What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-19 compared with 2025-05-20 · 223 added, 327 removed, 80 unchanged (87% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

This quarterly report on Form 10-Q and other

22 unchanged sentences

activity, performance, or achievements.

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

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

Readers are urged to carefully

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

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

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

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

Readers are urged

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

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

Overview of Our Business

Future FinTech is a holding company incorporated under the laws of

the State of Florida and it is not a Chinese operating company.

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

a substantial majority of our operations through our subsidiaries and this structure involves unique risks to investors.

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 People’s Republic of China.

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 supply chain

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

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

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.

Due to worsened investment market sentiment in Hong Kong, the Company

sold its ownership in Nice Talent Asset Management Limited (“NTAM”) to a third party for HK$2.4 million (approximately $300,000)

in November 2024 and is no longer in asset management business in Hong Kong.

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 closing of the transactions contemplated by the Agreement took

place on December 9, 2024.

On December 18, 2024, the Company sold all of its interest and ownership of Future Fintech Digital Capital

Management LLC, FTFT UK Limited, DigiPay FinTech Limited, GlobalKey SharedMall Limited, Future Fintech Labs Inc., and Future Fintech Digital

Number One GP, LLC (USA) to Alec Orudjiev, the general counsel of FT Global for $25,000 through the court ordered auction by the United

States Marshal for the Southern District of New York.

Currently, the main business of the Company is supply-chain financing services and

trading in China.

There are legal and operational risks

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

These risks could result in a

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

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

the past few years, the PRC government initiated a series of regulatory actions and statements to regulate business operations in

China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over

China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of

cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

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

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

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

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

enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial

application of the PRC securities laws.

On February 15, 2022, Cybersecurity Review Measures published by Cyberspace Administration

of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public

Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration

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

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

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

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

Review Office.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on

September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC

under the following circumstances:

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

(ii) any critical information

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

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

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

previous year;

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

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

on March 31, 2023.

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

related information under certain circumstances, such as:

a) an issuer making an application for initial public offering and listing

in an overseas market;

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

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

transfer of shares or other means.

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

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

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

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

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

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

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

occurrence and public disclosure of the event:

(i) change of control;

(ii) investigations or sanctions imposed by overseas

securities regulatory agencies or other competent authorities;

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

(iv) voluntary or mandatory delisting.

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

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

material omissions, which may result in a fine ranging from RMB1 million to RMB10 million, and in cases of severe violations, the

relevant responsible persons may also be barred from entering the securities market.

On February 24, 2023, the CSRC, the

Ministry of Finance, the National Administration of State Secretes Protection and the National Archives Administration released the

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

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

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

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

authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials

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

regulatory agencies and other entities and individuals.

It further stipulates that (i) providing or publicly disclosing documents

and materials which may adversely affect national security or public interests, and accounting records or photocopies thereof to

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

shall be subject to corresponding procedures in accordance with relevant laws and regulations;

and (ii) any working papers formed in

the territory of the PRC by securities companies and securities service agencies that provide domestic enterprises with securities

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

which shall be subject to corresponding procedures in accordance with relevant laws and regulations.

As of the date of this report,

these new laws and guidelines that became effective have not impacted the Company’s ability to conduct its business, accept

foreign investment or list on a U.S.

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

The Company is still processing the filings with CSRC for its offerings since the effective of New Overseas Listing Rules and

has not complied the filing requirements yet which would subject the Company to fines and other penalties for violation of New

Overseas Listing Rules.

In addition, new rules and regulations could be adopted and there are uncertainties in the interpretation

and enforcement of existing laws and guidelines, which could materially and adversely impact our business and financial outlook and

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

or other foreign stock exchange.

in foreign investment regulations, and other policies in China or related enforcement actions by China government could result in a

material change in our operations and the value of our securities and could significantly limit or completely hinder our ability to

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

On August 6, 2021, the

Company completed acquisition of 90% of the issued and outstanding shares of Nice Talent Asset Management Limited (“NTAM”),

a Hong Kong-based asset management company, from Joy Rich Enterprises Limited (“Joy Rich”).

NTAM is licensed under the Securities

and Futures Commission of Hong Kong (“SFC”) to carry out regulated activities in Type 4:

Advising on Securities and Type 9:

Asset Management.

In order to retain talent in view of the increased turnover in the industry in Hong Kong, top performers of NTAM who

had worked with the company for years were granted the right to subscribe for new shares of NTAM with cash.

As a result, in July 2023,

19 shares of NTAM were issued to Ms.

Lau Kwai Chun at a cash consideration of HK$1,786,301 and in December 2023, 11 shares of NTAM were

issued to Aspenwood Capital Partner Limited at a cash consideration of HK$1,034,174.

Due to the abovementioned 30 new shares issuance,

the Company’s holding of NTAM decreased from 90% to 77.14%.

In August 2024, NTAM issued additional 168 shares with HK$17,900 each

for a total of HK$3,007,200 by way of rights subscription offer to three existing shareholders of NTAM and Future Fintech (Hong Kong)

Limited did not participate in the subscription and an outsider investor purchased the shares.

After the right subscription, the shareholding

percentage of NTAM by Future Fintech (Hong Kong) Limited decreased from 77.14% to 42.86%.

In November 2024, the Company sold its

remaining 42.86% ownership of NTAM to a third party for HK$2.4 million and is no longer in asset management business in Hong Kong.

On April 18, 2022, the

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

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

has no operation before the acquisition.

The Company tried to

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

The Company has changed its name from KAZAN

S.A to FTFT Paraguay S.A.

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

Paraguay as planned.

On February 27, 2023,

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

FinTech Group Inc.

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

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

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

incorporated in China (“Alpha SZ”).

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

Trading’ and Type 4 ‘Securities Consulting’ financial licenses issued by the Hong Kong Securities and Futures Commission.

Alpha SZ provides technical support services to Alpha HK.

The share transfer transaction was approved by the Securities and Futures

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

The names of the two entities

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

Ltd.’, respectively.

On September 4, 2024,

the Company deregistered and dissolved the Tianjin Future Private Equity Fund Management Partnership, a Limited Partnership under the

laws of China.

On December 6, 2024,

the Company and FTFT SuperComputing Inc.

a wholly owned subsidiary of the Company (“FTFT SuperComputing”) entered into a Stock

Purchase Agreement (the “Agreement”) with DDMM Capital LLC (the “Buyer”).

Pursuant to the terms of the Agreement,

the Company sold all of the issued and outstanding shares of FTFT SuperComputing to the Buyer for a purchase price that equals to:

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.

closing of the transactions contemplated by the Agreement took place on December 9, 2024.

On December 18, 2024,

the Company sold all of its interest and ownership of Future Fintech Digital Capital Management LLC, FTFT UK Limited, DigiPay FinTech

Limited, GlobalKey SharedMall Limited, Future Fintech Labs Inc., and Future Fintech Digital Number One GP, LLC (USA) to Alec Orudjiev,

the general counsel of FT Global for $25,000 through the court ordered auction by the United States Marshal for the Southern District

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 “2023 Reverse Stock Split”).

On March 27, 2025, 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-10 reverse stock split of the Company’s authorized shares of common stock from 60,000,000

shares to 6,000,000 shares, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock

(“2025 Reverse Stock Split”, collectively with 2023 Reverse Stock Split as “Reverse Splits”).

The common stock

will continue to be $0.001 par value.

The Company rounded up the fractional shares that result from the 2025 Reverse Stock Split and no

fractional shares will be issued in connection with the 2025 Reverse Stock Split and no cash or other consideration will be paid in connection

with any fractional shares that would otherwise have resulted from the 2025 Reverse Stock Split.

No changes are being made to the number

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

The amendment to the Articles

of Incorporation of the Company took effect at 1:00pm E.T.

on April 1, 2025.

The Company operated

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

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

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

the outbreak of COVID-19.

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

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

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

local authority on March 7, 2024.

The Company currently has one directly controlled

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

Future FinTech Group Inc.

is a Florida holding

company with no material operations of its own.

We conduct substantially all of our business through subsidiaries, and this structure

involves unique risks for investors.

We are not a Chinese operating company, although we have had significant operations in China and

Historically, our business focused on fruit juice

manufacturing and distribution in China.

Due to rising production costs and stricter environmental laws, we shifted our operations toward

supply chain financing and trading in China, asset management in Hong Kong, cross-border money transfer services in the United Kingdom,

brokerage and investment banking in Hong Kong, and cryptocurrency mining in the United States.

Most of these activities have since been

reduced or exited.

Recent strategic changes include:

● Exit from Variable Interest Entity (VIE) operations

in China – Our VIE, E-Commerce Tianjin, generated minimal revenue since 2021 and was deregistered on March 7, 2024.

● Disposal of Hong Kong asset management operations

– In November 2024, we sold our remaining 42.86% interest in Nice Talent Asset Management Limited for approximately $300,000 and

ceased asset management activities in Hong Kong.

● Sale of cryptocurrency mining operations –

On December 9, 2024, we sold FTFT SuperComputing Inc., including the assumption of approximately $973,000 in liabilities and $1.0 million

applied toward a litigation judgment.

● Disposition of multiple subsidiaries –

On December 18, 2024, we sold Future Fintech Digital Capital Management LLC, FTFT UK Limited, DigiPay FinTech Limited, GlobalKey SharedMall

Limited, Future Fintech Labs Inc., and Future Fintech Digital Number One GP, LLC through a court-ordered auction for $25,000.

● Closure of Paraguay cryptocurrency venture –

FTFT Paraguay S.A., acquired in 2022, was dissolved in December 2023 after we were unable to develop planned operations.

As of June 30, 2025, our principal business operations

sale of fast-moving consumer goods;

commission-based trading and consulting services;

and supply chain financing and trading.

We currently have one directly controlled subsidiary,

Future FinTech (Hong Kong) Limited.

Supply Chain Financing Service and Trading

37 unchanged sentences

Results of Operations

Comparison of Three Months ended March 31,

Comparison of Three Months ended June 30,

2025 and 2024:

The following table presents our consolidated

revenues for the three months ended March 31, 2025 and 2024, respectively:

Three months ended

The following table sets forth the breakdown of

our revenues for the three months ended June 30, 2025 and 2024, respectively:

Three months ended June 30,

Fast-Moving Consumer Goods (FMCG)

Trading Commission and Consulting service

Supply Chain Financing/Trading

The decrease in revenue for the three months ended

March 31, 2025 was primarily due to less revenue from others, mainly due to the decreased debt recovery consulting service fee as well

dollar bond service income of approximately $0.16 million.

Supply chain financing/trading increased $36,028

from $0.44 million for the three months ended March 31, 2024 to $0.48 million for the same period of 2025.

It was due to the Company sold

more bulk goods with ownership than as an agent which counted the total sales as our revenue instead of agent fees.

Other revenues decreased from $0.24 million for

the three months ended March 31, 2024 to $0.08 million for the same period of 2025, mainly due to the decreased debt recovery consulting

service fee as well as U.S.

dollar bond service income of approximately $0.16 million.

Gross Profit and Margin

The following table presents the consolidated

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

of the related revenues, for the three months ended March 31, 2025 and 2024, respectively:

Three months ended March 31,

Total revenue

For the three months ended June 30, 2025 and 2024,

revenue from sales of FMCG was $387,684 and nil, respectively, representing an increase of $387,684, or 100.00%.

The increase was primarily

attributable to the Company’s strategic expansion into the FMCG sector in September 2024, which significantly contributed to our

revenue growth during the three months ended June 30, 2025.

For the three months ended June 30, 2025 and 2024,

revenue from trading commission and consulting service was $217,598 and $204,315, respectively, representing an increase of $13,283, or

The increase was mainly attributable to higher trading volume in U.S.

equity markets and the completion of a secondary offering

during the three months ended June 30, 2025.

For the three months ended June 30, 2025 and 2024,

revenue from supply chain financing/trading was nil and $64,674, respectively, representing a decrease of $64,674, or 100.00%.

was due to our management’s decision to temporarily suspend these operations resulting from lower coal prices and reduced market

demand in China during the three months ended June 30, 2025.

The following table sets forth the breakdown of

the gross profit for the three months ended June 30, 2025 and 2024, respectively:

Three months ended June 30,

Fast-Moving Consumer Goods (FMCG)

Trading Commission and Consulting service

Supply Chain Financing/Trading

Overall gross profit decreased to $0.08 million for three months ended

March 31, 2025 from $0.28 million for the same period of 2024.

The decrease is mainly due to the decrease of gross profits from others

which is in line with the decrease of revenues during the first quarter of 2025.

Overall gross margin as a percentage of revenue was 14.22%

for the three months ended March 31, 2025, a decrease of 26.29% from 40.50% for the same period of last fiscal year, mainly due to decrease

in profit margin for debt recovery consulting service fee as well as U.S.

Total gross profit

Overall gross profit decreased by $0.07 million,

or 27.56%, to $0.19 million for the three months ended June 30, 2025 from $0.26 million for the same period last year.

The decrease was

primarily due to the decrease in gross profit from supply chain financing/trading which was in line with the decrease in revenue for this

business segment during the three months ended June 30, 2025.

Overall gross margin as a percentage of revenue was 30.86% for the three

months ended June 30, 2025, representing a decrease of 64.99% from 95.85% for the same period last year, mainly due to the decrease in

gross margin for debt recovery consulting service fee as well as U.S.

dollar bond service.

Additionally, the decrease in gross margin

was due to the lower gross margin from FMCG, which accounted for a majority portion of total revenue during the three months ended June

Operating Expenses

The following table presents our consolidated

operating expenses and operating expenses as a percentage of revenue for the three months ended March 31, 2025 and 2024, respectively:

First quarter of 2025

First quarter of 2024

General and administrative

The following table sets forth the breakdown of

our operating expenses and operating expenses as a percentage of revenue for the three months ended June 30, 2025 and 2024, respectively:

Three months ended June 30,

General and administrative expenses

Selling expenses

Bad debt provision (recovery)

Total operating expenses

For the three months ended June 30, 2025, our

general and administrative expenses were $0.85 million, representing a decrease of $0.57 million, or 40.03%, as compared to the same period

The decrease was mainly due to decreased professional service fees during the three months ended June 30, 2025.

For the three months ended June 30, 2025, our

selling expenses were $0.25 million, representing an increase of $0.10 million, or 64.37%, as compared to the same period last year.

increase was mainly due to increased traveling costs and sales team performance incentives.

For the three months ended June 30, 2025, our

bad debt provision was $0.39 million, representing an increase of $0.67 million, or 242.47%, as compared to the same period last year.

The increase was primarily due to the management’s efforts in collection of long overdue receivables from our customers, causing

net recovery of credit losses during the three months ended June 30, 2024.

Other Income, Net

For the three months ended June 30, 2025, our

net other income was $3.16 million, representing an increase of $2.93 million, or 1,259.48%, as compared to the same period last year.

The increase was primarily due to the gain of $3.1 million on debt restructuring during the three months ended June 30, 2025 as we entered

into a settlement and forbearance agreement with FT Global.

Income tax provision was nil for the three months

ended June 30, 2025, and 2024.

Net income (loss) from continuing operation

For the three months ended June 30, 2025, our

net income from continuing operation were $1.85 million, representing an increase of $2.66 million, or 328.85%, as compared to the same

period last year.

The increase was primarily due to the increase in net other income, as discussed above.

Comparison of Six Months ended June 30,

2025 and 2024:

The following table sets forth the breakdown of

our revenues for the six months ended June 30, 2025 and 2024, respectively:

Six months ended June 30,

Fast-Moving Consumer Goods (FMCG)

Trading Commission and Consulting service

Supply Chain Financing/Trading

Total revenue

For the six months ended June 30, 2025 and 2024,

revenue from sales of FMCG was $864,135 and nil, respectively, representing an increase of $864,135, or 100.00%.

The increase was primarily

attributable to the Company’s strategic expansion into the FMCG sector in September 2024, which significantly contributed to revenue

growth during the six months ended June 30,2025.

For the six months ended June 30, 2025 and 2024,

revenue from trading commission and consulting service was $292,783 and $441,740, respectively, representing a decrease of $148,957, or

The decrease was mainly due to lower revenue from both U.S.

dollar bond trading service and consulting service during the six

months ended June 30, 2025.

For the six months ended June 30, 2025 and 2024,

revenue from supply chain financing/trading was $1,341 and $506,438, respectively, representing a decrease of $505,097, or 99.74%.

decrease was due to our management’s decision to temporarily suspend these operations resulting from lower coal prices and reduced

market demand in China during the six months ended June 30, 2025.

The following table sets forth the breakdown of

the gross profit for the six months ended June 30, 2025 and 2024, respectively:

Six months ended June 30,

Fast-Moving Consumer Goods (FMCG)

Trading Commission and Consulting service

Supply Chain Financing/Trading

Overall gross profit decreased by $0.27 million,

or 50.20%, to $0.27 million for the six months ended June 30, 2025 from $0.53 million for the same period last year.

The decrease was

primarily due to the decrease in gross profit from trading commission and consulting service and supply chain financing/trading which

were in line with the decrease in revenue for these two business segments during the six months ended June 30, 2025.

Overall gross margin

as a percentage of revenue was 22.91% for the six months ended June 30, 2025, representing a decrease of 33.29% from 56.20% for the same

period last year, mainly due to the decrease in gross margin for debt recovery consulting service fee as well as U.S.

dollar bond service.

Additionally, the decrease in gross margin was due to the lower gross margin from FMCG, which accounted for a majority portion of total

revenue during the six months ended June 30, 2025.

Operating Expenses

The following table sets forth the breakdown of

our operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2025 and 2024, respectively:

Six months ended June 30,

General and administrative expense

Stock compensation expense

2 unchanged sentences

Total operating expenses

General and administrative expenses increased

by $0.39 million, or 32.63%, to $1.58 million for the three months ended March 31, 2025 from $1.19 million for the same period of last

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

March 31, 2025.

Stock compensation expense was $1.09 million for the three months ended

March 31, 2025.

On March 10, 2025, the Compensation Committee of the Board of Directors of the Company granted 500,000 shares of common

stock of the Company (“Shares”), par value $0.001, pursuant to the Company’s 2024 Omnibus Equity Plan, to certain officers

and employees of the Company and its subsidiaries.

As the closing price of the Company stock was $2.17 on March 10, 2025, the Company

recorded an expense of $1.09 million in the third quarter of fiscal year 2024.

As of the date of this report, the Shares have been issued

to the Grantees.

The stock price and share numbers have been adjusted based on the one for ten reverse split effected on April 1,

Selling expenses decreased by $0.08 million during

the three months ended March 31, 2025, compared to the same period of last fiscal year.

The decrease in selling expenses was mainly due

to decreased employee bonuses.

Bad debt provision increased by $27.65 million

during the three months ended March 31, 2025, compared to the same period of last fiscal year.

The increase was due to provision for bad

debts on related party receivables in connection with the disposal of a subsidiary in 2025.

For the six months ended June 30, 2025, our general

and administrative expenses were $2.43 million, representing a decrease of $0.18 million, or 6.94%, as compared to the same period last

The decrease was mainly due to the decreased professional service fees and traveling fees during the six months ended June 30, 2025.

For the six months ended June 30, 2025, our stock

compensation expense was $1.09 million, representing an increase of $1.09 million, as compared to the same period last year.

10, 2025, the Compensation Committee of the Board of Directors of the Company granted 500,000 shares of common stock of the Company (“Shares”),

par value $0.001, pursuant to the Company’s 2024 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries.

As the closing price of the Company stock was $2.17 on March 10, 2025, the Company recorded an expense of $1.09 million in the first quarter

of fiscal year 2025.

The Shares were issued to the Grantees on March 10, 2025.

The stock price and share numbers have been adjusted based

on the one for ten reverse splits effected on April 1, 2025.

For the six months ended June 30, 2025, our selling

expenses were $0.44million, representing an increase of $0.02 million, or 5.37%, as compared to the same period last year.

For the six months ended June 30, 2025, our bad

debt provision was $28.76 million, representing an increase of $28.32 million, or 6,391.30%, as compared to the same period last year.

The increase was primarily due to provision for bad debts on related party receivables in connection with the disposal of a subsidiary

during the six months ended June 30, 2025.

Other Income (Expense), Net

Other expenses, net, decreased by $1.64 million to positive $0.20 million

for the three months ended March 31, 2025 from $1.44 million in the same period of the last fiscal year, primarily due to higher legal

fees of litigation with FT Global in the same period of 2024.

Tax provision was nil for the three months ended

March 31, 2025, primarily due to decreased revenue.

Net loss from continue operation

Net loss from continue operation increased by $27.60 million from $3.34

million for the three months ended March 31, 2024 to $30.95 million for the same period of 2025 mainly due to the increase in operating

expenses, as discussed above.

For the six months ended June 30, 2025, our net

other income was $3.36 million, representing an increase of $4.57 million, or 378.41%, as compared to the same period last year.

was primarily due to the gain on debt restructuring during the six months ended June 30, 2025.

On June 17, 2025, we entered into a settlement

and forbearance agreement (“the Agreement”) with FT Global.

Pursuant to the Agreement, we were required to pay an aggregate

settlement amount of $2.0 million and issue a total of 1,700,000 shares of common stock.

Upon the debt restructurings, we recognized a

gain of $3.07 million which was recorded as gain on debt restructuring on the unaudited condensed consolidated statement of operations

and comprehensive income (loss).

The increase in net other income was also attributable to higher legal case fee of litigation with FT

Global during the six months ended June 30, 2024.

Income tax provision was nil for the six months

ended June 30, 2025, and June 30, 2024.

Net loss from continuing operation

For the six months ended June 30, 2025, our net

loss from continuing operation were $29.09 million, representing an increase of $24.94 million, or 600.94%, as compared to the same period

The increase was primarily due to the increase in operating expenses, as discussed above.

Gain on disposal of discontinued operations

Gain on disposal of discontinued operation was $28.24 million for the

three months ended March 31, 2025, which was related to the transfer of FTFT UK LIMITED, FTFT Finance UK Limited, Future Fintech Digital

Number One US, LP, Future Fintech Digital Number One Offshore, LLC(Cayman), Future Fintech Digital Number One GP,LLC (USA), FTFT Digital

Number One, Ltd.(Cayman), Future FinTech Labs Inc, Future Fintech Digital Capital, FTFT CAPITAL INVESTMENTS, DigiPay FinTech Limited,

DCON DigiPay Limited-JPN and Global Key Shared Mall Ltd.

Loss per Share

Basic and diluted loss per share from continuing operations were $(12.65)

and $10.78 for the three months ended March 31, 2025, respectively, as compared to a loss of $(1.68) and $0.01 for the same periods of

2024, respectively.

Basic and diluted income per share attributable to discontinued operations was $(12.65) and $10.76 for the three months

ended March 31, 2025, respectively.

Basic and diluted earnings per share attributable to discontinued operations was $(1.68) and $0.01

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

Gain on disposal of discontinued operation was

$28.24 million for the six months ended June 30, 2025, which was related to the transfer of FTFT UK LIMITED, FTFT Finance UK Limited,

Future Fintech Digital Number One US, LP, Future Fintech Digital Number One Offshore, LLC(Cayman), Future Fintech Digital Number One GP,LLC

(USA), FTFT Digital Number One, Ltd.(Cayman), Future FinTech Labs Inc, Future Fintech Digital Capital, FTFT CAPITAL INVESTMENTS, DigiPay

FinTech Limited, DCON DigiPay Limited-JPN and Global Key Shared Mall Ltd.

Earnings (loss) per Share

For the six months ended June 30, 2025, basic and

diluted loss per share from continuing operations were both $10.27, as compared to loss per share of $2.08 per share (both basic and diluted)

for the same period last year.

For the six months ended June 30, 2025, basic and diluted earnings per share from discontinued operations

was $9.31 and $9.30, respectively, as compared to loss per share of $0.47 per share (both basic and diluted) for the same period last

Liquidity and Capital Resources

As of March 31, 2025, we had cash and restricted

cash of $4.44 million, as compared to $4.77 million as of December 31, 2024.

Our working capital has historically been generated from our operating

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

Our working capital was $6.50 million as of March 31, 2025, a

decrease of $1.10 million from working capital of $7.60 million as of December 31, 2024, mainly due to the decrease in current assets

and an increase in current liabilities.

As of June 30, 2025, we had cash and restricted

cash of $5.79 million, representing an increase of $1.02 million from $4.77 million as of December 31, 2024.

Our working capital has historically been generated

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

Our working capital was $11.47 million as of

June 30, 2025, an increase of $3.87 million from working capital of $7.60 million as of December 31, 2024, mainly due to the decrease

in current liabilities.

Net cash used in operating activities increased

by $21.45 million to $28.84 million for the three months ended March 31, 2025 from $7.39 million for the same period of the last fiscal

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

Net cash provided by investing activities decreased

$0.65 million to $0.16 million for the three months ended March 31, 2025 from $0.80 million for the same period of the last fiscal year.

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

Net cash provided by financing activities for

the three months ended March 31, 2025 was $6,093 representing an increase of $2.47 million, as compared to cash used in financing activities

of $2.47 million during the three months ended March 31, 2024.

The increase in cash provided by financing activities was mainly due to

proceeds from the issuance of common stock from a private placement, net of issuance costs in first quarter 2024.

by $16.93 million to $27.73 million for the six months ended June 30, 2025 from $10.80 million for the same period last year.

in net cash used in operating activities was primarily due to the increase in net loss from continuing operation, the decrease in accrued

expenses and other payables, as well as the decrease in other receivables.

The increase was partially offset by the increase in bad debt

provision, the increase in advances to suppliers and other current assets and the decrease in accounts payable.

Net cash provided by investing activities increased

by $0.41 million to $0.62 million for the six months ended June 30, 2025 from $0.21 million for the same period last year.

was due to the increase in repayment for debt investment and loan receivables.

The increase was partially offset by the decrease in repayment

for short term investment.

Net cash used in financing activities for the

six months ended June 30, 2025 was $0.01 million, representing a decrease of $2.46 million, as compared to net cash provided by financing

activities of $2.45 million during the same period last year.

The decrease in net cash provided by financing activities was mainly due

to the decrease in proceeds from the issuance of common stock from a private placement, net of issuance costs.

Off-balance sheet arrangements

As of March 31, 2025, we did not have any off-balance

As of June 30, 2025, we did not have any off-balance

sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures

about Market Risk

Not applicable.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis