What changed in this filing

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Item 1. Financial Statements

2021-05-17 compared with 2020-11-16 · 1196 added, 1258 removed, 143 unchanged (94% of the section changed)

Financial Statements

FINTECH GROUP INC.

CONSOLIDATED BALANCE SHEETS

September 30,

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS

Cash and cash equivalents

Accounts receivable

Other receivables, net

Advances to suppliers and other current assets

Loan receivables

Other receivables, net

Assets related to discontinued operations

TOTAL CURRENT ASSETS

$ 100,345,801

Property, plant and equipment, net

Right of Use Assets

Intangible assets, net

Amount due from related parties

Long term investments

$ 115,980,570

Intangible assets

Amounts due from related parties

TOTAL NON-CURRENT ASSETS

CURRENT LIABILITIES

2 unchanged sentences

Advances from customers

Convertible loan payables

Loans payables

Convertible note payables

Loan payables

Lease liability-current

1 unchanged sentence

TOTAL CURRENT LIABILITIES

$ 202,789,675

NON-CURRENT LIABILITIES

Amount due to related parties

Lease liability-non-current

Amounts due to related parties

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

$ 204,057,776

Commitments and contingencies (Note 14)

2 unchanged sentences

Common stock, $0.001 par value;

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

300,000,000 shares authorized;

59,583,486 shares and 50,053,606 shares issued and outstanding as of March 31, 2021 and December 31, 2020 respectively

Additional paid-in capital

2 unchanged sentences

(124,384,301 )

Accumulated other comprehensive income

Accumulated other comprehensive loss

Total Future FinTech Group, Inc.

stockholders’

(92,438,567 )

Non-controlling interests

Total stockholders’

(88,077,206 )

TOTAL LIABILITIES AND STOCKHOLDERS’

$ 115,980,570

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

FINTECH GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

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)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of goods sold

2 unchanged sentences

Selling expenses

Bad debt provision

(Recovery) Provision of doubtful debts

Total operating expenses

Loss from operations

Other income (expense)

Other (expenses) income

Interest income

Interest expenses

Loss on debt settlement

Loss on debt settlement and conversion

Other income (expenses), net

Total other income (expenses)

Total other income (expenses), net

Loss from Continuing Operations before Income Tax

Income tax provision

Loss from Continuing Operations, net of tax

Loss from Continuing Operations

Discontinued Operations (Note 16)

Loss from discontinued operations

Gain on disposal of discontinued operations

NET INCOME (LOSS)

Loss attributable to the non-controlling interest

Net income (loss) attributable to Future Fintech Group, Inc.

Common Shareholders

Comprehensive income (loss):

Net income (loss)

Foreign currency translation

Comprehensive income (loss)

Comprehensive income (loss) attributable to non-controlling interest

Comprehensive Income (loss) Attributable to Future Fintech Group, Inc.

Common Shareholders

Basic Earnings (Loss) per Share:

Basic loss per share from continuing operations

Basic earnings (loss) per share from discontinued operations

Basic Earnings (Loss) per Share from Net Income (Loss)

Diluted Earnings (Loss) per Share:

Diluted loss per share from continuing operations

Diluted earnings (loss) per share from discontinued operations

Diluted Earnings (Loss) per Share from Net Income (Loss)

Weighted average number of shares outstanding

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

Income (loss) from discontinued operations

Net Income (Loss)

$ 116,887,859

$ (5,026,553 )

Adjustments to reconcile net loss to net cash provided by operating activities

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

Accounts receivable

Other receivable

Advances to suppliers and other current assets

Accounts payable

Accrued expenses

(16,180,323 )

Change in net assets related to discontinued operations

Advances from customers

Net Cash Provided by (Used in) Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and plant

Purchase of intangible assets

Payments for loan receivables

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common stock

Proceeds from amount due from related parties, net

Proceeds from secured convertible promissory note

Proceeds from loans

Repayment of loans

Proceeds from sale of discontinued operations

Net cash provided by financing activities

Effect of change in exchange rate

NET INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest

Cash paid for income taxes

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

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.

Net Loss attributable to non-controlling interests

Net income(loss) from discontinued operations attributable to Future

Fintech Group, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Months ended September 30, 2019

comprehensive

Balance at June 30, 2019

of common stocks

currency translation adjustment

Balance at September 30, 2019

Months ended September 30, 2020

comprehensive

Balance at June 30, 2020

$ 116,887,921

$ (96,636,617 )

$ (2,097,523 )

Issuance of common stocks-conversion of debt

Loss on debt settlement

Issuance of common stocks-cash

$ (2,425,017 )

Other comprehensive income (loss)

Income (loss) from continued operations

$ (6,698,006 )

Foreign currency translation adjustment

Balance at September 30, 2020

Foreign currency translation –

continued operations

Comprehensive income (loss) - continued operation

Income (loss) from discontinued operations

$ 123,585,865

Foreign currency translation - discontinued operation

(10,781,209 )

Comprehensive (loss) income - discontinued operation

Comprehensive Income (Loss)

$ 107,649,332

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

Months ended September 30, 2019

Net loss attributable to non-controlling interests

COMPREHENSIVE LOSS ATTRIBUTABLE TO FUTURE FINTECH GROUP INC.

Earnings (loss) per share:

Basic earnings (loss) per share from continued operation

Basic earnings (loss) per share from discontinued operation

Diluted Earnings (loss) per share:

Diluted loss per share

Diluted earnings (loss) per share from discontinued operation

Weighted average number of shares outstanding

* Reclassification - certain reclassifications have been made

to the financial statements for the three months ended March 31, 2020 to conform to the presentation for the three months ended March

31, 2021, 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 STOCKHOLDERS'

Three Months ended March 31, 2020

comprehensive

3 unchanged sentences

$ (88,077,206 )

Issuance of common stocks for conversion of debts

Net income from continued operations

Net income from discontinued operations

Share-based payments -service

Foreign currency translation adjustment

Disposal of discontinued operation

(10,781,209 )

Issuance of common stocks

Foreign currency translation

Balance at September 30, 2019

(17,231,453 )

Balance at March 31, 2020

$ 109,793,334

1 unchanged sentence

$ (2,088,945 )

Months ended September 30, 2020

Three Months ended March 31, 2021

Additional paid-in

comprehensive

2 unchanged sentences

$ (124,384,301 )

$ (88,077,206 )

Issuance of common stocks-conversion of debt

Loss on debt settlement

Issuance of common stocks - cash

Net income (loss)

Share-based payments

Net income from continued operations

Net income from discontinued operations

Share-based payments-service

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at March 31, 2021

$ 169,891,428

$ (125,181,610 )

Balance at September 30, 2020

The accompanying notes are an integral part of

these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$ 116,887,859

Net income from discontinued operation

Net loss from continuing operations

Adjustments to reconcile net income to net cash provided by operating activities

(Recovery) Provision of doubtful debts

Share-based payments

Interest expenses related to convertible note

Changes in operating assets and liabilities

Accounts receivable

Other receivable

Advances to suppliers and other current assets

Accounts payable

Due to related parties

Accrued expenses

Advances from customers

Net Cash Used in Operating Activities –

Discontinued Operations

Net Cash Used in Operating Activities –

Continued Operations

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment

Net Cash Used in Investing Activities from Discontinued Operations

Net Cash Used in Investing Activities from Continuing Operations

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issuance of common stock, net of issuance costs

Proceeds from amounts due from related parties, net

Repayment of convertible payable

Repayment of loans payable

Proceeds from Secured Convertible Promissory Note

Net cash provided by financing activities

Effect of change in exchange rate

NET INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash and cash equivalents from the discontinued operations, end of period

Cash and cash equivalents, from the continuing operations end of period

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Issuance of common stocks for conversion of debts

The accompanying notes are an integral part of

these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CORPORATE INFORMATION

Future FinTech Group Inc.

(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, website:

http://gksharedmall.com/), which is based on blockchain technology;

a cross-border e-commerce

platform (“NONOGIRL”);

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

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.

to the drastically increased production cost and tightened environmental law in China, the Company has transformed its business from fruit

juice manufacturing and distribution to a real-name blockchain e-commerce platform that integrates blockchain and internet technology

from the end of 2018.

On July 22, 2020, the Company established Future

Commercial Management (Beijing) Co., Ltd.

Its scope of business includes management and consulting services.

The Company’s activities are principally

conducted by its subsidiaries and Variable Interest Entity (“VIE”) operating in the PRC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 March 31, 2021 and the results of operations and cash

flows for the periods ended March 31, 2021 and 2020.

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 months ended March 31, 2021 are not necessarily

indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2021.

The balance sheet

at December 31, 2020 has been derived from the audited financial statements at that date.

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.

As a result of our direct ownership in our wholly

foreign-owned enterprise (“WFOE”) and the contractual arrangements with our VIE, we are regarded as the primary beneficiary

of our VIE, and we treat it and its subsidiaries as our consolidated affiliated entities under U.S.

We 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, 2020

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

Discontinued Operations

On February 27, 2020, SkyPeople BVI (the “Seller”)

completed the transfer of its ownership of HeDeTang HK to New Continent International Co., Ltd.

(the “Buyer”), an unrelated

third party and a company incorporated in the British Virgin Islands for a total price of RMB 0.6 million (approximately $85,714), pursuant

to a Share Transfer Agreement entered into by the Seller and the Buyer on September 18, 2019 and approved at the special shareholders

meeting of the Company on February 26, 2020.

As the Company believed that no continued cash flow would be generated by the sold component,

in accordance with ASC 205-20, the Company presented the operating results from Hedetang HK as discontinued operations within the accompanying

consolidated financial statements.

In addition, The Company’s Huludao Wonder

operation, a subsidiary which produces concentrated apple juice, suffered continued operating losses from 2014 to 2016 and its cash flow

was minimal for these three years.

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

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

On March 11, 2020, the Company’s Board

of Directors passed a resolution to sell the operation of Future 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.

On March 18, 2021, Chain Future Digital Tech (Beijing)

had deregistered.

On May 7, 2020, Future Business Management Co.,

completed the transfer of its ownership of Zhonglian Hengxin Assets Management Co., Ltd to individual third party.

On July 24, 2020,

the Company’s Board of Directors passed a resolution to sell the operation of Hedetang Farm Products Trading Markets (Mei County)

and close the operation of Chain Cloud Mall Logistics Center (Shaanxi) Co., Ltd.

As a result, Skypeople Foods Holdings Limited

Company was deregistered on July 27, 2020;

Digital Online Marketing Limited Company was deregistered on July 28, 2020;

On October 31,

2020, Cloud Chain Mall Network and Technology (Tianjin) Co., Limited and Chain Cloud Mall Logistics Center (Shanxi) Co., Ltd.

the transfer of its ownership of Hedetang Farm Products Trading Markets (Mei county) Co., Ltd to third parties.

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.

Segment Information Reclassification

Historically, the Company operated in five segments:

concentrated apple juice and apple aroma, concentrated kiwifruit juice and kiwifruit puree, concentrated pear juice, fruit juice beverages,

As the Company classified the juice related operation

into discontinued operation in the beginning of year 2019, and in accordance with the Company’s new business strategy, the Company

classified business segment into CCM Shopping Mall Membership, sales of goods and others.

Uses of Estimates in the Preparation of Financial

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.

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.

These factors raise substantial doubts about the Company’s ability to continue as a going concern.

has raised funds through issuance of convertible notes and common stock.

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 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.

Impairment of Long-Lived Assets

In accordance with the ASC 360-10,

Accounting for the Impairment or Disposal of Long-Lived Assets , long-lived assets, such as property, plant and equipment and purchased

intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological

or other industrial changes.

The determination of recoverability of assets to be held and used is made by comparing the carrying amount

of an asset to future undiscounted cash flows to be generated by the assets.

If such assets are considered to be impaired,

the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.

Fair Value of Financial Instruments

The Company has adopted FASB ASC Topic on Fair

Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value

in GAAP, and expands disclosures about fair value measurements.

ASC 820 establishes a three-level valuation hierarchy of valuation techniques

based on observable and unobservable input, which may be used to measure fair value and include the following:

Level 1 - Quoted prices in active markets for

identical assets or liabilities.

Level 2 - Input other than Level 1 that is observable,

either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other input that is observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable input that is supported

by little or no market activity and that is significant to the fair value of the assets or liabilities.

Our cash and cash equivalents and restricted

cash are classified within level 1 of the fair value hierarchy because they are value using quoted market price.

Earnings (Loss) Per Share

Under ASC 260-10, Earnings Per Share ,

basic EPS excludes dilution for Common Stock equivalents and is calculated by dividing net income (loss) available to common stockholders

by the weighted-average number of Common Stock outstanding for the period.

Diluted EPS is calculated by using the treasury

stock method, assuming conversion of all potentially dilutive securities, such as stock options and warrants.

Under this method, (i)

exercise of options and warrants is assumed at the beginning of the period and shares of Common Stock are assumed to be issued, (ii)

the proceeds from exercise are assumed to be used to purchase Common Stock at the average market price during the period, and (iii) the

incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included

in the denominator of the diluted EPS computation.

The numerators and denominators used in the computations of basic and diluted EPS

are presented in the following table.

As of March 31, 2021:

Loss from continuing operations

Income from discontinuing operations

Loss available to common stockholders from continuing operations

Income available to common stockholders from discontinuing operations

Dilutive EPS:

Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding.

Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continuing operations

Diluted Earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding.

As of March 31, 2020:

Loss from continuing operations

$ (6,698,006 )

Income from discontinuing operations

$ 123,585,865

Loss available to common stockholders from continuing operations

$ (6,698,006 )

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

FINTECH GROUP INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS DESCRIPTION

FinTech Group Inc.

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

“us,”

“our”

“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

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

Due to the drastically increased production

cost and tightened environmental law in China, the Company has transformed its business from fruit juice manufacturing and distribution

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 by the Company’s subsidiary, HeDeTang Holdings (HK) Ltd (“HeDeTang

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

on September 18, 2019, the Company sold HeDeTang HK and all its subsidiaries,

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

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

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

our wholly foreign-owned enterprise (“WFOE”) and the contractual arrangements with our VIE, we are regarded as the

primary beneficiary of our VIE, and we treat it and its subsidiaries as our consolidated affiliated entities under U.S.

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

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.

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

or financial.

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.

Income available to common stockholders from discontinuing operations

$ 123,585,865

Dilutive EPS:

Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding.

Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continuing operations

$ (6,698,006 )

Diluted Earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding.

$ 123,585,865

Cash and Cash Equivalents

Cash and cash equivalents included cash on hand

and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original

maturity of three months or less.

Deposits in banks in the PRC are only insured

by the government up to RMB500,000, and are consequently exposed to risk of loss.

The Company believes the probability of a bank failure,

causing loss to the Company, is remote.

Receivable and Allowances

Accounts receivable are recognized and carried

at the original invoice amounts less an allowance for any uncollectible amount.

We have a policy of reserving for uncollectible accounts

based on our best estimate of the amount of probable credit losses in our existing accounts receivable.

We extend credit to our customers

based on an evaluation of their financial condition and other factors.

We generally do not require collateral or other security to support

accounts receivable.

We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required.

Other receivables, and loan receivables are recognized

and carried at the initial amount when occurred less an allowance for any uncollectible amount.

We have a policy of reserving for uncollectible

accounts based on our best estimate of the amount of probable impairment losses in our existing receivable.

We determine whether an allowance for doubtful

accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial

In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific

allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected.

These specific allowances

are re-evaluated and adjusted as additional information is received.

The amounts calculated are analyzed to determine the total amount

of the allowance.

We may also record a general allowance as necessary.

Direct write-offs are taken in the period when

we have exhausted our efforts to collect overdue and unpaid receivable or otherwise evaluate other circumstances that indicate that we

should abandon such efforts.

The Company has assessed its accounts receivable

including credit term and corresponding all its accounts receivables in March 2021.

Upon such credit terms, bad debt expense was $2,872

and $4.2 million during the three months ended March 31, 2021 and 2020, respectively.

