What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-21 compared with 2022-08-15 · 451 added, 354 removed, 1069 unchanged (43% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

2 unchanged sentences

Accounts receivable, net

Notes receivable

Advances to suppliers and other current assets

10 unchanged sentences

Accounts payable

Notes payable

Accrued expenses and other payables

1 unchanged sentence

Dividend payables

Lease liability-current

Lease liability

Amounts due to related parties

4 unchanged sentences

Long term debt

Lease liability

Deferred liabilities

6 unchanged sentences

300,000,000 shares authorized;

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

73,114,147 shares and 70,067,147 shares issued and outstanding as of September 30, 2022 and December 31, 2021 respectively

Additional paid-in capital

8 unchanged sentences

Non-controlling interests

( 1,094,664 )

Total stockholders’ equity

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenue

1 unchanged sentence

General and administrative expenses

Research and dvelopment expenses

Research and development expenses

Stock compensation expense

Selling expenses

6 unchanged sentences

( 10,158,234 )

( 9,736,553 )

Other (expenses) income

1 unchanged sentence

Interest expenses

Other income (expenses), net

Total other income (expenses), net

Other income , net

Total other income, net

Loss from Continuing Operations before Income Tax

10 unchanged sentences

Discontinued Operations (Note 22)

(Loss) Gain on disposal of discontinued operations

Income from discontinued operations

Loss on disposal of discontinued operations

( 3,679,447 )

( 3,523,652 )

(Loss) Income from discontinued operations

( 3,633,897 )

( 10,494,177 )

( 8,668,956 )

( 11,694,964 )

Net Loss attributable to non-controlling interests

18 unchanged sentences

( 9,504,987 )

Net income (loss) from discontinued operations

Net (loss) from discontinued operations

( 3,859,791 )

( 2,647,316 )

Foreign currency translation – discontinued operations

Comprehensive income (loss) - discontinued operation

Comprehensive loss - discontinued operation

( 3,726,423 )

( 2,579,147 )

Comprehensive Loss

2 unchanged sentences

( 12,191,720 )

( 12,084,134 )

Net loss attributable to non-controlling interests

3 unchanged sentences

( 11,687,817 )

( 11,900,142 )

Earnings (Loss) per share:

5 unchanged sentences

Weighted average number of shares outstanding

* Reclassification -

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 June 30, 2021

Three Months ended September 30, 2021

comprehensive

Balance at March 31, 2021

Balance at June 30, 2021

$ 202,266,182

2 unchanged sentences

Issuance of common stocks - cash

Issuance of common stocks-non cash

Net loss from continued operations

2 unchanged sentences

Net income from discontinued operations

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at June 30, 2021

( 3,679,447 )

( 3,546,079 )

Balance at September 30, 2021

$ 220,523,246

Three Months ended June 30, 2022

$ ( 135,895,273 )

$ ( 787,184 )

$ ( 231,451 )

Three Months ended September 30, 2022

comprehensive

Balance at March 31, 2022

Balance at June 30, 2022

$ 221,416,496

4 unchanged sentences

( 3,633,897 )

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

1 unchanged sentence

( 1,834,957 )

Disposition of discontinued operation

Balance at June 30, 2022

Balance at September 30, 2022

$ 222,693,189

2 unchanged sentences

$ ( 1,094,664 )

Six Months ended June 30, 2021

Nine Months ended September 30, 2021

comprehensive

4 unchanged sentences

Issuance of common stocks - cash

Issuance of common stocks-non cash

Net loss from continued operations

3 unchanged sentences

Share-based payments-service

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

Disposal of discontinued operation

Balance at June 30, 2021

( 3,523,652 )

( 3,455,483 )

Balance at September 30, 2021

$ 220,523,246

Six Months ended June 30, 2022

$ ( 135,895,273 )

$ ( 787,184 )

$ ( 231,451 )

Nine Months ended September 30, 2022

comprehensive

7 unchanged sentences

Share-based payments-service

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

2 unchanged sentences

Disposition of discontinued operation

Balance at June 30, 2022

Balance at September 30, 2022

$ 222,693,189

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 11,694,964 )

Net (loss) income from discontinued operation

Net loss from discontinued operation

( 2,647,316 )

Net loss from continuing operations

8 unchanged sentences

Accounts receivable

Notes receivable

( 8,290,510 )

1 unchanged sentence

( 1,079,100 )

( 1,690,100 )

Advances to suppliers and other current assets

( 5,502,062 )

( 5,642,045 )

Notes payable

Accounts payable

3 unchanged sentences

Accrued expenses

( 1,398,587 )

Taxes payable

Advances from customers

Net Cash Used in Operating Activities – Continued Operations

( 5,129,561 )

( 3,077,432 )

Net Cash Used in Operating Activities – Discontinued Operations

Net cash provided by (used in) operating activities – continued operations

( 19,812,246 )

Net cash provided by operating activities – discontinued operations

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

( 19,810,956 )

( 6,308,385 )

Acquisition of a subsidiary - NTAM, net of cash

Disposal of a subsidiary - Guangchengji, net of cash

Repayment of loan receivable

2 unchanged sentences

( 14,440,605 )

( 6,706,933 )

Net cash used in investing activities from discontinuing operations

5 unchanged sentences

Proceeds from loan payable

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of change in exchange rate

( 3,201,964 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

( 17,308,858 )

4 unchanged sentences

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Issuance of common stocks

Deferred liabilities

8 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, 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.

(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, money

transfer service, asset 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, money transfer service and cryptocurrency market data service.

On May 11, 2021, the Company established Future

35 unchanged sentences

On December 15, 2021, the Company established

FTFT Supercomputing Inc.

FTFT Super Computing Inc.

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

2 unchanged sentences

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 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 .

The Company 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.

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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.

adjustments, necessary to present fairly the financial position as of September 30, 2022 and the results of operations and cash flows

for the periods ended September 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 nine months ended September 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

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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

1 unchanged sentence

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.

The Company incurred operating losses amounted

$ 8.67 million and may continue to incur operating losses 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.

The ability of the Company to continue as a going

8 unchanged sentences

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,

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

Level 1 - Quoted prices in active markets for identical

assets or liabilities.

Level 1 - Quoted prices in active markets for identical assets or liabilities.

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

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following table.

Three Months ended June 30, 2022:

Loss from continuing operations

Three Months ended September 30, 2022:

Loss from continuing operations attributable to Future Fintech Group, Inc.

$ ( 3,531,499 )

Loss from discontinuing operations

Loss from discontinuing operations attributable to Future Fintech Group, Inc.

Loss available to common stockholders from continuing operations

6 unchanged sentences

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

Three Months ended September 30, 2021:

Loss from continuing operations attributable to Future Fintech Group, Inc.

$ ( 6,450,394 )

Income from discontinuing operations

Loss from discontinuing operations attributable to Future Fintech Group, Inc.

$ ( 3,859,791 )

Loss available to common stockholders from continuing operations

$ ( 6,450,394 )

Income available to common stockholders from discontinuing operations

Loss available to common stockholders from discontinuing operations

$ ( 3,859,791 )

Dilutive EPS:

3 unchanged sentences

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

$ ( 3,859,791 )

Loss from discontinuing operations

For the nine months ended September 30, 2022:

Loss from continuing operations attributable to Future Fintech Group, Inc.

$ ( 8,164,899 )

Loss from discontinuing operations attributable to Future Fintech Group, Inc.

Loss available to common stockholders from continuing operations

6 unchanged sentences

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

For the nine months ended September 30, 2021:

Loss from continuing operations attributable to Future Fintech Group, Inc.

$ ( 8,863,656 )

Income from discontinuing operations

Loss from discontinuing operations attributable to Future Fintech Group, Inc.

$ ( 2,647,316 )

Loss available to common stockholders from continuing operations

$ ( 8,863,656 )

Income available to common stockholders from discontinuing operations

Loss available to common stockholders from discontinuing operations

$ ( 2,647,316 )

Dilutive EPS:

3 unchanged sentences

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

$ ( 2,647,316 )

Cash and Cash Equivalents

2 unchanged sentences

maturity of three months or less.

Deposits in banks in the PRC are only insured

by the government up to RMB 500,000 , and are consequently exposed to risk of loss.

The Company believes the probability of a bank failure,

causing loss to the Company, is remote.

Deposits in banks in the PRC and Hong Kong

are only insured by the government up to RMB 500,000 and HK$ 500,000 , respectively, and are consequently exposed to risk of loss.

