achieves lower than 60% earnings goal for a given year, the amount of such year’s earn-out

shares shall be reduced to zero.

The Company Shares will be issued pursuant to the exemption from registration provided by Regulation

On November 2, 2020, the Company entered

into a Securities Purchase Agreement with certain investors pursuant to which the Company agreed to sell to these investors in

a private placement 167,034 shares of the Company’s common stock, at a purchase price of $1.87 per share for an aggregate

offering price of $312,352.

This private placement will be completed pursuant to the exemption from registration provided by Regulation

S promulgated under the Securities Act of 1933, as amended.

On July 22, 2020, the Company established

Future Commercial Management (Beijing) Co., Ltd.

Its scope of business includes management and consulting services.

On July 28, 2020, the Company, entered

into a Standstill Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).

Pursuant to the Standstill Agreement, Lender

agreed to refrain and forbear temporarily from making redemptions under certain Secured Promissory Note that was sold and issued

by the Company to the Lender on December 19, 2019 in the original principal amount of $1,060,000 (the “Note”).

agreed not to redeem any portion of the Note (the “Standstill”) for a period beginning on the date of the Agreement

and ending on the date that is ninety (90) days from the date of the Agreement.

As a material inducement and partial consideration

for Lender’s agreement to enter into the Agreement, the Company agreed that the outstanding balance of the Note shall be

increased by nine percent (9%) on the date of the Agreement (the “Standstill Fee”).

The Company and Lender agreed that,

following the application of the Standstill Fee, the outstanding balance of the Note is $1,209,636.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

quarterly report on Form 10-Q and other reports filed by the Company from time to time with the SEC (collectively the “Filings”)

contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available

to, Company’s management as well as estimates and assumptions made by Company’s management.

Readers are cautioned

not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.

When used in the filings, the words “may”, “will”, “should”, “would”, “anticipate”,

“believe”, “estimate”, “expect”, “future”, “intend”, “plan”,

or the negative of these terms and similar expressions as they relate to Company or Company’s management identify forward-looking

Such statements reflect the current view of Company with respect to future events and are subject to risks, uncertainties,

assumptions, and other factors (including the statements in the section “results of operations”

below), and any

businesses that Company may acquire.

Should one or more of these risks or uncertainties materialize, or should the underlying

assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended,

Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the

heading “Risk Factors”

and those listed in our Annual Report on Form 10-K for the year ended December 31, 2019 (the

“2019 Form 10-K”) and in this Form 10-Q.

The following discussion should be read in conjunction with our Financial

Statements and related Notes thereto included elsewhere in this report and in our 2019 Form 10-K.

the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, the Company

cannot guarantee future results, levels of activity, performance, or achievements.

Except as required by applicable law, including

the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to

conform these statements to actual results.

Readers are urged to carefully review and consider the various disclosures made throughout

the entirety of this report, which attempts to advise interested parties of the risks and factors that may affect our business,

financial condition, results of operations, and prospects.

of Our Business

FinTech is a holding company incorporated under the laws of the State of Florida.

The Company historically engaged in the production

and sale of fruit juice concentrates (including fruit purees and fruit juices), fruit beverages (including fruit juice beverages

and fruit cider beverages) in the PRC.

Due to drastically increased production costs and tightened environmental laws in China,

the Company had transformed its business from fruit juice manufacturing and distribution to a real-name blockchain e-commerce

platform that integrates blockchain and internet technology.

The main business of the Company includes an online shopping platform,

Chain Cloud Mall (CCM), which is based on blockchain technology;

a cross-border e-commerce platform (NONOGIRL) which started

its trial operation in March 2020 and formally launched in July 2020;

a blockchain-based application incubator and a digital payment

system (DCON);

and the application and development of blockchain-based e-commerce technology and financial technology.

Cloud Mall adopts a “multi-vendor hosted stores + platform self-hosted stores”

The platform supports various

marketing methods, including point rewards programs, coupons, live webcasts, game interaction, and social media sharing.

the blockchain-powered features, CCM is also fully equipped with the same functions and services that other Chinese leading traditional

e-commerce platforms provide.

on blockchain technology, CCM is established to transform the relationship between companies and consumers from traditional selling

and buying relationships to a value-sharing relationship.

The platform will fairly distribute the benefit of the entire mall to

users who engaged in the promotion, development, and consumption based on their contributions to the platform.

The members of

CCM are not only consumers and entrepreneurs but also participants, promoters and beneficiaries.

The CCM shared shopping mall

platform is designed to be a block-chain based shopping mall for merchants and goods, not the exchange of digital currencies,

and it currently only accepts payment from credit cards, Alipay and WeChat.

Management’s

Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and

other reports filed by the Company from time to time with the SEC (collectively the “Filings”) contain or may contain

forward-looking statements and information that are based upon beliefs of, and information currently available to, Company’s

management as well as estimates and assumptions made by Company’s management.

Readers are cautioned not to place undue reliance

on these forward-looking statements, which are only predictions and speak only as of the date hereof.

When used in the filings,

the words “may”, “will”, “should”, “would”, “anticipate”, “believe”,

“estimate”, “expect”, “future”, “intend”, “plan”, or the negative of

these terms and similar expressions as they relate to Company or Company’s management identify forward-looking statements.

Such statements reflect the current view of Company with respect to future events and are subject to risks, uncertainties, assumptions,

and other factors (including the statements in the section “results of operations”

below), and any businesses

that Company may acquire.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions

prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading “Risk

Factors”

and those listed in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”)

and in this Form 10-Q.

The following discussion should be read in conjunction with our Financial Statements and related Notes thereto

included elsewhere in this report and in our 2019 Form 10-K.

Although the Company believes the expectations

reflected in the forward-looking statements are based on reasonable assumptions, the Company cannot guarantee future results, levels

of activity, performance, or achievements.

Except as required by applicable law, including the securities laws of the United States,

the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this report, which attempts

to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations,

and prospects.

Overview of Our Business

Future FinTech is a holding company incorporated

under the laws of the State of Florida.

The Company historically engaged in the production and sale of fruit juice concentrates

(including fruit purees and fruit juices), fruit beverages (including fruit juice beverages and fruit cider beverages) in the PRC.

Due to drastically increased production costs and tightened environmental laws in China, the Company had transformed its business

from fruit juice manufacturing and distribution to a real-name blockchain technology and e-commerce platform that integrates blockchain

and internet technology business.

The main business of the Company includes an online shopping platform, Chain Cloud Mall (CCM),

which is based on blockchain technology;

a cross-border e-commerce platform (NONOGIRL) which started its trial operation in March

2020 and formally launched in July 2020;

a blockchain-based application incubator and technical service and support for real name

and blockchain based assets and their operating entities (DCON);

and the application and development of blockchain-based e-commerce

technology and financial technology.

Currently, the Android version app of the

NONOGIRL platform has been launched on Googleplay, Tencent Application Treasure, Xiaomi, OPPO, and VIVO application stores, and

the IOS version app of the platform has been launched on Apple App Store.

As of September 30, 2020, there were 10,450 registered

users of the NONOGIRL platform, of which 1,210 were in China and 9,240 were outside of China

The Company is also expanding into financial

service business.

On July 13, 2020, the Company entered into a Share Exchange Agreement with Joy Rich Enterprises Limited (“Joy

Rich”) to acquire 90% of the issued and outstanding shares of Nice Talent Asset Management Limited (“NTAM”),

a Hong Kong-based asset management company, from Joy Rich.

NTAM is licensed under the Securities and Futures Commission of Hong

Kong (“SFC”) to carry out regulated activities in Type 4:

Advising on Securities and Type 9:

Asset Management.

transaction is expected to close by the end of November 2020.

In August 2020, the Company announced that

it plans to enter the challenger bank and digital payment sector.

The challenger banks distinguish themselves from the historic

banks by modern financial technology practices, such as online-only operations without physical retail stores, which reduce the

banking costs and avoid the complexities of traditional banking.

In recent years, challenger banks and third-party payment systems

have grown rapidly worldwide, rising to the top of the financial services industry, with personalized banking services that have

reinvented the customer experience.

Countries around the globe have enforced lockdowns recently and have advised their citizens

to socially distance during the COVID-19 pandemic leading to traditional physical banking services declining due to health and

safety concerns.

This has expedited innovation in financial banking industries.

FTFT has already recruited certain professionals

from this industry, and has been in frequent contact with companies in this sector in Southeast Asia and Europe,

in order to find M&A targets.

Chain Cloud Mall adopts a “multi-vendor

hosted stores + platform self-hosted stores”

The platform supports various marketing methods, including point rewards

programs, coupons, live webcasts, game interaction, and social media sharing.

Besides the blockchain-powered features, CCM is also

fully equipped with the same functions and services that other Chinese leading traditional e-commerce platforms provide.

Based on blockchain technology, CCM is

established to transform the relationship between companies and consumers from traditional selling and buying relationships to

a value-sharing relationship.

The platform will fairly distribute the benefit of the entire mall to users who engaged in the promotion,

development, and consumption based on their contributions to the platform.

The members of CCM are not only consumers and entrepreneurs

but also participants, promoters and beneficiaries.

The CCM shared shopping mall platform is designed to be a block-chain based

shopping mall for merchants and goods, not the exchange of digital currencies, and it currently only accepts payment from credit

cards, Alipay and WeChat.

Chain Cloud Mall is an enterprise and customer

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completely new source of data traffic for enterprises on our platform.

on the Chain Cloud Mall issue their own blockchain points and anti-counterfeiting QR codes.

Every product comes with unique

anti-counterfeiting QR codes on the label.

Customers collect the points issued by the merchants by scanning products with their

mobile phones on the anti-counterfeiting QR code.

These QR codes are generated by blockchain system of Chain Cloud Mall and provided

to merchants.

The successful collection of the merchant points confirms that the authentication of product from such enterprise.

The Chain Cloud Mall to record and provide Chain Cloud Mall points to its members upon a successful new member and/or product

referral, which can be used as credit when making purchases on CCM.

It incentivizes its members to promote the platform and share

the products with their social contacts, which in turn increases the sales through Chain Cloud Mall and helps the Company generate

greater value.

shopping mall membership

are the key participants on CCM and drivers of its growth.

Our members typically pay to gain access to a dedicated app that provides

access to a curated selection of products, exclusive membership benefits, and features, including discounted prices and point

Members can refer others to become members and are rewarded for doing so.

Members can also promote products on various

social platforms and are rewarded if those users purchase our products.

Currently, there are three kinds of membership programs,

Diamond Elite, Gold Elite and Silver Elite, with different membership fees and benefits.

The higher membership fee provides more

benefits to the members.

have a unique real-name and membership–based blockchain e-commerce shopping platform that integrates blockchain, internet

technology and distinguishes itself by utilizing the automatic value distribution system of the blockchain and sharing the value

of the platform to all the participants in the system.

latest CCM v3.0 creates a new value cycle system of online shopping mall with the real-name blockchain system with following characteristics:

anti-counterfeiting

Merchants on the Chain Cloud Mall

issue their own blockchain points and anti-counterfeiting QR codes.

Every product comes with unique anti-counterfeiting QR codes

on the label.

Customers collect the points issued by the merchants by scanning products with their mobile phones on the anti-counterfeiting

These QR codes are generated by blockchain system of Chain Cloud Mall and provided to merchants.

The successful collection

of the merchant points confirms that the authentication of product from such enterprise.

The Chain Cloud Mall records and provides

Chain Cloud Mall points to its members upon a successful new member and/or product referral, which can be used as credit when making

purchases on CCM.

It incentivizes its members to promote the platform and share the products with their social contacts, which

in turn increases the sales through Chain Cloud Mall and helps the Company generate greater value.

CCM shopping mall membership

Members are the key participants on CCM

and drivers of its growth.

Our members typically pay to gain access to a dedicated app that provides access to a curated selection

of products, exclusive membership benefits, and features, including discounted prices and point rewards.

Members can refer others

to become members and are rewarded for doing so.

Members can also promote products on various social platforms and are rewarded

if those users purchase our products.

Sales of Goods

We have a unique real-name and membership–based

blockchain e-commerce shopping platform that integrates blockchain, internet technology and distinguishes itself by utilizing the

automatic value distribution system of the blockchain and sharing the value of the platform to all the participants in the system.

Our latest CCM v3.0 creates a new value

cycle system of online shopping mall with the real-name blockchain system with following characteristics:

Blockchain anti-counterfeiting

real-name blockchain technology to carry out anti-counterfeiting for products produced by the enterprises.

3 unchanged sentences

to the authentication of the products they purchase and solve the problem of counterfeiting products in online shopping mall.

points settlement leads to secondary data traffic

points are also discount coupons for merchants, guiding customers to the platform of the merchants, and provide them discounts

when purchasing.

This process is called secondary data traffic.

Blockchain points settlement leads to secondary data traffic

Blockchain points are also discount

coupons for merchants, guiding customers to the platform of the merchants, and provide them discounts when purchasing.

is called secondary data traffic.

Every company is aware of the importance of maintaining old customers.

Blockchain anti-counterfeiting technology through scanning of QR codes by the customers helps companies identify such customers

and allows them to systematically maintain contacts with such customers.

promotion system

promotion system brings secondary data traffic comes with volume and high turnover ratio.

Blockchain anti-counterfeiting

technology through scanning of QR codes by the customers helps companies identify such customers and allows them to systematically

maintain contacts with such customers.

Points promotion system

Points promotion

system brings secondary data traffic comes with volume and high turnover ratio.

All such sales are directed to the merchants’

2 unchanged sentences

products again and collect more blockchain points.

community system to build a high value community

Anti-counterfeiting

technology plus the Company’s secondary data traffic platform have created great value for the merchants that have stores

on our platform.

By gathering all loyal customers to a merchant’s store, we can build a standard value community.

common interest, the value community of a merchants can form a self-organizing system with customer groups to maximize the interests

of such merchant.

Approximately

$2,853 and $286,000 was recognized as revenue from orders on sales of the Company’s

own products on the platform for the six months ended June 30, 2020 and June 30, 2019, respectively.

of COVID-19 on our Business

December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread

throughout China and other parts of the world.

COVID-19 has materially

and adversely affected our business during the six months ended June 30, 2020.

In early 2020, Chinese government took emergency

measures to combat the spread of the virus, including quarantines, travel restrictions, and the temporary closure of office buildings

and facilities in China.

Member community system to build a high value community

Anti-counterfeiting technology

plus the Company’s secondary data traffic platform have created great value for the merchants that have stores on our platform.

By gathering all loyal customers to a merchant’s store, it can build a community of people with the common interest.

the community, the merchant can form a self-organizing system with customer groups to maximize the interests of such merchant.

Approximately $8,000 and $406,000 were

recognized as revenues from orders on sales of the Company’s own products on the platform for the nine months ended September

30, 2020 and September, 2019, respectively.

During the third quarter of 2020, the Company’s

Board of Directors passed a resolution to close the operation of CCM Logistics, a subsidiary located in the national kiwifruit

Industrial Park of Baoji City.

In July 2020, the Company established a winding-down plan to close this operation.

November 12, 2020, CCM Tianjin, a wholly owned subsidiary of the Company entered into an Equity Transfer Agreement with Xi’an

Yishengkang Information Technology, Ltd.

(“Xi’an Yishengkang”), an unrelated third party, pursuant to which CCM

Tianjin agreed to sell 90% of total issued and outstanding capital stock of Hedetang Market that it owns to Xi’an Yishengkang

for RMB9,000 (approximately $1,324).

On the same date, CCM Logistics entered

into another Equity Transfer Agreement with an individual and unrelated third party, Liyuan Ying, pursuant to which CCM Tianjin

agreed to sell 10% of total issued and outstanding capital stock of Hedetang Market that it owns to Liyuan Ying for RMB1,000 (approximately

Impact of COVID-19 on our Business

In December 2019, a novel strain of coronavirus

was reported to have surfaced in Wuhan, China, the pandemic quickly spread to many provinces, autonomous regions, and cities all

over the China and other parts of the world.COVID-19 has materially and adversely affected our business, especially during the

first six months of 2020.

