Future FinTech Group Inc. 10-K

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly under the heading “Risk Factors.” 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 Hong Kong. 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. 42 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 and trading. 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 the receivables and payables of industrial customers, obtains the creditor’s rights or commodity goods rights of large state-owned enterprises through trade execution, provides customers with working capital, accelerates capital turnover, and then expands the business scale and improves the industrial value. Through our supply chain service ability and customer resources, we can tap into low-risk assets, flexibly carry out financial services around the actual financial needs of certain industries, and reduce the overall risk of the business by using the control of business flow, goods logistics and capital flow in the process of commodity circulation. 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 operation basis, actively uses a variety of channels and products for financing, such as banks, commercial factoring companies, accounts receivable, asset-backed securities, and other innovative financing methods to obtain sufficient funds. We sign purchase and sale agreements with suppliers and buyers. The suppliers are responsible for the supply and transportation of goods to the end users’ designated freight yard or transfer the title to us in certain warehouses. We also provide trading service as we don’t take control over the ownership of the goods but receive 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, and steel when no control is obtained throughout the transactions. We select customers and suppliers that have good credit and reputation. 43 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. Our 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 March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered. The loss on disposal was $45,487.54. On September 4, 2024, Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership) was dissolved and deregistered. The loss on disposal was $22.46. On October 18, 2024, Nice Talent Asset Management Limited (“NTAM”) was disposed of for a consideration of $0.31 million (HK$2.40 million). The loss on disposal was $2.32 million. On December 6, 2024, FTFT Super Computing Inc. was disposed of for a consideration of US$1.97 million, of which (i) the assumption of the obligations of FTFT Super Computing totaling $973,072.24 and (ii) $1,000,000 was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global Capital, Inc. arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District of New York. The gain on disposal was $3.42 million. 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. 44 Segment Information Reclassification 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 The Company has adopted FASB ASC Topic on Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable input, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Input other than Level 1 that is observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other input that is observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable input that is supported by little or no market activity and that is significant to the fair value of the assets or liabilities. 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 applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We assess 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 or services. We allocate the transaction price to each performance obligation based on the relative standalone selling price of the goods or services provided. Revenue is recognized upon the transfer of control of promised goods or services to a customer. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. 45 Foreign Currency and Other Comprehensive Income (Loss) The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency; however, the reporting currency of the Company is the United States dollar (“USD”). Assets and liabilities of the Company’s foreign subsidiaries have been translated into USD using the exchange rate at the balance sheet date, while equity accounts are translated using historical exchange rate. The average exchange rate for the period has been used to translate revenues and expenses. Translation adjustments are reported separately and accumulated in a separate component of equity (cumulative translation adjustment). 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 been, or could be, converted into USD at rates used in translation. Income Taxes Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted at the balance sheet date. Deferred income tax liabilities or assets are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and the financial reporting amounts at each period end. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. ASC 740 provides guidance for recognizing and measuring uncertain tax positions, and it prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. ASC 740 also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. Impairment of Long-Lived 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 changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. 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 accompanying consolidated financial statements. See Note 2. Summary of Significant Accounting Policies, to our Consolidated Financial Statements for a description of applicable recent accounting pronouncements. 46 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 December 31, Variance 2025 2024 Amount % REVENUE $ 3,829,805 $ 2,114,410 $ 1,715,395 81.13 % Cost of revenue 3,421,485 876,471 2,545,014 290.37 % Gross profit 408,320 1,237,939 (829,619 ) (67.02 )% OPERATING EXPENSES General and administrative expenses 4,343,383 4,702,662 (359,279 ) (7.64 )% Stock-based compensation 1,085,000 670,980 414,020 61.70 % Selling expenses 848,313 635,918 212,395 33.40 % Allowance for credit losses/doubtful accounts 28,138,746 28,113,978 24,768 0.09 % Total operating expenses 34,415,442 34,123,538 291,904 0.86 % LOSS FROM OPERATIONS (34,007,122 ) (32,885,599 ) (1,121,523 ) 3.41 % OTHER INCOME (EXPENSES) Interest income 61,807 691,257 (629,450 ) (91.06 )% Interest expenses (128,170 ) (107,732 ) (20,438 ) 18.97 % Amortization of debt issuance costs (20,475 ) - (20,475 ) (100.00 )% Gain on Debt Restructuring 2,979,948 - 2,979,948 100.00 % Other income (expenses), net 167,758 (1,436,931 ) 1,604,689 (111.67 )% Total other income (expenses), net 3,060,868 (853,406 ) 3,914,274 (458.66 )% Loss from Continuing Operations before Income Tax (30,946,254 ) (33,739,005 ) 2,792,751 (8.28 )% Net loss from continuing operations (30,946,254 ) (33,739,005 ) 2,792,751 (8.28 )% Net income from discontinued operations 28,192,255 559,318 27,632,937 4,940.47 % Net loss (2,753,999 ) (33,179,687 ) 30,425,688 (91.70 )% COMPREHENSIVE LOSS ATTRIBUTABLE TO Future Fintech Group, Inc. $ (4,243,687 ) $ (32,995,434 ) $ 28,751,747 (87.14 )% 47 Revenue 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, 2025 2024 Change Amount Amount Amount % Fast-Moving Consumer Goods (“FMCG”) $ 3,259,845 $ 25,537 $ 3,234,308 12,665.18 % Supply Chain Financing/Trading 1,349 957,708 (956,359 ) (99.86 )% Trading Commission and Consulting services 568,611 1,131,165 (562,554 ) (49.73 )% Total revenue $ 3,829,805 $ 2,114,410 $ 1,715,395 81.13 % 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. 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 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 31, 2025. 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. Gross Profit 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, Variance 2025 % 2024 % Amount % Fast-Moving Consumer Goods (FMCG) $ 33,144 8.12 % $ 138 - % $ 33,006 23,917.39 % Supply Chain Financing/Trading 1,347 0.33 % 163,753 13.23 % (162,406 ) (99.18 )% Trading Commission and Consulting services 373,829 91.55 % 1,074,048 86.77 % (700,219 ) (65.19 )% Total Amount $ 408,320 100.00 % $ 1,237,939 100.00 % $ (829,619 ) (67.02 )% 48 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 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, 2025 2024 Variance Amount % of revenue Amount % of revenue Amount % of General and administrative expense $ 4,343,383 113.41 % $ 4,702,662 222.41 % $ (359,279 ) (7.64 )% Stock compensation expense 1,085,000 28.33 % 670,980 31.73 % 414,020 61.70 % Selling expenses 848,313 22.15 % 635,918 30.08 % 212,395 33.40 % Allowance for credit losses/doubtful accounts 28,138,746 734.73 % 28,113,978 1,329.64 % 24,768 0.09 % Total operating expenses $ 34,415,442 898.62 % $ 34,123,538 1,613.86 % $ 291,904 0.86 % General and administrative expenses decreased 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. 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 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. 49 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 31, 2025. 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 31, 2025. 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. The 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 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. As of 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. 50 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. Cash Flows 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 December 31, 2025 2024 Net cash used in operating activities from continuing operations $ (31,771,593 ) $ (20,434,271 ) Net cash provided by operating activities from discontinued operations 29,225,270 8,567,715 Net cash used in investing activities from continuing operations (28,957,019 ) (1,720,443 ) Net cash provided by financing activities from continuing operations 31,773,098 2,478,258 Effect of exchange rate change on cash and restricted cash 42,297 (141,708 ) Net increase (decrease) in cash and restricted cash 312,053 (11,250,449 ) Cash and restricted cash, from the continuing operations beginning of year 4,765,111 16,093,190 Less: Cash and restricted cash from the discontinued operations, end of year - 77,630 Cash and restricted cash, from the continuing operations, end of year $ 5,077,164 $ 4,765,111 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. 51 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, 2025 and 2024, we did not have any off-balance sheet arrangements. ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by this item is included 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 Not applicable.