What changed in this filing

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Item 1. Financial Statements

2023-05-22 compared with 2022-11-21 · 739 added, 823 removed, 697 unchanged (69% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

Cash and cash equivalents

Restricted cash

Short - term investment

3 unchanged sentences

Other receivables, net

Amount due from related parties

Assets related to discontinued operations

Amount due from related party

TOTAL CURRENT ASSETS

Property, plant and equipment, net

Right of use assets

Right of use assets - operation lease

Intangible assets

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Advances from customers

Dividend payables

Lease liability

Lease liability - operation lease

Amounts due to related parties

Deferred liabilities

Liabilities related to discontinued operations

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Long term debt

Lease liability

Deferred liabilities

Lease liability - operation lease

TOTAL NON-CURRENT LIABILITIES

5 unchanged sentences

60,000,000 shares authorized;

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

14,645,653 shares and 14,645,653 shares issued and outstanding as of March 31, 2023 and December 31, 2022 respectively

Additional paid-in capital

5 unchanged sentences

( 3,038,065 )

( 3,623,005 )

Total Future FinTech Group, Inc.

2 unchanged sentences

( 1,350,593 )

( 1,279,580 )

TOTAL STOCKHOLDERS’ EQUITY

6 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenue

Cost of revenues - third party

Cost of revenues-related party

Operating Expenses

1 unchanged sentence

Research and development expenses

Stock compensation expense

Selling expenses

Provision of doubtful debts

Impairment Loss

(Recovery) Provision of doubtful debts

Total operating expenses

2 unchanged sentences

( 2,676,471 )

( 10,158,234 )

( 9,736,553 )

Other (expenses) income

1 unchanged sentence

Interest expenses

Other income , net

Other expenses, net

Total other income, net

Loss from Continuing Operations before Income Tax

( 3,432,460 )

( 6,634,386 )

Loss before Income Tax

( 2,221,803 )

1 unchanged sentence

Income tax provision

Loss from Continuing Operations

$ ( 2,247,477 )

$ ( 2,698,371 )

( 8,668,802 )

( 9,047,648 )

Discontinued Operations (Note 22)

Loss on disposal of discontinued operations

( 3,679,447 )

( 3,523,652 )

(Loss) Income from discontinued operations

( 3,633,897 )

( 10,494,177 )

( 8,668,956 )

( 11,694,964 )

Net Loss attributable to non-controlling interests

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

$ ( 3,531,499 )

$ ( 10,310,185 )

Net loss attributable to Future Fintech Group, Inc.

$ ( 2,176,464 )

1 unchanged sentence

Other comprehensive income (loss)

Loss from continued operations

$ ( 2,247,477 )

$ ( 2,698,371 )

( 8,668,802 )

( 9,047,648 )

Foreign currency translation – continued operations

( 1,834,957 )

( 3,522,764 )

Comprehensive loss - continued operation

( 5,468,854 )

( 7,188,881 )

( 12,191,566 )

( 9,504,987 )

Net (loss) from discontinued operations

( 3,859,791 )

( 2,647,316 )

Foreign currency translation – discontinued operations

Comprehensive loss - discontinued operation

( 3,726,423 )

( 2,579,147 )

Unrealized gains on available-for-sale securities

Foreign currency translation

Comprehensive loss

1 unchanged sentence

( 2,880,988 )

( 12,191,720 )

( 12,084,134 )

Net loss attributable to non-controlling interests

2 unchanged sentences

( 2,705,779 )

( 11,687,817 )

( 11,900,142 )

Earnings (Loss) per share:

Basic loss per share from continued operation

Basic earnings per share from discontinued operation

Diluted Earnings (Loss) per share:

Diluted loss per share from continued operation

Diluted earnings per share from discontinued operation

Loss per share:

Basic loss per share

Diluted loss per share:

Diluted loss per share

Weighted average number of shares outstanding

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months ended September 30, 2021

comprehensive

Balance at June 30, 2021

$ 202,266,182

$ ( 125,585,088 )

$ ( 366,057 )

Issuance of common stocks - cash

Issuance of common stocks-non cash

Net loss from continued operations

( 6,450,394 )

( 6,634,386 )

Net income from discontinued operations

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

Disposal of discontinued operation

( 3,679,447 )

( 3,546,079 )

Balance at September 30, 2021

$ 220,523,246

$ ( 135,895,273 )

$ ( 787,184 )

$ ( 231,451 )

Three Months ended September 30, 2022

comprehensive

Balance at June 30, 2022

$ 221,416,496

$ ( 143,245,468 )

$ ( 2,285,669 )

$ ( 992,266 )

( 3,531,499 )

( 3,633,897 )

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

( 1,834,957 )

Balance at September 30, 2022

$ 222,693,189

$ ( 146,776,967 )

$ ( 4,120,626 )

$ ( 1,094,664 )

Nine Months ended September 30, 2021

Three Months ended March 31, 2022

comprehensive

3 unchanged sentences

$ ( 597,862 )

Issuance of common stocks - cash

Issuance of common stocks-non cash

Net loss from continued operations

$ ( 590,761 )

( 2,523,162 )

Net income from discontinued operations

( 2,698,371 )

Share-based payments-service

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

Disposal of discontinued operation

( 3,523,652 )

( 3,455,483 )

Balance at September 30, 2021

Balance at March 31, 2022

$ 221,472,527

2 unchanged sentences

$ ( 765,970 )

Nine Months ended September 30, 2022

Three Months ended March 31, 2023

comprehensive

6 unchanged sentences

( 2,247,477 )

Share-based payments-service

Share-based payments-omnibus equity plan

Unrealized gains on available-for-sale securities

Foreign currency translation adjustment

( 3,522,764 )

Disposition of discontinued operation

Balance at September 30, 2022

Balance at March 31, 2023

$ 222,751,657

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 2,698,371 )

Net loss from discontinued operation

( 2,647,316 )

Net loss from continuing operations

( 8,668,802 )

( 9,047,648 )

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

Provision (Recovery) of doubtful debts

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

Provision of doubtful debts

Share-based payments

Impairment of short - term investment

Interest expenses related to convertible note

Changes in operating assets and liabilities

Accounts receivable

( 8,290,510 )

Other receivable

( 2,875,509 )

( 1,690,100 )

Advances to suppliers and other current assets

( 10,555,558 )

( 5,642,045 )

Notes payable

Accounts payable

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

( 1,970,327 )

Accrued expenses

( 1,398,587 )

Taxes payable

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

Advances from customers

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

Net Cash Used in Operating Activities – Continued Operations

( 10,436,724 )

Net cash provided by operating activities – discontinued operations

Net Cash Used in Operating Activities – Discontinued Operations

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

( 5,000,000 )

( 6,308,385 )

Acquisition of a subsidiary - NTAM, net of cash

Disposal of a subsidiary - Guangchengji, net of cash

Repayment of loan receivable

Repayment for loan receivable

Purchase of intangible assets

Net cash used in investing activities from continued operations

( 14,440,605 )

( 6,706,933 )

Net cash used in investing activities from discontinuing operations

Net Cash Provided by Investing Activities from Continued Operations

CASH FLOWS FROM FINANCING ACTIVITIES

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

Repayment of convertible payable

( 1,163,146 )

Payment of dividends to the non-controlling interest

Proceeds from loan payable

Net cash (used in) provided by financing activities

Payment of dividends to the non-controlling interest

Net cash provided by financing activities

Effect of change in exchange rate

( 3,201,964 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET INCREASE IN CASH AND RESTRICTED CASH

( 9,935,384 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

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

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

Cash and Restricted Cash at Beginning of Year

Cash and Restricted Cash at End of Year

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Issuance of common stocks

Deferred liabilities

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid

Interest paid

Cash paid for income taxes

The accompanying notes are an integral part of

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The main business of the Company includes an online shopping

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

transfer service, asset management and cryptocurrency market data services.

The Company is also engaged in the development of blockchain

based e-Commerce technology, cryptocurrency mining, cryptocurrency investment management as well as financial service technology businesses.

Prior to 2019, the Company engaged in the production and sales of fruit juice concentrates, fruit juice beverages and other fruit-related

products in the People’s Republic of China (“PRC”, or “China”), and overseas markets.

Due to the drastically

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

and distribution to a real-name blockchain e-commerce platform that integrates blockchain and internet technology, supply chain financing

services and trading, assets management, money transfer service and cryptocurrency market data service.

On May 11, 2021, the Company established Future

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

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.

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 fund.

On December 15, 2021, the Company established

FTFT Super Computing Inc.

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

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

supply chain financing services and trading, asset management and

money transfer services.

The Company has also expanded into cryptocurrency mining and cryptocurrency market data and information service

Prior to 2019, the Company engaged in the production and sales of fruit juice concentrates, fruit juice beverages and other

fruit-related products in the People’s Republic of China (“PRC”, or “China”), and overseas markets.

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

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

supply chain financing services and trading and asset management and money transfer services.

In March 2022, FTFT UK Limited received approval

to operate as an Electronic Money Directive (“EMD”) Agent and has been registered as such with the Financial Conduct Authority

(FCA), a UK regulator.

This status grants FTFT UK Limited the ability to distribute or redeem e-money and provide certain financial services

on behalf of an e-money institution (registration number 903050).

On April 14, 2022, the Company established Future

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on July 28, 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.,

(“E-Commerce Tianjin”) in the PRC.

On September 29, 2022, FTFT UK Limited completed its acquisition of

100 % of the issued and outstanding shares of Khyber Money Exchange Ltd., a company incorporated in England and Wales, from Rahim Shah,

a resident of United Kingdom for a total of Euros € 685,000 (“Purchase Price”), pursuant to a Share Purchase Agreement

(the “Agreement”) dated September 1, 2021.

Khyber Money Exchange Ltd.

is a money transfer company with a platform for transferring

money through one of its agent locations or via its online portal, mobile platform or over the phone.

Khyber Money Exchange Ltd.

is regulated by the UK Financial Conduct Authority (FCA) and the parties received approval by the FCA before the formal closing of the

On October 11, 2022, the Company changed the name of Khyber Money Exchange Ltd.

to FTFT Finance UK Limited.

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”).

Alpha HK holds

Type 1 ‘Securities Trading’, Type 2 ‘Futures Contract Trading’ and Type 4 ‘Securities Consulting’

financial licenses issued by the Hong Kong Securities and Futures Commission.

Alpha SZ provides technical support services to Alpha HK.

The share transfer transaction is still subject to the approval of the Securities and Futures

Commission of Hong Kong (“SFC”) and has not been closed yet.

The Company’s business and operations are principally conducted

by its subsidiaries in the PRC and Hong Kong.

On January 26, 2023, 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 is issued in connection with the Reverse

Stock Split and no cash or other consideration is 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 took effect at 1:00am Eastern Time

on February 1, 2023.

The Reverse Stock Split and Amendment were authorized and approved by the Board of Directors of the Company without

shareholders’ approval, pursuant to 607.10025 of the Florida Business Corporation Act of the State of Florida.

The reverse stock split would be reflected in our March 31, 2023 and

December 31, 2022 statements of changes in stockholders’ equity, and in per share data for all periods presented.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

for the periods ended September 30, 2022 and 2021.

adjustments, necessary to present fairly the financial position as of March 31, 2023 and the results of operations and cash flows for

the periods ended March 31, 2023 and 2022.

The financial data and other information disclosed in these notes to the interim financial

statements related to these periods are unaudited.

The results for the three to nine months ended September 30, 2022 are not necessarily

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

The balance sheet

of December 31, 2021 has been derived from the audited financial statements at that date.

Our contractual arrangements with our VIE and

their respective shareholders allow us to (i) exercise effective control over our VIE, (ii) receive substantially all of the economic

benefits of our VIE, and (iii) have an exclusive option to purchase all or part of the equity interests in our VIE when and to the extent

permitted by PRC law.

