What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-18 compared with 2025-04-15 · 332 added, 518 removed, 90 unchanged (90% of the section changed)

ITEM 7 – MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the

6 unchanged sentences

under the heading “Risk Factors.”

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.

The Company also expanded into brokerage and investment banking business in Hong Kong and cryptocurrency mining farm in

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.

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.

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.

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

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.

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

respectively.

has no operation before the acquisition.

The Company plans to develop bitcoin and other cryptocurrency mining

and related services 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

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:

(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.

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 during outbreak of COVID-19 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

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 of

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.

There are legal and operational risks associated

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

These risks could result in a material change

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

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

In the past few years, the

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

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

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

in anti-monopoly enforcement.

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

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

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

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

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

On February 15, 2022, Cybersecurity Review Measures

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

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

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

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

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

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

On 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:

processor transfers important data to overseas;

(ii) any critical information infrastructure operator or data processor who processes

personal information of over 1 million people provides personal information to overseas;

(iii) any data processor who provides personal

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

more than 10,000 people to overseas since January 1st of the previous year;

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

transfer security assessment is required as prescribed by the CAC.

On February 17, 2023, the CSRC released 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;

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

share swap, transfer of shares or other means.

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

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

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

offering or listing before effective date of the new rules and 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

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

or (iv) voluntary or mandatory delisting.

The New Overseas

Listing Rules stipulate the legal consequences to the companies for breaches, including failure to fulfill filing obligations or filing

documents having false statement or misleading information or material omissions, which may result in a fine ranging from RMB1 million

to RMB10 million, and in cases of severe violations, the relevant responsible persons may also be barred from entering the securities

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

National Archives Administration released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the

Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Administration Provisions, which took

effect on March 31, 2023.

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

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

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

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

agencies and other entities and individuals.

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

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

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

in accordance with relevant laws and regulations;

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

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

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

with relevant laws and regulations.

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

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

or other foreign stock exchange except

for the filing requirement under New Overseas Listing Rules.

The Company is still processing the filings with CSRC for its offerings since

the effective of New Overseas Listing Rules and has not complied the filing requirements yet which would subject the Company to fines

and other penalties for violation of New Overseas Listing Rules.

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

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

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

or other foreign stock exchange.

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

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

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

In the opinion of our PRC counsel Fengdong Law

Firm, subsidiaries of the Company are incorporated and operating in mainland China have received all required permissions from Chinese

authorities to operate their current business in China, including Business licenses and Bank Account Open Permits, as of the date of this

In the opinion of Fengdong Law Firm, as of the

date of this report, we, our subsidiaries in China are not subject to permission requirements from the CSRC or CAC or any other entity

that is required to approve of their operations and have not received or were denied such permissions by any PRC authorities.

we are required to file with CSRC for any offerings under New Overseas Listing Rules.

The Company is still processing the filings with

CSRC for its offerings since the effective of New Overseas Listing Rules and has not complied the filing requirements yet which would

subject the Company to fines and other penalties for violation of New Overseas Listing Rules.

Given the current PRC regulatory environment,

it is uncertain whether we, our subsidiaries, will be able to obtain permission from the PRC government to offer our securities to foreign

investors, and even when such permission is obtained, whether it will be denied or rescinded.

If we or any of our subsidiaries do not

receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable

laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals, it could

significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of

our securities to significantly decline or become worthless.

Failure to take timely and appropriate measures to adapt to any of these

or similar regulatory compliance challenges could materially and adversely affect our current corporate structure and business operations.

The Company currently has one directly controlled

subsidiaries:

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

SkyPeople Foods Holdings Limited (“SkyPeople

BVI”) was a wholly owned subsidiary of the Company and a company organized under the laws of the British Virgin Islands, which held

100% of the equity interest of HeDeTang Holdings (HK) Ltd.

