What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-20 compared with 2023-11-20 · 346 added, 553 removed, 135 unchanged (87% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and other

14 unchanged sentences

estimated, expected, intended, or planned.

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

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

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

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

31, 2023 (the “2023 Form 10-K”) and in this Form 10-Q.

2 unchanged sentences

Although the Company believes the expectations

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

activity, performance, or achievements.

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

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

Readers are urged to carefully

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

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

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

of activity, performance, or achievements.

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

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

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

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

Overview of Our Business

5 unchanged sentences

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

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

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

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

In March 2022, FTFT UK Limited received approval

to operate as an Electronic Money Directive (“EMD”) Agent and has been registered as such with the Financial Conduct Authority

(FCA), a UK regulator.

This status grants FTFT UK Limited the ability to distribute or redeem e-money and provide certain financial services

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

On April 14, 2022, the Company established Future

Trading (Chengdu) Co., Ltd.

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

On April 18, 2022, the Company and Future Fintech

(Hong Kong) Limited, a wholly owned subsidiary of the Company jointly acquired 100% equity interest of KAZAN S.A., a company incorporated

in Republic of Paraguay for $288.

The Company owns 90% and FTFT HK owns 10% of Kazan S.A., respectively.

has no operation before

the acquisition.

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

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

on July 28, 2022.

On September 29, 2022, FTFT UK Limited completed

its acquisition of 100% of the issued and outstanding shares of Khyber Money Exchange Ltd., a company incorporated in England and Wales,

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

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

Khyber Money Exchange Ltd.

is a money transfer company with a platform

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

Khyber Money Exchange

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

the transaction.

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

to FTFT Finance UK Limited.

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

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

(the “Company”)

entered into a Share Transfer Agreement (the “Agreement”) with Alpha Financial Limited, a company incorporated in Hong Kong

(“Seller”) and sole owner and shareholder of Alpha International Securities (Hong Kong) Limited, a company incorporated in

Hong Kong (“Alpha HK”) and Alpha Information Service (Shenzhen) Co., Ltd., a company incorporated in China (“Alpha SZ”).

Alpha HK holds Type 1 ’Securities Trading’, Type 2 ‘Futures Contract Trading’ and Type 4 ’Securities Consulting’

financial licenses issued by the Hong Kong Securities and Futures Commission.

Alpha SZ provides technical support services to Alpha HK.

The share transfer transaction was approved by the Securities and Futures Commission of Hong

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

The names of the two entities were

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

Ltd.’, respectively.

On January 26, 2023,

the Company filed with the Florida Secretary of State’s office Articles of Amendment (the “Amendment”) to amend

its Second Amended and Restated Articles of Incorporation, as amended (“Articles of Incorporation”).

As a result of the Amendment,

the Company has authorized and approved a 1-for-5 reverse stock split of the Company’s authorized shares of common stock from 300,000,000

shares to 60,000,000 shares, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock

(the “Reverse Stock Split”).

The common stock continue to be $0.001 par value.

The Company rounds up to the next full share

of the Company’s shares of common stock any fractional shares that result from the Reverse Stock Split and no fractional shares

is issued in connection with the Reverse Stock Split and no cash or other consideration is paid in connection with any fractional shares

that would otherwise have resulted from the Reverse Stock Split.

No changes are being made to the number of preferred shares of the Company

which remain as 10,000,000 preferred shares as authorized but not issued.

The amendment to the Articles of Incorporation of the Company

took effect at 1:00am Eastern Time on February 1, 2023.

The Reverse Stock Split and Amendment were authorized and approved by the Board

of Directors of the Company without shareholders’ approval, pursuant to 607.10025 of the Florida Business Corporation Act of the

State of Florida.

We are a holding company incorporated in Florida

and we are not a Chinese operating company.

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

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

We also operate a blockchain based online shopping mall

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

or E-Commerce

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

Our shares of common stock are shares

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

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

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

Chinese regulatory authorities

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

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

There are legal and operational

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

These risks could result

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

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

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

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

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

efforts in anti-monopoly enforcement.