As a result of our direct ownership in our wholly

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

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

We have consolidated the financial

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

The results for the three months ended March 31, 2023 are not necessarily indicative

of the results to be expected for any subsequent periods or for the entire year ending December 31, 2023.

The balance sheet at December

31, 2022 has been derived from the audited financial statements at that date.

Our contractual arrangements with the VIE and their respective shareholders

allow us to (i) exercise effective control over the VIE, (ii) receive substantially all of the economic benefits of the VIE, 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.

As a result of our direct ownership in our wholly owned subsidiary

and the contractual arrangements with the VIE, we are regarded as the primary beneficiary of the VIE, and we treat it and its subsidiaries

as our consolidated affiliated entities under U.S.

We have consolidated the financial results of the VIE in our condensed consolidated

financial statements in accordance with U.S.

Certain information and footnote disclosures normally

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Discontinued Operations

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

was deregistered.

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

was dissolved and deregistered.

On August 2, 2021, the Company sold Guangchengji

(Guangdong) Industrial Co., Ltd.

to an unrelated third party.

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

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

On June 27, 2022, Chain Cloud Mall Logistics Center

5 unchanged sentences

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.

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

Uses of Estimates in the Preparation of Financial

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assuming that the Company will continue as a going concern.

The Company incurred operating losses amounted

$ 8.67 million and may continue to incur operating losses as the Company implements its future business plan.

These factors raise substantial

doubts about the Company’s ability to continue as a going concern.

The Company has raised funds through issuance of convertible

notes and common stock.

The Company incurred operating losses and had

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

future business plan.

The Company’s operating losses amounted $ 2.25 million, and it had negative operating cash flows amounted $ 10.44

million as of March 31, 2023.

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

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

The ability of the Company to continue as a going

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

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

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

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.

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

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

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

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

Level 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 active markets for identical assets or liabilities.

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

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 are classified within

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

Earnings (Loss) Per Share

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 Per Share

Under ASC 260-10, Earnings Per Share , basic

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following table.

Three Months ended September 30, 2022:

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

$ ( 3,531,499 )

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

Loss available to common stockholders from continuing operations

$ ( 3,531,499 )

Loss available to common stockholders from discontinuing operations

Dilutive EPS:

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

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

$ ( 3,531,499 )

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

Three Months ended September 30, 2021:

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

$ ( 6,450,394 )

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

$ ( 3,859,791 )

Loss available to common stockholders from continuing operations

$ ( 6,450,394 )

Loss available to common stockholders from discontinuing operations

$ ( 3,859,791 )

Dilutive EPS:

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

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

$ ( 6,450,394 )

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

$ ( 3,859,791 )

For the nine months ended September 30, 2022:

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

As of March 31, 2023:

Net loss attributable to Future Fintech Group, Inc.

$ ( 2,176,464 )

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

Loss available to common stockholders from continuing operations

Loss available to common stockholders

$ ( 2,176,464 )

Loss available to common stockholders from discontinuing operations

Dilutive EPS:

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

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

$ ( 8,164,899 )

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

For the nine months ended September 30, 2021:

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

$ ( 8,863,656 )

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

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

$ ( 2,176,464 )

Loss available to common stockholders from continuing operations

As of March 31, 2022:

Net loss attributable to Future Fintech Group, Inc.

$ ( 2,523,162 )

Loss available to common stockholders from discontinuing operations

Loss available to common stockholders

$ ( 2,523,162 )

1 unchanged sentence

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

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

$ ( 8,863,656 )

Diluted Earnings 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

$ ( 2,523,162 )

3 unchanged sentences

maturity of three months or less.

Deposits in banks in the PRC and Hong Kong

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

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

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

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

We determine whether an allowance for doubtful

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

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

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

These specific allowances

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

The amounts calculated are analyzed to determine the total amount

of the allowance.

Allowances for doubtful accounts are maintained for

expected credit losses resulting from the Company's customers' inability to make required payments.

The allowances are based on the Company's

regular assessment of various factors, including the credit-worthiness and financial condition of specific customers, historical experience

with bad debts and customer deductions, receivables aging, current economic conditions, reasonable and supportable forecasts of future

economic conditions, and other factors that may affect the Company's ability to collect from customers.

The Company maintains an allowance

for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”) and records the allowance for credit losses

as an offset to accounts receivable and contract assets, and the estimated credit losses charged to the allowance is classified as “Bad

debt expense” in the consolidated statements of comprehensive income.

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.

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should abandon such efforts.

The Company has assessed its accounts receivable

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

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

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

There is no accounts receivable balance overdue

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

The Company has assessed its accounts receivable including credit term

and corresponding all its accounts receivables as of March 31, 2023.

Bad debt expense was $ 16,826 and $ 2,002 during the three months ended

March 31, 2023 and 2022, respectively.

Accounts receivables of $ 1.14 million and nil have been outstanding for over 90 days as of March

31, 2023 and December 31, 2022, respectively.

Revenue Recognition

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

Control is generally transferred

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

transferred to its customers.

We do not make any significant judgment in evaluating

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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.

During the second

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

Sales of coals and aluminum ingots

The Company recognize revenue when the receipt

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

Sales of coals, aluminum ingots, sand and

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.

Revenue was nil

during the three months ended March 31, 2023 and 2022, respectively.

Sales of coals and aluminum ingots as

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.

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 recognizes net revenue from sale of coals and aluminum ingots when no control obtained throughout the transactions.

Revenue was $ 0.11 million and nil during the three months ended March 31, 2023 and 2022, respectively.

Asset Management Service

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

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

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

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

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use if they were pricing the intangible asset.

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

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

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

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The financial statements of the Company’s

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

however, the reporting currency of the Company

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

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

foreign subsidiaries and VIE 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 7.10 and 6.38 at the balance sheet dates of September 30, 2022 and December 31, 2021, respectively.

to USD was 6.87:1 and 6.96:1 at the balance sheet dates of March 31, 2023 and December 31, 2022, respectively.

The average exchange rate

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

The average exchange rates we used to convert RMB to USD were 6.61 and

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

The average exchange rates we used to convert RMB to USD were 6.67:1

and 6.35:1 for three months ended March 31, 2023 and 2022, respectively.

The exchange rate we used to convert HKD to USD

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

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

and expenses.

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

was 7.85:1 and 7.80:1 at the balance sheet dates of March 31, 2023 and December 31, 2022.

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 7.84:1 and 7.81:1 for three

months ended March 31, 2023 and 2022, respectively.

The exchange rate we used to convert GBP to USD

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

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

and expenses.

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

was 0.81:1 and 0.83:1 at the balance sheet dates of March 31, 2023 and December 31, 2022.

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 0.82:1 and 0.75:1 for three

months ended March 31, 2023 and 2022, respectively.

The exchange rate we used to convert AED to USD

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

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

and expenses.

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

was 3.67:1 and 3.67:1 at the balance sheet dates of March 31, 2023 and December 31, 2022.

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 three

months ended March 31 2023 and 2022, respectively.

The exchange rate we used to convert PYG to USD

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

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

and expenses.

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

was 7166.48:1 and 7322.90:1 at the balance sheet dates of March 31, 2023 and 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 7275.55:1 for three months

ended March 31 2023.

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.

We use the asset and liability method of accounting

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future revenue and operating margin.

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

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

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

Short-term investments

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

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

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

Fair valued or carried at amortized costs.

31, 2023 and December 31, 2022, the short-term investments amounted to $ 1.18 million and $ 0.99 million, respectively.

Due to fluctuations

of the quoted shares included in its investment portfolios, the Company unrealized holding gains on available-for-sale securities of $ 0.18

million on March 31, 2023 and recognized an impairment to the investment portfolio of $ 0.91 million on December 31, 2022.

We adopted ASU No.

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Variable interest entities

On July 31, 2019, Chain Cloud Mall Network and

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

(“E-commerce Tianjin”),

On July 31, 2019, Cloud Chain Network and Technology

(Tianjin) Co., Limited (“CCM Tianjin” or “WFOE”, formerly known as Chain Cloud Mall Network and Technology (Tianjin)

Co., Limited), E-commerce Tianjin, and Mr.

Zeyao Xue and Mr.

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

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

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

Therefore, pursuant to ASC 810,

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

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

into the following agreements, or collectively, the “Variable Interest Entity Agreements” or “VIE Agreements,”

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

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

Pursuant to Chinese law and regulations, a foreign

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

Company is expanding in China.

Company is conducting in China.

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

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

use the Chain Cloud Mall System owned by CCM Tianjin.

use the Cloud Chain Mall System owned by CCM Tianjin.

E-commerce Tianjin was incorporated by Mr.

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

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

Zeyao Xue is a major shareholder

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Kai Xu was the Chief Operating Officer of the Company

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

division of the Company.

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

of blockchain division of the Company.

The VIE Agreements are as follows:

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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.

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

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

33 unchanged sentences

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.

4) Exclusive Operation and Use Rights Authorization letter which authorizes CCM Tianjin, to exclusively operate and use the Cloud Chain Mall System and the authorization period is the same as the term of the EXCLUSIVE THEHNOLOGY CONSULTING AND SERVICE AGREEMENT entered into by and between CCM Tianjin and E-commerce Tianjin dated July 31, 2019.

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

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

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

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

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

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

Management is currently evaluating the effect of the adoption

of ASU 2016-13 on the consolidated financial statements.

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

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

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

Management adopted 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

In November 2021, the FASB issued ASU No.

10 unchanged sentences

The Company adopted ASU No.

2021-10 effective January 1, 2022.

The adoption of this standard did not have

a material impact on the Company consolidated financial statements.

2021-10 effective on January 1, 2022.

The adoption of this standard did not

have a material impact on the Company consolidated financial statements.

Management does not believe that any other recently

3 unchanged sentences

assets and liabilities are as follows:

September 30,

Current assets

Cash and cash equivalents

Other receivables

Other current assets

Total current assets

Property and equipment, net

3 unchanged sentences

$ ( 132,741 )

September 30,

Current liabilities:

7 unchanged sentences

are as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net (loss) income

ACCOUNTS RECEIVABLE

Accounts receivable, net consist of the following:

September 30,

Coal and Aluminum Ingots Supply Chain Financing/Trading

Supply Chain Financing/Trading

Asset management service

Total accounts receivable

Total accounts receivable, net

The following table sets forth our concentration

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

September 30,

Total accounts receivable, net

OTHER RECEIVABLES

As of September 30, 2022, the balance of other

As of March 31, 2023, the balance of other receivables

was $ 5.51 million.

As of April 22, 2022 and January 31, 2023, FTFT Super Computing Inc.

entered into a “Electricity Sales and Purchase Agreement” with a third-party seller.

FTFT Super Computing Inc.

initial amount of Adequate Assurance to the seller in the form of a cash deposit in the amount of $ 1.86 million and has receivables from

resale of electricity $ 0.18 million.

On February 3, 2023, Future Fintech Group Inc.

entered into a “Consulting Agreement” with a third party for its professional service of potential acquisition projects.

Future Fintech Group Inc.

provided initial amount of cash deposit to the third party in the amount of $ 2.40 million.

2023, the parties terminated the agreement and the Company has received repayment of $ 2.40 million.

In addition, other receivables included total $ 1.07 million deposit paid

and prepayments to third party.

As of December 31, 2022, the balance of other

receivables was $ 2.65 million.

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

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

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

Under this agreement, FTFT UK Limited

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

Exchange Ltd.

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

(“Purchase Price”).

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

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

actual amount in Khyber’s account at closing).

April 22, 2022, Champion Energy Services, LLC

and FTFT Supercomputing Inc.

signed Electricity Sales and Purchases Agreement.

Upon enrollment of FTFT Supercomputing Inc.’s facilities,

Champion Energy Services, LLC shall sell and deliver, or engage a third party (including Local Utility) to deliver, and FTFT Supercomputing

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

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

FTFT Supercomputing Inc shall provide

an initial amount of Adequate Assurance to Champion Energy Services, LLC in the form of a cash deposit amounted $ 1.00 million.

In addition, other receivables included deposit

paid and prepayments amounting to $ 0.94 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

As of April 22, 2022, FTFT Super Computing Inc.

entered into a “Electricity

Sales and Purchase Agreement” with a third-party seller.

FTFT Super Computing Inc.

provided an initial amount of Adequate Assurance

to the seller in the form of a cash deposit in the amount of $ 1.00 million and has receivables from resale of electricity $ 0.24 million.

In addition, other receivables included total $ 1.17 million deposit

paid and prepayments to third party.

LOAN RECEIVABLES

As of September 30, 2022, the balance of loan

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

As of March 31, 2023, the balance of loan receivables was $ 19.04 million,

which was from a third party.

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

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

Pursuant to the Loan Agreement, FTFT HK loaned 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 $ 2.16 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

same 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 $ 6.36

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

same 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 $ 7.28 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 $ 5.09 million (RMB 35 million).

The amount of

$ 2.18 million (RMB 15 million) will be repaid within 3 months.

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

1 unchanged sentence

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

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

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.

1 unchanged sentence

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

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

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 $ 2.16 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 US$6.36 million to the third party at

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

Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 6.36 million to the same 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 $ 6.36 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 same 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

1 unchanged sentence

Pursuant to the Loan Agreement, Future Private Equity

Fund Management (Hainan) Co.

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

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

On September 23, 2022, Nice Talent Asset Management

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

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

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

Fund Management (Hainan) Co., Limited loaned an amount of $ 7.28 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 $ 5.09 million (RMB 35 million).

The amount of

$ 2.18 million (RMB 15 million) will be repaid within 3 months.

SHORT - TERM INVESTMENT

As of September 30, 2022, the balance of short

term investment was $ 0.97 million.

As of March 31, 2023, the balance of short - term investments were

$ 1.18 million.

On September 6, 2021, 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.

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

ADVANCES TO SUPPLIERS AND OTHER CURRENT

The amount of advances to suppliers and other

current assets consisted of the followings:

September 30,

Prepayments for Coal and Aluminum Ingots Supply Chain Financing/Trading

invested RMB 13,000,000 ($ 1.89 million) to

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

According to the market

value, the Company’s balance of the short - term investment was $ 1.18 million on March 31, 2023.

Due to fluctuations of the quoted

shares included in its investment portfolios, the Company unrealized holding gains on available-for-sale securities of $ 0.18 million.

As of December 31, 2022, the balance of short - term investments were

$ 0.99 million.

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

invested RMB 13,000,000 ($ 1.87 million) 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.

OTHER CURRENT ASSETS

The amount of other current assets consisted of

the followings:

Prepayments for Supply Chain Financing/Trading

Prepayments for Sand and Steel Supply Chain Financing/Trading

Prepaid expenses

As of September 30, 2022, the balance of goodwill

mainly represented an amount of $ 15.73 million that arose from acquisition of Nice Talent Asset Management Limited (“Nice Talent”)

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

of 90 % of the issued and outstanding shares of Nice Talent from Joy Rich Enterprises Limited (“Joy Rich”) 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) paid in 2,244,156 shares of common stock of the Company on August 4, 2021.

40 % of the Purchase

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

with 20 % for each of the years ended on December 31, 2021 and December 31, 2022, respectively.

Nice Talent has met the performance requirements

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

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

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

On August 6, 2021 (“Acquisition

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

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

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

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

40 % of the Purchase

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

Talent with 20 % for each of the years ended on December 31, 2021 and December 31, 2022, respectively.

Nice Talent has met the

performance requirements for the year ended on December 31, 2021 and the first 20 % of the Purchase Price in shares of common stock of the Company has been paid in July 2022,

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

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

As of March 31, 2023 and 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 two installments for 20 % each shall be paid

in shares of common stock of the Company upon the completion of the audited reports for Nice Talent for each of the years ended on December

31, 2021 and December 31, 2022, respectively.

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 in England and Wales, for £ 786,887 ($ 0.95

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.

On August 6, 2021 (“Acquisition Date”), the Company through

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

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

of common stock of the Company (the “Company Shares”).

60 % of the Purchase Price ($ 11.22 million) was paid in 2,244,156 shares

of common stock of the Company on August 4, 2021.

40 % of the Purchase Price ($ 7.39 million) in two installments for 20 % each shall be

paid in shares of common stock of the Company upon the completion of the audited reports for Nice Talent of the years ended on December

31, 2021 and 2022, respectively.

Nice Talent has met the performance requirements for the year ended on December 31, 2021 and 2022, however,

the 40 % of the Purchase Price has not been paid in the shares of common stock of the Company to Joy Rich as of the date of this report.

The transaction was accounted for in accordance

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

The Company retained an independent appraisal firm to advise management in

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

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

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

The values assigned in these financial statements

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

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

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

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

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 in England and Wales, for £ 786,887 ($ 0.95

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

Property, plant and equipment, net

Accrued expenses and other payables

Net identifiable assets acquired

Total purchase price for acquisition net of $ 166,676 of cash

The Company has included the operating results of FTFT Finance UK Limited

in its consolidated financial statements since October 1, 2022.

The Company’s non-cancellable operating

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

For the nine months ended

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

The Company’s operating lease has remaining

lease term of approximately one month .

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

For the three months ended

March 31, 2023, the operating lease cost was $ 0.98 million.

The Company’s operating leases have remaining

lease terms of approximately 48 months.

As of March 31, 2023, the weighted average remaining lease term and weighted average discount

rate were 4 years and 4.75 %, respectively.

Maturities of lease liabilities were as follows:

As of September 30,

From October 1, 2022 to September 30, 2023

From October 1, 2023 to September 30, 2024

As of March 31,

From April 1, 2023 to March 31, 2024

From April 1, 2024 to March 31, 2025

From April 1, 2025 to March 31, 2026

From April 1, 2026 to March 31, 2027

amounts representing interest

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Long term obligations

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 $ 0.16 million for three

months ended March 31, 2023.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

September 30,

Office equipment, fixtures and furniture

Leasehold Improvement

accumulated depreciation and amortization

Construction in progress

Depreciation expense included in general and

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

Depreciation expense

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

Depreciation expense included in general and administration

expenses for the three months ended March 31, 2023 and 2022 was $ 73,614 and $ 45,208 , respectively.

Depreciation expense included in cost

of sales for the three months ended March 31, 2023 and 2022 was $ 0 and $ 0 , respectively.

INTANGIBLE ASSETS

Intangible assets consist of the following:

September 30,

System and software

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( 1,862,289 )

Amortization expense included in general and

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

Amortization expense

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

Amortization expense included in general and administration

expenses for the three months ended March 31, 2023 and 2022 was $ 14,259 and $ 11,768 , respectively.

Amortization expense included in cost

of sales for the three months ended March 31, 2023 and 2022 was $ 0 and $ 0 , respectively.

The estimated amortization is as follows:

As of September 30,

From October 1, 2022 to September 30, 2023

From October 1, 2023 to September 30, 2024

From October 1, 2024 to September 30, 2025

From October 1, 2025 to September 30, 2026

From October 1, 2026 to September 30, 2027

As of September 30, 2022, the balance of note

payable was $ 2.82 million.

The Company issues an acceptance bill $ 2.82 million

(RMB 20 million) to purchase coal.

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

LONG TERM DEBT

As of September 30, 2022, loan payables were

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 it off to Shaanxi Entai Bio-Technology Co., Ltd.

As of March 31,

From April 1, 2023 to March 31, 2024

From April 1, 2024 to March 31, 2025

From April 1, 2025 to March 31, 2026

From April 1, 2026 to March 31, 2027

From April 1, 2027 to March 31, 2028

Note payable consist of the following:

FUCE Future Supply Chain (Xi’an) Co., Ltd.

August 10, 2022

August 10, 2023

FUCE Future Supply Chain (Xi’an) Co., Ltd.

August 12, 2022

August 12, 2023

FUCE Future Supply Chain (Xi’an) Co., Ltd.

July 28, 2022

July 28, 2023

FUCE Future Supply Chain (Xi’an) Co., Ltd.

December 19, 2022

December 19, 2023

At maturity, the Notes are payable at their principal amount thereon.

The 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 March 31, 2023, there was no such event of default.

ACCOUNT PAYABLES

The amount of account payables were consisted

of the followings:

Supply Chain Financing/Trading payment

ACCRUED EXPENSES AND OTHER PAYABLES

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consisted of the followings:

September 30,

Legal fee and other professionals

Wages and employee reimbursement

CONVERTIBLE NOTES PAYABLE

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

convertible debt consisted of the following:

September 30,

DEFERRED LIABILITIES

As of September 30, 2022, the balance of

deferred liabilities mainly represented an amount of $ 7.39 million that arose from the payment for the remaining 40 % of the Purchase

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

20 % of the Purchase Price (current

$3.74 million, non-current $3.65 million) shall be paid in shares of common stock of the Company upon the completion of the audited

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

Nice Talent has met

the performance requirements for the year ended on December 31, 2021 and the first 20% of the Purchase Price in shares of common stock of the Company has been paid in July 2022,

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

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

As of December 31, 2021, the balance of deferred

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

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

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

non-current $ 3.38 million) shall be paid in shares of common stock of the Company upon the completion of the audited reports for Nice

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

As of March 31, 2023 and 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”).

20 % and 20 % of the Purchase Price

in two installments for 20 % each 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, 2021 and 2022, respectively.

However, the 40 % of the Purchase Price has not been paid

in the shares of common stock of the Company as of the date of this report

RELATED PARTY TRANSACTION

As of September 30, 2022, the amounts due to

the related parties consisted of the followings:

As of March 31, 2023, the amounts due to the related

parties were consisted of the followings:

General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

Alpha Yield Limited

Director and legal representative of NTAM

Accrued expenses, interest free and payment on demand

Reits (Beijing) Technology Co., Ltd

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.

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.

As of September 30, 2022, the amounts due from

the related parties consisted of the followings:

Vice president of the Company

Prepaid expenses, interest free and payment on demand.

Chief Financial Officer of the Company

As of March 31, 2023, the amounts due from the

related parties were consisted of the followings:

Deputy General Manager of a subsidiary of the Company

Prepaid expenses, interest free and payment on demand.

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Prepaid expenses, interest free and payment on demand.

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

parties consisted of the followings:

General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

Vice president of the Company

Accrued expenses, interest free and payment on demand.

Shaanxi Fu Chen Venture Capital Management Co.

(“Shaanxi Fu Chen”)

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.

Shaanxi Fu Chen holds 100% interest of this company

Other payables, interest free and payment on demand.

Chief Financial Officer of the Company

Prepaid expenses, interest free and payment on demand.

During three months ended March 31, 2023, the

Company had the following transactions with related parties:

JKNDC Limited

A company owned by the minority shareholder of NTAM

Other expenses

JKNDC Limited

A company owned by the minority shareholder of NTAM

Cost of revenue- Asset management service

Alpha Yield Limited

A director of the Company is a shareholder of this company

Consultancy fee

Nice Talent Partner Limited

A company owned by the minority shareholder of NTAM

Consultancy fee

As of December 31, 2022, the amount due to the

related parties was consisted of the followings:

Reits (Beijing) Technology Co., Ltd

Zhi Yan is the legal representative of this company

Acquisition of intangibles upon the full completion of the online platform pursuant to an agreement originally entered between parties before Zhi Yan became a related party.

The amount is interest free and payment on demand.

Shaanxi Chunlv Ecological Agriculture Co.

Shaanxi Fu Chen holds 80% interest of this company

Other payables, interest free and payment on demand.

Chief Financial Officer of the Company

Accrued expenses, interest free and payment on demand.

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

General Manager of a subsidiary of the Company

Other payables, interest free and payment on demand.

As of December 31, 2022, the amount due from the

related parties was consisted of the followings:

Deputy General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

Shaanxi Fuju Mining Co., Ltd

Shaanxi Fu Chen holds 80% interest of this company

Other payables, interest free and payment on demand.

As of December 31, 2021, the amounts due from the related

parties consisted of the followings:

Shaanxi Fu Chen Venture Capital Management Co.

(“Shaanxi Fu Chen”)

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

Loan receivables*, interest free and payment on demand.

A shareholder of a Company’s subsidiary

Advance to pay for the incorporation costs of the establishment of the subsidiary in Dubai* Amount is interest free and payment on demand.

* The related party transactions

have been approved by the Company’s Audit Committee.

Chief Financial Officer of the Company

Loan receivables*, interest free and payment on demand.

Vice president of the Company

Loan receivables*, interest free and payment on demand.

Ola Johannes Lind

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.

NTAM’s Director

Advance to pay for directors*

Amount is interest free and payment on demand.

During three months ended March 31, 2022, the Company had the following

transactions with related parties:

Nice Talent Partner Limited

A company owned by the minority shareholder of NTAM

Consultancy fee

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

The Company is incorporated in the United States

of America and is subject to United States federal United States federal taxation.

of America and is subject to United States federal taxation.

The applicable tax rate is 21 % in 2023 and 2022.

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

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

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

The Company evaluates the level of authority

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

No provisions for income

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

taxable income for the three months ended March 31, 2023 and 2022.

For the three months

ended March 31, 2023 and 2022, the Company had current income tax expenses of $ 25,674 and $ 187,953 , 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 nine months ended September 30, 2022, the Company had no unrecognized

tax benefits.

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

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

For the years ended March 31, 2023, the Company had no unrecognized tax benefits.

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

tax assets for certain subsidiaries and a VIE.

The amount of unrecognized deferred tax liabilities

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The Company has not provided deferred taxes on

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

The Company has not provided deferred taxes on

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

1 unchanged sentence

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

Since the Company

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

to their immediate foreign holding companies in the foreseeable future.

Accordingly, the Company has not recorded any deferred taxes

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

Effective on January 1, 2008, the PRC

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

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

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

Accordingly, the Company has not recorded any deferred taxes in

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

Effective on January 1, 2008, the PRC Enterprise

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

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

The tax rate for pre-tax profits below

RMB 1 million is 2.5%;

the tax rate for pre-tax profits between RMB1 million to RMB 3 million is 10%.

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

E-Commerce Tianjin, Future Supply

(Chengdu) Co., Ltd.

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

were subject to an enterprise

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

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

Each of Future Fin-Tech (Hong Kong) Limited, QR

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

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

The applicable tax rate

is 16.5 % in Hong Kong.

FTFT UK LIMITED is incorporated in United Kingdom

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.

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

Other subsidiaries

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

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

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

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

The applicable tax rate is 16.5 %

in Hong Kong.

FTFT UK Limited and FTFT Finance UK Limited are incorporated

in United Kingdom and are 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.

5 unchanged sentences

The applicable tax rate is nil in British Virgin Island.

FTFT Paraguay S.A.

is incorporated in Republic

The applicable tax rate is 10 %.

Reconciliation of the differences between the

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

Nine Months Ended

September 30, 2022

Nine Months Ended

September 30, 2021

Loss before taxation

Notional tax on profit before CIT and Hong Kong

Computed expected tax expense

Others, primarily the difference in tax rates

Deferred tax assets losses not recognized

PRC statutory tax rate

Computed expected benefits

Others, primarily the differences in tax rates

Effect of tax losses not recognized

IMPAIRMENT LOSS

The Company recorded $ 0.93 million of impairment

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

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

of investment portfolios.

Overall economic environment has worsened in China with Covid-19 outbreak and related lockdown in various cities

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

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

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

Company recorded nil and $ 0.25 million of impairment loss in three months ended 2023 and 2022 relating to the short - term investment

mainly due to Future Private Equity Fund Management (Hainan) Co., Ltd.

invested $ 2.05 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 three

months ended March 31, 2022.

According to the market value, the Company’s balance of the short - term investment was $ 1.8 million

on March 31, 2022.

SHARE BASED COMPENSATION

On February 1, 2023, the Company effected 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.

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

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,

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 abovementioned consultant fee to the Consultant.

On February 23, 2020, the Company

issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately, 1,125,000

and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January 25, 2022

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

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

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

under the Securities Act of 1933, as amended.

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.

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

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

Consultant immediately upon issuance.

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

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

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

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

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

immediately upon issuance.

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

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

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

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

The share numbers are pre-reverse stock split effected on February 1, 2023.

Restricted net assets

PRC laws and regulations permit payments of dividends

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

with PRC accounting standards and regulations.

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

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

50 % of their respective registered capital.

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

distribution.

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

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

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

Except for the above or disclosed elsewhere, there

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

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

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 $ 31.75 million (RMB 211,700,556 ) as of March 31, 2023.

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;

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

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

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

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

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

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

The Grants vested immediately on the Grant Date and each

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

As the closing price of the

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

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

DISCONTINUED OPERATIONS

On March 18, 2021, Chain Future Digital Tech

(Beijing) Co., Ltd.

was deregistered.

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

was dissolved and deregistered.

On August 2, 2021, the Company sold Guangchengji

(Guangdong) Industrial Co., Ltd.

to an unrelated third party.

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

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

On June 27, 2022, Chain Cloud Mall Logistics

Center (Shanxi) Co., Ltd.

was dissolved and deregistered.

Loss from discontinued operations for September 30, 2022 and 2021

was as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

COST OF SALES

OPERATING EXPENSES:

General and administrative

Selling expenses

Bad debt provision

OTHER INCOME (EXPENSE)

Interest income

Interest expenses

Other income net

Income from discontinued operations before income tax

Income tax provision

Income from discontinued operation before non-controlling interest

(Loss) Income on disposal of discontinued operations

( 3,679,447 )

( 3,523,652 )

(LOSS) INCOME FROM DISCONTINUED OPERATION

( 3,859,791 )

( 2,647,316 )

The major components of assets and liabilities

related to discontinued operations are summarized below:

September 30,

Property, plant and equipment, net

Other current assets

Amount due from related parties

Total assets related to discontinued operations

Accrued expenses

Amount due to related parties

Total liabilities related to discontinued operations

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 are pre-reverse stock split effected on February 1, 2023.

SEGMENT REPORTING

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

The Company operated in four segments starting in fiscal

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

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

“coal and aluminum ingots supply chain financing service

and trading business, asset management service and others”.

Due the COVID-19 pandemic and restriction on large

gatherings in China, which have made the promotion strategy for its online e-commerce 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

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

The Company operates in three segments starting in fiscal

“supply chain financing service and trading business and asset management service and others”.

The Company began to provide coal and aluminum ingots 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.

The Company began to provide sand and steel supply chain financing services during the first quarter of 2023.

Some of our operation might not individually meet

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

information provided to the chief operating decision maker.

The chief operating decision maker evaluates the results of each segment

in assessing performance and allocating resources among the segments.

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

assessing performance and allocating resources among the segments.

Since there is an overlap of services and products between different

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Segment profit represents the gross profit of each reportable segment.

Three months ended September 30, 2022

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Three months ended September 30, 2021

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Nine months ended September 30, 2022:

As of March 31, 2023:

Financing/Trading

Reportable segment revenue

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Segment gross profit

Nine months September 30, 2021:

As of March 31, 2022:

Reportable segment revenue

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Segment gross profit

Loss before Income Tax:

Three months Ended, March 31

Supply chain financing/trading

Asset management service

Corporate and Unallocated

Total operating expenses and other expense

Loss before Income Tax

( 2,221,803 )

( 2,510,418 )

Segment assets:

Supply chain financing/trading

Asset management service

Corporate and Unallocated

COMMITMENTS AND CONTINGENCIES

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In January 2021, FT Global Capital, Inc.

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

(“FT Global”), 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

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

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

and/or wall-crossed to the Company.

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

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

FT Global claims approximately $ 7,000,000

in damages and attorneys’ fees.

The Company timely removed the case to the United

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

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

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

FT Global argues that the Court should

deny the Company’s motion to dismiss.

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

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

On April 8, 2021, the parties filed a Joint Preliminary Report and Discovery

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.

In the complaint, FT Global alleges

claims, most of which attempt to hold the Company liable under legal theories that relate back to an alleged breach of an exclusive

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

FT Global claims

that the Company failed to compensate FT Global for securities purchase transactions between December 2020 and April 2021, pursuant

to the terms of the expired exclusive placement agent agreement.

Allegedly, the exclusive placement agent agreement required the

Company to pay FT Global for capital received during the term of the agreement and for the 12-month period following the termination

of the agreement involving any investors that FT Global introduced and/or wall-crossed to the Company.

However, the Company

believes the securities purchase transactions at issue did not involve the one investor which FT Global introduced or wall-crossed

to the Company during the term of the agreement.

FT Global claims approximately $ 7,000,000 in damages and attorneys’

The Company timely removed the case to the United States District Court

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

On March 9, 2021,

the Company filed a motion to dismiss based on FT Global’s failure to state a claim which is pending before the Court.

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.

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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.

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

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including quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China.

In response to the

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

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

Our offices in China were closed and employees worked

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

The quarantines, travel restrictions, and the temporary closure of office

buildings have materially negatively impacted our business.

In response to

the evolving dynamics related to the COVID-19 outbreak, the Company was 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 20200 until late March 2020.

The quarantines, travel restrictions, and the temporary closure of

office buildings have materially negatively impacted our business.

Our suppliers were negatively affected, and could continue to be negatively

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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, especially to our supply chain financing and trading business during the first quarter of 2022.

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

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

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

The outbreak has had and might continue 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.

There was outbreak in various cities and provinces due to Omicron variant in Xi’an city, Hong Kong, Shanghai, Beijing

and other cities in 2022, which have resulted quarantines, travel restrictions, and temporary closure of office buildings and facilities

in these cities.

In December 2022, the Chinese government eased its strict zero COVID-19 policy which resulted in a surge of new

COVID-19 cases during December 2022 and January 2023, which has disrupted our business operations in China.

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.

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.

Chinese government put a restriction on large gatherings in 2020 and 2021, which made the promotion strategy for our online e-commerce

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

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

Also, since the second quarter of 2021, the Company has transformed its member-based Chain Cloud Mall to a sale agent based eCAAS platform

and began to provide supply chain financing services.

The global economy has also been materially negatively

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

The Chinese and global

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

affected by the COVID-19 and there is continued severe uncertainty about the potential outbreak and new variants of COVID-19.

and global growth forecast is extremely uncertain, which would seriously affect our business.

While the potential economic impact brought by,

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Further, as we do not have access to a revolving

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

we require additional capital.

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

require additional capital.

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

1 unchanged sentence

our ability to raise additional capital.

Consequently, our results of operations have

been materially and adversely affected by COVID-19 pandemic.

Consequently, our results of operations have been

materially and adversely affected by COVID-19 pandemic.

Any potential further impact to our results will depend on, to a large extent,

future developments and new information that may emerge regarding the duration and severity of the COVID-19, new variants of COVID-19,

the efficacy and distribution of COVID-19 vaccines and the actions taken by government authorities and other entities to contain the

COVID-19 or treat its impact, almost all of which are beyond our control.

future developments and new information that may emerge regarding the 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

3 unchanged sentences

We are considered foreign persons or

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

persons and foreign invested enterprises.

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

5 unchanged sentences

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

Customer concentration risk

For three months ended March 31, 2023, one customer

accounted for 84.78 % of the Company’s total revenues.

For three months ended March 31, 2022, one customer accounted for 98.89 % of

the Company’s total revenues.

Vendor concentration risk

For three months ended March 31, 2023, one vendor accounted for 16.56 %

of the Company’s total purchases.

For three months ended March 31, 2022, one vendor accounted for 17.70 % of the Company’s

total purchases.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of the

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

The Company has evaluated subsequent events through

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements