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Item 1A. Risk Factors

2024-04-16 compared with 2023-04-19 · 578 added, 706 removed, 595 unchanged (68% of the section changed)

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The following risk factors describe the most significant events, facts or circumstances that could

have a material adverse effect upon our business, financial condition, results of operations, ability to implement our business plan

and the market price for our securities.

Additional risks and uncertainties that presently are not considered material or are not known

to us, and therefore are not mentioned herein, may impair our business operations.

have a material adverse effect upon our business, financial condition, results of operations, ability to implement our business plan and

the market price for our securities.

Additional risks and uncertainties that presently are not considered material or are not known to

us, and therefore are not mentioned herein, may impair our business operations.

Many of these events are outside of our control.

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In recent years, there have been outbreaks of

epidemics in various countries, including China.

Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has

been spread rapidly to many parts of the world, including China, Hong Kong and the U.S.

In March 2020, the World Health Organization

declared COVID-19 a pandemic.

The COVID-19 pandemic has resulted in, among other things, quarantines, travel restrictions, and the temporary

closure of office buildings and facilities in China, Hong Kong and in the U.S.

epidemics in various countries.

At the end of 2019, there was an outbreak of a novel strain of coronavirus (COVID-19), which has been

spread rapidly to many parts of the world, including China, Hong Kong, UK and the U.S.

In March 2020, the World Health Organization declared

COVID-19 a pandemic.

The COVID-19 pandemic resulted in, among other things, quarantines, travel restrictions, and the temporary closure

of office buildings and facilities in China, Hong Kong, UK and in the U.S.

A large part of our revenues are generated in

China and Hong Kong.

Consequently, our results of operations have been and may continue to be adversely affected, to the extent that

COVID-19 harms the Chinese, Hong Kong and global economy.

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

developments and new information that may emerge regarding the duration and severity of COVID-19 and the actions taken by government

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

Potential impacts

include, but are not limited to, the following:

temporary closure of offices, travel restrictions or suspension of

transportation of products to our customers;

and our suppliers have been negatively affected, and could continue to be negatively

affected, on their ability to fulfill our demands if there is any resurgence of COVID-19;

our customers that are negatively impacted by the outbreak of COVID-19

may reduce their budgets to purchase our products and services, which may materially adversely impact our revenue;

We may have to provide significant sales incentives to our customers

in response to the COVID-19 outbreak, which may in turn materially adversely affect our financial condition and operating results;

The business operations of our customers and suppliers have been and

could continue to be negatively impacted by the outbreak, which may result in loss of customers or disruption of our services, which

may in turn materially adversely affect our financial condition and operating results;

any disruption of our supply chain, logistics providers or customers

could adversely impact our business and results of operations, including causing our suppliers unable to provide products for a period

of time or materially delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive

and business harm to us;

The Company’s promotion strategy for our e-commerce platform

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 and these restrictions has made CCM Shopping Mall and NONOGIRL difficult

to recruit new members and the Company has to close NONOGIRL platform and change business model of CCM Shopping Mall.

The global stock markets may experience, significant decline from the

COVID-19 outbreak, which could materially adversely affect our stock price.

Because of the uncertainty surrounding the COVID-19

outbreak, the future impact related to the outbreak and potential resurgence as well as the local and global response cannot be reasonably

estimated at this time.

There have been outbreaks of Omicron variant in various cities in China 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 global economy has

also been materially negatively affected by the COVID-19 and there is continued severe uncertainty about the duration and intensity of

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

While the potential

economic impact brought by, and the duration of COVID-19 and its new variants may be difficult to assess or predict, a widespread pandemic

Consequently, our results of operations was adversely affected during the outbreak, especially between 2020 and 2022.

There have been outbreaks of Omicron variant in various cities in China in 2022 which 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.

A widespread pandemic

could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect

our liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 and its new variants could materially

negatively affect our business and the value of our common stock.

Further, as we do not

have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the

future in the event that we require additional capital.

We currently believe that our financial resources will be adequate to see us

through the outbreak.

However, in the event that we do need to raise capital in the future, outbreak-related instability in the securities

markets could adversely affect our ability to raise additional capital.

In addition, a recession or market correction resulting pandemic could materially negatively affect our business and the

value of our common stock.

In general, our business could be adversely affected

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for a prolonged period of time.

Various impacts arising from severe conditions may cause business disruption, resulting in material,

adverse effects to our financial condition and results of operations.

Various impacts arising from severe conditions may cause business disruption, resulting in material, adverse

effects to our financial condition and results of operations.

Economic conditions have had and may continue

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spending, high unemployment levels, declining consumer or business confidence and continued volatility and disruption in the credit and

capital markets, would likely result in reduced demand for our products and services.

To the extent an international economic downturn

develops, we could experience a reduction in sales volume.

If we are unable to reduce our operating costs and expenses proportionately,

many of which are fixed, our results of operations would be adversely affected.

capital markets in China, would likely result in reduced demand for our products and services.

To the extent an economic downturn develops,

we could experience a reduction in sales volume.

If we are unable to reduce our operating costs and expenses proportionately, many of

which are fixed, our results of operations would be adversely affected.

The supply chain financing service industry

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chain financing workflows and optimize payment cycles, which is an emerging and relatively new business model in China.

we are faced with uncertainties relating to the intensifying competition and evolving regulatory environment in China’s supply

chain financing service industry.

There have been limited proven methods to project available technology, regulatory and industry standards

on which we can rely, and the delayed, unexpected or adverse developments in this sector may adversely and materially affect our operational

and financial performances.

As market dynamics, regulatory environment and our business continue to develop, we may need to adjust our

business model and continue to upgrade our products and service offerings, and if we fail to adapt to these developments promptly, or

at all, our business, financial condition, results of operations and prospects may be materially and adversely affected.

In addition, we

are facing uncertainties relating to the intensifying competition and evolving regulatory environment in China’s supply chain financing

service industry.

There have been limited proven methods to project available technology, regulatory and industry standards on which we

can rely, and the delay, unexpected or adverse developments in this sector may adversely and materially affect our operational and financial

performances.

As market develops, regulatory environment and our business continue to develop, we may need to adjust our business model

and continue to upgrade our products and service offerings, and if we fail to adapt to these developments promptly, or at all, our business,

financial condition, results of operations and prospects may be materially and adversely affected.

The supply chain financing service industry

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acquisitions or consolidations within the industries where we operate that result in emergence of stronger competitors.

new competitors may leverage their established platforms or market positions, or introduce innovative business models, to launch products

Existing and new

competitors may leverage their established platforms or market positions, or introduce innovative business models, to launch products

or services that may attract a large customer base and achieve rapid growth, which may materially and adversely affect our business and

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of operations and prospects, as well as our reputation and brand.

Our supply chain finance business faces

risks in receivables, timely supplies, credit evaluation and commodity price fluctuations all of which could materially and adversely

affect our business, financial condition and results of operations.

Our supply chain finance business faces risks in receivables,

timely supplies, credit evaluation and commodity price fluctuations all of which could materially and adversely affect our business, financial

condition and results of operations.

Our supply chain finance

business faces various risk in its operation, including (i) risk of failure to collect our receivables in time after the delivery of

(ii) risk of unable to supply the commodity according to the contract requirements such as issues of quality and/or quantity

business faces various risk in its operation, including (i) risk of failure to collect our receivables in time after the delivery of commodities;

(ii) risk of unable to supply/deliver the commodity according to the contract requirements such as issues of quality and/or quantity of

If we fail to control such risk and strictly implement our new supplier and client evaluation standards as well as the background

investigation for our risk control, we might not receive payment for the goods delivered or lose control of the title of the goods or

breach contracts to supply goods according to its terms, which will materially and adversely affect our business, financial condition

breach contracts to supply goods according to their terms, which will materially and adversely affect our business, financial condition

and results of operations.

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The asset management

services that NTAM provides involve various risks, and failure to identify or fully appreciate such risks will negatively affect our

reputation, client relationships, operations and prospects.

NTAM provides asset

and wealth management service to clients.

Neither the principal

nor the return of the asset management products that NTAM has provided its services on is guaranteed by NTAM.

As such, NTAM generally

does not bear any liabilities for any loss to capital invested in the products.

However, despite related risk warnings and disclaimers,

the investors may attempt to hold NTAM responsible for their losses and terminate their business with us, which could harm our reputation

and result in reduced business.

In addition, although NTAM has implemented transparent disclosure policies, such policies and procedures

may not be fully effective.

If NTAM or its customer service personnel are found to have engaged in misconduct or negligent in providing

their services, NTAM may be held responsible when the investors incur losses, and our reputation, client relationships, business and

prospects will be materially and adversely affected.

services that NTAM provides involve various risks, and failure to identify or fully appreciate such risks will negatively affect our reputation,

client relationships, operations and prospects.

NTAM provides asset and

wealth management service to clients.

Neither the principal nor the return of the asset management products that NTAM has provided its

services on is guaranteed by NTAM.

As such, NTAM generally does not bear any liabilities for any loss to capital invested in the products.

However, despite related risk warnings and disclaimers, the investors may attempt to hold NTAM responsible for their losses and terminate

their business with us, which could harm our reputation and result in reduced business.

In addition, although NTAM has implemented transparent

disclosure policies, such policies and procedures may not be fully effective.