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

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

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

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

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

On February 15, 2022, Cybersecurity

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

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

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

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

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

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

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

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

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

On July 7, 2022, CAC promulgated the Measures for

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

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

(i) any data processor transfers important

data to overseas;

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

million people provides personal information to overseas;

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

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

since January 1st of the previous year;

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

is required as prescribed by the CAC.

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

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

effect on June 30, 2023.

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

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

a) an issuer making an application for initial public

offering and listing in an overseas market;

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

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

share swap, transfer of shares or other means.

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

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

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

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

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

Furthermore, upon

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

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

of the event:

(i) change of control;

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

and distribution to financial technology related service businesses.

The main business of the Company includes supply chain financing

services and trading in China, asset management business in Hong Kong and cross-border money transfer service in UK.

The Company also

expanded into brokerage and investment banking business in Hong Kong and cryptocurrency mining farm in the U.S.

The Company had contractual

arrangements with a VIE E-Commerce Tianjin in China, which has generated minimal revenue and business since 2021 due to the negative

impact caused by COVID-19.

The Company started the process to close it down in November 2023 and completed deregistration and dissolution

of the VIE with local authority on March 7, 2024.

There are legal and operational risks associated

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

These risks could result in a material change

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

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

In the past few years, the

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

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

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

in anti-monopoly enforcement.

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

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

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

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

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

On February 15, 2022, Cybersecurity Review Measures

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

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

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

and State Cryptography Administration became effective, which provides that, Critical Information Infrastructure Operators (“CIIOs”)

that intend to purchase internet products and services and Online Platform Operators engaging in data processing activities that affect

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

On November 14, 2021,

CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure

(Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to

file a cybersecurity review with the Office of Cybersecurity Review.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment

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

assessment coordinated by the CAC under the following circumstances:

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

any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides

personal information to overseas;

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

information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of

the previous year;

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

On February 17, 2023, the CSRC released New Overseas Listing Rules with five interpretive guidelines, which took effect on

March 31, 2023.

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

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

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:

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.

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

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

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

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

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

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

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

entities and individuals.

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

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

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

accordance with relevant laws and regulations;

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.

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

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

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

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

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

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

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

and other entities and individuals.

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

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

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

in accordance with relevant laws and regulations;

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

6 unchanged sentences

for the filing requirement under New Overseas Listing Rules.

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

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

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

or other foreign stock exchange.

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

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

Added Telecom Business License.

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

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

or were denied such permissions by any PRC authorities.

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

Listing Rules.

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

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

it will be denied or rescinded.

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

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

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

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

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

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

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

and adversely affect our current corporate structure and business operations.

Chain Cloud Mall is a unique real-name based

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

The CCM shared shopping mall platform is

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

only accepts payment from credit cards, Alipay and WeChat.

Currently, Chain Cloud Mall adopts an “Enterprise Communication as

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

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

Anti-Counterfeiting Committee reviews

and accepts the companies to join its 3.15 China Responsible Brand Program.

After acceptance, these companies are authorized to use

anti-counterfeiting labels on their products which have authenticated joint signatures of these companies and Anti-Counterfeiting

Committee that are recorded on the blockchain quality and safety traceability system controlled by the Anti-Counterfeiting

The companies will sell such products on our eCAAS platform.

The companies can also use sales agents to sell their

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

Any new sales agent must

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

sales agent services on the platform.

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

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

The Company started its trial operation of NONOGIRL,

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

The cross-border e-commerce platform aimed to

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

It was aimed at

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

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

The Company’s promotion strategy

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

Due to the outbreak of COVID-19, the

Chinese government put a restriction on large gatherings.

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

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

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

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

agent based eCAAS platform and began to provide supply chain financing services and trading business.

The Company currently has ten direct controlled

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.

In addition, new rules and regulations could be adopted and there

are uncertainties in the interpretation and enforcement of existing laws and guidelines, which could materially and adversely impact

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

or other foreign

stock exchange.

Any change in foreign investment regulations, and other policies in China or related enforcement actions by China

government could result in a material change in our operations and the value of our securities and could significantly limit or completely

hinder our ability to offer our securities to investors or cause the value of our securities to significantly decline or be worthless.

In March 2022, FTFT

UK Limited received approval to operate as an Electronic Money Directive (“EMD”) Agent and has been registered as such with

the Financial Conduct Authority (FCA), a UK regulator.

This status grants FTFT UK Limited the ability to distribute or redeem e-money

and provide certain financial services on behalf of an e-money institution (registration number 903050).

On April 14, 2022, the

Company established Future Trading (Chengdu) Co., Ltd.

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

On April 18, 2022, the

Company and Future Fintech (Hong Kong) Limited, a wholly owned subsidiary of the Company jointly acquired 100% equity interest of KAZAN

S.A., a company incorporated in Republic of Paraguay for $288.

has no operation before the acquisition.

The Company tried to

develop bitcoin and other cryptocurrency mining and related service business in Paraguay.

The Company has changed its name from KAZAN

S.A to FTFT Paraguay S.A.

on July 28, 2022 and it was dissolved in December 2023 as the Company was not able to develop the business in

Paraguay as planned.

On September 29, 2022,

FTFT UK Limited completed its acquisition of 100% of the issued and outstanding shares of Khyber Money Exchange Ltd., a company incorporated

in England and Wales, from Rahim Shah, a resident of United Kingdom for a total of Euros €685,000 (“Purchase Price”),

pursuant to a Share Purchase Agreement (the “Agreement”) dated September 1, 2021.

Khyber Money Exchange Ltd.

is a money transfer

company with a platform for transferring money through one of its agent locations or via its online portal, mobile platform or over the

Khyber Money Exchange Ltd.

is regulated by the UK Financial Conduct Authority (FCA) and the parties received approval by the FCA

before the formal closing of the transaction.

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

Finance UK Limited.

On February 27, 2023,

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

FinTech Group Inc.

(the “Company”) entered into a Share Transfer Agreement (the “Agreement”) with Alpha Financial

Limited, a company incorporated in Hong Kong (“Seller”) and sole owner and shareholder of Alpha International Securities

(Hong Kong) Limited, a company incorporated in Hong Kong (“Alpha HK”) and Alpha Information Service (Shenzhen) Co., Ltd.,

a company incorporated in China (“Alpha SZ”).

Alpha HK holds Type 1 ’Securities Trading’, Type 2 ‘Futures

Contract Trading’ and Type 4 ’Securities Consulting’ financial licenses issued by the Hong Kong Securities and Futures

Alpha SZ provides technical support services to Alpha HK.

The share transfer transaction was approved by the Securities

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

of the two entities were also changed to ‘FTFT International Securities and Futures Limited’ and ‘FTFT Information

Services (Shenzhen) Co.

Ltd.’, respectively.

On January 26, 2023, the Company filed with the Florida Secretary of

State’s office Articles of Amendment (the “Amendment”) to amend its Second Amended and Restated Articles of Incorporation,

as amended (“Articles of Incorporation”).

As a result of the Amendment, the Company has authorized and approved a 1-for-5

reverse stock split of the Company’s authorized shares of common stock from 300,000,000 shares to 60,000,000 shares, accompanied

by a corresponding decrease in the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”).

The common stock continues to be $0.001 par value.

The Company rounded up to the next full share of the Company’s shares of common

stock any fractional shares that result from the Reverse Stock Split and no fractional shares were issued in connection with the Reverse

Stock Split and no cash or other consideration were paid in connection with any fractional shares that would otherwise have resulted from

the Reverse Stock Split.

No changes have been made to the number of preferred shares of the Company which remain as 10,000,000 preferred

shares as authorized but not issued.

The amendment to the Articles of Incorporation of the Company took effect on February 1, 2023.

Reverse Stock Split and Amendment were authorized and approved by the Board of Directors of the Company without shareholders’ approval,

pursuant to 607.10025 of the Florida Business Corporation Act of the State of Florida.