Accounts receivables of nil have been outstanding

for over 90 days as of March 31, 2021 and December 31, 2020, respectively.

Inventories consist of raw materials, packaging

materials (which include ingredients and supplies) and finished goods (which) include finished juice in the bottling, canning operations

Inventories also consist of merchant gift package to be delivered with the new membership signed up in our e-commerce platform.

Inventories are valued at the lower of cost or net realizable value.

We determine cost on the basis of the weighted average method.

Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are written off.

Revenue Recognition

We apply the five steps defined under ASC 606:

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction

price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the

entity satisfies a performance obligation.

We assess its revenue arrangements against specific criteria in order to determine if it is

acting as principal or agent.

Revenue arrangements with multiple performance obligations are divided into separate distinct goods or

We allocate the transaction price to each performance obligation based on the relative standalone selling price of the goods

or services provided.

Revenue is recognized upon the transfer of control of promised goods or services to a customer.

We do not make any significant judgment in evaluating

when control is transferred.

Revenue is recorded net of value-added tax.

Revenue recognitions are as follows:

Online sales and Membership fee:

The Company recognizes the sale of goods 15 days

after the products are shipped (after the 15 days return policy).

The revenue from the membership fee is amortized over the lifetime

of the membership, which is one year.

For the merchandise gift package, revenue is recognized when the receipt of the gift package is

confirmed by the members.

Other revenues include revenues earned on net basis from sales of certain products on our platform.

Property, Plant and Equipment

Property, plant and equipment are stated at cost

less accumulated depreciation and any impairment losses.

Depreciation is computed using the straight-line method over the useful lives

of the assets.

Major renewals and betterments are capitalized and depreciated;

maintenance and repairs that do not extend the life of

the respective assets are expensed as incurred.

Upon disposal of assets, the cost and related accumulated depreciation are removed from

the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income.

Depreciation related to property, plant and equipment

used in production is reported in cost of sales, and includes amortized amounts related to capital leases.

We estimated that the residual

value of the Company’s property and equipment ranges from 3% to 5%.

Property, plant and equipment are depreciated over their estimated

useful lives as follows:

Machinery and equipment

Furniture and office equipment

Motor vehicles

Depreciation expense included in general and

administration expenses for the three months ended March 31, 2021 and 2020 was $1,515 and $428 respectively.

Depreciation expense included

in cost of sales for the three months ended March 31, 2021 and 2020 was nil respectively.

Intangible Assets

Acquired intangible assets are recognized based

on their cost to the Company, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized

unless the fair value of noncash assets given as consideration differs from the assets’

carrying amounts on the Company’s

These assets are amortized over their useful lives if the assets are deemed to have a finite life and they are reviewed for impairment

by testing for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants

would use if they were pricing the intangible asset.

The useful life of the Company’s intangible assets is ten year, which is determined

by using the time period that an intangible is estimated to contribute directly or indirectly to a Company’s future cash flows.

Foreign Currency and Other Comprehensive Income

The financial statements of the Company’s

foreign subsidiaries are measured using the local currency as the functional currency;

however, the reporting currency of the Company

Assets and liabilities of the Company’s foreign subsidiaries have been translated into USD using the exchange rate

at the balance sheet dates, while equity accounts are translated using historical exchange rate.

The exchange rate we used to convert

RMB to USD was 6.57 and 6.52 at the balance sheet dates of March 31, 2021 and December 31, 2020, respectively.

The average exchange rate

for the period has been used to translate revenues and expenses.

The average exchange rates we used to convert RMB to USD were 6.48 and

6.98 for three months ended March 31, 2021 and 2020, respectively.

Translation adjustments are reported separately and accumulated in

a separate component of equity (cumulative translation adjustment).

We use the asset and liability method of accounting

for income taxes in accordance with ASC Topic 740, “Income Taxes.”

Under this method, income tax expense is recognized for

the amount of:

(i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting

from matters that have been recognized in an entity’s financial statements or tax returns.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of

operations in the period that includes the enactment date.

A valuation allowance is provided to reduce the deferred tax assets reported

if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred

tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting

for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement

attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Topic 740-10-25 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure,

and transition.

We have no material uncertain tax positions for any of the reporting periods presented.

After adoption of ASC 842 and related

standards, which introduced a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize

expenses on their income statements in a manner similar to current accounting, thus operating lease right-of-use assets and liabilities

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

For short-term leases with an initial

lease term of 12 months or less and with purchase options we are reasonably certain will not be exercised.

As a lessee, the Company leases

equipment, land and office building.

Lease expense is recognized on a straight-line basis over the lease term.

Convertible notes

The Company accounts for its convertible notes

at issuance by allocating the proceeds received from a convertible note among freestanding instruments according to ASC 470, Debt, based

upon their relative fair values.

The fair value of debt and common stock is determined based on the closing price of the common stock

on the date of the transaction.

Convertible notes are subsequently carried at amortized cost.

Each convertible note is analyzed for the

existence of a beneficial conversion feature (“BCF”), defined as the fair value of the common stock at the commitment date

for the convertible note, less the effective conversion price.

No BCF was recognized for the convertible notes issued during March 31,

2021 and 2020.

Share-based compensation

The Company awards share options and other equity-based

instruments to its employees, directors and consultants (collectively “share-based payments”).

Compensation cost related

to such awards is measured based on the fair value of the instrument on the grant date.

The Company recognizes the compensation cost

over the period the employee is required to provide service in exchange for the award, which generally is the vesting period.

of cost recognized is adjusted to reflect the expected forfeiture prior to vesting.

When no future services are required to be performed

by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition,

the cost of the award is expensed on the grant date.

The Company recognizes compensation cost for an award with only service conditions

that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the

cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that

is vested at that date.

Variable interest entities

On July 31, 2019, Chain Cloud Mall Network and

Technology (Tianjin) Co., Limited (“CCM Tianjin”), Chain Cloud Mall E-commerce (Tianjin) Co., Ltd.

(“E-commerce Tianjin”),

Zeyao Xue and Mr.

Kai Xu, citizens of China and shareholders of E-commerce Tianjin, entered into the following agreements, or

collectively, the “Variable Interest Entity Agreements”

or “VIE Agreements,”

pursuant to which CCM Tianjin has

contractual rights to control and operate the business of E-commerce Tianjin (the “VIE”).

Therefore, pursuant to ASC 810,

E-Commerce Tianjin is included in the Company’s consolidated financial statements since then.

Pursuant to Chinese law and regulations, a foreign

owned enterprise cannot apply for and hold a license for operation of certain e-commerce businesses, the category of business which the

Company is expanding in China.

CCM Tianjin is an indirectly wholly foreign owned enterprise of the Company.

In order to comply with Chinese

law and regulations, CCM Tianjin agreed to provide E-commerce Tianjin an Exclusive Operation and Use Rights Authorization to operate

and use the Cloud Chain Mall System owned by CCM Tianjin.

E-commerce Tianjin was incorporated by Mr.

Kai Xu solely for the purpose of holding the operation license of the Cloud Chain Mall System.

Zeyao Xue is a major shareholder

of the Company and the son of Mr.

Yongke Xue, our Chairman of the Board.

Kai Xu was the Chief Operating Officer of the Company and

currently is the Deputy General Manager of FT Commercial Group Ltd., a wholly owned subsidiary of the Company.

The VIE Agreements are as follows:

Exclusive Technology Consulting and Service Agreement by and between CCM Tianjin and E-commerce Tianjin.

Pursuant to the Exclusive Technology Consulting and Service Agreement, CCM Tianjin agreed to act as the exclusive consultant of E-commerce Tianjin and provide technology consulting and services to E-commerce Tianjin.

In exchange, E-commerce Tianjin agreed to pay CCM Tianjin a technology consulting and service fee, the amount of which is to be equivalent to the amount of net profit before tax of E-commerce Tianjin, payable on a quarterly basis after making up losses of previous years (if necessary) and deducting necessary costs, expenses and taxes related to the business operations of E-commerce Tianjin.

Without the prior written consent of CCM Tianjin, E-commerce Tianjin may not accept the same or similar technology consulting and services provided by any third party during the term of the agreement.

