What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 642 added, 539 removed, 781 unchanged (60% of the section changed)

6 unchanged sentences

Accounts receivable, net

Notes receivable

Advances to suppliers and other current assets

1 unchanged sentence

Other receivables, net

Amount due from related party

Amount due from related parties

Assets related to discontinued operations

12 unchanged sentences

Deferred liabilities

Short term loans

Liabilities related to discontinued operations

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Lease liability-non-current

Long term debt

7 unchanged sentences

300,000,000 shares authorized;

70,067,147 shares and 70,067,147 shares issued and outstanding as of March 31, 2022 and December 31, 2021 respectively

70,067,147 shares and 70,067,147 shares issued and outstanding as of June 30, 2022 and December 31, 2021 respectively

Additional paid-in capital

4 unchanged sentences

Accumulated other comprehensive loss

( 2,285,669 )

Total Future FinTech Group, Inc.

9 unchanged sentences

Three Months Ended

Cost of goods sold

Six Months Ended

Cost of revenue

Operating Expenses

General and administrative expenses

Research and development expenses

Research and dvelopment expenses

Selling expenses

Provision (Recovery) of doubtful debts

Impairment Loss

(Recovery) Provision of doubtful debts

Total operating expenses

2 unchanged sentences

( 5,518,926 )

( 2,280,571 )

Other (expenses) income

2 unchanged sentences

Other income (expenses), net

Total other income, net

Total other income (expenses), net

Loss from Continuing Operations before Income Tax

( 2,212,746 )

( 1,276,405 )

( 4,723,164 )

( 1,817,707 )

Income tax provision

1 unchanged sentence

( 2,336,534 )

( 1,276,405 )

( 5,034,905 )

( 1,817,707 )

Discontinued Operations (Note 22)

Gain on disposal of discontinued operations

Loss from discontinued operations

(Loss) Gain on disposal of discontinued operations

Income from discontinued operations

( 2,336,688 )

( 5,035,059 )

( 1,200,787 )

Net Loss attributable to non-controlling interests

loss from continued operations attributable to Future Fintech Group, Inc.

Net loss from continued operations attributable to Future Fintech Group, Inc.

$ ( 2,110,392 )

$ ( 403,478 )

$ ( 4,633,554 )

$ ( 1,200,787 )

Other comprehensive income (loss)

2 unchanged sentences

( 1,276,405 )

( 5,034,905 )

( 1,817,707 )

Foreign currency translation – continued operations

Comprehensive loss - continued

( 1,505,190 )

Loss from discontinued operations

( 1,687,807 )

Foreign currency translation - discontinued operation

Comprehensive loss - discontinued operation

Comprehensive loss - continued operation

( 3,841,724 )

( 1,258,185 )

( 6,722,712 )

( 1,786,799 )

Net income (loss) from discontinued operations

Foreign currency translation – discontinued operations

Comprehensive income (loss) - discontinued operation

Comprehensive Loss

1 unchanged sentence

( 6,722,866 )

( 1,168,830 )

Net loss attributable to non-controlling interests

1 unchanged sentence

( 3,615,582 )

Loss per share:

( 6,321,361 )

( 1,168,830 )

Earnings (Loss) per share:

Basic loss per share from continued operation

Basic loss per share from discontinued operation

Diluted loss per share:

Diluted loss per share

Diluted loss per share from discontinued operation

Basic earnings per share from discontinued operation

Diluted Earnings (Loss) per share:

Diluted loss 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, 2021 to conform to the presentation

for the three months ended March 31, 2022, with no effect on previously reported net income (loss).

certain reclassifications have been made to the financial statements for the period ended June 30, 2021 to conform to the presentation

for the period ended June 30, 2022, with no effect on previously reported net income (loss).

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months ended March 31, 2021

Three Months ended June 30, 2021

comprehensive

Balance at March 31, 2021

$ 169,891,428

$ ( 125,181,610 )

$ ( 321,769 )

Issuance of common stocks - cash

Net loss from continued operations

( 1,276,405 )

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 )

Three Months ended June 30, 2022

comprehensive

Balance at March 31, 2022

$ 221,416,496

$ ( 141,135,076 )

$ ( 780,479 )

$ ( 765,970 )

( 2,110,238 )

( 2,336,534 )

Foreign currency translation adjustment

( 1,505,190 )

Disposition of discontinued operation

Balance at June 30, 2022

$ 221,416,496

$ ( 143,245,468 )

$ ( 2,285,669 )

$ ( 992,266 )

Six Months ended June 30, 2021

comprehensive

Balance at December 31, 2020

3 unchanged sentences

Issuance of common stocks - cash

Net income from continued operations

Net loss from continued operations

( 1,817,707 )

Net income from discontinued operations

2 unchanged sentences

Disposal of discontinued operation

Balance at March 31, 2021

Balance at June 30, 2021

$ 202,266,182

1 unchanged sentence

$ ( 366,057 )

Three Months ended March 31, 2022

Six Months ended June 30, 2022

comprehensive

at December 31, 2021

Balance at December 31, 2021

$ 220,523,246

4 unchanged sentences

( 5,034,905 )

payments-service

currency translation adjustment

at March 31, 2022

Share-based payments-service

Foreign currency translation adjustment

( 1,687,807 )

Disposition of discontinued operation

Balance at June 30, 2022

$ 221,416,496

$ ( 143,245,468 )

$ ( 2,285,669 )

$ ( 992,266 )

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 1,200,787 )

Net loss from discontinued operation

Net (loss) income from discontinued operation

Net loss from continuing operations

( 5,034,905 )

Adjustments to reconcile net income to net cash provided by

operating activities

Provision (recovery) of doubtful

( 1,817,707 )

Adjustments to reconcile net income to net cash provided by (used in) operating activities

Provision (Recovery) of doubtful debts

Share-based payments

Impairment of short term investment

Interest expenses related to convertible

Interest expenses related to convertible note

Changes in operating assets and liabilities

Accounts receivable

Notes receivable

( 1,174,122 )

Other receivable

Advances to suppliers and other current

( 1,198,592 )

Advances to suppliers and other current assets

( 2,894,838 )

Accounts payable

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

( 1,180,054 )

Accrued expenses

Proceeds from amounts due from related

Repayment of amounts due to related parties,

Taxes payable

Advances from customers

Net Cash Used in Operating Activities – Discontinued

( 1,438,953 )

Net Cash Used in Operating Activities – Continued Operations

( 5,129,561 )

( 3,077,432 )

Net Cash Used in Operating Activities – Discontinued Operations

( 1,247,917 )

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

( 11,363,000 )

Repayment for loan receivable

Repayment of loan receivable

Purchase of intangible assets

Net Cash Provided by Investing Activities from Continued Operations

Net Cash Used in Investing Activities from Continued Operations

( 5,985,370 )

Net Cash Used in Investing Activities from Discontinuing Operations

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issuance of common stock,

net of issuance costs

Proceeds from loan payable

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

Repayment of convertible payable

( 1,163,146 )

Payment of dividends

to the non-controlling interest

Payment of dividends to the non-controlling interest

Proceeds from loan payable

Net cash provided by financing activities

Effect of change in exchange rate

( 1,263,771 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents, beginning of

( 8,242,297 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash and cash

equivalents from the discontinued operations, end of period

Cash and cash equivalents,

from the continuing operations end of period

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

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

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Issuance of common

stocks for conversion of debts

Deferred liabilities

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid

Interest paid

The accompanying notes are an integral part of

4 unchanged sentences

Future FinTech Group Inc.

(the “Company”)

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

The main business of the Company includes an online shopping

platform, Chain Cloud Mall, which is based on blockchain technology;

supply chain financing services and trading, financial technology

service business and the application and development of blockchain-based technology in financial technology services.

The Company has

also expanded into financial services and cryptocurrency market data and information service businesses.

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, supply chain financing services and trading

and financial 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”) is a holding

company incorporated under the laws of the State of Florida.

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

Cloud Mall, which is based on blockchain technology, supply chain financing services and trading, assets management, and cryptocurrency

market data services.

The Company is also engaged in the development of blockchain based e-Commerce technology, cryptocurrency mining,

cryptocurrency investment management as well as financial service technology businesses.

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, supply chain financing services and trading, assets management and cryptocurrency

market data service.

On May 11, 2021, the Company established Future

35 unchanged sentences

On December 15, 2021, the Company established

FTFT Super Computing Inc.

FTFT Supercomputing Inc.

Its business is bitcoin and other cryptocurrency mining and related services.

On April 14, 2022, the Company established Future

Trading (Chengdu) Co., Ltd.

Its business is coal and aluminum ingots supply chain financing services and trading.

On April 18, 2022, the Company and Future Fintech (Hong Kong) Limited,

a wholly owned subsidiary of the Company jointly acquired 100 % equity interest of KAZAN S.A., a company incorporated in Republic of Paraguay for $ 288 .

owns 90 % and FTFT HK owns 10 % of Kazan S.A., respectively.

has no operation before the acquisition.

The Company plans to develop

bitcoin and other cryptocurrency mining and related services in Paraguay.

The Company has changed its name from KAZAN S.A to FTFT Paraguay S.A.

on July 28, 2022.

The Company’s business and operations are

5 unchanged sentences

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, 2022 and the results of operations and cash

flows for the periods ended March 31, 2022 and 2021.

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, 2022 are not necessarily

indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2022.

The balance sheet

at December 31, 2021 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, 2022 and the results of operations and cash flows for the

periods ended June 30, 2022 and 2021.

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, 2022 are not necessarily indicative of

the results to be expected for any subsequent periods or for the entire year ending December 31, 2022.

The balance sheet of December 31,

2021 has been derived from the audited financial statements at that date.

Our contractual arrangements with our VIE and

3 unchanged sentences

As a result of our direct ownership in our wholly

owned subsidiary and the contractual arrangements with our VIE, we are regarded as the primary beneficiary of our VIE, and we treat it

and its subsidiaries as our consolidated affiliated entities under U.S.

We have consolidated the financial results of our VIE in

our condensed consolidated financial statements in accordance with U.S.

Certain information and footnote disclosures

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

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

These unaudited financial

statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2021

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

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

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

We have consolidated the financial

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

Certain information and footnote disclosures normally

included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed

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

These unaudited financial statements should

be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2021 as included in our

Annual Report on Form 10-K.

Discontinued Operations

8 unchanged sentences

discontinued its operations, and on November 4, 2021, it was transferred to Shaanxi Fu Chen Venture Capital Management Co.

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 June 27, 2022, Chain Cloud Mall Logistics Center

(Shanxi) Co., Ltd.

was dissolved and deregistered.

Based on the disposal plan and in accordance with

ASC 205-20, the Company presented the operating results from these operations as a discontinued operation.

Segment Information Reclassification

classified business segment into CCM Shopping Mall Membership, asset management service , coal and aluminum

ingots supply chain financing service and trading and others.

The Company classified business segment into CCM

Shopping Mall Membership, asset management service, coal and aluminum ingots supply chain financing service 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

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated

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

The significant areas requiring the use

of management estimates include, but not limited to, the allowance for doubtful receivable, estimated useful life and residual value

of property, plant and equipment, impairment of long-lived assets provision for staff benefit, recognition and measurement of deferred

income taxes and valuation allowance for deferred tax assets.

Although these estimates are based on management’s knowledge of current

events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences

may be material to our condensed consolidated financial statements.

The Company’s condensed consolidated financial statements have

been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements

and reported amounts of revenue and expenses during the reporting period.

The significant areas requiring the use of management estimates

include, but not limited to, the allowance for doubtful receivable, estimated useful life and residual value of property, plant and equipment,

impairment of long-lived assets, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance

for deferred tax assets.

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

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

consolidated financial statements.

Going Concern

The Company’s financial statements are

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

The Company incurred operating losses and had

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

future business plan.

Operating losses amounted $ 2.70 million, and had negative operating cash flows amounted $ 0.64 million

as of March 31, 2022.

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

The Company’s financial statements are prepared

assuming that the Company will continue as a going concern.

The Company incurred operating losses amounted $ 5.03 million and had

negative operating cash flows amounted $ 5.13 million as of June 30, 2022 and may continue to incur operating losses and generate negative

cash flows as the Company implements its future business plan.

These factors raise substantial doubts about the Company’s ability

to continue as a going concern.

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

1 unchanged sentence

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

Research and development

Research and development expenses include salaries,

contracted services, as well as the related expenses for our research and product development team, and expenditures relating to our

efforts to develop, design, and enhance our service to our clients.

