What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-21 compared with 2023-05-22 · 467 added, 363 removed, 196 unchanged (81% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and other

14 unchanged sentences

estimated, expected, intended, or planned.

Factors that might cause or contribute to such a discrepancy include, but are not limited to,

those listed under the heading “Risk Factors” and those listed in our Annual Report on Form 10-K for the year ended December

Factors that might cause or contribute to such a discrepancy include, but are not limited

to, those listed under the heading “Risk Factors” and those listed in our Annual Report on Form 10-K for the year ended December

31, 2022 (the “2022 Form 10-K”) and in this Form 10-Q.

2 unchanged sentences

Although the Company believes the expectations

reflected in the forward-looking statements are based on reasonable assumptions, the Company cannot guarantee future results, levels of

activity, performance, or achievements.

Except as required by applicable law, including the securities laws of the United States, the Company

does not intend to update any of the forward-looking statements to conform these statements to actual results.

Readers are urged to carefully

review and consider the various disclosures made throughout the entirety of this report, which attempts to advise interested parties of

the risks and factors that may affect our business, financial condition, results of operations, and prospects.

reflected in the forward-looking statements are based on reasonable assumptions, the Company cannot guarantee future results, levels

of activity, performance, or achievements.

Except as required by applicable law, including the securities laws of the United States,

the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

are urged to carefully review and consider the various disclosures made throughout the entirety of this report, which attempts to advise

interested parties of the risks and factors that may affect our business, financial condition, results of operations, and prospects.

Overview of Our Business

5 unchanged sentences

increased production costs and tightened environmental laws in China, the Company had transformed its business from fruit juice manufacturing

and distribution to a real-name blockchain based e-commerce platform, supply chain financing service and trading business, asset management

and money transfer services.

The main business of the Company includes an online shopping platform, Chain Cloud Mall (“CCM”),

which is based on blockchain technology;

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

Company has also expanded into cryptocurrency mining, cryptocurrency market data and information service businesses.

and distribution to a supply chain financing service and trading business, asset management and cross-border money transfer services.

The main business of the Company includes supply chain financing services and trading, asset management and cross-border money transfer

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

In March 2022, FTFT UK Limited received approval

9 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.

1 unchanged sentence

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.

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

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

Khyber Money Exchange Ltd.

is a money transfer company with a platform

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

Khyber Money Exchange

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

the transaction.

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.

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 transaction.

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

to FTFT Finance UK Limited.

to FTFT Finance UK

On February 27, 2023, Future FinTech (Hong Kong)

7 unchanged sentences

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 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 .

On January 26, 2023,

17 unchanged sentences

State of Florida.

We are a holding company

incorporated in Florida and we are not a Chinese operating company.

As a holding company with no material operations of our own, we conduct

a substantial majority of our operations through our subsidiaries in China, Hong Kong, Dubai and UK and we operate a blockchain based

online shopping mall through contractual arrangements with a variable interest entity (VIE) –E-Commerce Tianjin, based in China

and this structure involves unique risks.

Our shares of common stock are shares of our Florida holding company, and we do not have any

equity ownership of the VIE, instead we control and receive the economic benefits of the VIE’s business operations through certain

contractual arrangements, which are used to replicate foreign investment in Chinese-based companies where Chinese law prohibits direct

foreign investment in value added telecom/e-commerce business.

Chinese regulatory authorities could disallow the VIE structure, which

could result in a material change in our operations and/or value of our shares, including that it could cause the value of shares to significantly

decline or become worthless.

There are legal and operational risks associated with being based in

and having a substantial majority of operations in China and Hong Kong.

These risks could result in a material change in our operations

and/or the value of our common stock or could significantly limit or completely hinder our ability to offer or continue to offer securities

to investors and cause the value of our shares to significantly decline or be worthless.

Recently, the PRC government initiated a series

of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal

activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure,

adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued

an announcement to crack down on illegal activities in the securities market and promote the high-quality development of the capital market,

which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and

judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial

application of the PRC securities laws.

On February 15, 2022, Cybersecurity Review Measures published by Cyberspace Administration of

China or the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security,

Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and

Television, China Securities Regulatory Commission (“CSRC”), State Secrecy Administration and State Cryptography Administration

became effective, which provides that, Critical Information Infrastructure Operators (“CIIOs”) that intend to purchase internet

products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security

shall be subject to the cybersecurity review by the Cybersecurity Review Office.

On November 14, 2021, CAC published the Administration

Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”, which requires

cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with

the Office of Cybersecurity Review.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer,

effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the

CAC under the following circumstances:

(i) any data processor transfers important data to overseas;

(ii) any critical information infrastructure

operator or data processor who processes personal information of over 1 million people provides personal information to overseas;

any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people

or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year;

and (iv) other circumstances

under which the data cross-border transfer security assessment is required as prescribed by the CAC.

On February 17, 2023, the CSRC released

the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “New Overseas Listing

Rules”) with five interpretive guidelines, which took effect on March 31, 2023.

The New Overseas Listing Rules require Chinese domestic

enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such

a) an issuer making an application for initial public offering and listing in an overseas market;

b) an issuer making an overseas

securities offering after having been listed on an overseas market;

c) a domestic company seeking an overseas direct or indirect listing

of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means.

According to the Notice on Arrangements

for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has

already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators

or exchanges but has not completed such offering or listing before effective date of the new rules and completes such offering or listing

before September 30, 2023 are considered as an existing listed company and is not required to make any filing until it conducts a new

offering in the future.

Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed its

offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working

days after the occurrence and public disclosure of the event:

We are a holding company incorporated in Florida

and we are not a Chinese operating company.

As a holding company with no material operations of our own, we conduct a substantial majority

of our operations through our subsidiaries in China, Hong Kong, Dubai and UK.

We also operate a blockchain based online shopping mall

through contractual arrangements with a variable interest entity (VIE) – Cloud Chain E-Commerce (Tianjin) Co., Ltd.

or E-Commerce

Tianjin in China which currently has very limited business and this structure involves unique risks.

Our shares of common stock are shares

of our Florida holding company, and we do not have any equity ownership of the VIE, instead we control and receive the economic benefits

of the VIE’s business operations through certain contractual arrangements, which are used to replicate foreign investment in Chinese-based

companies where Chinese law prohibits direct foreign investment in value added telecom/e-commerce business.

Chinese regulatory authorities

could disallow the VIE structure, which could result in a material change in our operations and/or value of our shares, including that

it could cause the value of shares to significantly decline or become worthless.

There are legal and operational

risks associated with being based in and having a substantial majority of operations in China and Hong Kong.

These risks could result

in a material change in our operations and/or the value of our common stock or could significantly limit or completely hinder our ability

to offer or continue to offer securities to investors and cause the value of our shares to significantly decline or be worthless.

the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance

notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed

overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the

efforts in anti-monopoly enforcement.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General

Office of the State Council jointly issued an announcement to crack down on illegal activities in the securities market and promote the

high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen

cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas,

and to establish and improve the system of extraterritorial application of the PRC securities laws.

On February 15, 2022, Cybersecurity

Review Measures published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry

and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s

Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission (“CSRC”), State Secrecy

Administration and State Cryptography Administration became effective, which provides that, Critical Information Infrastructure Operators

(“CIIOs”) that intend to purchase internet products and services and Online Platform Operators engaging in data processing

activities that affect or may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office.

On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber

Data Security Measure (Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want

to list abroad to file a cybersecurity review with the Office of Cybersecurity Review.

On July 7, 2022, CAC promulgated the Measures for

the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for

data cross-border security assessment coordinated by the CAC under the following circumstances:

(i) any data processor transfers important

data to overseas;

(ii) any critical information infrastructure operator or data processor who processes personal information of over 1

million people provides personal information to overseas;

(iii) any data processor who provides personal information to overseas and has

already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas

since January 1st of the previous year;

and (iv) other circumstances under which the data cross-border transfer security assessment

is required as prescribed by the CAC.

On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities

Offering and Listing by Domestic Enterprises (the “New Overseas Listing Rules”) with five interpretive guidelines, which took

effect on June 30, 2023.

The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental

authorities and report related information under certain circumstances, such as:

a) an issuer making an application for initial public

offering and listing in an overseas market;

b) an issuer making an overseas securities offering after having been listed on an overseas

c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s),

share swap, transfer of shares or other means.

According to the Notice on Arrangements for Overseas Securities Offering and Listing by

Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has

already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such

offering or listing before effective date of the new rules and completes such offering or listing before September 30, 2023 are considered

as an existing listed company and is not required to make any filing until it conducts a new offering in the future.

Furthermore, upon

the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an

overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure

of the event:

(i) change of control;

(ii) investigations or sanctions imposed by overseas

securities regulatory agencies or other competent authorities;

(ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent

(iii) change of listing status or transfer of listing segment;

voluntary or mandatory delisting.

On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secretes

Protection and the National Archives Administration released the Provisions on Strengthening the Confidentiality and Archives Administration

Related to the Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Administration Provisions,

which took effect on March 31, 2023.

PRC domestic enterprises seeking to offer securities and list in overseas markets, either directly

or indirectly, shall establish and improve the system of confidentiality and archives work, and shall complete approval and filing procedures

with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents

or materials involving state secrets and work secrets of state organs to relevant securities companies, securities service institutions,

overseas regulatory agencies and other entities and individuals.

It further stipulates that (i) providing or publicly disclosing documents

and materials which may adversely affect national security or public interests, and accounting records or photocopies thereof to relevant

securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals shall be subject

to corresponding procedures in accordance with relevant laws and regulations;

and (ii) any working papers formed in the territory of the

PRC by securities companies and securities service agencies that provide domestic enterprises with securities services relating to overseas

securities issuance and listing shall be stored in the territory of the PRC, the outbound transfer of which shall be subject to corresponding

procedures in accordance with relevant laws and regulations.

As of the date of this report, these new laws and guidelines that became

effective have not impacted the Company’s ability to conduct its business, or list on a U.S.

or other foreign stock exchange;

new rules and regulations could be adopted and there are uncertainties in the interpretation and enforcement of existing laws and guidelines,

which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments

or continue to list on a U.S.

or (iv) voluntary or mandatory delisting.

24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secretes Protection and the National Archives Administration

released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and

Listing by Domestic Companies, or the Confidentiality and Archives Administration Provisions, which took effect on March 31, 2023.

domestic enterprises seeking to offer securities and list in overseas markets, either directly or indirectly, shall establish and improve

the system of confidentiality and archives work, and shall complete approval and filing procedures with competent authorities, if such

PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets

and work secrets of state organs to relevant securities companies, securities service institutions, overseas regulatory agencies and other

entities and individuals.

It further stipulates that (i) providing or publicly disclosing documents and materials which may adversely

affect national security or public interests, and accounting records or photocopies thereof to relevant securities companies, securities

service institutions, overseas regulatory agencies and other entities and individuals shall be subject to corresponding procedures in

accordance with relevant laws and regulations;

and (ii) any working papers formed in the territory of the PRC by securities companies

and securities service agencies that provide domestic enterprises with securities services relating to overseas securities issuance and

listing shall be stored in the territory of the PRC, the outbound transfer of which shall be subject to corresponding procedures in accordance

with relevant laws and regulations.

As of the date of this report, these new laws and guidelines that became effective have not impacted

the Company’s ability to conduct its business, accept foreign investment or list on a U.S.

or other foreign stock exchange except

for the filing requirement under New Overseas Listing Rules;

however, new rules and regulations could be adopted and there are uncertainties

in the interpretation and enforcement of existing laws and guidelines, which could materially and adversely impact our business and financial

outlook and may impact our ability to accept foreign investments or continue to list on a U.S.

or other foreign stock exchange.

The VIE and certain subsidiaries of the Company are incorporated and operating

in mainland China and they have received all required permissions from Chinese authorities to operate their current business in China,

including Business licenses, Bank Account Open Permits and Value Added Telecom Business License.

As of the date of this report, we, our

subsidiaries and the VIE in China are not subject to permission requirements from the CSRC or CAC or any other entity that is required

to approve of the VIE’s operations and have not received or were denied such permissions by any PRC authorities.

Currently, we are

required to file with CSRC for any offerings under New Overseas Listing Rules.

Given the current PRC regulatory environment, it is uncertain

whether we, our subsidiaries or the VIE, will be able to obtain permission from the PRC government to offer our securities to foreign

investors, and even when such permission is obtained, whether it will be denied or rescinded.

If we or any of our subsidiaries or the

VIE do not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required,

or applicable laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals,

it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the

value of our securities to significantly decline or become worthless.

If applicable laws, regulations, or interpretations change and the

VIE is required to obtain permissions or approvals in the future, we may face substantial uncertainties as to whether we can obtain such

permissions or approvals in a timely manner, or at all.

Failure to take timely and appropriate measures to adapt to any of these or similar

regulatory compliance challenges could materially and adversely affect our current corporate structure and business operations.

Chain Cloud Mall is a unique real-name based blockchain

e-commerce shopping platform that integrates blockchain, internet technology.

The CCM shared shopping mall platform is designed to be

a block-chain based shopping mall for merchants and goods, not the exchange of digital currencies, and it currently only accepts payment

from credit cards, Alipay and WeChat.

Currently, Chain Cloud Mall adopts an “Enterprise Communication as A Service” or eCAAS

platform which is a part of 3.15 China Responsible Brand Program run by the Anti-Counterfeiting Committee of China Foundation of Consumer

Protection (the “Anti-Counterfeiting Committee”).

Anti-Counterfeiting Committee reviews and accepts the companies to join

its 3.15 China Responsible Brand Program.

After acceptance, these companies are authorized to use anti-counterfeiting labels on their

products which have authenticated joint signatures of these companies and Anti-Counterfeiting Committee that are recorded on the blockchain

quality and safety traceability system controlled by the Anti-Counterfeiting Committee.

The companies will sell such products on our eCAAS

The companies can also use sales agents to sell their products on our eCAAS platform and parties can negotiate the commission

percentages for the products sold.

Any new sales agent must be recommended by existing agents and pay a one-time fee to the eCAAS platform

to be admitted as the authorized agent to provide sales agent services on the platform.

The Company started its trial operation of NONOGIRL, a cross-border

e-commerce platform, in March 2020 and formally launched it in July 2020.

The cross-border e-commerce platform aimed to build a new s2b2c

(supplier to business and consumer) outsourcing sales platform dominated by social media influencers.

It was aimed at the growing female

consumer market, with the ability to broadcast, short video, and all forms communication through the platform.

It could also create a

sales oriented sharing ecosystem with other major social media used by customers, etc.

The Company’s promotion strategy previously

mainly relied on the training of members and distributors through meetings and conferences.

Due to the outbreak of COVID-19, the

Chinese government put a restriction on large gatherings.

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

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

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

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

agent based eCAAS platform and began to provide supply chain financing services and trading of coal for coal mines and power generation

plants as well as aluminum ingots.

and certain subsidiaries of the Company are incorporated and operating in mainland China and they have received all required permissions

from Chinese authorities to operate their current business in China, including Business licenses, Bank Account Open Permits and Value

Added Telecom Business License.

As of the date of this report, we, our subsidiaries and the VIE in China are not subject to permission

requirements from the CSRC or CAC or any other entity that is required to approve of the VIE’s operations and have not received

or were denied such permissions by any PRC authorities.

Currently, we are required to file with CSRC for any offerings under New Overseas

Listing Rules.

Given the current PRC regulatory environment, it is uncertain whether we, our subsidiaries or the VIE, will be able to

obtain permission from the PRC government to offer our securities to foreign investors, and even when such permission is obtained, whether

it will be denied or rescinded.

If we or any of our subsidiaries or the VIE do not receive or maintain such permissions or approvals,

inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change

and we or our subsidiaries are required to obtain such permissions or approvals, it could significantly limit or completely hinder our

ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become

If applicable laws, regulations, or interpretations change and the VIE is required to obtain permissions or approvals in the

future, we may face substantial uncertainties as to whether we can obtain such permissions or approvals in a timely manner, or at all.

Failure to take timely and appropriate measures to adapt to any of these or similar regulatory compliance challenges could materially

and adversely affect our current corporate structure and business operations.

Chain Cloud Mall is a unique real-name based

blockchain e-commerce shopping platform that integrates blockchain, internet technology.

The CCM shared shopping mall platform is designed

to be a block-chain based shopping mall for merchants and goods, not the exchange of digital currencies, and it currently only accepts

payment from credit cards, Alipay and WeChat.

Currently, Chain Cloud Mall adopts an “Enterprise Communication as A Service”

or eCAAS platform which is a part of 3.15 China Responsible Brand Program run by the Anti-Counterfeiting Committee of China Foundation

of Consumer Protection (the “Anti-Counterfeiting Committee”).

Anti-Counterfeiting Committee reviews and accepts the companies

to join its 3.15 China Responsible Brand Program.

After acceptance, these companies are authorized to use anti-counterfeiting labels

on their products which have authenticated joint signatures of these companies and Anti-Counterfeiting Committee that are recorded on

the blockchain quality and safety traceability system controlled by the Anti-Counterfeiting Committee.

The companies will sell such products

on our eCAAS platform.

The companies can also use sales agents to sell their products on our eCAAS platform and parties can negotiate

the commission percentages for the products sold.

Any new sales agent must be recommended by existing agents and pay a one-time fee to

the eCAAS platform to be admitted as the authorized agent to provide sales agent services on the platform.

The Company started its trial operation of NONOGIRL,

a cross-border e-commerce platform, in March 2020 and formally launched it in July 2020.

The cross-border e-commerce platform aimed to

build a new s2b2c (supplier to business and consumer) outsourcing sales platform dominated by social media influencers.

at the growing female consumer market, with the ability to broadcast, short video, and all forms communication through the platform.

It could also create a sales oriented sharing ecosystem with other major social media used by customers, etc.

The Company’s promotion

strategy previously mainly relied on the training of members and distributors through meetings and conferences.

Due to the outbreak of

COVID-19, the Chinese government put a restriction on large gatherings.

These restrictions made the promotion strategy for our online

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

e-commerce platforms.

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

which later being closed.

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

Cloud Mall to a sale agent based eCAAS platform and began to provide supply chain financing services and trading of coal for coal mines

and power generation plants as well as aluminum ingots.

The Company currently has ten direct controlled

2 unchanged sentences

FinTech (Hong Kong) Limited, a company incorporated under the laws of Hong Kong, GlobalKey Shared Mall Limited, a company incorporated

under the laws of Cayman Islands (“GlobalKey Shared Mall”), Tianjin Future Private Equity Fund Management Partnership, a Limited

Partnership under the laws of China, FTFT UK Limited, a company incorporated under the laws of United Kingdom, Future Fintech Digital

Capital Management, LLC, a company incorporated under the laws of Connecticut, Future Fintech Digital Number One GP, LLC, a company incorporated

under the laws of Connecticut, Future FinTech Labs Inc., a company incorporated under the laws of New York, FTFT SuperComputing Inc.

company incorporated under the laws of Ohio and FTFT Paraguay S.A., a company incorporated under the laws of Paraguay.

under the laws of Cayman Islands (“GlobalKey Shared Mall”), Tianjin Future Private Equity Fund Management Partnership, a

Limited Partnership under the laws of China, FTFT UK Limited, a company incorporated under the laws of United Kingdom, Future Fintech

Digital Capital Management, LLC, a company incorporated under the laws of Connecticut, Future Fintech Digital Number One GP, LLC, a company

incorporated under the laws of Connecticut, Future FinTech Labs Inc., a company incorporated under the laws of New York, FTFT SuperComputing

a company incorporated under the laws of Ohio and FTFT Paraguay S.A., a company incorporated under the laws of Paraguay.

CCM Shopping Mall

1 unchanged sentence

member subscriptions caused by restrictions on our promotion strategy for the control of spread of COVID-19, we have transformed the CCM

shopping mall from a member based platform to a sale agent based eCAAS platform.

The eCAAS platform is entrusted by the Anti-Counterfeiting

Committee to run its Responsible Brand Program.

Anti-Counterfeiting Committee

will review and accept the companies to join its Responsible Brand Program.

After acceptance, these companies are authorized to use 315

anti-counterfeiting labels on their products and sell them on our eCAAS platform.

The companies can also use sales agents to sell their

products on our eCAAS platform and parties can negotiate the commission percentages for the products sold.

Any new sales agent must be

recommended by existing agents and pay a one-time fee to the eCAAS platform to be admitted as the authorized agent to provide sales agent

services on the platform.

Coal, Aluminum Ingots, Sand and Steel Supply

Chain Financing Service and Trading

Since the second quarter of 2021, we started coal supply chain financing

shopping mall from a member based platform to a sale agent based eCAAS platform since the second quarter of 2021.

The eCAAS platform is

entrusted by the Anti-Counterfeiting Committee to run its Responsible Brand Program.

Anti-Counterfeiting

Committee will review and accept the companies to join its Responsible Brand Program.

After acceptance, these companies are authorized

to use 315 anti-counterfeiting labels on their products and sell them on our eCAAS platform.

The companies can also use sales agents

to sell their products on our eCAAS platform and parties can negotiate the commission percentages for the products sold.

Any new sales

agent must be recommended by existing agents and pay a one-time fee to the eCAAS platform to be admitted as the authorized agent to provide

sales agent services on the platform.

Supply Chain Financing Service and Trading

Since the second quarter of 2021, we started

coal supply chain financing service and trading business.

Since the third quarter of 2021, we started aluminum ingots supply chain financing

service and trading business.

Since the third quarter of 2021, we started aluminum ingots supply chain financing service and trading business.

Since the first quarter of 2023, we started sand and steel supply chain financing service and trading business.

3 unchanged sentences

scale and improves the industrial value.

Through our supply chain service ability and customer

resources, we can tap into low-risk assets, flexibly carry out financial services around the actual financial needs of certain industries,

and reduce the overall risk of the business by using the control of business flow, goods logistics and capital flow in the process of

commodity circulation.

We focus on bulk coal, aluminum ingots, sand and steel and take large

state-owned or listed companies as the core service targets;

We use our own funds as the operation basis, actively uses a variety of channels

and products for financing, such as banks, commercial factoring companies, accounts receivable, asset-backed securities, and other innovative

financing methods to obtain sufficient funds.

We sign purchase and sale agreements with suppliers and buyers.

suppliers are responsible for the supply and transportation of the commodities to the end users’ designated freight yard or transfer

the title of them to us in certain warehouses.

We are considered as trading agent if we don’t take control over of the goods.

select the customers and suppliers that have good credit and reputation.

Through our supply chain service ability and

customer resources, we can tap into low-risk assets, flexibly carry out financial services around the actual financial needs of certain

industries, and reduce the overall risk of the business by using the control of business flow, goods logistics and capital flow in the

process of commodity circulation.

We focus on bulk coal, aluminum ingots, sand

and steel and take large state-owned or listed companies as the core service targets;

We use our own funds as the operation basis, actively

uses a variety of channels and products for financing, such as banks, commercial factoring companies, accounts receivable, asset-backed

securities, and other innovative financing methods to obtain sufficient funds.

We sign purchase and sale agreements with suppliers

The suppliers are responsible for the supply and transportation of the commodities to the end users’ designated freight

yard or transfer the title of them to us in certain warehouses.

We are considered as trading agent if we don’t take control over

of the goods and the revenues will be recognized as agent service fees instead of entire purchase price of the goods.

We select the customers

and suppliers that have good credit and reputation.

Asset Management Service .

5 unchanged sentences

NTAM offers diversified asset management portfolio for professional

Assets of NTAM’s clients are held in banks, where clients gave the banks their authorization allowing NTAM to place trading

instructions on behalf of the clients in order to manage the clients’ assets.

Assets of NTAM’s clients are held in banks, where clients gave the banks their authorization allowing NTAM to place

trading instructions on behalf of the clients in order to manage the clients’ assets.

NTAM mainly engages in following asset management

7 unchanged sentences

When NTAM manages clients’ investment portfolio

in bonds that are denominated in major international currencies such as US dollar, euro and sterling, the issuer of debts shall have good

credit rating and asset liability ratio.

Through active management, NTAM focus on bonds with higher yield to maturity among bonds with

the same maturity and credit rating.

in bonds that are denominated in major international currencies such as US dollar, euro and sterling, the issuer of debts shall have

good credit rating and asset liability ratio.

Through active management, NTAM focus on bonds with higher yield to maturity among bonds

with the same maturity and credit rating.

(3) Precious metals and currencies investment

NTAM also manages clients’ investment portfolio

in major international currencies and precious metals, including US dollar, euro, British pound, Japanese yen, Australian dollar and offshore

Chinese yuan.

in major international currencies and precious metals, including US dollar, euro, British pound, Japanese yen, Australian dollar and

offshore Chinese yuan.

Precious metals include gold, platinum and silver.

With research on the fundamentals of market supply and demand to predict

the trend of commodity prices, NTAM endeavors to improve the rate of return for clients through dual currency investment, options and

structured products.

With research on the fundamentals of market supply and demand

to predict the trend of commodity prices, NTAM endeavors to improve the rate of return for clients through dual currency investment,

options and structured products.

(4) Derivative Investment

5 unchanged sentences

bank to provide exclusive private solutions for our clients.

NTAM’s main revenue is generated from providing professional

advices to clients and management fees for managing the investment of the clients.

As of March 31, 2023, NTAM has approximately US$242

million assets under its management.

NTAM’s main revenue is generated from providing

professional advices to clients and management fees for managing the investment of the clients.

As of June 30, 2023, NTAM has approximately

US$242 million assets under its management.

Money Transfer Business

13 unchanged sentences

FTFT Finance is a financial platform that enables

its customers to send their hard-earned money to their country of origin, or any other country of their liking, with ease and at a reasonable

cost, transparent exchange rate and without any hidden charges.

We believe that it is our understanding of our customers and their diverse

backgrounds that has helped FTFT Finance to become a credible and trustworthy money remittance business.

The FTFT Pay platform and system

support direct connections to over 130 countries and their local banks, targeting customers with transfer destinations based in prominent

countries across the Middle East and Southeast Asia.

its customers to send their hard-earned money to their countries of origin, or any other countries of their liking, with ease and at a

reasonable cost, transparent exchange rate and without any hidden charges.

We believe that it is our understanding of our customers and

their diverse backgrounds that has helped FTFT Finance to become a credible and trustworthy money remittance business.

The FTFT Pay platform

and system support direct connections to over 130 countries and their local banks, targeting customers with transfer destinations based

in prominent countries across the Middle East and Southeast Asia.

Remittance service is a highly saturated market

2 unchanged sentences

(formerly known as Transfer Wise), Remitly and Remit World as its main competitors.

FTFT Finance has an edge over companies like wise

in many different ways, for example, FTFT Finance offers competitive rates for its services and does not charge customer fees for remittance

to Pakistan as it receives its rebate from local banks.

This approach provides gives us an advantage over our competitors.

FTFT Finance has an edge over companies like

wise in many different ways, for example, FTFT Finance offers competitive rates for its services and does not charge customer fees for

remittance to Pakistan as it receives its rebate from local banks.

This approach provides us an advantage over our competitors.

Expats living in the United Kingdom often send

money to their relatives either to support them, or for emergency uses or weddings.

money to their relatives either to support them, for emergency uses or weddings, etc.

The UK has a large migrant population of Indians,

6 unchanged sentences

transactions as well as marketing and promotions.

The management of FTFT Finance are currently engaged

in talks with different PR companies to kick start a new campaign under FTFT Finance brand name as all previous campaigns were under Khyber

Money Exchange brand.

Recent Developments Related to the COVID-19

11 unchanged sentences

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.

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

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

with the new variants of COVID-19, which could materially adversely impact our business and results of operations, especially to our supply

chain financing and trading business during the first quarter of 2022.

There was outbreak in various cities and provinces due to Omicron

variant in many cities including Xi’an city, Hong Kong, Shanghai and Beijing in 2022, which have resulted quarantines, travel restrictions,

and temporary closure of office buildings and facilities in these cities.

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 affected by

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

The Chinese and global

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

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

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

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

There were outbreaks in various cities

and provinces in China due to Omicron variant in many cities, such as Xi’an city, Hong Kong, Shanghai and Beijing in 2022, which

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

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

The global economy has also been materially negatively

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

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

While the potential economic impact brought by,

6 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.

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

new information that may emerge regarding new variants of COVID-19, the efficacy and distribution of COVID-19 vaccines and the actions

taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control.

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,

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

vaccines and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of

which are beyond our control.

Results of Operations

Comparison of Three Months ended March 31,

Comparison of Three Months ended June 30,

2023 and 2022:

The following table presents our consolidated

revenues for the three months ended March 31, 2023 and 2022, respectively:

revenues for the three months ended June 30, 2023 and 2022, respectively:

Three months ended

1 unchanged sentence

Supply Chain Financing/Trading

The decrease in revenue for the three months ended March 31, 2023 was

primarily due to less revenue from asset management service, as clients are cautious on stock and other investments during the current

market condition in the first quarter 2023, which has caused reduce in revenue of asset management business for the Company.

Supply chain financing/trading increased from $0 the three months ended

March 31, 2022 to the same period of 2023.

Due to COVID-19 outbreak and related quarantines, travel restrictions and lockdown in various

cities in China during the first quarter 2022, the Company did not have any coals and aluminum ingots supply chain financing/trading business

during the first quarter 2022 while the COVID-19 has been mostly under the control in China since the end of January 2023.

Others are mainly platform service fees, promotion

income for the stores on the platform and others.

$ (3,609,286 )

Revenue for the three months ended June 30, 2023

was $3.8 million, an decrease of $3.6 million, or 48.65%, from $7.4 million for the same period of the last fiscal year.

in revenue for the three months ended June 30, 2023 was primarily due to significant decrease in revenue from supply chain financing/trading

business from $3.7 million for the three months ended June 30, 2022 to $369,993 for the three months ended June 30, 2023 as the Company

had more trading agent type of business for a fee instead of taking control over the goods which generates more overall revenue for purchase

price of the entire goods.

Asset management service decreased by $0.40 million

from $3.66 million during the three months ended June 30, 2022 to $3.26 million in the same period of 2023, which mainly due to that clients

are cautious on investing stock and other investments during current market condition in the second quarter 2023, which has reduced our

revenue in asset management fees.

Others are mainly from CCM platform service fees

and promotion income for the stores on the platform, etc.

Gross Profit and Margin

1 unchanged sentence

gross profit of each of our main products and services and the consolidated gross profit margin, which is gross profit as a percentage

of the related revenues, for the three months ended March 31, 2023 and 2022, respectively:

Three months ended March 31,

of the related revenues, for the three months ended June 30, 2023 and 2022, respectively:

Three months ended June 30,

Asset management service

Supply Chain Financing/Trading

Overall gross margin as a percentage of revenue was 35.6% for the three

months ended March 31, 2023, a decrease of 16.0% from 51.6% for the same period of last fiscal year, mainly due to lower profit margin

from the asset management service for the three months ended March 31, 2023, comparing to the same period of 2022, which was mainly due

to increased salary and employees for our asset management business.

Gross profits for the three months ended June

30, 2023 was $1.26 million, an decrease from $1.38 million for the same period of the last fiscal year.

Overall gross margin as a

percentage of revenue was 33.06% for the three months ended June 30, 2023, an increase of 14.52% from 18.54% for the same period of last

fiscal year, mainly due to higher profit margin from supply chain financing/trading business for the three months ended June 30, 2023,

comparing to the same period of 2022, which was mainly due to decreased supply chain financing/trading cost as we had more revenue generated

from trading agent fees instead of taking control of goods for resale.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the three months ended March 31, 2023 and 2022, respectively:

First quarter of 2023

First quarter of 2022

operating expenses and operating expenses as a percentage of revenue for the three months ended June 30, 2023 and 2022, respectively:

June 30, 2023

June 30, 2022

General and administrative

4 unchanged sentences

Total operating expenses

General and administrative expenses increased

by $0.07 million, or 2.0%, from $3.4 million to $3.5 million for the three months ended March 31, 2023, compared to the same period of

last fiscal year.

The increase in general and administrative expenses was mainly due to increased rental fee during the three months ended

March 31, 2023.

Total operating expenses for the three months

ended June 30, 2023 was $1.60 million, an decrease of $2.62 million from $4.22 million for the same period of the last fiscal year.

General and administrative expenses decreased by $104,024, or 3.93%,

from $2.65 million to $2.55 million for the three months ended June 30, 2023, compared to the same period of last fiscal year, mainly

due to decrease in salaries during the three months ended June 30, 2023.

Selling expenses decreased by $0.23 million during

the three months ended March 31, 2023, compared to the same period of last fiscal year.

the three months ended June 30, 2023, compared to the same period of last fiscal year.

The decrease in selling expenses was mainly due

1 unchanged sentence

The Company recorded $0.45 million of impairment

loss in three months ended March 31, 2022 relating to short term investment which mainly due to Future Private Equity Fund Management

(Hainan) Co., Ltd.

invested $1.89 million (RMB13,000,000) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in

various types of investment portfolios.

Overall economic environment got worsened in China with Covid-19 outbreak and related lockdown

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

According to the market value, the Company’s

balance of the short - term investment was $1.8 million on March 31, 2022.

loss in three months ended June 30, 2022 relating to short term investment which mainly due to Future Private Equity Fund Management (Hainan)

invested $1.94 million (RMB13,000,000) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types

of investment portfolios.

The impairment loss relating to short term investment is due to that overall economic environment has worsened

in China with Covid-19 outbreak and related lockdown in various cities in China in 2022, Ukraine war, inflation, looming recession worldwide.

According to the market value, the Company’s balance of the short term investment was $1.06 million as of June 30, 2023 and $0.99

million as of December 31, 2022.

The Company recorded $0.12 million of research

and development expenses.

Research and development expenses include salaries, contracted services, as well as the related expenses of

our research and product development team, and expenditures relating to our efforts to develop, design new products and services, and

enhance our existing products and services to our clients.

Research and development expenses decreased by $0.22 million during the three

months ended March 31, 2023, compared to the same period of last fiscal year.

The decrease in research and development expenses was mainly

due to decreased salaries.

and development expenses during the three months ended June 30, 2023.

Research and development expenses include salaries, contracted services,

as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design

new products and services, and enhance our existing products and services to our clients.

Research and development expenses decreased

by $0.63 million during the three months ended June 30, 2023, compared to the same period of last fiscal year.

The decrease in research

and development expenses was mainly due to decreased salaries.

Write back of provision of doubtful debt recorded

$1.19 million during the three months ended June 30, 2023, it was due to bad debt recovery recognized in previous years and the Company

did not have same recovery for the same period in 2022.

Other Income (Expense), Net

Other expenses, net increased by $0.24 million to $0.41 million for

the three months ended March 31, 2023 from $0.17 million in the same period of the last fiscal year, primarily due to increased interest

Other expenses, net, increased by $1.90 million

to negative $1.27 million for the three months ended June 30, 2023 from positive $0.63 million in the same period of the last fiscal year,

primarily due to the payment of a civil penalty in the aggregate amount of $1,650,000 was approved by the Board during the three months

ended June 30, 2023 for the settlement with the Securities and Exchange Commission.

Tax provision decreased by $0.09 million for the

three months ended March 31, 2023, primarily due to decreased revenue.

three months ended June 30, 2023, comparing to the same period of 2022, primarily due to decreased revenue.

Non-controlling Interests

As of March 31, 2023, Shaanxi Chunlv Ecological

Agriculture Co., Ltd.

(“Shaanxi Chunlv”) holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited,

which was dissolved and deregistered on June 27, 2022.

Nature Worldwide Resources Ltd.

holds 40% interest in DCON DigiPay Limited (“DCON

Each of Bin Wu and Lixiong Huang holds 25% and 20% interest in FTFT Capital Investments L.L.C., respectively.

Capital Partner Limited holds 5%, Cheung Hiu Tung holds 2.22% and Choi Tsz Leung holds 2.78% of equity interest of NATM.

Yaohua Dai holds

20% equity interest of Future Fintech Digital Capital.

Net loss decreased by $0.45 million from $2.70 million for the three

months ended March 31, 2022 to $2.25 million for the same period of 2023 mainly due to the decrease in operating expenses, as discussed

As of June 30, 2023, (i) Nature Worldwide Resources

holds 40% interest in DCON DigiPay Limited (“DCON Digipay”);

(ii) each of Bin Wu and Lixiong Huang holds 25% and 20%

interest in FTFT Capital Investments L.L.C., respectively;

(iii) Aspenwood Capital Partner Limited holds 5%, Cheung Hiu Tung holds 2.22%

and Choi Tsz Leung holds 2.78% of equity interest of NATM and (iv) Yaohua Dai holds 20% equity interest of Future Fintech Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $0.69

million from $2.34 million for the three months ended June 30, 2022 to $1.64 million for the same period of 2023 mainly due to the decrease

in operating expenses, as discussed above.

Gain on disposal of discontinued

Gain on disposal of discontinued operation was

$0.11 million for the three months ended June 30, 2023, which was related to the dissolution and deregistration of QR ( HK )

Limited on June 16, 2023.

Comparison of Six Months Ended June 30, 2023

The following table presents our consolidated

revenues for the six months ended June 30, 2023 and 2022, respectively:

Six months ended

Asset management service

Supply Chain Financing/Trading

$ (3,681,686 )

Revenue for the six months ended June 30, 2023 was $7.2 million, an

decrease of $3.7 million, or 33.82%, from $10.89 million for the same period of the last fiscal year.

The decrease in revenue for the

six months ended June 30, 2023 was primarily due to significant decrease in revenue from supply chain financing/trading business from

$3.7 million for the six months ended June 30, 2022 to $480,792 for the six months ended June 30, 2023 as the Company had more trading

agent type of business for a fee instead of taking control over the goods which generates more overall revenue for purchase price of the

entire goods.

Asset management service decreased by $0.73 million

from $7.15 million during the six months ended June 30, 2022 to $6.42 million in the same period of 2023, which mainly due to that clients

are cautious on investing stock and other investments during current market condition in 2023, which has reduced our revenue in asset

management fees.

Others are mainly from CCM platform service fees,

promotion income for the stores on the platform and others.

Gross Profit and Margin

The following table presents the consolidated

gross profit of each of our main products and services and the consolidated gross profit margin, which is gross profit as a percentage

of the related revenues, for the six months ended June 30, 2023 and 2022, respectively:

Six months ended June 30,

Asset management service

Supply Chain Financing/Trading

Gross profits for the six months ended June 30,

2023 was $2.47 million, an decrease from $3.16 million for the same period of the last fiscal year.

Overall gross margin as a percentage

of revenue was 34.25% for the six months ended June 30, 2023, an increase of 5.19% from 29.06% for the same period of last fiscal year,

mainly due to higher profit margin from supply chain financing/trading business for the six months ended June 30, 2023, comparing to the

same period of 2022, which was mainly due to decreased supply chain financing/trading cost as we had more revenue generated from trading

agent fees instead of taking control of goods for resale.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2023 and 2022, respectively:

Six months ended

June 30, 2023

June 30, 2022

General and administrative

Research and Development expenses

Selling expenses

Bad debt provision

Impairment Loss

Total operating expenses

Total operating expenses for the six months ended

June 30, 2023 was $5.44 million, an decrease of $3.24 million from $8.68 million for the same period of the last fiscal year.

General and administrative expenses decreased by $36,034, or 0.59%,

from $6.06 million to $6.02 million for the six months ended June 30, 2023, compared to the same period of last fiscal year, mainly due

to decrease in salaries during the six months ended June 30, 2023.

Selling expenses decreased by $0.88 million during

the six months ended June 30, 2023, compared to the same period of last fiscal year.

The decrease in selling expenses was mainly due

to decreased salaries and advertising fees.

The Company recorded $0.70 million of impairment

loss in six months ended June 30, 2022 relating to short term investment which mainly due to Future Private Equity Fund Management (Hainan)

invested $1.94 million (RMB13,000,000) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types

of investment portfolios.

The impairment loss relating to the short term investment is due to that overall economic environment has worsened

in China with Covid-19 outbreak and related lockdown in various cities in China in 2022, Ukraine war, inflation, looming recession worldwide.

According to the market value, the Company’s balance of the short term investment was $1.06 million as of June 30, 2023 and $0.99

million as of December 31, 2022.

The Company recorded $0.33 million of research

and development expenses during the six months ended June 30, 2023.

Research and development expenses include salaries, contracted services,

as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design

new products and services, and enhance our existing products and services to our clients.

Research and development expenses decreased

by $0.88 million during the six months ended June 30, 2023, compared to the same period of last fiscal year.

The decrease in research

and development expenses was mainly due to decreased salaries.

Write back of provision of doubtful debt recorded

$1.17 million during the six months ended June 30, 2023, it was due to bad debt recovery recognized in previous years and the Company

did not have same recovery for the same period in 2022.

Other Income (Expense), Net

Other expenses, net increased by $1.66 million

to negative $0.86 million for the six months ended June 30, 2023 from positive $0.80 million in the same period of the last fiscal year,

primarily due to the payment of a civil penalty for the aggregate amount of $1,650,000 was approved by the Board during the six months

ended June 30, 2023 for the settlement with the Securities and Exchange Commission.

Tax provision decreased by $0.25 million for the

six months ended June 30, 2023, comparing to the same period of 2022, primarily due to decreased revenue.

Non-controlling Interests

As of June 30, 2023, (i) Nature Worldwide Resources

holds 40% interest in DCON DigiPay Limited (“DCON Digipay”);

(ii)each of Bin Wu and Lixiong Huang holds 25% and 20% interest

in FTFT Capital Investments L.L.C., respectively;

(iii) Aspenwood Capital Partner Limited holds 5%, Cheung Hiu Tung holds 2.22% and Choi

Tsz Leung holds 2.78% of equity interest of NATM;

and(iv)Yaohua Dai holds 20% equity interest of Future Fintech Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $1.14

million from $5.03 million for the six months ended June 30, 2022 to $3.89 million for the same period of 2023 mainly due to the decrease

in operating expenses, as discussed above.

Gain on disposal of discontinued

Gain on disposal of discontinued operation was

$0.11 million for the six months ended June 30, 2023, which was related to the dissolution and deregistration of QR ( HK )

Limited on June 16, 2023.

Loss per Share

Basic and diluted loss per share were $0.15 and

$0.15 for the three months ended March 31, 2023, respectively, as compared to a loss of $0.19 and $0.18 for the same periods of 2022,

respectively.

Basic and diluted loss per share from continuing

operations were $0.26 and $0.26 for the six months ended June 30, 2023, respectively, as compared to a loss of $0.35 and $0.34 for the

same periods of 2022, respectively.

Basic and diluted income per share attributable to discontinued operations was $0.01 and $0.01 for

the six months ended June 30, 2023, respectively.

Basic and diluted earnings per share attributable to discontinued operations was nil

for the six months ended June 30, 2022, respectively.

Liquidity and Capital Resources

As of March 31, 2023, we had cash and restricted

As of June 30, 2023, we had cash and restricted

cash of $36.79 million, as compared to $29.74 million as of December 31, 2022.

The decrease in cash, cash equivalents and restricted cash

was mainly due to increased prepayment for coals and aluminum ingots supply chain financing and trading business from the first quarter

Our working capital has historically been generated from our operating

cash flows, advances from our customers and loans from bank facilities.

Our working capital was $44.83 million as of March 31, 2023, a

decrease of $1.64 million from working capital of $46.48 million as of March 31, 2022, mainly due to the decrease in current assets and

an increase in current liabilities.

Net cash used in operating activities increased

by $9.80 million to $10.44 million for the three months ended March 31, 2023 from $0.64 million for the same period of the last fiscal

The increase in net cash used by operating activities was primarily due to increase in advances to suppliers and other current assets.

Net cash used in investing activities decreased

$0.25 million to $0.16 million for the three months ended March 31, 2023 from $0.41 million for the same period of the last fiscal year.

It was due to decrease in payment for loan receivable and purchase of intangible assets.

The increase in cash, cash equivalents and restricted cash

was mainly due to decreased accounts receivable and loan receivable from the six months ended June 30, 2023.

Our working capital has historically been generated

from our operating cash flows, advances from our customers and loans from bank facilities.

Our working capital was $41.79 million as of

June 30, 2023, a decrease of $4.69 million from working capital of $46.48 million as of December 31, 2022, mainly due to the decrease

in current assets and an increase in current liabilities.

cash used in operating activities increased by $0.88 million to

$6.01 million for the six months ended June 30, 2023 from $5.13 million for the same period of the last fiscal year.

The increase in net

cash used by operating activities was primarily due to increase in advances to suppliers and other current assets.

Net cash provided by investing activities increased

$20.62 million to $14.64 million for the six months ended June 30, 2023 from $(5.98) million for the same period of the last fiscal year.

It was due to increase in repayment from loan receivable.

Net cash provided in financing activities for

the three months ended March 31, 2023 was nil representing a decrease of $3.56 million, as compared to cash provided by financing activities

of $3.56 million during the three months ended March 31, 2022.

The decrease in cash provided by financing activities was mainly due to

proceeds from loan payable.

the six months ended June 30, 2023 was nil, representing a decrease of $4.14 million, as compared to cash provided by financing activities

of $4.14 million during the six months ended June 30, 2022.

The decrease in cash provided by financing activities was mainly due

to proceeds from loan payable to the Company.

Off-balance sheet arrangements

As of March 31, 2023, we did not have any off-balance

As of June 30, 2023, we did not have any off-balance

sheet arrangements.

Quantitative and Qualitative Disclosures

about Market Risk

Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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 2. Management’s Discussion and Analysis