What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-21 compared with 2023-05-22 · 672 added, 490 removed, 946 unchanged (55% of the section changed)

34 unchanged sentences

60,000,000 shares authorized;

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

14,645,653 shares and 14,645,653 shares issued and outstanding as of June 30, 2023 and December 31, 2022 respectively

Additional paid-in capital

19 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenues-third party

4 unchanged sentences

Selling expenses

Provision of doubtful debts

Impairment Loss

(Recovery) Provision of doubtful debts

( 1,187,403 )

( 1,170,577 )

Total operating expenses

2 unchanged sentences

( 2,968,314 )

( 5,518,926 )

Other (expenses) income

1 unchanged sentence

Interest expenses

Other expenses, net

Other (expense) income, net

( 1,513,440 )

( 1,561,949 )

Total other income, net

Loss before Income Tax

( 1,267,860 )

Loss from Continuing Operations before Income Tax

( 1,607,423 )

( 2,212,746 )

( 3,829,226 )

( 4,723,164 )

Income tax provision

Loss from Continuing Operations

( 1,643,301 )

( 2,336,534 )

( 3,890,778 )

( 5,034,905 )

Discontinued Operations

Gain/(Loss) on disposal of discontinued operations

( 1,537,821 )

( 2,336,688 )

( 3,785,298 )

( 5,035,059 )

Net Loss attributable to non-controlling interests

Net loss attributable to Future Fintech Group, Inc.

Net income/(loss) from continued operations attributable to Future Fintech Group, Inc.

$ ( 1,472,004 )

$ ( 2,110,392 )

$ ( 3,648,468 )

$ ( 4,633,554 )

Other comprehensive income (loss)

Loss from continued operations

( 1,643,301 )

( 2,336,534 )

Unrealized gains on available-for-sale securities

Foreign currency translation

( 3,890,778 )

( 5,034,905 )

Foreign currency translation – continued operations

( 1,488,634 )

( 1,505,190 )

( 1,084,545 )

( 1,687,807 )

Unrealized holding (losses)/gains on available-for-sale securities

Comprehensive loss - continued operation

( 3,198,493 )

( 3,841,724 )

( 4,861,030 )

( 6,722,712 )

Net income (loss) from discontinued operations

Foreign currency translation – discontinued operations

Comprehensive income (loss) - discontinued operation

Comprehensive Loss

1 unchanged sentence

( 3,841,878 )

( 4,755,550 )

( 6,722,866 )

Net loss attributable to non-controlling interests

2 unchanged sentences

( 3,615,582 )

Loss per share:

Basic loss per share

Diluted loss per share:

Diluted loss per share

( 4,618,720 )

( 6,321,361 )

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

Weighted average number of shares outstanding

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months ended March 31, 2022

Three Months ended June 30, 2022

comprehensive

Balance at March 31, 2022

$ 221,472,527

$ ( 141,135,076 )

$ ( 780,479 )

$ ( 765,970 )

Net loss from continued operation

( 2,110,238 )

( 2,336,534 )

Foreign currency translation adjustment

( 1,505,190 )

Disposition of discontinued operation

Balance at June 30, 2022

$ 221,472,527

$ ( 143,245,468 )

$ ( 2,285,669 )

$ ( 992,266 )

Three Months ended June 30, 2023

comprehensive

Balance at March 31, 2023

$ 222,751,657

$ ( 154,452,898 )

$ ( 3,038,065 )

$ ( 1,350,593 )

Net loss from continued operation

( 1,577,484 )

( 1,643,301 )

Unrealized loss on available-for-sale securities

Foreign currency translation adjustment

( 1,488,634 )

Disposition of discontinued operation

Balance at June 30, 2023

$ 222,751,657

$ ( 155,924,902 )

$ ( 4,593,257 )

$ ( 1,416,410 )

Six Months ended June 30, 2022

comprehensive

Balance at December 31, 2021

3 unchanged sentences

$ ( 590,761 )

Net loss from continued operation

( 4,633,400 )

2 unchanged sentences

Foreign currency translation adjustment

Balance at March 31, 2022

( 1,687,807 )

Disposition of discontinued operation

Balance at June 30, 2022

$ 221,472,527

$ ( 143,245,468 )

Three Months ended March 31, 2023

$ ( 2,285,669 )

$ ( 992,266 )

Six Months ended June 30, 2023

comprehensive

4 unchanged sentences

$ ( 1,279,580 )

Net loss from continued operation

( 3,753,948 )

2 unchanged sentences

Foreign currency translation adjustment

Balance at March 31, 2023

( 1,084,545 )

Disposition of discontinued operation

Balance at June 30, 2023

$ 222,751,657

$ ( 155,924,902 )

$ ( 4,593,257 )

$ ( 1,416,410 )

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 5,035,059 )

Net income/(loss) from discontinued operation

Net loss from continuing operations

( 3,890,778 )

( 5,034,905 )

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

4 unchanged sentences

Accounts receivable

Notes receivable

( 1,174,122 )

Other receivable

( 3,107,748 )

( 1,198,592 )

Advances to suppliers and other current assets

( 15,265,659 )

( 2,894,838 )

Accounts payable

( 3,206,986 )

Accrued expenses

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

Accrued expenses

Taxes payable

Advances from customers

1 unchanged sentence

( 6,008,062 )

Net Cash Used in Operating Activities – Discontinued Operations

( 5,129,561 )

Net cash provided by operating activities – Discontinued Operations

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment

Payment for loan receivable

Purchase of property, plant and equipment

Payment of loan receivable

( 11,363,000 )

1 unchanged sentence

Purchase of intangible assets

Net Cash Provided by Investing Activities from Continued Operations

Net cash provided by (used in) investing activities from Continued Operations

( 5,985,370 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from loan payable

Payment of dividends to the non-controlling interest

Proceeds from loan payable

Net cash provided by financing activities

Effect of change in exchange rate

NET INCREASE IN CASH AND RESTRICTED CASH

( 1,685,141 )

( 1,263,771 )

NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH

( 8,242,297 )

Cash and Restricted Cash at Beginning of Year

1 unchanged sentence

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION

Deferred liabilities

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid

Cash paid for income taxes

7 unchanged sentences

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

The main business of the Company includes an online shopping

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

supply chain financing services and trading, 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.

The main business of the Company includes supply chain financing

services and trading, asset management and cross-border money transfer services.

The Company has also expanded into cryptocurrency mining

and cryptocurrency market data and information service business.

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 supply chain financing services and trading,

asset management and cross-border money transfer services.

In March 2022, FTFT UK Limited received approval

12 unchanged sentences

the acquisition.

The Company plans to develop bitcoin and other cryptocurrency mining and related services in Paraguay.

The Company has

changed its name from KAZAN S.A to FTFT Paraguay S.A.

The Company is developing bitcoin and other cryptocurrency mining and related service business in Paraguay.

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

on July 28, 2022.

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.

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

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.

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 transaction.

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”).

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

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

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

Futures Commission of Hong Kong (“SFC”) and the Company has recently received the approval from SFC.

The acquisition is expected

to close in September 2023.

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

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 June 30, 2023 and

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

6 unchanged sentences

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

adjustments, necessary to present fairly the financial position as of March 31, 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 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.

adjustments, necessary to present fairly the financial position as of June 30, 2023 and the results of operations and cash flows for the

periods ended June 30, 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 six months ended June 30, 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

8 unchanged sentences

was dissolved and deregistered.

On June 16, 2023, QR (HK) Limited was

dissolved and deregistered.

Based on the disposal plan and in accordance with

1 unchanged sentence

Segment Information Reclassification

The Company classified business segment into CCM

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

The Company classified business segment into asset management service

and, supply chain financing and trading, and others.

Uses of Estimates in the Preparation of Financial

17 unchanged sentences

The Company’s operating losses amounted $ 3.89 million, and it had negative operating cash flows amounted $ 6.01

million as of March 31, 2023.

million as of June 30, 2023.

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

45 unchanged sentences

following table.

As of March 31, 2023:

Net loss attributable to Future Fintech Group, Inc.

For the six Months ended June 30, 2023:

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

$ ( 3,753,948 )

Loss available to common stockholders

Net income from discontinuing operations attributable to Future Fintech Group, Inc.

Loss available to common stockholders from continuing operations

$ ( 3,753,948 )

Income available to common stockholders from discontinuing operations

Dilutive EPS:

2 unchanged sentences

$ ( 3,753,948 )

As of March 31, 2022:

Net loss attributable to Future Fintech Group, Inc.