(“HeDeTang HK”), a company organized under the laws of the Hong

Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), and HeDeTang HK held 73.42% of the

equity interest of SkyPeople Juice Group Co., Ltd., (“SkyPeople (China)”), a company incorporated under the laws of the PRC.

SkyPeople (China) had eleven subsidiaries in the PRC, which were mainly involved in the production and sales of fruit juice concentrates,

fruit juice beverages and other fruit-related products in the PRC and overseas markets.

On February 27, 2020, SkyPeople BVI (the “Seller”)

completed the transfer of its ownership of HeDeTang HK to New Continent International Co., Ltd.

(the “Buyer”), an unrelated

third party and a company incorporated in the British Virgin Islands for a total price of RMB 0.6 million (approximately $85,714), pursuant

to a Share Transfer Agreement entered into by the Seller and the Buyer on September 18, 2019 and approved at the special shareholders

meeting of the Company on February 26, 2020 (the “Sale Transaction”).

SkyPeople BVI had no operational assets or business

after the transfer and the Company dissolved SkyPeople BVI on July 27, 2020.

Supply Chain Financing

Service and Trading in China

Since the second quarter

of 2021, we started supply chain financing service and trading business, which currently includes coal, aluminum ingots, sand and steel

supply chain financing service and trading business.

Overview of Our Business

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 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 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.

On November 18, 2025, we sold Future

Commercial Management (Hainan) Co., Ltd.

to Xi’an Yinshi Trading Co., Ltd.

for $1.4 million (RMB 10 million).

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 December 31, 2025, our principal business

operations consist of:

sale of fast-moving consumer goods;

commission-based trading and consulting services;

and supply chain financing

We currently have one directly controlled subsidiary,

Future FinTech (Hong Kong) Limited.

Fast-Moving Consumer Goods (“FMCG”)

Since the third quarter of 2024, we entered into

FMCG business to tap into the fast-growing online retail market.

We operate an online store on reputable e-commerce platform and focus

on sales of non-alcoholic beverage and dairy beverages.

The business model relies on selling large quantities of goods to generate revenue,

as the profit margin on each individual item is usually slim.

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.

Our supply chain finance business mainly serves

6 unchanged sentences

commodity circulation.

We focus on bulk commodity goods such as sand,

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

We focus on bulk commodity goods such as coal,

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

we use our own funds as the

5 unchanged sentences

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

goods but receive lower margin for the transaction.

For the sale of goods where we obtain control of the goods before transferring it

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

We consider multiple factors

when determining whether we obtain control of third-party goods, including evaluating if we can establish the price of the goods, retain

goods but receive an agent service fee for the transaction.

For the sale of goods where we obtain control of the goods before transferring

them to the customer, we recognize revenue based on the gross revenue amount billed to customers as sales of goods.

We consider multiple

factors when determining whether we obtain control of the goods, including evaluating if we can establish the price of the goods, retain

inventory risk for tangible goods or have the responsibility for ensuring acceptability of the goods.

We recognize net revenue as agent

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

the customers and suppliers that have good credit and reputation.

Asset Management,

Brokerage and Investment Banking Services in Hong Kong .

The Company acquired

90% of the issued and outstanding shares of Nice Talent Asset Management Limited (“NTAM”), a Hong Kong-based asset management

company in August 2021.

NTAM was founded in 2018 and it engages asset management and advisory services.

NTAM is licensed under the Securities

and Futures Commission of Hong Kong (SFC) for carrying out regulated activities in “Advising on Securities” and “Asset

NTAM offers diversified asset management portfolio for professional investors.

Assets of NTAM’s clients are held

in banks, where clients gave the banks their authorization allowing NTAM to place trading instructions on behalf of the clients in order

to manage the clients’ assets.

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 closed the

sale of 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

NTAM mainly engages in following asset management services for its

(1) Equity Investment

NTAM manages clients’ investment portfolio

in stocks of the companies listed on the international market with strong liquidity.

At the same time, it selects companies that have

unique or differentiated businesses, realizing above average profit growth.

(2) Debt investment

When NTAM manages clients’ investment portfolio

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

credit rating and asset liability ratio.

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

the same maturity and credit rating.

(3) Precious metals and currencies investment

NTAM also manages clients’ investment portfolio

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

Chinese yuan.

Precious metals include gold, platinum and silver.

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

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

structured products.

(4) Derivative Investment

NTAM also manages clients’ investment portfolio

in financial derivatives in different asset classes, such as options and structured products.

(5) External Asset Management Services (EAM)

This business takes customer demand as the service

purpose, cooperates with several private banks which provide asset custody services, and innovatively introduces the function of investment

bank to provide exclusive private solutions for clients.

NTAM’s main revenue is generated from providing

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

Impact of COVID-19 on our Business

In December 2019, a novel strain of coronavirus

was reported and has spread throughout China and other parts of the world.

On March 11, 2020, the World Health Organization characterized

the outbreak as a “pandemic”.

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

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

In response to

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

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

Our offices in China were closed and the employees

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

The quarantines, travel restrictions, and the temporary closure of

office buildings have materially negatively impacted our business.

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

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

impact our business and results of operations.

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

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

temporary closure of office buildings and facilities in these cities.

In December 2022, the Chinese government eased its strict zero

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

operations in China.

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

and distributors through meetings and conferences.

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

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

new members for its online e-commerce platforms.

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

started a process to close down its operations in November 2023 and completed deregistration and dissolution of the VIE with local authority

on March 7, 2024.

While the potential economic impact brought by

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

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

Further, as we do not have access

to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the

event that we require additional capital.

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

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

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

We select customers

and suppliers that have good credit and reputation.

However, due to the continuous decline in coal prices and weakening market

demand in China, we have significantly scaled down our supply chain financing and trading business segment since late 2025.

This business

segment generated limited revenue during the year ended December 31, 2025, and we may continue to conduct certain related activities in

2026 depending on market conditions.

Trading Commission and Consulting services

FTFT International Securities and Futures Limited,

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

FTFT International Securities

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

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

Meanwhile, we also provide integrated business

and financial consulting services that helps our customers turn ambitious goals into financial realities.

Through our deep industry expertise,

we partner closely with our customers to diagnose complex challenges, develop data-backed strategies, and drive seamless execution.

consulting services includes but not limited to debt recovery consulting service, listing and financing consulting service etc.

Critical Accounting Policies and Estimates

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.

On November 27, 2024, Nice Talent Asset Management

Limited (“NTAM”) was disposed of for a consideration of US$ 0.31 million (HK$2.40 million).

On December 9, 2024, FTFT SuperComputing Inc.

was disposed of for a consideration of US$1.97 million, of which (i) the assumption of the obligations of FTFT SuperComputing totaling

The loss on disposal was $22.46.

On October 18, 2024, Nice Talent Asset Management

Limited (“NTAM”) was disposed of for a consideration of $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

1 unchanged sentence

arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District

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

The gain on disposal was $3.42 million.

On February 3, 2025, 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 were disposed of for a consideration of

US$25,000 after a court auction sale.

The gain on disposal was $28.26 million.

On December 16, 2025, Future Commercial Management (Hainan) Co., Ltd.

was disposed of for a consideration of $1.4 million (RMB 10.0 million).

The gain on disposal was $52,749.

Segment Information Reclassification

The Company’s businesses mainly are Supply

Chain Financing and Trading Services and Asset Management Services.

Use of Estimates

The Company’s consolidated financial statements

have been prepared in accordance with U.S.

GAAP and this requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure at 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 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, valuation of change in fair value of warrant liability, 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.

We classified our business segments into Trading

Commission and Consulting services, Fast-Moving Consumer Goods (FMCG), and Supply Chain Financing and Trading.

Uses of Estimates in the Preparation of Financial Statements

Our 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 are not limited to, the expected credit losses for receivables, estimated useful life and residual value of property and equipment,

impairment of long-lived assets, provision for staff benefits, 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.

Fair Value of Financial Instruments

On January 1, 2009, the Company adopted FASB Accounting

Standard Codification 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 does not require any new

fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source

of the information.

In February 2008, FASB deferred the effective date of ASC 820 by one year for certain non-financial assets and non-financial

liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).

The Company adopted the provisions of ASC 820, except as it applies to those non-financial assets and non-financial liabilities for which

the effective date has been delayed by one year.

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:

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

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by little or no market activity and that is significant to the fair value of the assets or liabilities.

Classification within the hierarchy

is determined based on the lowest level of input that is significant to the fair value measurement.

The Company’s cash and cash equivalents

and restricted cash and short-term investments are classified within level 1 of the fair value hierarchy because they are valued using

quoted market prices.

Revenue Recognition

The Company adopted ASC 606, Revenue from Contracts

with Customers, from January 1, 2018.

The adoption had no impact on the Company’s retained earnings as of January 1, 2018 as well

as the Company’s financial statements for the year ended December 31, 2019.

To achieve that core principle, we apply the five steps

defined under Topic 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 is recognized upon the transfer of control of promised goods or services to

Historically, the Company has not had any returned products.

Accordingly, no provision has been made for returnable goods.

The Company is not required to rebate or credit a portion of the original fee if it subsequently reduces the price of its products.

Foreign Currency and Other Comprehensive Income

The Company applies the five steps defined under

(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 our 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

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.

Foreign Currency and Other Comprehensive Income (Loss)

The financial statements of the Company’s

7 unchanged sentences

in a separate component of equity (cumulative translation adjustment).

Other comprehensive income for the years ended

December 31, 2024 and 2023 represented foreign currency translation adjustments and were included in the consolidated statements of comprehensive

Other comprehensive income (loss) for the years

ended December 31, 2025 and 2024 represented foreign currency translation adjustments and were included in the consolidated statements

of operation and comprehensive loss.

There is no guarantee the RMB amounts could have

16 unchanged sentences

Impairment of Long-Lived Assets

In accordance with the FASB 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.

It is reasonably possible that these assets could become impaired as a result of technological or other

industrial changes.

Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future

net undiscounted cash flows to be generated by the assets.

In accordance with ASC 360-10, Accounting for

the Impairment or Disposal of Long-Lived Assets , long-lived assets, such as property 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

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 costs to sell.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but

not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

Summary of Significant Accounting Policies, to our Consolidated Financial Statements for a description of applicable recent

accounting pronouncements.

Comparison of Operation Results of years ended

December 31, 2024 and 2023

The following table presents our consolidated

revenues for our main products and services for the fiscal years 2024 and 2023, respectively, (in thousands):

not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the accompanying

consolidated financial statements.

Summary of Significant Accounting Policies, to our Consolidated Financial Statements for

a description of applicable recent accounting pronouncements.

Results of Operations for the Years Ended December

31, 2025 and 2024

The following table summarizes the results of

our operations during the years ended December 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage

increase or (decrease) during such fiscal years.

For the Years Ended

Cost of revenue

OPERATING EXPENSES

General and administrative expenses

Stock-based compensation

Selling expenses

Allowance for credit losses/doubtful accounts

Total operating expenses

LOSS FROM OPERATIONS

(34,007,122 )

(32,885,599 )

OTHER INCOME (EXPENSES)

Interest income

Interest expenses

Amortization of debt issuance costs

Gain on Debt Restructuring

Other income (expenses), net

Total other income (expenses), net

Loss from Continuing Operations before Income Tax

(30,946,254 )

(33,739,005 )

Net loss from continuing operations

(30,946,254 )

(33,739,005 )

Net income from discontinued operations

(33,179,687 )

COMPREHENSIVE LOSS ATTRIBUTABLE TO Future Fintech Group, Inc.

$ (4,243,687 )

$ (32,995,434 )

The following table sets forth the breakdown of

our revenues for the years ended December 31, 2025 and 2024, respectively:

For the Years Ended December 31,

Fast-Moving Consumer Goods (“FMCG”)

Supply Chain Financing/Trading

Revenue decreased from $21.7 million in 2023 to

$2.16 million in 2024, decrease of $19.54 million or 158.5%.

The decrease in overall revenue was mainly due to the sale of the subsidiary

NTAM which generated $12.88 million revenue from asset management business in 2023 as well as decrease in revenues generated from supply

chain financing and trading business.

As the real estate, infrastructure and overall economy in China have slowed down in 2024, the demand

for sand and steel has dropped during 2024 comparing to the same period of 2023, and coal price has decreased in China and the market

demand has also decreased during 2024 as comparing to the same period of 2023.

Other revenues increased from $0.87 million for

the year ended December 31, 2023 to $1.18 million for the same period of 2024, mainly due to the increased debt recovery consulting service

fee as well as U.S.

dollar bond service income, as we did not have such income in 2023.

(in thousands)

Trading Commission and Consulting services

Total revenue

Revenue from sales of FMCG increased by $3,234,308,

or 12,665.18%, from $25,537 for the year ended December 31, 2024 to $3,259,845 for the year ended December 31, 2025.

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 year ended December 31, 2025.

Revenue from supply chain financing/trading decreased

by $956,359, or 99.86%, from $957,708 for the year ended December 31, 2024 to $1,349 for the year ended December 31, 2025.

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 year ended December 31, 2025.

Revenue from trading commission and consulting

services decreased by $562,554, or 49.73%, from $1,131,165 for the year ended December 31, 2024 to $568,611 for the year ended December

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

31, 2024, did not recur during the year ended December 31, 2025.

The following table sets forth the breakdown of

the gross profit for the years ended December 31, 2025 and 2024, respectively:

For the Years Ended December 31,

Fast-Moving Consumer Goods (FMCG)

Supply Chain Financing/Trading

Overall gross profit increased from approximately

$1.12 million in 2023 to approximately $1.27 million in 2024, mainly due to new consulting and US dollar bond services business in 2024

comparing to 2023.

Trading Commission and Consulting services

Overall gross profit decreased by $829,619, or

67.02%, to $408,320 for the year ended December 31, 2025 from $1,237,939 for the year ended December 31, 2024.

The decrease was primarily

due to the decrease in gross profit from trading commission and consulting services, and supply chain financing/trading which were in

line with the decrease in revenue for these two business segments for the year ended December 31, 2025.

Although revenue from the FMCG

segment increased significantly for the year ended December 31, 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 10.66% for the year ended December 31, 2025, representing

a decrease of 47.89 percentage points from 58.55% for the year ended December 31, 2024, 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 for the year ended December 31, 2025.

Operating Expenses

The following table presents consolidated operating

expenses and operating expenses as a percentage of revenue for 2024 and 2023, respectively, (in thousands):

General and administrative

Research and development expenses

The following table sets forth the breakdown of

our operating expenses and operating expenses as a percentage of revenue for the years ended December 31, 2025 and 2024, respectively:

For the Years Ended December 31,

General and administrative expense

Stock compensation expense

Selling expenses

(Recovery) Provision of doubtful debts

Impairment Loss

Allowance for credit losses/doubtful accounts

Total operating expenses

General and administrative expenses decreased

by $1 million, or 13.89%, from $7.2 million to $6.2 million for the year ended 2024, compared to the same period of last fiscal year.

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

ended December 31, 2024.

Selling expenses increased by $0.35 million to

$0.63 million in 2024 as compared to $0.28 million in 2023, the increase in selling expenses was mainly due to increase in selling expenses

from our supply chain business.

Bad debt provision increased by $27.35 million

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

The increase was due to bad debt provision in 2024 because a different

bad debt provision accounting treatment method used in 2024.

Loss from Operations

Loss from operations increased by $1.41 million

to $34.23 million for 2024 from $32.82 million for 2023, mainly due to decrease in cost of revenue.

Noncontrolling Interests

Worldwide Resources Ltd.

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

Each of Bin Wu and Lixiong Huang holds

25% and 20% interest in FTFT Capital Investments L.L.C., respectively.

Loss per Share

Basic and diluted loss per share from continuing

operations were $1.63 and $1.63 in fiscal 2024, as compared to $2.21 and $2.2 in fiscal 2023, respectively.

Basic and diluted loss per

share attributable to discontinued operations was $0.06 and $0.06 for fiscal year 2024 as compared to basic and diluted income per share

$0.07 and $0.07 for fiscal year 2023 respectively.

by $359,279, or 7.64%, from $4,702,662 for the year ended December 31, 2024 to $4,343,383 for the year ended December 31, 2025.

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 for the year ended December 31, 2025.

Stock compensation expense increased by $414,020

or 61.70%, from $670,980 for the year ended December 31, 2024 to $1,085,000 for the year ended December 31, 2025.

On March 10, 2025, the

Compensation Committee of the Board of Directors of the Company granted 125,000 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 $8.68 on March 10, 2025, the Company recorded an expense of $1.09 million in the year ended December 31, 2025.

Selling expenses increased by $212,395, or 33.40%,

from $635,918 for the year ended December 31, 2024 to $848,313 for the year ended December 31, 2025.

The increase was primarily attributable

to increased business entertainment expenses, resulting from our initiatives to expand into new business segments and acquire new customers.

Allowance for credit losses/doubtful accounts

increased slightly by $24,768, or 0.09%, from $28,113,978 for the year ended December 31, 2024 to $28,138,746 for the year ended December

Our management will continue monitoring and putting effort in collection of receivables to lower the level of the allowance.

Other Income (Expense), Net

Net other income increased by $3,914,274 or 458.66%,

from net other expense of $853,406 for the year ended December 31, 2024 to net other income of $3,060,868 for the year ended December

The increase was primarily due to the gain on debt restructuring during the year ended December 31, 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 425,000 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 consolidated statements of operations 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 year ended December 31, 2024, and no such cost was incurred during the year ended December 31, 2025.

Net Loss From Continuing Operations

Net loss from continuing operations decreased

by $2,792,751, or 8.28%, from $33,739,005 for the year ended December 31, 2024 to $30,946,254 for the year ended December 31, 2025.

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

Gain on Disposal of Discontinued Operations

Gain on disposal of discontinued operations was

$28.31 million for the year ended December 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, Global Key Shared Mall Ltd.

and Future Commercial Management (Hainan) Co., Ltd.

Earnings (Loss) per Share

For the year ended December 31, 2025, basic and

diluted loss per share from continuing operations were both $15.52, as compared to loss per share of $64.49 (both basic and diluted) for

the year ended December 31, 2024.

For the year ended December 31, 2025, basic and diluted earnings per share from discontinued operations

were both $13.21, as compared to earnings per share of $1.50 and $1.49 for the year ended December 31, 2024, respectively.

Liquidity and Capital Resources

As of December 31, 2024, we had cash and cash

equivalents of $4.84 million, a decrease of $12.57 million, from $17.41 million as of December 31, 2023.

The decrease in cash, cash equivalents

was mainly due the loss in provision of doubtful debt for the year ended December 31, 2024 comparing to the same period of 2023.

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 $8.27 million as of

December 31, 2024, a decrease of $28.49 million from $36.76 million as of December 31, 2023, mainly due to decrease in current assets.

In 2024, net cash used in our operating activities

was $21.23 million compared to net cash used in operating activities of $14.56 million in 2023.

The increase in net cash used by operating

activities was primarily due to an increase in provision of doubtful debt during the year ended December 31, 2024.

In 2024, net cash provided in our investing activities

was $16.29 million compared to net cash used in operating activities of $8.78 million in 2023 mainly due to decrease in repayment for

loan receivable.

In 2024, cash used by financing activities was

$2.5 million as compared to cash used in financing activities negative $2.4 million in 2023.

The increase in cash used by financing activities

was mainly due to proceeds from the issuance of common stock from a private placement, net of issuance costs.

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.

December 31, 2025, we had cash and restricted cash of $5.08 million, representing an increase of $0.31 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 convertible notes.

Our working capital was $42.55 million as of December 31, 2025, an increase

of $34.95 million from working capital of $7.60 million as of December 31, 2024, mainly due to the increase in investment funds and the

decrease in accrued expenses and other payables.

The following is a summary of cash provided by

or used in each of the indicated types of activities during the years ended December 31, 2025 and 2024, respectively.

For the Years Ended

Net cash used in operating activities from continuing operations

$ (31,771,593 )

$ (20,434,271 )

Net cash provided by operating activities from discontinued operations

Net cash used in investing activities from continuing operations

(28,957,019 )

Net cash provided by financing activities from continuing operations

Effect of exchange rate change on cash and restricted cash

Net increase (decrease) in cash and restricted cash

(11,250,449 )

Cash and restricted cash, from the continuing operations beginning of year

Cash and restricted cash from the discontinued operations, end of year

Cash and restricted cash, from the continuing operations, end of year

Operating Activities

Net cash used in operating activities from continuing

operations amounted to $31.77 million for the year ended December 31, 2025, primarily due to i) a net loss from continuing operations

of $30.95 million adjusted for non-cash activities including allowance for credit losses/doubtful accounts of $28.14 million, gain on

debt restructuring of $2.98 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 $27.24 million, b) a decrease in accrued expenses and other payables of $2.35

million, c) an increase in advances to suppliers and other current assets of $0.89 million, which was partially offset by a) an increase

in accounts payable of $1.04 million, b) an increase in other non-current liabilities of $1.09 million, c) a decrease in accounts receivable

of $0.85 million.

Net cash used in operating activities from continuing operations amounted

to $20.43 million for the year ended December 31, 2024, primarily due to i) a net loss from continuing operations of $33.74 million adjusted

for non-cash activities including allowance for credit losses/doubtful accounts of $28.11 million, and share-based payments of $0.67

million, and ii) net changes in our operating assets and liabilities, which mainly include a) an increase in other receivables of $11.15

million, b) an increase in advances to suppliers and other current assets of $4.67 million, c) a decrease in accrued expenses and other

payables of $1.19 million, d) a decrease in accounts payable of $1.08 million, which was partially offset by a decrease in accounts receivable

of $2.64 million.

Investing Activities

Net cash used in investing activities from continuing

operations amounted to $28.96 million for the year ended December 31, 2025, primarily due to prepayment for a business acquisition of

$29.93 million, which was partially offset by repayment from debt investment of $0.84 million.

Net cash used in investing activities from continuing

operations amounted to $1.72 million for the year ended December 31, 2024, primarily due to payment for debt investments of $1.54 million

and payment for loan receivable of $0.14 million.

Financing Activities

Net cash provided by financing activities from

continuing operations amounted to $31.77 million for the year ended December 31, 2025, primarily consisting of i) proceeds from the issuance

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

Net cash provided by financing activities from

continuing operations amounted to $2.48 million for the year ended December 31, 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

$0.09 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 December 31, 2024, we did not have any off-balance

sheet arrangements.

As of December 31, 2025 and 2024, we did not

have any off-balance sheet arrangements.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

3 unchanged sentences

in the Company’s consolidated financial statements beginning on page F-1 of this Annual Report on Form 10-K.

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

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-K

Item 7. Management’s Discussion and Analysis