Company believes the probability of a bank failure, causing loss to the Company, is remote.

Receivable and Allowances

22 unchanged sentences

The Company has assessed its accounts receivable

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

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

Upon such credit terms, bad debt expense was $ 1,947

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.

and $( 15,255 ) during the nine months ended September 30, 2022 and 2021, respectively.

There is no accounts receivable balance overdue

for over 90 days as of September 30, 2022 and December 31, 2021.

Revenue Recognition

48 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 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.

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

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 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

5 unchanged sentences

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.

to USD was 7.10 and 6.38 at the balance sheet dates of September 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 6.61 and

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

6.47 for nine months ended September 30, 2022 and 2021, respectively.

The exchange rate we used to convert HKD to USD

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

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

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

and expenses.

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

The exchange rate we used to convert GBP to USD

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

was 0.89 at the balance sheet dates of September 30, 2022.

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

and expenses.

The average exchange rate we used to convert GBP to USD was 0.80 for nine months ended September 30, 2022.

The exchange rate we used to convert AED to USD

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

was 3.66 at the balance sheet dates of September 30, 2022.

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

and expenses.

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

The exchange rate we used to convert PYG to USD

was 7078.87 at the balance sheet dates of September 30, 2022.

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

and expenses.

The average exchange rate we used to convert PYG to USD was 6903.82 for nine months ended September 30, 2022.

Translation adjustments are reported separately

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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.

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

Short-term investments

2 unchanged sentences

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

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

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

investments amounted to $ 0.97 million and $ 2.19 million, respectively.

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dated July 31, 2019.

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.

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.

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.

Zeyao 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

14 unchanged sentences

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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assets and liabilities are as follows:

September 30,

Current assets

4 unchanged sentences

$ ( 186,992 )

September 30,

Current liabilities:

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

ACCOUNTS RECEIVABLE

Accounts receivable, net consist of the following:

September 30,

Coal and Aluminum Ingots Supply Chain Financing/Trading

3 unchanged sentences

of accounts receivable, net of specific allowances for doubtful accounts.

September 30,

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 June 30, 2022, the balance of other receivables

was $ 3.17 million.

On September 1, 2021, FTFT UK Limited, a company organized under the laws of United Kingdom and a wholly owned subsidiary

of the Company entered into a Share Purchase Agreement (the “Agreement”) with Rahim Shah, a resident of United Kingdom (“Seller”).

Under this agreement, FTFT UK Limited (the “Buyer”) agreed to acquire 100 % of the issued and outstanding shares (the “Sale

Shares”) of Khyber Money Exchange Ltd.

(“Khyber”), a company incorporated in England and Wales from the Seller for a

total of Euros € 685,000 (“Purchase Price”).

Buyer deposited Euros € 685,000 ($ 0.72 million) for the Purchase Price

and £ 400,000 ($ 0.48 million) for cash balance expected to be left in the bank account of Khyber upon the closing (subject to refund

to the Buyer upon the actual amount in Khyber’s account at closing) to Buyer’s solicitors to be held by Buyer’s solicitors

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

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.

As of September 30, 2022, the balance of other

receivables was $ 3.04 million.

On September 1, 2021, FTFT UK Limited, a company

organized under the laws of United Kingdom and a wholly owned subsidiary of the Company entered into a Share Purchase Agreement (the

“Agreement”) with Rahim Shah, a resident of United Kingdom (“Seller”).

Under this agreement, FTFT UK Limited

(the “Buyer”) agreed to acquire 100 % of the issued and outstanding shares (the “Sale Shares”) of Khyber Money

Exchange Ltd.

(“Khyber”), a company incorporated in England and Wales from the Seller for a total of Euros € 685,000

(“Purchase Price”).

Buyer has paid Euros € 685,000 ($ 0.67 million) for the Purchase Price and £ 400,000 ($ 0.43

million) for cash balance expected to be left in the bank account of Khyber upon the closing (subject to refund to the Buyer upon the

actual amount in Khyber’s account at closing).

April 22, 2022, Champion Energy Services, LLC

and FTFT Supercomputing Inc.

signed 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

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 facilities.

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

1 unchanged sentence

LOAN RECEIVABLES

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

was $ 11.59 million, which was from third parties.

As of September 30, 2022, the balance of loan

receivables was $ 19.50 million, which was from third parties.

On September 8, 2021, FUCE Future Supply Chain

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

On July 14, 2022, Future Private Equity Fund Management

(Hainan) Co., Limited entered into a “Loan Agreement” with a third party.

Pursuant to the Loan Agreement, Future Private Equity

Fund Management (Hainan) Co.

, Limited loaned an amount of US$7.04 million (RMB50 million) to the third party at the annual interest rate

of 8% from July 15, 2022 to July 14, 2023.

On September 23, 2022, Nice Talent Asset Management

Limited entered into a “Loan Agreement” with a third party.

Pursuant to the Loan Agreement, Nice Talent Asset Management Limited.,

loaned an amount of US$0.88 million to the third party at the annual interest rate of 2% from September 23, 2022 to September 22, 2027.

SHORT TERM INVESTMENT

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

investment was $ 1.26 million.

As of September 30, 2022, the balance of short

term investment was $ 0.97 million.

On September 6, 2021, Future Private Equity Fund Management (Hainan) Co., Ltd.

invested $ 1.94 million (RMB 13,000,000 )

to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types of investment portfolios.

According to the market

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

invested $ 1.83 million

(RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types of investment portfolios.

to the market value, the Company’s balance of the short term investment was $ 0.97 million on September 30, 2022.

ADVANCES TO SUPPLIERS AND OTHER CURRENT

The amount of advances to suppliers and other

current assets consisted of the followings:

September 30,

Prepayments for Coal and Aluminum Ingots Supply Chain Financing/Trading

Prepaid expenses

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”)

As of September 30, 2022, the balance of goodwill

mainly represented an amount of $ 15.73 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

6 unchanged sentences

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 to Joy Rich as of the date of this report.

On August 6, 2021 (“Acquisition Date”),

the Company through its wholly owned subsidiary Future FinTech (Hong Kong) Limited., completed its acquisition of 90 % of the issued and

outstanding shares of Nice Talent from Joy Rich Enterprises Limited for HK$ 144,000,000 (the “Purchase Price”) which shall

be paid in the shares of common stock of the Company (the “Company Shares”).

60 % of the Purchase Price ($ 11.22 million) was

paid in 2,244,156 shares of common stock of the Company on August 4, 2021.

40 % of the Purchase Price ($ 7.21 million) shall be paid in

shares of common stock of the Company upon the completion of the audited reports for Nice Talent with 20 % 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 to Joy Rich as of the

date of this report.

for the year ended on December 31, 2021 and the first 20 % of the Purchase Price in shares of common stock of the Company has been paid

in July 2022, and the final 20 % of the Purchase Price has not been paid in the shares of common stock of the Company to Joy Rich as of

the date of this report as it is subject to the performance of Nice Talent for the year ended of December 31, 2022.

On August 6, 2021 (“Acquisition

Date”), the Company through its wholly owned subsidiary Future FinTech (Hong Kong) Limited., completed its acquisition of 90 %

of the issued and outstanding shares of Nice Talent from Joy Rich Enterprises Limited for HK$ 144,000,000 (the “Purchase

Price”) which shall be paid in the shares of common stock of the Company (the “Company Shares”).

Purchase Price ($ 11.22 million) was paid in 2,244,156 shares of common stock of the Company on August 4, 2021.

40 % of the Purchase

Price ($ 7.21 million) shall be paid in shares of common stock of the Company upon the completion of the audited reports for Nice

Talent with 20 % 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 and the first 20 % of the Purchase Price in shares of common stock of the Company has been paid in July 2022,

and the final 20 % of the Purchase Price has not been paid in the

shares of common stock of the Company to Joy Rich as of the date of this report as it is subject to the performance of Nice Talent for the year ended of December 31, 2022.

The transaction was accounted for in accordance

with the provisions of ASC 805-10, Business Combinations.

The Company retained an independent appraisal firm to advise management in the

determination of the fair value of the various assets acquired and liabilities assumed.

The Company retained an independent appraisal firm to advise management in

the determination of the fair value of the various assets acquired and liabilities assumed.

The values assigned in these financial statements

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

For the six months ended

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

For the nine months ended

September 30, 2022, the operating lease cost was $ 0.36 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.

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

rate were 1.92 years and 4.75 %, respectively.

Maturities of lease liabilities were as follows:

As of June 30,

From July 1, 2022 to July 31, 2022

As of September 30,

From October 1, 2022 to September 30, 2023

From October 1, 2023 to September 30, 2024

amounts representing interest

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Property and equipment consist of the following:

September 30,

Office equipment, fixtures and furniture

2 unchanged sentences

Construction in progress

Depreciation expense included in general and administration

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.

Depreciation expense included in general and

administration expenses for the nine months ended September 30, 2022 and 2021 was $ 137,187 and $ 14,018 , respectively.

Depreciation expense

included in cost of sales for the nine months ended September 30, 2022 and 2021 was $ 0 and $ 0 , respectively.

INTANGIBLE ASSETS

Intangible assets consist of the following:

September 30,

System and software

2 unchanged sentences

( 1,903,059 )

Amortization expense included in general and administration

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.

Amortization expense included in general and

administration expenses for the nine months ended September 30, 2022 and 2021 was $ 45,699 and $ 3,750 , respectively.

Amortization expense

included in cost of sales for the nine months ended September 30, 2022 and 2021 was $ 0 and $ 0 , respectively.

The estimated amortization is as follows:

As of September 30,

From October 1, 2022 to September 30, 2023

From October 1, 2023 to September 30, 2024

From October 1, 2024 to September 30, 2025

From October 1, 2025 to September 30, 2026

From October 1, 2026 to September 30, 2027

As of September 30, 2022, the balance of note

payable was $ 2.82 million.

The Company issues an acceptance bill $ 2.82 million

(RMB 20 million) to purchase coal.

The acceptance bill was issued on July 28, 2022 and has a maturity date of August 12, 2023 .

LONG TERM DEBT

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 September 30, 2022, loan payables were

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

2 unchanged sentences

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

On September 5,

2022, the Company pay it off to Shaanxi Entai Bio-Technology Co., Ltd.

ACCRUED EXPENSES AND OTHER PAYABLES

1 unchanged sentence

consisted of the followings:

September 30,

Legal fee and other professionals

1 unchanged sentence

CONVERTIBLE NOTES PAYABLE

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

debt consisted of the following:

( 1,163,146 )

As of September 30, 2022 and December 31, 2021,

convertible debt consisted of the following:

September 30,

DEFERRED LIABILITIES

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 September 30, 2022, the balance of

deferred liabilities mainly represented an amount of $ 7.39 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 $3.65 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 and the first 20% of the Purchase Price in shares of common stock of the Company has been paid in July 2022,

and the final 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 it is subject to the performance of Nice Talent for the year ended of December 31, 2022.

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

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

20 % of 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.

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”).

20 % of 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 June 30, 2022, the amounts due to the related

parties consisted of the followings:

As of September 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.

Alpha Yield Limited

Director and legal representative of NTAM

Accrued expenses, interest free and payment on demand

Reits (Beijing) Technology Co., Ltd

2 unchanged sentences

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

As of September 30, 2022, the amounts due from

the related parties consisted of the followings:

Vice president of the Company

Prepaid expenses, interest free and payment on demand.

3 unchanged sentences

Prepaid expenses, interest free and payment on demand.

As of December 31, 2021, the amounts due

to the related parties consisted of the followings:

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 and VP of the blockchain

division of the Company

Deputy General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

2 unchanged sentences

Other payables, interest free and payment on demand.

As of December 31, 2021, the amounts due

from the related parties 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.

3 unchanged sentences

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 payment on demand.

related party transactions have been approved by the Company’s Audit Committee.

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

2 unchanged sentences

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

each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures

taxable income for the nine months ended September 30, 2022 and

For the nine months ended September 30, 2022 and 2021, the Company had current income tax expenses of $ 513,178 and nil , respectively.

The Company evaluates the level of authority

for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures

the unrecognized benefits associated with the tax positions.

For the years ended March 31, 2022, the Company had no unrecognized tax benefits.

Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred

tax assets for certain subsidiaries and a VIE.

For the nine months ended September 30, 2022, the Company had no unrecognized

tax benefits.

Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to

realize the deferred tax assets for certain subsidiaries and a VIE.

The amount of unrecognized deferred tax liabilities

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The Company has not provided deferred taxes on

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

The Company has not provided deferred taxes on

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

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Since the Company intends

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

their immediate foreign holding companies in the foreseeable future.

Accordingly, the Company has not recorded any deferred taxes in relation

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

Effective on January 1, 2008, the PRC Enterprise

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

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

The tax rate for pre-tax profits below

RMB 1 million is 2.5%;

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

to their immediate foreign holding companies in the foreseeable future.

Accordingly, the Company has not recorded any deferred taxes

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

Effective on January 1, 2008, the PRC

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

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

tax rate for pre-tax profits below RMB 1 million is 2.5%;

the tax rate for pre-tax profits between RMB1 million to RMB 3 million is

E-Commerce Tianjin, Future Supply

(Chengdu) Co., Ltd.

E-Commerce Tianjin, Future Supply (Chengdu) Co., Ltd.

and Future Big Data (Chengdu) Co., Ltd.

were subject to an enterprise income tax rate of 2.5% and 10%.

Other subsidiaries

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.

were subject to an enterprise

income tax rate of 2.5%, 2.5% and 5%, respectively.

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

Each of Future Fin-Tech (Hong Kong) 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

Reconciliation of the differences between the

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

Nine Months Ended

September 30, 2022

Nine Months Ended

September 30, 2021

Loss before taxation

$ ( 4,723,164 )

$ ( 1,817,707 )

Notional tax on profit before CIT and Hong Kong

Computed expected tax expense

( 1,180,791 )

Others, primarily the difference in tax rates

2 unchanged sentences

The Company recorded $ 0.93 million of impairment

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

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

invested $ 1.83 million (RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types

2 unchanged sentences

in China in 2022, Ukraine war, inflation, looming recession worldwide.

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

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

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

the short term investment was $ 0.97 million on September 30, 2022.

SHARE BASED COMPENSATION

26 unchanged sentences

For the year ended December 31, 2020, the Company recorded stock related compensation of

$ 1.19 million, based on the stock closing price of $ 0.794 on the Agreement date, for the 1,500,000 shares which were released to the Consultant

immediately upon issuance.

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

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

25, 2022, the Company released the final 1,125,000 shares to the Consultant and the Company has recognized stock related compensation

of $ 0.89 million for the 1,125,000 shares.

$ 1.19 million, based on the stock closing price of $ 0.794 on the Agreement date, for the 1,500,000 shares which were released to the

Consultant immediately upon issuance.

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

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

On January 25, 2022, the Company released the final 1,125,000 shares to the Consultant and the Company has recognized stock

related compensation of $ 0.89 million for the 1,125,000 shares.

Restricted net assets

PRC laws and regulations permit payments of dividends

by the Company’s subsidiaries incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with

PRC accounting standards and regulations.

In addition, the Company’s subsidiaries incorporated in the PRC are required to annually

appropriate 10 % of their net income to the statutory reserve prior to payment of any dividends, unless the reserve has reached 50 % of

their respective registered capital.

Furthermore, registered share capital and capital reserve accounts are also restricted from distribution.

As a result of the restrictions described above and elsewhere under PRC laws and regulations, the Company’s subsidiaries incorporated

in the PRC are restricted in their ability to transfer a portion of their net assets to the Company in the form of dividends.

The restriction

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

on the use of proceeds generated by the Company’s subsidiaries to satisfy any obligations of the Company.

by the Company’s subsidiaries incorporated in the PRC only out of their retained earnings, if any, as determined in accordance

with PRC accounting standards and regulations.

In addition, the Company’s subsidiaries incorporated in the PRC are required to

annually appropriate 10 % of their net income to the statutory reserve prior to payment of any dividends, unless the reserve has reached

50 % of their respective registered capital.

Furthermore, registered share capital and capital reserve accounts are also restricted from

distribution.

As a result of the restrictions described above and elsewhere under PRC laws and regulations, the Company’s subsidiaries

incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company in the form of dividends.

The restriction amounted to $ 25.46 million (RMB 168,239,218 ) as of September 30, 2022.

Except for the above or disclosed elsewhere, there

is no other restriction on the use of proceeds generated by the Company’s subsidiaries to satisfy any obligations of the Company.

Payments-omnibus equity plan

On July 12, 2022 (the “Grant Date”),

the Compensation Committee of the Board of Directors (the “Board”) of the Company granted 3,047,000 shares of common stock

of the Company, par value $ 0.001 (the “Shares”), pursuant to the Company’s 2020 Omnibus Equity Plan, to certain officers

and employees of the Company and its subsidiaries (the “Grantees”), including:

800,000 shares to Shanchun Huang, Chief Executive

Officer of the Company;

800,000 shares to Yongke Xue, President of the Company;

100,000 shares to Ming Yi, Chief Financial Officer of

the Company, 547,000 shares to Peng Lei, general manager of a subsidiary of the Company, 300,000 shares to Pang Dong, general manager

of a subsidiary the Company , and 500,000 shares to Kai Xu, Deputy General Manager of a subsidiary of the Company and vice president of

blockchain division of the Company (collectively, the “Grants”).

The Grants vested immediately on the Grant Date and each

of the Grantees also entered into an Unrestricted Stock Award Agreement with the Company on July 12, 2022.

As the closing price of the

Company stock was $ 0.42 on July 12, 2022, the Company recorded an expense of $ 1.28 million in the third quarter of fiscal year 2022.

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

DISCONTINUED OPERATIONS

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

On March 18, 2021, Chain Future Digital Tech

(Beijing) Co., Ltd.

was deregistered.

6 unchanged sentences

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.

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:

Loss from discontinued operations for September 30, 2022 and 2021

was as follows:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

COST OF SALES

1 unchanged sentence

General and administrative

Selling expenses

Bad debt provision

1 unchanged sentence

Interest income

Other income(expenses) net

Interest expenses

Other income net

Income from discontinued operations before income tax

2 unchanged sentences

(Loss) Income on disposal of discontinued operations

( 3,679,447 )

( 3,523,652 )

(LOSS) INCOME FROM DISCONTINUED OPERATION

( 3,859,791 )

( 2,647,316 )

The major components of assets and liabilities

related to discontinued operations are summarized below:

September 30,

Property, plant and equipment, net

9 unchanged sentences

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

The Company operates in four segments starting in fiscal

The Company operated 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”.

management service and others” and operates in three segment in 2022:

“coal and aluminum ingots supply chain financing service

and trading business, 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.

gatherings in China, which have made the promotion strategy for its online e-commerce platform difficult to implement and the Company

has experienced difficulties to subscribe new members for its online e-commerce platform.

Due to lack of new members, difficulties in

1 unchanged sentence

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

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

Some of our operation might not individually

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

information provided to the chief operating decision maker.

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

assessing performance and allocating resources among the segments.

The chief operating decision maker evaluates the results of each segment

in assessing performance and allocating resources among the segments.

Since there is an overlap of services and products between different

3 unchanged sentences

Segment profit represents the gross profit of each reportable segment.

Three months ended June 30, 2022

Three months ended September 30, 2022

Reportable segment revenue

2 unchanged sentences

Segment gross profit

Three months ended June 30, 2021

Three months ended September 30, 2021

Reportable segment revenue

2 unchanged sentences

Segment gross profit

Six months ended June 30, 2022:

Nine months ended September 30, 2022:

Reportable segment revenue

2 unchanged sentences

Segment gross profit

Six months June 30, 2021:

Nine months September 30, 2021:

Reportable segment revenue

2 unchanged sentences

Segment gross profit

$ ( 247,611 )

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

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.

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

46 unchanged sentences

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.

On October 12, 2022, the Company filed a motion for summary judgment on all claims asserted by FT Global in this lawsuit.

November 2, 2022, FT Global filed its opposition to the Company’s motion for summary judgment.

On November 16, 2022, the Company

filed its reply in support of its motion for summary judgement on all claims asserted by FT Global in this lawsuit.

The Company will continue

to vigorously defend the action against FT Global.

RISKS AND UNCERTAINTIES

12 unchanged sentences

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

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 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.

or our marketing activities with the new variants of COVID-19, which could materially adversely impact our business and results of operations, especially to our supply chain financing and trading business during the first quarter of 2022.

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

20 unchanged sentences

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.

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.

1 unchanged sentence

our ability to raise additional capital.

Consequently, our results of operations have been

materially and adversely affected by COVID-19 pandemic.

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.

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

3 unchanged sentences

We are considered foreign persons or

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

persons and foreign funded enterprises.

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

persons and foreign invested enterprises.

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

6 unchanged sentences

SUBSEQUENT EVENTS

The Company 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