The Company operated

a blockchain based online shopping platform, Chain Cloud Mall (“CCM”) Chain Cloud Mall through its VIE and its business was

materially and negatively affected by outbreak of COVID-19 since early 2020 because the Company was unable to implement its promotion

strategy to enroll new members through training of such members and distributors via meetings and conferences which was not possible

during the outbreak of COVID-19.

CCM has generated minimal revenue and business since 2021, despite the Company transformed the member-based

business model of CCM to a sale agent based “Enterprise Communication as A Service” or eCAAS platform during the second quarter

The Company started a process to close it down in November 2023 and completed deregistration and dissolution of the VIE with

local authority on March 7, 2024.

The Company currently has nine directly controlled

subsidiaries:

1 unchanged sentence

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

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

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

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

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

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

CCM Shopping Mall

Due to the lack of new

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

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

The eCAAS platform is

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

Anti-Counterfeiting Committee

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

After acceptance, these companies are authorized to use 315

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

The companies can also use sales agents to sell their

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

Any new sales agent must be

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

services on the platform.

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

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

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

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

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

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

a company incorporated under the laws of Ohio.

Supply Chain Financing Service and Trading

Since the second quarter of 2021, we started coal

supply chain financing service and trading business.

Since the second quarter of 2021, we started

coal supply chain financing service and trading business.

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

5 unchanged sentences

scale and improves the industrial value.

Through our supply chain service ability and customer

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

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

commodity circulation.

We focus on bulk coal, aluminum ingots, sand and

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

We use our own funds as the operation basis, actively

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

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

We sign purchase and sale agreements with suppliers

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

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

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

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

We select the customers

and suppliers that have good credit and reputation.

Asset Management Service .

Through our supply chain service ability and

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

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

process of commodity circulation.

We focus on bulk commodity goods such as coal,

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

We use our own funds as the

operation basis, actively uses a variety of channels and products for financing, such as banks, commercial factoring companies, accounts

receivable, asset-backed securities, and other innovative financing methods to obtain sufficient funds.

We sign purchase and sale agreements with

suppliers and buyers.

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

freight yard or transfer the title to us in certain warehouses.

We also provide trading service as we don’t take control over

the ownership of the goods but receive agent service fee for the transaction.

For the sale of goods where we obtain control of the

goods before transferring it to the customer, we recognize revenue based on the gross revenue amount billed to customers as sales of

We consider multiple factors when determining whether we obtain control of the goods, including evaluating if we can

establish the price of the goods, retain inventory risk for tangible goods or have the responsibility for ensuring acceptability of

We recognize net revenue as agent services for the sales of coals, aluminum ingots, sand and steel when no

control obtained throughout the transactions.

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

Asset Management Service, Brokerage and Investment

Banking Services in Hong Kong .

NTAM engages assets management and advisory services.

NTAM’s main revenue is generated from providing professional advices to customers and management fees for managing the investment

NTAM’s main revenue is generated from providing professional advice to customers and management fees for managing the investment

of the clients.

15 unchanged sentences

credit rating and asset liability ratio.

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

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

the same maturity and credit rating.

1 unchanged sentence

NTAM also manages clients’ investment portfolio

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

Chinese yuan.

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

offshore Chinese yuan.

Precious metals include gold, platinum and silver.

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

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

structured products.

With research on the fundamentals of market supply and demand

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

options and structured products.

(4) Derivative Investment

6 unchanged sentences

NTAM’s main revenue is generated from providing

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

As of September 30, 2023, NTAM has

approximately US$242 million assets under its management.

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

As of March 31, 2024, NTAM has approximately

US$359 million assets under its management.

FTFT International Securities and Futures Limited,

a company we acquired in November 2023, provides brokerage and investment banking services in Hong Kong.

FTFT International Securities

and Futures Limited holds Type 1 “Securities Trading”, Type 2 “Futures Contract Trading” and Type 4 “Securities

Consulting” financial licenses issued by the Hong Kong Securities and Futures Commission.

Money Transfer Business

11 unchanged sentences

FTFT Finance’s plan is to develop products and services across different regions

of the world and become a global name in money remittance services.

FTFT Finance is a financial platform that enables

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

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

We believe that it is our understanding of our customers and

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

The FTFT Pay platform

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

in prominent countries across the Middle East and Southeast Asia.

Remittance service is a highly saturated market

in the United Kingdom.

There are many companies that offer remittance services, however, FTFT Finance only sees Ace Money Transfer, Wise

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

FTFT Finance has an edge over companies like wise

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

to Pakistan as it receives its rebate from local banks.

This approach provides us an advantage over our competitors.

Expats living in the United Kingdom often send

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

The UK has a large migrant population of Indians,

Pakistanis and Bangladeshis.

FTFT Finance has been in money remittance business

since 2009 and has over 500,000 customers.

FTFT Finance advertises through Instagram, Twitter, Facebook and LinkedIn in order to reach

out to new customers.

FTFT Finance implemented email marketing, in which they email customers daily to keep them updated on their account,

transactions as well as marketing and promotions.

Recent Developments Related to the COVID-19

of the world.

FTFT Finance is a financial platform that enables its customers to

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

exchange rate and without any hidden charges.

We believe our customers and their diverse backgrounds that have helped FTFT Finance to

become a credible and trustworthy money remittance business.

Remittance service is a highly saturated market in the United Kingdom

and there are many companies that offer remittance services.

FTFT Finance has an edge over companies like wise in different ways, for

example, FTFT Finance offers competitive rates for its services and does not charge customer fees for remittance to Pakistan as it receives

its rebate from local banks.

This approach provides gives us an advantage over our competitors.

Impact of COVID-19 on our business

In December 2019, a novel strain of coronavirus

2 unchanged sentences

the outbreak as a “pandemic”.

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

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

In response to the

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

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

Our offices in China were closed and the employees worked from

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

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

have materially negatively impacted our business.

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

providers, customers or our marketing activities with the new variants of COVID-19, which could materially adversely impact our business

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

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

and Beijing in 2022, which have resulted quarantines, travel restrictions, and temporary closure of office buildings and facilities in

these cities.

In December 2022, the Chinese government eased its strict zero COVID-19 policy which resulted in a surge of new COVID-19

cases during December 2022 and January 2023, which has disrupted our business operations in China.

The Company’s promotion strategy

of CCM Shopping Mall previously mainly relied on the training of members and distributors through meetings and conferences.

Chinese government

put a restriction on large gatherings in 2020 and 2021, which made the promotion strategy for our online e-commerce platforms difficult

to implement and the Company experienced difficulties to subscribe new members for its online e-commerce platforms.

Due to the lack of

new subscribers, in June 2021, the Company suspended its cross-border e-commerce platform NONOGIRL which later being closed.

the second quarter of 2021, the Company has transformed its member-based Chain Cloud Mall to a sale agent based eCAAS platform and began

to provide supply chain financing services.

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

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

The global economy has also been materially negatively

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

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

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

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

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

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

Our offices in China were closed and the employees

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

The quarantines, travel restrictions, and the temporary closure of

office buildings have materially negatively impacted our business.

The outbreak has had and might continue to have disruption to our

supply chain, logistics providers, customers or our marketing activities with the new variants of COVID-19, which could materially adversely

impact our business and results of operations.

There were outbreaks in various cities and provinces in China due to Omicron variant,

such as Xi’an city, Hong Kong, Shanghai, Beijing and other cities in 2022, which have resulted quarantines, travel restrictions,

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

In December 2022, the Chinese government eased its strict

zero COVID-19 policy which resulted in a surge of new COVID-19 cases during December 2022 and January 2023, which has disrupted our business

operations in China.

The Company’s promotion strategy of CCM Shopping Mall previously mainly relied on the training of members

and distributors through meetings and conferences.

Chinese government put a restriction on large gatherings in 2020 and 2021, which made

the promotion strategy for our online e-commerce platforms difficult to implement and the Company experienced difficulties to subscribe

new members for its online e-commerce platforms.

Since 2021, CCM generated minimal revenue and business for the Company.

started a process to close it down in November 2023 and completed deregistration and dissolution of the VIE with local authority on March

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 could result in significant

disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity.

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.

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

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

Consequently, our results of operations have been

materially and adversely affected by COVID-19 pandemic.

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

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

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

which are beyond our control.

new variants of COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global

financial markets, reducing our ability to access capital, which could negatively affect our liquidity.

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.

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

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

Results of Operations

Comparison of Three Months ended September

Comparison of Three Months ended March

31, 2024 and 2023:

The following table presents our consolidated

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

revenues for the three months ended March 31, 2024 and 2023, respectively:

Three months ended

September 30,

Asset management service

Supply Chain Financing/Trading

Revenue for the three months ended September 30,

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

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

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

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

Asset management service decreased by $4.57 million

from $7.84 million during the three months ended September 30, 2022 to $3.27 million in the same period of 2023, which mainly due to that

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

our revenue in asset management fees.

Others are mainly from non-performing debt recovery

consulting and service fees.

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

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

the third quarter of 2023.

The increase in revenue for the three months ended

March 31, 2024 was primarily due to more revenue from asset management service, as the Company hired more seasoned account managers to

boost the assets under management (“AUM”) and thus improved the revenue.

Supply chain financing/trading increased $0.33 million from $0.11million

for the three months ended March 31, 2023 to $0.44 million for the same period of 2024.

It was due to the Company sold more bulk goods

with ownership during first quarter of 2024 than as an agent during the same period of 2023.

Other revenues increased from $0.09 million for

the three months ended March 31, 2023 to $0.31 million for the same period of 2024, mainly due to the increased debt recovery consulting

service fee as well as U.S.

dollar bond service income of approximately $0.24 million, as we did not have such income in first quarter

Gross Profit and Margin

1 unchanged sentence

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

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

Three months ended September 30,

Asset management service

Supply Chain Financing/Trading

Gross profits for the three months ended September

30, 2023 was $1.39 million, an decrease from $1.49 million for the same period of the last fiscal year.

Overall gross margin as a

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

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

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

Operating Expenses

The following table presents our consolidated

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

September 30, 2023

September 30, 2022

General and administrative

Research and Development expenses

Stock compensation expense

Selling expenses

Bad debt provision

Impairment Loss

Total operating expenses

Total operating expenses for the three months

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

General and administrative expenses increased

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

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

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

Stock compensation expense was $1.28 million during

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

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

for three months ended September 30, 2023.

Selling expenses decreased by $0.17 million during

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

The decrease in selling expenses was mainly

due to decreased salaries and advertising fees.

The Company recorded $0.04 million and $0.23 million

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

Equity Fund Management (Hainan) Co., Ltd.

invested $1.85 million (RMB13,000,000) to entrust Shanghai Yuli Enterprise Management Consulting

Firm to invest in various types of investment portfolios.

The impairment loss relating to short term investment is due to that overall

economic environment has worsened in China with Covid-19 outbreak and related lockdown in various cities in China in 2022, Ukraine war,

inflation, high interest rate, looming recession worldwide.

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

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

The Company recorded $0.17 million of research

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

Research and development expenses include salaries, contracted

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

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

Research and development expenses decreased

by $0.77 million during the three months ended September 30, 2023, compared to the same period of last fiscal year.

The decrease in research

and development expenses was mainly due to decreased salaries.

Provision of doubtful debt recorded $0.02 million

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

Other Income (Expense), Net

Other expenses, net, decreased by $1.05 million

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

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

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

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

asset management service.

Non-controlling Interests

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

Resources Ltd.

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

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

and 20% interest in FTFT Capital Investments L.L.C., respectively;

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

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

Fintech Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $1.18

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

decrease in operating expenses, as discussed above.

Comparison of Nine Months Ended September 30,

2023 and 2022

The following table presents our consolidated

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

Nine months ended

September 30,

of the related revenues, for the three months ended March 31, 2024 and 2023, respectively:

Three months ended March 31,

Asset management service

Supply Chain Financing/Trading

Revenue for the nine months ended September 30,

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

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

supply chain financing and trading business in 2023.

Asset management service decreased by $1.58 million

from $11.27 million during the nine months ended September 30, 2022 to $9.69 million in the same period of 2023, which mainly due to that

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

asset management fees.

Others are mainly from non-performing debt recovery

consulting and service fees.

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

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

Overall gross profit increased to $1.95 million for three months ended

March 31, 2024 from $1.20 million for the same period of 2023.

The increase is mainly due to the increase of gross profits from asset

management service business and others which is in line with the increase of revenues for these two business segments during the first

quarter of 2024.

Gross Profit and Margin

The following table presents the consolidated

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

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

Nine months ended September 30,

Asset management service

Supply Chain Financing/Trading

Gross profits for the nine months ended September

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

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

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

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

Overall gross margin as a percentage of revenue was 38.1% for the three months ended March 31, 2024, an increase of 2.4%

from 35.7% for the same period of last fiscal year, mainly due to increase in profit margin for our asset management business as it has

more large clients which was offset by the decrease in profit margin for our supply chain financing/trading business as its revenue mostly

came from sales of goods with ownership during three months ended March 31, 2024, which has much lower profit margin than the revenue

from agent service fees that we mostly generated from the same period of 2023.

Operating Expenses

The following table presents our consolidated

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

Nine months ended

September 30, 2023

September 30, 2022

operating expenses and operating expenses as a percentage of revenue for the three months ended March 31, 2024 and 2023, respectively:

First quarter of 2024

First quarter of 2023

General and administrative

Research and Development expenses

Stock compensation expense

Selling expenses

Bad debt provision

Impairment Loss

Total operating expenses

Total operating expenses for the nine months ended

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

General and administrative expenses increased

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

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

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

Stock compensation expense was $1.28 million during

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

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

for three months ended September 30, 2023.

Selling expenses decreased by $0.63 million during

the nine months ended September 30, 2023, compared to the same period of last fiscal year.

The decrease in selling expenses was mainly

due to decreased salaries and advertising fees.

The Company recorded $3,872 and $0.93 million

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

Equity Fund Management (Hainan) Co., Ltd.

invested $1.85 million (RMB13,000,000) to entrust Shanghai Yuli Enterprise Management Consulting

Firm to invest in various types of investment portfolios.

The impairment loss relating to the short term investment is due to that overall

economic environment has worsened in China with Covid-19 outbreak and related lockdown in various cities in China in 2022, Ukraine war,

inflation, high interest rate, looming recession worldwide.

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

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

by $0.05 million, or 1.4%, to $3.42 million for the three months ended March 31, 2024 from $3.37 million for the same period of last fiscal

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

March 31, 2024.

Selling expenses increased by $0.14 million during

the three months ended March 31, 2024, compared to the same period of last fiscal year.

The increase in selling expenses was mainly due

to increased employee bonuses.

Bad debt provision increased by $0.78 million

during the three months ended March 31, 2024, compared to the same period of last fiscal year.

The increase was due to different bad debt

provision methods in 2024.

The Company recorded $0.01 million of research

and development expenses during the nine months ended September 30, 2023.

Research and development expenses include salaries, contracted

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

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

Research and development expenses decreased

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

The decrease in research

and development expenses was mainly due to decreased salaries.

Write back of provision of doubtful debt recorded

$1.15 million during the nine months ended September 30, 2023, it was due to bad debt recovery recognized in previous years and the Company

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

and development expenses.

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

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

enhance our existing products and services to our clients.

Research and development expenses decreased by $0.21 million during the three

months ended March 31, 2024, compared to the same period of last fiscal year.

The decrease in research and development expenses was mainly

due to decreased salaries.

Other Income (Expense), Net

Other expenses, net increased by $1.67 million

to negative $0.71 million for the nine months ended September 30, 2023 from positive $2.00 million in the same period of the last fiscal

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

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

Tax provision decreased by $0.44 million for the

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

revenue from asset management service.

to $1.72 million for the three months ended March 31, 2024 from $0.04 million in the same period of the last fiscal year, primarily due

to legal fees of litigation with FT Global.

Tax provision decreased by $0.03 million for

the three months ended March 31, 2024, primarily due to decreased revenue.

Non-controlling Interests

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

Resources Ltd.

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

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

and 20% interest in FTFT Capital Investments L.L.C., respectively;

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

2.22% and Choi Tsz Leung holds 2.78% of equity interest of NATM, respectively;

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

Digital Capital.

Loss from Continuing Operations

Loss from Continuing Operations decreased by $2.33

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

decrease in operating expenses, as discussed above.

Nature Worldwide Resources Ltd.

holds 40% interest in DCON DigiPay

Limited (“DCON Digipay”).

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

respectively.

Aspenwood Capital Partner Limited holds 9.52%, Lau kwai Chun holds 9.05%, Cheung Hiu Tung holds 1.9% and Choi Tsz Leung

holds 2.38% of equity interest of NATM.

Yaohua Dai holds 20% equity interest of Future Fintech Digital Capital.

Net loss from continue operation

Net loss from continue operation increased by

$1.83 million from $2.14 million for the three months ended March 31, 2023 to $3.97 million for the same period of 2024 mainly due to

the increase in operating expenses, as discussed above.

Gain on disposal of discontinued operations

Gain on disposal of discontinued operation was

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

on June 16, 2023.

$0.65 million for the three months ended March 31, 2024, which was related to the dissolution and deregistration of Chain Cloud Mall

Network and Technology (Tianjin) Co., Limited.

Loss per Share

Basic and diluted loss per share from continuing

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

operations were $0.20 and $0.20 for the three months ended March 31, 2024, respectively, as compared to a loss of $0.14 and $0.14 for

the same periods of 2023, respectively.

Basic and diluted income per share attributable to discontinued operations was $0.03 and $0.03

for the nine months ended September 30, 2023, respectively.

for the three months ended March 31, 2024, respectively.

Basic and diluted earnings per share attributable to discontinued operations

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

was $0.01 and $0.01 for the three months ended March 31, 2023, respectively.

Liquidity and Capital Resources

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

As of March 31, 2024, we had cash and restricted

cash of $14.89 million, as compared to $19.03 million as of December 31, 2023.

The increase in cash, cash equivalents and restricted cash

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

The decrease in cash, cash equivalents and restricted

cash was mainly due to increased other receivables from the first quarter of 2024.

Our working capital has historically been generated

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

Our working capital was $39.14 million as of

September 30, 2023, a decrease of $7.34 million from working capital of $46.48 million as of December 31, 2022, mainly due to the decrease

Our working capital was $36.78 million as

of March 31, 2024, a decrease of $0.69 million from working capital of $36.76 million as of March 31, 2023, mainly due to the decrease

in current assets and an increase in current liabilities.

Net cash used in operating activities increased

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

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

Net cash provided by investing activities increased

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

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

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

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

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

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

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

Off-balance sheet arrangements

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

cash used in operating activities decreased by $2.12 million to $8.15 million for the three months ended March 31, 2024 from $10.33 million

for the same period of the last fiscal year.

The decrease in net cash used by operating activities was primarily due to decrease in other

Net cash used in investing activities increased

$0.61 million to $0.80 million for the three months ended March 31, 2024 from $0.20 million for the same period of the last fiscal year.

It was due to increase in payment for short term investment.

cash provided in financing activities for the three months ended March 31, 2024 was $2.55 million representing an increase of $2.61 million,

as compared to cash used in financing activities of $0.06 million during the three months ended March 31, 2023.

increase in cash provided by financing activities was mainly due to proceeds from the issuance of common stock from a private placement,

net of issuance costs.

Off-balance sheet arrangements

As of March 31, 2024, we did not have any off-balance

sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis