What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-20 compared with 2023-08-21 · 299 added, 274 removed, 389 unchanged (60% 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

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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.

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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.

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.

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.

Overview of Our Business

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

On April 14, 2022, the Company established Future

Trading (Chengdu) Co., Ltd.

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

On April 18, 2022, the Company and Future Fintech

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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.

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.

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.

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

to FTFT Finance UK

to FTFT Finance UK Limited.

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

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Alpha SZ provides technical support services to Alpha HK.

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.

On January 26, 2023,

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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 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

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.

Due to the slowdown of economy and fierce competition in e-commerce area in China, CCM has

generated nominal revenue for the Company since its transition to the agent based eCAAS platform.

The Company started its trial operation of NONOGIRL,

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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.

It was aimed at

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

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 business.

The Company currently has ten direct controlled

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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

a 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 Inc.

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

CCM Shopping Mall

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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.

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.

Due to the slowdown of economy and fierce competition in e-commerce area in China, CCM has generated nominal

revenue for the Company since its transition to the agent based eCAAS 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 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

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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;

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

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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

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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

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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.

As of September 30, 2023, NTAM has

approximately US$242 million assets under its management.

Money Transfer Business

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(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.

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.

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Recent Developments Related to the COVID-19

In December 2019, a novel strain of coronavirus was reported and has

spread throughout China and other parts of the world.

On March 11, 2020, the World Health Organization characterized the outbreak as a

In early 2020, Chinese government took emergency measures to combat the spread of the virus, including quarantines,

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

In response to the evolving dynamics related

to the COVID-19 outbreak, the Company followed the guidelines of local authorities as it prioritizes the health and safety of its employees,

contractors, suppliers and business partners.

Our offices in China were closed and the employees worked from home at the end of January

2020 until late March 2020.

The quarantines, travel restrictions, and the temporary closure of office buildings have materially negatively

impacted 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

In December 2019, a novel strain of coronavirus

was reported and has spread throughout China and other parts of the world.

On March 11, 2020, the World Health Organization characterized

the outbreak as a “pandemic”.

In early 2020, Chinese government took emergency measures to combat the spread of the virus,

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

In response to the

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

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

Our offices in China were closed and the employees worked from

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

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

have materially negatively impacted 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.

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.

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.

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.

Due to the slowdown of economy and fierce competition in e-commerce

area in China, CCM has generated nominal revenue for the Company since its transition to the agent based eCAAS platform.

The global economy has also been materially negatively

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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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Results of Operations

Comparison of Three Months ended June 30,

Comparison of Three Months ended September

30, 2023 and 2022:

The following table presents our consolidated

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

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

Three months ended

September 30,

Asset management service

Supply Chain Financing/Trading

$ (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.

Revenue for the three months ended September 30,

2023 was $23.75 million, an increase of $11.79 million, or 98.63%, from $11.96 million for the same period of the last fiscal year.

increase in revenue for the three months ended September 30, 2023 was primarily due to significant increase in revenue from supply chain

financing/trading business from $4.12 million for the three months ended September 30, 2022 to $19.99 million for the three months ended

September 30, 2023 as the Company increased the revenue from sand and steel supply chain financing.

Asset management service decreased by $4.57 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.

from $7.84 million during the three months ended September 30, 2022 to $3.27 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 third quarter 2023, which has reduced

our revenue in asset management fees.

Others are mainly from non-performing debt recovery

consulting and service fees.

Others increased by $0.49 million from $1,319 during the three months ended September 30, 2022 to $0.48 million

in the same period of 2023, which mainly due to its new business of non-performing debt recovery consulting and service fees started during

the third quarter of 2023.

Gross Profit and Margin

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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 June 30, 2023 and 2022, respectively:

Three months ended June 30,

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

Three months ended September 30,

Asset management service

Supply Chain Financing/Trading

Gross profits for the three months ended June

Gross profits for the three months ended September

30, 2023 was $1.39 million, an decrease from $1.49 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.

percentage of revenue was 5.86% for the three months ended September 30, 2023, a decrease of 6.63% from 12.49% for the same period of

last fiscal year, mainly due to lower profit margin from supply chain financing/trading business for the three months ended September

30, 2023, comparing to the same period of 2022, which was mainly due to increased supply chain financing/trading cost.

Operating Expenses

The following table presents our consolidated

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

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

September 30, 2023

September 30, 2022

General and administrative

Research and Development expenses

Stock compensation expense

Selling expenses

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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.

ended September 30, 2023 was $3.98 million, a decrease of $2.16 million from $6.13 million for the same period of the last fiscal year.

General and administrative expenses increased

by $270,902, or 7.61%, from $3.56 million to $3.83 million for the three months ended September 30, 2023, compared to the same period

of last fiscal year, mainly due to increased professional service fees for acquisition projects and certain training and consulting fees

for the acquired and newly established companies during the three months ended September 30, 2023.

Stock compensation expense was $1.28 million during

the three months ended September 30, 2022, as the Compensation Committee of the Board of Directors (the “Board”) of the Company

granted certain shares of common stock of the Company to certain officers and employees in July 2022 and we did not have such expense

for three months ended September 30, 2023.

Selling expenses decreased by $0.17 million during

the three 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 $0.45 million of impairment

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 three months ended September 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 $0.04 million and $0.23 million

of impairment loss in three months ended September 30, 2023 and 2022 relating to short term investment which mainly due to Future Private

Equity Fund Management (Hainan) Co., Ltd.

invested $1.85 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, high interest rate, looming recession worldwide.

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

investment was $0.95 million as of September 30, 2023 and $0.99 million as of December 31, 2022.

The Company recorded $0.17 million of research

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.

and development expenses during the three months ended September 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.

by $0.77 million during the three months ended September 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.

Provision of doubtful debt recorded $0.02 million

during the three months ended September 30, 2023 which we did not have for the same period of 2022.

Other Income (Expense), Net

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

Other expenses, net, decreased by $1.05 million

to negative $0.06 million for the three months ended September 30, 2023 from positive $1.21 million in the same period of the last fiscal

year, primarily due to a large change in foreign exchange gain.

provision decreased by $0.19 million from $0.01 million for the

three months ended September 30, 2023, comparing to $0.20 million for the same period of 2022, primarily due to decreased revenue from

asset management service.

Non-controlling Interests

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

As of September 30, 2023, (i) Nature Worldwide

Resources Ltd.

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;

(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

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.

2.22% and Choi Tsz Leung holds 2.78% of equity interest of NATM, respectively and (iv) Yaohua Dai holds 20% equity interest of Future

Fintech Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $1.18

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

million from $3.63 million for the three months ended September 30, 2022 to $2.45 million for the same period of 2023 mainly due to the

decrease in operating expenses, as discussed above.

Comparison of Nine Months Ended September 30,

2023 and 2022

The following table presents our consolidated

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

Six months ended

revenues for the nine months ended September 30, 2023 and 2022, respectively:

Nine months ended

September 30,

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.

Revenue for the nine months ended September 30,

2023 was $30.96 million, an increase of $8.11 million, or 35.52%, from $22.84 million for the same period of the last fiscal year.

increase in revenue for the nine months ended September 30, 2023 was primarily due to significant increase in revenue from sand and steel

supply chain financing and trading business in 2023.

Asset management service decreased by $1.58 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.

from $11.27 million during the nine months ended September 30, 2022 to $9.69 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 non-performing debt recovery

consulting and service fees.

Others increased by $0.72 million from $0.08 million during the nine months ended September 30, 2022 to $0.79

million in the same period of 2023, which mainly due to its new business of non-performing asset recovery service started during the third

quarter of 2023.

Gross Profit and Margin

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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,

of the related revenues, for the nine months ended September 30, 2023 and 2022, respectively:

Nine months ended September 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.

Gross profits for the nine months ended September

30, 2023 was $3.86 million, an decrease from $0.80 million form $4.66 million for the same period of the last fiscal year.

gross margin as a percentage of revenue was 12.46% for the nine months ended September 30, 2023, a decrease of 7.92% from 20.38% for the

same period of last fiscal year, mainly due to lower profit margin from supply chain financing/trading business for the nine months ended

September 30, 2023, comparing to the same period of 2022, which was mainly due to increased supply chain financing/trading cost.

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

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

Nine months ended

September 30, 2023

September 30, 2022

General and administrative

Research and Development expenses

Stock compensation expense

Selling expenses

2 unchanged sentences

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.

Total operating expenses for the nine months ended

September 30, 2023 was $9.41 million, an decrease of $5.40 million from $14.82 million for the same period of the last fiscal year.

General and administrative expenses increased

by $0.23 million, or 2.44%, to $9.85 million for the nine months ended September 30, 2023, compared to $9.62 million for the same period

of last fiscal year, mainly due to increased professional service fees for acquisition projects and certain training and consulting fees

for the acquired and newly established companies during the nine months ended September 30, 2023.

Stock compensation expense was $1.28 million during

the nine months ended September 30, 2022, as the Compensation Committee of the Board of Directors (the “Board”) of the Company

granted certain shares of common stock of the Company to certain officers and employees in July 2022 and we did not have such expense

for three months ended September 30, 2023.

Selling expenses decreased by $0.63 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 nine months ended September 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 $3,872 and $0.93 million

of impairment loss in nine months ended September 30, 2023 and 2022 relating to short term investment which mainly due to Future Private

Equity Fund Management (Hainan) Co., Ltd.

invested $1.85 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, high interest rate, looming recession worldwide.

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

investment was $0.95 million as of September 30, 2023 and $0.99 million as of December 31, 2022.

The Company recorded $0.34 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.

and development expenses during the nine months ended September 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.

by $1.65 million during the nine months ended September 30, 2023, compared to the same period of last fiscal year.

The decrease in research

1 unchanged sentence

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

$1.15 million during the nine months ended September 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.

1 unchanged sentence

Other expenses, net increased by $2.72 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.

to negative $0.71 million for the nine months ended September 30, 2023 from positive $2.00 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 that was approved by the Board during the

nine months ended September 30, 2023 for the settlement with the Securities and Exchange Commission.

Tax provision decreased by $0.44 million for the

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

nine months ended September 30, 2023, from $0.07 million to $0.51 million comparing to the same period of 2022, primarily due to decreased

revenue from asset management service.

Non-controlling Interests

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

As of September 30, 2023, (i) Nature Worldwide

Resources Ltd.

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.

(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, respectively;

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

Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $2.33

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

million from $8.67 million for the nine months ended September 30, 2022 to $6.34 million for the same period of 2023 mainly due to the

decrease in operating expenses, as discussed above.

Gain on disposal of discontinued operations

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.

$0.11 million for the nine months ended September 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 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.

operations were $0.42 and $0.42 for the nine months ended September 30, 2023, respectively, as compared to a loss of $0.57 and $0.55 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 nine months ended September 30, 2023, respectively.

Basic and diluted earnings per share attributable to discontinued operations

was nil for the nine months ended September 30, 2022, respectively.

Liquidity and Capital Resources

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

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

cash of $33.40 million, as compared to $29.74 million as of December 31, 2022.

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.

was mainly due to decreased accounts receivable and loan receivable for the nine months ended September 30, 2023.

Our working capital has historically been generated

1 unchanged sentence

Our working capital was $39.14 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

September 30, 2023, a decrease of $7.34 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 used in operating activities increased

by $4.64 million to $6.42 million for the nine months ended September 30, 2023 from $1.78 million for the same period of the last fiscal

The increase in net cash used in operating activities was primarily due to increase in advances from customers.

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 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.

$34.08 million to $13.64 million for the nine months ended September 30, 2023 from $(20.44) million for the same period of the last fiscal

It was due to increase in repayment from loan receivable and decrease in payment for loan receivable.

Net cash used in financing activities for the nine months ended September

30, 2023 was $2.91 million, representing an increase of $5.23 million, as compared to cash provided by financing activities of positive

$2.11 million during the nine months ended September 30, 2022.

The increase in cash used in financing activities was mainly due to proceeds

from loan payable to the Company and increase in notes payable.

Off-balance sheet arrangements

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

sheet arrangements.

As of September 30, 2023, we did not have any

off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

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