What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-16 compared with 2021-05-17 · 667 added, 812 removed, 527 unchanged (74% of the section changed)

4 unchanged sentences

Cash and cash equivalents

Accounts receivable, net

Advances to suppliers and other current assets

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Commitments and contingencies (Note 14)

STOCKHOLDER’S EQUITY

Future FinTech Group, Inc, Stockholders’

STOCKHOLDER’S EQUITY

Future FinTech Group, Inc, Stockholders’ equity

Common stock, $ 0.001 par value;

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

65,321,192 shares and 50,053,606 shares issued and outstanding as of June 30, 2021 and December 31, 2020 respectively

Additional paid-in capital

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Total Future FinTech Group, Inc.

stockholders’

stockholders’ equity

Non-controlling interests

Total stockholders’

TOTAL LIABILITIES AND STOCKHOLDERS’

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of

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Three Months Ended

Six Months Ended

Cost of goods sold

5 unchanged sentences

Loss from operations

( 2,126,945 )

( 6,343,220 )

Other (expenses) income

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Loss on debt settlement and conversion

Other income (expenses), net

Other (expenses) income, net

Total other income (expenses), net

( 1,172,355 )

Loss from Continuing Operations before Income Tax

( 1,357,280 )

( 7,515,575 )

Income tax provision

Loss from Continuing Operations

( 1,357,280 )

( 7,515,575 )

Discontinued Operations (Note 12)

Gain on disposal of discontinued operations

Gain (loss) on disposal of discontinued operations

Income (loss) from discontinued operations

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Net Loss attributable to non-controlling interests

Net income(loss) from discontinued operations attributable to Future

Fintech Group, Inc.

income(loss) from discontinued operations attributable to Future Fintech Group, Inc.

$ ( 403,478 )

$ ( 834,980 )

$ ( 1,200,787 )

$ 116,052,941

Other comprehensive income (loss)

1 unchanged sentence

( 1,357,280 )

Foreign currency translation –

continued operations

( 7,515,575 )

Foreign currency translation – continued operations

Comprehensive income (loss) - continued operation

Income (loss) from discontinued operations

( 1,325,313 )

Foreign currency translation - discontinued operation

( 6,055,955 )

Comprehensive (loss) income - discontinued operation

Income (loss) from discontinued operations

currency translation – discontinued operations

( 10,781,302 )

Comprehensive income (loss) - discontinued operation

Comprehensive Income (Loss)

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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

( 1,168,830 )

Earnings per share:

Basic earnings per share from continued operation

Basic earnings per share from discontinued operation

Diluted Earnings per share:

Diluted earnings per share from continued operation

Diluted earnings 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).

* Reclassification - certain reclassifications have been made to the financial statements for the period ended June 30, 2020 to conform to the presentation for the period ended June 30, 2021, with no effect on previously reported net income (loss).

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months ended March 31, 2020

Three Months ended June 30, 2020

comprehensive

Balance at December 31, 2019

Balance at March 31, 2020

$ 109,793,334

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Net income from discontinued operations

Share-based payments -service

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at June 30, 2020

$ 110,355,855

$ ( 97,261,671 )

$ ( 2,088,945 )

Three Months ended June 30, 2021

comprehensive

Balance at March 30, 2021

2 unchanged sentences

$ ( 321,769 )

Three Months ended March 31, 2021

Additional paid-in

Issuance of common stocks - cash

Net income from continued operations

Net income from discontinued operations

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at June 30, 2021

$ 202,266,182

$ ( 125,585,088 )

$ ( 366,057 )

Six Months ended June 30, 2020

comprehensive

2 unchanged sentences

$ ( 213,314,612 )

$ ( 88,077,206 )

Issuance of common stocks - cash

Net income from continued operations

( 7,515,513 )

( 7,515,575 )

Net income from discontinued operations

2 unchanged sentences

Disposal of discontinued operation

Balance at March 31, 2021

( 10,781,302 )

( 6,450,244 )

Balance at June 30, 2020

$ 110,355,855

$ ( 97,261,671 )

$ ( 2,088,945 )

Six Months ended June 30, 2021

comprehensive

Balance at December 31, 2020

$ 133,510,862

$ ( 124,384,301 )

$ ( 398,014 )

Issuance of common stocks - cash

Net income from continued operations

( 1,357,280 )

Net income from discontinued operations

Share-based payments-service

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at June 30, 2021

$ 202,266,182

$ ( 125,585,088 )

$ ( 366,057 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 1,200,787 )

$ 116,052,879

Net income from discontinued operation

Net loss from continuing operations

( 1,357,280 )

( 7,515,575 )

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

4 unchanged sentences

Accounts receivable

( 2,197,937 )

Other receivable

4 unchanged sentences

Advances from customers

Net Cash Used in Operating Activities –

Discontinued Operations

Net Cash Used in Operating Activities –

Continued Operations

Net Cash Used in Operating Activities – Discontinued Operations

( 2,987,290 )

( 1,717,808 )

Net Cash Used in Operating Activities – Continued Operations

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment

Payment for Loan receivable

Additions to property, plant and equipment

( 1,836,288 )

Net Cash Used in Investing Activities from Discontinued Operations

( 2,042,800 )

Net Cash Used in Investing Activities from Continuing Operations

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Proceeds from amounts due from related parties, net

Repayments of related party loan

( 1,249,758 )

Proceeds from loan payable

Proceeds from secured convertible promissory note

Repayment of convertible payable

( 1,163,146 )

Repayment of loans payable

Proceeds from Secured Convertible Promissory Note

Net cash provided by financing activities

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Future FinTech Group Inc.

(the “Company”)

is a holding company incorporated under the laws of the State of Florida.

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

a cross-border e-commerce

platform (“NONOGIRL”);

supply chain financing and

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.

and technical service and support for blockchain based assets and their operating

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 and financial technology services.

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.

Its business includes management and consulting services.

On May 11, 2021, the Company established Future Supply (Chengdu) Co.,

Its business is coal supply chain financing and trading.

On May 21, 2021, the Company established Future

Big Data (Chengdu) Co., Ltd.

in Chengdu, China.

Its business includes big data technology and industrial internet data services.

On June 8, 2021, the Company established Tianjin Future Private Equity

Fund Management Partnership (Ltd Partnership) in Tianjin, China.

Its business is mainly external equity investment.

June 14, 2021, the Company established Future

FinTech Labs Inc.

in New York to serve as its global R&D and technical support center.

On June 24, 2021, the Company established FTFT

Capital Investments L.L.C.

in Dubai, United Arab Emirates.

Its business is to serve institutional investors and high net worth individuals.

On August 2, 2021, the Company incorporated FTFT

UK Limited in United Kingdom as serve as its operating base to develop fintech business in Europe.

The Company’s activities are principally

conducted by its subsidiaries and its blockchain based e-commerce platform is conducted through its Variable Interest Entity (“VIE”)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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.

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

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

In the opinion of management, the unaudited financial statements

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

adjustments, necessary to present fairly the financial position as of June 30, 2021 and the results of operations and cash flows for the

periods ended June 30, 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 to six months ended June 30, 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 of December 31,

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

Our contractual arrangements with our VIE and

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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.

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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.

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

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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 addition, 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.,

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.

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, SkyPeople Foods Holding Ltd.

and Chain Future Digital Tech

(Beijing) Co., Ltd.

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

was dissolved and deregistered with local government.

On May 7, 2020, Future Business Management

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)

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.

As a result, Skypeople Foods Holdings Limited

Company was deregistered on July 27, 2020;

As a result, Skypeople Foods

Holdings Limited Company was deregistered on July 27, 2020;

Digital Online Marketing Limited Company was deregistered on July 28,

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.

