What changed in this filing

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Item 1. Financial Statements

2023-11-20 compared with 2023-08-21 · 352 added, 318 removed, 1300 unchanged (34% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

29 unchanged sentences

Common stock, $ 0.001 par value;

60,000,000 shares authorized;

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

60,000,000 shares authorized, 14,645,653 shares and 14,645,653 shares issued and outstanding as of September 30, 2023 and December 31, 2022 respectively

Additional paid-in capital

19 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues-third party

3 unchanged sentences

Research and development expenses

Stock compensation expense

Selling expenses

Impairment Loss

(Recovery) Provision of doubtful debts

( 1,187,403 )

Provision (Recovery) of doubtful debts

( 1,152,798 )

4 unchanged sentences

( 5,554,395 )

( 10,158,234 )

Other (expenses) income

3 unchanged sentences

( 1,617,355 )

( 1,561,949 )

Total other income, net

( 1,267,860 )

Total other income (expense), net

Loss from Continuing Operations before Income Tax

30 unchanged sentences

( 3,522,764 )

( 1,084,545 )

( 1,687,807 )

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

29 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months ended June 30, 2022

Three Months ended September 30, 2022

comprehensive

Balance at March 31, 2022

Balance at June 30, 2022

$ 221,472,527

5 unchanged sentences

( 3,633,897 )

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

1 unchanged sentence

( 1,834,957 )

Disposition of discontinued operation

Balance at June 30, 2022

Balance at September 30, 2022

$ 222,751,657

2 unchanged sentences

$ ( 1,094,664 )

Three Months ended June 30, 2023

Three Months ended September 30, 2023

comprehensive

Balance at March 31, 2023

Balance at June 30, 2023

$ 222,751,657

7 unchanged sentences

Foreign currency translation adjustment

( 1,488,634 )

Disposition of discontinued operation

Balance at June 30, 2023

Balance at September 30, 2023

$ 222,751,657

2 unchanged sentences

$ ( 1,457,803 )

Six Months ended June 30, 2022

Nine Months ended September 30, 2022

comprehensive

8 unchanged sentences

Share-based payments-service

Share-based payments-omnibus equity plan

Foreign currency translation adjustment

2 unchanged sentences

Disposition of discontinued operation

Balance at June 30, 2022

Balance at September 30, 2022

$ 222,751,657

2 unchanged sentences

$ ( 1,094,664 )

Six Months ended June 30, 2023

Nine Months ended September 30, 2023

comprehensive

7 unchanged sentences

( 6,340,471 )

Unrealized gains on available-for-sale securities

Foreign currency translation adjustment

( 1,084,545 )

Disposition of discontinued operation

Balance at June 30, 2023

Balance at September 30, 2023

$ 222,751,657

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

12 unchanged sentences

Notes receivable

( 1,174,122 )

Other receivable

3 unchanged sentences

( 5,502,062 )

( 2,894,838 )

Accounts payable

( 3,251,326 )

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

Accrued expenses

1 unchanged sentence

Advances from customers

( 1,170,574 )

Net cash used in operating activities – Continued Operations

4 unchanged sentences

Purchase of property, plant and equipment

Disposal of property and equipment

Payment of loan receivable

6 unchanged sentences

Payment of dividends to the non-controlling interest

Proceeds from amounts due from related parties, net

Repayment of amounts due to related parties, net

Notes payable

( 2,893,184 )

Proceeds from loan payable

Net cash provided by financing activities

Effect of change in exchange rate

Net cash (used in) provided by financing activities

( 2,914,830 )

Effect of change in exchange rate

( 3,201,964 )

33 unchanged sentences

Trading (Chengdu) Co., Ltd.

Its business is coal and aluminum ingots supply chain financing services and trading.

Its business is bulk commodities supply chain financing services and trading.

On April 18, 2022, the Company and Future Fintech

28 unchanged sentences

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 share transfer transaction was approved by the Securities and Futures Commission

of Hong Kong (“SFC”) in August 2023 and the acquisition was closed on November 7, 2023.

The names of the two entities

were subsequently changed to ‘FTFT International Securities and Futures Limited’ and ‘FTFT Information Services (Shenzhen)

Ltd.’, respectively.

The Company’s business and operations are

principally conducted by its subsidiaries in the PRC and Hong Kong.

principally conducted by its subsidiaries in the PRC, Hong Kong and UK.

On January 26, 2023, the Company filed with the

12 unchanged sentences

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.

The amendment to the Articles of Incorporation of the Company took effect 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 September 30, 2023 and December 31, 2022 statements of changes in stockholders’ equity, and in per share data for all periods

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 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 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.

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

for the periods ended September 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 nine months ended September 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

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was dissolved and deregistered.

On June 16, 2023, QR (HK) Limited 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 asset management service

and, supply chain financing and trading, and others.

The Company classified business segment into asset

management service, supply chain financing and trading, and others.

Uses of Estimates in the Preparation of Financial

13 unchanged sentences

assuming that the Company will continue as a going concern.

The Company incurred operating losses and had

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

future business plan.

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

million as of June 30, 2023.

Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative

cash flows as the Company implements its future business plan.

The Company’s operating losses amounted $ 6.34 million, and it had

negative operating cash flows amounted $ 6.42 million as of September

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

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

The Company has raised

funds through issuance of convertible notes and common stock.

The ability of the Company to continue as a going

43 unchanged sentences

following table.

For the six Months ended June 30, 2023:

For the nine months ended September 30, 2023:

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

9 unchanged sentences

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:

For the nine months ended September 30, 2022:

Loss from continuing operations

9 unchanged sentences

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

Three Months ended June 30, 2023:

Three months ended September 30, 2023:

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

9 unchanged sentences

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:

Three months ended September 30, 2022:

Loss from continuing operations

35 unchanged sentences

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.

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.

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.

3 unchanged sentences

The Company has assessed its accounts receivable

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

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

Bad debt expense was $( 1,152,798 ) and $ 1,947

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

during the nine months ended September 30, 2023 and 2022, respectively.

Accounts receivables of $ 0.95 million and nil have been outstanding

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

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

Revenue Recognition

18 unchanged sentences

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.

was $ 20.27 million and $ 11.49 million during the nine months ended September 30, 2023 and 2022, respectively.

Sales agent services of coals, aluminum ingots,

7 unchanged sentences

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.

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

Revenue was $ 0.20

million and nil during the nine months ended September 30, 2023 and 2022, respectively.

Asset Management Service

25 unchanged sentences

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

by testing for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants would

use if they were pricing the intangible asset.

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

by testing for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

The fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants

would use if they were pricing the intangible asset.

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

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

7 unchanged sentences

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.

was 7.18:1 and 6.96:1 at the balance sheet dates of September 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 7.01:1

and 6.61:1 for nine months ended September 30, 2023 and 2022, respectively.

The exchange rate we used to convert HKD to USD

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 7.83:1 for six

months ended June 30, 2023 and 2022, respectively.

was 7.82:1 and 7.80:1 at the balance sheet dates of September 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 7.83:1 and 7.83:1 for

nine months ended September 30, 2023 and 2022, respectively.

The exchange rate we used to convert GBP to USD

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 0.81:1 and 0.77:1 for six

months ended June 30, 2023 and 2022, respectively.

was 0.82:1 and 0.83:1 at the balance sheet dates of September 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 0.80:1 and 0.80:1 for

nine months ended September 30, 2023 and 2022, respectively.

The exchange rate we used to convert AED to USD

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 six

months ended June 30 2023 and 2022, respectively.

The exchange rate we used to convert PYG to USD

was 7258.03:1 and 7322.90:1 at the balance sheet dates of June 30, 2023 and December 31, 2022.

was 3.66:1 and 3.67:1 at the balance sheet dates of September 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 7240.40:1 for six months

ended June 30 2023.

The average exchange rates we used to convert AED to USD were 3.66:1 and 3.67:1 for

nine months ended September 30 2023 and 2022, respectively.

The exchange rate we used to convert PYG to USD

was 7289.83:1 and 7322.90:1 at the balance sheet dates of September 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 7250.00:1 and 6903.82:1

for nine months ended September 30 2023 and 2022.

Translation adjustments are reported separately

48 unchanged sentences

Fair valued or carried at amortized costs.

As of September

30, 2023 and December 31, 2022, the short-term investments amounted to $ 0.95 million and $ 0.99 million, respectively.

Due to fluctuations

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

million on June 30, 2023 and recognized an impairment to the investment portfolio of $ 0.91 million on December 31, 2022.

of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of $ 3,872

and $ 0.93 million during the nine months ended September 30, 2023 and 2022.

We adopted ASU No.

140 unchanged sentences

assets and liabilities are as follows:

September 30,

Cash and cash equivalents

7 unchanged sentences

$ ( 132,741 )

September 30,

Current liabilities:

7 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

ACCOUNTS RECEIVABLE

Accounts receivable, net consist of the following:

September 30,

Supply Chain Financing/Trading

3 unchanged sentences

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

September 30,

Total accounts receivable, net

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.

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

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.

As of September 30, 2023, the balance of other

receivables was $ 5.89 million.

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.

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 pre purchase electricity $ 0.17 million.

On February 3, 2023, Future Fintech Group Inc.

2 unchanged sentences

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 $ 1.46 million deposit

2 unchanged sentences

receivables was $ 2.65 million.

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.

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 .

8 unchanged sentences

resale of electricity $ 0.24 million.

In addition, other receivables included total $ 1.17 million deposit

paid and prepayments to third parties.

In addition, other receivables included total

$ 1.17 million deposit paid and prepayments to third parties.

LOAN RECEIVABLES

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

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

As of September 30, 2023, the balance of loan

receivables was $ 4.92 million, which was from a third party.

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

29 unchanged sentences

was $ 19.16 million, which was from a third party.

On September 8, 2021, FUCE Future Supply Chain

(Xi’an) Co., Ltd., a wholly owned subsidiary of the Company, entered into a “Loan Agreement” with a third party.

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

loaned an amount of $ 0.22 million (RMB 1.5 million) to the third

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

September 8, 2021, FUCE Future Supply Chain (Xi’an) Co., Ltd., a wholly owned subsidiary of the Company, entered into a “Loan

Agreement” with a third party.

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

loaned an amount

of $ 0.22 million (RMB 1.5 million) to the third party at the annual interest rate of 5.25 % from September 8, 2021 to September 6, 2023.

As of March 30, 2023, the Company has received repayment $ 0.22 million.

On March 10, 2022, FTFT HK entered into a “Loan

29 unchanged sentences

SHORT - TERM INVESTMENT

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

investments were $ 1.06 million.

As of September 30, 2023, the balance of short

- term investments were $ 0.95 million.

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

1 unchanged sentence

($ 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.

to the market value, the Company’s balance of the short - term investment was $ 0.95 million on September 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

of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of $ 3,872 .

As of December 31, 2022, the balance of short

9 unchanged sentences

the followings:

September 30,

Prepayments for Supply Chain Financing/Trading

1 unchanged sentence

Prepaid expenses

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

As of September 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.

20 unchanged sentences

implied fair value, an impairment loss should be recognized.

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

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

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

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

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

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

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

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

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

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

paid in 2,244,156 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.

The 40 % of the Purchase Price has been paid in the shares of common stock of the Company to Joy Rich

on October 17, 2023.

The transaction was accounted for in accordance

38 unchanged sentences

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

For the six months ended

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

For the nine months ended

September 30, 2023, the operating lease cost was $ 0.80 million.

The Company’s operating leases have remaining

lease terms of approximately 42 months.

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

were 3.75 years and 4.75 %, respectively.

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

rate were 3.50 years and 4.75 %, respectively.

Maturities of lease liabilities were as follows:

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

As of September 30,

From October 1, 2023 to September 30, 2024

From October 1, 2024 to September 30, 2025

From October 1, 2025 to September 30, 2026

From October 1, 2026 to September 30, 2027

amounts representing interest

6 unchanged sentences

whereby lease assets and lease liabilities are not recognized on the balance sheet.

Short term leases cost was $ 0.14 million for six months

ended June 30, 2023.

Short term leases cost was $ 0.17 million for nine

months ended September 30, 2023.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

September 30,

Office equipment, fixtures and furniture

2 unchanged sentences

Depreciation expense included in general and administration

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 six months ended June 30, 2023 and 2022 was nil , respectively.

expenses for the nine months ended September 30, 2023 and 2022 was $ 223,687 and $ 137,187 , respectively.

Depreciation expense included

in cost of sales for the nine months ended September 30, 2023 and 2022 was nil , respectively.

INTANGIBLE ASSETS

Intangible assets consist of the following:

September 30,

System and software

3 unchanged sentences

Amortization expense included in general and administration

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 six months ended June 30, 2023 and 2022 was nil , respectively.

expenses for the nine months ended September 30, 2023 and 2022 was $ 42,776 and $ 45,699 , respectively.

Amortization expense included in

cost of sales for the nine months ended September 30, 2023 and 2022 was nil , respectively.

The estimated amortization is as follows:

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

As of September 30, 2023

From October 1, 2023 to September 30, 2024

From October 1, 2024 to September 30, 2025

From October 1, 2025 to September 30, 2026

From October 1, 2026 to September 30, 2027

From October 1, 2027 to September 30, 2028

Note payable consist of the following:

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

August 10, 2022

August 10, 2023

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

August 12, 2022

August 12, 2023

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

July 28, 2022

July 28, 2023

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

December 19, 2022

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to notify the applicant and sign another loan contract.

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

As of September 30, 2023, there was no such event of default.

ACCOUNT PAYABLES

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of the followings:

September 30,

Supply Chain Financing/Trading payment

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consisted of the followings:

September 30,

Legal fee and other professionals

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of the followings:

September 30,

Coal and Aluminum Ingots Supply Chain Financing/Trading

DEFERRED LIABILITIES

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.

As of September 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.

The 40 % of the Purchase Price has been paid in the shares

of common stock of the Company on October 17, 2023.

RELATED PARTY TRANSACTION

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

parties were consisted of the followings:

As of September 30, 2023, the amounts due to the

related parties were consisted of the followings:

General Manager of a subsidiary of the Company

Accrued expenses, interest free and payment on demand.

Chief Financial Officer of the Company

Accrued expenses, interest free and payment on demand.

Reits (Beijing) Technology Co., Ltd

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The amount is interest free and payment on demand.

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

related parties were consisted of the followings:

As of September 30, 2023, the amounts due from

the related parties were consisted of the followings:

Deputy General Manager of a subsidiary of the Company

Prepaid expenses, interest free and payment on demand.

Chief Financial Officer of the Company

Chief Operating Officer of the Company*

Prepaid expenses, interest free and payment on demand.

During six months ended June 30, 2023, the Company

had the following transactions with related parties:

Yang Liu resigned as Chief Operating Officer of the Company

on July 27, 2023 and remains as an officer of a subsidiary of the Company.

During nine months ended September 30, 2023, the

Company had the following transactions with related parties:

JKNDC Limited

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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

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

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

During nine months ended September 30, 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 payable to Nice Talent Partner

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

The Company is incorporated in the United States

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

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.

taxable income for the nine months ended September 30, 2023 and 2022.

For the nine months

ended September 30, 2023 and 2022, the Company had current income tax expenses of $ 72,287 and $ 513,178 , respectively.

The Company evaluates the level of authority for

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

the unrecognized benefits associated with the tax positions.

For the nine months ended September 30, 2023, the Company had no unrecognized

tax benefits.

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

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

The amount of unrecognized deferred tax liabilities

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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

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

September 30,

Loss before taxation

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( 1,567,046 )

( 2,038,906 )

Others, primarily the differences in tax rates

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IMPAIRMENT LOSS

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.

The Company recorded $3,872 and $ 0.23 million

of impairment loss in nine months ended 2023 and 2022 relating to the short - term investment mainly due to Future Private Equity Fund

Management (Hainan) Co., Ltd.

invested $ 1.85 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, 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 nine months ended September 30, 2023 and

According to the market value, the Company’s balance of the short - term investment was $ 0.95 million and $ 0.98 million on

September 30, 2023 and December 31, 2022.

SHARE BASED COMPENSATION

On February 1, 2023, the Company effected a 1-for-5 reverse stock split

of the Company’s authorized shares of common stock from 300,000,000 shares to 60,000,000 shares, accompanied by a corresponding

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

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

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

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

Consultant immediately upon issuance.

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

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

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.

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

immediately upon issuance.

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

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

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

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

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

Restricted net assets

PRC laws and regulations permit payments of dividends by the Company’s

subsidiaries incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards

and regulations.

In addition, the Company’s subsidiaries incorporated in the PRC are required to annually appropriate 10 % of their

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

PRC laws and regulations permit payments of dividends

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

PRC accounting standards and regulations.

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

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

their respective registered capital.

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

As a result of the

restrictions described above and elsewhere under PRC laws and regulations, the Company’s subsidiaries incorporated in the PRC are

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

The restriction amounted

to $ 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 profits generated by the Company’s subsidiaries to satisfy any obligations of the Company.

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

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

The restriction

amounted to $ 26.61 million (RMB 191,062,532 ) as of September 30, 2023.

Except for the above or disclosed elsewhere, there is no other restriction

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

Payments-omnibus equity plan

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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.

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

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.

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

supply chain financing service

and trading business, asset management service and others.

The Company began to provide supply chain financing

services during the second quarter of 2021 and the Company acquired Nice Talent and started to provide asset management services since

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

Some of our operation might not individually meet

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

information provided to the chief operating decision maker.

The chief operating decision maker evaluates the results of each segment

in assessing performance and allocating resources among the segments.

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

assessing performance and allocating resources among the segments.

Since there is an overlap of services and products between different

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Segment profit represents the gross profit of each reportable segment.

Three months ended June 30, 2023

Three months ended September 30, 2023

Reportable segment revenue

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Segment gross profit

Three months ended June 30, 2022

Three months ended September 30, 2022

Reportable segment revenue

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Segment gross profit

Six months ended June 30, 2023:

Nine months ended September 30, 2023:

Reportable segment revenue

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Segment gross profit

Six months ended June 30, 2022:

Nine months ended September 30, 2022:

Reportable segment revenue

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Supply chain financing/trading

$ ( 326,287 )

$ ( 224,156 )

Asset management service

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Segment assets:

September 30,

Supply chain financing/trading

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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.

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

for admission.

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.

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 May 13, 2022, FT Global

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

On May 13, 2022, FT Global produced documents

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

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

FT Global’s requests for production of documents.

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

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

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

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

motions to October 12, 2022.

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

in this lawsuit.

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

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.

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 judgment on all claims asserted by FT Global in this lawsuit.

On August 31, 2023,

the Court entered an Order denying the Company’s motion for summary judgment.

On September 20, 2023, the parties filed a joint motion

to extend the deadline to file the consolidated pretrial order pending mediation of the case by the parties.

On September 21, 2023, the

Court granted the parties’ joint motion to extend the deadline to file the consolidated pretrial order to October 27, 2023.

16, 2023, the parties mediated the case.

On October 24, 2023, the parties filed another joint motion to extend the deadline to file the

consolidated pretrial order.

On October 27, 2023, the Court granted the parties’ joint motion to extend the deadline to file the

consolidated pretrial order to November 17, 2023 and set the case for trial on January 8, 2024.

Subsequently, the Court approved an extension

of the deadline to file a pretrial order to December 1, 2023.

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

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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;

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

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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.

The first and second installments of $ 150,000 each have been paid by the Company on July 7, 2023 and September 25, 2023, respectively.

The Company also has engaged an independent consultant to test, assess, and review the Company’s

internal accounting controls and internal control over financial reporting on July 26, 2023.

RISKS AND UNCERTAINTIES

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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.

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,

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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 business.

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

Customer concentration risk

For six months ended June 30, 2023, one customer

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

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

the Company’s total revenues.

For nine months ended September 30, 2023, two

customer accounted for 60.84 % and 27.88 % of the Company’s total revenues.

For nine months ended September 30, 2022, three customer

accounted for 45.93 %, 16.47 % and 13.08 % of the Company’s total revenues.

Vendor concentration risk

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.

For nine months ended September 30, 2023, one

vendors accounted for 75.83 % of the Company’s total purchases.

For nine months ended September 30, 2022, three vendors accounted

for 24.34 %, 22.80 % and 19.43 % of the Company’s total purchases.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through

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

the date of the issuance of the condensed consolidated financial statements and the following subsequent event is identified.

7, 2023, Future FinTech (Hong Kong) Limited (“Buyer”), a company incorporated in Hong Kong and a wholly owned subsidiary of

the Company, completed its acquisition of 100 % of the issued and outstanding shares 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”) from Alpha Financial Limited (“Seller”) for a total of HK$ 15,659,949 (approximately $ 2,007,686 ),

pursuant to a Share Transfer Agreement (the “Agreement”) dated February 27, 2023.

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