All the benefits and interests generated from the agreement, including but not limited to intellectual property rights, know-how and trade secrets, will be CCM Tianjin’s sole and exclusive property.

This agreement has a term of 10 years and may be extended unilaterally by CCM Tianjin with CCM Tianjin’s written confirmation prior to the expiration date.

E-commerce Tianjin cannot terminate the agreement early unless CCM Tianjin commits fraud, gross negligence or illegal acts, or becomes bankrupt or winds up.

Exclusive Purchase Option Agreement by and among CCM Tianjin, E-commerce Tianjin, Mr.

Zeyao Xue and Mr.

Pursuant to the Exclusive Purchase Option Agreement, Mr.

Zeyao Xue and Mr.

Kai Xu granted to CCM Tianjin and any party designated by CCM Tianjin the exclusive right to purchase, at any time during the term of this agreement, all or part of the equity interests in E-commerce Tianjin, or the “Equity Interests,”

at a purchase price equal to the registered capital paid by Mr.

Zeyao Xue and Mr.

Kai Xu for the Equity Interests, or, in the event that applicable law requires an appraisal of the Equity Interests, the lowest price permitted under applicable law.

Pursuant to powers of attorney executed by Mr.

Zeyao Xue and Mr.

Kai Xu, they irrevocably authorized any person appointed by CCM Tianjin to exercise all shareholder rights, including but not limited to voting on their behalf on all matters requiring approval of E-commerce Tianjin’s shareholder, disposing of all or part of the shareholder’s equity interest in E-commerce Tianjin, and electing, appointing or removing directors and executive officers.

The person designated by CCM Tianjin is entitled to dispose of dividends and profits on the equity interest without reliance on any oral or written instructions of Mr.

Zeyao Xue and Mr.

The powers of attorney will remain in force for so long as Mr.

Zeyao Xue and Mr.

Kai Xu remain the shareholders of E-commerce Tianjin.

Zeyao Xue and Mr.

Kai Xu have waived all the rights which have been authorized to CCM Tianjin’s designated person under the powers of attorney.

Equity Pledge Agreements by and among CCM Tianjin, E-commerce Tianjin, Mr.

Zeyao Xue and Mr.

Pursuant to the Equity Pledge Agreements, Mr.

Zeyao Xue and Mr.

Kai Xu pledged all of the Equity Interests to CCM Tianjin to secure the full and complete performance of the obligations and liabilities on the part of E-commerce Tianjin and them under this and the above contractual arrangements.

If E-commerce Tianjin, Mr.

Zeyao Xue, or Mr.

Kai Xu breaches their contractual obligations under these agreements, then CCM Tianjin, as pledgee, will have the right to dispose of the pledged equity interests.

Zeyao Xue and Mr.

Kai Xu agree that, during the term of the Equity Pledge Agreements, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests, and they also agree that CCM Tianjin’s rights relating to the equity pledge should not be interfered with or impaired by the legal actions of the shareholders of E-commerce Tianjin, their successors or designees.

During the term of the equity pledge, CCM Tianjin has the right to receive all of the dividends and profits distributed on the pledged equity.

The Equity Pledge Agreements will terminate on the second anniversary of the date when E-commerce Tianjin, Mr.

Zeyao Xue and Mr.

Kai Xu have completed all their obligations under the contractual agreements described above.

Exclusive Operation and Use Rights Authorization

letter which authorizes Cloud Chain Mall E-commerce (Tianjin) Co., Ltd, to exclusively operate and use the Cloud Chain Mall System and

the authorization period is the same as the term of the EXCLUSIVE THEHNOLOGY CONSULTING AND SERVICE AGREEMENT entered into by and between

Cloud Chain Mall Network and Technology (Tianjin) Co., Ltd.

and Cloud Chain Mall E-commerce (Tianjin) Co., Ltd.

dated July 31, 2019.

GlobalKey Shared Mall

Shopping Platform Software and System Transfer Agreement by and between Future Supply Chain Co., Ltd.

and Cloud Chain Mall Network

and Technology (Tianjian) Co., Ltd., pursuant to which the GlobalKey Shared Mall Shopping Platform Software and System was

transferred from Future Supply China Co., Ltd.

to CCM Tianjin and that both parties were wholly owned subsidiaries of the Company

and transfer price is $0.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No.

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

(“ASC 326”):

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.

2019, the FASB issued ASU 2019-10 “Financial Instruments –

Credit Losses (Topic 326), Derivatives and Hedging (Topic 815),

and Leases (Topic 842)”

(“ASC 2019-10”), which defers the effective date of ASU 2016-13 to fiscal years beginning after

December 15, 2022, including interim periods within those fiscal years, for public entities which meet the definition of a smaller reporting

The Company will adopt ASU 2016-13 effective January 1, 2023.

Management is currently evaluating the effect of the adoption of

ASU 2016-13 on the consolidated financial statements.

The effect will largely depend on the composition and credit quality of our investment

portfolio and the economic conditions at the time of adoption.

In August 2020, the FASB issued Accounting Standards

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.

Management does not believe that any other recently

issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial

LOAN RECEIVABLES

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

from Shenzhen Tiantian Haodian Technology Co., Ltd.

As of March 31, 2021, the balance of loan receivables

was $5.32 million, which 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”

On June 28, 2020, Guangchengji,

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

with Tiantian Haodian.

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.

The interest is paid quarterly.

There is no collateral or

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.

to the Loan Agreement, Guangchengji loaned up to the amount of RMB35 million (approximately $5.36 million) with Tiantian Haodian at the

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

The Company’s noncancelable operating leases

consist of leases for office space.

The Company is the lessee under the terms of the operating leases.

For the three months ended March

31, 2021, the operating lease cost was $0.24 million.

The Company’s operating leases have remaining

lease terms that range from approximately one year to two years.

As of March 31, 2021, the weighted average remaining lease term and weighted

average discount rate were 1.33 years and 6%, respectively.

Maturities of lease liabilities were as follows:

As of March 31,

From April 1, 2021 to March 31, 2022

From April 1, 2022 to March 31, 2023

amounts representing interest

Present Value of future minimum lease payments

Current obligations

Long term obligations

LOAN PAYABLES

As of March 31, 2021, loan payables were $0.27

million, which consisted of the loan payable of $0.02 million to Shaanxi Entai Bio-Technology Co., Ltd., loan payable $0.01 million to

Shenzhen Wangjv Trading Co., Ltd., and loan payable of $0.24 million to seven individuals.

The loan from Shaanxi Entai Bio-Technology Co.,

Ltd of $0.02 million was interest free and has no 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 $0.23 million from Shenzhen Wangjv

Trading Co., Ltd.

at the annual interest rate of 8% with the term of 1 year for the use of working capital.

On July 6, 2020, the Company

repaid $0.22 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 seven individuals, borrowing $0.36 million for working capital.

The repayment

term is one year.

The Company repaid $0.12 million to two individual lenders, Yinyang Chen and Zhixing Pan.

ACCRUED EXPENSES AND OTHER PAYABLES

The amount of accrued expenses and other payables

were consisted of the followings:

Legal fee and other professionals

Wages and employee reimbursement

CONVERTIBLE NOTES PAYABLE

As of March 31, 2021 and December 31, 2020, convertible

debt consisted of the following:

RELATED PARTY TRANSACTION

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

Legal representative of Guangchengji

As of March 31, 2021, the amounts due to the related

parties were consisted of the followings:

Chairman of the Company

Wei Cheng Pan

Legal representative of Guangchengji and Chief Strategy Officer of the Company

Shaanxi Fu Chen Venture Capital Management Co.

(“Shaanxi Fu Chen”)

Two outside shareholders of the Company are shareholders of Shaanxi Fu Chen

Other payables

General Manager of a subsidiary of the Company

Accrued expenses

Vice president of the Company

Accrued expenses

Shenzhen TianShunDa Equity Investment Fund Management Co., Ltd.

(“TianShunDa”)

Shaanxi Fu Chen holds 70% interest of TianShunDa

Other payables

Reits (Beijing) Technology Co., Ltd

Zhi Yan is the legal representative of this company

Acquisition of intangibles upon the full completion of the online platform pursuant to an agreement originally entered between parties before Zhi Yan was the general manager of our subsidiary.

Shaanxi Fuju Mining Co., Ltd

Shaanxi Fu Chen holds 80% interest of the company

Other payables

As of March 31, 2021, the amounts due from the

related parties were consisted of the followings:

Shanchun Huang

Chief Executive Officer of the Company

Chief Operating Officer of the Company

Payable to employee

InUnion Chain Ltd.

(“INU”)

The Company is the 10% equity shareholder of INU

Accounts payables

Chief Technology Officer of the Company

Chief Financial Officer of the Company

Payable to employee

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

on February 27, 2020.

Accounts payables

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 Commercial holds 33.33%

Deputy General Manager of a subsidiary of the Company

Interest free loan*

Son of the Chairman of the Company and

a major shareholder of the Company of the Company

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

Interest free loan*

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,

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 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 September 30, 2020

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

Year ending December 31,

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 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

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.

Chief Financial Officer of the Company

Interest free loan*

Chief Operator Officer of the Company

Interest free loan*

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

The Company is incorporated in the United States

of America and is subject to United States federal taxation.

No provisions for income taxes have been made, as the Company had no U.S.

taxable income for the three months ended March 31, 2021 and 2020.

The effective income tax rate for the Company for both of the three

months ended March 31, 2021 and 2020 were 0% and 0% respectively.

Some of our subsidiaries generated income and we accrued income tax

according to the Chinese corporate income tax rate, but some had a loss and no tax provision was made.

The amount of unrecognized deferred tax liabilities

for temporary differences related to the dividend from foreign subsidiaries is not determined because such determination is not practical.

The Company has not provided deferred taxes on

undistributed earnings attributable to its PRC subsidiaries as they are to be permanently reinvested.

The Company had no material adjustments to its

liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740, Income Taxes .

Since the Company

intends to reinvest its earnings to further expand its businesses in mainland China, its PRC subsidiaries do not intend to declare dividends

to their immediate foreign holding companies in the foreseeable future.

Accordingly, the Company has not recorded any deferred taxes in

relation to US tax on the cumulative amount of undistributed retained earnings since January 1, 2008.

Effective on January 1, 2008, the PRC Enterprise

Income Tax Law, EIT Law, and Implementing Rules imposed a unified enterprise income tax rate of 25% on all domestic-invested enterprises

and foreign-invested enterprises in the PRC, unless they qualify under certain limited exceptions.

All of the Companies’

subsidiaries were subject to an enterprise income tax rate of 25%.

SHARE BASED COMPENSATION

On January 25, 2020, the Company entered

into a Consulting Service Agreement (the “Agreement”) with Dragon Investment Holding Limited (Malta) (the “Consultant”),

Consulting Service Agreement

On January 25, 2020, the Company entered into

a Consulting Service Agreement (the “Agreement”) with Dragon Investment Holding Limited (Malta) (the “Consultant”),

a company incorporated in Malta, pursuant to which Consultant will:

(i) help the Company to locate new merger projects globally,

develop new merger strategy and provide the Company with at least five (5) merger and acquisition targets that have synergy with

the Company’s business and development plans and could clearly contribute to the Company’s strategic goals each year;

(ii) help the Company to map out new growth strategies in addition to its current business;

(iii) work with the Company to explore

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.

(i) help the Company to locate new merger projects globally, develop

new merger strategy and provide the Company with at least five (5) merger and acquisition targets that have synergy with the Company’s

business and development plans and could clearly contribute to the Company’s strategic goals each year;

(ii) help the Company to

map out new growth strategies in addition to its current business;

(iii) work with the Company to explore 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.

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.

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

Shares”) at a price of $0.794 per share, (the closing price of the Agreement date), as the payment for the above mentioned

consultant fee to the Consultant.

On February 23, 2020, The Company issued the Consultant Shares pursuant to the Agreement, of

which 1,500,000 shares were released to the Consultant immediately, 1,125,000 and 1,125,000 shares, respectively, will be held

by the Company and released to the Consultant on January 25, 2021 and January 25, 2022 if this Agreement has not been terminated

and there has been no breach of the Agreement by the Consultant at such time.

If the second and/or third release of the shares

mentioned above does not occur, such shares shall be returned to the Company as treasury shares.

The shares contemplated in the

Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act

of 1933, as amended.

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

In consideration of the services to be provided by the Consultant

to the Company, the Company agrees to pay the Consultant a three-year consulting fee totaling $3.0 million.

The Company shall issue a

total of 3,750,000 restricted shares of the Company Common Stock (the “Consultant Shares”) at a price of $0.794 per share,

(the closing price of the Agreement date), as the payment for the above mentioned consultant fee to the Consultant.

On February 23, 2020,

the Company issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately,

1,125,000 and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January

25, 2022 if this Agreement has not been terminated and there has been no breach of the Agreement by the Consultant at such time.

second and/or third release of the shares mentioned above does not occur, such shares shall be returned to the Company as treasury shares.

The shares contemplated in the Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated

under the Securities Act of 1933, as amended.

For the year ended December 31, 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.

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.

On January 25, 2021, the Company recorded stock related compensation of $0.89 million, based on the stock closing

price of $0.794 on the date of the Agreement, for the 1,125,000 shares which were released to the Consultant on January 25, 2021.

Company will recognize stock related compensation of $0.89 million for the 1,125,000 shares in the future when they are released to the

Consultant pursuant to the Agreement.

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.

On December 24, 2020, the Company entered into

a securities purchase agreement with certain purchasers, pursuant to which the Company sold to the purchasers in a registered direct offering,

an aggregate of 4,210,530 units, each consisting of one share of our common stock and a warrant to purchase 1 share of our Common Stock,

at a purchase price of $1.90 per unit, for aggregate gross proceeds to the Company of $8,000,007, before deducting fees to the placement

agent and other offering expenses payable by the Company.

On December 29, 2020, the Company issued Units consisting of an aggregate of

4,210,530 shares of our Common Stock and warrants to purchase up to an aggregate of 4,210,530 shares of our Common Stock at an exercise

price of $2.15 per share (the “Investors’

Warrants”).

The Investors’

Warrants have a term of five years and are

exercisable by the holder at any time after the date of issuance.

In connection with the offering, the Company also issued placement agent

a warrant to purchase 210,526 shares of our Common Stock (the “Placement Agent Warrant”) on substantially the same terms

as the Investors’

Warrants, except that the Placement Agent Warrant has an exercise price of $2.375 per share and are not exercisable

until June 24, 2021.

The net proceeds offering were $9,052 , 640,

after deducting underwriting discounts and commissions and other estimated offering expenses, and were received in January 2021.

the three months ended March 31, 2021, the Investors Warrants to purchase an aggregate of 4,210,530 shares of common stock were fully

exercised by the investors.

On January 11, 2021, the Company entered into

a securities purchase agreement with certain purchasers identified on the signature page thereto, pursuant to which the Company sold

to the Purchasers in a registered direct offering, an aggregate of 3,000,000 share of its common stock, par value $0.001 per share at

a purchase price of $5.00 per share, for aggregate gross proceeds to the Company of $13,797,732, after deducting fees to the placement

agent and other offering expenses payable by the Company.

On January 13, 2021, the Company issued 3,000,000 Shares pursuant to this Agreement.

On February 9, 2021, the Company entered into

a securities purchase agreement with certain purchasers identified on the signature page thereto, pursuant to which the Company sold

to the Purchasers in a registered direct offering, an aggregate of 2,000,000 shares of its common stock, par value $0.001 per share at

a purchase price of $5.95 per share, for aggregate gross proceeds to the Company of $10,992,250 , after deducting fees to the placement

agent and other offering expenses payable by the Company.

The Company issued 2,000,000 shares of its Common Stock to the purchaser on

February 11, 2021.

On April 12, 2017, the Company entered into a

Securities Purchase Agreement with certain purchasers (the “Purchasers”), pursuant to which the Company offered and sold to

the Purchasers, in a registered direct offering, an aggregate of 862,097 shares of common stock, par value $0.001 per share.

were sold to the Purchasers at a negotiated purchase price of $3.10 per share, for aggregate gross proceeds to the Company of $2,672,500, before

deducting fees to the placement agent and other offering expenses payable by the Company.

In a concurrent private placement, the

Company also issued to the each of the Purchasers a warrant to purchase one (1) share of the Company’s Common Stock for each share

purchased under the Purchase Agreement, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and each Purchaser

(each, a “Warrant”, and collectively, the “Warrants”).

The Warrants will be exercisable beginning on the six month

anniversary of the date of issuance at an initial exercise price of $5.20 per share and will expire on the five and a half year anniversary

of the date of issuance.

During the three months ended March 31, 2021, the holders of the Warrants

purchased an aggregate of 319,350 shares of common stock of the Company for $1,654,224, of which 1,230 shares of common stock were issued

based upon cashless exercises.

DISCONTINUED OPERATIONS

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 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

On July 31, 2019, Chain Cloud Mall Network

and Technology (Tianjin) Co., Limited (“CCM Tianjin”), Chain Cloud Mall E-commerce (Tianjin) Co., Ltd., (“E-commerce

Tianjin”), and Mr.

Zeyao Xue and Mr.

Kai Xu, citizens of China and shareholders of E-commerce Tianjin, entered into the following

agreements, or collectively, the “Variable Interest Entity Agreements”

or “VIE Agreements,”

which CCM Tianjin has contractual rights to control and operate the business of E-commerce Tianjin (the “VIE”).

pursuant to ASC 810, E-Commerce Tianjin is included in the Company’s condensed consolidated financial statements since then.

Pursuant to Chinese law and regulations,

a foreign owned enterprise cannot apply for and hold a license for operation of certain e-commerce businesses, and the category

of business which the Company plans to expand in China.

CCM Tianjin is an indirectly wholly foreign owned enterprise of the Company.

In order to comply with Chinese law and regulations, CCM Tianjin agreed to provide E-commerce Tianjin an Exclusive Operation and

Use Rights Authorization to operate and use the Chain Cloud Mall System owned by CCM Tianjin.

E-commerce Tianjin was incorporated by

Zeyao Xue and Mr.

Kai Xu solely for the purpose of holding the operation license of the Chain Cloud Mall System.

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

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,

refer to Note 15 “Variable Interest Entities,”

in the Company’s consolidated financial statements included in

Company’s 2019 Form 10-K.

ACCRUED EXPENSES AND OTHER PAYABLES

The amount of accrued expenses and other

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

September 30,

Acquisition of Intangibles

Legal fee and other professionals

Wages and employee reimbursement

Accrued interest

Accrued tax 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

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.

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

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

In August 2017, Cinda Capital Financing

(“Cinda”) filed a lawsuit with Beijing 2nd Intermediate People’s Court (the “Beijing Intermediate

Court”) against the Company’s indirectly wholly-owned subsidiaries Shaanxi Guoweimei Kiwi Deep Processing Company,

(“Guoweimei”) and Hedetang Market (Hedetang Market and together with Guoweimei, “Lessees”) requested

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.

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.

Supreme Court held a hearing at the end of July 2018.

On December 4, 2018, the Beijing Supreme Court upheld the lower court’s

On April 8, 2019, Beijing Intermediate Court issued the verdict for enforcement of the judgment and the plaintiff has

the priority rights for the repayment for the pledged land use rights of Lessees in Mei County and equity of Guoweimei.

is under enforcement procedure and Cinda is in the process of sale the land use rights.

Before the land use right is 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.

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.

In August 2017, Cinda Capital Financing

(“Cinda”) filed another lawsuit with Beijing Intermediate Court against the Company’s indirectly wholly-owned

subsidiaries Guoweimei and SkyPeople China for repayment of a leasing fee of RMB 84.97 million (approximately $12.35 million) plus

In January 2014, Guoweimei and SkyPeople China (the “Equipment Lessees”) signed an Equipment Financial Lease

Purchase Agreement with Cinda and an equipment supplier pursuant to which Cinda would provide funds to purchase equipment and the

Equipment Lessees would lease the equipment from Cinda.

Guoweimei pledged certain land use rights in Mei County to Cinda and Xi’an

Hedetang and Hedetang Holding pledged their equities in Guoweimei to Cinda to secure the repayment.

Hongke Xue also provided

a personal guarantee for the payment of the leasing fee.

Beijing Intermediate Court had two hearings of the case and on March 21,

2018, and it ruled in favor of Cinda to the effect that SkyPeople China and Guoweimei shall pay leasing fees due in the amount

of RMB 21.00 million (approximately $3.05 million), as well as leasing fees not yet due in the amount of RMB 63.98 million (approximately

$9.30 million), plus attorney’s fees and expenses.

Beijing Intermediate Court also ruled that Mr.

Hongke Xue is jointly liable

for the debt as the guarantor, and that Cinda has priority rights to the pledged land use rights in Mei County and the pledged

equities of Guoweimei as well as the ownership of the leasing properties until the leasing fees are paid.

SkyPeople China has appealed

the decision to the Beijing Supreme Court.

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.

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.

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

New Continent International Co., Ltd.

On September 18, 2019, SkyPeople Foods Holdings

Limited (“SkyPeople Foods”) 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 Holdings (HK) Ltd.

(“HeDeTang HK”) from SkyPeople Foods, 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.

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.

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 sale.

The discontinued operation presented in the financial

statement includes Huludao Wonder operation, a subsidiary which produces concentrated apple juice.

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 SkyPeople Foods and 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 Co., Ltd.

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

Directors passed a resolution to sell the operation of Future 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.

On March 18, 2021, Chain Future Digital Tech (Beijing) Co., Ltd.

was deregistered.

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.

On October 31, 2020, the transfer of ownership of Future Supply Chain Limited and Zhonglian Hengxin

was completed.

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

Directors passed a resolution to sell the operation of Hedetang Farm Products Trading Markets (Mei County) Co., Ltd.

and close the operation

of Chain Cloud Mall Logistics Center (Shaanxi) Co., Ltd.

On July 27,2020, Skypeople Foods Holdings Limited Company was dissolved;

28, 2020 digital online marketing limited company was dissolved;

On October 31, 2020, Cloud Chain Mall Network and Technology (Tianjin)

Co., Limited and Chain Cloud Mall Logistics Center (Shanxi) Co., Ltd.

completed the transfer of their ownership of Hedetang Farm Products

Trading Markets (Mei county) Co., Ltd.

Loss from discontinued operations

for March 31, 2021 and 2020 was as follows:

COST OF SALES

OPERATING EXPENSES:

General and administrative

(Recovery) Provision of doubtful debts

OTHER INCOME (EXPENSE)

Interest income

other income (expenses)

Income (loss) from discontinued operations before income tax

Income tax provision

Income (loss) from discontinued operation before noncontrolling interest

Loss on disposal of discontinued operations

(INCOME) LOSS FROM DISCONTINUED OPERATION

The major components of assets and liabilities

related to discontinued operations are summarized below:

Amount due from related parties

Total assets related to discontinued operations

Accrued expenses

Amount due from related parties

Total liabilities related to discontinued operations

SEGMENT REPORTING

In its operation of the business, management,

including our chief operating decision maker, who is also our Chief Executive Officer, reviews certain financial information, including

segmented internal profit and loss statements prepared on a basis not consistent with GAAP.

The Company operates in four segments starting

in fiscal 2019:

shared shopping mall membership fee, fruit related products, sales of goods and others.

Our concentrated juice and juice

beverages are primarily produced by the Company’s Jingyang factory.

The operation of fruit related products is classified as discontinued

operation as disclosed in Note 12.

In compliance with the Company’s business

transformation strategy, membership fees from the shared shopping mall and sales of goods through the shared shopping mall platform started

to generate the main revenues for the Company and became more and more important business sections of the Company since fiscal year 2019,

while its traditional business section of seasonal fruit related products continued to shrink in fiscal year 2019.

Some of our operation might not individually meet

the quantitative thresholds for determining reportable segments and we determine the reportable segments based on the discrete financial

information provided to the chief operating decision maker.

The chief operating decision maker evaluates the results of each segment in

assessing performance and allocating resources among the segments.

Since there is an overlap of services and products between different

subsidiaries of the Company, the Company does not allocate operating expenses and assets based on the product segments.

Therefore, operating

expenses and asset information by segment are not presented.

Segment profit represents the gross profit of each reportable segment.

As of March 31, 2021:

Mall Membership

Reportable segment revenue

Revenue from external customers

Segment gross profit

As of March 31, 2020:

Mall Membership

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

COMMITMENTS AND CONTINGENCIES

Legal case with FT Global Litigation

In January 2021, FT Global Capital, Inc.

Global”), a former placement agent of the Company filed a lawsuit against the Company in the Superior Court of Fulton County, Georgia.

FT Global served the complaint upon the Company in January 2021.

In the complaint, FT Global alleges claims, most of which

attempt to hold the Company liable under legal theories that relate back to an alleged breach of an exclusive placement agent agreement

between FT Global and the Company in July 2020 which had a term of three months.

FT Global claims that the Company failed to compensate

FT Global for securities purchase transactions between December 2020 and April 2021, pursuant to the terms of the expired exclusive placement

agent agreement.

Allegedly, the exclusive placement agent agreement required the Company to pay FT Global for capital received during

the term of the agreement and for the 12-month period following the termination of the agreement involving any investors that FT Global

introduced and/or wall-crossed to the Company.

However, the Company believes the securities purchase transactions at issue did not

involve the one investor which FT Global introduced or wall-crossed to the Company during the term of the agreement.

FT Global claims

approximately $7,000,000 in damages and attorneys’

The Company timely removed the case to the United

States District Court for the Northern District of Georgia (the (“Court”) on February 9, 2021 based on diversity of jurisdiction.

On March 9, 2021, the Company filed a motion to dismiss based on FT Global’s failure to state a claim which is pending before the

On March 23, 2021, FT Global filed its response to the Company’s motion to dismiss.

FT Global argues that the Court

should deny the Company’s motion to dismiss.

However, if the Court is inclined to grant the Company’s motion to dismiss,

FT Global requested that the Court permit it to file an amended complaint.

On April 8, 2021, the parties filed a Joint Preliminary

Report and Discovery Plan.

On April 12, 2021, the Court approved the Joint Preliminary Report and Discovery Plan and issued a Scheduling

Order placing this case on a six-month discovery tract.

The Company will continue to vigorously defend the action against FT Global.

RISKS AND UNCERTAINTIES

1 unchanged sentence

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 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

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 have

been materially adversely affected.

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 were affected by the outbreak of COVID-19 in China.

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.

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.

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.

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

Consequently, our results of operations have been

materially adversely affected by the COVID-19.

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.

and new information that may emerge regarding the duration and severity of the COVID-19, efficacy and distribution of COVID-19 vaccines

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

We conduct substantially all of our operations

and generate most of our revenue in the PRC.

Accordingly, economic, political and legal developments in the PRC will significantly

affect our business, financial condition, results of operations and prospects.

The PRC economy is in transition from a planned

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

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

Currency risks

A majority of the Company’s operating

transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB.

RMB is not freely convertible into foreign currencies.

The value of the RMB is subject to changes in the central government policies

and to international economic and political developments.

In the PRC, certain foreign exchange transactions are required by laws

to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”).

Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange

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

There are substantial uncertainties regarding

the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business

and the enforcement and performance of our arrangements with customers in certain circumstances.

We are considered foreign persons or

foreign funded enterprises under PRC laws and, as a result, we are required to comply with PRC laws and regulations related to foreign

persons and foreign funded enterprises.

These laws and regulations are sometimes vague and may be subject to future changes, and their

official interpretation and enforcement may involve substantial uncertainty.

The effectiveness of newly enacted laws, regulations or amendments

may be delayed, resulting in detrimental reliance.

New laws and regulations that affect existing and proposed future businesses may also

be applied retroactively.

We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our

SUBSEQUENT EVENTS

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.

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.

On April 1, 2021, the Company entered into a Securities

Purchase Agreement (the “Purchase Agreement”) with certain purchasers identified on the signature page thereto (the “Purchasers”),

pursuant to which the Company sold to the Purchasers in a registered direct offering, an aggregate of 5,737,706 shares (the “Shares”)

of its common stock, par value $0.001 per share (“Common Stock”) at a purchase price of $6.10 per share, for aggregate gross

proceeds to the Company of approximately $35 million, before deducting fees to the placement agent and other offering expenses payable

by the Company.

As of report day, the transaction has completed.

On April 9, 2021, the Company, Future FinTech

(Hong Kong) Limited., a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of the Company (“Buyer”), Nice

Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”) and Joy Rich Enterprises

Limited, a limited company organized under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich”

or the “Seller”)

entered into the First Amendment (the “Amendment”) to the Share Exchange Agreement (the “Agreement”), which was

originally entered into by the parties on July 13, 2020.

Pursuant to the Agreement, the Buyer agreed to acquire 90% of the issued and

outstanding ordinary shares of Nice (the “Nice Shares”) from the Seller in exchange for the shares of common stock of the

Company, as disclosed in the Form 8-K filed on July 16, 2020.

Pursuant to the Amendment, the parties agree to amend the purchase price

and certain earn-out terms as follows:

(i) the aggregate purchase price for Nice Shares shall be HK$144,000,000 (the “Purchase Price”)

and it shall be paid in the shares of common stock of the Company (the “Company Shares”);

(ii) 60% of the Purchase Price or

HK$86,400,000 shall be paid in the shares of common stock of the Company based on 95% of the closing price of the Company’s common

stock listed on Nasdaq Stock Exchange on the date prior to the date of the Amendment and the foreign exchange rate between HK$ and US$

shall be 7.7:1;

(iii) 20% of Purchase Price shall be paid in the shares of common stock of the Company if Nice achieves an Earnings Before

Interest and Taxes (the “EBIT”) of HK$14,000,000 (the “2021 EBIT Goal”), as evidenced in its 2021 audited financial

statements for fiscal year ended December 31, 2021 audited by the auditor of the Company (the “2021 Earn-Out Shares”);

the final 20% of Purchase Price shall be paid in the shares of common stock of the Company if Nice achieves an EBIT of HK$20,000,000 (the

“2022 EBIT Goal”), as evidenced in its 2022 audited financial statements for fiscal year ended December 31, 2022 audited by

the auditor of the Company (the “2022 Earn-Out Shares”);

(v) if Nice does not achieve the EBIT Goal for a given year, the

shortfall between EBIT Goal and the actual EBIT for that year shall be the EBIT Shortfall (the “EBIT Shortfall”) and the amount

of an EBIT Shortfall Fee that equals to 10 (ten) times of the EBIT Shortfall amount (the “EBIT Shortfall Fee”) shall be paid

in cash by the Seller to the Buyer even though such year’s Earn-Out Shares shall still be issued in full to the Seller.

On April 16, 2021, the Company through its wholly

owned subsidiary, Future Supply Chain Co., Ltd., completed its acquisition of 60% equity interest of Sichuan Ticode Supply Chain Management

(“Ticode”) from Sichuan Longma Electronic Technology Co.

(the “Seller”) in exchange for 7,789,882

shares of common stock of the Company (the “Company Shares”), pursuant to a Share Exchange Agreement (the “Agreement”)

dated February 26, 2021.

On April 25, 2021, the Audit Committee of the

Board of Directors of the Company dismissed BF Borgers CPA PC (“BF Borgers”) as the Company’s independent registered

public accounting firm, effective immediately.

On April 25, 2021, the Audit Committee of the

Board of Directors of the Company approved the engagement of Onestop Assurance PAC (“Onestop Assurance”) as the Company’s

independent registered public accounting firm, effective immediately.

The Audit Committee also approved Onestop Assurance to act as the

Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.

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, 2020 (the “2020 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 2020 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.

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

1 unchanged sentence

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);

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 based 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;

cross-border e-commerce platform (“NONOGIRL”);

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.

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.

The Company is also expanding into financial services.

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.

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

interactive and comprehensive shopping and sales service platform.

It is an open network promotion system with a blockchain based

anti-counterfeit system including referral point and discount points issuance and settlement.

The new business model creates a

completely new source of data traffic for enterprises on our platform.

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.

It is an open network promotion system with a blockchain based anti-counterfeit

system including referral point and discount points issuance and settlement.

The new business model creates a completely new source of

data traffic for enterprises on our platform.

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.

collect the points issued by the merchants by scanning products with their mobile phones on the anti-counterfeiting QR code.

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.

NONOGIRL started its trial operation in March

2020 and formally launched in July 2020.

It is a cross-border e-commerce platform, which aims to build a new s2b2c (supplier to business

and consumer) outsourcing sales platform dominated by social media influencers.

It is aimed at the growing female consumer market, with

the ability to broadcast, short video, and all forms communication through the platform.

It can also create a sale oriented sharing ecosystem

with other major social media used by customers, etc.

The Company currently has three direct wholly-owned

subsidiaries:

DigiPay FinTech Limited (“DigiPay”), a company incorporated under the laws of the British Virgin Islands, Future

FinTech (Hong Kong) Limited, a company incorporated under the laws of Hong Kong, and GlobalKey Shared Mall Limited, a company incorporated

under the laws of Cayman Islands (“GlobalKey Shared Mall”).

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.

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 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.

The essence of anti-counterfeiting

is to determine the person responsible for the product.

Using real-name blockchain system, it provides the assurance to our customers

to the authentication of the products they purchase and solve the problem of counterfeiting products in online shopping mall.

Using real-name

blockchain technology to carry out anti-counterfeiting for products produced by the enterprises.

The essence of anti-counterfeiting is

to determine the person responsible for the product.

Using real-name blockchain system, it provides the assurance to our customers to

the authentication of the products they purchase and solve the problem of counterfeiting products in online shopping mall.

Blockchain points settlement leads to secondary data traffic

1 unchanged sentence

coupons for merchants, guiding customers to the platform of the merchants, and provide them discounts when purchasing.

is called secondary data traffic.

This process 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.

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

2 unchanged sentences

All such sales are directed to the merchants’

stores when customers possess and use merchants coupons.

With a high level of user stickiness, customers are likely to purchase

products again and collect more blockchain points.

when customers possess and use merchants coupons.

With a high level of user stickiness, customers are likely to purchase products again

and collect more blockchain points.

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.

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

economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result

in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business

and the value of the Company’s Common Stock.

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

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.

Anti-counterfeiting technology plus

the Company’s secondary data traffic platform have created great value for the merchants that have stores on our platform.

all loyal customers to a merchant’s store, we can build a standard value community.

With the 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 $6,540 and $1,817 was recognized

as revenue from the “sale of goods”

segment from orders on sales of the Company’s own products on the platform for the

three months ended March 31, 2021 and March 31, 2020, respectively.

Results of Operations

Comparison of Three Months ended

September 30, 2020 and 2019:

Comparison of Three Months ended March 31,

2021 and 2020:

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):

revenues for the three months ended March 31, 2021 and 2020, respectively:

Three months ended

September 30,

CCM Shopping Mall Membership

Sales of goods

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 decrease in revenue for the three months ended

March 31, 2021 was primarily due to a decrease in new member subscription.

Due to the COVID-19 related restriction on large gathering

for meetings and conference which primarily used by us before the pandemic for marketing and business development of new members, the

Company has experienced difficulties to subscribe new members during the first quarter of 2021.

Sale of goods increased from $1,066 for the three

months ended March 31, 2020 to $6,540 for the three months ended March 31, 2021.

CCM Shopping Mall Membership fees decreased from $198,885

in the first quarter of 2020 to $73 in the same period of 2021 due the COVID-19 related restriction on large gathering for meetings and

conference which primarily used by us before the pandemic for marketing and business development of new members.

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):

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 March 31, 2021 and 2020, respectively:

Three months ended

September 30,

Sales of Goods

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):

Third quarter of

General and administrative

Selling expenses

Bad debt provision

Total operating expenses

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

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,

CCM Shopping Mall Membership

Sales of goods

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.

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.

Overall gross margin as a percentage of revenue

was 9% for the three months ended March 31, 2021, a decrease of 91% compared to 100% for the same period of last fiscal year, mainly due

to less revenues from the membership fee which has a much higher margin than that of 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):

Nine months ended

September 30,

Nine months ended

September 30,

operating expenses and operating expenses as a percentage of revenue for the three months ended March 31, 2021 and 2020, respectively:

First quarter of 2021

First quarter of 2020

General and administrative

2 unchanged sentences

Total operating expenses

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.

General and administrative expenses decreased

by $0.25 million, or 13.4%, from $1.85 million to $1.60 million for the three months ended March 31, 2021, compared to the same period

of last fiscal year.

The increase in general and administrative expenses was mainly due to decreased share issuance related expenses that

the Company recorded during the three months ended March 31, 2021.

Selling expenses remained the same in the first

quarter of 2021, compared to the same period of last fiscal year.

Write back of provision of doubtful debt was $0.003

million for the three months ended March 31, 2021, decreased by $4.21 million comparing to the same period of the last fiscal year.

back of provision was for doubtful debt from subsidiaries that disposed during the three months ended March 31, 2020，but no such

item in the three months ended March 31, 2021.

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.

Other expenses, net increased by $0.97 million

to positive $0.49 million for the three months ended March 31, 2021 from negative $0.49 million in the same period of the last fiscal

year, primarily due to disposal of current payments with InUnion Chain Ltd..

We did not have tax provision for the three months

ended March 31, 2021 and 2020, as the Company incurred losses in the first quarter of 2021 and 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.

As of March 31, 2021, Shaanxi Chunlv Ecological

Agriculture Co., Ltd.

(“Shaanxi Chunlv”) holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited,

Nature Worldwide Resources Ltd.

holds 40% interest in DCON DigiPay Limited (“DCON Digipay”).

Loss from Continuing Operations

Loss from continuing operations decreased by $5.71

million from $6.70 million for the three months ended March 31, 2020 to $0.99 million for the same period of 2021 mainly due to a decrease

in operating expenses, as discussed previously.

Gain on disposal of discontinued operations

Gain on disposal of discontinued operation was

$0.35 million for the three months ended March 31, 2021, which was related with deregistered Chain Future Digital Tech (Beijing) Co.,

Ltd during the first quarter of 2021.

Loss per Share

Basic and diluted loss per share from continuing

operations were $0.02 and $0.02 for the three months ended March 31, 2021, respectively, as compared to a loss of $0.20 and $0.20 for

the same periods of 2020, respectively.

Basic and diluted income per share attributable to discontinued operations was $0.01 and $0.01

for the three months ended March 31, 2021 respectively.

Basic and diluted loss per share attributable to discontinued operations was $3.73

and $3.65 for the three months ended March 31, 2020 respectively.

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.

As of March 31, 2021, we had cash and cash equivalents of $42.12

million, as compared to $9.79 million as of December 31, 2020.

The increase in cash, cash equivalents and restricted cash was mainly

due to financing from the issuance of shares of common stock.

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.

from our operating cash flows, advances from our customers and loans from bank facilities.

Our working capital was positive $44.81 million,

as of March 31, 2021, an increase of $44.64 million from working capital of positive $0.18 million, as of March 31, 2020, mainly due to

an increase in current assets and 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.

by $0.89 million to $0.66 million for the three months ended March 31, 2021 from a cash inflow of $1.56 million for the same period of

the last fiscal year.

The increase in net cash used by operating activities was primarily due to an decrease in net loss from continuing

operations during the first quarter of 2021.

Net cash used in investing activities was increased

$9,263 compare with the three months ended March 31, 2021 and March 31, 2020.

Net cash provided in financing activities for

the three months ended March 31, 2021 was $33.26 million representing an increase of $32.52 million, as compared to cash provided by financing

activities of $0.74 million during the three months ended March 31, 2020.

The increase in cash provided by financing activities was mainly

due to financing from the issuance of shares of common stock.

Off-balance sheet arrangements

As of September 30, 2020, we did not have any off-balance sheet

arrangements.

and Qualitative Disclosures about Market Risk

As of March 31, 2021, we did not have any off-balance

sheet arrangements.

Quantitative 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