On October 31, 2020, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited and Chain Cloud Mall Logistics Center

(Shanxi) Co., Ltd.

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

On April 19, 2021, FT Commercial Management (Beijing)

Co., Ltd was dissolved and deregistered with local government.

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

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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.

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, coal supply chain financing and trading 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

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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.

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’s financial statements are prepared

assuming that the Company will continue as a going concern.

The Company incurred operating losses and had

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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.

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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.

accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going

Impairment of Long-Lived Assets

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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.

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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.

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.

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:

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.

Three Months ended June 30, 2021:

Loss from continuing operations

$ ( 381,901 )

Income from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 381,901 )

Income available to common stockholders from discontinuing operations

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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

$ ( 381,901 )

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

As of March 31, 2020:

Three Months ended June 30, 2020:

Loss from continuing operations

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Income from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 750,935 )

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

$ ( 750,935 )

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

For the six months ended June 30, 2021:

Loss from continuing operations

$ ( 1,357,280 )

Income from discontinuing operations

Loss available to common stockholders from continuing operations

1 unchanged sentence

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

$ ( 1,357,280 )

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

For the six months ended June 30, 2020:

Loss from continuing operations

$ ( 7,515,575 )

Income from discontinuing operations

$ 123,568,454

Loss available to common stockholders from continuing operations

$ ( 7,515,575 )

Income available to common stockholders from discontinuing operations

$ 123,568,454

Dilutive EPS:

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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.

The Company has assessed its accounts receivable including

credit term and corresponding all its accounts receivables in June 2021.

Upon such credit terms, bad debt expense was $ 18,329 and $ 4.4

million during the six months ended June 30, 2021 and 2020, respectively.

There is no accounts receivable balance overdue for over 90 days

as of June 30, 2021 and December 31, 2020

Inventories consist of raw materials, packaging

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

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

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

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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.

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.

During the second

quarter of 2021, the Company has transformed its member based business model to sales agent based business model for its online shopping

Sales of Coals

The Company recognize revenue when the receipt

of merchandise is confirmed by the customers, which is the point that the title of the goods is transferred to the customer.

Property, Plant and Equipment

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We estimated that the residual

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

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

Property, plant and equipment are depreciated over their estimated

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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.

Depreciation expense included in general and administration

expenses for the six months ended June 30, 2021 and 2020 was $ 4,088 and $ 849 , respectively.

Depreciation expense included in cost of sales

for the six months ended June 30, 2021 and 2020 was nil, respectively.

Intangible Assets

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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

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.

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 years, 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.

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 6.46 and 6.52 at the balance sheet dates of June 30, 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 6.47 and 7.03

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).

for six months ended June 30, 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

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

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.

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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.

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.

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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,

No BCF was recognized for the convertible notes issued during June 30,

2021 and 2020.

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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.

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.

The amount of

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

When no future services are required to be performed

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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.

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”),

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”).

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

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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.

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 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.

Zeyao Xue and Mr.

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

Zeyao Xue is a

major shareholder of the Company and the son of Mr.

Yongke Xue, the President of the Company.

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

The VIE Agreements are as follows:

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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.

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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.

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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.

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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.

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

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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.

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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.

4) Exclusive Operation and Use Rights Authorization letter which authorizes Chain Cloud Mall E-commerce (Tianjin) Co., Ltd, to exclusively operate and use the Chain Cloud Mall System and the authorization period is the same as the term of the Exclusive Technology Consulting and Service Agreement entered into by and between Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd.

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

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

and Cloud Chain Mall Network

and Chain Cloud Mall Network

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

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In June 2016, the FASB issued ASU No.

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

(“ASC 326”):

(“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

on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at

amortized cost.

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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

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

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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

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LOAN RECEIVABLES

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 Future FinTech (Hong Kong) Limited, entered into a “Loan Agreement”

with Tiantian Haodian.

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

As of June 30, 2021, the balance of loan

receivables was $ 5.41 million, which was from Shenzhen Tiantian Haodian Technology Co., Ltd.

(“Tiantian Haodian”).

June 28, 2020, GuangChengJi (Shanghai) Industrial Co., Ltd.

(“Guangchengji”), a wholly owned subsidiary of Future

FinTech (Hong Kong) Limited, entered into a “Loan Agreement” with Tiantian Haodian.

Pursuant to the Loan Agreement,

Guangchengji loaned up to the amount of RMB 35 million (approximately $5.41 million) with Tiantian Haodian at the annual interest

rate of 10 % from June 28, 2020 to December 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

For the six months ended June 30,

2021, the operating lease cost was $ 0.20 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

As of June 30, 2021, the weighted average remaining lease term and weighted

average discount rate were 1.08 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

As of June 30,

From July 1, 2021 to June 30, 2022

From July 1, 2022 to June 31, 2022

amounts representing interest

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LOAN PAYABLES

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

As of June 30, 2021, loan payables were $ 0.44

million, which consisted of the loan payable of $ 0.19 million to Shaanxi Entai Bio-Technology Co., Ltd., loan payable $ 0.01 million to

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CONVERTIBLE NOTES PAYABLE

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

As of June 30, 2021 and December 31, 2020, convertible

debt consisted of the following:

RELATED PARTY TRANSACTION

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

As of June 30, 2021, the amounts due to the related

parties were consisted of the followings:

Chairman of the Company

President of the Company

Wei Cheng Pan

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Shaanxi Fu Chen Venture Capital Management Co.

(“Shaanxi Fu Chen”)

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

(“Shaanxi Fu Chen”)

Two outside shareholders of the Company who are also the shareholders

of Shaanxi Fu Chen

Other payables

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Shenzhen TianShunDa Equity Investment Fund Management Co., Ltd.

(“TianShunDa”)

Shaanxi Fu Chen holds 70% interest of TianShunDa

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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 Chunlv Ecological Agriculture Co.

Shaanxi Fu Chen Venture holds 80% interest of the company

Other payables

Deputy General Manager of a subsidiary of the Company

Accrued expenses

Shaanxi Fuju Mining Co., Ltd

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Other payables

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

As of June 30, 2021, the amounts due from the

related parties were consisted of the followings:

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Chief Executive Officer of the Company

Interest free loan*

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

Interest free loan*

Prepaid expenses*

a shareholder of a subsidiary of the Company

Advance to pay for the incorporation costs of the establishment of the subsidiary in Dubai*

Son of the President of the Company, a shareholder of the VIE of the Company and a major shareholder of the Company

Prepaid expenses *

Chief Financial Officer of the Company

Interest free loan*

Prepaid expenses *

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

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.

Prepaid expenses *

* The related party transactions have been approved by the Company’s

Audit Committee.

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 six months ended June 30, 2021 and 2020.

The effective income tax rate

for the Company for both of the six months ended June 30, 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.

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.

Company has not provided deferred taxes on undistributed earnings attributable to its PRC subsidiaries as they are to be permanently

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.

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.

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

BASED COMPENSATION

Service Agreement

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.

The term of the Agreement is three years.

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.

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 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.

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.

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.

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.

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.

The Company will recognize stock related compensation

of $ 0.89 million for the 1,125,000 shares in the future if and when they are released to the Consultant pursuant to the Agreement.

Purchase Agreement

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 $ 7,338,500 , after

deducting underwriting discounts and commissions and other estimated offering expenses, and were received on December 29, 2020.

issued 4,210,530 shares of its Common Stock to the purchaser on December 29, 2020.

During 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

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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.

a purchase price of $ 5.00 per share, for aggregate net 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 of common stock pursuant

to this Agreement.

On February 9, 2021, the Company entered into

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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.

a purchase price of $ 5.95 per share, for aggregate net 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 common stock to the purchasers on February

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

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 of its common stock, par value $ 0.001

per share at a purchase price of $ 6.10 per share, for aggregate net proceeds to the Company of approximately $ 32,380,492 , after deducting

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

The Company issued 5,737,706 shares of common stock to

the purchasers on April 5, 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

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-months 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 six months ended June 30, 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

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.

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

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.

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.

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 close of

the Sale Transaction.

discontinued operation presented in the financial statement includes Huludao Wonder operation, a subsidiary which produced concentrated

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

Based on the restructuring plan and

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

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

significant continuing involvement in the operation of the discontinued component.

Management of the Company initiated a plan to sell

the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance with ASC 205-20.

In accordance

with the restructuring plan, the Company intended to transfer the concentrated fruit juice production equipment in Huludao Wonder to

another subsidiary and to sell the land use right and facilities upon favorable circumstances.

On February 27, 2020 pursuant to a Share

Transfer Agreement entered into by 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.

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, SkyPeople

Foods Holding Ltd.

6 unchanged sentences

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

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;

On July 28, 2020 Digital Online Marketing Limited was dissolved;

31, 2020, Chain Cloud 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.

April 19, 2021, FT Commercial Management (Beijing) Co., Ltd was deregistered, resulting in a loss on disposal of $ 21,577 .

from discontinued operations for June 30, 2021 and 2020 was as follows:

and administrative

(Recovery) of doubtful debts

INCOME (EXPENSE)

income (expenses)

(loss) from discontinued operations before income tax

tax provision

(loss) from discontinued operation before noncontrolling interest

on disposal of discontinued operations

LOSS FROM DISCONTINUED OPERATION

$ ( 120,420 )

major components of assets and liabilities related to discontinued operations are summarized below:

plant and equipment, net

current assets

due from related parties

assets related to discontinued operations

due to related parties

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:

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

internal profit and loss statements prepared on a basis consistent with GAAP.

The Company operates in four segments starting in fiscal

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.

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:

In 2021, the Company principally engages in coal supply chain financing and trading business.

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 from fiscal year 2019, while its traditional business section of seasonal fruit related products continued to

shrink in fiscal year 2019.

However, due the COVID-19 pandemic and restriction on large gatherings in China, which have made the promotion

strategy for its online e-commerce platforms difficult to implement and the Company has experienced difficulties to subscribe new members

for its online e-commerce platforms.

Due to lack of new members, difficulties in retaining old customers and significant decrease of

revenue in e-commerce business, the Company began to provide supply chain financing and services for coal mines and power generation

plants to buy and sell coals.

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.

ended June 30, 2021

Mall Membership

financing/trading

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

As of March 31, 2020:

ended June 30, 2020

Mall Membership

segment revenue

Inter-segment

from external customers

Mall Membership

financing/trading

Reportable segment revenue

2 unchanged sentences

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.

of June 30, 2020:

Mall Membership

segment revenue

Inter-segment

from external customers

AND CONTINGENCIES

case with FT Global Litigation

January 2021, FT Global Capital, Inc.

(“FT 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.

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.

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’ fees.

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 Court.

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

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.

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.

On April 30, 2021, the Company

served FT Global with its Initial Disclosures.

On May 6, 2021, FT Global served the Company with its Initial Disclosures.

On May 17, 2021, FT Global served the Company with its First Amended Initial Disclosures.

The Company will continue to vigorously

defend the action against FT Global.

RISKS AND UNCERTAINTIES

Impact of COVID 19

In December 2019, a novel strain of coronavirus

was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world.

In December 2019, a novel

strain of coronavirus was reported and has spread throughout China and other parts of the world.

On March 11, 2020, the World Health Organization

characterized the outbreak as a “pandemic”.

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 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, 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

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 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.

Overview of Our Business

Future FinTech is a holding company incorporated

under the laws of the State of Florida.

The Company historically engaged in the production and sale of fruit juice concentrates (including

fruit purees and fruit juices), fruit beverages (including fruit juice beverages and fruit cider beverages) in the PRC.

Due to drastically

increased production costs and tightened environmental laws in China, the Company had transformed its business from fruit juice manufacturing

and distribution to a real-name blockchain 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.

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.

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.

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.

Sales of Goods

We have a unique real-name and membership–based

blockchain e-commerce shopping platform that integrates blockchain, internet technology and distinguishes itself by utilizing the automatic

value distribution system of the blockchain and sharing the value of the platform to all the participants in the system.

Our latest CCM v3.0 creates a new value cycle system of online shopping

mall with the real-name blockchain system with following characteristics:

Blockchain anti-counterfeiting

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

Blockchain points are also discount

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

This process is

called secondary data traffic.

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.

Points promotion system

Points promotion

system brings secondary data traffic comes with volume and high turnover ratio.

All such sales are directed to the merchants’

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.

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 March 31,

2021 and 2020:

The following table presents our consolidated

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

Three months ended

CCM Shopping Mall Membership

Sales of goods

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 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

CCM Shopping Mall Membership

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

First quarter of 2021

First quarter of 2020

General and administrative

Selling expenses

Bad debt provision

Total operating expenses

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 $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 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 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.

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

sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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

Our offices in China were closed and all of the Company’s employees worked from home at the end of January until late

The quarantines, travel restrictions, and the temporary closure of office buildings have negatively impacted our business.

Our suppliers were negatively affected, and could continue to be negatively affected in their ability to supply and ship products to our

customers in case of any resurgence of COVID-19.

Our customers that have been 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 e-commerce platform have been and could continue to be negatively impacted by the outbreak, which

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

has had and might continue to have disruption to our supply chain, logistics providers, customers or our marketing activities in case

of any resurgence of COVID-19, which could materially adversely impact our business and results of operations.

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 Company’s promotion strategy of 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.

These restrictions made the promotion

strategy for our online e-commerce platforms difficult to implement.

The Company has experienced difficulties to subscribe new members

for its online e-commerce platforms and has to transform its business model from member based platform to sales agent based platform during

the second quarter of 2021.

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 online shopping malls.

the potential economic impact brought by, and the duration of COVID-19 and its new variants 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 liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 and its new

variants could materially affect our business and the value of our common stock.

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 business.

July 7, 2021, the Company filed a Form S-8 to register the shares of Common Stock under the Company’s 2020 Omnibus Equity Plan

(the “Equity Plan”).

The Board of Directors of the Company approved and adopted the Equity Plan on October 27, 2020, which

was approved by the shareholders at the Company’s annual shareholders meeting on December 18, 2021.

The total aggregate shares

of common stock authorized for issuance during the term of the Equity Plan is limited to 5,000,000 shares.

July 12, 2021 (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company

granted 1,953,000 shares of common stock of the Company, par value $0.001 (the “Shares”), pursuant to the Company’s

2020 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries (the “Grantees”), including:

500,000 shares to Shanchun Huang, Chief Executive Officer of the Company;

300,000 shares to Yongke Xue, President of the Company;

shares to Ming Yi, Chief Financial Officer of the Company, and 40,000 shares to Yang Liu, Chief Operating Officer of the Company (collectively,

the “Grants”).

The Grants vested immediately on the Grant Date and each of the Grantees also entered into an Unrestricted

Stock Award Agreement with the Company on July 12, 2021.

As of the date of this report, the Shares have been issued to the Grantees.

July 22, 2021, the Company filed a shelf registration statement on Form S-3 under which the Company may, from time to time, sell securities

in one or more offerings up to a total dollar amount of $ 200,000,000 .

The shelf registration statement has not been declared

effective as of the date of this report.

July 22, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain investors identified

on the signature pages thereto (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers in a private

placement 548,799 shares (the “Shares”) of the Company’s common stock, par value $ 0.001 per share (the “Common

Stock”), at a purchase price of $ 2.83 per share for an aggregate offering price of $ 1,553,101 (the “Private Placement”).

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.

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