Future FinTech Group Inc. 10-K

ITEM 9A – CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2022. 68 The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by a company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2022, due to a material weakness in our internal control over financial reporting. We have weakness of controls over i) loans to third parties; ii) identify the related party transaction; iii) assessment for impairment and iv) lack sufficient accounting personnel with the appropriate level of knowledge, experience and training in U.S. GAAP and SEC reporting requirements. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our consolidated financial statements in accordance with U.S. GAAP. Our accounting policies and internal controls over financial reporting, established and maintained by management, are under the general oversight of the Board’s audit committee. Our internal control over financial reporting includes those policies and procedures that: ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed our internal control over financial reporting as of December 31, 2022. The standard measures adopted by management in making its evaluation are the measures in the Internal-Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management’s assessment, our CEO and CFO concluded that our internal control over financial reporting as of December 31, 2022 was ineffective. We have taken, and will take, certain actions to remediate the material weakness related to our lack of U.S. GAAP and SEC reporting experience. We engaged a consultant with U.S. GAAP knowledge and experience to supplement our current internal accounting personnel and assist us in the preparation of our financial statements to ensure that our financial statements are prepared in accordance with U.S. GAAP. We will engage an internal control consultant to improve our internal control procedures on loans to third parties, related party transactions management and assessment for impairment. We are also planning to arrange additional training of internal control for our employees and management on disclosure controls and procedures. The Company continues to make efforts to implementing our existing and newly adopted procedures to improve our disclosure controls and internal controls over financing reporting. Changes to Internal Control over Financial Reporting Other than discussed above, there has been no change to our internal control over financial reporting that occurred during the period covered by this annual report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B – OTHER INFORMATION None ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 69 PART III ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Executive Officers The following table sets forth as of April 12, 2023, the names, positions and ages of our current executive officers and directors. Our directors serve until the next annual meeting of shareholders or until their successors are elected and qualified. Our officers are elected by the Board and their terms of office are, except to the extent governed by an employment contract, at the discretion of the Board. Name of Current Director and/or Executive Officer Age Position(s) Yongke Xue (1) 55 President Shanchun Huang (2) 57 Chief Executive Officer (“CEO”) and Director Ming Yi (3) 42 Chief Financial Officer (“CFO”) Yang Liu (4) 43 Chief Operating Officer (“COO”) Fuyou Li (5)(6) 69 Independent Director and Chairman of the Board of Directors Johnson Lau (5)(7) 49 Independent Director Mingjie Zhao (5)(8) 57 Independent Director Ying Li (9) 34 Vice President and Director (1) On September 2, 2016, Mr. Yongke Xue resigned from his position as the CEO of the Company and Chairman of the Board of the Directors of the Company. Mr. Yongke Xue was appointed CEO on December 24, 2014, and resigned as CEO of the Company on September 2, 2016. On January 5, 2018, Mr. Yongke Xue was reappointed as the Company’s CEO, effective on January 31, 2018. On March 4, 2020. Mr. Yongke Xue resigned from his position as the CEO of the Company. On June 23, 2021, Yongke Xue resigned as a director and the Chairman of the Board. Yongke Xue was appointed as President of the Company on June 23, 2021. (2) Shanchun Huang was appointed as CEO on March 4, 2020 and a member of the Board of Directors of the Company on March 4, 2020. (3) Ming Yi was appointed as CFO on November 30, 2020. (4) Yang Liu was appointed as the COO of the Company on November 16, 2020. (5) Member of the audit committee and compensation committee. (6) Fuyou Li was appointed a member of the Board of Directors of the Company on May 8, 2015 and as the Chairman of the Board on June 23, 2021. (7) Johnson Lau was appointed a member of the Board of Directors of the Company on December 23, 2014. (8) Mingjie Zhao was appointed a member of the Board of Directors of the Company on July 15, 2020. (9) Ms. Ying Li was appointed as a member of the Board on June 23, 2021. 70 Yongke Xue, President Mr. Yongke Xue served as a member of the Board from February 26, 2008 to June 23, 2021 and as the Chairman of the Board from January 31, 2018 to June 23, 2021 and from February 26, 2008 to September 2, 2016. Mr. Xue served as our Chief Executive Officer from January 31, 2018 to March 4, 2020. Mr. Xue also served in that position from February 26, 2008 to February 18, 2013, and from December 24, 2014 to September 2, 2016. Mr. Yongke Xue served as the director of SkyPeople Juice Group Co., Ltd. from December 2005 to February 2020. Mr. Xue graduated from Xi’an Jiaotong University with an MBA in 2000. Mr. Xue graduated with a Bachelor’s degree in Metal Material& Heat Treatment from National University of Defense Technology in July 1989. Shanchun Huang, Chief Executive officer and Director of the Board Mr. Shanchun Huang has served as the Chief Executive Officer of the Company and a member of the Board since March 4, 2020. Since April 2021, Mr. Huang has served as the Chairman of the Board of Directors of Mars Acquisition Corp., a Cayman Islands exempted company incorporated as a blank check company. Mr. Huang served as the president of Wealth Index (Beijing) Fund Management Co., Ltd., which provides private equity fund management service, from March 2011 to March 2020, and as the president of Wealth Index (Beijing) International Investment Consulting Co., Ltd., which provides investment management and consulting services for non-securities related business, from August 2004 to March 2020. From May 2001 to June 2004, Mr. Huang was the vice president of Zhejiang Geely Holding Group Corporation, a global automobile company headquartered in Hangzhou, China. Mr. Huang graduated from Hefei Staff University of Science and Technology in July 1986, majoring in news collection and editing. The Board believes that Mr. Huang’s significant experience in investment and management will be an asset to the Company and the Board. Ming Yi, Chief Financial Officer On November 30, 2020, the Board of the Directors appointed Mr. Ming Yi as the Chief Financial Officer (“CFO”) of the Company. Mr. Yi has served as an independent director of Hudson Capital Inc. (Nasdaq: HUSN) since March 31, 2020. Mr. Yi was the Chief Financial Officer of SSLJ.com Limited from July 2018 to July 2019. From June 2011 to August 2018, Mr. Yi was the Chief Financial Officer and a board member of Wave Sync Corp. (formerly known as China Bio-Energy Corp). From September 2009 to April 2011, he served as a senior manager at Qi He Certified Public Accountants Co. Ltd. Form July 2007 to August 2010, Mr. Yi was a senior auditor at Ernst & Young. Mr. Yi received his Bachelor of Science degree in Accounting from School of Business Administrations of Liaoning University in 2004 and his Master of Science degree in Accounting and Finance from Victory University, Australia in 2006. Mr. Yi is a Certified Public Accountant in Australia. Yang Liu, Chief Operating Officer On November 16, 2020, the Company appointed Mr. Yang (Sean) Liu as the Chief Operating Officer (“COO”) of the Company. Since April 2021, Mr. Liu has served as an independent director of Mars Acquisition Corp., a Cayman Islands exempted company incorporated as a blank check company. Mr. Liu served as Chairman and Chief Executive Officer of Color Star Technology Co. Ltd. (Nasdaq: CSCW) from March 2019 to July 2020. Mr. Liu served as President of MagniFinTech from May 2017 to March 2019 and served as Chief Executive Officer of Wave Sync Corporation from July 2017 to August 2018. Mr. Liu served as the Murex Regional Manager at UBS from November 2015 to May 2017. From June 2008 to November 2015, Mr. Liu served as a Senior Consultant, Client Coordinator and Single-point of Contact at Murex North America. Mr. Liu holds a Bachelor of Science degree in Electric Engineering from Tsinghua University in China and two Master’s degrees in Financial Mathematics and Electrical Engineering from New Mexico State University. Fuyou Li , Director and Chairman of the Board Mr. Fuyou Li has served as a member of the Board and a member of the audit and compensation committees of the Board since May 8, 2015. Mr. Li was appointed as the Chairman of the Board on June 23, 2021. Mr. Li graduated from Xi’an Jiaotong University with a doctor’s degree in economics. He has taught international finance as a professor at Xi’an Jiaotong University since 2000. The Board believes his qualifications, professional background and expertise in international finance are important to the Company and the Board. Johnson Lau , Director On December 23, 2014, the Board appointed Johnson Lau as a member of the Board of Directors of the Company. Mr. Lau is also the Chairman of Audit committee of the Board and a member of the Compensation Committee of the Board. 71 Mr. Lau is the Chief Financial Officer of Beauty Express Group Holdings Limited (“Beauty Express”), a private company in Hong Kong since April 2021. Mr. Lau is a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants and CPA Australia. Mr. Lau has over 20 years of experience in the accounting profession. Mr. Lau started his career in Deloitte in Hong Kong and Beijing from 1997 to 2004. Prior to joining Beauty Express in 2021, Mr. Lau worked in various public and private companies in the United States, England and Hong Kong as Director of Finance and CFO for over fifteen years. Mr. Lau was the chief financial officer and was subsequently an executive director of Haike Chemical Group Limited, a company listed on the London Stock Exchange (LSE code: HAIK), from December 2006 to March 2009. Mr. Lau subsequently resigned as chief financial officer and was redesignated as a non-executive director of Haike Chemical Group Limited in March 2009 and retired as a non-executive director in January 2010. From April 2009, Mr. Lau was employed by Auto China International Limited, a company listed on the NASDAQ Capital Market and subsequently quoted on the OTC Markets (OTC: AUTCF) as chief financial officer. He was redesignated as the director of finance in July 2009 and subsequently departed in June 2013. From June 2010 to January 2013, Mr. Lau was an independent director of Lizhan Environmental Corporation. Mr. Lau was the chief financial officer of SGOCO Group, Ltd. (NASDAQ: SGOC) from July 2013 to June 2015. Mr. Lau was the chief financial officer of China Golden Classic Group Limited (HKEX: 8281.HK) from July 2015 to July 2018. Mr. Lau was the chief financial officer of Dafy Holdings Limited (HKEX: 1826.HK) from August 2018 to October 2019. Mr. Lau was the chief financial officer of a Hong Kong incorporated private company from November 2019 to February 2021. He was an independent non-executive director of Winshine Science Company Limited (HKEX: 209.HK) from October 2017 to April 2019. Mr. Lau holds a bachelor’s degree in commerce from Monash University, Australia. The Board believes that Mr. Lau’s extensive knowledge and experience in accounting and his public company experience is important to the Company’s internal controls and financial reporting and its status as a US publicly traded company. Mingjie Zhao, Director Mr. Mingjie Zhao was appointed as a member of the Board and Chairman of the Compensation Committee and a member of Audit Committee of the Board on July 15, 2020. Mr. Zhao has served as a director of New York Hua Yang, Inc. since April 2018. From July 2016 to March 2018, Mr. Zhao served as Chief Executive Officer of TD Holdings, Inc. (formerly known as China Commercial Credit Inc. and Nasdaq: CLG). Mr. Zhao was the Chief Operating Officer and a director of New York Hua Yang, Inc. from September 2011 to July 2016. Mr. Zhao obtained his Master of Business Administration degree from University of Bridgeport in Connecticut in May 2003 and his Bachelor of Science degree from China Eastern Normal University in Shanghai, China in July 1985. The Board believes that Mr. Zhao’s experience and extensive knowledge in management and public company is essential to the Company. Ying Li, Director and Vice President Ms. Ying Li was appointed as a member of the Board on June 23, 2021 and she has served as a director of Alpha International Securities (HONG KONG) Limited since September 9, 2020 and as a director of Alpha International Financial Holdings Limited since February 5, 2020. Ms. Li has served as the vice president of the Company and a director of Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company since July 2016. From October 2011 to December 2019, Ms. Li served as the secretary of the Board of the Company. Ms. Li received her bachelor’s degree in English from Xi’an International Studies University in July 2010. The Board believes that Ms. Li’s extensive business and operational knowledge of the Company qualifies her as a member of the Board. All of our directors and officers reside outside of the United States, except for Mr. Yang Liu, Mingjie Zhao and Ying Li. Mr. Yongke Xu, Mr. Ming Yi and Fuyou Li reside in China, Mr. Shanchuan Huang resides in the U.K. and Mr. Johnson Lau resides in Hong Kong. Board Diversity Matrix Board Diversity Matrix (As of April 12, 2023) Total Number of Directors 5 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Asian (other than South Asian) 5 Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that directors, certain officers of the Company and ten percent shareholders file reports of ownership and changes in ownership with the Commission as to the Company’s securities beneficially owned by them. Such persons are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of such forms received by the Company, or on written representations from certain reporting persons, the Company believes that, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent shareholders were complied with during the fiscal year ended December 31, 2022, except for the following: Mr. Ming Yi, the CFO of the Company, did not file a Form 4 for the grant of stock award for 100,000 shares on July 12, 2022 until August 2, 2022; Mr. Shanchun Huang, the CEO of the Company, did not file a Form 4 for the grant of stock award for 800,000 shares on July 12, 2022 until July 20, 2022; and Mr. Yongke Xue, president of the Company, did not file Form 4 for the grant of stock award for 800,000 shares on July 12, 2022. 72 Code of Ethics We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our code of business conduct and ethics is available on our website at www.ftft.com and may be found by first clicking on “Investors,” then “Corporate Governance” and then “Governance Documents.” We intend to disclose any amendments to the code, or any waivers of its requirements, on our website. Committees of the Company’s Board of Directors The Board held 10 regularly scheduled and special meetings during fiscal year 2022. All of the directors attended (in person or by telephone) all of the Board meetings and any committees of the Board on which they served during the fiscal year. Directors are expected to use their best efforts to be present at the shareholders annual meeting. All of our directors attended the December 16, 2022 shareholders annual meeting by tele-conference or in person. Audit Committee On April 25, 2008, the Board formed an audit committee. Messrs. Lau, Li and Zhao currently serve on the audit committee, which is chaired by Mr. Lau. Each member of the audit committee is “independent” as that term is defined in the rules of the SEC and within the meaning of such term as defined under the rules of the NASDAQ Capital Market. The Board has determined that each audit committee member has sufficient knowledge in financial and auditing matters to serve on the audit committee. The audit committee held 5 meetings during fiscal year 2022, and all audit committee members attended each of those meetings. Our Board has determined that Mr. Lau is an “audit committee financial expert,” as defined under the applicable SEC rules. The audit committee has a written charter, which is available on the Company’s website at http://www.ftft.com. Management is responsible for the Company’s internal controls and the financial reporting process. The independent accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing reports thereon. The audit committee’s responsibility is to monitor these processes. The audit committee meets with management, the leader of the internal audit function, and the independent accounting firm to facilitate communication. In addition, the audit committee appoints the Company’s independent accounting firm and pre-approves all audit and non-audit services to be performed by the independent accounting firm. Compensation Committee On April 25, 2008, the Board formed a compensation committee. Messrs. Lau, Li and Zhao currently serve on the compensation committee, which is chaired by Mr. Zhao. Each member of the compensation committee is “independent” as that term is defined in the SEC rules and within the meaning of such term as defined under the rules of the NASDAQ Capital Market, a “nonemployee director” for purposes of Section 16 of the Exchange Act. No interlocking relationship exists between the Board or the compensation committee and the Board or compensation committee of any other company, nor has any interlocking relationship existed during the last fiscal year. The compensation committee held 3 meetings during fiscal year 2022. The compensation committee has a written charter, which is available on the Company’s website at http://www.ftft.com/. Our Board has delegated to the compensation committee the responsibility, among other things, to determine any and all compensation payable to our executive officers, including annual salaries, incentive compensation, long-term incentive compensation and any other compensation, and to administer our equity and incentive compensation plans applicable to our executive officers. Decisions regarding executive compensation made by the compensation committee are considered final and are not generally subject to Board review or ratification. Under the terms of its written charter, the compensation committee has the power and authority to delegate any of its duties and responsibilities to subcommittees as the compensation committee may deem appropriate in its sole discretion. Historically, the compensation committee has not generally delegated any of its duties and responsibilities to subcommittees, but rather has taken such actions as a committee, as a whole. Deliberations and decisions by the compensation committee concerning executive officers are made by the compensation committee, without the presence of the any executive officer of the Company. 73 Other Committees The Board may on occasion establish other committees, as it deems necessary or required. We do not currently have a standing nominating committee, or a committee performing similar functions. The full Board currently serves this function. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the Board. The Board will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment. There have been no material changes to the procedures by which security holders may recommend nominees to the Board. Board Leadership Structure Our Board of Directors is currently comprised of five members, including three independent directors who serve as members of our audit committee and compensation committee. Our Board leadership structure consists of a Chairman of the Board. Currently, Mr. Fuyou Li, an independent director, serves as Chairman of the Board. The Board of Directors believes that this leadership structure, with Mr. Li serving as the Chairman and Mr. Shanchun Huang serving as Chief Executive Officer, is appropriate at this time because it enables the Board, as a whole, to engage in oversight of management, promote communication and collaboration between management and the Board, and oversee governance matters, while allowing our Chief Executive Officer to focus on his primary responsibility, the operational leadership and strategic direction of the Company. In addition to chairing the Board, Mr. Li is a member of the Audit and Compensation Committees. Board independence and oversight of the senior management of the Company are enabled by the presence of independent directors who have a wide range of expertise and skills and have oversight over critical functions of the Company, such as the review of business development, evaluation and compensation of executive management, the nomination of directors. Our independent directors collectively provide additional strength and balance to our Board leadership structure. Compensation Committee Interlocks and Insider Participation None of the Company’s executive officers has served as a member of a compensation committee, or other committee serving an equivalent function, of any other entity whose executive officers serve as a director of the Company or member of the Company’s compensation committee. Family Relationships There are no family relationships between any current executive officer or director of the Company. ITEM 11 – EXECUTIVE COMPENSATION Compensation Discussion and Analysis Compensation Objectives We operate in a highly competitive and rapidly changing industry. The key objectives of our executive compensation programs are to: ● attract, motivate and retain executives who drive our success and industry leadership; and provide executive officers, with a salary and/or stock award on the market value of that role, and ● the individual’s demonstrated ability to perform that role. 74 Stock Incentive Plans On October 9, 2019, the Board of Directors of the Company approved and adopted the Future FinTech Group Inc. 2019 Omnibus Equity Plan (the “2019 Equity Plan”), which was approved by the shareholders of the Company on February 26, 2020. The 2019 Equity Plan permits the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”), restricted stock, unrestricted stock and restricted stock units (“RSUs”) to its employees of up to 3,000,000 shares of Common Stock. The 2019 Equity Plan has a total of 3,000,000 shares of Common Stock. The Company grant the 3,000,000 shares under 2019 Equity Plan to nine officers, employees and director of the Company on December 28, 2020. As of December 31, 2021, no shares of stock available for award under the 2019 Equity Plan. The Board of Directors of the Company approved and adopted the Future FinTech Group Inc. 2020 Omnibus Equity Plan (the “2020 Equity Plan”) on October 27, 2020, which was approved by the shareholders at the shareholders annual meeting on December 18, 2020. The 2020 Equity Plan has a total of 5,000,000 shares of Common Stock. The Company grant the 1,953,000 shares under 2020 Equity Plan to sixteen officers and employees of the Company on July 12, 2021, including 500,000 shares to Shanchun Huang, Chief Executive Officer of the Company; 300,000 shares to Yongke Xue, President of the Company; 20,000 shares to Ming Yi, Chief Financial Officer of the Company, and 40,000 shares to Yang Liu, Chief Operating Officer of the Company. On July 12, 2022, the Company granted 3,047,000 shares under the 2020 Equity Plan, to six officers and employees of the Company and its subsidiaries, including: 800,000 shares to Shanchun Huang, Chief Executive Officer of the Company, 800,000 shares to Yongke Xue, President of the Company, and 100,000 shares to Ming Yi, Chief Financial Officer of the Company. As of December 31, 2022, no shares of stock available for award under the 2020 Equity Plan. We believe that the future success of the Company depends, in large part, upon the ability of the Company to maintain a competitive position in attracting, retaining and motivating key personnel. What Our Executive Compensation Program is Designed to Reward Our executive compensation program is designed to reward each individually named executive officer’s contribution to the advancement of our overall performance and execution of our goals, ideas and objectives. It is designed to reward and encourage exceptional performance at the individual level in the areas of organization, creativity and responsibility while supporting our core values and ambitions. This in turn aligns the interest of our executive officers with the interests of our shareholders, and thus with our interests. Determining Executive Compensation The Board’s compensation committee reviews and approves the compensation for executive officers annually. The compensation committee considers the overall performance of the past year and the financial and operating plans for the upcoming year in determining the compensation for the executive officers. A named executive officer’s base salary is determined by an assessment of his/her sustained performance against individual job responsibilities, including, where appropriate, the impact of his/her performance on our business results, current salary in relation to the salary range designated for the job, experience and mastery, and potential for advancement. The compensation committee also annually reviews market compensation levels with comparable jobs in the industry to determine whether the total compensation for our officers remains in the targeted median pay range. Role of Executive Officers in Determining Executive Compensation The compensation committee determines the compensation for the CEO, which is based on various factors, such as level of responsibility and contributions to our performance. The CEO recommends the compensation for our executive officers (other than the compensation of the CEO) to the compensation committee. The compensation committee reviews the recommendations made by the CEO and determines the compensation of the CFO and the other executive officers. 75 Employment Agreements We did not have an employment agreement with our Mr. Yongke Xue when he served as our CEO. On June 24, 2021, we entered into an Employment Agreement with Mr. Xue upon his appointment as the president of the Company. The Employment Agreement has a term of one year and Mr. Xue receives compensation in the amount of $1 per year. We entered into an Employment Agreement with our CEO, Mr. Shanchun Huang, on March 7, 2020 with a term of one year, which was renewed until March 7, 2024. Mr. Huang receives compensation in the amount of $1 per year. On November 16, 2020, the Company entered into an employment agreement with Mr. Yang Liu as COO of the Company and the term of the agreement is for one (1) year, which has been renewed until November 16, 2023. The agreement provides that Mr. Liu receives compensation in the amount of $1 per year. On December 1, 2020, the Company entered into an employment agreement with Mr. Ming Yi as CFO of the Company and the term of the agreement is for one (1) year, which has been renewed until December 1, 2023. The agreement provides that Mr. Yi receives compensation in the amount of $4,000 per month before tax. Summary Compensation of Named Executive Officers Our executive officers do not receive any compensation from the Company for also serving as directors of the Company. The following table sets forth information concerning cash and non-cash compensation paid by the Company to our named executive officers for the years ended December 31, 2022 and 2021. Name and Principal Position Year Ended Salary ($) Bonus ($) Stock Awards ($) Option Awards Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Yongke Xue (1) 12/31/2021 $ 1 - 843,000 - - - - $ 843,001 12/31/2022 $ 5,352 - 336,000 - - - - $ 341,352 Shanchun Huang (2) 12/31/2021 $ 1 - 1,405,000 - - - - $ 1,405,001 12/31/2022 $ 1 - 336,000 - - - - $ 336,001 Ming Yi (3) 12/31/2021 $ 48,000 - 56,200 $ 104,200 12/31/2022 $ 48,000 - 42,000 - - - - $ 90,000 Kai Xu (4) 12/31/2021 $ 13,642 - 792,000 - - - - $ 805,642 12/31/2022 $ 35,682 210,000 $ 223,642 Yang Liu (5) 12/31/2021 $ 1 - 112,400 - - - - $ 112,401 12/31/2022 $ 99,500 - - - - - - $ 99,500 Zhi Yan(6) 12/31/2022 $ 26,761 $ 26,761 Peng Lei(7) 12/31/2022 $ 53,582 229,740 $ 283,322 (1) On March 4, 2020, Mr. Yongke Xue resigned as the CEO of the Company and on June 23, 2021, Mr. Xue was appointed as the president of the Company. The compensation committee of the Board granted him a stock award for 300,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2021 and a stock award for 800,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2022. (2) On March 4, 2020, Mr. Shanchun Huang was appointed as the CEO of the Company. The compensation committee of the Board granted him a stock award for 500,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2021 and a stock award for 800,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2022. 76 (3) On November 30, 2020, the Board of the Directors appointed Mr. Ming Yi as the CFO of the Company. The compensation committee of the Board granted him a stock award for 20,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2021 and a stock award for 100,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2022. (4) On November 16, 2020, the Board of the Directors appointed Mr. Yang Liu as the COO of the Company. The compensation committee of the Board granted him a stock award for 40,000 shares of common stock of the Company under 2020 Omnibus Equity Plan on July 12, 2021. (5) On February 28, 2019, the board of directors appointed Mr. Kai Xu as the COO of the Company. Since February 2020, Mr. Xu has no longer served as the COO of the Company and he continues to serve as deputy general manager in a subsidiary of the Company and the vice president of blockchain division of the Company. The compensation committee of the Board granted him a stock award for 500,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2022. (6) On February 9, 2018, the board of directors appointed Mr. Zhi Yan as the Chief Technology Officer (“CTO”) of the Company. Since February 2020, Mr. Yan has no longer served as the CTO of the Company and he continues to serve as the general manager of a subsidiary of the Company. The compensation committee of the Board granted him a stock award for 300,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2021. (7) The compensation committee of the Board granted him a stock award for 547,000 shares of common stock of the Company under 2020 Equity Plan on July 12, 2022. * The Company effected a 1 for 5 reverse stock split on February 1, 2023. Outstanding Equity Awards at December 31, 2022 No outstanding equity awards held by named executive officers as of December 31, 2022. Compensation of Directors The following table sets forth information concerning cash and non-cash compensation paid by us to our directors during 2022. Name Fees Paid in Cash ($) Stock Awards Option Awards Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Yongke Xue(1) $ — — — — — — $ — Shanchun Huang $ — — — — — — $ — Ying Li (2) $ — — — — — — $ — Fuyou Li (3) $ 18,000 — — — — — $ 18,000 Johnson Lau (4) $ 25,000 — — — — — $ 25,000 Mingjie Zhao(5) $ 25,000 — — — — — $ 25,000 (1) Yongke Xue resigned as a member and Chairman of the Board on June 23, 2021. (2) Ying Li was appointed as a director of the Board on June 23, 2021. (3) On May 8, 2015, the Board appointed Mr. Fuyou Li as a member of the Board of Directors and a member of both the audit committee and compensation committee. Before June 30, 2021, Mr. Li was entitled for $8,850 per annum as compensation for his service as director of the Company and a member of the audit committee and compensation committee. On June 23, 2021, the Board appointed Mr. Fuyou Li as the Chairman of the Board and his annual compensation increased to $18,000 after June 30, 2021. (4) On December 23, 2014, the Board appointed Johnson Lau as a member of the Board of Directors of the Company and he currently serves as the Chairman of Audit Committee and a member of Compensation Committee of the Board. Mr. Lau is entitled for $25,000 per annum as compensation for his current services as a director of the Company and chair of the audit committee and a member of compensation committee. (5) On July 15, 2020, the Board appointed Mr. Mingjie Zhao as a member of the Board and Chairman of the Compensation Committee and a member of Audit Committee of the Board. Mr. Zhao is entitled for $25,000 per annum as compensation for his current services as a director of the Company and chair of the compensation committee and a member of audit committee. 77 ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Security Ownership of Certain Beneficial Owners and Management The following table provides information concerning beneficial ownership of our capital stock as of April 12, 2022, by: ● each shareholder or group of affiliated shareholders who owns more than 5% of our outstanding capital stock; ● each of our named executive officers; ● each of our directors; and all of our directors and ● executive officers as a group. The following table lists the number of shares and percentage of shares beneficially owned based on 14,645,653 shares of our Common Stock outstanding as of April 12, 2023. On February 1, 2023, the Company effected a 1-for-5 Reverse Stock Split of the Company’s authorized shares and outstanding shares of common stock. Beneficial ownership is determined in accordance with the SEC rules, and generally includes voting power and/or investment power with respect to the securities held. Shares of Common Stock subject to options and warrants currently exercisable or exercisable within 60 days of April 12, 2023 or issuable upon conversion of convertible securities which are currently convertible or convertible within 60 days of April 12, 2023 are deemed outstanding and beneficially owned by the person holding those options, warrants or convertible securities for purposes of computing the number of shares and percentage of shares beneficially owned by that person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and investment power with respect to all shares of our Common Stock shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the principal address of each of the shareholders, named executive officers, and directors below is c/o Future FinTech Group, Inc., Americas Tower, 1177 Avenue of The Americas, Suite 5100, New York, NY 10036. Shares Beneficially Owned Name of Beneficial Owner Number Percent Directors and Named Executive Officers Yongke Xue (1) 650,093 4.4 % Shanchun Huang 260,000 1.8 % Ming Yi 24,000 * Ying Li - - Mingjie Zhao - - Yang Liu 8,000 * Fuyou Li - - Johnson Lau - - All current directors and name executive officers as a group (8 persons) 942,093 6.4 % 5% or Greater Shareholders Zeyao Xue (2) 2,602,525 17.8 % All 5% or Greater Shareholders 2,602,525 17.8 % * Less than 1% (1) Consists of (i) 293,416 shares owned directly by Golden Dawn International Limited, a British Virgin Islands company, (ii) 36,677 shares owned directly by China Tianren Organic Food Holding. Each of Golden Dawn International Limited and China Tianren Organic Good Holding are indirect subsidiaries of V.X. Fortune Capital Limited, a British Virgin Islands company and Yongke Xue is the sole director of V.X. Fortune Capital Limited and (iii) 320,000 shares owned directly by Yongke Xue. (2) Mr. Zeyao Xue, the son of Yongke Xue, holds all of the issued and outstanding capital stock of Fancylight Limited, which is the indirect owner of those shares held by Golden Dawn International Limited and China Tianren Organic Food Holding. As such, Mr. Zeyao Xue shares beneficial ownership of 330,093 of his shares with Mr. Yongke Xue. The address of Zeyao Xue is No.3, Xijuyuan Xiang, Lianhu District, Xi’an City, Shaanxi Province, China. 78 ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE For details of related party transactions, see Note 21 “Related Party Transaction” to our consolidated financial statements. Director Independence We currently have five directors. Three of our current directors, Messrs. Johnson Lau, Fuyou Li and Mingjie Zhao, have been determined by our Board to be “independent directors” as defined under the rules of the NASDAQ Capital Market, constituting a majority of independent directors of the Board as required by the rules of the NASDAQ Capital Market. ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES The following table shows the fees that we paid or accrued for audit and other services for fiscal years 2022 and 2021. All of the services described in the following fee table were approved in conformity with the audit committee’s pre-approval process. Audit Fees 2022 2021 Audit Fees $ 280,000 $ 250,000 Tax Fees — — All Other Fees — — Total $ 280,000 $ 250,000 Audit Fees The amounts set forth opposite “Audit Fees” above reflect the aggregate fees billed or billable by auditors Onestop Assurance PAC (“Onestop Assurance”) for the audit of our annual consolidated financial statements, review of quarterly financial information and audit services that are normally provided by the principal accountant in connection with regulatory filings or engagements. Onestop Assurance provided professional services for the audit of our fiscal years 2022 and 2021 financial statements and $280,000 and $250,000 was paid to Onestop Assurance for audit of our fiscal years 2022 and 2021 financial statements, respectively. Tax Fees The Board audit committee’s policy is to pre-approve all audit services and all non-audit services that our independent accountants are permitted to perform for us under applicable federal securities regulations. The audit committee’s policy utilizes an annual review and general pre-approval of certain categories of specified services that may be provided by the independent accountant, up to pre-determined fee levels. Any proposed services not qualifying as a pre-approved specified service, and pre-approved services exceeding the pre-determined fee levels, require further specific pre-approval by the audit committee. The audit committee has delegated to the Chairman of the audit committee the authority to pre-approve audit and non-audit services proposed to be performed by the independent accountants. Our audit committee was established in April 2008. All the services provided by our auditors in fiscal years 2022 were pre-approved by the audit committee. 79 Changes in Registrant’s Certified Accountant On April 25, 2021, the Audit Committee of the Board of Directors of Future FinTech Group, Inc. (the “Company”) dismissed BF Borgers CPA PC (“BF Borgers”) as the Company’s independent registered public accounting firm, effective immediately. BF Borgers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2020 and December 31, 2019 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit reports on the consolidated financial statements of the Company for the fiscal years ended December 31, 2020 and December 31, 2019 contained an uncertainty about the Company’s ability to continue as a going concern. During the Company’s two fiscal years ended December 31, 2020 and December 31, 2019 and in the subsequent interim period through April 24, 2021, there were (i) no disagreements between the Company and BF Borgers on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BF Borgers, would have caused BF Borgers to make reference to the subject matter of the disagreement in their reports on the financial statements for such years, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K. On April 25, 2021, the Audit Committee of the Board of Directors of the Company approved the engagement of Onestop Assurance PAC (“Onestop Assurance”) as the Company’s independent registered public accounting firm, effective immediately. The Audit Committee also approved Onestop Assurance to act as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2021. During the Company’s two fiscal years ended December 31, 2020 and December 31, 2019 and through April 24, 2021, neither the Company nor anyone on its behalf consulted Onestop Assurance regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company; or (ii) any matter that was either the subject of a disagreement or a reportable event as described above; and there was neither a written report nor was oral advice provided to the Company by Onestop Assurance that was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue. The Company reported its change in auditors in Current Report on Form 8-K, filed on April 29, 2021. 80 PART IV ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) FINANCIAL STATEMENTS: The following documents are filed as part of or are included in this Annual Report: 1. Financial statements listed in the Index to Financial Statements, filed as part of this Annual Report beginning on page F-1; and 2. Exhibits (b) EXHIBITS: Exhibit Index Exhibit Number Description 2.1 Share Exchange Agreement, dated as of February 22, 2008 by and among Pacific Industry Holding Group Co., Ltd., “Pacific,” Terrence Leong, SkyPeople Fruit Juice, Inc., the “Registrant,” and the shareholders of Pacific. Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed with the Commission on February 28, 2008. 3.1 Second Amended and Restated Articles of Incorporation, dated June 6, 2017. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on June 9, 2017. 3.2 Certificate of Designations, Preferences and Rights of the Registrant’s Series A Convertible Preferred Stock. Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the Commission on February 28, 2008. 3.3 Certificate of Designations, Preferences, Rights and Limitations of the Registrant’s Series B Convertible Preferred Stock. Incorporated by reference to Exhibit 3.2 to the Form 8-K filed with the Commission on February 28, 2008. 3.4 Amended and Restated Bylaws, dated June 6, 2017. Incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed with the Commission on June 9, 2017. 3.5 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 10, 2016. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 15, 2016. 3.6 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 14, 2018. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 16, 2018. 3.7 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 18, 2021. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 23, 2021. 3.8 Articles of Amendment to the Second Amended and Restated Articles of Incorporation of the Registrant filed with Department of State of Florida on January 26, 2023. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on January 31, 2023. 4.1 Form of Warrant. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Commission on April 13, 2017. 4.2 Form of Investors Warrant. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Commission on December 28, 2020. 4.3 Form of Placement Agent Warrant. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the Commission on December 28, 2020. 4.4 Description of Securities of the Registrant registered under Section 12 of the Securities Exchange Act of 1934, as amended.* 81 Exhibit Number Description 10.1 Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 14, 2011. 10.2 Indemnification Agreement Between SkyPeople Juice, Inc. and Yongke Xue. Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the Commission on August 15, 2011 10.3 Form of Securities Purchase Agreement, dated April 12, 2017. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on April 13, 2017. 10.4 Exclusive Operation and Use Rights Authorization Letter by Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., dated July 31, 2019. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.5 Exclusive Technology Consulting and Service Agreement by and between Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd. and Chain Cloud Mall E-commerce (Tianjin) Co., Ltd, dated July 31, 2019. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.6 Exclusive Purchase Option Agreement by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. Zeyao Xue and Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.7 Equity Pledge Agreement by and among by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. and Zeyao Xue, dated July 31, 2019. Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.8 Equity Pledge Agreement by and among by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. and Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.9 Power of Attorney issued by Zeyao Xue, dated July 31, 2019. Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.10 Power of Attorney issued by Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.11 Share Transfer Agreement by and between SkyPeople Foods Holdings Limited, a wholly owned subsidiary of Future FinTech Group Inc. and New Continent International Co., Ltd. dated September 18, 2019. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on September 23, 2019. 10.12 Three Party Cooperation Agreement by GlobalKey SharedMall Limited, a wholly owned subsidiary of Future FinTech Group Inc., Fan Zhang and Caixia Wang, dated November 8, 2019. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on November 14, 2019. 10.13 Consulting Service Agreement by and between Future FinTech Group Inc. and Dragon Investment Holding Limited (Malta) dated January 25, 202. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on January 29, 2020 10.14 Employment Agreement between Future FinTech Group Inc. and Shanchun Huang dated March 7, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 10, 2020. 10.15 Employment Agreement, by between Future FinTech Group Inc. and Jing Chen dated May 21, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on May 22, 2020. 10.16 Securities Purchase Agreement by and between Future FinTech Group Inc. and Qun Xie dated June 16, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on June 18, 2020. 10.17 Share Exchange Agreement by and among Future FinTech Group Inc., Future FinTech (Hong Kong) Limited, Nice Talent Asset Management Limited and Joy Rich Enterprises Limited dated July 13, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 16, 2020. 10.18 Director Agreement by and between Future FinTech Group Inc. and Mingjie Zhao dated July 15, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 17, 2020. 10.19 Employment Agreement by and between Future FinTech Group Inc. and Yang Liu dated November 16, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on November 18, 2020. 10.20 Employment Agreement by and between Future FinTech Group Inc. and Ming Yi dated December 1, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 2, 2020. 82 Exhibit Number Description 10.21 Share Exchange Agreement by and among Future FinTech Group Inc., Future FinTech (Hong Kong) Limited, Asiasens Investment Holding Pte. Ltd., and Asen Maneuvre Group Limited, dated December 18, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 18, 2020. 10.22 Form of Securities Purchase Agreement dated December 24, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 28, 2020 10.23 Form of Placement Agent Agreement dated December 24, 2020. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on December 28, 2020. 10.24 Form of Securities Purchase Agreement dated January 11, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on January 12, 2021. 10.25 Form of Placement Agent Agreement dated January 11, 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on January 12, 2021. 10.26 Form of Securities Purchase Agreement dated February 9, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on February 10, 2021. 10.27 Form of Placement Agent Agreement dated February 9, 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on February 10, 2021. 10.28 Share Exchange Agreement by and Among Future FinTech Group Inc., Future Supply Chain Co., Ltd., Sichuan Longma Electronic Technology Co. Ltd. and Sichuan Ticode Supply Chain Management Co., Ltd. dated on February 26, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 1, 2021. 10.29 Form of Securities Purchase Agreement dated April 1, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on April 2, 2021. 10.30 Form of Placement Agent Agreement dated April 1, 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on April 2, 2021. 10.31 First Amendment to Share Exchange Agreement by and among Future FinTech Group Inc., Future FinTech (Hong Kong) Limited, Nice Talent Asset Management Limited and Joy Rich Enterprises Limited dated April 9, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on April 12, 2021 10.32 Termination Agreement by and Among Future FinTech Group Inc., Future Supply Chain Co., Ltd., Sichuan Longma Electronic Technology Co. Ltd. and Sichuan Ticode Supply Chain Management Co., Ltd. dated on May 31, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on June 2, 2021. 10.33 Employment Agreement by and between Future FinTech Group Inc. and Mr. Yongke Xue dated on June 24, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on June 28, 2021 10.34 Securities Purchase Agreement by and between Future FinTech Group Inc. and certain Purchasers, dated July 26, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 28, 2021. 10.35 Share Purchase Agreement by and between FTFT UK Limited and Rahim Shah dated September 1, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on September 7, 2021. 10.36 Collateral Deed by and between FTFT UK Limited and Rahim Shah dated September 1, 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on September 7, 2021. 10.37 FTFT North American Ohio Cryptocurrency Mining Farm Cooperation Agreement by and between Future FinTech Group Inc. and APC Service Ltd. dated December 13, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 17, 2021. 10.38 Form of Unrestricted Stock Award Agreement by and between Future FinTech Group Inc. and Grantees dated on July 12, 2022. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 15, 2022. 10.39 Share Transfer Agreement by and between Future FinTech (Hong Kong) Limited and Alpha Financial Limited dated February 27, 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 1, 2023. 16.1 Letter from B F Borgers CPA PC, dated April 29, 2021. Incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed with the Commission on April 29, 2021. 21.1 Description of Subsidiaries of the Registrant* 23.1 Consent of Onestop Assurance PAC* 31.1 Rule 13a-14(a) Certification of Principal Executive Officer of Registrant* 31.2 Rule 13a-14(a) Certification of Principal Financial Officer of Registrant* 32.1 Section 1350 Certification of Principal Executive Officer of Registrant.† 32.2 Section 1350 Certification of Principal Financial Officer of Registrant.† 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith † Furnished herewith (c) Other Financial Statement Schedules - None. 83 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Future FinTech Group Inc. April 19, 2023 By: /s/ Shanchun Huang Shanchun Huang Chief Executive Officer (principal executive officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Shanchun Huang and Ming Yi, and each of them, their attorneys-in-fact and agents, each with the power of substitution, for them in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Signature Name and Title Date /s/ Shanchun Huang Shanchun Huang April 19, 2023 Chief Executive Officer (principal executive officer and Director) /s/ Ming Yi Ming Yi April 19, 2023 Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Fuyou Li Fuyou Li April 19, 2023 Chairman of the Board of Directors and Director /s/ Mingjie Zhao Mingjie Zhao, Director April 19, 2023 /s/ Johnson Lau Johnson Lau, Director April 19, 2023 /s/ Ying Li Ying Li, Director April 19, 2023 84 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Audited Consolidated Financial Statements of Future FinTech Group Inc. Report of Independent Registered Public Accounting Firm (PCAOB ID: 6732 ) F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Comprehensive Income (Loss) F-5 Consolidated Statements of Changes in Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the board of directors of Future Fintech Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Future FinTech Group, Inc. (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has negative operating cash flow that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Emphasis of Matter The Company has significant transactions with related parties, which are described in Note 21 to the financial statements. Transactions involving related party cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of competitive, free market dealings may not exist. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Legal Proceedings Contingencies As described in Note 29 to the financial statements, management disclosed legal proceedings that involved the Company’s current subsidiaries, disposed subsidiaries, or the Company’s senior management where liability is not probable or the amount of the liability is not estimable, or both. If management believes there is at least a reasonable probability that a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for such amount to resolve or settle these claims will be recorded in the financial statements. F- 2 We determined that the legal proceedings contingencies are a critical audit matter as there was significant judgment made by management when assessing the likelihood of a loss being incurred and when estimating the loss or range of loss for each claim, which in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assessment of the liabilities and disclosures related to legal proceedings contingencies. Our audit of legal proceeding contingencies included, among others: ● reviewing management’s control for assessing legal proceedings; ● obtaining and evaluating the letters of audit inquiry with external legal counsel; ● reviewing public information regarding the Company’s litigation cases; ● evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable; ● evaluating the sufficiency of the Company’s disclosures related to legal proceedings. Valuation of Goodwill As described in Note 9 to the financial statements, goodwill mainly represented an amount of $13.98 million that arose from acquisition of Nice Talent Asset Management Limited and Khyber Money Exchange Ltd. The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value. 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. In addition, the discounted cash flow model requires the Company to select an appropriate weighted average cost of capital based on current market conditions as of December 31, 2022. A high degree of auditor judgment and an increased extent of effort were required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts. Our audit procedures related to the forecasts of future revenue and operating margin and the selection of the weighted average cost of capital used by management to estimate the fair value contributed by the reporting unit included the following, among others: ● Reviewing procedures of management’s impairment assessment; ● evaluating the reasonableness of the valuation model, methodology, and significant assumptions used by the Company, specifically the weighted average cost of capital including testing the mathematical accuracy of the Company’s calculation of the weighted average cost of capital; ● examining original transaction related documents; ● evaluating the sufficiency of the Company’s disclosures to goodwill. /s/ Onestop Assurance PAC We have served as the Company’s auditor since 2021. Singapore April 19, 2023 F- 3 FUTURE FINTECH GROUP INC. CONSOLIDATED BALANCE SHEETS December 31, 2022 December 31, 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 26,145,588 $ 50,273,517 Restricted cash 3,589,582 - Short - term investments 988,073 2,191,294 Accounts receivable, net 7,796,672 9,101,816 Advances to suppliers and other current assets 4,670,264 2,927,699 Loan receivables 19,157,538 6,000,000 Other receivables, net 2,649,536 1,965,159 Amount due from related parties 53,126 261,413 Assets related to discontinued operations - 157 TOTAL CURRENT ASSETS $ 65,050,379 $ 72,721,055 Property, plant and equipment, net $ 4,417,281 $ 3,163,052 Right of use assets - operation lease 1,055,906 113,163 Intangible assets 518,069 76,140 Goodwill 13,976,084 15,583,675 TOTAL NON-CURRENT ASSETS $ 19,967,340 $ 18,936,030 TOTAL ASSETS $ 85,017,719 $ 91,657,085 LIABILITIES CURRENT LIABILITIES Accounts payable $ 3,603,577 $ 79 Notes payable 3,589,582 - Accrued expenses and other payables 2,214,256 1,298,598 Advances from customers 1,236,241 2,893 Dividend payables - 63,477 Lease liability - operation lease 294,944 113,163 Amounts due to related parties 244,819 992,702 Deferred liabilities 7,387,697 3,740,260 Short term loans - 1,019,496 TOTAL CURRENT LIABILITIES $ 18,571,116 $ 7,230,668 NON-CURRENT LIABILITIES Long term debt - 188,215 Lease liability - operation lease 760,962 - Deferred liabilities $ - $ 3,384,044 TOTAL NON-CURRENT LIABILITIES 760,962 3,572,259 TOTAL LIABILITIES $ 19,332,078 $ 10,802,927 Commitments and contingencies (Note 29) STOCKHOLDERS’ EQUITY Future FinTech Group, Inc, Stockholders’ equity Common stock, $ 0.001 par value; 60,000,000 shares authorized; 14,645,653 shares and 14,036,253 shares issued and outstanding as of December 31, 2022 and December 31, 2021 respectively* $ 14,646 $ 14,036 Additional paid-in capital 222,751,657 220,579,277 Statutory reserve 98,357 61,382 Accumulated deficit ( 152,276,434 ) ( 138,611,914 ) Accumulated other comprehensive loss ( 3,623,005 ) ( 597,862 ) Total Future FinTech Group, Inc. stockholders’ equity 66,965,221 81,444,919 Non-controlling interests ( 1,279,580 ) ( 590,761 ) Total stockholders’ equity 65,685,641 80,854,158 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 85,017,719 $ 91,657,085 * all shares and per share data have been retroactively restated to reflect reverse stock split effected on February 1, 2023. The accompanying notes are an integral part of these consolidated financial statements. F- 4 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended, 2022 2021 Revenue $ 23,881,006 $ 25,050,801 Cost – third party 17,676,109 23,248,936 Cost – related party 809,451 - Gross profit 5,395,446 1,801,865 Operating Expenses General and administrative expenses 14,473,902 7,678,422 Research and development expenses 2,671,748 698,116 Stock-based compensation 1,279,740 5,487,930 Selling expenses 808,358 366,071 Provision (Recovery) of doubtful debts 26,440 ( 1,823 ) Impairment loss 3,248,805 781,733 Total operating expenses 22,508,993 15,010,449 Loss from operations ( 17,113,547 ) ( 13,208,584 ) Other (expenses) income Interest income 1,311,354 277,270 Interest expenses ( 11,696 ) ( 14,821 ) Other income, net 2,014,781 1,202,510 Total other income, net 3,314,439 1,464,959 Loss from Continuing Operations before Income Tax ( 13,799,108 ) ( 11,743,625 ) Income tax provision ( 456,598 ) ( 73,400 ) Deferred income tax ( 60,504 ) - Loss from Continuing Operations ( 14,316,210 ) ( 11,817,025 ) Discontinued Operations (Note 27) Loss on disposal of discontinued operations ( 154 ) ( 2,388,900 ) Net Loss $ ( 14,316,364 ) $ ( 14,205,925 ) Less: Net Loss attributable to non-controlling interests ( 688,819 ) ( 610,990 ) Net loss attributable to Future Fintech Group Inc. $ ( 13,627,545 ) $ ( 13,594,935 ) Other comprehensive income (loss) Loss from continued operations $ ( 14,316,210 ) $ ( 11,817,025 ) Foreign currency translation – continued operations ( 3,025,143 ) ( 124,441 ) Comprehensive income (loss) - continued operation ( 17,341,353 ) ( 11,941,466 ) Loss from discontinued operations $ ( 154 ) $ ( 2,388,900 ) Foreign currency translation - discontinued operation - ( 75,407 ) Comprehensive loss - discontinued operation ( 154 ) ( 2,464,307 ) Comprehensive Loss $ ( 17,341,507 ) $ ( 14,405,773 ) Less: Net loss attributable to non-controlling interests ( 688,819 ) ( 610,990 ) COMPREHENSIVE LOSS ATTRIBUTABLE TO FUTURE FINTECH GROUP INC. STOCKHOLDERS $ ( 16,652,688 ) ( 13,794,783 ) Earnings (loss) per share: Basic loss per share from continued operation $ ( 0.95 ) $ ( 0.86 ) Basic loss per share from discontinued operation - ( 0.18 ) $ ( 0.95 ) $ ( 1.04 ) Diluted Earnings (loss) per share: Diluted loss per share $ ( 0.95 ) $ ( 0.82 ) Diluted loss per share from discontinued operation - ( 0.18 ) $ ( 0.95 ) $ ( 1.00 ) Weighted average number of shares outstanding Basic 14,323,422 13,088,090 Diluted 14,533,948 13,645,881 The accompanying notes are an integral part of these consolidated financial statements. F- 5 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Accumulative Additional Other Non- Common Stock paid-in Statutory Accumulated comprehensive controlling Shares Amount capital reserve Deficits income interests Total Balance at December 31, 2020 10,033,544 $ 10,034 $ 133,550,881 - $ ( 124,384,301 ) $ ( 398,014 ) $ ( 47,459 ) $ 8,731,141 Issuance of common stocks-cash 3,163,031 3,163 69,427,276 - - - - 69,430,439 Issuance of common stocks-non cash 449,078 449 11,220,330 - - - 11,220,779 Share-based payments-omnibus equity plan 390,600 390 5,487,540 - - - 5,487,930 Net loss from continued operation - - - - ( 11,206,035 ) - ( 610,990 ) ( 11,817,025 ) Dividend to shareholders - - - - ( 571,296 ) - ( 63,477 ) ( 634,773 ) Share-based payments-service - - 893,250 - - - - 893,250 Statutory reserve - - - 61,382 ( 61,382 ) - - - Non-controlling interests on acquisition of subsidiary - - - - - - 131,165 131,165 Disposition of Discontinued operation - - - - ( 2,388,900 ) ( 75,407 ) - ( 2,464,307 ) Foreign currency translation adjustment - - - - - ( 124,441 ) - ( 124,441 ) Balance at December 31, 2021 14,036,253 $ 14,036 $ 220,579,277 61,382 $ ( 138,611,914 ) $ ( 597,862 ) $ ( 590,761 ) $ 80,854,158 Net loss from continued operation - - - - ( 13,627,391 ) - ( 688,819 ) ( 14,316,210 ) Statutory reserve - - - 36,975 ( 36,975 ) - - - Share-based payments-service - - 893,250 - - - - 893,250 Share-based payments-omnibus equity plan 609,400 610 1,279,130 - - - - 1,279,740 Disposition of Discontinued operation - - - - ( 154 ) - - ( 154 ) Foreign currency translation adjustment - - - - - ( 3,025,143 ) - ( 3,025,143 ) Balance at December 31, 2022 14,645,653 $ 14,646 $ 222,751,657 $ 98,357 $ ( 152,276,434 ) $ ( 3,623,005 ) $ ( 1,279,580 ) $ 65,685,641 All shares and per share data have been retroactively restated to reflect reverse stock split effected on February 1, 2023. The accompanying notes are an integral part of these consolidated financial statements. F- 6 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 14,316,364 ) $ ( 14,205,925 ) Net loss from discontinued operation ( 154 ) ( 2,388,900 ) Net loss from continuing operations ( 14,316,210 ) ( 11,817,025 ) Adjustments to reconcile net income to net cash provided by operating activities Depreciation 185,151 57,563 Amortization 63,552 5,340 Provision (Recovery) of doubtful debts 26,440 ( 1,823 ) Impairment of goodwill 2,214,825 781,733 Impairment of intangible 124,317 - Impairment of short term investment 909,663 - Share-based payments 2,172,990 6,381,180 Changes in operating assets and liabilities Accounts receivable 285,648 ( 7,693,914 ) Other receivables ( 1,417,128 ) ( 1,815,109 ) Advances to suppliers and other current assets ( 1,742,565 ) ( 2,905,416 ) Notes payable 3,589,582 - Accounts payable 3,603,498 3 Accrued expenses 866,882 ( 954,368 ) Advances from customers 1,233,348 ( 26,069 ) Proceeds from amounts due from related parties, net 517,076 438,240 Repayment of amounts due to related parties, net ( 966,603 ) ( 1,187,875 ) Taxes payable ( 41,111 ) - Net cash used in operating activities – continued operations ( 2,690,645 ) ( 18,737,540 ) Net cash provided by operating activities – discontinued operations - 1,363,946 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment ( 589,033 ) ( 3,167,126 ) Additions to loan receivables ( 20,078,917 ) ( 6,000,000 ) Repayment of loan receivable 6,880,000 - Payment for available-for-sale securities - ( 2,191,294 ) Acquisition of a subsidiary, net of cash 166,676 275,623 Disposal of a subsidiary, net of cash - ( 59,255 ) Purchase of intangible assets ( 570,351 ) ( 38,935 ) Net cash used in investing activities from continued operations ( 14,191,625 ) ( 11,180,987 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issuance of common stock, net of issuance costs - 69,430,439 Proceeds from loan payable - 1,007,517 Repayment of loans ( 188,215 ) - Payment of dividends to the non-controlling interest ( 63,477 ) - Repayment of convertible note payables - ( 1,163,146 ) Net cash (used in) provided by financing activities ( 251,692 ) 69,274,810 Effect of change in exchange rate ( 3,404,385 ) 127,976 NET (DECREASE ) INCREASE IN CASH AND CASH EQUIVALENTS ( 20,538,347 ) 40,848,205 Cash and cash equivalents, beginning of year 50,273,517 9,425,312 Cash and restricted cash at end of year 29,735,170 50,273,517 SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION Issuance of common stocks (Note 26) $ - $ 11,220,779 Deferred liabilities (Note 19) - 7,124,304 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid 714,126 3,687 Interest paid 11,696 14,821 The accompanying notes are an integral part of these consolidated financial statements. F- 7 FUTURE FINTECH GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR YEARS ENDED DECEMBER 31, 2022 AND 2021 1. CORPORATE INFORMATION Future FinTech Group Inc. (the “Company”) is a holding company incorporated under the laws of the State of Florida. The main business of the Company includes an online shopping platform, Chain Cloud Mall (“CCM”), 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 May 11, 2021, the Company established Future Supply (Chengdu) Co., Ltd. Its business is coal and aluminum ingots supply chain financing services and trading. On May 12, 2021, the Company established Future Big Data (Chengdu) Co., Ltd. in Chengdu, China. Its business includes big data technology and industrial internet data services. On June 8, 2021, the Company established Tianjin Future Private Equity Fund Management Partnership (Limited Partnership) in Tianjin, China. Its main business is external equity investment. June 14, 2021, the Company established Future FinTech Labs Inc. in New York to serve as its global R&D and technical support center. On June 24, 2021, the Company established FTFT Capital Investments L.L.C. in Dubai, United Arab Emirates. Its business is to provide financial technology and services, including a cryptocurrency market data platform that provides investors with real-time cryptocurrency market data and trading information. On July 2, 2021, the Company established Future Fintech Digital Number One US, LP. which is an investment fund. On July 6, 2021, the Company established Future Fintech Digital Capital Management, LLC, in the State of Connecticut, which provides investment advisory services and investment fund management. On July 6, 2021, the Company established Future Fintech Digital Number One GP, LLC., which is an off-shore investment fund. On August 2, 2021, the Company incorporated FTFT UK Limited in United Kingdom which serve as its operating base to develop fintech business in Europe. On August 6, 2021, the Company acquired 90 % equity interest of Nice Talent Asset Management Limited which mainly provides assets and wealth management services. On August 11, 2021, the Company established Future Private Equity Fund Management (Hainan) Co., Ltd. Its business is investment fund management. F- 8 On November 22, 2021, the Company established FTFT Digital Number One, Ltd., an investment fund. On November 22, 2021, the Company established Future Fintech Digital Number One Offshore, LLC., an investment. On December 15, 2021, the Company established FTFT Super Computing 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 . The Company owns 90 % and FTFT HK owns 10 % of Kazan S.A., respectively. Kazan S.A. 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. On October 1, 2022, FTFT UK Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd., a company incorporated for $ 0.95 million. It has a global remittance platform. The Company has changed its name from Khyber Money Exchange Ltd., to FTFT finance UK Limited on October 11, 2022. The Company’s business and operations are principally conducted by its subsidiaries and its blockchain based e-commerce platform business is conducted through its Variable Interest Entity (“VIE”) - Cloud Chain E-Commerce (Tianjin) Co., Ltd., formerly known as Chain Cloud Mall E-Commerce (Tianjin) Co., Ltd. (“E-Commerce Tianjin”) in the PRC. On February 1, 2023, the Company has authorized and approved a 1-for-5 reverse stock split of the Company’s authorized shares of common stock from 300,000,000 shares to 60,000,000 shares. The reverse stock split would be reflected in December 31, 2022 and December 31, 2021 statements of changes in stockholders’ equity, and in per share data for all periods presented. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation and principle of consolidation These consolidated financial statements (“financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America, or US GAAP. The Company’s functional currency of subsidiaries and VIE in China is the Chinese Renminbi (RMB). Other subsidiaries outside of China use U.S. Dollar (USD), Hong Kong Dollar (HKD), Great Britain Pound (“GBP”), AED (United Arab Emirates Dirham) and Guarani (PYG) as the functional currency; however, the accompanying consolidated financial statements have been translated and presented in USD. According to US GAAP Accounting Standard Codification (“ASC”) 810-10-15-8, for legal entities other than limited partnerships, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The consolidated financial statements include the accounts of the Company and its subsidiaries and the VIE. Our contractual arrangements with the VIE and their respective shareholders allow us to (i) exercise effective control over the VIE, (ii) become the primary beneficiary of the VIE for accounting purposes, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIE when and to the extent permitted by PRC law. F- 9 As a result of our direct ownership in our wholly foreign-owned enterprise (“WFOE”) and the contractual arrangements with the VIE, we are regarded as the primary beneficiary of the VIE for accounting purposes, and we treat it and its subsidiaries as the consolidated affiliated entities under U.S. GAAP. Certain amounts of prior years were reclassified to conform with current year presentation. Discontinued Operations On March 18, 2021, Chain Future Digital Tech (Beijing) Co., Ltd. was deregistered. On April 9, 2021, FT Commercial Management (Beijing) Co., Ltd. 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., Ltd. discontinued its operations, and on November 4, 2021, it was transferred to Shaanxi Fu Chen Venture Capital Management Co. Ltd. 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 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 Statements The Company’s 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 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 accounts 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 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 loss of $ 14.32 million and generated negative operating cash flows of $ 2.69 million for year ended December 31, 2022 and may continue to incur operating losses and generate negative operating 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 common stock. F- 10 The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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. The Company expenses research and development costs as they are incurred. Impairment of Long-Lived Assets In accordance with the ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets , long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. Fair Value of Financial Instruments The Company has adopted FASB ASC Topic on Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable input, which may be used to measure fair value and include the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Input other than Level 1 that is observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other input that is observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable input that is supported by little or no market activity and that is significant to the fair value of the assets or liabilities. Our cash and cash equivalents and restricted cash and short-term investments 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. F- 11 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. For the year ended December 31, 2022: Income Share Pre-share amount Loss from continued operations attributable to Future Fintech Group, Inc. $ ( 13,627,391 ) 14,323,422 $ ( 0.95 ) Loss from discontinued operations attributable to Future Fintech Group, Inc. $ ( 154 ) 14,323,422 $ - Basic EPS: Loss to common stockholders from continued operations $ ( 13,627,391 ) 14,323,422 $ ( 0.95 ) Loss available to common stockholders from discontinued operations $ ( 154 ) 14,323,422 $ - Dilutive EPS: Warrants - 210,526 - 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 continued operations attributable to Future Fintech Group, Inc. $ ( 13,627,391 ) 14,533,948 $ ( 0.95 ) Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations $ ( 154 ) 14,533,948 $ - For the year ended December 31, 2021: Income Share Pre-share amount Loss from continued operations attributable to Future Fintech Group, Inc. $ ( 11,206,035 ) 13,088,090 $ ( 0.86 ) Loss from discontinued operations attributable to Future Fintech Group, Inc. $ ( 2,388,900 ) 13,088,090 $ ( 0.18 ) Basic EPS: Loss to common stockholders from continuing operations $ ( 11,206,035 ) 13,088,090 $ ( 0.86 ) Loss available to common stockholders from discontinued operations $ ( 2,388,900 ) 13,088,090 $ ( 0.18 ) Dilutive EPS: Warrants - 557,791 - 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 continued operations attributable to Future Fintech Group, Inc. $ ( 11,206,035 ) 136,458,81 $ ( 0.82 ) Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations $ ( 2,388,900 ) 136,458,81 $ ( 0.18 ) F- 12 Cash, cash equivalents and restricted cash Cash and cash equivalents included cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. Deposits in banks in the PRC are only insured by the government up to RMB 500,000 , in the HK are only insured by the government up to HKD500,000, in the United Kingdom are only insured by the government up to GBP 18,000 , in the United States of America are only insured by the Federal Deposit Insurance Corporation up to USD250,000, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is not included in the total cash and cash equivalents in the consolidated statements of cash flows. Receivable and Allowances Accounts receivable are recognized and carried at the original invoice amounts less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. Other receivables, and loan receivables are recognized and carried at the initial amount when occurred less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable impairment losses in our existing receivable. We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary. Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivable or otherwise evaluate other circumstances that indicate that we should abandon such efforts. The Company has assessed its receivable including credit term and corresponding all its receivables in December 2022. Upon such credit terms, bad debt expense was $ 26,440 and $( 1,823 ) during the years ended December 31, 2022 and 2021, respectively. There is no accounts receivable balance overdue for over 90 days as of December 31, 2022 and December 31, 2021. Revenue Recognition We apply the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We assess its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. Revenue arrangements with multiple performance obligations are divided into separate distinct goods or services. We allocate the transaction price to each performance obligation based on the relative standalone selling price of the goods or services provided. Revenue is recognized upon the transfer of control of promised goods or services to a customer. 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. F- 13 We do not make any significant judgment in evaluating when control is transferred. Revenue is recorded net of value-added tax. Revenue recognitions are as follows: Online sales and membership fee: The Company recognizes the sale of goods 15 days after the products are shipped (after the 15 days return policy). The revenue from the membership fee is amortized over the lifetime of the membership, which is one year. For the merchandise gift package, revenue is recognized when the receipt of the gift package is confirmed by the members. Other revenues include revenues earned on net basis from sales of certain products on our platform and agent authorization fee. During 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. 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. Sales of coals and aluminum ingots agent For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. The company recognize net revenue from sale of coals and aluminum ingots when no control obtained throughout the transactions. 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 Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive income. Depreciation related to property, plant and equipment used in production is reported in cost of sales, and includes amortized amounts related to capital leases. We estimated that the residual value of the Company’s property and equipment ranges from 3 % to 5 %. Property, plant and equipment are depreciated over their estimated useful lives as follows: Building 30 years Machinery and equipment 5 - 10 years Furniture and office equipment 3 - 5 years Motor vehicles 5 years 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 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 five - 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. F- 14 Foreign Currency and Other Comprehensive Income (Loss) The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency; however, the reporting currency of the Company is the USD. 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 6.96:1 and 6.38:1 at the balance sheet dates of December 31, 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 6.73:1 and 6.45:1 for fiscal year 2022 and fiscal year 2021, respectively. The exchange rate we used to convert HKD to USD was 7.80:1 and 7.80:1 at the balance sheet dates of December 31, 2022 and December 31, 2021. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert HKD to USD were 7.83:1 and 7.77:1 for fiscal year 2022 and fiscal year 2021. The exchange rate we used to convert GBP to USD was 0.83:1 and 0.74:1 at the balance sheet dates of December 31, 2022 and December 31, 2021. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert GBP to USD were 0.81:1 and 0.73:1 for fiscal year 2022 and fiscal year 2021. The exchange rate we used to convert AED to USD was 3.67:1 and 3.67:1 at the balance sheet dates of December 31, 2022 and December 31, 2021. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert AED to USD were 3.67:1 and 3.67:1 for fiscal year 2022 and fiscal year 2021. The exchange rate we used to convert PYG to USD was 7,322.90:1 at the balance sheet dates of December 31, 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 6,976.87:1 for fiscal year 2022. Translation adjustments are reported separately and accumulated in a separate component of equity (cumulative translation adjustment). Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. For certain government subsidies, there are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. The government subsidies of operating nature with no further conditions to be met are recorded of operating expenses in “Other income” in the consolidated statements when received. The amendments in this update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. Income Taxes We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-25 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. F- 15 Goodwill The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value. 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. In addition, the discounted cash flow model requires the Company to select an appropriate weighted average cost of capital based on current market conditions as of December 31, 2022 and December 31, 2021. A high degree of auditor judgment and an increased extent of effort were required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts. Based upon the assessment, the Company has concluded that goodwill is $ 13.98 million and $ 15.58 million as of December 31, 2022 and December 31, 2021. Short-term investments Short-term investments consist primarily of investments in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and other investments that the Company has the intention to redeem within one year. Fair valued or carried at amortized costs. As of December 31, 2022 and December 31, 2021, the short-term investments amounted to $ 0.99 million and $ 2.19 million, respectively. Due to fluctuations of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of $ 0.91 million. Lease We adopted ASU No. 2016-02, Leases (Topic 842), or ASC 842, from January 1, 2020. We determine if an arrangement is a lease or contains a lease at lease inception. For operating leases, we recognize a right-of-use (“ROU”) asset and a lease liability based on the present value of the lease payments over the lease term on the consolidated balance sheets at commencement date. As most of our leases do not provide an implicit rate, we estimate our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any lease payments made, net of lease incentives. Lease expense is recorded on a straight-line basis over the lease term. Our leases often include options to extend and lease terms include such extended terms when we are reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when we are reasonably certain not to exercise those options. Share-based compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. F- 16 Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10 % of after-tax profit until the aggregated appropriations reach 50 % of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10 % of after-tax profits until the aggregated appropriations reach 50 % of the registered capital (as determined under PRC GAAP at each year-end). Variable interest entities On July 31, 2019, CCM Tianjin, E-commerce Tianjin, and Mr. Zeyao Xue and Mr. Kai Xu, citizens of China and shareholders of E-commerce Tianjin, entered into the following agreements, or collectively, the “Variable Interest Entity Agreements” or “VIE Agreements,” 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. CCM Tianjin is an indirectly wholly foreign owned enterprise of the Company. In order to comply with Chinese law and regulations, CCM Tianjin agreed to provide E-commerce Tianjin an Exclusive Operation and Use Rights Authorization to operate and use the Chain Cloud Mall System owned by CCM Tianjin. E-commerce Tianjin was incorporated by Mr. Zeyao Xue and Mr. Kai Xu solely for the purpose of holding the operation license of the Chain Cloud Mall System. Mr. Zeyao Xue is a major shareholder of the Company and the son of Mr. Yongke Xue, the President of the Company. Mr. 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. 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, 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. F- 17 2) Exclusive Purchase Option Agreement by and among CCM Tianjin, E-commerce Tianjin, Mr. Zeyao Xue and Mr. Kai Xu. Pursuant to the Exclusive Purchase Option Agreement, Mr. Zeyao Xue and Mr. Kai Xu granted to CCM Tianjin and any party designated by CCM Tianjin the exclusive right to purchase, at any time during the term of this agreement, all or part of the equity interests in E-commerce Tianjin, or the “Equity Interests,” at a purchase price equal to the registered capital paid by Mr. Zeyao Xue and Mr. Kai Xu for the Equity Interests, or, in the event that applicable law requires an appraisal of the Equity Interests, the lowest price permitted under applicable law. Pursuant to powers of attorney executed by Mr. Zeyao Xue and Mr. Kai Xu, they irrevocably authorized any person appointed by CCM Tianjin to exercise all shareholder rights, including but not limited to voting on their behalf on all matters requiring approval of E-commerce Tianjin’s shareholder, disposing of all or part of the shareholder’s equity interest in E-commerce Tianjin, and electing, appointing or removing directors and executive officers. The person designated by CCM Tianjin is entitled to dispose of dividends and profits on the equity interest without reliance on any oral or written instructions of Mr. Zeyao Xue and Mr. Kai Xu. The powers of attorney will remain in force for so long as Mr. Zeyao Xue and Mr. Kai Xu remain the shareholders of E-commerce Tianjin. Mr. Zeyao Xue and Mr. Kai Xu have waived all the rights which have been authorized to CCM Tianjin’s designated person under the powers of attorney. 3) Equity Pledge Agreements by and among CCM Tianjin, E-commerce Tianjin, Mr. Zeyao Xue and Mr. Kai Xu. Pursuant to the Equity Pledge Agreements, Mr. Zeyao Xue and Mr. Kai Xu pledged all of the Equity Interests to CCM Tianjin to secure the full and complete performance of the obligations and liabilities on the part of E-commerce Tianjin and them under this and the above contractual arrangements. If E-commerce Tianjin, Mr. Zeyao Xue, or Mr. Kai Xu breaches their contractual obligations under these agreements, then CCM Tianjin, as pledgee, will have the right to dispose of the pledged equity interests. Mr. Zeyao Xue and Mr. Kai Xu agree that, during the term of the Equity Pledge Agreements, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests, and they also agree that CCM Tianjin’s rights relating to the equity pledge should not be interfered with or impaired by the legal actions of the shareholders of E-commerce Tianjin, their successors or designees. During the term of the equity pledge, CCM Tianjin has the right to receive all of the dividends and profits distributed on the pledged equity. The Equity Pledge Agreements will terminate on the second anniversary of the date when E-commerce Tianjin, Mr. Zeyao Xue and Mr. Kai Xu have completed all their obligations under the contractual agreements described above. 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 CCM Tianjin, 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 . (6) Spousal Consent Letters. The spouse of Mr. Kai Xu (Mr. 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 In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”) “Financial Instruments - Credit Losses” (“ASC 326”): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. In November 2019, the FASB issued ASU 2019-10 “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)” (“ASC 2019-10”), which defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for public entities which meet the definition of a smaller reporting company. 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. F- 18 In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendments in this update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments are effective for all entities within their scope, which excludes not-for-profit entities and employee benefit plans, for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendment is permitted. The Company adopted ASU No. 2021-10 effective January 1, 2022. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial statements. 3. VARIABLE INTEREST ENTITY The carrying amount of the VIE’s consolidated assets and liabilities are as follows: December 31, December 31, 2022 2021 Cash and cash equivalents $ 12,684 $ 10,662 Other receivables 768 27,832 Other current assets 14,371 18,889 Total current assets 27,823 8,227 Intangible assets 88,302 36,230 Property and equipment, net 98 470 Total assets 116,223 83,421 Total liabilities ( 248,964 ) ( 270,413 ) Net assets $ ( 132,741 ) $ ( 186,992 ) December 31, December 31, 2022 2021 Current liabilities: Accounts payable $ 18,657 $ 79 Accrued expenses and other payables 6,455 1,112 Advances from customers 2,648 2,893 Amount Due to Related Party 221,204 266,329 Total current liabilities 248,964 270,413 Total liabilities $ 248,964 $ 270,413 The summarized operating results of the VIE’s are as follows: December 31, December 31, 2022 2021 Revenue $ 2,188 $ 6,659 Gross profit $ 2,188 $ 603 Net loss $ ( 276,766 ) $ ( 88,001 ) 4. ACCOUNTS RECEIVABLE Accounts receivable, net consist of the following: December 31, December 31, 2022 2021 Coal and Aluminum Ingots Supply Chain Financing/Trading $ 6,624,654 $ 7,938,152 Asset management service 1,145,518 1,163,664 Others 26,500 - Total accounts receivable, net $ 7,796,672 $ 9,101,816 F- 19 The following table sets forth our concentration of accounts receivable, net of specific allowances for doubtful accounts. December 31, December 31, 2022 2021 Debtor A $ 46.08 % $ 87.22 % Debtor B 15.65 % 10.60 % Debtor C 14.26 % 1.14 % Total accounts receivable, net $ 75.99 % $ 98.96 % 5. OTHER RECEIVABLES As of December 31, 2022, the balance of other receivables was $ 2.65 million. On October 1, 2022, FTFT UK Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd., a company incorporated for £ 786,887 . Buyer deposited £ 400,000 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 $ 0.24 million 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. As of January 9, 2023, the Company has received refund $ 0.24 million. As of April 22, 2022, FTFT Super Computing Inc. entered into a “Electricity Sales and Purchase Agreement” with a third party. FTFT Super Computing Inc. provided an initial amount of Adequate Assurance to Seller in the form of a cash deposit in the amount of $ 1.00 million and receivables from resale of electricity $ 0.24 million. In addition, other receivables included total $ 1.17 million deposit paid and prepayments. As of December 31, 2021, the balance of other receivables was $ 1.96 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 ($ 0.79 million) for the Purchase Price and £ 400,000 ($ 0.54 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. In addition, other receivables included total $ 0.63 million deposit paid and prepayments. 6. LOAN RECEIVABLES As of December 31, 2022, the balance of loan receivables was $ 19.16 million, which was from a third party. 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. Pursuant to the Loan Agreement, FUCE Future Supply Chain (Xi’an) Co., Ltd. loaned an amount of $ 0.22 million (RMB 1.5 million) to the third party at the annual interest rate of 5.25 % from September 8, 2021 to September 6, 2023. 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 $ 5.00 million to the third party at the annual interest rate of 10 % from March 10, 2022 to September 9, 2023. To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 5.00 million. On May 31, 2022, FTFT HK entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 6.36 million to the third party at the annual interest rate of 10 % from May 31, 2022 to May 30,2023. To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 4.10 million. On December 26, 2022, FTFT HK entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 0.40 million to the third party at the annual interest rate of 10 % from December 26, 2022 to March 26, 2023. As of April 17, 2023, the Company has received repayment $ 0.40 million. 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 $ 7.18 million (RMB 50 million) to the third party at the annual interest rate of 8 % from July 15, 2022 to July 14, 2023, guarantee by Junde Chen. To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 5.20 million (RMB 35 million). The amount of $ 1.9 million (RMB 15 million) will be repaid within 3 months. F- 20 7. SHORT - TERM INVESTMENTS As of December 31, 2022, the balance of short - term investments was $ 0.99 million. On September 6, 2021, Future Private Equity Fund Management (Hainan) Co., Ltd. invested $ 1.87 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 investments was $ 0.99 million on December 31, 2022. Due to fluctuations of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of $ 0.91 million. 8. OTHER CURRENT ASSETS The amount of other current assets consisted of the followings: December 31, December 31, 2022 2021 Prepayments for Coal and Aluminum Ingots Supply Chain Financing/Trading $ 3,766,643 $ 2,243,295 Prepaid expenses 72,544 439,404 Others 831,077 245,000 Total $ 4,670,264 $ 2,927,699 9. GOODWILL As of December 31, 2022, the balance of goodwill mainly represented an amount of $ 13.98 million that arose from acquisition of Nice Talent Asset Management Limited (“Nice Talent”) in 2021 and Khyber Money Exchange Ltd., in 2022. On August 6, 2021, 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 pre reverse stock split shares of common stock of the Company on August 4, 2021. 40 % of the Purchase Price ($7.39 million) in 20 % each installment shall be paid in shares of common stock of the Company upon the completion of the audited reports for Nice Talent for each of the years ended on December 31, 2022 and 2021, respectively. On October 1, 2022, FTFT UK Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd., a company incorporated for £ 786,887 ($ 0.95 million). The Company recorded $ 2.21 million of impairment loss in fiscal year 2022 related with goodwill mainly arose from acquisition of Nice Talent Asset Management Limited and FTFT Finance UK Limited (formerly known as Khyber Money Exchange Ltd.). Goodwill impairment test a s of December 31, 2022 using compare the carrying amount of the reporting unit (including goodwill) with its fair value. If the carrying amount exceeds the fair value, compare the implied fair value of the reporting unit’s goodwill with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss should be recognized. 10. ACQUISITION Nice Talent 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 shares of common stock of the Company on August 4, 2021. 40 % of the Purchase Price ($ 7.12 million) in 20 % each installment 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, 2022 and 2021, respectively. F- 21 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 values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date. 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 acquired and all the liabilities assumed, and followed ASC 805-20’s measurement procedures for recognition of the fair value of net assets acquired. The following table summarizes the allocation of estimated fair values of net assets acquired and liabilities assumed: Accounts receivable $ 1,407,902 Other receivables 27,701 Other current assets 7,039 Property, plant and equipment, net 53,577 Amount due from related party 38,323 Accrued expenses and other payables ( 498,515 ) Net identifiable assets acquired $ 1,036,027 Less: non-controlling interests 131,165 Add: goodwill 17,164,598 Total purchase price for acquisition net of $ 275,624 of cash $ 18,069,460 The Company has included the operating results of Nice Talent in its consolidated financial statements since the Acquisition Date. US$ 1,291,391 in net sales and US$ 114,623 in net gain of Nice Talent were included in the consolidated financial statements for the years ended December 31, 2021. Khyber Money Exchange Ltd. On October 1, 2022, FTFT UK Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd., a company incorporated for £ 786,887 ($ 0.95 million). The Company has changed its name from Khyber Money Exchange Ltd., to FTFT Finance UK Limited on October 11, 2022. The following table summarizes the allocation of estimated fair values of net assets acquired and liabilities assumed: Other receivables $ 242,087 Property, plant and equipment, net 584 Accrued expenses and other payables ( 89,888 ) Net identifiable assets acquired $ 152,783 Add: goodwill 628,938 Total purchase price for acquisition net of $ 166,676 of cash $ 781,721 The Company has included the operating results of FTFT Finance UK Limited in its consolidated financial statements since the Acquisition Date. Nil in net sales and US$ 20,440 in net loss of FTFT Finance UK Limited were included in the consolidated financial statements for the years ended December 31, 2022. Had the acquisition been completed from beginning of the current year, the revenue and the net loss of the Company would have been US$ 24.03 million and US$ 14.32 million. F- 22 11. LEASES The Company’s noncancelable operating leases consist of leases for office spaces and computer processing center. The Company is the lessee under the terms of the operating leases. For the year ended December 31, 2022, the operating lease cost was $ 1.06 million. The Company’s operating leases have remaining lease terms of approximately one year or less. As of December 31, 2022, the weighted average remaining lease term and weighted average discount rate were 4.25 years and 4.75 %, respectively. Maturities of lease liabilities were as follows: Operating As of December 31, 2022 Lease From January 1, 2023 to December 31, 2023 $ 377,611 From January 1, 2024 to December 31, 2024 319,741 From January 1, 2025 to December 31, 2025 204,000 From January 1, 2026 to December 31, 2026 204,000 From January 1, 2027 to March 31, 2027 51,000 Total $ 1,156,352 Less: amounts representing interest $ 100,446 Present Value of future minimum lease payments 1,055,906 Less: Current obligations 294,944 Long term obligations $ 760,962 The Company leases office space and equipment under various short-term operating leases. As permitted by ASC 842, the Company has elected the practical expedient for short-term leases, whereby lease assets and lease liabilities are not recognized on the balance sheet. Short term leases cost was $ 0.39 million for the year ended December 31, 2022. 12. PROPERTY, PLANT AND EQUIPMENT, NET Property and equipment consist of the following: December 31, December 31, 2022 2021 Office equipment, fixtures and furniture $ 491,022 $ 173,551 Vehicle 798,955 595,569 Building 37,785 37,779 Subtotal 1,327,762 806,899 Less: accumulated depreciation and amortization ( 277,094 ) ( 99,323 ) Construction in progress 3,372,301 2,461,690 Impairment ( 5,688 ) ( 6,214 ) Total $ 4,417,281 $ 3,163,052 Depreciation expense included in general and administration expenses for the years ended December 31, 2022 and 2021 was $ 185,151 and $ 57,563 respectively. Depreciation expense included in cost of sales for the year ended December 31, 2022 and 2021 was $ 0 and $ 0 respectively. F- 23 13. INTANGIBLE ASSETS Intangible assets consist of the following: December 31, December 31, 2022 2021 Trademarks $ 862 $ 941 System and software 2,578,647 2,126,791 Subtotal 2,579,509 2,127,732 Less: accumulated depreciation and amortization ( 199,151 ) ( 148,533 ) Less: impairment ( 1,862,289 ) ( 1,903,059 ) Total 518,069 76,140 Amortization expense included in general and administration expenses for the years ended December 31, 2022 and 2021 was $ 63,552 and $ 5,340 , respectively. Amortization expense included in cost of sales for the years ended December 31, 2022 and 2021 was $ 0 and $ 0 , respectively. The estimated amortization is as follows: As of December 31, Estimated amortization expense From January 1, 2023 to December 31, 2023 $ 57,035 From January 1, 2024 to December 31, 2024 57,035 From January 1, 2025 to December 31, 2025 57,035 From January 1, 2026 to December 31, 2026 57,035 From January 1, 2027 to December 31, 2027 57,035 Thereafter 232,894 Total $ 518,069 14. NOTE PAYABLE Note payable consist of the following: Issue date Principal amount US$ Mature date Effective interest rate FUCE Future Supply Chain (Xi’an) Co., Ltd. August 10, 2022 $ 1,435,834 August 10, 2023 0.05% FUCE Future Supply Chain (Xi’an) Co., Ltd. August 12, 2022 717,916 August 12, 2023 0.05% FUCE Future Supply Chain (Xi’an) Co., Ltd. July 28, 2022 717,916 July 28, 2023 0.05% FUCE Future Supply Chain (Xi’an) Co., Ltd. December 19, 2022 717,916 December 19, 2023 0.05% Total $ 3,589,582 At maturity, the Notes are payable at their principal amount thereon. There occurring with respect to any of the Company’s indebtedness, an event of default resulting in accelerated maturity or a failure to pay principal, interest or premium when due, the overdue interest shall be charged at 0.05 % per day, without the need to notify the applicant and sign another loan contract. As of December 31, 2022, there was no such event of default. 15. LONG TERM DEBT As of December 31, 2022, long term debt were nil . 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 from August 1, 2019 to August 1, 2024. On September 5, 2022, the Company pay off to Shaanxi Entai Bio-Technology Co., Ltd. F- 24 16. ACCOUNT PAYABLES The amount of account payables were consisted of the followings: December 31, December 31, 2022 2021 Coal and Aluminum Ingots Supply Chain Financing/Trading payment $ 3,584,920 $ - Others 18,657 79 Total $ 3,603,577 $ 79 17. ACCRUED EXPENSES AND OTHER PAYABLES The amount of accrued expenses and other payables were consisted of the followings: December 31, December 31, 2022 2021 Legal fee and other professionals $ 533,048 $ 280,647 Wages and employee reimbursement 763,983 272,093 Suppliers 708,287 155,043 Accruals 208,938 590,815 Total $ 2,214,256 $ 1,298,598 18. CONVERTIBLE NOTES PAYABLE As of December 31, 2022 and 2021, convertible debt consisted of the following: December 31, December 31, 2022 2021 Beginning $ - $ 1,163,146 Addition - - Payment - ( 1,163,146 ) Conversion - - Balance $ - $ - 19. DEFERRED LIABILITIES As of December 31, 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”). 40 % of the Purchase Price in 20 % each installment shall be paid in shares of common stock of the Company upon the completion of the audited reports for Nice Talent for the years ended on December 31, 2022 and 2021. F- 25 20. DIVIDEND PAYABLES As of December 31, 2022, the balance of dividend payables was nil . As of December 31, 2021, the balance of dividend payables was $ 0.06 million. Nice Talent Asset Management Limited declared dividend for HKD 27,500 per ordinary share, in a sum of HKD 4,950,000 ($ 634,773 ) to its shareholders. 90 % ($ 571,296 ) of the dividend were to Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company, and 5% ($31,738.5) of the dividend was to Aspenwood Capital Partner Limited and 5% ($31,738.5) of the dividend was to Cheung Hiu Tung, respectively. Dividend were paid on February 7, 2022. 21. RELATED PARTY TRANSACTION As of December 31, 2022, the amount due to the related parties was consisted of the followings: Name Amount Relationship Note Reits (Beijing) Technology Co., Ltd $ 14,538 Zhi Yan is the legal representative of this company Acquisition of intangibles upon the full completion of the online platform pursuant to an agreement originally entered between parties before Zhi Yan was the general manager of our subsidiary. Zhi Yan 230,281 General Manager of a subsidiary of the Company Other payables, interest free and payment on demand. Total $ 244,819 As of December 31, 2022, the amount due from the related parties was consisted of the followings: Name Amount Relationship Note Kai Xu $ 16 Deputy General Manager of a subsidiary of the Company Loan receivables*, interest free and payment on demand. Ming Yi 12,135 Chief Financial Officer of the Company Loan receivables*, interest free and payment on demand. Jing Chen 971 Vice president of the Company Loan receivables*, interest free and payment on demand. Ola Johannes Lind 2,168 Chief Executive Officer of the FTFT Capital Investments L.L.C. and Chief Strategy Officer of the Company Loan receivables*, interest free and payment on demand. Wong Tai Kue 37,836 NTAM’s Director Advance to pay for directors* Amount is interest free and payment on demand. Total $ 53,126 During 2022, the Company had the following transactions with related parties: Name Amount Relationship Note NDC $ 559,786 A company owned by the minority shareholder of NTAM Cost of revenue- Asset management service JKNDC Limited 249,666 A company owned by the minority shareholder of NTAM Cost of revenue- Asset management service Alpha Yield Limited 164,779 A director of the Company is a shareholder of this company Consultancy fee Nice Talent Partner Limited 357,564 A company owned by the minority shareholder of NTAM Consultancy fee NDC 81 A company owned by the minority shareholder of NTAM Consultancy fee Ningbo Tielin Supply Chain Management Co., Ltd 17,800 General Manager of Fuce Future Supply Chain (Xi'an) Co., Ltd. is a shareholder of Ningbo Tielin Revenue - Sales of Coals During fiscal year 2022, the Company extended advances amounting to $ 160,539 to six key management personnel, and a total of $ 171,863 had been either repaid or classified as business expenses. During fiscal year 2022, five key management personnel advanced a total of $ 132,770 to the Company, and the Company repaid $ 29,830 to them. F- 26 As of December 31, 2021, the amounts due to the related parties were consisted of the followings: Name Amount Relationship Note Zhi Yan $ 286,045 General Manager of a subsidiary of the Company Loan payables, interest free and payment on demand. Jing Chen 37,604 Vice president of the Company Accrued expenses, interest free and payment on demand. Shaanxi Fu Chen Venture Capital Management Co. Ltd. (“Shaanxi Fu Chen”) 72,046 Two outside shareholders of the Company are shareholders of Shaanxi Fu Chen Other payables, interest free and payment on demand. Future Supply Chain Co., Ltd. 280,571 Shaanxi Fu Chen holds 100% interest of this company Other payables, interest free and payment on demand. Reits (Beijing) Technology Co., Ltd 15,881 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 on demand. Shaanxi Chunlv Ecological Agriculture Co. Ltd. 257,876 Shaanxi Fu Chen holds 80% interest of this company Other payables, interest free and payment on demand. Ming Yi 8,942 Chief Financial Officer of the Company Accrued expenses, interest free and payment on demand. Ola Johannes Lind 4,933 Chief Executive Officer of a subsidiary of the Company and Chief Strategy Officer of the Company Other payables, interest free and payment on demand. Kai Xu 25,509 Deputy General Manager of a subsidiary of the Company Accrued expenses, interest free and payment on demand. Shaanxi Fuju Mining Co., Ltd 3,295 Shaanxi Fu Chen holds 80% interest of this company Other payables, interest free and payment on demand. Total $ 992,702 F- 27 As of December 31, 2021, the amounts due from the related parties were consisted of the followings: Name Amount Relationship Note Shaanxi Fu Chen Venture Capital Management Co. Ltd. (“Shaanxi Fu Chen”) $ 235,268 Two outside shareholders of the Company are shareholders of Shaanxi Fu Chen Loan receivables*, interest rate 5.25% and payment on demand. Bin Wu 26,145 A minority shareholder of a subsidiary of the Company Advance to pay for the incorporation costs of the establishment of the subsidiary in Dubai* Amount is interest free and payment on demand. Total $ 261,413 During 2021, the Company had the following transactions with related parties: Name Amount Relationship Note Loan to Shaanxi Fu Chen Venture Capital Management Co. Ltd. (“Shaanxi Fu Chen”) $ 235,268 Two outside shareholders of the Company are shareholders of Shaanxi Fu Chen Interest rate 5.25% and payment on demand. Loan from Shanchun Huang 300,359 Chief Executive Officer of the company; Director of the Board Interest free and payment on demand. Zhi, Yan 240,758 Chief Technology Officer of the company Interest free and payment on demand. Shaanxi Fu Chen repaid loan interest of $ 3,379 during 2021. During fiscal year 2021, the Company repaid loans to two key management personnel, which included a loan from the previous year amounting to $442,195 and a loan from the current year amounting to $300,359. During fiscal year 2021, the Company extended advances amounting to $391,250 to ten key management personnel, and a total of $675,637 had been either repaid or classified as business expenses. During fiscal year 2021, ten key management personnel advanced a total of $489,885 to the Company. * The related party transactions have been approved by the Company’s Audit Committee. 22. INCOME TAX The Company is incorporated in the United States of America and is subject to 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 years ended December 31, 2022 and 2021. For the years ended December 31, 2022 and 2021, the Company had current income tax expenses of $ 456,598 and $ 73,400 , 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 year ended December 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. The amount of unrecognized deferred tax liabilities for temporary differences related to the dividend from foreign subsidiaries is not determined because such determination is not practical. The Company has not provided deferred taxes on undistributed earnings attributable to its PRC and Hong Kong subsidiaries as they are to be permanently reinvested. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740, Income Taxes. Since the Company intends to reinvest its earnings to further expand its businesses in mainland China, its PRC subsidiaries do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, the Company has not recorded any deferred taxes in relation to US tax on the cumulative amount of undistributed retained earnings since January 1, 2008. F- 28 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 to RMB 3 million is 5%; the tax rate for pre-tax profits between RMB1 million to RMB 3 million is 10%. 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% in 2021, the applicable tax rate is 25% in 2022. 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 below HKD2 million is 8.5 %, exceeding HKD2 million is 16.5 % in Hong Kong. FTFT UK Limited is incorporated in United Kingdom and is subject to United Kingdom Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant United Kingdom tax laws. The applicable tax rate is 19 % in United Kingdom. FTFT Capital Investments L.L.C is incorporated in Dubai, United Arab Emirates. The applicable tax rate is nil in Dubai, United Arab Emirates. Digipay Fintech Limited is incorporated in British Virgin Island. The applicable tax rate is nil in British Virgin Island. FTFT Paraguay S.A. is incorporated in Republic of Paraguay. The applicable tax rate is 10 %. Significant components of the provision for income taxes are as follows: 2022 2021 Current tax $ 456,598 $ 73,400 Deferred tax - book-tax difference 60,504 - The provision for income taxes $ 517,102 $ 73,400 Reconciliation of the differences between the statutory EIT rate applicable to profits of the consolidated entities and the income tax expenses of the Company: 2022 2021 Loss before taxation $ ( 13,799,108 ) $ ( 11,743,625 ) Notional tax on profit before CIT and Hong Kong Computed expected tax expense ( 3,449,777 ) ( 413,908 ) Others, primarily the difference in tax rates 1,418,125 499,543 Deferred tax assets losses not recognized 2,488,250 ( 12,235 ) Total $ 456,598 $ 73,400 23. IMPAIRMENT LOSS The Company recorded $ 3.25 million of impairment loss in the year ended 2022 relating to the short - term investments $ 0.91 million, impairment of goodwill $ 2.21 million and impairment of intangible assets $ 0.13 million. The Company has intangible assets for certain acquired trade names and trademarks which are determined to have indefinite useful lives. The Company test indefinite-lived intangible assets for impairment annually the same measurement date as goodwill, the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Based on annual analysis, impairment of intangible assets $ 0.13 million. Future Private Equity Fund Management (Hainan) Co., Ltd. invested $ 1.83 million (RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types of investment portfolios. The Company may still suffer significant impairment loss or downward adjustments of our investments in the future, due to the potential worsening global economic conditions and the recent disruptions to, and volatility in, the continuing low market price of shares caused the Company to recognize a fair-value loss in 2022. According to the market value, the Company’s balance of the short - term investments was $ 0.99 million on December 31, 2022. F- 29 Goodwill represents the excess of the cost over the net tangible and identified intangible assets of acquired businesses. The Company evaluate goodwill for impairment annually as of the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Based on the impairment analysis performed in the fourth quarter. The Company recorded $ 2.21 million of impairment loss in fiscal year 2022 related with goodwill mainly arose from acquisition of Nice Talent Asset Management Limited and FTFT Finance UK Limited (formerly known as Khyber Money Exchange Ltd.). Goodwill impairment test as of December 31, 2022 using compare the carrying amount of the reporting unit (including goodwill) with its fair value. If the carrying amount exceeds the fair value, compare the implied fair value of the reporting unit’s goodwill with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss should be recognized. 24. OTHER INCOME (EXPENSES), NET The amount of other income (expenses) were consisted of the followings: 2022 2021 Gain on waiver of long term payables $ - $ 462,673 Government subsidies 842,287 775,013 Exchange gains 835,361 - Other expenses (income) 337,133 ( 35,176 ) Total other income, net $ 2,014,781 $ 1,202,510 25. SHARE BASED COMPENSATION On February 1, 2023, the Company has authorized and approved a 1-for-5 reverse stock split of the Company’s authorized shares of common stock from 300,000,000 shares to 60,000,000 shares. Consulting Service Agreement On January 25, 2020, the Company entered into a Consulting Service Agreement (the “Agreement”) with Dragon Investment Holding Limited (Malta) (the “Consultant”), a company incorporated in Malta, pursuant to which Consultant will: (i) help the Company to locate new merger projects globally, develop new merger strategy and provide the Company with at least five (5) merger and acquisition targets that have synergy with the Company’s business and development plans and could clearly contribute to the Company’s strategic goals each year; (ii) help the Company to map out new growth strategies in addition to its current business; (iii) work with the Company to explore new lines of business and associated growth strategies; and (iv) conduct market research and evaluating variable projects and providing feasibility studies per Company’s request from time to time. The term of the Agreement is three years. In consideration of the services to be provided by the Consultant to the Company, the Company agrees to pay the Consultant a three-year consulting fee totaling $ 3.0 million. The Company shall issue a total of 3,750,000 restricted shares of the Company Common Stock (the “Consultant Shares”) at a price of $ 0.794 per share (the closing price of the Agreement date), as the payment for the above mentioned consultant fee to the Consultant. On February 23, 2020, the Company issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately, 1,125,000 and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January 25, 2022 if this Agreement has not been terminated and there has been no breach of the Agreement by the Consultant at such time. If the second and/or third release of the shares mentioned above does not occur, such shares shall be returned to the Company as treasury shares. The shares contemplated in the Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. For the 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. 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. The share numbers in this Note 25 are pre-reverse stock split effected on February 1, 2023. Statutory reserve During the years ended December 31, 2022 and 2021, the Company collectively attributed $ 36,975 and $ 61,382 of retained earnings for their statutory reserves, respectively. F- 30 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 $ 31,474,600 (RMB 211,700,556 ) as of December 31, 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. As of the date of this report, the Shares have been issued to the Grantees. The share numbers in this Note 25 are pre-reverse stock split effected on February 1, 2023. 26. COMMON STOCK Securities Purchase Agreement On December 24, 2020, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company sold to the purchasers in a registered direct offering, an aggregate of 4,210,530 units, each consisting of one share of our common stock and a warrant to purchase 1 share of our Common Stock, at a purchase price of $ 1.90 per unit, for aggregate gross proceeds to the Company of $ 8,000,007 , before deducting fees to the placement agent and other offering expenses payable by the Company. On December 29, 2020, the Company issued Units consisting of an aggregate of 4,210,530 shares of our Common Stock and warrants to purchase up to an aggregate of 4,210,530 shares of our Common Stock at an exercise price of $ 2.15 per share (the “Investors’ Warrants”). The Investors’ Warrants have a term of five years and are exercisable by the holder at any time after the date of issuance. In connection with the offering, the Company also issued placement agent a warrant to purchase 210,526 shares of our Common Stock (the “Placement Agent Warrant”) on substantially the same terms as the Investors’ Warrants, except that the Placement Agent Warrant has an exercise price of $ 2.375 per share and are not exercisable until June 24, 2021. The net proceeds from offering were $ 7,338,500 , after deducting underwriting discounts and commissions and other estimated offering expenses, and were received on December 29, 2020. The Company issued 4,210,530 shares of its Common Stock to the purchaser on December 29, 2020. During the three months ended March 31, 2021, the Investors Warrants to purchase an aggregate of 4,210,530 shares of common stock were fully exercised by the investors. On January 11, 2021, the Company entered into a securities purchase agreement with certain purchasers identified on the signature page thereto, pursuant to which the Company sold to the purchasers in a registered direct offering, an aggregate of 3,000,000 share of its common stock, par value $ 0.001 per share at a purchase price of $ 5.00 per share, for aggregate net proceeds to the Company of $ 13,797,732 , after deducting fees to the placement agent and other offering expenses payable by the Company. On January 13, 2021, the Company issued 3,000,000 shares of common stock pursuant to this Agreement. F- 31 On February 9, 2021, the Company entered into a securities purchase agreement with certain purchasers identified on the signature page thereto, pursuant to which the Company sold to the purchasers in a registered direct offering, an aggregate of 2,000,000 shares of its common stock, par value $ 0.001 per share at a purchase price of $ 5.95 per share, for aggregate net proceeds to the Company of $ 10,992,250 , after deducting fees to the placement agent and other offering expenses payable by the Company. The Company issued 2,000,000 shares of common stock to the purchasers on February 11, 2021. On April 1, 2021, the Company entered into a Securities Purchase Agreement with certain purchasers identified on the signature page thereto (the “Purchasers”), pursuant to which the Company sold to the Purchasers in a registered direct offering, an aggregate of 5,737,706 shares of its common stock, par value $ 0.001 per share at a purchase price of $ 6.10 per share, for aggregate net proceeds to the Company of approximately $ 32,380,492 , after deducting fees to the placement agent and other offering expenses payable by the Company. The Company issued 5,737,706 shares of common stock to the purchasers on April 5, 2021. On April 12, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers (the “Purchasers”), pursuant to which the Company offered and sold to the Purchasers, in a registered direct offering, an aggregate of 862,097 shares of common stock, par value $0.001 per share. In a concurrent private placement, the Company also issued to the each of the Purchasers a warrant to purchase one (1) share of the Company’s Common Stock for each share purchased under the Purchase Agreement, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and each Purchaser (each, a “Warrant”, and collectively, the “Warrants”). The Warrants will be exercisable beginning on the six-months anniversary of the date of issuance at an initial exercise price of $5.20 per share and will expire on the five and a half year anniversary of the date of issuance. During the year ended December 30, 2021, the holders of the Warrants purchased an aggregate of 319,350 shares of common stock of the Company for $ 1,654,224 , of which 1,230 shares of common stock were issued based upon cashless exercises. On July 26, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain investors identified on the signature pages thereto (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers in a private placement 548,799 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $2.83 per share for an aggregate offering price of $1,553,101 (the “Private Placement”). The Private Placement was completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. On August 6, 2021, 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 Asset Management Limited from Joy Rich Enterprises Limited (the “Nice Shares”) 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, at a price of $5 per share. The share numbers in this Note 26 are pre-reverse stock split effected on February 1, 2023. 27. DISCONTINUED OPERATIONS On March 18, 2021, Chain Future Digital Tech (Beijing) Co., Ltd. was deregistered. On April 9, 2021, FT Commercial Management (Beijing) Co., Ltd. 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., Ltd. discontinued its operations, and on November 4, 2021, it was transferred to Shaanxi Fu Chen Venture Capital Management Co. Ltd. On June 27, 2022, Chain Cloud Mall Logistics Center (Shanxi) Co., Ltd. was dissolved and deregistered. F- 32 Loss from discontinued operations for fiscal years 2022 and 2021 was as follows: December 31, December 31, 2022 2021 REVENUES $ - $ - COST OF SALES - - GROSS PROFIT - - OPERATING EXPENSES: General and administrative - - Selling expenses - - Bad debt expenses - - Total - - OTHER INCOME (EXPENSE) Interest income - - Interest expense - - Other income (expenses) - - Total - - Loss from discontinued operations before income tax - - Income tax provision Loss from discontinued operation before noncontrolling interest $ - - Loss on disposal of discontinued operations ( 154 ) ( 2,388,900 ) Less: Net loss attributable to non-controlling interests - - LOSS FROM DISCONTINUED OPERATION $ ( 154 ) $ ( 2,388,900 ) The major components of assets and liabilities related to discontinued operations are summarized below: December 31, 2022 December 31, 2021 Amount due from related parties $ - $ 157 Total assets related to discontinued operations $ - $ 157 Total liabilities related to discontinued operations $ - $ - 28. SEGMENT REPORTING In its operation of the business, management, including our chief operating decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis consistent with GAAP. The Company operates in four segments starting in fiscal 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 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 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. Some of our operation might not individually meet the quantitative thresholds for determining reportable segments and we determine the reportable segments based on the discrete financial information provided to the chief operating decision maker. The chief operating decision maker evaluates the results of each segment in assessing performance and allocating resources among the segments. Since there is an overlap of services and products between different subsidiaries of the Company, the Company does not allocate operating expenses and assets based on the product segments. Therefore, operating expenses and asset information by segment are not presented. Segment profit represents the gross profit of each reportable segment. F- 33 For fiscal year 2022: Coals and aluminum ingots supply chain financing/trading Asset management service Others Total Reportable segment revenue $ 10,107,996 $ 13,630,508 $ 142,502 $ 23,881,006 Inter-segment loss - - - - Revenue-third party 10,107,996 13,630,508 142,502 23,881,006 Segment gross profit $ 338,970 $ 4,948,314 $ 108,162 $ 5,395,446 For fiscal year 2021: CCM Shopping Mall Membership Coals and aluminum ingots supply chain financing/trading Asset management service Others Total Reportable segment revenue $ 85 $ 34,034,662 $ 5,315,708 6,573 $ 39,357,028 Inter-segment loss - 14,306,227 - - 14,306,227 Revenue from external customers $ 85 19,728,435 5,315,708 6,573 25,050,801 Segment gross profit $ 85 $ 509,873 $ 1,291,390 517 $ 1,801,865 Loss from Continuing Operations before Income Tax: For the Years Ended, 2022 2021 Coals and aluminum ingots supply chain financing/trading ( 494,229 ) ( 451,125 ) Asset management service 2,431,254 1,157,184 Others 1,337,694 88,604 Corporate and Unallocated 15,919,835 12,750,827 Total operating expenses and other expense (income) 19,194,554 13,545,490 Loss from Continuing Operations before Income Tax ( 13,799,108 ) ( 11,743,625 ) Segment assets: December 31, 2022 2021 Coals and aluminum ingots supply chain financing/trading 26,487,090 20,900,211 Asset management service 3,387,506 2,007,040 Others 14,090,091 75,194 Corporate and Unallocated 41,053,032 68,674,640 Total assets 85,017,719 91,657,085 Assets subject to attribution to business segments largely include property, plant and equipment, receivable and right of use assets. All other items are reflected in Corporate and Unallocated. 29. COMMITMENTS AND CONTINGENCIES Legal case with FT Global Litigation In January 2021, FT Global Capital, Inc. (“FT Global”), a former placement agent of the Company filed a lawsuit against the Company in the Superior Court of Fulton County, Georgia. FT Global served the complaint upon the Company in January 2021. In the complaint, FT Global alleges claims, most of which attempt to hold the Company liable under legal theories that relate back to an alleged breach of an exclusive placement agent agreement between FT Global and the Company in July 2020 which had a term of three months. FT Global claims that the Company failed to compensate FT Global for securities purchase transactions between December 2020 and April 2021, pursuant to the terms of the expired exclusive placement agent agreement. Allegedly, the exclusive placement agent agreement required the Company to pay FT Global for capital received during the term of the agreement and for the 12-month period following the termination of the agreement involving any investors that FT Global introduced and/or wall-crossed to the Company. However, the Company believes the securities purchase transactions at issue did not involve the one investor which FT Global introduced or wall-crossed to the Company during the term of the agreement. FT Global claims approximately $ 7,000,000 in damages and attorneys’ fees. F- 34 The Company timely removed the case to the United States District Court for the Northern District of Georgia (the (“Court”) on February 9, 2021 based on diversity of jurisdiction. On March 9, 2021, the Company filed a motion to dismiss based on FT Global’s failure to state a claim which is pending before the Court. 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. 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; ii) claim for breach of the covenant of good faith and fair dealing; 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. 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. 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. On August 4, 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 12, 2022. On October 12, 2022, the Company filed a motion for summary judgment on all claims asserted by FT Global in this lawsuit. On 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. 30. RISKS AND UNCERTAINTIES Impact of COVID 19 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 the employees worked from home at the end of January until late March 2020 and was closed again in January 2022 due to the COVID-19 outbreak. 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 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 and Shanghai city 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. 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 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. 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. F- 35 Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we require additional capital. We currently believe that our financial resources will be adequate to see us through the outbreak. However, in the event that we do need to raise capital in the future, outbreak-related instability in the securities markets could adversely affect our ability to raise additional capital. Consequently, our results of operations have been materially 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 There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. We are considered foreign persons or foreign funded enterprises under PRC laws and, as a result, we are required to comply with PRC laws and regulations related to foreign persons and foreign funded enterprises. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. Customer concentration risk For the year ended December 31, 2022, two customers accounted for 52.86 % and 12.29 % of the Company’s total revenues. For the year ended December 31, 2021, three customers accounted for 59.15 %, 19.74 % and 17.22 % of the Company’s total revenues. Vendor concentration risk For the year ended December 31, 2022, two vendors accounted for 18.85 % and 15.87 % of the Company’s total purchases. For the year ended December 31, 2021, three vendors accounted for 40.76 %, 23.17 % and 18.55 % of the Company’s total purchases. 31. SUBSEQUENT EVENTS On January 26, 2023, Future FinTech Group Inc. (the “Company”) filed with the Florida Secretary of State’s office Articles of Amendment (the “Amendment”) to amend its Second Amended and Restated Articles of Incorporation, as amended (“Articles of Incorporation”). As a result of the Amendment, the Company has authorized and approved a 1-for-5 reverse stock split of the Company’s authorized shares of common stock from 300,000,000 shares to 60,000,000 shares, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). The common stock will continue to be $ 0.001 par value. The Company rounds up to the next full share of the Company’s shares of common stock any fractional shares that result from the Reverse Stock Split and no fractional shares will be issued in connection with the Reverse Stock Split and no cash or other consideration will be paid in connection with any fractional shares that would otherwise have resulted from the Reverse Stock Split. No changes are being made to the number of preferred shares of the Company which remain as 10,000,000 preferred shares as authorized but not issued. The amendment to the Articles of Incorporation of the Company takes effect at 1:00am Eastern Time on February 1, 2023. On February 27, 2023, Future FinTech (Hong Kong) Limited (“Buyer”), a company incorporated in Hong Kong and a wholly owned subsidiary of Future FinTech Group Inc. (the “Company”) entered into a Share Transfer Agreement (the “Agreement”) with Alpha Financial Limited, a company incorporated in Hong Kong (“Seller”) and sole owner and shareholder of Alpha International Securities (Hong Kong) Limited, a company incorporated in Hong Kong (“Alpha HK”) and Alpha Information Service (Shenzhen) Co., Ltd., a company incorporated in China (“Alpha SZ”). Pursuant to Agreement, the Buyer agreed to acquire all issued and outstanding shares of Alpha HK and Alpha SZ (the “Alpha Shares”) from the Seller in cash for a total of HK$15,659,949 (approximately $2,007,686). Pursuant to the terms of the Agreement, the parties agreed: (i) the purchase price of all issued and outstanding shares of Alpha HK (the “HK Shares”) shall be HK$ 14,010,421 (approximately $1,796,208 and the “HK Purchase Price”); (ii) the purchase price of all issued and outstanding shares of Alpha SZ (the “SZ Shares”) shall be HK$1,649,528 (approximately $211,478, the “SZ Purchase Price”, together with HK Purchase Price as the “Total Purchase Price”); (iii) 50% of the Total Purchase Price shall be paid to the Seller within 5 working days after the formal signing of the Agreement; (iv) the remaining 50% shall be paid within 5 working days after Buyer receives the approval notice from Hong Kong Securities and Futures Commission (“HKSFC”) for the transfer of HK Shares prior to December 31, 2023 (or such later date as the parties may mutually agree in writing); (v) if the HKSFC fails to give such approval within 365 days of this Agreement, Seller shall refund the amount paid by the Buyer under this Agreement within 3 working days after the earlier of receiving the notice of failure or the expiration of 365 days unless Buyer and Seller mutually have agreed to extend such deadline; and (vi) if the failure to obtain the approval from HKSFC is attributable to a material breach of the Agreement by the Buyer or fraud or willful malfeasance on the part of the Buyer, the amount of the Total Purchase Price theretofore paid will not be refunded. Ms. Ying Li, a director of the Board of Directors and vice president of the Company is a minority shareholder of the parent company of Alpha International Financial Holdings Limited (“Alpha International”), which is the sole shareholder of the Seller. Ms. Li has served as a director of Alpha International since February 5, 2020, and as a director of Alpha HK since September 9, 2020. F-35