All the expenses are related to the planning and implementation phases

of development, and costs that are associated with maintenance of the existing websites or software for internal use, apps for users.

contracted services, as well as the related expenses for our research and product development team, and expenditures relating to our efforts

to develop, design, and enhance our service to our clients.

All the expenses are related to the planning and implementation phases of

development, and costs that are associated with maintenance of the existing websites or software for internal use, apps for users.

Impairment of Long-Lived Assets

In accordance with the ASC 360-10,

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

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

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

or other industrial changes.

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

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

In accordance with the ASC 360-10, Accounting for the Impairment

or Disposal of Long-Lived Assets , long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization

are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable,

or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes.

The determination

of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows

to be generated by the assets.

If such assets are considered to be impaired,

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

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

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

Fair Value of Financial Instruments

4 unchanged sentences

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

Quoted prices in active markets for identical assets or liabilities.

Input other than Level 1 that is observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

Level 1 - Quoted prices in active markets for identical

assets or liabilities.

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

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

quoted prices in markets that are not active;

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

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

Our cash and cash equivalents and restricted

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

Earnings 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.

Level 3 - Unobservable input that is supported

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

Our cash and cash equivalents are classified within

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

Earnings (Loss) Per Share

Under ASC 260-10, Earnings Per Share , basic

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

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

Diluted EPS is calculated by using the treasury

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

Under this method, (i)

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

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

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

in the denominator of the diluted EPS computation.

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

are presented in the following table.

As of March 31, 2022:

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, 2022:

Loss from continuing operations

$ ( 2,110,238 )

Loss from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 2,110,238 )

Loss 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

$ ( 2,110,238 )

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

Three Months ended June 30, 2021:

Loss from continuing operations

$ ( 1,276,405 )

Income from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 1,276,405 )

Income available to common stockholders from discontinuing operations

Dilutive EPS:

2 unchanged sentences

$ ( 1,276,405 )

As of March 31, 2021:

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, 2022:

Loss from continuing operations

1 unchanged sentence

Loss from discontinuing operations

$ ( 256,007 )

Loss available to common stockholders from continuing operations

$ ( 5,034,905 )

Loss available to common stockholders

from discontinuing operations

Loss 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

$ ( 5,034,905 )

Diluted loss 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

$ ( 1,817,707 )

Income from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 1,817,707 )

Income available to common stockholders from discontinuing operations

Dilutive EPS:

3 unchanged sentences

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

$ ( 256,007 )

Cash and Cash Equivalents

7 unchanged sentences

Receivable and Allowances

Accounts receivable are recognized and

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

We have a policy of reserving for

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

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

Accounts receivable are recognized and carried

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

We have a policy of reserving for uncollectible accounts

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

We perform ongoing credit evaluations

of our customers and maintain an allowance for potential bad debts if required.

Other receivables, and loan receivables are recognized

14 unchanged sentences

should abandon such efforts.

The Company has assessed its accounts

receivable including credit term and corresponding all its accounts receivables in March 2022.

Upon such credit terms, bad debt

expense(recovery) was $ 2,002 and $( 15,224 ) during the three months ended March 31, 2022 and 2021, respectively.

Accounts receivables

of nil have been outstanding for over 90 days as of March 31, 2022 and December 31, 2021, respectively.

The Company has assessed its accounts receivable

including credit term and corresponding all its accounts receivables in June 2022.

Upon such credit terms, bad debt expense was $ 1,973

and $( 15,254 ) during the six months ended June 30, 2022 and 2021, respectively.

There is no accounts receivable balance overdue for over

90 days as of June 30, 2022 and December 31, 2021.

Revenue Recognition

8 unchanged sentences

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

Control is generally transferred

when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are

transferred to its customers.

We do not make any significant judgment in evaluating

3 unchanged sentences

Online sales and Membership fee:

The Company recognizes the sale of goods 15 days after the products

are shipped (after the 15 days return policy).

The revenue from the membership fee is amortized over the lifetime of the membership, which

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 and agent authorization fee.

the second quarter of 2021, the Company has transformed its member based business model to a sale agent based eCAAS platform for its online

shopping mall.

of coals and aluminum ingots

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.

Management Service

recognizes service revenue when a service is rendered, the Company issues bills to its customers and recognizes revenue according to the

The Company recognizes the sale of goods 15 days

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

The revenue from the membership fee is amortized over the lifetime of

the membership, which is one year.

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

by the members.

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

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 and aluminum ingots

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.

Asset Management Service

The Company recognizes service revenue when a

service is rendered, the Company issues bills to its customers and recognizes revenue according to the bills.

Property, Plant and Equipment

18 unchanged sentences

Intangible Assets

Acquired intangible assets are recognized based

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

unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s

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

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

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

would use if they were pricing the intangible asset.

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

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

Acquired intangible assets are recognized based on their cost to the

Company, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value

of non-cash assets given as consideration differs from the assets’ carrying amounts on the Company’s book.

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.

The 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

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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 6.35 and 6.38 at the balance sheet dates of March 31, 2022 and December 31, 2021, 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 6.71 and 6.38 at the balance sheet dates of June 30, 2022 and December 31, 2021, respectively.

The average exchange rate for

the period has been used to translate revenues and expenses.

The average exchange rates we used to convert RMB to USD were 6.48 and 6.47

6.48 for three months ended March 31, 2022 and 2021, respectively.

for six months ended June 30, 2022 and 2021, respectively.

The exchange rate we used to convert HKD to USD

was 7.83 at the balance sheet dates of March 31, 2022.

was 7.85 at the balance sheet dates of June 30, 2022.

The average exchange rate for the period has been used to translate revenues and

The average exchange rates we used to convert HKD to USD were 7.81 for three months ended March 31 2022.

The average exchange rate we used to convert HKD to USD was 7.83 for six months ended June 30, 2022.

The exchange rate we used to convert GBP to USD

was 0.76 at the balance sheet dates of March 31, 2022.

was 0.82 at the balance sheet dates of June 30, 2022.

The average exchange rate for the period has been used to translate revenues and

The average exchange rates we used to convert GBP to USD were 0.75 for three months ended March 31 2022.

The average exchange rate we used to convert GBP to USD was 0.77 for six months ended June 30, 2022.

The exchange rate we used to convert AED to USD

was 3.67 at the balance sheet dates of March 30, 2022.

was 3.67 at the balance sheet dates of June 30, 2022.

The average exchange rate for the period has been used to translate revenues and

The average exchange rates we used to convert AED to USD were 3.67 for three months ended March 31 2022.

The average exchange rate we used to convert AED to USD was 3.67 for six months ended June 30, 2022.

Translation adjustments are reported separately

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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

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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The Company uses the discounted

cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts

of future revenue and operating margin.

The company will perform annual goodwill impairment test end of the fiscal year.

cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts of

future revenue and operating margin.

The Company did not note any events occurred or circumstances indicated the fair value of a reporting

unit was below its carrying value as of June 30, 2022.

Short-term investments

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other investments that the Company has the intention to redeem within one year.

As of March 31, 2022 and 2021, the short-term investments

amounted to $ 1.80 million and $ 2.19 million, respectively.

As of June 30, 2022 and December 31, 2021, the short-term

investments amounted to $ 1.26 million and $ 2.19 million, respectively.

We adopted ASU No.

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the leases when we are reasonably certain not to exercise those options.

Convertible notes

The Company accounts for its convertible notes

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

upon their relative fair values.

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

on the date of the transaction.

Convertible notes are subsequently carried at amortized cost.

Each convertible note is analyzed for the

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

for the convertible note, less the effective conversion price.

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

2022 and 2021.

Share-based compensation

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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.

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, Cloud Chain Network and Technology

(Tianjin) Co., Limited (“CCM Tianjin” or “WFOE”, formerly known as Chain

Cloud Mall Network and Technology (Tianjin) Co., Limited ), E-commerce Tianjin, and Mr.

On July 31, 2019, Chain Cloud Mall Network and

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

(“E-commerce Tianjin”),

Zeyao Xue and Mr.

Kai Xu, citizens of China

and shareholders of E-commerce Tianjin, entered into the following agreements, or collectively, the “Variable Interest Entity Agreements”

or “VIE Agreements,” pursuant to which CCM Tianjin has contractual rights to control and operate the business of E-commerce

Tianjin (the “VIE”).

Therefore, pursuant to ASC 810, E-Commerce Tianjin is included in the Company’s consolidated financial

statements since then.

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

collectively, the “Variable Interest Entity Agreements” or “VIE Agreements,” pursuant to which CCM Tianjin has

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

Therefore, pursuant to ASC 810,

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

Pursuant to Chinese law and regulations, a foreign

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

Company is conducting in China.

Company is expanding in China.

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

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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.

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.

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

Zeyao Xue is a major shareholder

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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 and the vice president

of blockchain division of the Company.

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

division of the Company.

The VIE Agreements are as follows:

1) Exclusive Technology Consulting

and Service Agreement by and between CCM Tianjin and E-commerce Tianjin.

Pursuant to the Exclusive Technology Consulting and Service

Agreement, CCM Tianjin agreed to act as the exclusive consultant of E-commerce Tianjin and provide technology consulting and services

to E-commerce Tianjin.

In exchange, E-commerce Tianjin agreed to pay CCM Tianjin a technology consulting and service fee, the amount

of which is to be equivalent to the amount of net profit before tax of E-commerce Tianjin, payable on a quarterly basis after making

up losses of previous years (if necessary) and deducting necessary costs and expenses and taxes related to the business operations of

E-commerce Tianjin.

Without the prior written consent of CCM Tianjin, E-commerce Tianjin may not accept the same or similar technology

consulting and services provided by any third party during the term of the agreement.

All the benefits and interests generated from the

agreement, including but not limited to intellectual property rights, know-how and trade secrets, will be CCM Tianjin’s sole and

exclusive property.

This agreement has a term of 10 years and may be extended unilaterally by CCM Tianjin with CCM Tianjin’s written

confirmation prior to the expiration date.

E-commerce Tianjin cannot terminate the agreement early unless CCM Tianjin commits fraud,

gross negligence or illegal acts, or becomes bankrupt or winds up.

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

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

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

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

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

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

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

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

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

4) Exclusive Operation and Use Rights Authorization

letter which authorizes CCM Tianjin, 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 CCM Tianjin and E-commerce Tianjin

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.

dated July 31, 2019.

5) GlobalKey Shared Mall Shopping Platform Software and System Transfer Agreement by and between Future Supply Chain Co., Ltd.

and Cloud Chain Mall Network and Technology (Tianjian) Co., Ltd., pursuant to which the GlobalKey Shared Mall Shopping Platform Software and System was transferred from Future Supply China Co., Ltd.

5) GlobalKey Shared Mall Shopping

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

and Chain Cloud Mall Network and Technology

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

China Co., Ltd.

to CCM Tianjin and that both parties were wholly owned subsidiaries of the Company and transfer price is $ 0 .

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The spouse of Mr.

is not married), the shareholder of E-Commerce Tianjin has signed a spousal consent letter agreeing that the equity interests in E-Commerce

Tianjin held by and registered under the name of such shareholder will be disposed pursuant to the contractual agreements with CCM Tianjin.

The spouse of such shareholder agreed not to assert any rights over the equity interest in E-Commerce Tianjin held by such shareholder

Xue is not married), the shareholder of E-Commerce Tianjin has signed a spousal consent letter agreeing that the equity interests in

E-Commerce Tianjin held by and registered under the name of such shareholder will be disposed pursuant to the contractual agreements

with CCM Tianjin.

The spouse of such shareholder agreed not to assert any rights over the equity interest in E-Commerce Tianjin held

by such shareholder.

New Accounting Pronouncements

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

Management is currently evaluating the effect of the adoption

of ASU 2016-13 on the consolidated financial statements.

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

investment portfolio and the economic conditions at the time of adoption.

Management is currently evaluating the effect of the adoption of

ASU 2016-13 on the consolidated financial statements.

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

portfolio and the economic conditions at the time of adoption.

In November 2021, the FASB issued ASU No.

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are as follows:

Three Months Ended

Six Months Ended

ACCOUNTS RECEIVABLE

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Asset management service

Total accounts receivable, net

Total accounts receivable

The following table sets forth our concentration

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Total accounts receivable, net

NOTE RECEIVABLES

As of June 30, 2022, the balance of note receivables

was $ 1.17 million, which was from third party.

The Company accepted $1.17 million (RMB7.88 million)

bank acceptance drafts from third party interest free of accounts receivable.

The acceptance draft was issued on April 28, 2022 and has

a maturity date of April 28, 2023 .