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

For the six months ended June 30, 2022:

Loss from continuing operations

$ ( 5,034,905 )

Loss available to common stockholders

Loss from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 5,034,905 )

Loss available to common stockholders from discontinuing operations

Dilutive EPS:

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

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

$ ( 5,034,905 )

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

Three Months ended June 30, 2023:

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

$ ( 1,577,484 )

Net income from discontinuing operations attributable to Future Fintech Group, Inc.

Loss available to common stockholders from continuing operations

$ ( 1,577,484 )

Income available to common stockholders from discontinuing operations

Dilutive EPS:

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

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

$ ( 1,577,484 )

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

Three Months ended June 30, 2022:

Loss from continuing operations

$ ( 2,110,238 )

Loss from discontinuing operations

Loss available to common stockholders from continuing operations

$ ( 2,110,238 )

Loss available to common stockholders from discontinuing operations

Dilutive EPS:

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

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

$ ( 2,110,238 )

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

Cash and Cash Equivalents

2 unchanged sentences

maturity of three months or less.

Deposits in banks in the PRC are only insured by

the government up to RMB 500,000 , in the HK are only insured by the government up to HKD500,000, in the United Kingdom are only insured

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

16 unchanged sentences

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

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.

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

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.

2 unchanged sentences

should abandon such efforts.

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.

The Company has assessed its accounts receivable

including credit term and corresponding all its accounts receivables as of June 30, 2023.

Bad debt expense was $( 1,170,577 ) and $ 1,973

during the six months ended June 30, 2023 and 2022, respectively.

Accounts receivables of $ 1.42 million and nil have been outstanding

for over 90 days as of June 30, 2023 and December 31, 2022, respectively.

Revenue Recognition

15 unchanged sentences

Revenue recognitions are as follows:

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.

Sales of coals, aluminum ingots, sand and steel

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.

was nil and $ 3.65 million during the six months ended June 30, 2023 and 2022, respectively.

Sales agent services of coals, aluminum ingots,

sand and steel

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 revenue

amount billed to customers as sales of goods listed above.

The Company considers multiple factors when determining whether it obtains

control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible

products or has the responsibility for ensuring acceptability of the product.

The Company recognizes net revenue as agent services for

the sales of coals and aluminum ingots when no control obtained throughout the transactions.

Revenue was $ 0.48 million and nil during

the six months ended June 30, 2023 and 2022, respectively.

Asset Management Service

37 unchanged sentences

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

The exchange rate we used to convert RMB

to USD was 6.87:1 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 6.67:1

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

The exchange rate we used to convert RMB to USD

was 7.23:1 and 6.96:1 at the balance sheet dates of June 30, 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 6.93:1 and 6.48:1

for six months ended June 30, 2023 and 2022, respectively.

The exchange rate we used to convert HKD to USD

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

was 7.84:1 and 7.80:1 at the balance sheet dates of June 30, 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 average exchange rates we used to convert HKD to USD were 7.84:1 and 7.83:1 for six

months ended June 30, 2023 and 2022, respectively.

The exchange rate we used to convert GBP to USD

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

was 0.79:1 and 0.83:1 at the balance sheet dates of June 30, 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 average exchange rates we used to convert GBP to USD were 0.81:1 and 0.77:1 for six

months ended June 30, 2023 and 2022, respectively.

The exchange rate we used to convert AED to USD

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

was 3.66:1 and 3.67:1 at the balance sheet dates of June 30, 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 average exchange rates we used to convert AED to USD were 3.67:1 and 3.67:1 for six

months ended June 30 2023 and 2022, respectively.

The exchange rate we used to convert PYG to USD

was 7166.48:1 and 7322.90:1 at the balance sheet dates of March 31, 2023 and December 31, 2022.

was 7258.03:1 and 7322.90:1 at the balance sheet dates of June 30, 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.

The average exchange rate we used to convert PYG to USD was 7240.40:1 for six months

ended June 30 2023.

Translation adjustments are reported separately

51 unchanged sentences

of the quoted shares included in its investment portfolios, the Company unrealized holding gains on available-for-sale securities of $ 0.11

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

million on June 30, 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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Total liabilities

The summarized operating results of the VIE’s

are as follows:

Net (loss) income

The summarized operating results of the VIE’s are as follows:

Three Months Ended

Six Months Ended

ACCOUNTS RECEIVABLE

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OTHER RECEIVABLES

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

As of June 30, 2023, the balance of other receivables

was $ 5.74 million.

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

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.

FTFT Super Computing

provided an 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.

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

On May 18, 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.

In addition, other receivables included total $ 1.48 million deposit

paid and prepayments to third parties.

As of December 31, 2022, the balance of other

receivables was $ 2.65 million.

On October 1, 2022, FTFT UK Limited, a wholly

owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd., a company incorporated for £ 786,887 .

Buyer deposited £ 400,000 for cash balance expected to be left in the bank account of Khyber upon the closing (subject to refund

to the Buyer upon the actual amount $ 0.24 million in Khyber’s account at closing) to Buyer’s solicitors to be held by Buyer’s

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

As of January 9, 2023, the Company has received refund $ 0.24

On October 1, 2022, FTFT UK Limited (the “Buyer”), a wholly

owned subsidiary of the Company acquired 100 % equity interest of Khyber Money Exchange Ltd.

(“Khyber”) for £ 786,887 .

Buyer deposited £ 400,000 for cash balance expected to be left in the bank account of Khyber at the closing to the Buyer’s

solicitors’ client account upon the final closing of the acquisition, and the Buyer’s solicitors shall refund the amount after

deducting the cash balance in Khyber’s account upon closing.

As of January 9, 2023, the Company has received refund $ 0.24 million.

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

entered into a “Electricity

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

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.

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.

paid and prepayments to third parties.

LOAN RECEIVABLES

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

which was from a third party.

As of June 30, 2023, the balance of loan receivables

was $ 4.91 million, which was from a third party.

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

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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.

On May 31, 2022, FTFT HK entered into a “Loan

Agreement” with the same third party.

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

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

To strengthen the liquidity, the Company negotiated with the borrower

to early settle part of the loan.

As of April 17, 2023, the Company has received repayment $ 6.36 million.

On December 26, 2022, FTFT HK entered into a “Loan

Agreement” with the same third party.

Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 0.40 million to the third party

at the annual interest rate of 10 % from December 26, 2022 to March 26, 2023.

As of April 17, 2023, the Company has received repayment

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.

$ 0.40 million.

On July 14, 2022, Future Private Equity Fund Management

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party at the annual interest rate of 5.25 % from September 8, 2021 to September 6, 2023.

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

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

Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 5.00 million to the third party at the annual interest rate of 10 % from March

10, 2022 to September 9, 2023.

To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan.

On March 10, 2022, FTFT HK 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.

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SHORT - TERM INVESTMENT

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

$ 1.18 million.

As of June 30, 2023, the balance of short - term

investments were $ 1.06 million.

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

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.

invested RMB 13,000,000

($ 1.79 million) 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 $ 1.06 million on June 30, 2023.

Due to fluctuations

of the quoted shares included in its investment portfolios, the Company unrealized holding gains on available-for-sale securities of $ 0.11

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.

invested RMB 13,000,000

($ 1.87 million) 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 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

OTHER CURRENT ASSETS

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Prepaid expenses

As of March 31, 2023 and December 31, 2022, the

As of June 30, 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, 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 million).

The Company recorded $ 2.21 million of impairment

loss in fiscal year 2022 related with goodwill mainly arose from acquisition of Nice Talent Asset Management Limited and FTFT Finance

UK Limited (formerly known as Khyber Money Exchange Ltd.).

Goodwill impairment test 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

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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.

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 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

22 unchanged sentences

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

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 million).

The Company has changed its name from Khyber Money Exchange Ltd., to FTFT Finance UK Limited on October

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

For the three months ended

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

For the six months ended

June 30, 2023, the operating lease cost was $ 0.88 million.

The Company’s operating leases have remaining

lease terms of approximately 45 months.

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

rate were 4 years and 4.75 %, respectively.

As of June 30, 2023, the weighted average remaining lease term and weighted average discount rate

were 3.75 years and 4.75 %, respectively.

Maturities of lease liabilities were as follows:

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

As of June 30,

From July 1, 2023 to July 31, 2024

From July 1, 2024 to July 31, 2025

From July 1, 2025 to July 31, 2026

From July 1, 2026 to July 31, 2027

amounts representing interest

6 unchanged sentences

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.

Short term leases cost was $ 0.14 million for six months

ended June 30, 2023.

PROPERTY AND EQUIPMENT

4 unchanged sentences

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.

expenses for the six months ended June 30, 2023 and 2022 was $ 149,803 and $ 90,182 , respectively.

Depreciation expense included in cost

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

of sales for the six months ended June 30, 2023 and 2022 was nil , respectively.

INTANGIBLE ASSETS

5 unchanged sentences

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.

expenses for the six months ended June 30, 2023 and 2022 was $ 28,518 and $ 28,233 , respectively.

Amortization expense included in cost

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

of sales for the six months ended June 30, 2023 and 2022 was nil , respectively.

The estimated amortization is as follows:

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

As of June 30, 2023

From July 1, 2023 to July 31, 2024

From July 1, 2024 to July 31, 2025

From July 1, 2025 to July 31, 2026

From July 1, 2026 to July 31, 2027

From July 1, 2027 to July 31, 2028

Note payable consist of the following:

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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.

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 June 30, 2023, there was no such event of default.

ACCOUNT PAYABLES

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Wages and employee reimbursement

ADVANCES FROM CUSTOMERS

The amount of advances from customers consisted

of the followings:

Coal and Aluminum Ingots Supply Chain Financing/Trading

DEFERRED LIABILITIES

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

As of June 30, 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 March 31, 2023, the amounts due to the related

As of June 30, 2023, the amounts due to the related

parties were consisted of the followings:

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The amount is interest free and payment on demand.

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

As of June 30, 2023, the amounts due from the

related parties were consisted of the followings:

1 unchanged sentence

Prepaid expenses, interest free and payment on demand.

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

Prepaid expenses, interest free and payment on demand.

Chief Financial Officer of the Company

Prepaid expenses, interest free and payment on demand.

During three months ended March 31, 2023, the

Company had the following transactions with related parties:

During six months ended June 30, 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

Cost of revenue- Asset management service payable to JKNDC

Alpha Yield Limited

A director of the Company is a shareholder of this company

Consultancy fee

A director of NTAM is a shareholder of this company

Consultancy fee payable to Alpha Yield

Nice Talent Partner Limited

A company owned by the minority shareholder of NTAM

Consultancy fee

Consultancy fee payable to Nice Talent Partner

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

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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:

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

Loan receivables*, interest free and payment on demand.

Advance to the officer, interest free and payment on demand.

Chief Financial Officer of the Company

Loan receivables*, interest free and payment on demand.

Advance to the officer, interest free and payment on demand.

Vice president of the Company

Loan receivables*, interest free and payment on demand.

Advance to the officer, interest free and payment on demand.

Ola Johannes Lind

1 unchanged sentence

and Chief Strategy Officer of the Company

Loan receivables*, interest free and payment on demand.

Advance to the officer, 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.

Advance to the directors Amount is interest free and payment on demand.

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

The Company is incorporated in the United States

3 unchanged sentences

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 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

taxable income for the six months ended June 30, 2023 and 2022.

For the six months ended

June 30, 2023 and 2022, the Company had current income tax expenses of $ 61,552 and $ 311,741 , 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 six months ended June 30, 2023, the Company had no unrecognized tax benefits.

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.

2 unchanged sentences

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.

4 unchanged sentences

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.

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

15 unchanged sentences

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.

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.

7 unchanged sentences

is incorporated in Republic

The applicable tax rate is 10 %.

The applicable tax rate is 10 % in Paraguay.

Reconciliation of the differences between the

1 unchanged sentence

Loss before taxation

$ ( 3,829,226 )

$ ( 4,723,164 )

PRC statutory tax rate

Computed expected benefits

( 1,180,791 )

Others, primarily the differences in tax rates

1 unchanged sentence

IMPAIRMENT LOSS

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.

The Company recorded nil and $ 0.70 million of impairment loss in six

months ended 2023 and 2022 relating to the short - term investment mainly due to Future Private Equity Fund Management (Hainan) Co., Ltd.

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

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, high interest rate and the volatility in the continuing low market price of shares

that caused the Company to recognize a fair-value loss in six months ended June 30, 2022.

According to the market value, the Company’s

balance of the short - term investment was $ 1.26 million on June 30, 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.

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, accompanied by a corresponding

decrease in the Company’s issued and outstanding shares of common stock.

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

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 strategies;

and (iv) conduct market research and evaluating variable projects and providing feasibility studies per Company’s

request from time to time.

The term of the Agreement is three years.

In consideration of the services to be provided by the Consultant to the

Company, the Company agrees to pay the Consultant a three-year consulting fee totaling $ 3.0 million.

The Company shall issue a total of

3,750,000 restricted shares of the Company Common Stock (the “Consultant Shares”) at a price of $ 0.794 per share (the closing

price of the Agreement date), as the payment for the 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

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.

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.

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

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

under the Securities Act of 1933, as amended.

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

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

immediately upon issuance.

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

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

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

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

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

Consultant immediately upon issuance.

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

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

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

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

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

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The restriction amounted

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

to $ 30.70 million (RMB 212,706,932 ) as of June 30, 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.

the use of profits 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

On July 12, 2022 (the “Grant Date”),

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

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

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

800,000 shares to Shanchun Huang, Chief Executive

Officer of the Company;

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

100,000 shares to Ming Yi, Chief Financial Officer of the Company, 547,000

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

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

(collectively, the “Grants”).

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

Unrestricted Stock Award Agreement with the Company on July 12, 2022.

As the closing price of the Company stock was $ 0.42 on July 12,

2022, the Company recorded an expense of $ 1.28 million in the third quarter of fiscal year 2022.

As of the date of this report, the Shares

have been issued to the Grantees.

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

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

In its operation of the business, management,

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

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

The Company operates in 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

In its operation of the business, management, including our chief operating

decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss

statements prepared on a basis consistent with GAAP.

The Company operates in three segments:

supply chain financing service and trading

business, 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.

As of March 31, 2023:

Financing/Trading

Three months ended June 30, 2023

Reportable segment revenue

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Segment gross profit

As of March 31, 2022:

Three months ended June 30, 2022

Reportable segment revenue

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Segment gross profit

Six months ended June 30, 2023:

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Six months ended June 30, 2022:

Reportable segment revenue

Inter-segment loss

Revenue from external customers

Segment gross profit

Loss before Income Tax:

Three months Ended, March 31

Three Months Ended

Six Months Ended

Supply chain financing/trading

$ ( 287,602 )

Asset management service

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$ ( 2,212,746 )

$ ( 3,829,226 )

$ ( 4,723,164 )

Segment assets:

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In January 2021, FT Global Capital, Inc.

(“FT Global”), a former placement agent of the Company filed a lawsuit against the Company in the Superior Court of

Fulton County, Georgia.

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

FT Global served the complaint upon the Company in January 2021.

In the complaint, FT Global alleges

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

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

FT Global claims

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

to the terms of the expired exclusive placement agent agreement.

Allegedly, the exclusive placement agent agreement required the

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

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

However, the Company

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

to the Company during the term of the agreement.

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

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

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

On March 9, 2021,

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

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 Plan.

On April 12, 2021, the Court approved the Joint Preliminary Report and Discovery Plan and issued a Scheduling

Order placing this case on a six-month discovery tract.

On April 30, 2021, the Company served FT Global with its Initial Disclosures.

On May 6, 2021, FT

Global served the Company with its Initial Disclosures.

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

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

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

The Court denied the Company’s motion to

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

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

On May 17, 2021, FT Global served the Company with its First

Amended Initial Disclosures.

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

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

The Court denied the Company’s

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

agent agreement;

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

1 unchanged sentence

court concluded that additional information can be obtained through discovery.

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

complaint on November 24, 2021.

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

and requests for production of documents.

The Company timely filed an answer and defenses to FT

Global’s complaint on November 24, 2021.

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

interrogatories and requests for production of documents.

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

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

On March 24, 2022, FT Global propounded discovery requests upon the Company, including requests for production of documents and requests

for admission.

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

On May 13, 2022, FT Global

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

On May 13, 2022, FT Global produced documents

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

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

FT Global’s requests for production of documents.

2022, FT Global served its responses to the Company’s interrogatories and requests for admissions.

On May 13, 2022, FT Global produced

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

On June 3, 2022, the Company produced documents in

response to FT Global’s requests for production of documents.

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

2022, FT Global took the deposition of the Company.

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

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

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

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

On November 16, 2022, the Company

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

The Company will continue

to vigorously defend the action against FT Global.

On August 4, 2022, FT Global took the deposition of the Company.

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

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

motions to October 12, 2022.

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

in this lawsuit.

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

16, 2022, the Company filed its reply in support of its motion for summary judgement on all claims asserted by FT Global in this lawsuit.

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

Settlement with SEC

On December 17, 2019, the Company announced that

it received a subpoena from the SEC’s Division of Enforcement requiring the Company to produce documents and other information and

the Company has cooperated with the SEC’s investigation and information request.

On July 3, 2023, the SEC announced a settlement

of the investigation with the Company.

Without admitting or denying the SEC’s findings, the Company has consented to:

(i) cease and desist

from committing or causing any violations and any future violations of Sections 17(a)(2) and (3) of the Securities Act, Sections 13(a),

13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-13 and 13a-15(a) thereunder;

civil money penalty in the amount of $ 1,650,000 to the Securities and Exchange Commission for transfer to the general fund of the United

States Treasury, subject to Exchange Act Section 21F(g)(3) and the payment shall be made in the following installments:

the first installment

of $ 150,000 shall be paid within ten (10) days of July 3, 2023 (the “Order Date”);

the second installment of $ 375,000 shall

be paid within 90 days of the Order Date;

the third installment of $ 375,000 shall be paid within 180 days of the Order Date;

installment of $ 375,000 shall be made within 270 days of the Order Date;

and the last installment of $ 375,000 shall be made within 360

days of the Order Date;

(iii) retain, within sixty (60) days of the Order Date, at Company’s own expense, a qualified independent

consultant (the “Consultant”) not unacceptable to the SEC staff, to test, assess, and review the Company’s internal

accounting controls and internal control over financial reporting (collectively, “review), and the Consultant, at the conclusion

of the review, which in no event shall be no more than 180 days after the Order Date, to submit a report of the Consultant to the Company

and the SEC staff and the report shall address the Consultant’s findings and shall include a description of the review performed,

the conclusions reached, and the Consultant’s recommendations for changes or improvements;

and (iv) adopt, implement, and maintain

all policies, procedures and practices recommended in the report of the Consultant within 120 days of receiving the report from the Consultant.

The first installment of $ 150,000 has been paid by the Company on July 7, 2023.

RISKS AND UNCERTAINTIES

13 unchanged sentences

office buildings have materially negatively impacted our business.

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

affected in their ability to supply and ship products to our customers in case of any resurgence of COVID-19.

Our customers that have

been negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from us, which may materially

adversely impact our revenue.

The business operations of the third parties’ stores on our e-commerce platform have been and continue

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

condition and operating results.

The outbreak has had and 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 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 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 were outbreaks in various cities and provinces in China due to Omicron variant, such

as 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 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.

Due 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

9 unchanged sentences

require additional capital.

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

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

our ability to raise additional capital.

Consequently, our results of operations have been

materially and adversely affected by COVID-19 pandemic.

In the event that we do need to raise capital in the future and there is any outbreak due to new variants,

outbreak-related instability in the securities markets could adversely affect our ability to raise additional capital.

Consequently, our results of operations have

been materially and adversely affected by COVID-19 pandemic.

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

4 unchanged sentences

There are substantial uncertainties regarding

the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business

and the enforcement and performance of our arrangements with customers in certain circumstances.

We are considered foreign persons or

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

the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our

business and the enforcement and performance of our arrangements with customers in certain circumstances.

We are considered foreign persons

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

persons and foreign funded enterprises.

1 unchanged sentence

official interpretation and enforcement may involve substantial uncertainty.

The effectiveness of newly enacted laws, regulations or amendments

may be delayed, resulting in detrimental reliance.

New laws and regulations that affect existing and proposed future businesses may also

be applied retroactively.

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

The effectiveness of newly enacted laws, regulations or

amendments may be delayed, resulting in detrimental reliance.

New laws and regulations that affect existing and proposed future businesses

may also be applied retroactively.

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

on our business.

Customer concentration risk

For three months ended March 31, 2023, one customer

For six months ended June 30, 2023, one customer

accounted for 79.62 % of the Company’s total revenues.

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

For six months ended June 30, 2022, one customer accounted for 61.05 % 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.

For six months ended June 30, 2023, four vendors

accounted for 27.78 %, 12.31 %, 11.63 % and 11.48 % of the Company’s total purchases.

For six months ended June 30, 2022, four vendors

accounted for 25.20 %, 24.15 %, 12.72 % and 10.63 % of the Company’s total purchases.

SUBSEQUENT EVENTS

2 unchanged sentences

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