If NTAM or its customer service personnel are found to have

engaged in misconduct or negligent in providing their services, NTAM may be held responsible when the investors incur losses, and our

reputation, client relationships, business and prospects will be materially and adversely affected.

Our operations

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is dependent, to a large extent, on the continued services of NTAM’s senior management, especially Mr.

Siu Kei Chan, the Chief

Executive Officer of NTAM.

If NTAM loses the services of Mr.

Chan, it needs to promptly hire an experienced professional from the market,

otherwise it may not be able to execute its existing business strategy effectively, or we may have to change our current business direction.

Such disruptions to our business may take up significant energy and resources of the Company, and materially and adversely affect our

future prospects.

Siu Kei Chan, the Chief Executive

Officer of NTAM.

If NTAM loses the service of Mr.

Chan, it needs to promptly hire an experienced professional from the market, otherwise

it may not be able to execute its existing business strategy effectively, or we may have to change our current business direction.

disruptions to our business may take up significant energy and resources of the Company, and materially and adversely affect our future

Moreover, NTAM daily

operations depend on the members of its mid-level management, experienced investment and trading managers, licensed representatives,

risk management officers, research analysts and IT specialists.

We devote considerable resources to the recruiting and retaining these

operations depend on the members of its mid-level management, experienced investment and trading managers, licensed representatives, risk

management officers, research analysts and IT specialists.

We devote considerable resources to the recruiting and retaining these personnel.

However, the market for quality professionals is increasingly competitive.

We expect to face significant competition from

other assets management firms and technology companies in hiring such personnel.

The intense competition may require us to offer more

competitive compensation and other benefits to our talent, which could materially and adversely affect our financial condition and results

of operations.

As a result, it may be difficult for us to continue to retain and motivate these employees, and this could affect their

decisions about whether or not they continue to work for us.

If we do not succeed in attracting, hiring, and integrating excellent personnel,

or retaining and motivating existing personnel, NTAM may be unable to grow effectively.

We expect to face significant competition from other assets

management firms and technology companies in hiring such personnel.

The intense competition may require us to offer more competitive compensation

and other benefits to our talent, which could materially and adversely affect our financial condition and results of operations.

result, it may be difficult for us to continue to retain and motivate these employees, and this could affect their decisions about whether

or not they continue to work for us.

If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and

motivating existing personnel, NTAM may be unable to grow effectively.

Our risk management

and internal control systems of NTAM, as well as the risk management tools available to us, may not fully protect us against various

risks inherent in our business .

and internal control systems of NTAM, as well as the risk management tools available to us, may not fully protect us against various risks

inherent in our business .

Currently, NTAM follows

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in the securities industry.

These methods may fail to predict future risk exposures, which could be significantly greater than those

indicated by our historical measures.

Other risk management methods depend upon an evaluation of available information regarding operating

and market conditions and other matters, which may not be accurate, complete, up-to-date or properly evaluated.

In addition, the capital

markets in Hong Kong are rapidly developing, the information and experience that NTAM relies on for its risk management methods may become

quickly outdated as capital markets and regulatory environment in Hong Kong continue to evolve.

Deficiencies in the risk management and

internal control systems and procedures may adversely affect our ability to identify or report our deficiencies or non-compliance.

of these may have a material and adverse effect on our business, financial condition, and operating results.

These methods may fail to predict future risk exposures, which could be significantly greater than those indicated

by our historical measures.

Other risk management methods depend upon an evaluation of available information regarding operating and market

conditions and other matters, which may not be accurate, complete, up-to-date or properly evaluated.

In addition, the capital markets

in Hong Kong are rapidly developing, the information and experience that NTAM relies on for its risk management methods may become quickly

outdated as capital markets and regulatory environment in Hong Kong continue to evolve.

Deficiencies in the risk management and internal

control systems and procedures may adversely affect our ability to identify or report our deficiencies or non-compliance.

may have a material and adverse effect on our business, financial condition, and operating results.

The operations

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Furthermore, additional regulatory approvals, licenses, permits or qualifications

may be required by relevant regulators in the future, and some of current approvals, licenses, permits or qualifications of NTAM are

subject to periodic renewal.

The failure to obtain or maintain the required approvals, licenses, permits or qualifications could adversely

affect our results of operations and financial condition.

may be required by relevant regulators in the future, and some of current approvals, licenses, permits or qualifications of NTAM are subject

to periodic renewal.

The failure to obtain or maintain the required approvals, licenses, permits or qualifications could adversely affect

our results of operations and financial condition.

The brokerage and

investment banking service industry are intensely competitive in Hong Kong.

If we are unable to compete effectively, we may lose our market

share and our results of operations and financial condition may be materially and adversely affected.

The financial services

industry, including the brokerage and investment banking services industry in Hong Kong, is intensely competitive, highly fragmented,

and subject to rapid change, and we expect it to remain so.

We compete mostly in Hong Kong, and on the basis of a number of factors, including

the ability to adapt to evolving financial needs of a broad spectrum of clients, our ability to identify market demands and business opportunities

to win client mandates, the quality of our advice, our employees and deal execution, the range and price of our products and services,

our innovation, our reputation, and the strength of our relationships.

We expect to continue to invest capital and resources in our businesses

in order to grow and develop them to a size where they are able to compete effectively in their markets, have economies of scale, and

are themselves able to produce or consolidate significant revenues and profit.

We cannot assure you that the planned and anticipated growth

of our brokerage and investment banking business will be achieved or in what timescale.

There may be difficulties securing financing for

investment for growth and in recruiting and retaining the skilled human resources required to compete effectively.

If we fail to compete

effectively against our competitors, our business, financial conditions, results of operations, and prospects will be materially and adversely

As an provider of brokerage

and investment banking business services for Hong Kong and Chinese investors on a global basis, our business generally requires us to

react promptly to the evolving demand of our clients and be able to provide innovative financial solutions tailored to their needs.

may not be able to compete effectively with our competitors at all times and always be able to provide appropriate financial solutions

that promptly and accurately address our clients’ needs.

If this were to happen, our ability to attract new or retain existing clients

will suffer, which would materially and adversely affect our revenues and earnings.

We primarily compete

with other providers of financial services to Asian investors.

We may face pricing pressure as some of our competitors may seek to obtain

higher market share by reducing fees and commissions.

Some of our competitors include large global financial institutions or state-owned

PRC financial institutions operating or headquartered in Hong Kong, many of which have longer operating histories, far broader financial

and other resources, and significantly greater name recognition than us and have the ability to offer a wider range of products, which

may enhance their competitive position.

They also regularly support services we do not provide, such as commercial lending, margin lending

and other financial services and products, which puts us at a competitive disadvantage and could result in pricing pressures or lost opportunities,

which in turn could materially and adversely affect our results of operations.

In addition, we may be at a competitive disadvantage with

regard to some of our competitors that have larger customer bases and greater human resources.

We may engage in future acquisitions involving

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and we expect to make investments in, and to acquire, business, products or technologies in the future.

We are in the process to complete

an acquisition of a money transfer company in UK, which is expected to close during the first half of this year.

In the event of any

future acquisitions, we may expend significant cash, incur substantial debt and/or issue equity securities and dilute the percentage

ownership of current shareholders, all of which could have a material adverse effect on our operating results and the price of our stock.

We cannot guarantee that we will be able to successfully integrate any business, products, technologies or personnel that we may acquire

in the future, and our failure to do so could have a material adverse effect on our business, operating results and financial condition.

We have completed acquisitions

of a money transfer company in UK and brokerage and investment banking firm in Hong Kong in 2023.

In the event of any future acquisitions,

we may expend significant costs and cash, incur substantial debt and/or issue equity securities and dilute the percentage ownership of

current shareholders, all of which could have a material adverse effect on our operating results and the price of our stock.

guarantee that we will be able to successfully integrate any business, products, technologies or personnel that we may acquire in the

future, and our failure to do so could have a material adverse effect on our business, operating results and financial condition.

We may not be able to prevent others from

unauthorized use of our intellectual property, which could harm our business and competitive position.

Our success depends, in part, on our ability

to protect our proprietary technologies.

The process of seeking intellectual property protection can be lengthy and expensive and we

cannot guarantee that our existing or future intellectual property rights will be fully protected or bring us the commercial advantages.

We also cannot guarantee that our current or potential competitors do not have, and will not obtain, intellectual property rights that

will prevent, limit or interfere with our ability to use our technology or sell our products and services in the PRC or other countries.

Our success depends, in part, on our ability to

protect our proprietary technologies.

The process of seeking intellectual property protection can be lengthy and expensive and we cannot

guarantee that our existing or future intellectual property rights will be fully protected or bring us the commercial advantages.

cannot guarantee that our current or potential competitors do not have, and will not obtain, intellectual property rights that will prevent,

limit or interfere with our ability to use our technology or sell our products and services in the PRC or other countries.

The implementation and enforcement of PRC intellectual

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in the PRC are not as effective as those in the United States and other countries.

We may need to resort to litigation to enforce or

defend our rights or to determine the enforceability, scope and validity of our proprietary rights or those of others.

Such litigation

will require significant expenditures of cash and management efforts and could harm our business, financial condition and results of

An adverse determination in any such litigation will impair our intellectual property rights and may harm our business, competitive

position, business prospects and reputation.

The blockchain related products and services

that we are developing have the potential to be used in ways we do not intend, including for criminal or other illegal activities.

Blockchain-related products and services, in

particular cryptocurrencies, have the potential to be used for financial crimes or other illegal activities.

Because the blockchain platform

that we are developing is novel, there are uncertainties regarding any legal and regulatory requirements for preventing blockchain-related

products and services from being put to such uses, and there are uncertainties regarding the liabilities and risks to the Company if

we are unable to prevent such uses.

Even if we comply with all laws and regulations regarding financial and blockchain related products

We may need to resort to litigation to enforce or defend

our rights or to determine the enforceability, scope and validity of our proprietary rights or those of others.

Such litigation will require

significant expenditures of cash and management efforts and could harm our business, financial condition and results of operations.

adverse determination in any such litigation will impair our intellectual property rights and may harm our business, competitive position,

business prospects and reputation.

The blockchain and digital assets related

products and services that we are developing have the potential to be used in ways we do not intend, including for criminal or other illegal

Blockchain-related products and services, in particular

cryptocurrencies, have the potential to be used for financial crimes or other illegal activities.

We are currently developing digital

assets mining farms, there are uncertainties regarding any legal and regulatory requirements for preventing blockchain-related products

and services from being put to such uses, and there are uncertainties regarding the liabilities and risks to the Company if we are unable

to prevent such uses.

Even if we comply with all laws and regulations regarding financial and blockchain and digital assets related products

and services, we have no ability to ensure that our customers, partners or others to whom we license or sell our products and services

comply with all laws and regulations applicable to them and their transactions.

Our blockchain based Shopping Mall employs security

measures common to blockchain technologies, such a multiple identity authentication and multi-signature requirements.

The security measures

to be employed by our blockchain projects are subject to further improvement and development.

There is no guarantee that the security

measures that we currently use or any that we may develop in the future will be effective.

Although we only provide hosting services to digital

assets miners, the security measures employed by our projects are subject to further improvement and development.

There is no guarantee

that the security measures that we currently use or any that we may develop in the future will be effective.

Any negative publicity we receive regarding any

allegations of unlawful uses of our blockchain platform could damage our reputation.

allegations of unlawful uses of our services and mining farm could damage our reputation.

More generally, any negative publicity regarding

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adversely affect the development of our blockchain related business.

Regulation of digital assets, cryptocurrencies,

crypto mining, blockchain technologies, and the blockchain platform we are developing is currently undeveloped and likely to rapidly

evolve as government agencies take greater interest in them.

Regulation also varies significantly among international, federal, state

and local jurisdictions and is subject to significant uncertainty.

Various legislative and executive bodies in the United States and

in other countries may in the future adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility

of tokens generally and the technology behind them or the means of transaction or in transferring them.

Failure by our subsidiaries to

comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change,

could result in a variety of adverse consequences, including civil penalties and fines.

Regulations of digital assets, cryptocurrencies,

crypto mining, blockchain technologies, are currently undeveloped and likely to rapidly evolve as government agencies take greater interest

Regulations also vary significantly among international, federal, state and local jurisdictions and is subject to significant

Various legislative and executive bodies in the United States and in other countries may in the future adopt laws, regulations,

or guidance, or take other actions, which may severely impact the permissibility of tokens, crypto currencies and digital assets generally

and the technology behind them or the means of transaction or in transferring them.

Failure by our subsidiaries to comply with any laws,

rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in

a variety of adverse consequences, including civil penalties and fines.

Intellectual property infringement claims

may adversely impact our results of operations.

As we develop and introduce new products and

services, we may be increasingly subject to claims of infringement of another party’s intellectual property.

If a claim for infringement

is brought against us, such claim may require us to modify our products or services, cease selling certain products or engage in litigation

As we develop and introduce new products and services,

we may be increasingly subject to claims of infringement of another party’s intellectual property.

If a claim for infringement is

brought against us, such claim may require us to modify our products or services, cease selling certain products or engage in litigation

to determine the validity and scope of such claims.

Any of these events may harm our business and results of operations.

Our e-commerce business depends on the

continued use of the Internet and the adequacy of the Internet infrastructure.

Our e-commerce business, money transfer business

and cryptocurrency market data platform depend upon the widespread use of the Internet and e-commerce.

Factors which could reduce the

widespread use of the internet for e-commerce include, without limitation, actual or perceived lack of security of information or privacy

protection, cyberattacks or other disruptions or damage to the internet or to users’ computers, whatever the cause, could reduce

customer satisfaction with our platforms and services and harm our business.

Our business depends on our website, app,

network infrastructure and transaction-processing systems.

Our e-commerce business, money transfer business

and cryptocurrency market data platform are dependent on our IT infrastructure.

Any system interruption that results in the unavailability

of our websites, apps or reduced performance of our transaction and information systems could reduce our ability to conduct our business.

We use internally and externally developed systems for our websites, apps and our transaction and information processing systems.

expect to experience system interruptions due to software failure.

We may also experience temporary capacity constraints due to sharply

increased traffic during events or other promotions.

Capacity constraints can cause system disruptions, slower response times, delayed

page presentation, degradation in levels of customer service and other problems.

We may also experience difficulties with our infrastructure

Any future difficulties with our transaction and information processing systems or difficulties upgrading, expanding or integrating

aspects of our systems may cause system disruptions, slower response times, and degradation in levels of customer service, additional

expense, impaired quality and speed of our services or other problems.

Our business depends on internet, our websites,

apps, network infrastructure and processing systems.

Our supply chain financing, money transfer, assets

management and digital mining services depend upon the widespread use of the internet.

Factors which could reduce the widespread use of

the internet include, without limitation, actual or perceived lack of security of information or privacy protection, cyberattacks or other

disruptions or damage to the internet or to users’ computers, whatever the cause, could reduce customer satisfaction with our platforms

and services and harm our business.

Any system interruption that results in the unavailability of our websites, apps or reduced performance

of our transaction and information systems could reduce our ability to conduct our business.

We use internally and externally developed

systems for our websites, apps and our transaction and information processing systems.

We expect to experience system interruptions due

to software failure.

Capacity constraints can cause system disruptions, slower response times, delayed page presentation, degradation

in levels of customer service and other problems.

We may also experience difficulties with our infrastructure upgrades.

Any future difficulties

with our transaction and information processing systems or difficulties upgrading, expanding or integrating aspects of our systems may

cause system disruptions, slower response times, and degradation in levels of customer service, additional expense, impaired quality and

speed of our services or other problems.

If the location where all of our computer and

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The occurrence of any of the foregoing risks could harm our business.

We are subject to cyber security risks

and may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents.

Our e-commerce business, money transfer business

and cryptocurrency market data platform are entirely dependent on the secure operation of our website and systems as well as the operation

of the internet generally.

Our business involves the storage and transmission of users’ proprietary information, and security breaches

could expose us to a risk of loss or misuse of this information, litigation, and potential liability.

A number of large internet companies

have suffered security breaches, some of which have involved intentional ransomware attacks.

From time to time, we and many other internet

businesses also may be subject to a denial of service attacks wherein attackers attempt to block customers’ access to our website

with ransomware.

If we are unable to avert a denial of service attack for any significant period, we could sustain substantial loss from

payment of ransom fee, lost sales and customer dissatisfaction.

We may not have the resources or technical sophistication to anticipate

or prevent rapidly evolving types of cyberattacks.

We are subject to cyber security risks and

may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents.

Our supply chain financing, money transfer, assets

management and digital mining services are dependent on the secure operation of our website and systems as well as the operation of the

internet generally.

Our business involves the storage of customers’ proprietary information, and security breaches could expose

us to a risk of loss or misuse of this information, litigation, and potential liability.

A number of large internet companies have suffered

security breaches, some of which have involved intentional ransomware attacks.

From time to time, we and many other internet businesses

also may be subject to a denial of service attacks wherein attackers attempt to block customers’ access to our website with ransomware.

If we are unable to avert a denial of service attack for any significant period, we could sustain substantial loss from payment of ransom

fee, lost sales and customer dissatisfaction.

We may not have the resources or technical sophistication to anticipate or prevent rapidly

evolving types of cyberattacks.

Cyberattacks may target us, our customers, our

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costs to deploy additional personnel and protection technologies, train employees, and engage third party experts and consultants.

person who is able to circumvent our security measures might be able to misappropriate our or our users’ proprietary information,

cause interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation and business.

compromise of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure,

damage to our reputation, and a loss of confidence in our security measures, which could harm our business.

Failure to comply with the relatively new

E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations.

As the e-commerce industry is still evolving

in China, new laws and regulations may be adopted from time to time to address new issues that arise from time to time.

in August 2018, the Standing Committee of the National People’s Congress promulgated the E-Commerce Law, which became effective

on January 1, 2019.

The E-Commerce Law generally provides that e-commerce operators must obtain administrative licenses if business

activities conducted by the e-commerce operators are subject to administrative licensing requirements under applicable laws and regulations.

In addition, the E-Commerce Law imposes a number of obligations on e-commerce platform operators, including the obligations:

verify and register platform merchants, (ii) to ensure platform cybersecurity, including, but not limited to, data privacy, (iii) to

ensure fair dealing and the legitimate rights and interests of consumers on the platform, (iv) to publicize transaction information

preservation and transaction rules, and (v) to protect intellectual properties.

See “ Item 1.

Overview—Government

Regulations—Regulations Relating to E-Commerce ” for further details.

As the E-Commerce Law is relatively new, no detailed

interpretation and implementation rules have been promulgated, and it remains uncertain how the E-Commerce Law will be interpreted and

We cannot assure you that our current business operations satisfy the obligations provided under the E-Commerce Law in all

If the PRC governmental authorities determine that we are not in compliance with all the requirements proposed under the E-Commerce

Law, we may be subject to fines and/or other sanctions.

The E-Commerce Law also imposes a requirement

on operators of e-commerce platforms, such as E-Commerce Tianjin, to assist in tax collection with respect to income generated by sellers

from transactions conducted on e-commerce platforms, including, among others, submitting to the tax authority information on the identities

of sellers on e-commerce platforms and other information relating to tax payment.

Failure to comply with the requirement may result in

operators of e-commerce platforms being subject to fines and, in severe circumstances, suspension of business operations of e-commerce

Substantial uncertainties exist regarding the interpretation and implementation of the E-Commerce Law.

We encourage and incentivize

merchants to promote the products on our platform.

If the merchants were deemed to be selling our products on consignment basis, the

PRC tax authorities may require them to make tax registration and request our assistance in these efforts, pursuant to the E-Commerce

Law, and the merchants on our platform may be subject to more stringent tax compliance requirements.

The PRC government may adopt additional

requirements from time to time, and we may be requested by tax authorities to provide further assistance in the enforcement of tax regulations,

such as disclosure of transaction records and bank account information of the merchants, and withholding taxes for such merchants.

any of these were to occur, we may lose our existing stores or fail to attract new stores on our platform and the level of activity may

be reduced on our platform.

We may also incur increased costs and expenses as a result.

The tightened tax enforcement by PRC tax authorities

in the e-commerce industry, such as imposition of reporting or withholding obligations on operators of e-commerce platforms with respect

to tax payable of merchants on e-commerce platforms, may have a material and adverse effect on our business, financial condition and

results of operations.

Failure to comply with sanctions laws,

anti-terrorist financing laws, anti-money laundering laws, and similar laws associated with

our activities, and anti-corruption laws could subject us to penalties and other adverse consequences.

We have implemented

policies and procedures designed to allow us to comply with anti-money laundering laws and economic sanctions laws and prevent our money

transfer platform from being used to facilitate business in countries or with persons or entities designated on lists promulgated by

UK government and equivalent international authorities or that are otherwise the target of sanctions.

We may utilize the services of

vendors, such as screening tools, in implementing such policies and procedures.

In the event that we or any of our users engage in any

conduct, intentionally or not, that facilitates money laundering, terrorist financing, or other illicit activity, or that violates anti-money

laundering or sanctions laws, or otherwise constitutes activity that is prohibited by such laws, including through the fault of any vendor,

we may be subject to fines, penalties, lawsuits, and enforcement actions;

who is able to circumvent our security measures might be able to misappropriate our or our customers’ proprietary information, cause

interruption in our operations, damage our computers or those of our customers, or otherwise damage our reputation and business.

Any compromise

of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to

our reputation, and a loss of confidence in our security measures, which could harm our business.

Failure to comply with sanctions laws, anti-terrorist

financing laws, anti-money laundering laws, and similar laws associated with our activities, and anti-corruption laws could subject us

to penalties and other adverse consequences.

We have implemented policies

and procedures designed to allow us to comply with anti-money laundering laws and economic sanctions laws and prevent our money transfer

platform from being used to facilitate business in countries or with persons or entities designated on lists promulgated by governments

and equivalent international authorities or that are otherwise the target of sanctions.

We may utilize the services of vendors, such as

screening tools, in implementing such policies and procedures.

In the event that we or any of our users engage in any conduct, intentionally

or not, that facilitates money laundering, terrorist financing, or other illicit activity, or that violates anti-money laundering or sanctions

laws, or otherwise constitutes activity that is prohibited by such laws, including through the fault of any vendor, we may be subject

to fines, penalties, lawsuits, and enforcement actions;

additional compliance requirements;

increased regulatory scrutiny

of our business;

increased regulatory scrutiny of our business;

restriction of our operations;

or damage to our reputation or brand.

Law enforcement and

regulators continue to scrutinize compliance with these obligations, which may require us to further revise or expand our compliance

program, including the procedures that we use to verify the identity of our customers or monitor our platform for potential illegal activity.

In addition, any policies and procedures that we implement to comply with sanctions laws may not be effective, including in preventing

customers from using our services for transactions with sanctioned persons or jurisdictions subject to comprehensive sanctions.

the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our platform

false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without

our knowledge provide services to individuals or entities that have been designated by UK government or other relevant sanctions authorities

are located in a jurisdiction subject to comprehensive sanctions or an embargo by the UK or another country in which we operate or are

Law enforcement and regulators

continue to scrutinize compliance with these obligations, which may require us to further revise or expand our compliance program, including

the procedures that we use to verify the identity of our customers or monitor our platform for potential illegal activity.

any policies and procedures that we implement to comply with sanctions laws may not be effective, including in preventing customers from

using our services for transactions with sanctioned persons or jurisdictions subject to comprehensive sanctions.

Given the technical limitations

in developing controls to prevent, among other things, the ability of customers to publish on our platform false or deliberately misleading

information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services

to individuals or entities that have been designated by UK or Hong Kong government or other relevant sanctions authorities are located

in a jurisdiction subject to comprehensive sanctions or an embargo by the UK, Hong Kong or other countries in which we operate or are

licensed to do business, and such services may not be in compliance with applicable economic sanctions regulations.

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practices that meet investors’ expectations in the United States.

Rules adopted by the SEC, or the Commission,

pursuant to Sarbanes-Oxley Section 404 require annual assessment of our internal controls over financial reporting.

The standards

that must be met for management to assess the internal controls over financial reporting as effective are relatively new and complex,

and they require significant documentation, testing and possible remediation to meet the detailed standards.

This assessment will need

to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting as

we have done previously and this year, we will be unable to assert that our internal controls are effective.

If we continue to be unable

to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness

of our financial reports, which could harm our business and cause the price of our stock to decline.

We may need additional capital to fund

our future operations and, if it is not available when needed, we may need to reduce our planned development and marketing efforts, which

Rules adopted by the SEC, or the Commission, pursuant

to Sarbanes-Oxley Section 404 require annual assessment of our internal controls over financial reporting.

The standards that must

be met for management to assess the internal controls over financial reporting as effective are relatively new and complex, and they require

significant documentation, testing and possible remediation to meet the detailed standards.

This assessment will need to include disclosure

of any material weaknesses identified by our management in our internal control over financial reporting.

During the evaluation and testing

process, if we identify one or more material weaknesses in our internal control over financial reporting as we have done previously and

this year, we will be unable to assert that our internal controls are effective.

If we continue to be unable to conclude that our internal

control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports,

which could harm our business and cause the price of our stock to decline.

We may need additional capital to fund our

future operations and, if it is not available when needed, we may need to reduce our planned development and marketing efforts, which

may reduce our sales revenue.

We believe that our existing working capital

and cash available from operations will enable us to meet our working capital requirements for at least the next twelve months.

if cash from future operations is insufficient, or if cash is used for acquisitions or other currently unanticipated uses, we may need

additional capital.

The development and marketing of new products and services and the expansion of our business and associated support

personnel require a significant commitment of resources.

In addition, if the markets for our products and services develop more slowly

than anticipated, or if we fail to establish significant market share and achieve sufficient net revenues, we may continue to consume

significant amounts of capital.

We believe that our existing working capital and

cash available from operations will enable us to meet our working capital requirements for at least the next twelve months.

cash from future operations is insufficient, or if cash is used for acquisitions or other currently unanticipated uses, we may need additional

The development and marketing of new products and services and the expansion of our business and associated support personnel

require a significant commitment of resources.

In addition, if the markets for our products and services develop more slowly than anticipated,

or if we fail to establish significant market share and achieve sufficient net revenues, we may continue to consume significant amounts

As a result, we could be required to raise additional capital.

To the extent that we raise additional

capital through the sale of equity or convertible debt securities or other methods, the issuance of such securities could result in dilution

of the shares held by existing shareholders.

If additional funds are raised through the issuance of debt securities, such securities

may provide the holders certain rights, preferences, and privileges senior to those of common shareholders, and the terms of such debt

could impose restrictions on our operations.

We cannot guarantee that additional capital, if required, will be available on acceptable

terms, or at all.

If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our

planned business development and marketing efforts, which could harm our business, financial condition and operating results.

To the extent that we raise additional capital through the

sale of equity or convertible debt securities or other methods, the issuance of such securities could result in dilution of the shares

held by existing shareholders.

If additional funds are raised through the issuance of debt securities, such securities may provide the

holders certain rights, preferences, and privileges senior to those of common shareholders, and the terms of such debt could impose restrictions

on our operations.

We cannot guarantee that additional capital, if required, will be available on acceptable terms, or at all.

unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned business development

and marketing efforts, which could harm our business, financial condition and operating results.

If our costs and demands upon management

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public companies, our operating results could be harmed.

As a public company, we do and will continue

to incur significant legal, accounting, investor relations and other expenses, including costs associated with public company reporting

requirements.

We also have incurred and will incur costs associated with current corporate governance requirements, including requirements

under Section 404 and other provisions of Sarbanes-Oxley, as well as rules implemented by the SEC and the stock exchange on which

our common stock is traded.

The expenses incurred by public companies for reporting and corporate governance purposes have increased

dramatically over the past several years.

These rules and regulations have increased our legal and financial compliance costs substantially

and make some activities more time consuming and costly.

If our costs and demands upon management increase disproportionately to the

growth of our business and revenue, our operating results could be harmed.

As a public company, we do and will continue to

incur significant legal, accounting, investor relations and other expenses, including costs associated with public company reporting requirements.

We also have incurred and will incur costs associated with current corporate governance requirements, including requirements under Section

404 and other provisions of Sarbanes-Oxley, as well as rules implemented by the SEC and the stock exchange on which our common stock

The expenses incurred by public companies for reporting and corporate governance purposes have increased dramatically over

the past several years.

These rules and regulations have increased our legal and financial compliance costs substantially and make some

activities more time consuming and costly.

If our costs and demands upon management increase disproportionately to the growth of our business

and revenue, our operating results could be harmed.

There are inherent uncertainties involved

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affect reported amounts of assets (including intangible assets), liabilities and related reserves, revenue, expenses and income.

judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes

to the amounts of assets, liabilities, revenue, expenses and income.

judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to

the amounts of assets, liabilities, revenue, expenses and income.

Any such changes could have a material adverse effect on our business,

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costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Risks Related to Doing Business in the PRC

Related to Doing Business in the PRC

Changes in China’s economic, political

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the political, economic, and legal environments in the PRC, in addition to the general state of the PRC economy.

The Company’s

results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies

with respect to laws and regulations, cybersecurity, anti-monopoly, anti-inflationary measures, currency conversion and remittance abroad,

VIE structures, and rates and methods of taxation, among other things, and such change of rules and policies can happen quickly with

little advance notice.

The Company’s results

may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect

to laws and regulations, cybersecurity, anti-monopoly, anti-inflationary measures, currency conversion and remittance abroad, and rates

and methods of taxation, among other things, and such change of rules and policies can happen quickly with little advance notice.

A substantial of the Company’s sales, purchases

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be adversely affected by government control over blockchain related financial technology, capital investments or changes in tax regulations.

In addition, in the past the Chinese government has implemented certain measures, including interest rate increases, to control the pace

of economic growth.

These measures may cause decreased economic activity in China, and since 2012, China’s economic growth has

Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely

affect our business and results of operations.

In addition, in the past the Chinese government has implemented certain measures, including more regulations on U.S.

listed Chinese companies

and control the pace of economic growth.

These measures may cause decreased economic activity in China, and since 2012, China’s

economic growth has slowed down.

Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and

materially and adversely affect our business and results of operations.

Furthermore, we and our China based operating

entities, as well as our investors, face uncertainty about future actions by the Chinese government that could significantly affect our

financial performance and operations, including the enforceability of the VIE contractual arrangements.

If future laws, administrative

regulations or provisions mandate further actions to be taken by companies with respect to existing VIE contractual arrangements, we

may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all.

Failure to take timely and

appropriate measures to adapt to any of these or similar regulatory compliance challenges could materially and adversely affect our current

corporate structure and business operations.

financial performance and operations.

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

challenges could materially and adversely affect our business operations.

If we become subject to additional scrutiny,

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public companies that have substantially

operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators

and regulatory agencies.

operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and

regulatory agencies.

Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities,

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have been subject to shareholder lawsuits and SEC enforcement actions and have conducted internal and external investigations into the

The Company has received subpoenas from the SEC’s Division of Enforcement requiring us to produce documents and detailed

information relating to, among other things, the Company’s accounting procedures and treatment, management oversight, and the sale

of HeDeTang Holdings (HK) Ltd.

to New Continent International Co., Ltd.

The Company has provided responsive documents and information

and will continue to cooperate with regulator and produce requested documents and information.

It is not clear what effect this sector-wide

scrutiny, criticism and negative publicity will have on us and our business.

If we become the subject of any unfavorable allegations,

whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations

and/or defend our company.

It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us and our business.

If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend

significant resources to investigate such allegations and/or defend our company.

This situation may be a major distraction to our management.

If such allegations are not proven to be groundless,

our business operations will be severely hindered and your investment in our shares could be rendered worthless.

If such allegations are not proven to be groundless, our business operations will be severely hindered and your investment in our shares

could be rendered worthless.

Uncertainties and quick change in the interpretation

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On July 6, 2021, the General Office of the Communist

Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal

activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires

the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision

over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities

Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities

in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant

governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over

China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

Since this announcement is relatively new, uncertainties still exist in relation to how soon legislative or administrative regulation

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As confirmed by our PRC counsel Fengdong Law Firm, we are currently not subject to cybersecurity review with

the Cyberspace Administration of China (“CAC”) under these new measures, because the VIE E-Commerce Tianjin is not a cyberspace

operator with personal information of more than 1 million users or has activities that affect or may affect national security.

Nevertheless,

the aforementioned draft measures and any related implementation rules to be enacted may subject us to additional compliance requirement

in the future.

We cannot rule out the possibility that

the PRC government will institute a licensing regime or pre-approval requirement covering our industry at some point in the future.

such a licensing regime or approval requirement were introduced, we cannot assure you that we would be able to obtain any newly required

license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our

the Cyberspace Administration of China (“CAC”) under these new measures, because E-Commerce Tianjin is not a cyberspace operator

with personal information of more than 1 million users or has activities that affect or may affect national security.

Nevertheless, the

aforementioned draft measures and any related implementation rules to be enacted may subject us to additional compliance requirement in

We cannot rule out the possibility that the

PRC government will institute a licensing regime or pre-approval requirement covering our industry at some point in the future.

a licensing regime or approval requirement were introduced, we cannot assure you that we would be able to obtain any newly required license

in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our operations.

From time to time, we may have to resort to administrative

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On February 17, 2023, the CSRC released New Overseas

Listing Rules with five interpretive guidelines, which will take effect on March 31, 2023.

The New Overseas Listing Rules require Chinese

domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances.

The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single

or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary

listing or dual major listing of issuers already listed overseas.

According to the Notice on Arrangements for Overseas Securities Offering

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

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

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

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

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

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

disclosure of the event:

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

The New Overseas Listing Rules require Chinese domestic

enterprises to complete filings with CSRC and report related information under certain circumstances, such as:

a) an issuer making an

application for initial public offering and listing in an overseas market;

b) an issuer making an overseas securities offering after having

been listed on an overseas market;

c) a domestic company seeking an overseas direct or indirect listing of its assets through single or

multiple acquisition(s), share swap, transfer of shares or other means.

According to the Notice on Arrangements for Overseas Securities

Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas

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

not completed such offering or listing before effective date of the new rules and also completes the offering or listing before September

30, 2023 are considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future.

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

securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 business days after the occurrence

and public disclosure of the event:

(i) change of control;

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

other competent authorities;

(ii) investigations or sanctions imposed by overseas securities regulatory

agencies or other competent authorities;

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

or (iv) voluntary or mandatory delisting.

or (iv) voluntary or mandatory

The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches, including failure to fulfill

filing obligations or filing documents having false statement or misleading information or material omissions, which may result in a fine

ranging from RMB1 million to RMB10 million, and in cases of severe violations, the relevant responsible persons may also be barred from

entering the securities market.

The Company is still processing the filings with CSRC for its offerings since the effective

of New Overseas Listing Rules and has not complied the filing requirements yet which would subject the Company to fines and other penalties

for violation of New Overseas Listing Rules.

On February 24, 2023, the CSRC revised the Provisions

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exchange, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S.

in the future, and even when such permission is obtained, whether it will be denied or rescinded, which could significantly limit or

completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our shares to significantly

decline or be worthless.

in the future, and even when such permission is obtained, whether it will be denied or rescinded, which could significantly limit or completely

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

or be worthless.

There are uncertainties under the PRC Securities

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evidence within the territory of the PRC.

On December 28, 2019, the amended Securities

Law of the PRC (the “PRC Securities Law”) was promulgated, which became effective on March 1, 2020.

On December 28, 2019, the amended Securities Law

of the PRC (the “PRC Securities Law”) was promulgated, which became effective on March 1, 2020.

According to Article 177 of

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As advised by our PRC counsel Fengdong Law Firm, Article 177 is only

applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities

within the territory of the PRC.

applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities within

the territory of the PRC.

A substantial of our business operation is conducted in the PRC.

In the event that the U.S.

regulatory agencies carry out an investigation on us such as an enforcement action by the Department of Justice, the SEC or other authorities,

such agencies’ activities will constitute conducting an investigation or collecting evidence directly within the territory of the

PRC and accordingly fall within the scope of Article 177.

securities regulatory

agencies carry out an investigation on us such as an enforcement action by the Department of Justice, the SEC or other authorities, such

agencies’ activities will constitute conducting an investigation or collecting evidence directly within the territory of the PRC

and accordingly fall within the scope of Article 177.

In that case, the U.S.

securities regulatory agencies may have

to consider establishing cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance,

diplomatic channels or establishing a regulatory cooperation mechanism with the securities regulatory authority of the PRC.

there is no assurance that the U.S.

securities regulatory agencies will succeed in establishing such cross-border cooperation in this

particular case and/or establish such cooperation in a timely manner.

securities regulatory agencies may have to

consider establishing cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance, diplomatic

channels or establishing a regulatory cooperation mechanism with the securities regulatory authority of the PRC.

However, there is no

assurance that the U.S.

securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case

and/or establish such cooperation in a timely manner.

Furthermore, as Article 177 is

still a recently promulgated provision and, as the date of this report, there have not been implementing rules or regulations regarding

the application of Article 177, it remains unclear as to how it will be interpreted, implemented or applied by the Chinese

Securities Regulatory Commission or other relevant government authorities.

As such, there are uncertainties as to the procedures and

requisite timing for the U.S.

securities regulatory agencies to conduct investigations and collect evidence within the territory of the

securities regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine

to suspend or de-register our registration with the SEC and may also delist our securities from Nasdaq or other applicable trading market

within the US.

the application of Article 177, it remains unclear as to how it will be interpreted, implemented or applied by the Chinese Securities

Regulatory Commission or other relevant government authorities.

As such, there are uncertainties as to the procedures and requisite timing

securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC.

securities regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine to suspend or de-register

our registration with the SEC and may also delist our securities from Nasdaq or other applicable trading market within the U.S.

Under the PRC Enterprise Income Tax Law,

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In addition, a circular, known as SAT Circular 82,

82, issued in April 2009 by the State Administration of Taxation, or the “SAT,” specifies that certain offshore incorporated

enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are

located or resident in the PRC:

senior management personnel and departments that are responsible for daily production, operation and

issued in April 2009 by the State Administration of Taxation, or the “SAT,” specifies that certain offshore incorporated enterprises

controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or

resident in the PRC:

senior management personnel and departments that are responsible for daily production, operation and management;

financial and personnel decision making bodies;

key properties, accounting books, company seal, and minutes of board meetings

and shareholders’ meetings;

key properties, accounting books, company seal, and minutes of board meetings and shareholders’

and half or more of the senior management or directors having voting rights.

Further to SAT Circular

82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation

of SAT Circular 82 and clarify the reporting and filing obligations of such “Chinese-controlled offshore incorporated resident

enterprises.” SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration

on post-determination matters.

Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC

enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth

in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT’s general position on how the “de facto management body”

test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC

enterprises, PRC enterprise groups, or by PRC or foreign individuals.

Further to SAT Circular 82, the SAT issued a bulletin,

known as SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82 and clarify

the reporting and filing obligations of such “Chinese-controlled offshore incorporated resident enterprises.” SAT Bulletin

45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters.

Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups,

not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin

45 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining

the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups,

or by PRC or foreign individuals.

If the PRC tax authorities determine that the

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individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources.

It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country

of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.

Any such tax may reduce the returns on your

investment in our shares.

is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of

tax residence and the PRC in the event that we are treated as a PRC resident enterprise.

Any such tax may reduce the returns on your investment

in our shares.

Although up to the date of this report, Future FinTech Group Inc.

has not been notified or informed by the

PRC tax authorities that it has been deemed to be a resident enterprise for the purpose of the EIT Law, we cannot assure you that it

will not be deemed to be a resident enterprise in the future.

We could be restricted from paying dividends

to shareholders due to PRC laws and other contractual requirements.

To the extent cash and/or assets in the business are in the PRC and/or

Hong Kong or our PRC and/or Hong Kong entities, the VIE, and the WFOE, such funds and/or assets may not be available to fund operations

or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition of restrictions and limitations on the

ability of us or our subsidiaries by the PRC government to transfer cash and/or assets.

We are a holding company incorporated in the

State of Florida and do not have any assets or conduct any business operations other than our investments in our subsidiaries and affiliates.

has not been notified or informed by the PRC tax authorities

that it has been deemed to be a resident enterprise for the purpose of the EIT Law, we cannot assure you that it will not be deemed to

be a resident enterprise in the future.

We could be restricted from paying

dividends to shareholders due to PRC laws and other contractual requirements.

To the extent cash and/or assets in the business are

in the PRC and/or Hong Kong or our PRC and/or Hong Kong entities, such funds and/or assets may not be available to fund operations

or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition of restrictions and limitations on

the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets.

We are a holding company incorporated in the State

of Florida and do not have any assets or conduct any business operations other than our investments in our subsidiaries and affiliates.

As a result of our holding company structure, we rely entirely on dividend payments from our subsidiaries.

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certain reserve funds.

Furthermore, if our subsidiaries and the VIE in China incur debt on its own in the future, the instruments governing

the debt may restrict its ability to pay dividends or make other payments.

Although we do not intend to pay dividends in the future,

our inability to receive all of the profit from our China subsidiaries’ operations may provide an additional obstacle to our ability

to pay dividends if we so decide in the future.

To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our

PRC and/or Hong Kong entities, the VIE, and the WFOE, such funds and/or assets may not be available to fund operations or for other use

outside of the PRC and/or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or

our subsidiaries by the PRC government to transfer cash and/or assets.

Furthermore, if our subsidiaries in China incur debt on its own in the future, the instruments governing the debt

may restrict its ability to pay dividends or make other payments.

Although we do not intend to pay dividends in the future, our inability

to receive all of the profit from our China subsidiaries’ operations may provide an additional obstacle to our ability to pay dividends

if we so decide in the future.

To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our PRC and/or Hong

Kong entities, such funds and/or assets may not be available to fund operations or for other use outside of the PRC and/or Hong Kong due

to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to

transfer cash and/or assets.

Governmental control of currency conversion

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RMB is currently not a freely convertible

Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to satisfy

foreign currency obligations.

Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to satisfy foreign

currency obligations.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions,

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The value of the RMB against the U.S.

and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions.

Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition.

to the extent that we need to convert U.S.

dollars we receive from an offering of our securities into RMB for our operations in China,

appreciation of the RMB against the U.S.

dollar would diminish the value of the proceeds of the offering and could harm our business,

financial condition and results of operations.

other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions.

significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition.

For example, to

the extent that we need to convert U.S.

dollars we receive from an offering of our securities into RMB for our operations in China, appreciation

of the RMB against the U.S.

dollar would diminish the value of the proceeds of the offering and could harm our business, financial condition

and results of operations.

Conversely, if we decide to convert our RMB into U.S.

dollars for business purposes and

dollar appreciates against the RMB, the U.S.

dollars for business purposes and the U.S.

dollar appreciates

against the RMB, the U.S.

dollar equivalent of the RMB we convert would be reduced.

In addition, the depreciation

of significant U.S.

dollar denominated assets could result in a charge to our income statement and a reduction in the value of these

In addition, the depreciation of significant U.S.

dollar denominated assets could result in a charge to our income statement and a reduction in the value of these assets.

PRC regulations relating to offshore investment

activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to

us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.

The State Administration of Foreign Exchange

or SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment

through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires PRC residents or entities to register with SAFE or

its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment

activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to us

or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.

The State Administration of Foreign Exchange or

SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment

through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires PRC residents or entities to register with SAFE or its

local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment

or financing.

In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle

undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name, and

operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

SAFE Circular

37 is issued to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing

and Roundtrip Investments via Overseas Special Purpose Vehicles, or SAFE Circular 75.

SAFE promulgated the Notice on Further Simplifying

and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which took effect on June 1,

This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE

or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment

or financing.

If our shareholders who are PRC residents or

entities do not complete their registration as required, our PRC subsidiaries may be prohibited from distributing its profits and proceeds

from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional

capital to our PRC subsidiaries.

undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name, and operation

term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

SAFE Circular 37 is issued

to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip

Investments via Overseas Special Purpose Vehicles, or SAFE Circular 75.

SAFE promulgated the Notice on Further Simplifying and Improving

the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which took effect on June 1, 2015.

has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch

in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

If our shareholders who are PRC residents or entities

do not complete their registration as required, our PRC subsidiaries may be prohibited from distributing its profits and proceeds from

any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital

to our PRC subsidiaries.

The failure or inability of the relevant shareholders

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Company, replacing earlier rules promulgated in March 2007.

Pursuant to these rules, PRC citizens and non-PRC citizens who reside in

China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,

Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China

for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,

subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary

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Federal securities laws or otherwise.

It may also be difficult for you or overseas

regulators to conduct investigations or collect evidence within China.

For example, in China, there are significant legal and other obstacles

to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.

It may also be difficult for you or overseas regulators

to conduct investigations or collect evidence within China.

For example, in China, there are significant legal and other obstacles to

obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.

Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region

to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in

the Unities States may not be efficient in the absence of practical cooperation mechanism.

Furthermore, according to Article 177 of the

PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to

directly conduct investigation or evidence collection activities within the territory of the PRC.

Article 177 further provides that Chinese

entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies

without prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State

While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas

securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties

faced by you in protecting your interests.

to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the

Unities States may not be efficient in the absence of practical cooperation mechanism.

Furthermore, according to Article 177 of the PRC

Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly

conduct investigation or evidence collection activities within the territory of the PRC.

Article 177 further provides that Chinese entities

and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without

prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council.

While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities

regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by

you in protecting your interests.

The filing with the China Securities Regulatory

Commission (“CSRC”) is required in connection with any offering under New Overseas Listing Rules, and we cannot assure you

that we will be able to timely make such filing, in which case we may face sanctions by the CSRC or other PRC regulatory agencies for

failure to timely file with the CSRC for this offering.

17, 2023, the CSRC released the New Overseas Listing Rules, which took effect on March 31, 2023.

The New Overseas Listing Rules require

Chinese domestic enterprises to complete filings with relevant CSRC and report related information under certain circumstances, such as:

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

b) an issuer making an overseas securities

offering after having been listed on an overseas market;

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

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

According to the Notice on Arrangements for

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

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

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

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

offering in the future.

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

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

business days after the occurrence and public disclosure of the event:

(i) change of control;

(ii) investigations or sanctions imposed

by overseas securities regulatory agencies or other competent authorities;

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

or (iv) voluntary or mandatory delisting.

The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches,

including failure to fulfill filing obligations or filing documents having false statement or misleading information or material omissions,

which may result in a fine ranging from RMB1 million to RMB10 million, and in cases of severe violations, the relevant responsible persons

may also be barred from entering the securities market.

Our PRC counsel has advised us based on their understanding of the current PRC

laws, rules and regulations relating to the CSRC’s filing requirements, we are required to carry out filing procedures as required

if we conduct any overseas offerings or offerings within other circumstances under rules with the CSRC.

The Company is still processing

the filings with CSRC for its offerings since the effective of New Overseas Listing Rules and has not complied the filing requirements

yet which would subject the Company to fines and other penalties for violation of New Overseas Listing Rules.

Given the current PRC regulatory

environment, it is uncertain when and whether we and our PRC subsidiaries will be required to obtain other permissions or approvals from

the PRC government to list on U.S.

exchanges in the future, and even if and when such permissions or approvals are obtained, whether they

will be denied or rescinded.

If we or any of our PRC subsidiaries do not receive or maintain such permissions or approvals, inadvertently

conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we or our

subsidiaries are required to obtain such permissions or approvals in the future, it could significantly

limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities

to significantly decline or become worthless.

The Holding Foreign Companies Accountable

Act, or the HFCA Act, and the related regulations are evolving quickly.

Further implementations and interpretations of or amendments

to the HFCA Act or the related regulations, or a PCOAB’s determination of its lack of sufficient access to inspect our auditor,

might pose regulatory risks to and impose restrictions on us because of our operations in mainland China and Hong Kong.

Further implementations and interpretations of or amendments to

the HFCA Act or the related regulations, or a PCOAB’s determination of its lack of sufficient access to inspect our auditor, might

pose regulatory risks to and impose restrictions on us because of our operations in mainland China and Hong Kong.

A potential consequence

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In accordance with the HFCA Act, trading in securities of any registrant on a national

securities exchange or in the over-the-counter trading market in the United States may be prohibited if the PCAOB determines that it

cannot inspect or fully investigate the registrant’s auditor for three consecutive years beginning in 2021, and, as a result, an

exchange may determine to delist the securities of such registrant.

securities exchange or in the over-the-counter trading market in the United States may be prohibited if the PCAOB determines that it cannot

inspect or fully investigate the registrant’s auditor for three consecutive years beginning in 2021, and, as a result, an exchange

may determine to delist the securities of such registrant.

On June 22, 2021, the U.S.

Senate passed the Accelerating Holding

Foreign Companies Accountable Act, which, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from

trading on any U.S.

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus

reducing the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB

inspection requirement.

On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated

Appropriations Act”), was signed into law by President Biden.

The Consolidated Appropriations Act contained, among other things,

an identical provision to Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection

years required for triggering the prohibitions under the HFCA Act from three years to two.

Senate passed the Accelerating Holding Foreign Companies

Accountable Act, which, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time

period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection requirement.

December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations

Act”), was signed into law by President Biden.

The Consolidated Appropriations Act contained, among other things, an identical provision

to Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection years required for triggering

the prohibitions under the HFCA Act from three years to two.

On November 5, 2021, the SEC adopted the PCAOB

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On December 16, 2021, the PCAOB issued its determinations

(the “Determination”) that they are unable to inspect or investigate completely PCAOB-registered public accounting firms

headquartered in mainland China and in Hong Kong.

The Determination includes lists of public accounting firms headquartered in mainland

China and Hong Kong that the PCAOB is unable to inspect or investigate completely.

(the “Determination”) that they are unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered

in mainland China and in Hong Kong.

The Determination includes lists of public accounting firms headquartered in mainland China and Hong

Kong that the PCAOB is unable to inspect or investigate completely.

On August 26, 2022, the PCAOB signed a Statement

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On December 15, 2022, the PCAOB Board determined that

the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland

China and Hong Kong and voted to vacate its previous determinations to the contrary.

However, should PRC authorities obstruct or otherwise

fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China

and Hong Kong and voted to vacate its previous determinations to the contrary.

However, should PRC authorities obstruct or otherwise fail

to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

The enactment of the HFCA Act and related regulations

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The inability of the PCAOB to conduct inspections of auditors in China and

Hong Kong makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control

procedures as compared to auditors outside of China that are subject to the PCAOB inspections.

Our auditor, Onestop Assurance PAC, an independent

registered public accounting firm that is headquartered in Singapore, as an auditor of companies that are traded publicly in the United

Hong Kong makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control procedures

as compared to auditors outside of China that are subject to the PCAOB inspections.

Our auditor, Fortune CPA Inc., an independent

registered public accounting firm that is headquartered in California, as an auditor of companies that are traded publicly in the United

States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts inspections

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delisting would have a negative impact on the market price of our shares.

Risks Relating to Our Corporate Structure

If the PRC government deems that the contractual

arrangements in relation to the consolidated variable interest entity do not comply with PRC regulatory restrictions on foreign investment

in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject

to severe penalties or be forced to relinquish our interests in those operations.

Foreign ownership of internet-based businesses,

including value-added telecommunications services, is subject to restrictions under current PRC laws and regulations.

To comply with

PRC laws and regulations, we conduct our e-commerce operations in China through a series of contractual arrangements entered into among

WFOE, the VIE and the shareholders of the VIE.

As a result of these contractual arrangements, we exert control over the VIE and consolidate

its operating results in our financial statements under U.S.

For a detailed description of these contractual arrangements, see

“ The VIE Contractual Arrangements.”

In the opinion of our PRC counsel Fengdong Law

Firm, our current ownership structure, the ownership structure of our PRC subsidiary and the consolidated VIE, and the contractual arrangements

among WFOE, the VIE and the shareholders of the VIE are common practices for the companies listed on stock exchanges in the U.S.

in the businesses restricted in China and these contractual arrangements are valid and binding in accordance with their terms and applicable

PRC laws and regulations currently in effect.

However, our PRC counsel Fengdong Law Firm has also advised us that there are substantial

uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance

that the PRC government will ultimately take a view that is consistent with the opinion of our PRC counsel Fengdong Law Firm.

event PRC regulations change or are interpreted differently in the future, our shares may decline in value or become worthless if we

are unable to assert our contractual control rights over the assets of the VIE.

If the PRC government finds that our contractual

arrangements do not comply with its restrictions on foreign investment in the e-commerce business, the relevant PRC regulatory authorities,

including the China Securities Regulatory Commission may require us to discontinue or place restrictions or onerous conditions on

our operations and it may also impose fines, confiscate the income from the WFOE or VIE.

The imposition of any of these penalties

would result in a material and adverse effect on our ability to conduct our e-commerce business.

In addition, it is unclear what impact

the PRC government actions would have on us and on our ability to consolidate the financial results of the VIE in our consolidated financial

statements, if the PRC government authorities were to find the VIE structure and contractual arrangements to be in violation of PRC laws

and regulations.

If the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE

or our right as the primary beneficiary of the VIE for accounting purposes and we are not able to restructure our ownership structure

and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of the VIE in our consolidated

financial statements.

Either of these results, or any other significant penalties that might be imposed on us in this event, would have

a material adverse effect on our financial condition and results of operations.

Any failure by the consolidated VIE or

its shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on our business.

If the consolidated VIE or its shareholders fail

to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional

resources to enforce such arrangements.

We may also have to rely on legal remedies under PRC laws, including seeking specific performance

or injunctive relief, and claiming damages, which we cannot assure you will be effective under PRC laws.

For example, if the shareholders

of the VIE were to refuse to transfer their equity interest in the VIE to us or our designee if we exercise the purchase option pursuant

to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal action to

compel them to perform their contractual obligations.

All the agreements under our contractual arrangements

are governed by PRC laws.

Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved

in accordance with PRC legal procedures.

The legal system in the PRC is not as well established as in some other jurisdictions, such

as in the United States.

As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.

Meanwhile, there are some regulations unfavorable to VIEs.

However, there are very few precedents and little formal guidance as to how

contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under PRC laws and

there remain significant uncertainties regarding the ultimate outcome of such legal proceedings should legal action become necessary.

Currently, almost all of the Chinese companies listed on overseas stock exchanges that are in the internet-based business such as e-commerce

or online-gaming have adopted a VIE structure.

If the losing parties fail to carry out the court judgement or arbitration awards within

a prescribed time limit, the prevailing parties may only enforce them in PRC courts, which would require additional expenses and delay.

In the event that we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the

process of enforcing these contractual arrangements, we may not be able to exert effective control over the consolidated variable interest

entities, and our ability to conduct our business may be negatively affected.

The shareholders of the consolidated VIE

may have potential conflicts of interest with us, which may adversely affect our business and financial condition.

The shareholders of the VIE and their interests

in the VIE may differ from their interests of our Company as a whole.

These shareholders may breach, or cause the consolidated variable

interest entities to breach, the existing contractual arrangements we have with them and the consolidated variable interest entity, which

would have a material adverse effect on our ability to act as the primary beneficiary of the VIE for accounting purposes.

the shareholders may be able to cause our agreements with E-Commerce Tianjin to be performed in a manner adverse to us by, among other

things, failing to remit payments due under the contractual arrangements to us on a timely basis.

We cannot assure you that when conflicts

of interest arise, any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved

in our favor.

Currently, we do not have any arrangements to

address potential conflicts of interest between these shareholders and our company, except that we could exercise our purchase option

under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in E-Commerce

Tianjin to a PRC entity or individual designated by us, to the extent permitted by PRC laws.

If we cannot resolve any conflict of interest

or dispute between us and the shareholders of the VIE, we would have to rely on legal proceedings, which could result in the disruption

of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

Our contractual arrangements with the consolidated

affiliated entity may not be as effective in providing operational control as direct ownership.

We have relied and expect to continue to rely

on contractual arrangements with E-Commerce Tianjin and its shareholders to operate our CCM shopping mall business.

For a description

of these contractual arrangements, see “ The VIE Contractual Arrangements .” These contractual arrangements may not

be as effective in providing us with control over such entity as direct ownership.

If we had direct ownership of E-Commerce Tianjin,

we would be able to exercise our rights as a shareholder to effect changes in the board of directors, which in turn could effect changes,

subject to any applicable fiduciary obligations, at the management level.

However, under the current contractual arrangements, we rely

on the performance by E-Commerce Tianjin and its shareholders of their contractual obligations to exercise control over the consolidated

affiliated entity.

Therefore, our contractual arrangements with the consolidated affiliated entity may not be as effective in ensuring

our control over our CCM shopping mall as direct ownership would be.

Risks Related to Our Common Stock

We are authorized to issue blank check

preferred stock, which may be issued without shareholder approval and which may adversely affect the rights of holders of our Common

We are authorized to issue 10,000,000 shares

of preferred stock.

The Board is authorized under our articles of incorporation, as amended, to provide for the issuance of shares of

preferred stock by resolution and by filing a certificate of designations under Florida law, to fix the designation, powers, preferences

and rights of the shares of each such series of preferred stock and the qualifications, limitations or restrictions thereof without any

further vote or action by the shareholders.

We are authorized to issue blank check preferred

stock, which may be issued without shareholder approval and which may adversely affect the rights of holders of our Common Stock.

We are authorized to issue 10,000,000 shares of

preferred stock.

The Board is authorized under our articles of incorporation, as amended, to provide for the issuance of shares of preferred

stock by resolution and by filing a certificate of designations under Florida law, to fix the designation, powers, preferences and rights

of the shares of each such series of preferred stock and the qualifications, limitations or restrictions thereof without any further vote

or action by the shareholders.

As of December 31, 2023, there were no shares of preferred stock issued and outstanding.

Any shares of preferred stock that are issued are likely to have priority over our Common Stock with respect to dividend or liquidation

In the event of issuance, the preferred stock could be utilized under certain circumstances as a method of discouraging, delaying

or preventing a change in control, which could have the effect of discouraging bids to acquire us and thereby prevent shareholders from

receiving the maximum value for their shares.

We have no present intention to issue any shares of preferred stock in order to discourage

or delay a change of control or for any other reason.

However, there can be no assurance that preferred stock will not be issued at some

time in the future.

Any shares of

preferred stock that are issued are likely to have priority over our Common Stock with respect to dividend or liquidation rights.

event of issuance, the preferred stock could be utilized under certain circumstances as a method of discouraging, delaying or preventing

a change in control, which could have the effect of discouraging bids to acquire us and thereby prevent shareholders from receiving the

maximum value for their shares.

We have no present intention to issue any shares of preferred stock in order to discourage or delay a

change of control or for any other reason.

However, there can be no assurance that preferred stock will not be issued at some time in

Zeyao Xue has control over key decision

2 unchanged sentences

and directly beneficially owns 3,652,850 shares, or approximately 18.3%, of our outstanding common stock as of April 12, 2024.

Zeyao Xue’s beneficial ownership of 17.8% of Future FinTech’s issued and outstanding common stock will

likely give him the ability to control the outcome of matters submitted to shareholders for approval, including but not limited to the

election of directors and any merger, consolidation, or sale of all or substantially all of the Company’s assets.

This concentrated

control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of the Company’s

assets that other shareholders support, or conversely this concentrated control could result in the consummation of such a transaction

that other shareholders do not support.

This concentrated control could also discourage a potential investor from acquiring the common

stock of the Company due to the limited voting power of such shares.

Xue’s beneficial ownership of 18.3% of Future FinTech’s issued and outstanding common stock will likely give him the ability

to control the outcome of matters submitted to shareholders for approval, including but not limited to the election of directors and any

merger, consolidation, or sale of all or substantially all of the Company’s assets.

This concentrated control could delay, defer,

or prevent a change of control, merger, consolidation, or sale of all or substantially all of the Company’s assets that other shareholders

support, or conversely this concentrated control could result in the consummation of such a transaction that other shareholders do not

This concentrated control could also discourage a potential investor from acquiring the common stock of the Company due to the

limited voting power of such shares.

As a shareholder, even a controlling shareholder, Mr.

entitled to vote his shares, and shares over which he has voting control, in his own interests, which may not always be in the interests

of our shareholders generally.

Zeyao Xue is entitled to vote his shares, and

shares over which he has voting control, in his own interests, which may not always be in the interests of our shareholders generally.

Anti-takeover provisions in our charter

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Our Articles of Incorporation and Bylaws also contain other provisions which could have anti-takeover effects.

These provisions include, without limitation, the authority of our Board of Directors to issue additional shares of preferred stock and

to fix the relative rights and preferences of the preferred stock without the need for any shareholder vote or approval, as discussed

above, and advance notice procedures to be complied with by our shareholders in order to make shareholder proposals or nominate directors,

authorize the issuance of “blank check” preferred stock

that could be issued by the Board to thwart a takeover attempt;

require that directors only be removed from office upon a majority

shareholder vote;

provide that vacancies on the board of directors, including newly created

directorships, may be filled only by a majority vote of directors then in office;

provisions include, without limitation, the authority of our Board of Directors to issue additional shares of preferred stock and to fix

the relative rights and preferences of the preferred stock without the need for any shareholder vote or approval, as discussed above,

and advance notice procedures to be complied with by our shareholders in order to make shareholder proposals or nominate directors, such

authorize the issuance of “blank check” preferred stock that could be issued by the Board to thwart a takeover attempt;

require that directors only be removed from office upon a majority shareholder vote;

provide that vacancies on the board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office;

limit who may call special meetings of shareholders;

7 unchanged sentences

NASDAQ rules require us to maintain a minimum bid price of $1.00 per share of our common stock.

We may be unable to meet NASDAQ

listing requirements, including minimum bid price, minimum levels of stockholders’ equity or market values of our common stock

in which case, our common stock could be delisted.

If our common stock were to be delisted, the liquidity of our common stock would be

materially adversely affected and the market price of our common stock could decrease.

On February 28, 2019, the Company received a

letter from NASDAQ notifying the Company that, because the closing bid price for the Company’s common stock listed on NASDAQ was

below $1.00 for 30 consecutive trading days, the Company no longer met the minimum bid price requirement for continued listing on NASDAQ

under NASDAQ Marketplace Rule 5550(a)(2).

On May 7, 2019, the Company received a written notification from the NASDAQ Stock Market Listing

Qualifications Staff indicating that the Company has regained compliance with the $1.00 minimum closing bid price requirement and that

the matter is now closed.

We may be unable to meet NASDAQ listing

requirements, including minimum bid price, minimum levels of stockholders’ equity or market values of our common stock in which

case, our common stock could be delisted.

If our common stock were to be delisted, the liquidity of our common stock would be materially

adversely affected and the market price of our common stock could decrease.

On February 28, 2019, the Company received a letter

from NASDAQ notifying the Company that, because the closing bid price for the Company’s common stock listed on NASDAQ was below

$1.00 for 30 consecutive trading days, the Company no longer met the minimum bid price requirement for continued listing on NASDAQ under

NASDAQ Marketplace Rule 5550(a)(2).

On May 7, 2019, the Company received a written notification from the NASDAQ Stock Market Listing Qualifications

Staff indicating that the Company has regained compliance with the $1.00 minimum closing bid price requirement and that the matter is

On April 17, 2019, the Company received a notification

21 unchanged sentences

Listing Rules.

On March 18, 2020, the Company received written notice form NASDAQ stating that the Company complies with the Listing

Rule 5550(b)(1).

On March 18, 2020, the Company received written notice form NASDAQ stating that the Company complies with the Listing Rule

On November 4, 2019, the Company received a letter

26 unchanged sentences

On February 15, 2023, the Company received a written notification from the NASDAQ Stock Market Listing Qualifications

Staff indicating that the Company has regained compliance with the $1.00 minimum closing bid price requirement for continued listing

on the NASDAQ Capital Market pursuant to NASDAQ Listing Rule 5550(a)(2) and that the matter is now closed.

ITEM 1B – UNRESOLVED STAFF COMMENTS

Not applicable.

Staff indicating that the Company has regained compliance with the $1.00 minimum closing bid price requirement for continued listing on

the NASDAQ Capital Market pursuant to NASDAQ Listing Rule 5550(a)(2) and that the matter is now closed.

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-K

Item 1A. Risk Factors