OTHER RECEIVABLES

As of March 31, 2022, the balance of other receivables

As of June 30, 2022, the balance of other receivables

was $ 3.17 million.

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in their client account upon the final closing of the acquisition.

In addition, other receivables included total

$ 1.09 million deposit paid and prepayments.

April 22, 2022, Champion Energy Services,

LLC and FTFT Supercomputing Inc.

signed an Electricity Sales and Purchases Agreement.

Upon enrollment of FTFT Supercomputing

Inc.’s facilities, Champion Energy Services, LLC shall sell and deliver, or engage a third party (including Local Utility) to

deliver, and FTFT Supercomputing Inc.

shall purchase and receive, 100 % of FTFT Supercomputing Inc.’s electricity requirements

for enrolled FTFT Supercomputing Inc.’s facilities at the Delivery Point(s) solely for use at FTFT Supercomputing Inc’s

FTFT Supercomputing Inc shall provide an initial amount of Adequate Assurance to Champion Energy Services, LLC in the

form of a cash deposit amounted $ 1.00 million.

In addition, other receivables included deposit

paid and prepayments amounting to $ 0.97 million.

LOAN RECEIVABLES

As of March 31, 2022, the balance of loan receivables

was US$ 5 million, which was from a third party.

On March 10, 2022, Future FinTech (Hong Kong) Limited (“FTFT HK”), a wholly

owned subsidiary of the Company, entered into a “Loan Agreement” with a third party.

Pursuant to the Loan Agreement, FTFT

HK loaned up to the amount of US$5 million to the third party at the annual interest rate of 10% from March 10, 2022 to September 9,

As of June 30, 2022, the balance of loan receivables

was $ 11.59 million, which was from third parties.

On September 8, 2021, FUCE Future Supply Chain

(Xi’an) Co., Ltd., a wholly owned subsidiary of the Company, entered into a “Loan Agreement” with a third party.

to the Loan Agreement, FUCE Future Supply Chain (Xi’an) Co., Ltd.

loaned an amount of US$0.22 million (RMB1.5million) to the third

party at the annual interest rate of 5% from September 8, 2021 to September 7, 2022.

On March 10, 2022, Future FinTech (Hong Kong)

Limited (“FTFT HK”), a wholly owned subsidiary of the Company, entered into a “Loan Agreement” with a third party.

Pursuant to the Loan Agreement, FTFT HK loaned an amount of US$5 million to the third party at the annual interest rate of 10% from March

10, 2022 to September 9, 2022.

On May 30, 2022, FTFT HK entered into a “Loan

Agreement” with a third party.

Pursuant to the Loan Agreement, FTFT HK loaned an amount of US$ 6.36 million to the third party at

the annual interest rate of 10% from May 31, 2022 to May 30,2023.

SHORT TERM INVESTMENT

As of March 31, 2022, the balance of short term

As of June 30, 2022, the balance of short term

investment was $ 1.26 million.

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According to the market

value, the Company’s balance of the short term investment was $ 1.8 million on March 31, 2022.

OTHER CURRENT ASSETS

The amount of other current assets consisted of

the followings:

value, the Company’s balance of the short term investment was $ 1.26 million on June 30, 2022.

ADVANCES TO SUPPLIERS AND OTHER

CURRENT ASSETS

The amount of advances to suppliers and other

current assets consisted of the followings:

Prepayments for Coal and Aluminum Ingots Supply Chain Financing/Trading

Prepaid expenses

As of March 31, 2022, the balance of goodwill

mainly represented an amount of $ 15.61 million that arose from acquisition of Nice Talent Asset Management Limited (“Nice Talent”)

As of June 30, 2022, the balance of goodwill mainly

represented an amount of $ 15.69 million that arose from acquisition of Nice Talent Asset Management Limited (“Nice Talent”)

On August 6, 2021, the Company through its wholly owned subsidiary Future FinTech (Hong Kong) Limited., completed its acquisition

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As required by ASC 805-20, Business Combinations—Identifiable

Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified all the assets

Assets and Liabilities, and Any Non-controlling Interest, management conducted a review to reassess whether they identified all the assets

acquired and all the liabilities assumed, and followed ASC 805-20’s measurement procedures for recognition of the fair value of

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of Nice Talent in its consolidated financial statements since the Acquisition Date.

The Company’s non-cancellable operating leases

consist of leases for office space.

The Company’s non-cancellable operating

leases consist of leases for office space.

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

For the three months ended March

31, 2022, the operating lease cost was $ 0.07 million.

The Company’s operating leases have remaining lease terms of

approximately four months .

As of March 31, 2022, the weighted average remaining lease term and weighted average discount rate were 0.33

years and 6 %, respectively.

For the six months ended

June 30, 2022, the operating lease cost was $ 0.02 million.

The Company’s operating lease has remaining

lease term of approximately one month .

As of June 30, 2022, the weighted average remaining lease term and weighted average discount rate

were 0.08 years and 6 %, respectively.

Maturities of lease liabilities were as follows:

As of March 31,

From April 1, 2022 to July 31, 2022

As of June 30,

From July 1, 2022 to July 31, 2022

amounts representing interest

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Depreciation expense included in general and administration

expenses for the three months ended March 31, 2022 and 2021 was $ 45,208 and $ 396 , respectively.

Depreciation expense included in cost

of sales for the three months ended March 31, 2022 and 2021 was $ 0 and $ 0 , respectively.

expenses for the six months ended June 30, 2022 and 2021 was $ 90,182 and $ 1,411 , respectively.

Depreciation expense included in cost of

sales for the six months ended June 30, 2022 and 2021 was $ 0 and $ 0 , respectively.

INTANGIBLE ASSETS

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Amortization expense included in general and administration

expenses for the three months ended March 31, 2022 and 2021 was $ 11,768 and $ 1,248 , respectively.

Amortization expense included in cost

of sales for the three months ended March 31, 2022 and 2021 was $ 0 and $ 0 , respectively.

SHORT TERM LOANS

As of March 31, 2022, loan payables were $ 4.65

million, which consisted of the loan payable of $ 4.65 million to a third party.

Fuce Future Supply Chain (Xi’an) Co., Ltd signed a factoring

business contract with a third party and obtained a factoring financing of $ 4.65 million (RMB 29.50 million) that was interest free, RMB

6.50 million ($ 1.02 million) due date was April 28, 2022, which was renewed to May 28, 2022, RMB 10 million ($ 1.56 million) will due on

May 26, 2022 and RMB 13 million ($ 2.04 million) will due on June 20, 2022.

As of December 31, 2021, loan payables were $ 1.02 million, which consisted

of the loan payable of $ 1.02 million to a third party.

Fuce Future Supply Chain (Xi’an) Co., Ltd signed a factoring

business contract with third party and obtained a factoring financing of $ 1.02 million (RMB 6.5 million) was interest free, with an expiration

date of April 28, 2022.

expenses for the six months ended June 30, 2022 and 2021 was $ 28,233 and $ 2,500 , respectively.

Amortization expense included in cost of

sales for the six months ended June 30, 2022 and 2021 was $ 0 and $ 0 , respectively.

LONG TERM DEBT

As of March 31, 2022, loan payables were $ 0.19 million, which consisted

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

The loan from Shaanxi Entai Bio-Technology Co., Ltd of $ 0.19 million

was interest free and has no assets pledged for this loan.

As of June 30, 2022, loan payables were $ 0.18

million, which consisted of the loan payable of $ 0.18 million to Shaanxi Entai Bio-Technology Co., Ltd.

The loan from Shaanxi Entai Bio-Technology Co.,

Ltd of $ 0.18 million was interest free and has no assets pledged for this loan from August 1, 2019 to August 1, 2024.

As of December 31, 2021, loan payables were $ 0.19

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

The loan from Shaanxi Entai Bio-Technology Co., Ltd of $ 0.19 million

was interest free and has no assets pledged for this loan.

The loan from Shaanxi Entai Bio-Technology Co.,

Ltd of $ 0.19 million was interest free and has no assets pledged for this loan from August 1, 2019 to August 1, 2024.

ACCRUED EXPENSES AND OTHER PAYABLES

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CONVERTIBLE NOTES PAYABLE

As of March 31, 2022 and December 31, 2021, convertible

As of June 30, 2022 and December 31, 2021, convertible

debt consisted of the following:

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DEFERRED LIABILITIES

As of March 31, 2022, the balance of deferred

As of June 30, 2022, the balance of deferred liabilities

mainly represented an amount of $ 7.30 million that arose from the payment for the remaining 40 % of the Purchase Price of the acquisition

of Nice Talent Asset Management Limited (“Nice Talent”).

20% of the Purchase Price (current $3.74 million, non-current $3.56

million) shall be paid in shares of common stock of the Company upon the completion of the audited reports for Nice Talent for each of

the years ended on December 31, 2021 and December 31, 2022, respectively.

Nice Talent has met the performance requirements for the year

ended on December 31, 2021, however, the 20% of the Purchase Price has not been paid in the shares of common stock of the Company as of

the date of this report.

As of December 31, 2021, the balance of deferred

liabilities mainly represented an amount of $ 7.12 million that arose from the payment for the remaining 40 % of the Purchase Price of the

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of the years ended on December 31, 2021 and December 31, 2022, respectively.

Nice Talent has met the performance requirements for

the year ended on December 31, 2021, however, the 20% of the Purchase Price has not been paid in the shares of common stock of the Company

as of the date of this report.

of December 31, 2021, the balance of deferred liabilities mainly represented an amount of $ 7.12 million that arose from the payment for

the remaining 40 % of the Purchase Price of the acquisition of Nice Talent Asset Management Limited (“Nice Talent”).

the Purchase Price (current $ 3.74 million, non-current $ 3.38 million) shall be paid in shares of common stock of the Company upon the

completion of the audited reports for Nice Talent for each of the years ended on December 31, 2021 and December 31, 2022, respectively.

RELATED PARTY TRANSACTION

As of March 31, 2022, the amounts due to the related

parties were consisted of the followings:

Shaanxi Chunlv Ecological Agriculture Co.

Shaanxi Fu Chen Venture Capital Management Co.

holds 80% interest of Chunlv;

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

Accrued expenses, interest free and payment on demand.

Deputy General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

As of June 30, 2022, the amounts due to the related

parties consisted of the followings:

General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

Vice president of the Company

Accrued expenses, interest free and payment on demand.

Future Supply Chain Co., Ltd.

Fu Chen holds 100% interest of this company

Accrued expenses, interest free and payment on demand.

Reits (Beijing) Technology Co., Ltd

Zhi Yan is the legal representative of this company

Acquisition of intangibles upon the full completion of the online platform

pursuant to an agreement originally entered between parties before Zhi Yan became a related party.

The amount is interest free and payment

Shaanxi Fuju Mining Co., Ltd

Fu Chen holds 80% interest of the company

Accrued expenses, interest free and payment on demand.

As of March 31, 2022, the amounts due from the

related parties were consisted of the followings:

A shareholder of a Company’s subsidiary

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

Amount is interest free and paument on demand.

Chief Executive Officer of a

subsidiary of the Company and Chief Strategy Officer of the Company

Loan receivables, interest free and payment on demand.

Shaanxi Fu Chen Venture Capital Management Co.

Two outside shareholders of the Company are shareholders of Fu

Loan receivables, interest free and payment on demand.

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.

The amount is interest free and payment on demand.

As of June 30, 2022, the amounts due from the

related parties consisted of the followings:

Deputy General Manager of a subsidiary of the Company and VP of the blockchain division of the Company

Prepaid expenses, interest free and payment on demand.

Chief Financial Officer of the Company

Prepaid expenses, interest free and payment on demand.

As of December 31, 2021, the amounts due to the

related parties were consisted of the followings:

Chief Executive Officer of a subsidiary of the Company and Chief Strategy Officer of the Company

Prepaid expenses, interest free and payment on demand.

As of December 31, 2021, the amounts due

to the related parties consisted of the followings:

General Manager of a subsidiary of the Company

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Other payables, interest free and payment on demand.

Deputy General Manager of a subsidiary of the Company

Deputy General Manager of a subsidiary of the Company and VP of the blockchain

division of the Company

Accrued expenses, interest free and payment on demand.

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Other payables, interest free and payment on demand.

As of December 31, 2021, the amounts due from

the related parties were consisted of the followings:

As of December 31, 2021, the amounts due

from the related parties consisted of the followings:

Shaanxi Fu Chen Venture Capital Management Co.

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Amount is interest free and payment on demand.

The related party transactions

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.

related party transactions 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 United States federal taxation.

The applicable tax rate is 21 % in 2022 and 2021.

No provisions

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

taxable income for the three months ended March 31, 2022 and 2021.

the three months ended March 31, 2022 and 2021, the Company had current income tax expenses of $ 187,953 and nil , respectively.

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

taxable income for the six months ended June 30, 2022 and 2021.

For the six months ended June 30, 2022 and 2021, the Company had current income tax expenses of $ 311,741 and nil , respectively.

The Company evaluates the level of authority for

12 unchanged sentences

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.

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

10 unchanged sentences

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

Future Fin Tech (HongKong) Limited, QR (HK)

Limited and Nice Talent Asset Management Limited is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable

income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws.

The applicable tax

rate is 16.5 % in Hong Kong.

Future Fin Tech (HongKong) Limited, QR (HK) Limited

and Nice Talent Asset Management Limited is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as

reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws.

The applicable tax rate is 16.5 %

in Hong Kong.

FTFT UK LIMITED is incorporated in United Kingdom

8 unchanged sentences

The applicable tax rate is nil in British Virgin Island.

Reconciliation of the differences between the

statutory EIT rate applicable to profits of the consolidated entities and the income tax expenses of the Company:

Reconciliation

of the differences between the statutory EIT rate applicable to profits of the consolidated entities and the income tax expenses of the

Loss before taxation

1 unchanged sentence

$ ( 1,817,707 )

PRC statutory tax rate

Computed expected benefits

Others, primarily the differences in tax rates

Effect of tax losses not recognized

Notional tax on profit before CIT and Hong Kong

Computed expected tax expense

( 1,180,791 )

Others, primarily the difference in tax rates

Deferred tax assets losses not recognized

IMPAIRMENT LOSS

The Company recorded $ 0.70 million of impairment

loss in three months ended 2022 relating to the short term investment mainly due to Future Private Equity Fund Management (Hainan) Co.,

loss in six months ended 2022 relating to the short term investment mainly due to Future Private Equity Fund Management (Hainan) Co.,

invested $ 1.94 million (RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types

3 unchanged sentences

According to the market value, the Company’s balance of the

short term investment was $ 1.8 million on March 31, 2022.

short term investment was $ 1.26 million on June 30, 2022.

SHARE BASED COMPENSATION

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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 abovementioned consultant fee to the Consultant.

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

On February 23, 2020,

23 unchanged sentences

The restriction

amounted to $ 26.49 million (RMB 168,239,218 ) as of March 31, 2022.

amounted to $ 25.95 million (RMB 168,239,218 ) as of June 30, 2022.

Except for the above or disclosed elsewhere, there is no other restriction

1 unchanged sentence

DISCONTINUED OPERATIONS

On November 12, 2020, CCM Tianjin and Chain Cloud Mall Logistics Center

(Shanxi) Co., Ltd.

entered into agreements to transfer their ownership of Hedetang Farm Products Trading Markets (Mei county) Co., Ltd.

(“Hedetang Farm”) to third parties and the Company has discontinued the operations of Hedetang Farm.

However, the ownership

transfer process with local government was delayed due to COVID-19.

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

was deregistered.

On April 9, 2021, FT Commercial Management (Beijing)

Co., Ltd was deregistered, resulting in a loss on disposal of $ 351,914 .

On August 2, 2021, Guangchengji (Guangdong) Industrial

Co., Ltd was sold to a third party.

On November 4, 2021, Future Supply Chain Co.,

Ltd was transferred to a third party.

Loss from discontinued operations

for March 31, 2022 and 2021 was as follows:

was dissolved and deregistered.

On August 2, 2021, the Company sold Guangchengji

(Guangdong) Industrial Co., Ltd.

to an unrelated third party.

On September 2, 2021, Future Supply Chain Co.,

discontinued its operations, and on November 4, 2021, it was transferred to Shaanxi Fu Chen Venture Capital Management Co.

On June 27, 2022, Chain Cloud Mall Logistics Center

(Shanxi) Co., Ltd.

was dissolved and deregistered.

Loss from discontinued operations for June 30, 2022

and 2021 was as follows:

Three Months Ended

Six Months Ended

COST OF SALES

1 unchanged sentence

General and administrative

(Recovery) of doubtful debts

Bad debt provision

OTHER INCOME (EXPENSE)

Interest income

other income (expenses)

Other income(expenses) net

Income from discontinued operations before income tax

Income tax provision

Income from discontinued operation before noncontrolling interest

Loss on disposal of discontinued operations

LOSS FROM DISCONTINUED OPERATION

$ ( 256,007 )

Income from discontinued operation before non-controlling interest

(Loss) Income on disposal of discontinued operations

(LOSS) INCOME FROM DISCONTINUED OPERATION

The major components of assets and liabilities

related to discontinued operations are summarized below:

Property, plant and equipment, net

Other current assets

Amount due from related parties

1 unchanged sentence

Accrued expenses

Amount due from related parties

Amount due to related parties

Total liabilities related to discontinued operations

4 unchanged sentences

The Company operates in four segments starting in fiscal

shared shopping mall membership fee coal and aluminum ingots supply chain financing service and trading

business and asset management service and others.

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 services during the second quarter of 2021 and the Company acquired Nice Talent and started to provide

asset management services since August 2021.

“shared shopping mall membership fee coal and aluminum ingots supply chain financing service and trading business and asset

management service and others”.

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

services during the second quarter of 2021 and the Company acquired Nice Talent and started to provide asset management services since

Some of our operation might not individually meet

8 unchanged sentences

Segment profit represents the gross profit of each reportable segment.

As of March 31, 2022:

aluminum ingots

financing/trading

Three months ended June 30, 2022

Reportable segment revenue

2 unchanged sentences

Segment gross profit

As of March 31, 2021:

Three months ended June 30, 2021

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Six months ended June 30, 2022:

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Six months June 30, 2021:

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

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’ fees.

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

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’ fees.

The Company timely removed the case to the United

2 unchanged sentences

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.

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

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.

On November 10, 2021, the Court entered an Order granting the Company’s motion to dismiss

FT Global’s fraud claim and breach of contract claim as to the disclosure of its confidential and proprietary information.

The Court denied the Company’s motion to dismiss FT Global’s i) breach of contract claim for failure to pay FT Global pursuant

to the terms of the exclusive placement agent agreement;

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.

On November 10, 2021, the Court entered an Order granting the Company’s motion to dismiss FT Global’s fraud claim and breach

of contract claim as to the disclosure of its confidential and proprietary information.

The Court denied the Company’s motion to

dismiss FT Global’s i) breach of contract claim for failure to pay FT Global pursuant to the terms of the exclusive placement agent

ii) claim for breach of the covenant of good faith and fair dealing;

claim for attorney’s fees, and the court concluded that additional information can be obtained through discovery.

Company timely filed an answer and defenses to FT Global’s complaint on November 24, 2021.

On January 3, 2022, the Company

propounded discovery requests upon FT Global, including interrogatories and requests for production of documents.

On March 23, 2022,

the Company propounded requests for admission upon FT Global.

On March 24, 2022, FT Global propounded discovery requests upon the

Company, including requests for production of documents and requests for admission.

On April 1, 2022, FT Global served its response to the Company’s

requests for production of documents.

On May 13, 2022, FT Global served its responses to the Company’s

interrogatories and requests for admissions.

On May 13, 2022, FT Global produced documents in response to the Company’s requests

for production of documents.

The Company will continue to vigorously defend the

action against FT Global.

and iii) claim for attorney’s fees, and the Court

concluded that additional information can be obtained through discovery.

The Company timely filed an answer and defenses to FT Global’s

complaint on November 24, 2021.

On January 3, 2022, the Company propounded discovery requests upon FT Global, including interrogatories

and requests for production of documents.

On March 23, 2022, the Company propounded requests for admission upon FT Global.

2022, FT Global propounded discovery requests upon the Company, including requests for production of documents and requests for admission.

On April 1, 2022, FT Global served its response to the Company’s requests for production of documents.

On May 13, 2022, FT Global

served its responses to the Company’s interrogatories and requests for admissions.

On May 13, 2022, FT Global produced documents

in response to the Company’s requests for production of documents.

On June 3, 2022, the Company produced documents in response to

FT Global’s requests for production of documents.

On August 3, 2022, the Company took the deposition of FT Global.

2022, FT Global took the deposition of the Company.

On August 3, 2022, the Court granted the parties’ Consent Motion to Extend Discovery

Period extending the discovery period from August 5, 2022 to September 14, 2022 and the deadline to file dispositive motions to October

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

RISKS AND UNCERTAINTIES

Impact of COVID 19

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.

In response to the evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines

of local authorities as it prioritizes the health and safety of its employees, contractors, suppliers and business partners.

in China were closed and the employees worked from home at the end of January 20200 until late March 2020.

The quarantines, travel restrictions,

and the temporary closure of office buildings have materially 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

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 continue to be negatively impacted by the outbreak, which in turn adversely affects the business of

our platform as a whole as well as our financial condition and operating results.

The outbreak has had and continues to have disruption

to our supply chain, logistics providers, customers or our marketing activities with the new variants of COVID-19, which could materially

adversely impact our business and results of operations.

Although China has already begun to recover from the outbreak of COVID-19, there

are still outbreak in various cities and provinces due to new variants, including the recent outbreak of Omicron variant in Xi’an

city, Hong Kong, Shanghai and Beijing in 2022 which have resulted quarantines, travel restrictions, and temporary closure of office buildings

and facilities in these cities.

The Company’s promotion strategy of CCM Shopping Mall previously mainly relied on the training of

members and distributors through meetings and conferences.

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.

In response to the

evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines of local authorities as it prioritizes the

health and safety of its employees, contractors, suppliers and business partners.

Our offices in China were closed and employees worked

from home at the end of January 2020 until late March 2020.

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 continue to be

negatively impacted by the outbreak, which in turn adversely affects the business of our platform as a whole as well as our financial

condition and operating results.

The outbreak has had and continues to have disruption to our supply chain, logistics providers, customers

or our marketing activities with the new variants of COVID-19, which could materially adversely impact our business and results of operations.

Although China has already begun to recover from the outbreak of COVID-19, there are still outbreak in various cities and provinces

due to new variants, including the recent outbreak of Omicron variant in Xi’an city, Hong Kong, Shanghai and Beijing in 2022 which

have resulted quarantines, travel restrictions, and temporary closure of office buildings and facilities in these cities.

The Company’s

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

Chinese government still puts a restriction on large gatherings.

These restrictions

made the promotion strategy for our 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 the lack of new subscribers, in June 2021, the Company suspended

its cross-border e-commerce platform NONOGIRL.

Also, since the second quarter of 2021, the Company has transformed its member-based Chain

Cloud Mall to a sale agent based eCAAS platform and began to provide supply chain financing services.

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 our business.

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

negatively affect our business and the value of our common stock.

as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing

in the future in the event that we require additional capital.

We currently believe that our financial resources will be adequate to see

us through the outbreak.

However, in the event that we do need to raise capital in the future, outbreak-related instability in the securities

markets could adversely affect our ability to raise additional capital.

Consequently, our results of

operations have been materially and adversely affected by COVID-19 pandemic.

Any potential further 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, new variants

of COVID-19, the 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.

These restrictions made the promotion strategy for our online e-commerce

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

to the lack of new subscribers, in June 2021, the Company suspended its cross-border e-commerce platform NONOGIRL.

Also, since the second

quarter of 2021, the Company has transformed its member-based Chain Cloud Mall to a sale agent based eCAAS platform and began to provide

supply chain financing services.

The global economy has also been materially negatively

affected by the COVID-19 and there is continued severe uncertainty about the duration and intensity of its impacts.

The Chinese and global

growth forecast is extremely uncertain, which would seriously affect customer spending on our business.

While 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.

a recession or market correction resulting from the spread of COVID-19 and its new variants could materially negatively affect our business

and the value of our common stock.

Further, as we do not have access to a revolving

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

require additional capital.

We currently believe that our financial resources will be adequate to see us through the outbreak.

in the event that we do need to raise capital in the future, outbreak-related instability in the securities markets could adversely affect

our ability to raise additional capital.

Consequently, our results of operations have been

materially and adversely affected by COVID-19 pandemic.

Any potential further 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, new variants of COVID-19,

the 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

13 unchanged sentences

SUBSEQUENT EVENTS

has evaluated subsequent events through the date of the issuance of the condensed consolidated financial statements and no subsequent

event is identified.

The Company has evaluated subsequent events through

the date of the issuance of the condensed consolidated financial statements and no subsequent event is identified.

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