In early 2020, Chinese government took emergency measures to combat the spread of the virus, including

quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China.

Substantially all of our revenues are generated

In response to the evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines

of local authorities as it prioritizes the health and safety of its employees, contractors, suppliers and business partners.

offices in China was closed and all of the Company’s employees worked from home from Chinese New Year at the end of January

until late March 2020.

The quarantines, travel restrictions, and the temporary closure of office buildings have negatively impacted

our business.

Our suppliers have negatively been affected, and could continue to be negatively affected in their ability to supply

and ship products to our customers.

Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets

to purchase products and services from us, which may materially adversely impact our revenue.

The business operations of the third

parties’

stores on our platform have been and could continue to be negatively impacted by the outbreak, which may negatively

impact their operations and business, which may in turn adversely affect the business of our platform as a whole as well as our

financial condition and operating results.

The outbreak has had and might continue to have disruption to our supply chain, logistics

providers, customers or our marketing activities which could materially adversely impact our business and results of operations,

including causing our suppliers to cease manufacturing products for a period of time or materially delay delivery to

us and customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us.

of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not

have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions.

If the SMEs that we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual

after a prolonged outbreak, our revenues and business operations may be materially and adversely impacted.

global economy has also been materially negatively affected by the COVID-19 and there is continued severe uncertainty about the

duration and intensity of its impacts.

The Chinese and global growth forecast is extremely uncertain, which would seriously affect

customer spending on our shopping mall.

In response to the evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines of local

authorities as it prioritizes the health and safety of its employees, contractors, suppliers and business partners.

in China was closed and all of the Company’s employees worked from home from Chinese New Year at the end of January until

late March 2020.

Other businesses in China started reopening around the end of the first quarter as well, and more and more businesses,

transportation, logistic and marketing activities have gradually resumed since then.

Our offices currently are in normal operation.

However, quarantines, travel restrictions, and the temporary closure of office buildings have negatively impacted our business

during the outbreak.

Our suppliers have negatively been affected, and could continue to be negatively affected in their ability

to supply and ship products to our customers by any further outbreak or resurgence of COVID-19 in China.

Our customers that are

negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from us, which may materially

adversely impact our revenue.

The business operations of the third parties’

stores on our platform have been and could continue

to be negatively impacted by any further outbreak or resurgence of COVID-19, which may negatively impact their operations and business,

which may in turn adversely affect the business of our platform as a whole as well as our financial condition and operating results.

The outbreak has had and might continue to have disruption to our supply chain, logistics providers, customers or our marketing

activities if there is a resurgence of COVID-19 in China, which could materially adversely impact our business and results of operations,

including causing our suppliers to cease manufacturing products for a period of time or materially delay delivery to us and customers,

which may also lead to loss of customers, as well as reputational, competitive and business harm to us.

Some of our customers,

contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not have strong cash

flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions.

If the SMEs that

we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged

outbreak, our revenues and business operations may be materially and adversely impacted.

The global economy

has also been materially negatively affected by the COVID-19 and there is continued severe uncertainty about the duration and intensity

of its impacts.

The Chinese and global growth forecast is extremely uncertain, which would seriously affect customer spending on

our shopping mall.

While the potential

3 unchanged sentences

and the value of the Company’s Common Stock.

as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial

debt financing in the future in the event that we require additional capital.

We currently believe that our financial resources

will be adequate to see us through the outbreak.

However, in the event that we do need to raise capital in the future, outbreak-related

instability in the securities markets could adversely affect our ability to raise additional capital.

Consequently,

our results of operations has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Chinese

and global economy.

Any potential impact to our results will depend on, to a large extent, future developments and new information

that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other

entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control.

On February 21, 2020, the Company received a subpoena from the

SEC’s Division of Enforcement requiring us to produce documents and detailed information relating to, among other things,

the Company’s accounting procedures, management oversight, and the sale of HeDeTang holdings (HK) Ltd.

to New Continent International

The subpoena required the Company to produce all responsive documents created during, or concerning, the period January

1, 2016 to the present, unless otherwise specified.

The Company is cooperating with the SEC’s investigation

and has provided responsive documents and information requested in the subpoena.

In the event the Company locates additional responsive

documents, we expect to produce them promptly to the SEC.

We will also make officers or other employees available to be interviewed

by the SEC with regard to the subject matters identified in the subpoena.

Further, as we

do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing

in the future in the event that we require additional capital.

We currently believe that our financial resources will be adequate

to see us through the outbreak.

However, in the event that we do need to raise capital in the future, outbreak-related instability

in the securities markets could adversely affect our ability to raise additional capital.

Consequently, our results of operations have

been materially adversely affected.

Any potential impact to our results will depend on, to a large extent, future developments

and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities

and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control.

On February 21, 2020, the Company received

a subpoena from the SEC’s Division of Enforcement requiring us to produce documents and detailed information relating to,

among other things, the Company’s accounting procedures, management oversight, and the sale of HeDeTang holdings (HK) Ltd.

to New Continent International Co., Ltd.

The subpoena required the Company to produce all responsive documents created during,

or concerning, the period January 1, 2016 to the present, unless otherwise specified.

The Company is cooperating with the SEC’s

investigation and has provided responsive documents and information requested in the subpoena.

In the event the Company locates

additional responsive documents, we expect to produce them promptly to the SEC.

We will also make officers or other employees available

to be interviewed by the SEC with regard to the subject matters identified in the subpoena.

The Company is unable to predict, what

10 unchanged sentences

enforcement action could have a material adverse effect on our business, financial condition, results of operations and cash flows.

of Operations

of Three Months ended June 30, 2020 and 2019:

following table presents our consolidated revenues for the three months ended June 30, 2020 and 2019, respectively (in thousands):

Results of Operations

Comparison of Three Months ended

September 30, 2020 and 2019:

The following table presents our consolidated

revenues for each of our main services and products for the three months ended September 30, 2020 and 2019, respectively (in thousands):

Three months ended

CCM Shopping Mall Membership

September 30,

Sales of Goods

decrease in revenue for the three months ended June 30, 2020 was mainly due to the decrease in sales from sales of goods.

Sale of goods decreased from $148 thousand

for the three months ended June 30, 2019 to $2 thousand for the three months ended June 30, 2020.

The Company’s promotion

strategy previously mainly relied on the training of members and distributors through meetings and conferences.

Due to the outbreak

of COVID-19 in 2020, the Chinese government put a restriction on large gatherings.

These restrictions made the promotion strategy

for CCM Shopping Mall difficult to implement.

As a result, there was a decrease in the sales of good due to the lack of ability

to promote the use of the CCM shopping mall through existing marketing strategies.

Revenue from CCM Shopping Mall Membership

decreased slightly to $105 thousand for the three months ended June 30, 2020 from $109 thousand for the same period of last fiscal

the second quarter of 2020, the Company launched CCM v3.0.

With the new application, the Company charges RMB 1,000

(approximately $142) per year to the suppliers, who agree to adopt the QRO anti-counterfeiting code for their products, which

they sell in CCM.

CCM members that serve as agents to sell products from CCM suppliers are charged a one-time agent fee of

RMB 3,820 (approximately $543) by CCM.

CCM also charges commission on the

products sold on the platform, and a service fee to the

agent and merchants, who receive payments through CCM

from the money collected from the sale of goods.

All the above income is classified as other income, which is $7 thousand for

the six months ended June 30, 2020.

following table presents the consolidated gross profit of each of our main products and services and the consolidated gross profit

margin, which is gross profit as a percentage of the related revenues, for the three months ended June 30, 2020 and 2019, respectively

(in thousands):

The Company’s promotion strategy previously

mainly relied on the training of members and distributors through meetings and conferences.

Due to the outbreak of COVID-19, the

Chinese government put a restriction on large gatherings and these restrictions made the promotion strategy for CCM Shopping Mall

and NONOGIR difficult to implement.

As a result, there was a decrease in the sales of good due to the lack of ability to promote

the use of our CCM shopping mall and NONOGIR to purchase our products through existing marketing strategies.

Revenue from service fees includes CCM

Shopping Mall and NONOGIRL membership, agent fees, commission on sales, service fees, etc.

In the second quarter of 2020, the Company

launched CCM v3.0.

With the new application, the Company charges RMB 1,000 (approximately $142) per year to the suppliers,

who agree to adopt the QRO anti-counterfeiting code for their products, which they sell in CCM and NONOGIR.

Members that serve

as agents to sell products for CCM and NONOGIR suppliers are charged a one-time agent fee of RMB 3,820 (approximately $543) by

CCM and NONOGIR.

CCM and NONOGIR also charges commission from products sold on the platform, and service fee from the agent, who

receive commission from the suppliers.

As there was no promotion of the CCM shopping

mall and NONOGIR, revenue from service fees also decreased in the third quarter of fiscal year 2020, compared to the same period

The following table presents the consolidated

gross profit of each of our main services and products and the consolidated gross profit margins for the three months ended September

30, 2020 and 2019, respectively (in thousands):

Three months ended

CCM Shopping Mall Membership

Sales of goods

Overall gross margin as a percentage

of revenue was 91.2% for the three ended June 30, 2020, an increase of 36.7% compared to 54.5% for the same period of last

The increase in gross margin as a percentage of revenue was mainly attributable to the increase in the revenue

percentage of CCM Shopping Mall Membership relative to the total revenue.

CCM Shopping Mall Membership has a higher gross

As a percentage of total revenue, revenue from CCM shopping mall membership was 96.2% and 69.3% for the three months

ended June 30, 2020 and June 30, 2019, respectively.

In terms of dollar value, the overall gross

profit for the three ended June 30, 2020 was $104 thousand, a decrease of $36 thousand, compared $140 thousand for the same period

of last fiscal year.

The decrease in the dollar value of overall gross margin was mainly due to the decrease in revenue from the

September 30,

Sales of Goods

following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the three months

ended June 30, 2020 and 2019, respectively:

Total/Overall (for gross margin)

The decrease in gross margin as a percentage

of revenue for the nine months ended September 30, 2020 as compared to the same period of last year was due to a decrease in gross

margin from services fees, which accounts for 89.7% of total revenue for the three months ended September 30, 2020.

The decrease in gross profit from service

fees for the nine months ended September 30, 2020 as compared to the same period of last year in dollar amount was mainly due to

a decrease in revenue.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the three months ended September 30, 2020 and 2019, respectively

(in thousands):

Second quarter of 2020

Second quarter of 2019

Third quarter of

General and administrative

2 unchanged sentences

Total operating expenses

and administrative expenses decreased by $456 thousand, or 52.5%, from $869 thousand to $413 thousand for the three months ended

June 30, 2020, compared to the same period of last fiscal year.

The decrease in general and administrative expenses was mainly

due to the decrease in payroll related expenses as a result

of the Company’s cost control efforts.

Selling expenses decreased by $484 thousand,

or 98.4%, from $492 thousand to $8 thousand for the three months ended June 30, 2020, compared to the same period of the last fiscal

The decrease was mainly due to a decrease in payroll related expenses for the sales staff, which now is mainly based on performance-based

In addition, the shipping expenses decreased as a result of a decreased in the sales volume in the second quarter of

Bad debt provision was $211 thousand for

the three months ended June 30, 2020, which was mainly for the other receivables, which are more than three months past due.

Income (Expense), Net

expenses, net decreased by $20,179 to $9,963 for the three months ended June 30, 2020 from $30,135 in the same period of the last

fiscal year, primarily due to an increase in exchange gains.

We did not have tax provision for the three

months ended June 30, 2020, as the Company incurred losses in the second quarter of 2020.

Income tax provision was $75 for the

three months ended June 30, 2019.

Non-controlling

of June 30, 2020, Shaanxi Chunlv Ecological Agriculture Co., Ltd.

holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi)

Co., Limited (“CCM Logistics”), CCM Logistics holds 10% interest in ) Hedetang Farm Products Trading Market (Mei County)

Co., Ltd., Nature Worldwide Resources Ltd.

held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds 45% interest in Zhonglian

from Continuing Operations

Loss from operations was $0.54 million for the three months

ended June 30, 2020, a decrease of $0.71 million, as compared $1.25 million for the same period of the last fiscal year.

was mainly due to the decrease in operating expenses, which was partially offset by a decrease in gross margin, as discussed earlier.

and diluted loss per share from continuing operations were $0.20 and $0.20 for the three months ended June 30, 2020, respectively,

as compared to a loss of $0.03 and $0.03 for the same periods of 2019, respectively.

Basic and diluted income per share attributable

to discontinued operations was $0 and $0 for the three months ended June 30, 2020 respectively.

Basic and diluted loss per share

attributable to discontinued operations was $0.02 and $0.02 for the three months ended June 30, 2019, respectively.

of Six Months ended June 30, 2020 and 2019:

following table presents our consolidated revenues for the six months ended June 30, 2020 and 2019, respectively (in thousands):

Six months ended

CCM Shopping Mall Membership

The decrease in general and administrative

expenses for the nine months ended September 30, 2020 as compared to the same period of last year was mainly due to the decrease

in payroll related expenses as a result of the Company’s cost control efforts.

The decrease in selling expenses for the

nine months ended September 30, 2020 as compared to the same period of last year was mainly due to a decrease in payroll related

expenses for the sales staff, which staffs, who now are mainly based on performance-based commission.

In addition, the shipping

expenses decreased as a result of a decreased in the sales volume in the third quarter of 2020, compared to the same period of

Bad debt provision for the three months

ended September 30, 2020 was mainly for the other receivables, which are more than three months past due.

Other Income (Expense), Net

Other expenses, net increased by $1.44

million to $1.42 million for the three months ended September 30, 2020 from other expenses of $0.02 million in the same period

of the last fiscal year, primarily due to an increase in loss of $1.95 million recorded in the third quarter of 2020 for the issuance

of common stock for the Debt Repayment Agreement that the Company entered during fiscal year 2020.

There were no provisions for income taxes,

as the company suffered a loss.

Non-controlling Interests

As of September 30, 2020, Shaanxi Chunlv

Ecological Agriculture Co., Ltd.

holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited (“CCM Logistics”),

CCM Logistics holds 10% interest in ) Hedetang Farm Products Trading Market (Mei County) Co., Ltd., Nature Worldwide Resources

held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds 45% interest in Zhonglian Hengxin.

Comparison of Nine Months ended September

30, 2020 and 2019:

The following table presents our consolidated

revenues for each of our main services and products for the nine months ended September 30, 2020 and 2019, respectively (in thousands):

Nine months ended

Sales of Goods

Revenue for the six months ended June

30, 2020 was $314 thousand as compared to $417 thousand for the same period in 2019, a decrease of $104 thousand million, or 24.7%.

The decrease was due to a decrease in sales of goods, which was partially offset by the growth of our business section of CCM

shopping mall membership.

Sale of goods decreased from $286 thousand

for the six months ended June 30, 2019 to $3 thousand for the six months ended June 30, 2020.

The decrease was mainly due to the

negative impact of COVID-19 during this period, as the staff could not work in the office and shipments stopped.

In addition, the

Company is lack of ability to promote the use of the CCM shopping mall through existing marketing strategies.

As a percentage of total revenue, revenue from CCM shopping

mall membership was 96.5% and 31.4% for the six months ended June 30, 2020 and June 30, 2019, respectively.

The absolute amount

of revenue from CCM shopping mall membership increased by $172 thousand from $131 thousand to $303 thousand for the six months

ended June 30, 2020 compared to the same periods of the last fiscal year.

In the second quarter of 2020, the

Company launched CCM v3.0.

With the new application, the Company charges RMB 1,000 (approximately $142) per year to the

supplier, who agrees to adopt the QRO anti-counterfeiting code for their products, which they sell in CCM.

CCM members, who

want to serve as agents to sell products from CCM suppliers, get charged a one-time agent fee of RMB 3,820 (approximately

CCM also charges commission on the products sold on the platform, and a service fee to the agent and suppliers, who

get paid by CCM from the money collected from the sale of goods.

All the above income is classified as other income, which is

$8 thousand for the six months ended June 30, 2020.

following table presents the consolidated gross profit of each of our main products and services and the consolidated gross profit

margin, which is gross profit as a percentage of the related revenues, for the six months ended June 30, 2020 and 2019, respectively

(in thousands):

Six months ended

CCM Shopping Mall Membership

The decrease in revenue for the nine months

ended September 30, 2020 as compared to the same period of last year was due to a decrease in sales of goods.

The decrease in sale of goods was mainly

due to the negative impact of COVID-19 during this period, as the staff could not work in the office and shipments stopped during

the first quarter.

In addition, the Company is lack of ability to promote the use of our CCM shopping mall and NONOGIRL to purchase

our products through existing marketing strategies.

As a percentage of total revenue, revenue

from service fees was 97.8% and 45.5% for the nine months ended September 30, 2020 and September 30, 2019, respectively.

In the second quarter of 2020, the Company

launched CCM v3.0.

With the new application, the Company charges RMB 1,000 (approximately $142) per year to the suppliers, who

agree to adopt the QRO anti-counterfeiting code for their products, which they sell in CCM.

Members that serve as agents to sell

products from CCM suppliers are charged a one-time agent fee of RMB 3,820 (approximately $543) by CCM.

CCM also charges commission

from products sold on the platform, and service fee from the agent, who receive commission from the suppliers.

The following table presents the consolidated

gross profit of each of our main services and products and the consolidated gross profit margin, which is gross profit as a percentage

of the related revenues, for the nine months ended September 30, 2020 and 2019, respectively (in thousands):

Nine months ended

September 30,

Sales of Goods

Overall gross margin as a percentage of

revenue was 96.8% for the six months ended June 30, 2020, an increase of 55.8% compared 41.0% for the same period of last fiscal

The increase in gross margin as a percentage of revenue was mainly attributable to the decrease in the revenue percentage

of sales of goods relative to the total revenue.

Total/Overall (for gross margin)

The increase in gross margin as a percentage

of revenue for the nine months ended September 30, 2020 as compared to the same period of last year was mainly attributable to

the decrease in the revenue percentage of sales of goods relative to the total revenue.

Sale of goods has a lower margin.

As a percentage of total revenue, revenue

from sales of goods was 0.7% and 31.0% for the six months ended June 30, 2020 and June 30, 2019, respectively.

dollar value, the overall gross profit for the six ended June 30, 2020 was $304 thousand, an increase of $133 thousand, compared

$171 thousand for the same period of last fiscal year.

The increase in the dollar value of overall gross margin was mainly due

to the increase in revenue from the CCM Shopping Mall Membership.

following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the six months

ended June 30, 2020 and 2019, respectively:

in the dollar value of overall gross margin for the nine months ended September 30, 2020 as compared to the same period of last

year was mainly due to the decrease in revenue from the sales of goods.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the nine months ended September 30, 2020 and 2019, respectively

(in thousands):

First half of 2020

First half of 2019

Nine months ended

September 30,

Nine months ended

September 30,

General and administrative

2 unchanged sentences

Total operating expenses

General and administrative expenses increased

by $516 thousand, or 28.4%, to $2,333 thousand for the six months ended June 30, 2020 compared to $1,817 thousand in the same period

of the last fiscal year.

The increase in general and administrative expenses was mainly due to stock related expenses of $1,191

thousand that the Company recorded during first quarter of 2020, for a Consulting Service Agreement that the Company entered into

on January 25, 2020 with Dragon Investment Holding Limited (Malta), which was partially offset by the decrease in payroll related

expenses as a result of the Company’s cost control efforts.

Selling expenses decreased by $538 thousand,

or 96.4%, to $20 thousand for the six months ended June 30, 2020, compared to $558 thousand for the same period of the last fiscal

The decrease was mainly due to a decrease in in payroll related expenses for the sales staff, which now is mainly on performance

based compensation.

In addition, the shipping expenses decreased as a result of a decreased in the sales volume during the six

months ended June 30, 2020.

Bad debt provision was $4,414 thousand and $7 thousand for the

six months ended June 30, 2020 and June 30,2019, respectively.

Bad debt provision incurred during the six months ended June 30,

2020 was mainly for the other receivables from HeDeTang HK, which was sold to New Continent International Co., Ltd.

the first quarter of 2020.

Income (Expense), Net

expenses, net increased by $0.45 million to $0.56 million for the six months ended June 30, 2020 from $0.11 million in the same

period of the last fiscal year, primarily due to currency exchange loss related with the sale of HeDeTang HK.

did not have tax provision for the six months ended June 30, 2020, as the Company suffered losses in this period.

Provision for

income taxes were $75 for the six months ended June 30, 2019.

Non-controlling

of June 30, 2020, Shaanxi Chunlv Ecological Agriculture Co., Ltd.

holds 20.0% interest in Chain Cloud Mall Logistics Center

(Shaanxi) Co., Limited (“CCM Logistics”), CCM Logistics holds 10% interest in Hedetang Farm Products Trading

Market (Mei County) Co., Ltd., Nature Worldwide Resources Ltd.

held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds

45% interest in Zhonglian Hengxin.

from Continuing Operations

from continuing operations increased by $4.70 million from $2.32 million for the six months ended June 30, 2019 to $7.02 million

for the same period of 2020 mainly due to an increase in stock related expenses and bad debt expenses, as discussed previously.

on disposal of discontinued operations

on disposal of discontinued operation was $123.69 million for the three months ended June 30, 2020, which was related with sale

of HeDeTang HK to New Continent International Co., Ltd.

during the first quarter of 2020.

The total assets of HeDeTang HK

were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27,

2020, resulting in a gain on disposal of $123.69 million.

There was no income or loss from HeDeTang HK from January 1, 2020 to

and diluted loss per share from continuing operations were $0.20 and $0.19 for the six months ended June 30, 2020, respectively,

as compared to a loss of $0.05 and $0.05 for the same periods of 2019, respectively.

Basic and diluted income per share attributable

to discontinued operations was $3.45 and $3.39 for the six months ended June 30, 2020 respectively.

Basic and diluted loss per

share attributable to discontinued operations was $0.04 and $0.04 for the six months ended June 30, 2019 respectively.

and Capital Resources

As of June 30, 2020, we had cash and cash

equivalents of $0.58 million, as compared to $0.54 million as of December 31, 2019.

working capital has historically been generated from our operating cash flows, advances from our customers and loans from bank

Our working capital was negative $6.02 million, as of June 30, 2020, an increase of $89.70 million from working capital

of negative $89.72 million as of June 30, 2019, mainly due to a decrease in current liabilities.

Net cash used in operating activities increased

by $1.66 million to $1.41million for the six months ended June 30, 2020 from a cash inflow of $0.25 million for the same period

of the last fiscal year.

The increase in net cash used by operating activities was primarily due to a decrease in cash provided

by the discontinued operations for six months ended June 30, 2020 as compared to the same period of last fiscal year.

cash used in investing activities was $0 for the six months ended June 30, 2020 and June 30, 2019, respectively.

Net cash provided in financing activities for the six months

ended June 30, 2020 was $1.68 million representing an increase of $1.14 million, as compared to cash provided by financing activities

of $0.54 million during the six months ended June 30, 2019.

The increase in cash provided by financing activities was mainly attributable

to the increase in proceeds from related party loan and payment of $0.50 million that the Company received for the issuance of

the Company’s Common Stock pursuant to the Securities Purchase Agreement that the Company entered with Qun Xie on June 16,

sheet arrangements

of June 30, 2020, we did not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

The increase in general and administrative

expenses for the nine months ended September 30, 2020 as compared to the same period of the last fiscal year was mainly due to

stock related expenses of $1,191 thousand that the Company recorded during first quarter of 2020, for a Consulting Service Agreement

that the Company entered into on January 25, 2020 with Dragon Investment Holding Limited (Malta), which was partially offset by

the decrease in payroll related expenses as a result of the Company’s cost control efforts.

decrease in selling expenses thousand for the nine months ended September 30, 2020, compared to the same period of the last fiscal

year was mainly due to a decrease in payroll related expenses

for the sales staffs, who now are mainly on performance based compensation.

In addition, the shipping expenses decreased as a result

of a decreased in the sales volume during the nine months ended September 30, 2020.

Bad debt provision incurred during the

period ended September 30, 2020 was mainly for the other receivables, which are more than three months past due.

Other Income (Expense), Net

Other expenses, net increased by $2.04

million to $2.17 million for the nine months ended September 30, 2020 from other expenses of $0.13 million in the same period of

the last fiscal year, primarily due to the increase of loss of $1.95 million related with the issuance of common stock for the

Debt Repayment Agreement that the Company entered during the nine months ended September 30, 2020.

Non-controlling Interests

As of September 30, 2020, Shaanxi Chunlv

Ecological Agriculture Co., Ltd.

holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited (“CCM Logistics”),

CCM Logistics holds 10% interest in Hedetang Farm Products Trading Market (Mei County) Co., Ltd., Nature Worldwide Resources Ltd.

held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds 45% interest in Zhonglian Hengxin.

Liquidity and Capital Resources

As of September 30, 2020, we had cash and

cash equivalents of $0.96 million, as compared to $0.53 million as of December 31, 2019.

Our working capital has historically been generated

from our operating cash flows, advances from our customers and loans from bank facilities and issuance of stock.

capital was $4.0 million, as of September 30, 2020, an increase of $106 million from working capital of negative $102 million as

of September 30, 2019, mainly due to a decrease in current liabilities.

Net cash used in operating activities decreased

by $6.5 million to $0.8 million for the nine months ended September 30, 2020 from $7.3 million for the same period of the last

The decrease in net cash used in operating activities was primarily due to an increase in net income.

Net cash used in investing activities was

$5.1 million for the nine months ended September 30, 2020.

Net cash used in investing activities was mainly for the payment in

short-term loan investment of $5.1 million and the purchase of accounting software of $1,259 for the nine months ended September

Net cash provided in financing activities

for the nine months ended September 30, 2020 was $7.2 million representing an increase of $6.2 million, as compared to cash provided

by financing activities of $1.0 million during the nine months ended September 30, 2019.

The increase in cash provided by financing

activities was mainly attributable to the proceeds of $5.5 million from loan payables that the Company received during the nine

months ended September 30, 2020.

Off-balance Sheet Arrangements

As of September 30, 2020, we did not have any off-balance sheet

arrangements.

and Qualitative Disclosures about Market Risk

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements