What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-19 compared with 2024-08-19 · 257 added, 242 removed, 325 unchanged (61% 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.

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

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

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

activity, performance, or achievements.

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

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

Readers are urged to carefully

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

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

Overview of Our Business

11 unchanged sentences

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.

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

36 unchanged sentences

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

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

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;

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.

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;

(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.

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

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

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

with relevant laws and regulations.

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

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

or other foreign stock exchange except

for the filing requirement under New Overseas Listing Rules.

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).

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.

On February 24, 2023, the CSRC, the Ministry of Finance,

the National Administration of State Secretes Protection and the National Archives Administration released the Provisions on Strengthening

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

Confidentiality and Archives Administration Provisions, which took effect on March 31, 2023.

PRC domestic enterprises seeking to offer

securities and list in overseas markets, either directly or indirectly, shall establish and improve the system of confidentiality and

archives work, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their

overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of state organs

to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals.

further stipulates that (i) providing or publicly disclosing documents and materials which may adversely affect national security or public

interests, and accounting records or photocopies thereof to relevant securities companies, securities service institutions, overseas regulatory

agencies and other entities and individuals shall be subject to corresponding procedures in accordance with relevant laws and regulations;

and (ii) any working papers formed in the territory of the PRC by securities companies and securities service agencies that provide domestic

enterprises with securities services relating to overseas securities issuance and listing shall be stored in the territory of the PRC,

the outbound transfer of which shall be subject to corresponding procedures in accordance with relevant laws and regulations.

date of this report, these new laws and guidelines that became effective have not impacted the Company’s ability to conduct its

business, accept foreign investment or list on a U.S.

or other foreign stock exchange except for the filing requirement under New Overseas

Listing Rules.

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

5 unchanged sentences

has no operation before the acquisition.

The Company tried

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

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 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,

46 unchanged sentences

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.

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

5 unchanged sentences

DigiPay FinTech Limited (“DigiPay”), a company incorporated under the laws of the British Virgin Islands, Future

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

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”), 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 Inc.

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.

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,

4 unchanged sentences

We sign purchase and sale agreements with suppliers

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.

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

14 unchanged sentences

NTAM offers diversified asset management portfolio for professional

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

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

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

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

NTAM mainly engages in following asset management

7 unchanged sentences

When NTAM manages clients’ investment portfolio

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

good credit rating and asset liability ratio.

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

with the same maturity and credit rating.

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

credit rating and asset liability ratio.

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

the same maturity and credit rating.

(3) Precious metals and currencies investment

NTAM also manages clients’ investment portfolio

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

offshore Chinese yuan.

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

Chinese yuan.

Precious metals include gold, platinum and silver.

With research on the fundamentals of market supply and demand

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

options and structured products.

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

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

structured products.

(4) Derivative Investment

7 unchanged sentences

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

As of June 30, 2024, NTAM has approximately

US$348 million assets under its management.

As of September 30, 2024, NTAM has

approximately US$367 million assets under its management.

FTFT International Securities and Futures Limited,

24 unchanged sentences

in the United Kingdom and there are many companies that offer remittance services.

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

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.

32 unchanged sentences

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.

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 June 30,

Comparison of Three Months ended September

30, 2024 and 2023:

The following table presents our consolidated

revenues for the three months ended June 30, 2024 and 2023, respectively:

revenues for the three months ended September 30, 2024 and 2023, respectively:

Three months ended

September 30,

Asset management service

Supply Chain Financing/Trading

The increase in revenue for the three months ended

June 30, 2024 was primarily due to more revenue from asset management service, as the Company hired more seasoned account managers to

boost the services and the revenues.

Supply chain financing/trading decreased $0.31

million from $0.37 million for the three months ended June 30, 2023 to $0.06 million for the same period of 2024.

It was due to coal prices

have decreased in China and the market demand has also decreased in the second quarter 2024.

(19,562,368 )

$ (18,562,049 )

Revenue for the three months ended September 30,

2024 decreased to approximately $5.18 million from approximately $23.74 million for the same period of the last year.

The decrease in

revenue for the three months ended September 30, 2024 was primarily due to decrease revenue from supply chain financing/trading, as the

real estate, infrastructure and overall economy in China have slowed down in 2024.

The demand for sand and steel has dropped during three

months ended September 30, 2024 comparing to the same period of 2023, and coal price has decreased in China and the market demand has

also decreased during the third quarter 2024 as comparing to the same period of 2023.

Asset management service revenues increased $0.44

million from $3.27 million for the three months ended September 30, 2023 to $3.71 million for the same period of 2024, as the Company

hired more seasoned account managers to boost the services and the revenues.

Other revenues increased from $0.47 million for

the three months ended June 30, 2023 to $0.35 million for the same period of 2024, mainly due to the increased debt recovery consulting

the three months ended September 30, 2023 to $1.04 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 $0.20 million, as we did not have such income in the second quarter

dollar bond service income of approximately $0.50 million, as we did not have such income in the third 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 revenue, for the three months ended June 30, 2024 and 2023, respectively:

Three months ended June 30,

of the related revenue, for the three months ended September 30, 2024 and 2023, respectively:

Three months ended September 30,

Asset Management Service

Supply Chain Financing/Trading

Overall gross profit increased to $1.59 million

for three months ended June 30, 2024 from $1.24 million for the same period of 2023.

The increase is mainly due to the increase of gross

profits from asst management service and others business which is in line with the increase of revenues for these business segments during

the second quarter of 2024.

Overall gross margin as a percentage of revenue was 37.93% for the three months ended June 30, 2024, an increase

of 4.54% from 33.39% for the same period of last fiscal year, mainly due to increase in profit margin for our others business, as we generated

certain new revenues that we did not have during the second quarter 2023.

gross profit increased to $1.51 million for three months ended September 30, 2024 from $1.41 million for the same period of 2023.

increase is mainly due to the increase of gross profit from others business which is in line with the increase of revenues for such business

segment during the third quarter of 2024.

Overall gross margin as a percentage of revenue was 29.25% for the three months ended September

30, 2024, an increase of 22.42% from 5.95% for the same period of last fiscal year, mainly due to higher profit margin from supply chain

financing/trading business and other businesses for the three months ended September 30, 2024, comparing to the same period of 2023, which

was mainly due to higher supply chain financing/trading cost in 2023, and the

increased debt recovery consulting service fee as well as U.S.

dollar bond service income of approximately $0.50 million in third quarter

of 2024 as we did not have such income in the third quarter 2023.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the three months ended June 30, 2024 and 2023, respectively:

Second quarter of 2024

Second quarter of 2023

operating expenses and operating expenses as a percentage of revenue for the three months ended September 30, 2024 and 2023, respectively:

Third quarter of 2024

Third quarter of 2023

General and administrative

1 unchanged sentence

Selling expenses

Impairment Loss

Bad debt provision

Total operating expenses

General and administrative expenses increased

by $0.97 million, or 39.87%, to $3.39 million for the three months ended June 30, 2024, from $2.42 million for the same period of last

The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for

litigation with FT Global and internal control training fees.

General and administrative expenses decreased

by $0.47 million, or 12.45%, to $3.32 million for the three months ended September 30, 2024, from $3.79 million for the same period of

last fiscal year.

The decrease in general and administrative expenses was mainly due to decreased professional service fees and rental

Selling expenses increased by $0.01 million during

the three months ended June 30, 2024, compared to the same period of last fiscal year.

Bad debt provision decreased by $0.95 million

during the three months ended June 30, 2024, compared to the same period of last fiscal year.

The decrease was due to bad debt recovery

the three months ended September 30, 2024, compared to the same period of last fiscal year.

Bad debt provision increased by $3.37 million

during the three months ended September 30, 2024, compared to the same period of last fiscal year.

The increase was due to bad debt recovery

recognized in previous years and a different bad debt provision accounting treatment method used in 2024.

The Company recorded $0.002 million of research

and development expenses.

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

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

enhance our existing products and services to our clients.

Research and development expenses decreased by $0.11 million during the three

months ended June 30, 2024, compared to the same period of last fiscal year.

The decrease in research and development expenses was mainly

due to decreased salaries.

The Company recorded $655 of research and development

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 $0.02 million during the three months ended September

30, 2024, compared to the same period of last fiscal year.

The decrease in research and development expenses was mainly due to decreased

Other Income (Expense), Net

Other expenses, net decreased by $1.18 million

to $0.09 million for the three months ended June 30, 2024 from $1.27 million in the same period of the last fiscal year, primarily due

to the escrow payment of a civil penalty for the amount of $1,650,000 during the three months ended June 30, 2023 for the settlement with

the Securities and Exchange Commission and impact of exchange gains and losses.

Tax provision decreased by $0.04 million for

the three months ended June 30, 2024, primarily due to decreased revenue.

Other expenses, net increased by $0.23 million

to $0.38 million for the three months ended September 30, 2024 from $0.15 million in the same period of the last fiscal year, primarily

due to change of foreign currency exchange rate and impact of exchange gains and losses.

Tax provision decreased by $10,735 for the three

months ended September 30, 2024, primarily due to decreased revenue.

Non-controlling Interests

Nature Worldwide Resources Ltd.

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.

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.

1 unchanged sentence

Net loss from continue operation increased by

$0.26 million from $1.54 million for the three months ended June 30, 2023 to $1.80 million for the same period of 2024 mainly due to

the increase in operating expenses, as discussed above.

Comparison of Six Months ended June 30,

$2.54 million from $2.39 million for the three months ended September 30, 2023 to $4.93 million for the same period of 2024 mainly due

to the increase in operating expenses, as discussed above.

Comparison of Nine Months ended September

30, 2024 and 2023:

The following table presents our consolidated

revenues for the six months ended June 30, 2024 and 2023, respectively:

Three months ended

revenues for the nine months ended September 30, 2024 and 2023, respectively:

Nine months ended

September 30,

Asset management service

Supply Chain Financing/Trading

The increase in revenue for the six months ended

June 30, 2024 was primarily due to more revenue from asset management service, as the Company hired more seasoned account managers to

boost the services and the revenues.

Supply chain financing/trading increased $0.03

million from $0.48 million for the six months ended June 30, 2023 to $0.51 million for the same period of 2024.

(19,536,723 )

$ (16,321,894 )

Revenue for the nine months ended September 30,

2024 decreased to approximately $14.5 million from approximately $30.82 million for the same period of the last year.

The decrease in

revenue for the nine months ended September 30, 2024 was primarily due to decrease revenue from supply chain financing/trading, as the

real estate, infrastructure and overall economy in China have slowed down in 2024.

The demand for sand and steel has dropped during nine

months ended September 30, 2024 comparing to the same period of 2023, and coal price has decreased in China and the market demand has

also decreased during three quarters in 2024 as comparing to the same period of 2023.

Asset management service increased $2.18 million

from $9.69 million for the nine months ended September 30, 2023 to $11.88 million for the same period of 2024.

It was due to the Company

hired more seasoned account managers to boost the services and the revenues.

Other revenues increased from $0.66 million for

the six months ended June 30, 2023 to $0.65 million for the same period of 2024, mainly due to the increased debt recovery consulting

the nine months ended September 30, 2023 to $1.69 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 $0.44 million, as we did not have such income during the six

months ended June 30, 2023.

dollar bond service income of approximately $0.60 million and cryptocurrency mining service income of $0.65

million, as we did not have such income in 2023.

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 six months ended June 30, 2024 and 2023, respectively:

Six months ended June 30,

of the related revenues, for the nine months ended September 30, 2024 and 2023, respectively:

Nine months ended September 30,

Asset management service

Supply Chain Financing/Trading

Overall gross profit increased to $3.55 million

for six months ended June 30, 2024 from $2.44 million for the same period of 2023.

The increase is mainly due to the increase of gross

profits from asset management service business others which is in line with the increase of revenues for these two business segments during

six months ended June 30, 2024.

Overall gross margin as a percentage of revenue was 38.02% for the six months ended June 30, 2024, an

increase of 3.52% from 34.49% for the same period of last fiscal year, 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 six months ended June 30, 2024, which has much lower profit margin than the revenue

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

gross profit increased to $5.06 million for nine months ended September 30, 2024 from $3.86 million for the same period of 2023.

increase is mainly due to others including debt recovery consulting service fee as well as U.S.

dollar bond service income of approximately

$0.60 million and cryptocurrency mining service income of $0.65 million, as we did not have such income in 2023.

Overall gross margin

as a percentage of revenue was 34.89% for the nine months ended September 30, 2024, an increase of 22.38% from 12.51% for the same period

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

30, 2024, comparing to the same period of 2023, which was mainly due to higher supply chain financing/trading cost in 2023.

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2024 and 2023, respectively:

Six months ended

June 30, 2024

Six months ended

June 30, 2023

operating expenses and operating expenses as a percentage of revenue for the nine months ended September 30, 2024 and 2023, respectively:

Nine months ended

September 30, 2024

Nine months ended

September 30, 2023

General and administrative

1 unchanged sentence

Selling expenses

Impairment Loss

Bad debt provision

1 unchanged sentence

General and administrative expenses increased

by $1.01 million, or 17.44%, to $6.81 million for the six months ended June 30, 2024 from $5.80 million for the same period of last fiscal

The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for litigation

with FT Global and internal control training fees.

Selling expenses increased by $0.17 million during

the three months ended June 30, 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 decreased by $1.73 million

during the six months ended June 30, 2024, compared to the same period of last fiscal year.

The decrease was due to bad debt recovery

by $0.54 million, or 5.62%, to $10.13 million for the nine months ended September 30, 2024 from $9.59 million for the same period of last

The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for

litigation with FT Global and internal control training fees.

expenses increased by $0.18 million during the nine months ended September 30, 2024, compared to the same period of last fiscal year.

The increase in selling expenses was mainly due to increased employees’ salaries.

Bad debt provision increased by $5.09 million

during the nine months ended September 30, 2024, compared to the same period of last fiscal year.

The increase was due to bad debt recovery

recognized in previous years and a different bad debt provision accounting treatment method used in 2024.

The Company recorded $0.002 million of research

and development expenses during six months ended June 30, 2024.

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 $0.32 million during the three months ended June 30, 2024, compared to the same period of last fiscal year.

The decrease in research

and development expenses was mainly due to decreased salaries.

The Company recorded $3,029 of research and development

expenses during nine months ended September 30, 2024.

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 $0.34

million during the nine months ended September 30, 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 $0.67 million

to $1.52 million for the six months ended June 30, 2024 from $0.89 million in the same period of the last fiscal year, primarily due

to the e scrow payment of a civil penalty for the amount of

$1,650,000 during the three months ended June 30, 2023 for the settlement with the Securities and Exchange Commission and impact of exchange

gains and losses.

Tax provision decreased by $0.06 million for

the six months ended June 30, 2024, primarily due to decreased revenue.

expenses, net increased by $0.43 million to $1.15 million for the nine months ended September 30, 2024 from $0.71 million in the same

period of the last fiscal year, primarily due to primarily due to civil penalty payments for the settlement with the Securities and Exchange

Commission, and change of foreign currency exchange rate and impact of exchange gains and losses.

Tax provision decreased by $0.07 million for the

nine months ended September 30, 2024, primarily due to decreased revenue.

Non-controlling Interests

9 unchanged sentences

Net loss from continue operation increased by

$2.09 million from $3.68 million for the six months ended June 30, 2023 to $5.77 million for the same period of 2024 mainly due to the

increase in operating expenses, as discussed above.

$4.63 million from $6.07 million for the nine months ended September 30, 2023 to $10.70 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

$0.65 million for the six months ended June 30, 2024, which was related to the dissolution and deregistration of Chain Cloud Mall Network

and Technology (Tianjin) Co., Limited.

$0.64 million for the nine months ended September 30, 2024, which was related to the dissolution and deregistration of Chain Cloud Mall

Network and Technology (Tianjin) Co., Limited and Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership).

Loss per Share

Basic and diluted loss per share from continuing

operations were $0.29 and $0.29 for the six months ended June 30, 2024, respectively, as compared to a loss of $0.24 and $0.24 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 six months ended June 30, 2024, respectively.

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

and $0.01 for the six months ended June 30, 2023, respectively.

operations were $0.53 and $0.53 for the nine months ended September 30, 2024, respectively, as compared to a loss of $0.40 and $0.40 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, 2024, respectively.

Basic and diluted loss per share attributable to discontinued operations was

$0.01 and $0.01 for the nine months ended September 30, 2023, respectively.

Liquidity and Capital Resources

As of June 30, 2024, we had cash and restricted

As of September 30, 2024, we had cash and restricted

cash of $6.52 million, as compared to $19.02 million as of December 31, 2023.

The decrease in cash, cash equivalents and restricted cash

was mainly due to increased other current asset from the six months ended June 30, 2024.

was mainly due to increased other current asset from the nine months ended September 30, 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 $33.48 million as

of June 30, 2024, a decrease of $7.61 million from working capital of $41.79 million as of June 30, 2023, mainly due to the decrease

Our working capital was $28.29 million as of

September 30, 2024, a decrease of $10.85 million from working capital of $39.14 million as of September 30, 2023, mainly due to the decrease

in current assets and an increase in current liabilities.

Net cash used in operating activities increased

by $4.98 million to $11.94 million for the six months ended June 30, 2024 from $6.96 million for the same period of the last fiscal year.

The increase in net cash used by operating activities was primarily due to increase in accounts receivable and advances to suppliers

and other current assets.

Net cash provided by investing activities decreased

$14.56 million to $0.08 million for the six months ended June 30, 2024 from $14.64 million for the same period of the last fiscal year.

by $6.10 million to $13.52 million for the nine months ended September 30, 2024 from $7.43 million for the same period of the last fiscal

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

Net cash used in investing activities increased

$14.94 million to $1.18 million for the nine months ended September 30, 2024 from positive $13.76 million for the same period of the last

It was due to decrease in repayment for loan receivable.

Net cash provided in financing activities for

the six months ended June 30, 2024 was $2.34 million representing an increase of $2.36 million, as compared to cash used in financing

activities of $0.01 million during the six months ended June 30, 2023.

The 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.

the nine months ended September 30, 2024 was $1.32 million representing an increase of $4.23 million, as compared to cash used in financing

activities of $2.91 million during the nine months ended September 30, 2023.

The 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 June 30, 2024, we did not have any off-balance

sheet arrangements.

As of September 30, 2024, we did not have any

off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis