Future FinTech Group Inc. 10-K

ITEM 9A – CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2024. 53 The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by a company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2024, due to a material weakness in our internal control over financial reporting., we currently are training our staff with the appropriate level of knowledge, experience and training in U.S. GAAP and SEC reporting requirements. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our consolidated financial statements in accordance with U.S. GAAP. Our accounting policies and internal controls over financial reporting, established and maintained by management, are under the general oversight of the Board’s audit committee. Our internal control over financial reporting includes those policies and procedures that: ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed our internal control over financial reporting as of December 31, 2024. The standard measures adopted by management in making its evaluation are the measures in the Internal-Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management’s assessment, our CEO and CFO concluded that our internal control over financial reporting as of December 31, 2024 was ineffective. We have taken, and are taking, certain actions to remediate the material weakness related to our lack of U.S. GAAP and SEC reporting experience. We engaged a consultant with U.S. GAAP knowledge and experience to supplement our current internal accounting personnel and assist us in the preparation of our financial statements to ensure that our financial statements are prepared in accordance with U.S. GAAP. We also engaged an internal control consulting firm in July 2023 to review, test and improve our internal accounting controls and internal control over financial reporting. We have adopted and are implementing policies, procedures and practices recommended in the report of the consultant and have arranged training of internal control for our employees and management on disclosure controls and procedures. We believe the measures described above will remediate the material weakness. The Company continues to make efforts to implementing its existing and newly adopted procedures to improve our disclosure controls and internal controls over financing reporting. Changes to Internal Control over Financial Reporting Other than discussed above, there has been no change to our internal control over financial reporting that occurred during the period covered by this annual report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B – OTHER INFORMATION None ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 54 PART III ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Executive Officers The following table sets forth as of April 11, 2025, the names, positions and ages of our current executive officers and directors. Our directors serve until the next annual meeting of shareholders or until their successors are elected and qualified. Our officers are elected by the Board and their terms of office are, except to the extent governed by an employment contract, at the discretion of the Board. Name of Current Director and/or Executive Officer Age Position(s) Hu Li (1) 51 Chief Executive Officer (“CEO”), President and Director Ming Yi (2) 44 Chief Financial Officer (“CFO”) Peng Lei (3) 47 Chief Operating Officer (“COO”) Fuyou Li (4)(5) 71 Independent Director and Chairman of the Board of Directors Mingyong Hu (4)(6) 46 Independent Director Mingjie Zhao (4)(7) 59 Independent Director Ying Li (8) 36 Vice President and Director (1) Hu Li was appointed as CEO, President and a member of the Board of Directors of the Company on August 5, 2024. (2) Ming Yi was appointed as CFO of the Company on November 30, 2020. (3) Peng Lei was appointed as the COO of the Company on July 28, 2023. (4) Member of the audit committee and compensation committee. (5) Fuyou Li was appointed a member of the Board of Directors of the Company on May 8, 2015 and as the Chairman of the Board on June 23, 2021. (6) Mingyong Hu was appointed a member of the Board of Directors of the Company on October 1, 2024. (7) Mingjie Zhao was appointed a member of the Board of Directors of the Company on July 15, 2020. (8) Ms. Ying Li was appointed as a member of the Board on June 23, 2021. Hu Li, Chief Executive officer, President and Director of the Board Mr. Hu Li has served as the Chief Executive Officer, President of the Company and a member of the Board since August 5, 2024. Mr. Li has served as the Corporate Secretary of the Company since June 2019. Mr. Li has served as a director and Chief Executive Officer of FTFT International Securities and Futures Limited, a wholly owned subsidiary of the Company since January 2024. Mr. Li has served as a director of the Board of Directors of Shineco, Inc. (Nasdaq: SISI) since September 2021. Mr. Li served as the chief supervisor of Anhui Yihai Mining Equipment Co., Ltd., a public company in China NEEQ Market (Stock Symbol: 831451) from February 2018 to July 2021. From September 2015 to February 2018, Mr. Li served as the Vice General Manager of Shaanxi Huipu Financial Leasing Co., Ltd. Mr. Li obtained his master’s degree in Business Administration (MBA) from Xi’an Technology University in 2008 and bachelor’s degree from Xi’an Fanyi University in 1996 . The Board believes that Mr. Hu’s significant experience in investment and management will be an asset to the Company and the Board . 55 Ming Yi, Chief Financial Officer On November 30, 2020, the Board of the Directors appointed Mr. Ming Yi as the Chief Financial Officer (“CFO”) of the Company. Mr. Yi has served as an independent director of Hudson Capital Inc. (Nasdaq: HUSN) since March 31, 2020. Mr. Yi was the Chief Financial Officer of SSLJ.com Limited from July 2018 to July 2019. From June 2011 to August 2018, Mr. Yi was the Chief Financial Officer and a board member of Wave Sync Corp. (formerly known as China Bio-Energy Corp). From September 2009 to April 2011, he served as a senior manager at Qi He Certified Public Accountants Co. Ltd. Form July 2007 to August 2010, Mr. Yi was a senior auditor at Ernst & Young. Mr. Yi received his Bachelor of Science degree in Accounting from School of Business Administrations of Liaoning University in 2004 and his Master of Science degree in Accounting and Finance from Victory University, Australia in 2006. Mr. Yi is a Certified Public Accountant in Australia . Peng Lei, Chief Operating Officer On July 28, 2023, the Company appointed Mr. Peng Lei as the Chief Operating Officer (“COO”) of the Company. Mr. Peng Lei has served as general manager of Future Commercial Management Co., Ltd., a wholly owned subsidiary of the Company since July 2022. From July 2019 to July 2022, Mr. Lei served as the general manager of Xi’an Dingtaiheng Supply Chain Management Co., Ltd. and Ningbo Tielin Supply Chain Management Co., Ltd. From March 2014 to July 2019, Mr. Lei served as a director and general manager of Changan Parking Investment Management (Shanghai) Co., Ltd. From April 2010 to March 2014, Mr. Lei was the manager of Xi’an Zhonglou Sub-branch of Shanghai Pudong Development Bank. Mr. Lei received his Ph.D. degree and master’s degree in finance from the School of Economics and Finance of Xi’an Jiaotong University in September 2011 and July 2009, respectively. Mr. Lei received his bachelor’s degree in international finance from the School of Management of Xi’an Jiaotong University in July 1999. Fuyou Li , Director and Chairman of the Board Mr. Fuyou Li has served as a member of the Board and a member of the audit and compensation committees of the Board since May 8, 2015. Mr. Li was appointed as the Chairman of the Board on June 23, 2021. Mr. Li graduated from Xi’an Jiaotong University with a doctor’s degree in economics. He has taught international finance as a professor at Xi’an Jiaotong University from 2000 to July 2023. The Board believes his qualifications, professional background and expertise in international finance are important to the Company and the Board. Mingyong Hu , Director On October 1, 2024, the Board appointed Mingyong Hu as a member of the Board of Directors of the Company. Mr. Hu is also the Chairman of Audit committee of the Board and a member of the Compensation Committee of the Board. Mr. Mingyong Hu was the founder and CFO of Beijing Xiaowu Supply Chain Technology Co., Ltd. from August 2021 to April 2024. From March 2019 to July 2021, Mr. Hu was the executive vice president of Zhenghua Guotai International Trading Co., Ltd. From October 2017 to March 2019, Mr. Hu was the general manager of Zhongrong Dinghui (Beijing) Equity Investment Fund Management Co., Ltd. From January 2016 to October 2017, Mr. Hu was the executive vice president of Zhongsheng Wantong Equity Investment Fund Management (Beijing) Co., Ltd. From June 2007 to December 2015, Mr. Hu was a partner and executive deputy general manager of Zhonghao Investment Group Co., Ltd. Mr. Mingyong Hu received his bachelor’s degree in accounting from Hunan University in July 2001. Mr. Hu is a Certified Public Accountant of China, and he also holds Certification of Securities Professional and Fund Qualification Certificate in China. 56 Mingjie Zhao, Director Mr. Mingjie Zhao was appointed as a member of the Board and Chairman of the Compensation Committee and a member of Audit Committee of the Board on July 15, 2020. Mr. Zhao has served as a director of New York Hua Yang, Inc. since April 2018. From July 2016 to March 2018, Mr. Zhao served as Chief Executive Officer of TD Holdings, Inc. (formerly known as China Commercial Credit Inc. and Nasdaq: GLG). Mr. Zhao was the Chief Operating Officer and a director of New York Hua Yang, Inc. from September 2011 to July 2016. Mr. Zhao obtained his Master of Business Administration degree from University of Bridgeport in Connecticut in May 2003 and his Bachelor of Science degree from China Eastern Normal University in Shanghai, China in July 1985. The Board believes that Mr. Zhao’s experience and extensive knowledge in management and public company is essential to the Compan y. Ying Li, Director and Vice President Ms. Ying Li was appointed as a member of the Board on June 23, 2021 and she has served as a director of Alpha International Securities (HONG KONG) Limited since September 9, 2020 and as a director of Alpha International Financial Holdings Limited since February 5, 2020. The Company acquired FTFT International Securities and Futures Limited in November 2023 and changed its name to FTFT International Securities and Futures Limited. Ms. Li has served as the vice president of the Company and a director of Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company since July 2016. From October 2011 to December 2019, Ms. Li served as the secretary of the Board of the Company. Ms. Li received her bachelor’s degree in English from Xi’an International Studies University in July 2010. The Board believes that Ms. Li’s extensive business and operational knowledge of the Company qualifies her as a member of the Board. All of our directors and officers reside outside of the United States, except for Mr. Mingjie Zhao. Mr. Peng Lei, Mr. Hu Li, Mr. Ming Yi, Ms. Ying Li and Fuyou Li reside in China. Board Diversity Matrix Board Diversity Matrix (As of April 11, 2025) Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background   Asian (other than South Asian) 5 Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that directors, certain officers of the Company and ten percent shareholders file reports of ownership and changes in ownership with the Commission as to the Company’s securities beneficially owned by them. Such persons are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of such forms received by the Company, or on written representations from certain reporting persons, the Company believes that, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent shareholders were complied with during the fiscal year ended December 31, 2024,. 57 Code of Ethics We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our code of business conduct and ethics is available on our website at www.ftft.com and may be found by first clicking on “Investors,” then “Corporate Governance” and then “Governance Documents.” We intend to disclose any amendments to the code, or any waivers of its requirements, on our website. Committees of the Company’s Board of Directors The Board held 10 regularly scheduled and special meetings during fiscal year 2024. All of the directors attended (in person or by telephone) all of the Board meetings and any committees of the Board on which they served during the fiscal year. Directors are expected to use their best efforts to be present at the shareholders annual meeting. All of our directors attended the December 5, 2024 shareholders annual meeting by tele-conference or in person. Audit Committee On April 25, 2008, the Board formed an audit committee. Messrs. Hu, Li and Zhao currently serve on the audit committee, which is chaired by Mr. Lau. Each member of the audit committee is “independent” as that term is defined in the rules of the SEC and within the meaning of such term as defined under the rules of the NASDAQ Capital Market. The Board has determined that each audit committee member has sufficient knowledge in financial and auditing matters to serve on the audit committee. The audit committee held 4 meetings during fiscal year 2024, and all audit committee members attended each of those meetings. Our Board has determined that Mr. Hu is an “audit committee financial expert,” as defined under the applicable SEC rules. The audit committee has a written charter, which is available on the Company’s website at http://www.ftft.com. Management is responsible for the Company’s internal controls and the financial reporting process. The independent accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing reports thereon. The audit committee’s responsibility is to monitor these processes. The audit committee meets with management, the leader of the internal audit function, and the independent accounting firm to facilitate communication. In addition, the audit committee appoints the Company’s independent accounting firm and pre-approves all audit and non-audit services to be performed by the independent accounting firm. Compensation Committee On April 25, 2008, the Board formed a compensation committee. Messrs. Hu, Li and Zhao currently serve on the compensation committee, which is chaired by Mr. Zhao. Each member of the compensation committee is “independent” as that term is defined in the SEC rules and within the meaning of such term as defined under the rules of the NASDAQ Capital Market, a “nonemployee director” for purposes of Section 16 of the Exchange Act. No interlocking relationship exists between the Board or the compensation committee and the Board or compensation committee of any other company, nor has any interlocking relationship existed during the last fiscal year. The compensation committee held 3 meetings during fiscal year 2024. The compensation committee has a written charter, which is available on the Company’s website at http://www.ftft.com/. Our Board has delegated to the compensation committee the responsibility, among other things, to determine any and all compensation payable to our executive officers, including annual salaries, incentive compensation, long-term incentive compensation and any other compensation, and to administer our equity and incentive compensation plans applicable to our executive officers. Decisions regarding executive compensation made by the compensation committee are considered final and are not generally subject to Board review or ratification. Under the terms of its written charter, the compensation committee has the power and authority to delegate any of its duties and responsibilities to subcommittees as the compensation committee may deem appropriate in its sole discretion. Historically, the compensation committee has not generally delegated any of its duties and responsibilities to subcommittees, but rather has taken such actions as a committee, as a whole. Deliberations and decisions by the compensation committee concerning executive officers are made by the compensation committee, without the presence of the any executive officer of the Company. 58 Other Committees The Board may on occasion establish other committees, as it deems necessary or required. We do not currently have a standing nominating committee, or a committee performing similar functions. The full Board currently serves this function. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the Board. The independent directors of the Board will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment by the Board. Other than the Rule 14a-19 under the Exchange Act, there have been no material changes to the procedures by which security holders may recommend nominees to the Board. Board Leadership Structure Our Board of Directors is currently comprised of five members, including three independent directors who serve as members of our audit committee and compensation committee. Our Board leadership structure consists of a Chairman of the Board. Currently, Mr. Fuyou Li, an independent director, serves as Chairman of the Board. The Board of Directors believes that this leadership structure, with Mr. Fuyou Li serving as the Chairman and Mr. Hu Li serving as Chief Executive Officer, is appropriate at this time because it enables the Board, as a whole, to engage in oversight of management, promote communication and collaboration between management and the Board, and oversee governance matters, while allowing our Chief Executive Officer to focus on his primary responsibility, the operational leadership and strategic direction of the Company. In addition to chairing the Board, Mr. Li is a member of the Audit and Compensation Committees. Board independence and oversight of the senior management of the Company are enabled by the presence of independent directors who have a wide range of expertise and skills and have oversight over critical functions of the Company, such as the review of business development, evaluation and compensation of executive management, the nomination of directors. Our independent directors collectively provide additional strength and balance to our Board leadership structure. Compensation Committee Interlocks and Insider Participation None of the Company’s executive officers has served as a member of a compensation committee, or other committee serving an equivalent function, of any other entity whose executive officers serve as a director of the Company or member of the Company’s compensation committee. Family Relationships There are no family relationships between any current executive officer or director of the Company. ITEM 11 – EXECUTIVE COMPENSATION Compensation Discussion and Analysis Compensation Objectives We operate in a highly competitive and rapidly changing industry. The key objectives of our executive compensation programs are to: ● attract, motivate and retain executives who drive our success and industry leadership; and provide executive officers, with a salary and/or stock award on the market value of that role, and ● the individual’s demonstrated ability to perform that role. 59 Stock Incentive Plans The Board of Directors of the Company approved and adopted the Future FinTech Group Inc. 2024 Omnibus Equity Plan (the “2020 Equity Plan”) on October 12, 2024, which was approved by the shareholders at the shareholders annual meeting on December 5, 2024., to provide equity awards to employees, directors and consultants of the Company (the “2024 Plan”). There are 5,000,000 shares of commons stock available for awards under 2024 Plan. On March 10, 2025, the Compensation Committee of the Board granted stock awards of 5,000,000 shares of common stock of the Company, pursuant to the Company’s 2024 Omnibus Equity Plan, to sixteen officers and employees of the Company and its subsidiaries, including: 300,000 shares to Hu Li, Chief Executive Officer of the Company (All the share numbers stated here are before the 1 for 10 reverse stock split effected in April 1, 2025) The Board of Directors of the Company approved and adopted the Future FinTech Group Inc. 2023 Omnibus Equity Plan (the “2023 Equity Plan”) on October 12, 2023, which was approved by the shareholders at the shareholders annual meeting on December 5, 2023. The 2023 Equity Plan has a total of 5,000,000 shares of Common Stock. On December 23, 2023 (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company granted stock awards of 2,890,000 shares of common stock of the Company, pursuant to the Company’s 2023 Equity Plan, to sixteen officers and employees of the Company and its subsidiaries (the “Grantees”), including: 200,000 shares to Shanchun Huang, Chief Executive Officer and President of the Company, 40,000 shares to Peng Lei, Chief Operating Officer of the Company, and 30,000 shares to Hoo Lee, Corporate Secretary of the Company (collectively, the “Grants”). The Grants vested immediately on the Grant Date and each of the Grantees also entered into an Unrestricted Stock Award Agreement with the Company on December 23, 2023. On October 4, 2024, the Company granted the remaining 2,110,000 share under 2023 Omnibus Equity Plan to 4 employees of the Company and its subsidiaries. (All the share numbers stated here are before the 1 for 10 reverse stock split effected in April 1, 2025) We believe that the future success of the Company depends, in large part, upon the ability of the Company to maintain a competitive position in attracting, retaining and motivating key personnel. What Our Executive Compensation Program is Designed to Reward Our executive compensation program is designed to reward each individually named executive officer’s contribution to the advancement of our overall performance and execution of our goals, ideas and objectives. It is designed to reward and encourage exceptional performance at the individual level in the areas of organization, creativity and responsibility while supporting our core values and ambitions. This in turn aligns the interest of our executive officers with the interests of our shareholders, and thus with our interests. Determining Executive Compensation The Board’s compensation committee reviews and approves the compensation for executive officers annually. The compensation committee considers the overall performance of the past year and the financial and operating plans for the upcoming year in determining the compensation for the executive officers. A named executive officer’s base salary is determined by an assessment of his/her sustained performance against individual job responsibilities, including, where appropriate, the impact of his/her performance on our business results, current salary in relation to the salary range designated for the job, experience and mastery, and potential for advancement. The compensation committee also annually reviews market compensation levels with comparable jobs in the industry to determine whether the total compensation for our officers remains in the targeted median pay range. Role of Executive Officers in Determining Executive Compensation The compensation committee determines the compensation for the CEO, which is based on various factors, such as level of responsibility and contributions to our performance. The CEO recommends the compensation for our executive officers (other than the compensation of the CEO) to the compensation committee. The compensation committee reviews the recommendations made by the CEO and determines the compensation of the CFO and the other executive officers. 60 Employment Agreements We entered into an Employment Agreement with our CEO, Mr. Hu Li, on August 5, 2024 with a term of three year subject to renewal. Mr. Li receives compensation in the amount of $7,000 per month and will be eligible for an annual cash and equity bonus in the Board’s sole discretion. On November 16, 2020, the Company entered into an employment agreement with Mr. Yang Liu as COO of the Company and the term of the agreement is for one (1) year, which has been renewed until November 16, 2023. The agreement provides that Mr. Liu receives compensation in the amount of $1 per year. On July 27, 2023, Mr. Yang Liu resigned from his position as the COO of the Company, effective on July 28, 2023. On July 28, 2023, the Board of Directors of the Company appointed Mr. Peng Lei as the COO of the Company. In connection with his appointment as COO, the Company entered into an employment agreement (the “Agreement”) with Mr. Peng Lei on August 1, 2023. The Agreement provides that Mr. Lei will receive compensation in the amount of $50,000 per year before tax and the term of the Agreement is for one (1) year which was renewed until August 1, 2025. On December 1, 2020, the Company entered into an employment agreement with Mr. Ming Yi as CFO of the Company and the term of the agreement is for one (1) year, which has been renewed until December 1, 2025. The agreement provides that Mr. Yi receives compensation in the amount of $4,000 per month before tax. Summary Compensation of Named Executive Officers Our executive officers do not receive any compensation from the Company for also serving as directors of the Company. The following table sets forth information concerning cash and non-cash compensation paid by the Company to our named executive officers for the years ended December 31, 2024 and 2023. Name and Principal Position Year Ended Salary ($) Bonus ($) Stock Awards ($) Option Awards Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Yongke Xue (1) 12/31/2023 $ 4,683 - - - - - $ 4,683 Shanchun Huang (2) 12/31/2023 $ 1 $ - $ 248,000 - - - - $ 248,001 12/31/2024 $ 90,740 - - - - - $ 90,740 Ming Yi (3) 12/31/2023 $ 44,276 $ - $ 44,276 12/31/2024 $ 47,180 - - - - - $ 47,180 Hu Li (4) 12/31/2024 $ 49,389 $ $ 49,389 Peng Lei (5) 12/31/2023 $ 51,213 $ 49,600 $ 100,813 12/31/2024 $ 50,753 $ 50,753 (1) On March 4, 2020, Mr. Yongke Xue resigned as the CEO of the Company and on June 23, 2021, Mr. Xue was appointed as the president of the Company.. Mr. Yongke Xue passed away on November 24, 2023. 61 (2) On March 4, 2020, Mr. Shanchun Huang was appointed as the CEO of the Company. The compensation committee of the Board granted him a stock award for 200,000 shares of common stock of the Company under 2023 Equity Plan on December 23, 2023. Mr. Shanchun Huang was resigned as CEO and President of the Company on August 5, 2024. (3) On November 30, 2020, the Board of the Directors appointed Mr. Ming Yi as the CFO of the Company. (4) On August 5, 2024, Mr. Hu Li was appointed ad CEO and President of the Company. (5) Mr. Peng Lei served as general manager of Future Commercial Management Co., Ltd., a wholly owned subsidiary of the Company since July 2022 and was appointed as COO of the Company on July 28, 2023. On December 23, 2023, the compensation committee of the Board granted him a stock award of 40,000 shares of common stock of the Company under 2023 Equity Plan. * All share granted before January 31, 2023 have been retroactively restated to reflect Reverse Stock Split effected on February 1, 2023 but not restated to reflect the 1 for 10 reverse split effected on April 1, 2025. Outstanding Equity Awards at December 31, 2024 No outstanding equity awards held by named executive officers as of December 31, 2024. Compensation of Directors The following table sets forth information concerning cash and non-cash compensation paid by us to our directors during 2024. Name Fees Paid in Cash ($) Stock Awards Option Awards Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Shanchun Huang(1) $ — — — — — — $ — Ying Li $ — — — — — — $ — Fuyou Li (2) $ 18,000 — — — — — $ 18,000 Johnson Lau (3) $ 20,833 — — — — — $ 20,833 Mingyong Hu (4) $ 3,000 — — — — — $ 3,000 Hu Li (5) $ — — — — — — $ --- Mingjie Zhao (6) $ 25,000 — — — — $ 25,000 (1) Mr. Shanchuan Huang resigned as Chief Executive Officer, President and Director of the Company on August 5, 2024. (2) On May 8, 2015, the Board appointed Mr. Fuyou Li as a member of the Board of Directors and a member of both the audit committee and compensation committee. Before June 30, 2021, Mr. Li was entitled for $8,850 per annum as compensation for his service as director of the Company and a member of the audit committee and compensation committee. On June 23, 2021, the Board appointed Mr. Fuyou Li as the Chairman of the Board and his annual compensation increased to $18,000 after June 30, 2021. 62 (3) On December 23, 2014, the Board appointed Johnson Lau as a member of the Board of Directors of the Company and he served as the Chairman of Audit Committee and a member of Compensation Committee of the Board. Mr. Lau is entitled for $25,000 per annum as compensation for his services as a director of the Company and chair of the audit committee and a member of compensation committee. Mr. Lau resigned as the member of the Board, Chairman of the Audit Committee and a member of Compensation Committee, effective on September 30, 2024. (4) Mr. Mingyong Hu was appointed as a member of the Board, Chairman of the Audit Committee and a member of Compensation Committee of the Board, effective immediately, to fill the vacancy following the resignation of Mr. Lau. (5) Mr. Hu Li was appointed as Chief Executive Officer, President and Director of the Company on August 5, 2024, following the resignation of Mr. Shanchun Huang. (6) On July 15, 2020, the Board appointed Mr. Mingjie Zhao as a member of the Board and Chairman of the Compensation Committee and a member of Audit Committee of the Board. Mr. Zhao is entitled for $25,000 per annum as compensation for his current services as a director of the Company and chair of the compensation committee and a member of audit committee. ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Security Ownership of Certain Beneficial Owners and Management The following table provides information concerning beneficial ownership of our capital stock as of April 11, 2025, by: ● each shareholder or group of affiliated shareholders who owns more than 5% of our outstanding capital stock; ● each of our named executive officers; ● each of our directors; and all of our directors and ● executive officers as a group. The following table lists the number of shares and percentage of shares beneficially owned based on 3,050,770 shares of our Common Stock outstanding as of April 11, 2025. The Company effected a 1 for 10 reverse split on April 1, 2025. Beneficial ownership is determined in accordance with the SEC rules, and generally includes voting power and/or investment power with respect to the securities held. Shares of Common Stock subject to options and warrants currently exercisable or exercisable within 60 days of April 11, 2025 or issuable upon conversion of convertible securities which are currently convertible or convertible within 60 days of April 11, 2025 are deemed outstanding and beneficially owned by the person holding those options, warrants or convertible securities for purposes of computing the number of shares and percentage of shares beneficially owned by that person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and investment power with respect to all shares of our Common Stock shown as beneficially owned by them. 63 Unless otherwise indicated in the footnotes, the principal address of each of the shareholders, named executive officers, and directors below is c/o Future FinTech Group, Inc., Americas Tower, 1177 Avenue of The Americas, Suite 5100, New York, NY 10036. Shares Beneficially Owned Name of Beneficial Owner Number Percent Directors and Named Executive Officers Hu Li 30,000 * % Ming Yi 2,400 * % Ying Li - - Mingjie Zhao - - Peng Lei 14,940 * % Fuyou Li - - Mingyong Hu - - All current directors and name executive officers as a group (8 persons) 47,340 1.5 % 5% or Greater Shareholders Zeyao Xue (1) 385,287 12.6 % All 5% or Greater Shareholders 385,287 12.6 % * Less than 1% (1) Including 352,277 shares directly owned by Mr. Zeyao Xue and 33,011 shares indirectly and beneficially owned by Mr. Zeyao Xue, which consists of (i) 29,342 shares that are directly owned by Golden Dawn International Limited (“Golden Dawn”), a British Virgin Islands company and (ii) 3,668 shares that are directly owned by China Tianren Organic Food Holding (“China Tianren”). Mr. Zeyao Xue holds all of the issued and outstanding capital stock of Fancylight Limited, which is an indirect 100% owner of Golden Dawn and China Tianren. As such, Mr. Zeyao Xue holds the beneficial ownership of shares owned by Golden Dawn and China Tianren. The address of Zeyao Xue is No.3, Xijuyuan Xiang, Lianhu District, Xi’an City, Shaanxi Province, China. ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE For details of related party transactions, see Note 16 “Related Party Transaction” to our consolidated financial statements. Director Independence We currently have five directors. Three of our current directors, Messrs. Mingyong Hu, Fuyou Li and Mingjie Zhao, have been determined by our Board to be “independent directors” as defined under the rules of the NASDAQ Capital Market, constituting a majority of independent directors of the Board as required by the rules of the NASDAQ Capital Market. ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES The following table shows the fees that we paid or accrued for audit and other services for fiscal years 2024 and 2023. All of the services described in the following fee table were approved in conformity with the audit committee’s pre-approval process. Audit Fees 2024 2023 Audit Fees $ 354,440 $ 312,000 Tax Fees — All Other Fees 63,000 78,350 Total $ 417,440 $ 390,350 64 Audit Fees The amounts set forth opposite “Audit Fees” above reflect the aggregate fees billed or billable by auditors Fortune CPA Inc. (“Fortune CPA”) for the audit of our annual consolidated financial statements, review of quarterly financial information and audit services that are normally provided by the principal accountant in connection with regulatory filings or engagements. Fortune CPA provided professional services for the audit of our fiscal years 2024 and 2023 financial statements and $354,440 and $312,000 were paid to Fortune CPA for audit of our fiscal years 2024 and 2023 financial statements, respectively. All Other Fees Our former auditor Onestop Assurance PAC (“Onestop Assurance”) provided professional services for the audit of our fiscal year 2022 financial statements and $78,350 was paid in 2023 for review of our filings and Form S-8 and $63,000 was paid for review of our 2023 annual report in 2024. Tax Fees The Board audit committee’s policy is to pre-approve all audit services and all non-audit services that our independent accountants are permitted to perform for us under applicable federal securities regulations. The audit committee’s policy utilizes an annual review and general pre-approval of certain categories of specified services that may be provided by the independent accountant, up to pre-determined fee levels. Any proposed services not qualifying as a pre-approved specified service, and pre-approved services exceeding the pre-determined fee levels, require further specific pre-approval by the audit committee. The audit committee has delegated to the Chairman of the audit committee the authority to pre-approve audit and non-audit services proposed to be performed by the independent accountants. Our audit committee was established in April 2008. All the services provided by our auditors in fiscal years 2024 were pre-approved by the audit committee. Changes in Registrant’s Certified Accountant On August 2, 2023, the Audit Committee of the Board of Directors of Future FinTech Group, Inc. (the “Company”) dismissed Onestop Assurance PAC (“Onestop Assurance”) as the Company’s independent registered public accounting firm, effective immediately. Onestop Assurance’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit reports on the consolidated financial statements of the Company for the fiscal years ended December 31, 2022 and December 31, 2021 contained an uncertainty about the Company’s ability to continue as a going concern. During the Company’s two fiscal years of 2022 and 2021 and in the subsequent interim period through August 1, 2023, there were (i) no disagreements between the Company and Onestop Assurance on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Onestop Assurance, would have caused Onestop Assurance to make reference to the subject matter of the disagreement in their reports on the financial statements for such years, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K. On August 2, 2023, the Audit Committee of the Board of Directors of the Company approved the engagement of Fortune CPA, Inc. (“Fortune CPA”) as the Company’s independent registered public accounting firm, effective immediately. The Audit Committee also approved Fortune CPA to act as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023. During the Company’s two fiscal years of 2022 and 2021 and through August 1, 2023, neither the Company nor anyone on its behalf consulted Fortune CPA regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company; or (ii) any matter that was either the subject of a disagreement or a reportable event as described above; and there was neither a written report nor was oral advice provided to the Company by Fortune CPA that was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue. The Company reported its change in auditors in Current Report on Form 8-K, filed on Augst 8, 2023. 65 PART IV ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) FINANCIAL STATEMENTS: The following documents are filed as part of or are included in this Annual Report: 1. Financial statements listed in the Index to Financial Statements, filed as part of this Annual Report beginning on page F-1; and 2. Exhibits (b) EXHIBITS: Exhibit Index Exhibit Number Description 2.1 Share Exchange Agreement, dated as of February 22, 2008 by and among Pacific Industry Holding Group Co., Ltd., “Pacific,” Terrence Leong, SkyPeople Fruit Juice, Inc., the “Registrant,” and the shareholders of Pacific. Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed with the Commission on February 28, 2008. 3.1 Second Amended and Restated Articles of Incorporation, dated June 6, 2017. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on June 9, 2017. 3.2 Certificate of Designations, Preferences and Rights of the Registrant’s Series A Convertible Preferred Stock. Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the Commission on February 28, 2008. 3.3 Certificate of Designations, Preferences, Rights and Limitations of the Registrant’s Series B Convertible Preferred Stock. Incorporated by reference to Exhibit 3.2 to the Form 8-K filed with the Commission on February 28, 2008. 3.4 Amended and Restated Bylaws, dated June 6, 2017. Incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed with the Commission on June 9, 2017. 3.5 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 10, 2016. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 15, 2016. 3.6 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 14, 2018. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 16, 2018. 3.7 Articles of Amendment to the Articles of Incorporation of the Registrant filed with the Department of State of Florida on March 18, 2021. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on March 23, 2021. 3.8 Articles of Amendment to the Second Amended and Restated Articles of Incorporation of the Registrant filed with Department of State of Florida on January 26, 2023. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on January 31, 2023. 3.9 Articles of Amendment to the Second Amended and Restated Articles of Incorporation of the Registrant filed with Department of State of Florida on April 1, 2025. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on April 1, 2025. 4.1 Form of Warrant. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Commission on April 13, 2017. 4.2 Form of Placement Agent Warrant. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the Commission on December 28, 2020. 4.3 Description of Securities of the Registrant registered under Section 12 of the Securities Exchange Act of 1934, as amended.* 66 Exhibit Number Description 10.1 Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 14, 2011. 10.2 Exclusive Operation and Use Rights Authorization Letter by Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., dated July 31, 2019. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.3 Exclusive Technology Consulting and Service Agreement by and between Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd. and Chain Cloud Mall E-commerce (Tianjin) Co., Ltd, dated July 31, 2019. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.4 Exclusive Purchase Option Agreement by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. Zeyao Xue and Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.5 Equity Pledge Agreement by and among by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. and Zeyao Xue, dated July 31, 2019. Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.6 Equity Pledge Agreement by and among by and among Chain Cloud Mall Network and Technology (Tianjin) Co., Ltd., Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. and Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.7 Power of Attorney issued by Zeyao Xue, dated July 31, 2019. Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.8 Power of Attorney issued by Kai Xu, dated July 31, 2019. Incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the Commission on August 6, 2019. 10.9 Consulting Service Agreement by and between Future FinTech Group Inc. and Dragon Investment Holding Limited (Malta) dated January 25, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on January 29, 2020 10.10 Director Agreement by and between Future FinTech Group Inc. and Mingjie Zhao dated July 15, 2020. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 17, 2020. 67 Exhibit Number Description 10.11 Share Purchase Agreement by and between FTFT UK Limited and Rahim Shah dated September 1, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on September 7, 2021. 10.12 Collateral Deed by and between FTFT UK Limited and Rahim Shah dated September 1, 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on September 7, 2021. 10.13 FTFT North American Ohio Cryptocurrency Mining Farm Cooperation Agreement by and between Future FinTech Group Inc. and APC Service Ltd. dated December 13, 2021. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 17, 2021. 10.14 Form of Unrestricted Stock Award Agreement by and between Future FinTech Group Inc. and Grantees dated on July 12, 2022. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on July 15, 2022. 10.15 Share Transfer Agreement by and between Future FinTech (Hong Kong) Limited and Alpha Financial Limited dated February 27, 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 1, 2023. 10.16 Employment Agreement by and between the Company and Peng Lei dated August 1, 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on August 2, 2023. 10.17 Form of Unrestricted Stock Award Agreement by and between Future FinTech Group Inc. and Grantees dated on December 23, 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 26, 2023. 10.18 Securities Purchase Agreement by and between Future FinTech Group, Inc. and Streeterville Capital, LLC, dated December 27, 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 27, 2023. 10.19 Convertible Promissory Note, issued by Future FinTech Group, Inc. to Streeterville Capital, LLC, dated December 27, 2023. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Commission on December 27, 2023. 10.20 Form of Securities Purchase Agreement dated January 5, 2024. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on January 8, 2024. 10.21 Amendment to Convertible Promissory Note dated February 11, 2024. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on February 14, 2024. 10.22 Employment Agreement by and between Future FinTech Group, Inc. and Mr. Hu Li, dated August 5, 2024. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on August 9, 2024. 10.23 Director Agreement by and Between the Company and Mingyong Hu dated October 1, 2024 . Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on October 4, 2024. 10.24 Stock Purchase Agreement by and among Future FinTech Group Inc., FTFT SuperComputing Inc. and DDMM Capital LLC dated on December 6, 2024. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on December 11, 2024. 14.1 Code of Business Conduct and Ethics Incorporated by reference to Exhibit 14.1 to our Annual Report on Form 10-K filed with the Commission on April 16, 2024. 16.1 Letter from Onestop Assurance PAC to SEC, dated August 8, 2023. Incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed with the Commission on August 10, 2023. 19.1 Insider Trading Policy Incorporated by reference to Exhibit 19.1 to our Annual Report on Form 10-K filed with the Commission on April 16, 2024. 21.1 Description of Subsidiaries of the Registrant* 23.1 Consent of Fortune CPA Inc.* 31.1 Rule 13a-14(a) Certification of Principal Executive Officer of Registrant* 31.2 Rule 13a-14(a) Certification of Principal Financial Officer of Registrant* 32.1 Section 1350 Certification of Principal Executive Officer of Registrant.† 32.2 Section 1350 Certification of Principal Financial Officer of Registrant.† 97.1 Clawback Policy Incorporated by reference to Exhibit 97.1 to our Annual Report on Form 10-K filed with the Commission on April 16, 2024. 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith † Furnished herewith (c) Other Financial Statement Schedules - None. 68 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Future FinTech Group Inc. April 15, 2025 By: /s/ Hu Li Hu Li Chief Executive Officer, President and Director (principal executive officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Hu Li and Ming Yi, and each of them, their attorneys-in-fact and agents, each with the power of substitution, for them in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Signature Name and Title Date /s/ Hu Li Hu Li April 15, 2025 Chief Executive Officer, President and Director (principal executive officer and Director) /s/ Ming Yi Ming Yi April 15, 2025 Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Fuyou Li Fuyou Li April 15, 2025 Chairman of the Board of Directors and Director /s/ Mingjie Zhao Mingjie Zhao, Director April 15, 2025 /s/ Mingyong Hu Mingyong Hu, Director April 15, 2025 /s/ Ying Li Ying Li, Director April 15, 2025 69 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Audited Consolidated Financial Statements of Future FinTech Group Inc. Report of Independent Registered Public Accounting Firm (PCAOB ID: 6901) F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Comprehensive Income (Loss) F-5 Consolidated Statements of Changes in Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Future FinTech Group Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Future FinTech Group Inc. (the “Company”) and its subsidiaries as of December 31, 2024 and 2023, and the related consolidated statements of operation, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. The Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered losses from operations. Therefore, the Company has stated substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. F- 2 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Going Concern As described further in Note 2 to the financial statements, the Company financial statements are prepared assuming that the Company will continue as a going concern. We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s future cash flows and the risk of bias in management’s judgments and assumptions in estimating these cash flows. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others: We reviewed the Company’s working capital and liquidity ratios, operating expenses, and uses and sources of cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least one year from the financial statement issuance date. This testing included the inquiries with management, analyzing the subsequent company financial position, and consideration the positive and negative evidence impacting management’s arrangements in place as of the report date. /s/ Fortune CPA, Inc We have served as the Company’s auditor since 2023. Orange, CA April 15, 2025 PCAOB # 6901 F- 3 FUTURE FINTECH GROUP INC. CONSOLIDATED BALANCE SHEETS December 31, 2024 December 31, 2023* ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,842,741 $ 17,412,865 Short - term investments 1,391 959,028 Accounts receivable, net 2,088,962 4,409,812 Advances to suppliers and other current assets 4,974,277 3,437,925 Loan receivables 7,094,764 14,895,086 Other receivables, net 1,694,752 7,589,038 Amount due from related parties 20,000 12,151 Assets related to discontinued operations - 5,774,564 TOTAL CURRENT ASSETS $ 20,716,887 $ 54,490,469 Property, plant and equipment, net $ 2,599,194 $ 2,812,151 Right of use assets - operation lease 523,792 448,035 Intangible assets 532,822 588,982 Debt investment 1,530,243 - Assets related to discontinued operation - 2,601,113 TOTAL NON-CURRENT ASSETS $ 5,186,051 $ 6,450,281 TOTAL ASSETS $ 25,902,938 $ 60,940,750 LIABILITIES CURRENT LIABILITIES Accounts payable $ 2,219,301 $ 3,301,715 Accrued expenses and other payables 9,938,495 11,115,595 Advances from customers 30,559 303,711 Convertible notes payables 553,086 1,100,723 Lease liability - operation lease 334,017 353,268 Amounts due to related parties 37,907 103,530 Liability related to discontinued operation - 1,449,820 TOTAL CURRENT LIABILITIES $ 13,113,365 $ 17,728,362 NON-CURRENT LIABILITIES Lease liability - operation lease 192,754 106,525 Liability related to discontinued operation $ - $ 690,819 TOTAL NON-CURRENT LIABILITIES 192,754 797,344 TOTAL LIABILITIES $ 13,306,119 $ 18,525,706 Commitments and contingencies (Note 23) STOCKHOLDERS’ EQUITY Future FinTech Group, Inc, Stockholders’ equity Common stock, $ 0.001 par value; 60,000,000 shares authorized; 24,470,844 shares and 17,834,874 shares issued and outstanding as of December 31, 2024 and December 31, 2023 respectively* $ 24,470 $ 17,835 Additional paid-in capital 237,474,153 233,890,997 Statutory reserve 98,357 98,357 Accumulated deficit ( 218,885,534 ) ( 185,929,662 ) Accumulated other comprehensive loss ( 4,248,561 ) ( 4,094,276 ) Total Future FinTech Group, Inc. stockholders’ equity 14,462,885 43,983,251 Non-controlling interests ( 1,866,066 ) ( 1,568,207 ) Total stockholders’ equity 12,596,819 42,415,044 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 25,902,938 $ 60,940,750 * all shares and per share data have been retroactively restated to reflect reverse stock split effected on February 1, 2023. The accompanying notes are an integral part of these consolidated financial statements. F- 4 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended, 2024 2023* Revenue $ 2,158,125 $ 21,697,205 Cost 886,108 20,575,600 Gross profit 1,272,017 1,121,605 Operating Expenses General and administrative expenses 6,212,895 7,243,721 Research and development expenses 312,865 340,408 Stock-based compensation 670,980 3,468,000 Selling expenses 635,918 288,314 Provision (Recovery) of doubtful debts 27,350,439 ( 787,868 ) Impairment loss - 14,160,931 Total operating expenses 35,183,097 24,713,506 Loss from operations ( 33,911,080 ) ( 23,591,901 ) Other (expenses) income Interest income 1,105,674 1,314,230 Interest expenses ( 108,454 ) ( 892 ) Other (expenses) income, net ( 1,319,982 ) ( 10,541,007 ) Total other expenses, net ( 322,762 ) ( 9,227,669 ) Loss from Continuing Operations before Income Tax ( 34,233,842 ) ( 32,819,570 ) Income tax provision - - Deferred income tax - ( 7,833 ) Loss from Continuing Operations ( 34,233,842 ) ( 32,827,403 ) Discontinued Operations (Note 21) Loss from discontinued operations - ( 1,574,978 ) Gain on disposal of discontinued operations 1,054,155 386,482 Net Loss $ ( 33,179,687 ) $ ( 34,015,899 ) Less: Net Loss attributable to non-controlling interests of discontinued operations ( 190,840 ) ( 108,046 ) Less: Net Loss attributable to non-controlling interests of continued operations ( 32,975 ) ( 254,625 ) Net loss attributable to Future Fintech Group Inc. $ ( 32,955,872 ) $ ( 33,653,228 ) Other comprehensive income (loss) Loss from continued operations $ ( 34,233,842 ) $ ( 32,827,403 ) Foreign currency translation – continued operations ( 154,285 ) ( 494,786 ) Comprehensive loss - continued operation ( 34,388,127 ) ( 33,322,189 ) Gain (Loss) from discontinued operations $ 1,054,155 $ ( 1,188,496 ) Foreign currency translation - discontinued operation 114,723 23,515 Comprehensive income (loss) - discontinued operation 1,168,878 ( 1,164,981 ) Comprehensive Loss $ ( 33,219,249 ) $ ( 34,487,170 ) Less: Net loss attributable to non-controlling interests of continued operations ( 32,975 ) ( 254,625 ) Less: Net loss attributable to non-controlling interests of discontinued operations ( 190,840 ) ( 108,046 ) COMPREHENSIVE LOSS ATTRIBUTABLE TO FUTURE FINTECH GROUP INC. STOCKHOLDERS $ ( 32,995,434 ) ( 34,124,499 ) Earnings (loss) per share: Basic loss per share from continued operation $ ( 1.63 ) $ ( 2.21 ) Basic earnings (loss) per share from discontinued operation 0.06 ( 0.07 ) $ ( 1.57 ) $ ( 2.28 ) Diluted Earnings (loss) per share: Diluted loss per share $ ( 1.63 ) $ ( 2.20 ) Diluted earnings (loss) per share from discontinued operation 0.06 ( 0.07 ) $ ( 1.57 ) $ ( 2.27 ) Weighted average number of shares outstanding Basic 20,928,073 14,746,726 Diluted 20,970,181 14,788,834 * Reclassification- certain reclassifications have been made to the financial statements for the period ended December 31, 2023 to conform to the presentation for the period ended December 31, 2024, with no effect on previously reported net income (loss). The accompanying notes are an integral part of these consolidated financial statements. F- 5 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Accumulative Additional Other Non- Common Stock paid-in Statutory Accumulated comprehensive controlling Shares Amount capital reserve Deficits income interests Total Balance at December 31, 2022 14,645,653 $ 14,646 $ 222,751,657 $ 98,357 $ ( 152,276,434 ) $ ( 3,623,005 ) $ ( 1,279,580 ) $ 65,685,641 Issuance of common stocks-non cash 299,221 299 7,387,398 - - - - 7,387,697 ) Net loss from continued operation - - - - ( 32,572,778 ) - ( 254,625 ) ( 32,827,403 ) Net loss from discontinued operations - - - - ( 1,466,932 ) - ( 108,046 ) ( 1,574,978 ) Contribution by non-controlling interests - - 286,832 - - - 74,044 360,876 Share-based payments-omnibus equity plan 2,890,000 2,890 3,465,110 - - - - 3,468,000 Disposition of Discontinued operation - - - - 386,482 23,515 - 409,997 Foreign currency translation adjustment - - - - - ( 494,786 ) - ( 494,786 ) Balance at December 31, 2023 17,834,874 $ 17,835 $ 233,890,997 $ 98,357 $ ( 185,929,662 ) $ ( 4,094,276 ) $ ( 1,568,207 ) $ 42,415,044 Issuance of common stocks-conversion of debt 2,375,434 2,375 622,625 - - - - 625,000 Issuance of common stocks-cash 2,150,536 2,150 2,578,493 - - - - 2,580,643 Net loss from continued operation - - - - ( 34,200,867 ) - ( 32,975 ) ( 34,233,842 ) Share-based payments-omnibus equity plan 2,110,000 2,110 668,870 - - - - 670,980 Disposition of Discontinued operation - - ( 286,831 ) - 1,244,995 114,723 ( 264,884 ) 808,002 Foreign currency translation adjustment - - - - - ( 269,008 ) - ( 269,008 ) Balance at December 31, 2024 24,470,844 $ 24,470 $ 237,474,153 $ 98,357 $ ( 218,885,534 ) $ ( 4,248,561 ) $ ( 1,866,066 ) $ 12,596,819 All shares and per share data have been retroactively restated to reflect reverse stock split effected on February 1, 2023. The accompanying notes are an integral part of these consolidated financial statements. F- 6 FUTURE FINTECH GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 33,179,687 ) $ ( 34,015,899 ) Net income (loss) from discontinued operation 1,054,155 ( 1,188,496 ) Net loss from continuing operations ( 34,233,842 ) ( 32,827,403 ) Adjustments to reconcile net income to net cash provided by operating activities Depreciation 209,254 201,363 Amortization 57,035 57,035 Provision (Recovery) of doubtful debts 27,350,439 ( 716,914 ) Impairment of goodwill - 14,148,298 Impairment of short term investment 9,315 12,633 Interest expenses related to convertible note 77,363 - Share-based payments 670,980 3,468,000 Changes in operating assets and liabilities Accounts receivable 2,637,772 5,564,429 Other receivables ( 10,366,870 ) ( 7,312,243 ) Advances to suppliers and other current assets ( 5,106,927 ) 1,219,839 Operating lease assets and liabilities ( 8,779 ) 11,757 Accounts payable ( 1,082,414 ) ( 4,407,094 ) Accrued expenses ( 1,177,100 ) 6,946,335 Advances from customers ( 273,152 ) ( 929,882 ) Net cash used in operating activities – continued operations ( 21,236,926 ) ( 14,563,847 ) Net cash provided by (used in) operating activities – discontinued operations 10,093,999 ( 24,066 ) CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment ( 34,056 ) ( 65,653 ) Disposal of property and equipment 230,738 32,490 Additions to loan receivables ( 421,249 ) ( 9,966,830 ) Repayment of loan receivable 280,833 14,107,063 Payment for Short term Investment 946,669 - Increase of financial products ( 1,391 ) - Debt investment ( 1,530,243 ) - Acquisition of a subsidiary, net of cash - 4,679,434 Disposal of a subsidiary, net of cash ( 1,101,201 ) ( 5,993 ) Net cash (used in) provided by investing activities from continued operations ( 1,629,900 ) 8,780,511 Net cash used in investing activities from discontinued operations ( 2,064,479 ) ( 745,440 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issuance of common stock, net of issurance costs 2,580,643 - Notes payable ( 3,589,582 ) Proceeds from amounts due from related parties, net 166,766 83,055 Repayment of amounts due to related parties, net ( 240,238 ) - Proceeds from secured convertible promissory note - 1,100,723 Net cash provided by (used in) financing activities from continued operations 2,507,171 ( 2,405,804 ) Net cash provided by financing activities from discontinued operations - 582,056 Effect of change in exchange rate ( 239,989 ) ( 188,642 ) NET DECREASE IN CASH AND CASH EQUIVALENTS ( 12,570,124 ) ( 8,565,232 ) Cash and cash equivalents, from the continuing operations beginning of year 17,412,865 27,597,510 Cash and restricted cash at end of year 4,842,741 19,032,278 Less: Cash and cash equivalents from the discontinued operations, end of year - ( 1,619,413 ) Cash and cash equivalents, from the continuing operations end of year 4,842,741 17,412,865 SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION Conversion of debt 625,000 - SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid $ - $ 510,838 Interest paid 108,454 - The accompanying notes are an integral part of these consolidated financial statements. F- 7 FUTURE FINTECH GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR YEARS ENDED DECEMBER 31, 2024 AND 2023 1. CORPORATE INFORMATION Future FinTech Group Inc. (the “Company”) is a holding company incorporated under the laws of the State of Florida. The Company historically engaged in the production and sale of fruit juice concentrates (including fruit purees and fruit juices), fruit beverages (including fruit juice beverages and fruit cider beverages) in the PRC. Due to drastically increased production costs and tightened environmental laws in China, the Company had transformed its business from fruit juice manufacturing 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 a 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. 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) Co. Ltd.’, respectively. On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Alpha International Securities (HONG KONG) Limited a company incorporated in Hong Kong for $ 1,791,174 (HKD 14,010,421 ), which is in the securities business. The Company has changed its name from Alpha International Securities (HONG KONG) Limited to FTFT International Securities and Futures Limited on November 1, 2023. On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Alpha Information Services (Shenzhen) Co., Ltd for $ 210,788 (HKD 1,649,528 ), which provides information services for FTFT International Securities and Futures Limited. The Company has changed its name from Alpha Information Services (Shenzhen) Co., Ltd to Future information service (Shenzhen) Co., Ltd on November 3, 2023. F- 8 The Company’s business and operations are principally conducted by its subsidiaries in the PRC, Hong Kong and UK. 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 will 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 on February 1, 2023. The Reverse Stock Split and Amendment were authorized and approved by the Board of Directors of the Company without shareholders’ approval, pursuant to 607.10025 of the Florida Business Corporation Act of the State of Florida. The 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 reverse stock split would be reflected in our December 31, 2024 and December 31, 2023 statements of changes in stockholders’ equity, and in per share data for all periods presented. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation and principle of consolidation These consolidated financial statements (“financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America, or US GAAP. The Company’s functional currency of subsidiaries in China is the Chinese Renminbi (RMB). Other subsidiaries outside of China use U.S. Dollar (USD), Hong Kong Dollar (HKD), Great Britain Pound (“GBP”) and AED (United Arab Emirates Dirham) as the functional currency; however, the accompanying consolidated financial statements have been translated and presented in USD. According to US GAAP Accounting Standard Codification (“ASC”) 810-10-15-8, for legal entities other than limited partnerships, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. F- 9 The consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Discontinued Operations On June 16, 2023, QR (HK) Limited was dissolved and deregistered. On December 5, 2023, FTFT PARAGUAY S.A. was dissolved. On March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered. The loss on disposal was $ 45,487.54 . On September 4, 2024, Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership) was dissolved and deregistered. The loss on disposal was $ 22.46 . On October 18, 2024, Nice Talent Asset Management Limited (“NTAM”) was disposed of for a consideration of US$ 0.31 million (HK$ 2.40 million). The loss on disposal was $ 2.32 million. On December 6, 2024, FTFT Super Computing Inc. was disposed of for a consideration of US$ 1.97 million, of which (i) the assumption of the obligations of FTFT Super Computing totaling $ 973,072.24 and (ii) $ 1,000,000 was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global Capital, Inc. arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District of New York. The gain on disposal was $ 3.42 million. Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation. Segment Information Reclassification The Company classified business segment into asset management service, supply chain financing and trading, and others. Uses of Estimates in the Preparation of Financial Statements The Company’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but not limited to, the allowance for doubtful accounts receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. Going Concern The Company’s financial statements are prepared assuming that the Company will continue as a going concern. The Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. The Company’s operating losses amounted $ 36.62 million, and it had negative operating cash flows amounted $ 21.24 million as of December 31, 2024. These factors raise substantial doubts about the Company’s ability to continue as a going concern. The Company has raised funds through issuance of convertible notes and common stock. F- 10 The Company had net working capital of $ 7.60 million. The Company had current liabilities of $ 13.11 million which is expected to get repaid within twelve months. As of December 31, 2024, the Company had cash of $ 4.84 million, accounts receivable of $ 2.09 million and loan receivables of $ 7.09 million, which were expected to be liquid and used to repay the liabilities. As such, the Company believed it had sufficient cash to settled the liabilities within the next 12 months. The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Research and development Research and development expenses include salaries, contracted services, as well as the related expenses for our research and product development team, and expenditures relating to our efforts to develop, design, and enhance our service to our clients. The Company expenses research and development costs as they are incurred. Impairment of Long-Lived Assets In accordance with the ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets , long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. Fair Value of Financial Instruments The Company has adopted FASB ASC Topic on Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable input, which may be used to measure fair value and include the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Input other than Level 1 that is observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other input that is observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable input that is supported by little or no market activity and that is significant to the fair value of the assets or liabilities. Our cash and cash equivalents and restricted cash and short-term investments are classified within level 1 of the fair value hierarchy because they are value using quoted market price. Earnings (Loss) Per Share Under ASC 260-10, Earnings Per Share , basic EPS excludes dilution for Common Stock equivalents and is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of Common Stock outstanding for the period. F- 11 Diluted EPS is calculated by using the treasury stock method, assuming conversion of all potentially dilutive securities, such as stock options and warrants. Under this method, (i) exercise of options and warrants is assumed at the beginning of the period and shares of Common Stock are assumed to be issued, (ii) the proceeds from exercise are assumed to be used to purchase Common Stock at the average market price during the period, and (iii) the incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted EPS computation. The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table. For the year ended December 31, 2024: Income Share Pre-share amount Loss from continued operations attributable to Future Fintech Group, Inc. $ ( 34,200,867 ) 20,928,073 $ ( 1.63 ) Income from discontinued operations attributable to Future Fintech Group, Inc. $ 1,244,995 20,928,073 $ 0.06 Basic EPS: Loss to common stockholders from continuing operations $ ( 34,200,867 ) 20,928,073 $ ( 1.63 ) Income available to common stockholders from discontinued operations $ 1,244,995 20,928,073 $ 0.06 Dilutive EPS: Warrants - 42,108 - Diluted earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continued operations attributable to Future Fintech Group, Inc. $ ( 34,200,867 ) 20,970,181 $ ( 1.63 ) Diluted earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations $ 1,244,995 20,970,181 $ 0.06 For the year ended December 31, 2023: Income Share Pre-share amount Loss from continued operations attributable to Future Fintech Group, Inc. $ ( 32,572,778 ) 14,746,726 $ ( 2.21 ) Loss from discontinued operations attributable to Future Fintech Group, Inc. $ ( 1,080,450 ) 14,746,726 $ ( 0.07 ) Basic EPS: Loss to common stockholders from continuing operations $ ( 32,572,778 ) 14,746,726 $ ( 2.21 ) Loss available to common stockholders from discontinued operations $ ( 1,080,450 ) 14,746,726 $ ( 0.07 ) Dilutive EPS: Warrants before 1-for-5 reverse stock split - 210,526 - Warrants after 1-for-5 reverse stock split - 42,108 - Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continued operations attributable to Future Fintech Group, Inc. $ ( 32,572,778 ) 14,788,834 $ ( 2.20 ) Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations $ ( 1,080,450 ) 14,788,834 $ ( 0.07 ) F- 12 Cash, cash equivalents and restricted cash Cash and cash equivalents included cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. Deposits in banks in the PRC are only insured by the government up to RMB 500,000 , in the HK are only insured by the government up to HKD 500,000 , in the United Kingdom are only insured by the government up to GBP 18,000 , in the United States of America are only insured by the Federal Deposit Insurance Corporation up to USD 250,000 , and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is not included in the total cash and cash equivalents in the consolidated statements of cash flows. Receivable and Allowances Accounts receivable are recognized and carried at the original invoice amounts less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. Other receivables, and loan receivables are recognized and carried at the initial amount when occurred less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable impairment losses in our existing receivable. Allowances for doubtful accounts are maintained for expected credit losses resulting from the Company’s customers’ inability to make required payments. The allowances are based on the Company’s regular assessment of various factors, including the credit-worthiness and financial condition of specific customers, historical experience with bad debts and customer deductions, receivables aging, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. The Company maintains an allowance for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”) and records the allowance for credit losses as an offset to accounts receivable and contract assets, and the estimated credit losses charged to the allowance is classified as “bad debt expense” in the consolidated statements of comprehensive income. We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary. Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivable or otherwise evaluate other circumstances that indicate that we should abandon such efforts. The Company has assessed its receivable including credit term and corresponding all its receivables in December 2024. Upon such credit terms, bad debt expense was $ 27.35 million and $( 787,868 ) during the years ended December 31, 2024 and 2023, respectively. Accounts receivables of $ 1.15 million and nil have been outstanding for over 90 days as of December 31, 2024 and December 31, 2023, respectively. Revenue Recognition We apply the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We assess its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. Revenue arrangements with multiple performance obligations are divided into separate distinct goods or services. We allocate the transaction price to each performance obligation based on the relative standalone selling price of the goods or services provided. Revenue is recognized upon the transfer of control of promised goods or services to a customer. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. F- 13 We do not make any significant judgment in evaluating when control is transferred. Revenue is recorded net of value-added tax. Revenue recognitions are as follows: Sales of coals, aluminum ingots, sand and steel The Company recognize revenue when the receipt of merchandise is confirmed by the customers, which is the point that the title of the goods is transferred to the customer. Revenue was $ 0.83 million and $ 20.44 million during the year ended December 31, 2024 and 2023, respectively. Sales agent services of coals, aluminum ingots, sand and steel For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross revenue amount billed to customers as sales of goods listed above. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. The Company recognizes net revenue as agent services for the sales of coals, aluminum ingots, sand and steel when no control obtained throughout the transactions. Revenue was $ 0.15 million and $ 0.33 million during the year ended December 31, 2024 and 2023, respectively. Brokerage service Daily Bargain Detail Report will be submitted to accountant each day, and accountant posts commission based on received settlement report. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive income. Depreciation related to property, plant and equipment used in production is reported in cost of sales, and includes amortized amounts related to capital leases. We estimated that the residual value of the Company’s property and equipment ranges from 3 % to 5 %. Property, plant and equipment are depreciated over their estimated useful lives as follows: Building 30 years Machinery and equipment 5 - 10 years Furniture and office equipment 3 - 5 years Motor vehicles 5 years Intangible Assets Acquired intangible assets are recognized based on their cost to the Company, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s book. These assets are amortized over their useful lives if the assets are deemed to have a finite life and they are reviewed for impairment by testing for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants would use if they were pricing the intangible asset. The useful life of the Company’s intangible assets is five - ten years , which is determined by using the time period that an intangible is estimated to contribute directly or indirectly to a Company’s future cash flows. F- 14 Foreign Currency and Other Comprehensive Income (Loss) The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency; however, the reporting currency of the Company is the USD. Assets and liabilities of the Company’s foreign subsidiaries have been translated into USD using the exchange rate at the balance sheet dates, while equity accounts are translated using historical exchange rate. The exchange rate we used to convert RMB to USD was 7.19 :1 and 7.08 :1 at the balance sheet dates of December 31, 2024 and December 31, 2023, respectively. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert RMB to USD were 7.12 :1 and 7.05 :1 for fiscal year 2024 and fiscal year 2023, respectively. The exchange rate we used to convert HKD to USD was 7.76 :1 and 7.82 :1 at the balance sheet dates of December 31, 2024 and December 31, 2023. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert HKD to USD were 7.80 :1 and 7.83 :1 for fiscal year 2024 and fiscal year 2023. The exchange rate we used to convert GBP to USD was 0.79 :1 and 0.78 :1 at the balance sheet dates of December 31, 2024 and December 31, 2023. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert GBP to USD were 0.78 :1 and 0.80 :1 for fiscal year 2024 and fiscal year 2023. The exchange rate we used to convert AED to USD was 3.65 :1 and 3.66 :1 at the balance sheet dates of December 31, 2024 and December 31, 2023. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates we used to convert AED to USD were 3.66 :1 and 3.66 :1 for fiscal year 2024 and fiscal year 2023. Translation adjustments are reported separately and accumulated in a separate component of equity (cumulative translation adjustment). Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. For certain government subsidies, there are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. The government subsidies of operating nature with no further conditions to be met are recorded of operating expenses in “Other income” in the consolidated statements when received. The amendments in this update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. Income Taxes We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-25 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. F- 15 Goodwill The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value. The Company uses the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts of future revenue and operating margin. In addition, the discounted cash flow model requires the Company to select an appropriate weighted average cost of capital based on current market conditions as of December 31, 2024 and December 31, 2023. A high degree of auditor judgment and an increased extent of effort were required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts. Based upon the assessment, the Company has concluded that goodwill is nil as of December 31, 2024 and December 31, 2023. Short-term investments Short-term investments consist primarily of investments in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and other investments that the Company has the intention to redeem within one year. Fair valued or carried at amortized costs. As of December 31, 2024 and December 31, 2023, the short-term investments amounted to $ 1,391 and $ 0.96 million, respectively. Due to fluctuations of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of $ 12,633 in 2023. Long-term investments Long-term investments consist primarily of investments in debt investment with original maturities between three years and more. Fair valued or carried at amortized costs. As of December 31, 2024 and December 31, 2023, the long-term investments amounted to $ 1.83 million and nil , respectively. Due to the Company has received repayment $ 0.25 million (RMB 1,800,000 ) debt investment, the Company did not recognize an impairment. Lease We adopted ASU No. 2016-02, Leases (Topic 842), or ASC 842, from January 1, 2020. We determine if an arrangement is a lease or contains a lease at lease inception. For operating leases, we recognize a right-of-use (“ROU”) asset and a lease liability based on the present value of the lease payments over the lease term on the consolidated balance sheets at commencement date. As most of our leases do not provide an implicit rate, we estimate our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any lease payments made, net of lease incentives. Lease expense is recorded on a straight-line basis over the lease term. Our leases often include options to extend and lease terms include such extended terms when we are reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when we are reasonably certain not to exercise those options. Share-based compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. F- 16 Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10 % of after-tax profit until the aggregated appropriations reach 50 % of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10 % of after-tax profits until the aggregated appropriations reach 50 % of the registered capital (as determined under PRC GAAP at each year-end). New Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures.” This ASU expands required public entities’ segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023 07 is applied retrospectively to all periods presented in financial statements, unless it is impracticable. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance effective July 1, 2024 and the adoption of this ASU is not expected to have a material impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company plans to adopt this guidance effective July 1, 2025 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial statements. 3. ACCOUNTS RECEIVABLE Accounts receivable, net consist of the following: December 31, December 31, 2024 2023 Supply Chain Financing/Trading $ 2,038,730 $ 3,251,822 Others 50,232 1,157,990 Total accounts receivable, net $ 2,088,962 $ 4,409,812 F- 17 The following table sets forth our concentration of accounts receivable, net of specific allowances for doubtful accounts. December 31, December 31, 2024 2023 Debtor A $ 34.54 % $ 27.31 % Debtor B 18.99 % 19.86 % Debtor C 17.78 % 12.47 % Total accounts receivable, net $ 71.31 % $ 59.64 % 4. OTHER RECEIVABLES As of December 31, 2024, the balance of other receivables was $ 1.69 million deposit paid and prepayments to third parties. As of December 31, 2023, the balance of other receivables was $ 7.59 million. On February 3, 2023, Future Fintech Group Inc. entered into a “Consulting Agreement” with a third party for its professional service of potential acquisition projects. Future Fintech Group Inc. provided initial amount of cash deposit to the third party in the amount of $ 2.40 million. As of December 31, 2024, the project has been terminated, therefore a full provision for bad debts made. On December 6, 2023, Future Fintech (Hong Kong) Limited entered into a “Mobile Software Application Development Agreement” with a third-party. Future Fintech (Hong Kong) Limited shall pay $ 4.00 million. Future Fintech (Hong Kong) Limited provided initial amount of cash deposit to the third party in the amount of $ 2.00 million. Development shall take 250 man-days. As of December 31, 2024, the project has been terminated, therefore a full provision for bad debts. On December 6, 2023, Future Fintech (Hong Kong) Limited entered into a “Augmented Reality (AR) Group Development and Service Agreement” with a third-party. Future Fintech (Hong Kong) Limited shall pay $ 5.00 million. Future Fintech (Hong Kong) Limited provided initial amount of cash deposit to the third party in the amount of $ 2.50 million. Development shall take 180 man-days. As of December 31, 2024, the project has been terminated, therefore a full provision for bad debts made. In addition, other receivables included total $ 0.70 million deposit paid and prepayments to third parties. F- 18 5. LOAN RECEIVABLES As of December 31, 2024, the balance of loan receivables was $ 7.09 million, which was from a third party. On July 14, 2022, Future Private Equity Fund Management (Hainan) Co., Limited entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Private Equity Fund Management (Hainan) Co., Limited loaned an amount of $ 7.00 million (RMB 50 million) to the third party at the annual interest rate of 8 % from July 15, 2022 to July 14, 2025 , guarantee by Junde Chen. To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 4.87 million (RMB 35 million). As of December 31, 2024, the balance of loan receivables was $ 2.09 million. The amount of $ 2.09 million (RMB 15 million) will be repaid within 12 months. On December 8, 2023, Future Private Equity Fund Management (Hainan) Co., Limited entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Private Equity Fund Management (Hainan) Co., Limited loaned an amount of $ 4.86 million (RMB 35 million) to the third party at the annual interest rate of 5 % from December 8, 2022 to December 8, 2025 . As of December 31, 2024, the balance of loan receivables was $ 4.85 million. On August 29, 2024, Future Supply Chain (Xi’an) Co., Ltd entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Supply Chain (Xi’an) Co., Ltd loaned an amount of $ 0.14 million (RMB 1 million) to the third party at the annual interest rate of 12 % from August 29, 2024 to November 30, 2025. As of December 31, 2024, the balance of loan receivables was $ 0.14 million. As of December 31, 2023, the balance of loan receivables was $ 14.90 million, which was from a third party. On March 10, 2022, FTFT HK entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, FTFT HK loaned an amount of $ 5.00 million to the third party at the annual interest rate of 10 % from March 10, 2022 to September 9, 2024 . To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 2.16 million. The company assesses that the loan cannot be recovered, therefore a full provision for bad debts made in 2024. On July 14, 2022, Future Private Equity Fund Management (Hainan) Co., Limited entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Private Equity Fund Management (Hainan) Co., Limited loaned an amount of $ 7.28 million (RMB 50 million) to the third party at the annual interest rate of 8 % from July 15, 2022 to July 14, 2025 , guarantee by Junde Chen. To strengthen the liquidity, the Company negotiated with the borrower to early settle part of the loan. As of April 17, 2023, the Company has received repayment $ 5.09 million (RMB 35 million). On December 8, 2023, Future Private Equity Fund Management (Hainan) Co., Limited entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Private Equity Fund Management (Hainan) Co., Limited loaned an amount of $ 4.94 million (RMB 35 million) to the third party at the annual interest rate of 5 % from December 8, 2022 to December 8, 2025 . On December 8, 2023, Future Fin Tech (Hong Kong) Limited entered into a “Loan Agreement” with a third party. Pursuant to the Loan Agreement, Future Fin Tech (Hong Kong) Limited loaned an amount of $ 5.00 million to the third party at the annual interest rate of 5 % from December 8, 2022 to December 8, 2024 . The company assesses that the loan cannot be recovered, therefore a full provision for bad debts made in 2024. F- 19 6. SHORT - TERM INVESTMENTS As of December 31, 2024 and 2023, the balance of short - term investments was $ 1,391 and $ 0.96 million. On September 6, 2021, Future Private Equity Fund Management (Hainan) Co., Ltd. invested $ 1.87 million (RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types of investment portfolios. Due to fluctuations of the quoted shares included in its investment portfolios, the Company recognized an impairment to the investment portfolio of nil and $ 12,633 for the years ended December 31, 2024 and 2023. 7. ADVANCES TO SUPPLIERS AND OTHER CURRENT ASSETS The amount of advances to suppliers and other current assets consisted of the followings: December 31, December 31, 2024 2023 Prepayments for Supply Chain Financing/Trading $ 4,351,414 $ 2,743,539 Prepaid expenses 34,867 29,693 Others 587,996 664,693 Total $ 4,974,277 $ 3,437,925 8. DEBT INVESTMENT As of December 31, 2024, debt investment was $ 1.53 million. On May 20, 2024, Future Commercial Management Co., Ltd. entered into a “Debt Transfer Agreement” with a third-party. Future Commercial Management Co., Ltd. paid $ 0.71 million (RMB 5.00 million) to purchase $ 2.12 million (principal amount RMB 7.50 million, interest RMB 7.35 million) in debt. The debt has pledge of three properties, amount $ 2.08 million (RMB 8.02 million). The debt is expected to be repaid $ 1.14 million (RMB 8.00 million) within 3 years. The company will perform debt impairment test end of the fiscal year. On July 4, 2024, Future Commercial Management Co., Ltd., an indirectly wholly owned subsidiary of the Company, entered into a “Entrustment Agreement” with Xi’an Qifeng Future Supply Chain Co., Ltd. (“Xi’an Qifeng”) to entrust Xi’an Qifeng for acquisition of certain debt assets. On September 26, 2024, Xi’an Qifeng through its authorized agent entered into a “Debt Transfer Agreement” with China Zhongxin Financial Assets Management Co., Ltd. Gansu Branch, pursuant to which Future Commercial Management Co., Ltd. paid $ 1.12 million (RMB 7.50 million) to purchase 60 % rights and ownership in debt assets which is amount of RMB 94.05 million (the total debt assets are of principal amount RMB 87.90 million, interest RMB 68.84 million). The debt has been pledged with one property amount $ 5.62 million (RMB 39.36 million). The debt has an annual interest rate of 12 % and payment requirement of principal $ 0.07 million (RMB 0.5 million) per month until it’s fully repaid. In 2024, the Company has received repayment $ 0.25 million (RMB 1,800,000 ). F- 20 9. ACQUISITION Alpha International Securities (Hong Kong) Limited On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Alpha International Securities (Hong Kong) Limited a company incorporated in Hong Kong for $ 1,791,174 (HKD 14,010,421 ). The Company is securities business. The Company has changed its name from Alpha International Securities (Hong Kong) Limited to FTFT International Securities and Futures Limited on November 1, 2023. Alpha Information Services (Shenzhen) Co., Ltd On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100 % equity interest of Alpha Information Services (Shenzhen) Co., Ltd for $ 210,788 (HKD 1,649,528 ). The Company is provided information services for FTFT International Securities and Futures Limited. The Company has changed its name from Alpha Information Services (Shenzhen) Co., Ltd to Future information service (Shenzhen) Co., Ltd on November 3, 2023. The following table summarizes the allocation of estimated fair values of net assets acquired and liabilities assumed: Accounts receivable $ 1,526,360 Other current assets 171,038 Property, plant and equipment, net 1,458 Intangible assets 127,846 Right of use assets 8,875 Lease liability-current ( 8,875 ) Accounts payable ( 4,123,903 ) Accrued expenses and other payables ( 552,484 ) Net identifiable assets acquired $ ( 2,849,685 ) Add: goodwill 172,213 Total purchase price for acquisition net of $ 4,679,434 of cash $ ( 2,677,472 ) The Company has included the operating results of FTFT International Securities and Futures Limited in its consolidated financial statements since the Acquisition Date. US$ 294,437 in net sales and US$ 88,408 in net income of FTFT International Securities and Futures Limited were included in the consolidated financial statements for the years ended December 31, 2023. The Company has included the operating results of Future information service (Shenzhen) Co., Ltd in its consolidated financial statements since the Acquisition Date. US$ 1,390 in net sales and US$ 50,80 in net loss of Future information service (Shenzhen) Co., Ltd were included in the consolidated financial statements for the years ended December 31, 2023. 10. LEASES The Company’s noncancelable operating leases consist of leases for office spaces and computer processing center. The Company is the lessee under the terms of the operating leases. For the year ended December 31, 2024, the operating lease cost was $ 0.54 million. The Company’s operating leases have remaining lease terms of approximately 28 months. As of December 31, 2024, the weighted average remaining lease term and weighted average discount rate were 2.33 years and 4.75 %, respectively. F- 21 Maturities of lease liabilities were as follows: Operating As of December 31, 2024 Lease From January 1, 2025 to December 31, 2025 $ 349,256 From January 1, 2026 to December 31, 2026 165,979 From January 1, 2027 to March 31, 2027 31,330 Total $ 546,565 Less: amounts representing interest $ 19,794 Present Value of future minimum lease payments 526,771 Less: Current obligations 334,017 Long term obligations $ 192,754 The Company leases office space and equipment under various short-term operating leases. As permitted by ASC 842, the Company has elected the practical expedient for short-term leases, whereby lease assets and lease liabilities are not recognized on the balance sheet. Short term leases cost was $ 0.14 million for the year ended December 31, 2024. 11. PROPERTY, PLANT AND EQUIPMENT, NET Property and equipment consist of the following: December 31, December 31, 2024 2023 Office equipment, fixtures and furniture $ 129,322 $ 280,461 Vehicle 721,562 730,998 Leasehold Improvement 62,339 108,360 Subtotal 913,222 1,119,819 Less: accumulated depreciation and amortization ( 534,926 ) ( 561,708 ) Construction in progress 2,226,408 2,259,634 Impairment ( 5,511 ) ( 5,593 ) Total $ 2,599,194 $ 2,812,151 Depreciation expense included in general and administration expenses for the years ended December 31, 2024 and 2023 was $ 209,254 and $ 201,363 respectively. Depreciation expense included in cost of sales for the year ended December 31, 2024 and 2023 was $0 and $0 , respectively. F- 22 12. INTANGIBLE ASSETS Intangible assets consist of the following: December 31, December 31, 2024 2023 Trademarks $ 847 $ 847 System and software 2,702,821 2,730,549 Subtotal 2,703,668 2,731,396 Less: accumulated depreciation and amortization ( 366,441 ) ( 311,131 ) Less: impairment ( 1,804,405 ) ( 1,831,283 ) Total 532,822 588,982 Amortization expense included in general and administration expenses for the years ended December 31, 2024 and 2023 was $ 57,035 and $ 57,035 , respectively. Amortization expense included in cost of sales for the years ended December 31, 2024 and 2023 was $ 0 and $ 0 , respectively. The estimated amortization is as follows: As of December 31, Estimated amortization expense From January 1, 2025 to December 31, 2025 $ 57,035 From January 1, 2026 to December 31, 2026 57,035 From January 1, 2027 to December 31, 2027 57,035 From January 1, 2028 to December 31, 2029 57,035 From January 1, 2029 to December 31, 2030 57,035 Thereafter 119,699 Total $ 404,874 The trading rights of license plates 1 and 2 on the Hong Kong Stock Exchange have no expiration date and do not require amortization, amount was $ 127,948 . F- 23 13. ACCOUNT PAYABLES The amount of account payables were consisted of the followings: December 31, December 31, 2024 2023 Supply Chain Financing/Trading payment $ 347,003 $ 728,010 Others 1,872,298 2,573,705 Total $ 2,219,301 $ 3,301,715 14. ACCRUED EXPENSES AND OTHER PAYABLES The amount of accrued expenses and other payables were consisted of the followings: December 31, December 31, 2024 2023 Legal fee and other professionals $ 64,488 $ 507,765 Wages and employee reimbursement 228,721 493,071 Provision for legal case 8,625,308 8,875,265 Suppliers 1,019,978 507,973 Accruals - 731,521 Total $ 9,938,495 $ 11,115,595 In January 2021, FT Global Capital, Inc. (“FT Global”), a former placement agent of the Company filed a lawsuit against the Company in the Superior Court of Fulton County, Georgia. FT Global served the complaint upon the Company in January 2021. In the complaint, FT Global alleges claims, most of which attempt to hold the Company liable under legal theories that relate back to an alleged breach of an exclusive placement agent agreement between FT Global and the Company in July 2020 which had a term of three months. FT Global claims that the Company failed to compensate FT Global for securities purchase transactions between December 2020 and April 2021, pursuant to the terms of the expired exclusive placement agent agreement. On April 11, 2024, on which date the jury returned a verdict in favor of FT Global and the Court entered a judgment awarding FT Global $ $ 10,598,380 . As of December 31, 2024, the Company has been payment $ 1.97 million. 15. CONVERTIBLE NOTES PAYABLE As of December 31, 2024 and 2023, convertible debt consisted of the following: December 31, December 31, 2024 2023 Beginning $ 1,100,723 $ - Addition - 1,100,723 Interest expenses 77,363 Payment - - Conversion ( 625,000 ) - Balance $ 553,086 $ 1,100,723 On December 27, 2023, the Company principal amount of $ 1.10 million coverable promissory note. Floor Price was $ 0.2272 per share of Common Stock. The Note shall be unsecured. On the date hereof, Company will reserve 5,000,000 shares of Common Stock from its authorized and unissued Common Stock to provide for all issuances of Common Stock under the Note (the “Share Reserve”). Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 2,375,434 , amount $ 625,000 , at a price of $ 0.2631 per share in 2024. F- 24 16. RELATED PARTY TRANSACTION As of December 31, 2024, the amount due to the related parties was consisted of the followings: Name Amount Relationship Note Ming Yi $ 8,871 Chief Financial Officer of the Company Accrued expenses, interest free and payment on demand. Shanchun Huang 29,036 Member of the BOD,.,Legal person of FTFT UK Limited Accrued expenses, interest free and payment on demand. Total $ 37,907 As of December 31, 2024, the amount due from the related parties was consisted of the followings: Name Amount Relationship Note Hu Li $ 20,000 Legal person of Future information service (shenZhen) Loan receivables*, interest free and payment on demand. Total $ 20,000 During 2024, the Company had the following transactions with related parties: Name Amount Relationship Note JKNDC Limited $ 6,933,009 JKNDC LImited’s owner is Tsoi Tsz Leung. Consultancy fee Nice Talent Partner Limited 3,000,000 Controlled by NTAM’s BOD CHAN Siu Kei Consultancy fee As of December 31, 2023, the amount due to the related parties was consisted of the followings: Name Amount Relationship Note Chao Li $ 73,893 Corporate legal representative Other payables, interest free and payment on demand. Ming Yi 29,513 Chief Financial Officer of the Company Accrued expenses, interest free and payment on demand. Xiaochen Zhao 124 Corporate legal representative Accrued expenses, interest free and payment on demand. Total $ 103,530 As of December 31, 2023, the amount due from the related parties was consisted of the followings: Name Amount Relationship Note Kai Xu $ 12,151 Deputy General Manager of a subsidiary of the Company Loan receivables*, interest free and payment on demand. Total $ 12,151 During 2023, the Company had the following transactions with related parties: Name Amount Relationship Note JKNDC Limited $ 7,664 JKNDC LImited’s owner is Tsoi Tsz Leung. Other income, net Nice Talent Partner Limited 459,867 Controlled by NTAM’s BOD CHAN Siu Kei Consultancy fee * The related party transactions have been approved by the Company’s Audit Committee. F- 25 17. INCOME TAX The Company is incorporated in the United States of America and is subject to United States federal taxation. The applicable tax rate is 21 % in 2024 and 2023. No provisions for income taxes have been made, as the Company had no U.S. taxable income for the years ended December 31, 2024 and 2023. For the years ended December 31, 2024 and 2023, the Company had current income tax expenses of nil , respectively. The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the year ended December 31, 2024, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets for certain subsidiaries. The amount of unrecognized deferred tax liabilities for temporary differences related to the dividend from foreign subsidiaries is not determined because such determination is not practical. The Company has not provided deferred taxes on undistributed earnings attributable to its PRC and Hong Kong subsidiaries as they are to be permanently reinvested. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740, Income Taxes. Since the Company intends to reinvest its earnings to further expand its businesses in mainland China, its PRC subsidiaries do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, the Company has not recorded any deferred taxes in relation to US tax on the cumulative amount of undistributed retained earnings since January 1, 2008. Effective on January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules imposed a unified enterprise income tax rate of 25 % on all domestic-invested enterprises and foreign-invested enterprises in the PRC, unless they qualify under certain limited exceptions. The tax rate for pre-tax profits below RMB 1 million to RMB 3 million is 5 %; the tax rate for pre-tax profits between RMB 1 million to RMB 3 million is 10 %. Other Subsidiaries and VIE were subject to an enterprise income tax rate of 25 %. Each of Future Fin-Tech (Hong Kong) Limited, QR (HK) Limited and Nice Talent Asset Management Limited is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate below HKD 2 million is 8.5 %, exceeding HKD 2 million is 16.5 % in Hong Kong. FTFT UK Limited is incorporated in United Kingdom and is subject to United Kingdom Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant United Kingdom tax laws. The applicable tax rate is 19 % in United Kingdom. FTFT Capital Investments L.L.C is incorporated in Dubai, United Arab Emirates. The applicable tax rate is nil in Dubai, United Arab Emirates. Digipay Fintech Limited is incorporated in British Virgin Island. The applicable tax rate is nil in British Virgin Island. Significant components of the provision for income taxes are as follows: 2024 2023 Current tax $ - $ - Deferred tax - book-tax difference - 7,833 The provision for income taxes $ - $ 7,833 Reconciliation of the differences between the statutory EIT rate applicable to profits of the consolidated entities and the income tax expenses of the Company: 2024 2023 Loss before taxation $ ( 34,233,842 ) $ ( 32,819,570 ) Notional tax on profit before CIT and Hong Kong Computed expected tax expense ( 8,558,461 ) ( 8,204,893 ) Others, primarily the difference in tax rates ( 13,628,152 ) 6,545,297 Deferred tax assets losses not recognized 22,186,612 1,659,596 Total $ - $ - F- 26 18. IMPAIRMENT LOSS The Company recorded nil of impairment loss in the year ended 2024. The Company recorded $ 14.16 million of impairment loss in the year ended 2023 relating to the short - term investments $ 12,633 and impairment of goodwill $ 14.15 million. Future Private Equity Fund Management (Hainan) Co., Ltd. invested $ 1.83 million (RMB 13,000,000 ) to entrust Shanghai Yuli Enterprise Management Consulting Firm to invest in various types of investment portfolios. The Company may still suffer significant impairment loss or downward adjustments of our investments in the future, due to the potential worsening global economic conditions and the recent disruptions to, and volatility in, the continuing low market price of shares caused the Company to recognize a fair-value loss in 2023. According to the market value, the Company’s balance of the short - term investments was $ 12,633 on December 31, 2023. Goodwill represents the excess of the cost over the net tangible and identified intangible assets of acquired businesses. The Company evaluate goodwill for impairment annually as of the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Based on the impairment analysis performed in the fourth quarter. The Company recorded $ 14.15 million of impairment loss in fiscal year 2023 related with goodwill mainly arose from acquisition of Nice Talent Asset Management Limited, Khyber Money Exchange Ltd., Alpha International Securities (Hong Kong) Limited and Alpha Information Services (Shenzhen). Goodwill impairment test as of December 31, 2023 using compare the carrying amount of the reporting unit (including goodwill) with its fair value. If the carrying amount exceeds the fair value, compare the implied fair value of the reporting unit’s goodwill with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss should be recognized. 19. SHARE BASED COMPENSATION On February 1, 2023, 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. Statutory reserve During the years ended December 31, 2024 and 2023, the Company collectively attributed nil of retained earnings for their statutory reserves, respectively. F- 27 Restricted net assets PRC laws and regulations permit payments of dividends by the Company’s subsidiaries incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s subsidiaries incorporated in the PRC are required to annually appropriate 10 % of their net income to the statutory reserve prior to payment of any dividends, unless the reserve has reached 50 % of their respective registered capital. Furthermore, registered share capital and capital reserve accounts are also restricted from distribution. As a result of the restrictions described above and elsewhere under PRC laws and regulations, the Company’s subsidiaries incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company in the form of dividends. The restriction amounted to $ 24,733,624 (RMB 176,144,932 ) as of December 31, 2024. Except for the above or disclosed elsewhere, there is no other restriction on the use of proceeds generated by the Company’s subsidiaries to satisfy any obligations of the Company. Payments-omnibus equity plan On July 12, 2022 (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company granted 3,047,000 shares of common stock of the Company, par value $ 0.001 (the “Shares”), pursuant to the Company’s 2020 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries (the “Grantees”), including: 800,000 shares to Shanchun Huang, Chief Executive Officer of the Company; 800,000 shares to Yongke Xue, President of the Company; 100,000 shares to Ming Yi, Chief Financial Officer of the Company, 547,000 shares to Peng Lei, general manager of a subsidiary of the Company, 300,000 shares to Pang Dong, general manager of a subsidiary the Company, and 500,000 shares to Kai Xu, Deputy General Manager of a subsidiary of the Company and vice president of blockchain division of the Company (collectively, the “Grants”). The Grants vested immediately on the Grant Date and each of the Grantees also entered into an Unrestricted Stock Award Agreement with the Company on July 12, 2022. As the closing price of the Company stock was $ 0.42 on July 12, 2022, the Company recorded an expense of $ 1.28 million in the third quarter of fiscal year 2022. As of the date of this report, the Shares have been issued to the Grantees. The share numbers in this Note 22 are pre-reverse stock split effected on February 1, 2023. On October 12, 2023, the Compensation Committee of the Board of Directors of the Company granted 2,890,000 shares of common stock of the Company, par value $ 0.001 , pursuant to the Company’s 2023 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries (the “Grantees”). As the closing price of the Company stock was $ 1.20 on December 23, 2023, the Company recorded an expense of $ 3.47 million in the third quarter of fiscal year 2023. As of the date of this report, the Shares have been issued to the Grantees. On October 4, 2024, the Compensation Committee of the Board of Directors of the Company granted 2,110,000 shares of common stock of the Company, par value $ 0.001 , pursuant to the Company’s 2023 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries (the “Grantees”). As the closing price of the Company stock was $ 0.318 on October 9, 2023, the Company recorded an expense of $ 0.67 million in the third quarter of fiscal year 2024. As of the date of this report, the Shares have been issued to the Grantees. F- 28 20. COMMON STOCK Securities Purchase Agreement On December 24, 2020, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company sold to the purchasers in a registered direct offering, an aggregate of 4,210,530 units, each consisting of one share of our common stock and a warrant to purchase 1 share of our Common Stock, at a purchase price of $ 1.90 per unit, for aggregate gross proceeds to the Company of $ 8,000,007 , before deducting fees to the placement agent and other offering expenses payable by the Company. On December 29, 2020, the Company issued Units consisting of an aggregate of 4,210,530 shares of our Common Stock and warrants to purchase up to an aggregate of 4,210,530 shares of our Common Stock at an exercise price of $ 2.15 per share (the “Investors’ Warrants”). The Investors’ Warrants have a term of five years and are exercisable by the holder at any time after the date of issuance. In connection with the offering, the Company also issued placement agent a warrant to purchase 210,526 shares of our Common Stock (the “Placement Agent Warrant”) on substantially the same terms as the Investors’ Warrants, except that the Placement Agent Warrant has an exercise price of $ 2.375 per share and are not exercisable until June 24, 2021. December 31, 2023 and 2024, outstanding warrant has 210,526 shares of our Common Stock. Warrants after 1-Furu-5 reverse stock split was 42,108 shares. Underlying Shares Weighted Average Exercise Price Weighted Average Term (Years) Options outstanding at December 31, 2023 42,108 $ 2.375 1.00 Granted - - - Forfeited - - - Cancelled - - - Options outstanding at December 31, 2024 42,108 $ 2.375 1.00 Options exercisable at December 31, 2024 42,108 $ 2.375 1.00 On August 6, 2021, the Company, through its wholly owned subsidiary Future FinTech (Hong Kong) Limited., completed its acquisition of 90 % of the issued and outstanding shares of Nice Talent Asset Management Limited from Joy Rich Enterprises Limited (the “Nice Shares”) for HK$ 144,000,000 (the “Purchase Price”) which shall be paid in the shares of common stock of the Company (the “Company Shares”). 60 % of the purchase price ($ 11.22 million) was paid in 2,244,156 shares of common stock of the Company on August 4, 2021, at a price of $ 5 per share. 40 % of the Purchase Price ($ 7.39 million) was paid in 299,221 shares of common stock of the Company on October 17, 2023. On January 5, 2024, the Company entered into a securities purchase agreement with certain purchasers identified on the signature page thereto, pursuant to which the Company sold to the purchasers in a private placement, an aggregate of 2,150,536 share of its common stock, par value $ 0.001 per share at a purchase price of $ 1.20 per share, for aggregate net proceeds to the Company of $ 2,580,644 . On January 18, 2024, the Company issued 2,150,536 shares of common stock pursuant to this Agreement. Common stocks issued in connection with the convertible notes On December 27, 2023, the Company entered into a Securities Purchase Agreement with Streeterville Capital, LLC, a Utah limited liability company (the “Lender”), pursuant to which the Company sold and issued to the Lender a Convertible Promissory Note (the “Note”) in the principal amount of $ 1,100,000 . On July 3, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 136,649 , amount $ 50,000 , at a price of $ 0.3659 per share. On July 18, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 217,139 , amount $ 75,000 , at a price of $ 0.3454 per share. On August 26, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 408,329 , amount $ 100,000 , at a price of $ 0.2449 per share. On October 24, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 390,625 , amount $ 100,000 , at a price of $ 0.256 per share. On November 11, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 390,625 , amount $ 100,000 , at a price of $ 0.256 per share. On November 14, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 393,855 , amount $ 100,000 , at a price of $ 0.2539 per share. On December 18, 2024, that Lender elects to redeem a portion of the Note in redemption conversion shares. Lender redemption conversion shares 438,212 , amount $ 100,000 , at a price of $ 0.2282 per share. The share numbers in this Note 22 are pre-reverse stock split effected on February 1, 2023. F- 29 21. DISCONTINUED OPERATIONS On June 16, 2023, QR (HK) Limited was dissolved and deregistered. On December 5, 2023, FTFT PARAGUAY S.A. was dissolved. On March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered. On September 4, 2024, Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership) was dissolved and deregistered. On October 18, 2024, Nice Talent Asset Management Limited was disposed of for a consideration of USD 0.31 million (HKD 2.40 million). On December 6, 2024, FTFT SuperComputing Inc. was disposed of for a consideration of USD 1.97 million. Loss from discontinued operations for fiscal years 2024 and 2023 was as follows: December 31, December 31, 2024 2023 Revenue $ - $ 13,168,348 Cost – third party - 8,423,457 Cost – related party - 978,801 Gross profit - 3,766,090 OPERATING EXPENSES: General and administrative - 4,211,836 Research and Development expenses - 2,577 Selling expenses - 310,737 Bad debt provision - 70,955 Total - 4,596,105 OTHER INCOME (EXPENSE) Interest income - 30,655 Interest expense - Other expense - ( 780,899 ) Total - ( 750,244 ) Loss from discontinued operations before income tax - ( 1,580,259 ) Income tax provision - 5,281 Loss from discontinued operation before noncontrolling interest $ - ( 1,574,978 ) Gain on disposal of discontinued operations 1,054,155 386,482 Less: Net loss attributable to non-controlling interests ( 190,840 ) ( 108,046 ) LOSS FROM DISCONTINUED OPERATION $ 1,244,995 $ ( 1,080,450 ) The major components of assets and liabilities related to discontinued operations are summarized below: December 31, 2024 December 31, 2023 Cash and cash equivalents $ - $ 1,619,413 Accounts receivable - 1,296,065 Other receivables - 2,459,259 Advances to suppliers and other current assets - 399,827 Property, plant and equipment, net - 1,767,037 Right of use assets - operation lease - 834,076 Total assets related to discontinued operations $ - $ 8,375,677 Accounts payable $ - $ 18,346 Accrued expenses and other payables - 881,886 Advances from customers - 2,604 Amount Due to Related Party - 401,516 Lease liability - operation lease - 145,468 Lease liability - operation lease non-current - 690,819 Total liabilities related to discontinued operations $ - $ 2,140,639 F- 30 22. SEGMENT REPORTING In its operation of the business, management, including our chief operating decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis consistent with GAAP. The Company operates in three segments: supply chain financing service and trading business, asset management service and others. The Company began to provide supply chain financing services during the second quarter of 2021. The Company began to provide sand and steel supply chain financing services during the first quarter of 2023. The Company began to provide brokerage services during the October 2023. Some of our operation might not individually meet the quantitative thresholds for determining reportable segments and we determine the reportable segments based on the discrete financial information provided to the chief operating decision maker. The chief operating decision maker evaluates the results of each segment in assessing performance and allocating resources among the segments. Since there is an overlap of services and products between different subsidiaries of the Company, the Company does not allocate operating expenses and assets based on the product segments. Therefore, operating expenses and asset information by segment are not presented. Segment profit represents the gross profit of each reportable segment. For fiscal year 2024: Supply Chain Financing/ Trading Brokerage service Others Total Reportable segment revenue $ 983,246 $ 870,864 $ 304,015 $ 2,158,125 Inter-segment loss - - - - Revenue from external customers 983,246 870,864 304,015 2,158,125 Segment gross profit $ 163,892 $ 813,747 $ 294,378 $ 1,272,017 For fiscal year 2023: Supply Chain Financing/ Trading Brokerage service Others Total Reportable segment revenue $ 20,769,323 $ 298,505 $ 629,377 $ 21,697,205 Inter-segment loss - - - - Revenue from external customers 20,769,323 298,505 629,377 21,697,205 Segment gross profit $ 465,020 $ 294,437 $ 362,148 $ 1,121,605 F- 31 Loss from Continuing Operations before Income Tax: For the Years Ended, 2024 2023 Supply chain financing/trading 3,753,106 848,031 Brokerage service 581,483 206,030 Others 4,340,920 636,436 Corporate and Unallocated 26,830,350 32,250,678 Total operating expenses and other expense 35,505,859 33,941,175 Loss from Continuing Operations before Income Tax ( 34,233,842 ) ( 32,819,570 ) Segment assets: December 31, 2024 2023 Supply chain financing/trading 5,717,948 12,437,136 Brokerage service 5,066,369 5,088,522 Others 13,252,693 14,062,310 Corporate and Unallocated 1,865,928 23,117,744 Assets related to discontinued operation - 6,235,038 Total assets 25,902,938 60,940,750 Assets subject to attribution to business segments largely include property, plant and equipment, receivable and right of use assets. All other items are reflected in Corporate and Unallocated. 23. COMMITMENTS AND CONTINGENCIES Legal case with FT Global Litigation In January 2021, FT Global Capital, Inc. (“FT Global”), a former placement agent of the Company filed a lawsuit against the Company in the Superior Court of Fulton County, Georgia. FT Global served the complaint upon the Company in January 2021. In the complaint, FT Global alleges claims, most of which attempt to hold the Company liable under legal theories that relate back to an alleged breach of an exclusive placement agent agreement between FT Global and the Company in July 2020 which had a term of three months. FT Global claims that the Company failed to compensate FT Global for securities purchase transactions between December 2020 and April 2021, pursuant to the terms of the expired exclusive placement agent agreement. Allegedly, the exclusive placement agent agreement required the Company to pay FT Global for capital received during the term of the agreement and for the 12-month period following the termination of the agreement involving any investors that FT Global introduced and/or wall-crossed to the Company. However, the Company believes the securities purchase transactions at issue did not involve the one investor which FT Global introduced or wall-crossed to the Company during the term of the agreement. FT Global claims approximately $ 7,000,000 in damages and attorneys’ fees. F- 32 The Company timely removed the case to the United States District Court for the Northern District of Georgia (the (“Court”) on February 9, 2021 based on diversity of jurisdiction. On March 9, 2021, the Company filed a motion to dismiss based on FT Global’s failure to state a claim which is pending before the Court. On November 10, 2021, the Court entered an Order granting the Company’s motion to dismiss FT Global’s fraud claim and breach of contract claim as to the disclosure of its confidential and proprietary information. The Court denied the Company’s motion to dismiss FT Global’s i) breach of contract claim for failure to pay FT Global pursuant to the terms of the exclusive placement agent agreement; ii) claim for breach of the covenant of good faith and fair dealing; and iii) claim for attorney’s fees, and the court concluded that additional information can be obtained through discovery. On October 12, 2022, the Company filed a motion for summary judgment on all claims asserted by FT Global in this lawsuit. On November 2, 2022, FT Global filed its opposition to the Company’s motion for summary judgment. On November 16, 2022, the Company filed its reply in support of its motion for summary judgment on all claims asserted by FT Global in this lawsuit. On August 31, 2023, the Court entered an Order denying the Company’s motion for summary judgment. The trial began on April 8, 2024 and ended on April 11, 2024, on which date the jury returned a verdict in favor of FT Global. On April 11, 2024, the Court entered a judgment awarding FT Global $ 8,875,265.31 and on April 16, 2024, the Court issued an amended judgment, awarding FT Global $ 10,598,379.93 , which includes $ 7,895,265.31 in damages, $ 1,723,114.62 in prejudgment interest, and $ 980,000.00 in attorney’s fees. . On May 9, 2024, the Company filed a post-trial motion to set aside the jury verdict and for a new trial and the Court denied the motion on March 3, 2025. The Company filed notice of appeal to appeal the judgement to the United States Court of Appeals for the Eleventh Circuit on April 2, 2025 and the Company will continue to vigorously defend the action against FT Global. FT Global has registered the Court’s judgment in the United States District Court for Southern District of New York (“NY Court”), where FT Global has brought a motion requiring the Company to turn over its stock in its subsidiary companies. The Company has filed an opposition to the motion, arguing that according to the New York statute the NY Court should first determine that the value of the stock in the subsidiary is insufficient to satisfy the judgment as the Company believe the request for turnover is premature before a valuation hearing. On August 28, 2024, NY Court granted FT Global’s motion for turnover of Defendant’s shares in Defendant’s wholly-owned subsidiaries as Defendant 1) failed to satisfy the $ 10.8 million judgment rendered in the Northern District of Georgia and registered in the Southern District of New York, and 2) is in possession of money and property in which it has an interest. The NY Court ordered Defendant shall turn over the shares, membership, or limited partnership interests in all of its subsidiaries, and the corporate seals of its China and Hong Kong-based subsidiaries, to the U.S. Marshal for auction or sale until the judgment is satisfied. Pursuant to the order issued by the United States District Court for the Southern District of New York on August 28, 2024, the United States Marshal for the Southern District of New York (“U.S. Marshal”) sold the securities of the subsidiaries of the Company other than those in Hong Kong and China in auction of: (i) all of the membership interests in Future Fintech Digital Capital Management LLC; (ii) all of the outstanding shares of FTFT UK Limited; (iii) the corporate seal of DigiPay FinTech Limited; (iv) the corporate seal of GlobalKey SharedMall Limited; (iv) all of the outstanding shares of Future Fintech Labs Inc.; and (v) all of the outstanding shares of Future Fintech Digital Number One GP, LLC (USA) to Alec Orudjiev, the general counsel of FT Global for $ 25,000 on December 18, 2024. On December 6, 2024, the Company agreed to sell all issued and outstanding shares of FTFT SuperComputing Inc. a wholly owned subsidiary of the Company (“FTFT SuperComputing”) to DDMM Capital LLC (the “Buyer”) for a purchase price that equals to: (i) the assumption of the obligations of FTFT SuperComputing totaling $ 973,072.24 and (ii)$ 1,000,000 , which was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global Capital, Inc. arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District of New York and all matters pertaining to such litigation. The Company has appealed the turnover order of the NY Court for the auction of securities of the subsidiaries of the Company in Hong Kong and China to the United States Court of Appeals for the Second Circuit and is waiting for the final decision of the Court of Appeals. On February 6, 2025, FT Global filed a motion (“Motion”) in the NY Court, amended on February 12, 2025, seeking a turnover order for 39,825,939 (before 1 for 10 reverse split) unissued shares of the Company’s common stock for sale to satisfy the judgement. The amended motion directs the requested relief not only at the Company but also at Transhare Corporation, the Company’s Florida-based transfer agent. The Company believes the Motion lacks merit, as the issuance of unissued shares in this manner would violate corporate governance principles, Florida corporate law, and federal securities regulations. The Company has opposed the Motion, which is now fully briefed and awaits decision by the NY Court. F- 33 Shareholders Lawsuit (LaBelle and Janzen) The LaBelle case is a putative securities class action filed in January 2024 and is pending in the District of New Jersey. Denise LaBelle (“Plaintiff”) alleges that the Company and certain of its officers violated Sections 10(b) and 20(a) of the Securities Exchange Act by making materially false or misleading statements in the company’s public filings and disclosures relating to the former Chief Executive Officer of the Company Mr. Shanchun Huang and charges filed by the SEC against Mr. Shanchun Huang with manipulative trading in the stock of the Company using an offshore account shortly before he became the Company’s CEO in 2020 and failing to disclose his beneficial ownership. Mr. Huang has denied the allegations of trading before he became CEO. Plaintiff claims that these alleged misstatements caused the Company’s stock to trade at artificially inflated prices, harming investors when the truth was revealed. The lead plaintiff and lead counsel were appointed in September 2024. The Company was served in September 2024, and the Plaintiff is currently seeking substituted service on the individual defendants. Once service is resolved, the Plaintiff is expected to file an amended complaint, which the Company and other defendants intend to move to dismiss. The Janzen action is a consolidated shareholder derivative case filed by Jeff Janzen on May 31, 2024, also pending in the District of New Jersey, brought nominally on behalf of Future FinTech. Plaintiff alleges that certain current and former officers and directors breached fiduciary duties by allowing or failing to prevent the same alleged misconduct at issue in LaBelle, including mismanagement and misleading public disclosures. The derivative case has been stayed by stipulation, pending resolution of the anticipated motion to dismiss in LaBelle, but plaintiff has reserved the right to participate in mediation and settlement discussions relating to the class action. 24. RISKS AND UNCERTAINTIES PRC Regulations There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. We are considered foreign persons or foreign funded enterprises under PRC laws and, as a result, we are required to comply with PRC laws and regulations related to foreign persons and foreign funded enterprises. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. Customer concentration risk For the year ended December 31, 2024, two customers accounted for 35.86 % and 13.57 % of the Company’s total revenues. For the year ended December 31, 2023, one customer accounted for 85.84 % of the Company’s total revenues. Vendor concentration risk For the year ended December 31, 2024, one vendor accounted for 90.77 % of the Company’s total purchases. For the year ended December 31, 2023, one vendor accounted for 87.58 % of the Company’s total purchases. 25. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of the issuance of the consolidated financial statements and no subsequent event is identified. F- 34