What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-19 · 220 added, 191 removed, 112 unchanged (79% of the section changed)

10 unchanged sentences

“future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate

to Company or Company’s management identify forward-looking statements.

Such statements reflect the current view of Company with

respect to future events and are subject to risks, uncertainties, assumptions, and other factors (including the statements in the section

“results of operations” below), and any businesses that Company may acquire.

Should one or more of these risks or uncertainties

materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed,

estimated, expected, intended, or planned.

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

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

31, 2024 (the “2024 Form 10-K”) and in this Form 10-Q.

The following discussion should be read in conjunction with our Financial

Statements and related Notes thereto included elsewhere in this report and in our 2024 Form 10-K.

Although the Company believes the expectations

to the Company or its management identify forward-looking statements.

Such statements reflect the current view of the Company with respect

to future events and are subject to risks, uncertainties, assumptions, and other factors (including the statements in the section “results

of operations” below), and any businesses that the Company may acquire.

Should one or more of these risks or uncertainties materialize,

or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated,

expected, intended, or planned.

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

under the heading “Risk Factors” and those listed in our Annual Report on Form 10-K for the year ended December 31, 2024 (the

“2024 Form 10-K”) and in this Form 10-Q.

The following discussion should be read in conjunction with our Financial Statements

and related Notes thereto included elsewhere in this report and in our 2024 Form 10-K.

Although the Company believes that the expectations

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

12 unchanged sentences

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.

Historically, our business was 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

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 Super Computing 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, Global Key Shared Mall Ltd., 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 September 30, 2025, our principal business

operations consist of:

sale of fast-moving consumer goods;

commission-based trading and consulting services;

and supply chain financing and trading.

and supply chain financing

We currently have one directly controlled subsidiary,

Future FinTech (Hong Kong) Limited.

Supply Chain Financing Service and Trading

Since the second quarter of 2021, we started coal

supply chain financing service and trading business.

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

Supply Chain Financing Service and Trading in China

Since the second quarter of 2021, we have engaged

in the coal supply chain financing service and trading business.

Since the third quarter of 2021, we have engaged in aluminum ingots supply

chain financing service and trading business.

Since the first quarter of 2023, we have engaged in sand and steel supply chain financing

service and trading business.

Since the first quarter of 2023, we started sand and steel supply chain financing service and trading business.

Our supply chain finance business mainly serves

22 unchanged sentences

We recognize net revenue as agent

services for the sales of coals, aluminum ingots, and steel when no control obtained throughout the transactions.

services for the sales of coals, aluminum ingots, and steel when no control is obtained throughout the transactions.

We select the customers

6 unchanged sentences

Results of Operations

Comparison of Three Months ended June 30,

Comparison of Three Months Ended September

30, 2025 and 2024:

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,

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

Three months ended September 30,

Fast-Moving Consumer Goods (“FMCG”)

2 unchanged sentences

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.

For the three months ended September 30, 2025

and 2024, revenue from sales of FMCG was $1,196,141 and $342, respectively, representing an increase of $1,195,799, or 349,648.83%.

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 September 30, 2025.

For the three months ended September 30, 2025 and 2024, revenue from

trading commission and consulting service was $128,492 and $598,245, respectively, representing a decrease of $469,753, or 78.52%.

decrease was mainly because a major project, which boosted revenue from consulting service during the three months ended September 30,

2024, did not recur in the same period this year.

For the three months ended September 30, 2025

and 2024, revenue from supply chain financing/trading was nil and $428,533, respectively, representing a decrease of $428,533, or 100.00%.

The 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 three months ended September 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,

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

Three months ended September 30,

Fast-Moving Consumer Goods (“FMCG”)

2 unchanged sentences

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

Overall gross profit decreased by $500,520, or

80.36%, to $122,337 for the three months ended September 30, 2025 from $622,857 for the same period last year.

The decrease was primarily

due to the decrease in gross profit from trading commission and consulting service which was in line with the decrease in revenue for

this business segment during the three months ended September 30, 2025.

Although revenue from FMCG segment increased significantly for

the three months ended September 30, 2025, gross profit from this business segment did not increase simultaneously due to its low gross

Overall gross margin as a percentage of revenue was 9.24% for the three months ended September 30, 2025, representing a decrease

of 51.41 percentage points from 60.64% for the same period last year, mainly due to the decrease in gross margin for debt recovery consulting

service fee, and our gross margin was further eroded by that of the FMCG segment, which accounted for a majority portion of total revenue

during the three months ended September 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 three months ended June 30, 2025 and 2024, respectively:

Three months ended June 30,

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

Three months ended September 30,

General and administrative expenses

Selling expenses

Bad debt provision (recovery)

Allowance for credit losses/doubtful accounts

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

For the three months ended September 30, 2025,

our general and administrative expenses were $1,324,770, representing a decrease of $255,798, or 16.18%, as compared to the same period

The decrease was primarily attributable to reduced salary, employee benefit and bonus expenses as a result of the implementation

of cost-control measures, as well as a decrease in commission expenses caused by decreased consulting service revenue.

The decrease was

partially offset by an increase in business entertainment expenses driven by our new business expansion.

For the three months ended September 30, 2025,

our selling expenses were $240,805, representing an increase of $137,011, or 132.00%, as compared to the same period last year.

was primarily attributable to increased business entertainment expenses, traveling costs and sales team performance incentives, resulting

from our initiatives to expand into new business segments and acquire new customers.

For the three months ended September 30, 2025,

our allowance for credit losses/doubtful accounts was $654,222, representing a decrease of $2,732,408, or 80.68%, 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,

The decrease was primarily due to the management’s efforts to collection of long overdue receivables from our

customers, resulting in a smaller allowance for credit losses during the three months ended September 30, 2025.

Other Income, Net

For the three months ended September 30, 2025,

our net other income was $132,148, representing a decrease of $99,225, or 42.89%, as compared to the same period last year.

was primarily due to reduced interest income during the three months ended September 30, 2025, resulting from a decreased loan receivable

Net loss from continuing operations

For the three months ended September 30, 2025,

our net loss from continuing operations was $1,965,312, representing a decrease of $2,251,450, or 53.39%, as compared to the same period

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

Comparison of Nine Months Ended September

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,

our revenues for the nine months ended September 30, 2025 and 2024, respectively:

Nine months ended September 30,

Fast-Moving Consumer Goods (“FMCG”)

Trading Commission and Consulting service

Supply Chain Financing/Trading

Trading Commission and Consulting service

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,

For the nine months ended September 30, 2025 and

2024, revenue from sales of FMCG was $2,060,276 and $342, respectively, representing an increase of $2,059,934, or 602,319.88%.

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

to revenue growth during the nine months ended September 30,2025.

For the nine months ended September 30, 2025 and

2024, revenue from supply chain financing/trading was $1,341 and $934,971, respectively, representing a decrease of $933,630, or 99.86%.

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 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 nine months ended September 30, 2025.

For the nine months ended September 30, 2025 and

2024, revenue from trading commission and consulting service was $421,275 and $1,039,985, respectively, representing a decrease of $618,710,

The decrease was mainly because a major project, which boosted revenue from consulting service during the nine months ended

September 30, 2024, did not recur in the same period this year.

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,

the gross profit for the nine months ended September 30, 2025 and 2024, respectively:

Nine months ended September 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.

Trading Commission and Consulting service

Overall gross profit decreased by $768,045, or

66.45%, to $387,727 for the nine months ended September 30, 2025 from $1,155,772 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 nine months ended September 30, 2025.

Although revenue from FMCG

segment increased significantly for the nine months ended September 30, 2025, gross profit from this business segment did not increase

simultaneously due to its low gross margin.

Overall gross margin as a percentage of revenue was 15.62% for the nine months ended September

30, 2025, representing a decrease of 42.90 percentage points from 58.51% for the same period last year, mainly due to the decrease in

gross margin for debt recovery consulting service fee, and our gross margin was further eroded by that of the FMCG segment, which accounted

for a majority portion of total revenue during the nine months ended September 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,

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

Nine months ended September 30,

General and administrative expense

1 unchanged sentence

Selling expenses

Bad debt provision

Allowance for credit losses/doubtful accounts

Total operating expenses

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.

For the nine months ended September 30, 2025,

our general and administrative expenses were $3,757,862, representing a decrease of $437,304, or 10.42%, as compared to the same period

The decrease was primarily attributable to reduced salary, employee benefit and bonus expenses as a result of the implementation

of cost-control measures, as well as a decrease in commission caused by decreased consulting service revenue during the nine months ended

September 30, 2025.

For the nine months ended September 30, 2025,

our stock compensation expense was $1,085,000, representing an increase of $1,085,000, 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, 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

For the nine months ended September 30, 2025,

our selling expenses were $681,483, representing an increase of $159,483, or 30.55%, as compared to the same period last year.

was primarily attributable to increased business entertainment expenses, resulting from our initiatives to expand into new business segments

and acquire new customers.

For the nine months ended September 30, 2025,

our allowance for credit losses/doubtful accounts was $29,416,788, representing an increase of $25,587,064, or 668.12%, as compared to

the same period last year.

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

the disposal of a subsidiary during the nine months ended September 30, 2025.

Other Income (Expense), Net

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.

For the nine months ended September 30, 2025,

our net other income was $3,494,470, representing an increase of $4,470,763, as compared to the same period last year.

The increase was

primarily due to the gain on debt restructuring during the nine months ended September 30, 2025.

On June 17, 2025, we entered into a settlement

4 unchanged sentences

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

and comprehensive loss.

The increase in net other income was also attributable to the absence of litigation-related compensation paid

to FT Global during the nine months ended September 30, 2024, and no such cost was incurred during same period this year.

Net loss from continuing operations

For the nine months ended September 30, 2025,

our net loss from continuing operations was $31,058,936, representing an increase of $22,691,525, or 271.19%, as compared to the same

period last year.

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

1 unchanged sentence

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

$28.24 million for the nine months ended September 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 nine months ended September 30, 2025,

basic and diluted loss per share from continuing operations were both $8.03, as compared to loss per share of $4.20 (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

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

was $6.82 and $6.81, respectively, as compared to loss per share of $0.80 (both basic and diluted) for the same period last year.

Liquidity and Capital Resources

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.

We currently finance our business operations primarily

through convertible notes and the sale of our common stock.

Our current cash primarily consists of cash on hand and cash in bank.

September 30, 2025, we had cash and cash equivalents of $6.89 million, representing an increase of $2.13 million from $4.77 million as

of December 31, 2024.

Working Capital

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 $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.

from our operating cash flows, advances from our customers and convertible notes.

Our working capital was $40.54 million as of September

30, 2025, an increase of $32.94 million from working capital of $7.60 million as of December 31, 2024, mainly due to the increase in current

assets, such as cash and cash equivalent and investment funds, and decrease in current liabilities, such as accrued expenses and other

The following table sets forth a summary of our

cash flows for the periods indicated:

Nine months ended

September 30,

Net cash used in operating activities from continuing operations

$ (28,707,319 )

$ (15,915,005 )

Net cash provided by operating activities from discontinued operations

Net cash used in investing activities from continuing operations

(29,035,242 )

Net cash provided by financing activities from continuing operations

Effect of exchange rate change on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

(11,088,681 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Operating Activities

Net cash used in operating activities from continuing operations amounted

to $28.71 million for the nine months ended September 30, 2025, primarily due to i) a net loss from continuing operations of $31.06 million

adjusted for non-cash activities including allowance for credit losses/doubtful accounts of $29.42 million, gain on debt restructuring

of $3.07 million and share-based payments of $1.09 million, and ii) net changes in our operating assets and liabilities, which mainly

include a) an increase in other receivables of $27.60 million, b) a decrease in accrued expenses and other payables of $1.52 million,

which was partially offset by a) an increase in accounts payable of $1.36 million, b) an increase in advances from customers of $0.98

million, c) an increase in other non-current liabilities of $1.09 million, d) a decrease in accounts receivable of $0.59 million.

Net cash used in operating activities from continuing

operations amounted to $15.92 million for the nine months ended September 30, 2024, primarily due to i) a net loss from continuing operations

of $8.37 million adjusted for non-cash activities including allowance for credit losses/doubtful accounts of $3.83 million, and ii) net

changes in our operating assets and liabilities, which mainly include a) an increase in advances to suppliers and other current assets

of $8.11 million, b) an increase in other receivables of $5.25 million, c) a decrease in accounts payable of $1.54 million, which was

partially offset by a decrease in accounts receivable of $2.74 million.

Investing Activities

Net cash used in investing activities from continuing

operations amounted to $29.04 million for the nine months ended September 30, 2025, primarily due to prepayment for a business acquisition

of $29.87 million, which was partially offset by repayment from debt investment of $0.70 million.

Net cash used in investing activities from continuing

operations amounted to $1.03 million for the nine months ended September 30, 2024, primarily due to payment for debt investments of $1.80

million, which was partially offset by repayment from short term investment of $0.95 million.

Financing Activities

Net cash provided by financing activities from continuing operations

amounted to $31.83 million for the nine months ended September 30, 2025, primarily consisting of i) proceeds from the issuance of common

stock, net of issuance costs of $30.00 million, ii) proceeds from convertible notes payables of $1.80 million.

Net cash provided by financing activities from

continuing operations amounted to $2.41 million for the nine months ended September 30, 2024, primarily consisting of proceeds from the

issuance of common stock, net of issuance costs of $2.58 million, which was partially offset by repayment of amounts due to related parties

of $0.10 million.

Contractual Obligations

The Company has no long-term fixed contractual obligations or commitments

other than leases that are disclosed in Note 8 in the notes to our consolidated financial statements.

Off-balance sheet arrangements

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

sheet arrangements.

Quantitative and Qualitative Disclosures

about Market Risk

As of September 30, 2025, we did not have any

off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market

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