FTFT 10-K & 10-Q changes, risk factors and insider trading
Future FinTech Group Inc. · Nasdaq · Services-Business Services, Nec · CIK 1066923 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our listing readiness and preparatory consulting services business is in an early stage and is subject to regulatory interpretation and execution risks, and our ability to develop this business may be affected by regulatory developments and market conditions.”
New heading “We have implemented a reverse stock split to address Nasdaq minimum bid price requirements, and there can be no assurance that our common stock will maintain compliance with Nasdaq listing standards.”
Removed heading “An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations and financial results.”
Largest changes
“Reverse stock splits do not directly affect the underlying value of a company and are often viewed negatively by the market. The market price of our common stock may decline following the reverse stock split for a variety of reasons, including market perceptions regarding our business, reduced liquidity due to a lower number of shares outstanding, general market conditions, or other factors unrelated to our financial performance. …”see in full comparison
“A delisting of our common stock from Nasdaq could materially and adversely affect the liquidity and market price of our securities, limit our ability to raise capital, reduce analyst coverage, and decrease investor confidence. While we intend to monitor our continued compliance with Nasdaq listing requirements, we may not be able to maintain compliance with the minimum bid price requirement or other listing standards in the future.”see in full comparison
“An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations and financial results.”see in full comparison
“A widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity. In addition, a recession or market correction resulting pandemic could materially negatively affect our business and the value of our common stock.”see in full comparison
FT Global has registered the Court’s judgment in the United States District Court for Southern District of New York (“NY Court”), where FT Global has brought a motion requiring the Company to turn over its stock in its subsidiary companies. The Company has filed an opposition to the motion, arguing that according to the New York statute the NY Court should first determine that the value of the stock in the subsidiary is insufficient to satisfy the judgment as the Company believe the request for turnover is premature before a valuation hearing. On August 28, 2024, NY Court granted FT Global’s motion for turnover of Defendant’s shares in Defendant’s wholly-owned subsidiaries as Defendant 1) failed to satisfy the $10.8 million judgment rendered in the Northern District of Georgia and registered in the Southern District of New York, and 2) is in possession of money and property in which it has an interest. The NY Court ordered Defendant shall turn over the shares, membership, or limited partnership interests in all of its subsidiaries, and the corporate seals of its China and Hong Kong-based subsidiaries, to the U.S. Marshal for auction or sale until the judgment is satisfied. Pursuant to the order issued by the United States District Court for the Southern District of New York on August 28, 2024, the United States Marshal for the Southern District of New York (“U.S. Marshal”) sold the securities of the subsidiaries of the Company other than those in Hong Kong and China in auction of: (i) all of the membership interests in Future Fintech Digital Capital Management LLC; (ii) all of the outstanding shares of FTFT UK Limited; (iii) the corporate seal of DigiPay FinTech Limited; (iv) the corporate seal of GlobalKey SharedMall Limited; (iv) all of the outstanding shares of Future Fintech Labs Inc.; and (v) all of the outstanding shares of Future Fintech Digital Number One GP, LLC (USA) to Alec Orudjiev, the general counsel of FT Global for $25,000 on December 18, 2024. On December 6, 2024, the Company agreed to sell all issued and outstanding shares of FTFT SuperComputing Inc. a wholly owned subsidiary of the Company (“FTFT SuperComputing”) to DDMM Capital LLC (the “Buyer”) for a purchase price that equals to: (i) the assumption of the obligations of FTFT SuperComputing totaling $973,072.24 and (ii)$1,000,000, which was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global Capital, Inc. arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District of New York and all matters pertaining to such litigation. The Company has appealed the turnover order of the NY Court for the auction of securities of the subsidiaries of the Company in Hong Kong and China to the United States Court of Appeals for the Second Circuit and is waiting for the final decision of the Court of Appeals. On February 6, 2025, FT Global filed a motion (“Motion”) in the NY Court, amended on February 12, 2025, seeking a turnover order for 39,825,939 unissued shares of the Company’s common stock for sale to satisfy the judgement.see in full comparisonTheOnamendedJune 17,motion directs the requested relief not only at2025, the CompanybutenteredalsointoataTransharesettlementCorporation, theandCompany’sforbearanceFlorida-basedagreementtransferwithagent.FTTheGlobal,Companypursuantbelievesto which theMotion lacks merit, as the issuance of unissued shares in this manner would violate corporate governance principles, Florida corporate law, and federal securities regulations. The Company has opposed the Motion, whichcompany isnowrequiredfully briefed and awaits decision by the NY Court. The litigation againstto pay FT Globalhasanbeenaggregatelong andamountcostlyofwhich$4.0hasmillionmateriallyover an 18-month period. For the fiscal year ended December 31, 2024 andadversely affect our business, financial condition and results of operations. If the NY Court grants the Motion, we will have to turn over for all the unissued shares of common stock of2025, the Company paid $1.97 million andthe$1.85existingmillion,shareholdersrespectively,willtowardsbe significantlyaccrueddilutedexpenses andtheothervalue of our securities will significantly decline or become worthless.payables.
“Our listing readiness and preparatory consulting services business is in an early stage and is subject to regulatory interpretation and execution risks, and our ability to develop this business may be affected by regulatory developments and market conditions.”see in full comparison
Full comparison: every changed paragraph (18)
FT Global has registered the Court’s judgment
in the United States
District Court for Southern District of New York (“NY Court”), where FT Global has brought a motion requiring
the Company
to turn over its stock in its subsidiary companies. The Company has filed an opposition to the motion, arguing that
according to the New
York statute the NY Court should first determine that the value of the stock in the subsidiary is insufficient to
satisfy the judgment
as the Company believe the request for turnover is premature before a valuation hearing. On August 28, 2024, NY Court
granted FT Global’s
motion for turnover of Defendant’s shares in Defendant’s wholly-owned subsidiaries as Defendant
1) failed to satisfy the $10.8
million judgment rendered in the Northern District of Georgia and registered in the Southern District of
New York, and 2) is in possession
of money and property in which it has an interest. The NY Court ordered Defendant shall turn over the
shares, membership, or limited partnership
interests in all of its subsidiaries, and the corporate seals of its China and Hong Kong-based
subsidiaries, to the U.S. Marshal for auction
or sale until the judgment is satisfied. Pursuant to the order issued by the United States
District Court for the Southern District of
New York on August 28, 2024, the United States Marshal for the Southern District of New York
(“U.S. Marshal”) sold the securities
of the subsidiaries of the Company other than those in Hong Kong and China in auction of:
(i) all of the membership interests in Future
Fintech Digital Capital Management LLC; (ii) all of the outstanding shares of FTFT UK Limited;
(iii) the corporate seal of DigiPay FinTech
Limited; (iv) the corporate seal of GlobalKey SharedMall Limited; (iv) all of the outstanding
shares of Future Fintech Labs Inc.; and
(v) all of the outstanding shares of Future Fintech Digital Number One GP, LLC (USA) to Alec Orudjiev,
the general counsel of FT Global
for $25,000 on December 18, 2024. On December 6, 2024, the Company agreed to sell all issued and outstanding
shares of FTFT SuperComputing
Inc. a wholly owned subsidiary of the Company (“FTFT SuperComputing”) to DDMM Capital LLC (the
“Buyer”) for a
purchase price that equals to: (i) the assumption of the obligations of FTFT SuperComputing totaling $973,072.24
and (ii)$1,000,000, which
was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global
Capital, Inc. arising from
the judgment entered in favor of FT Global and against the Company registered in the Southern District of New
York and all matters pertaining
to such litigation. The Company has appealed the turnover order of the NY Court for the auction of securities
of the subsidiaries of the
Company in Hong Kong and China to the United States Court of Appeals for the Second Circuit and is waiting
for the final decision of the
Court of Appeals. On February 6, 2025, FT Global filed a motion (“Motion”) in the NY Court,
amended on February 12, 2025,
seeking a turnover order for 39,825,939 unissued shares of the Company’s common stock for sale to
satisfy the judgement. TheOn amendedJune
17, motion directs the requested relief not only at2025, the Company butentered alsointo ata Transharesettlement Corporation,
theand Company’sforbearance Florida-basedagreement transferwith agent.FT TheGlobal, Companypursuant believesto which the Motion lacks merit, as the issuance of unissued shares in this
manner would violate corporate governance principles, Florida corporate law, and federal securities regulations. The Company has
opposed the Motion, whichcompany is nowrequired fully briefed and awaits decision by the NY Court. The litigation againstto
pay FT Global hasan beenaggregate long
andamount costlyof which$4.0 hasmillion materiallyover an 18-month period. For the fiscal year ended December 31, 2024 and adversely affect our business, financial condition and results of operations. If the NY Court grants
the Motion, we will have to turn over for all the unissued shares of common stock of2025, the Company
paid $1.97 million and the$1.85 existingmillion, shareholdersrespectively, willtowards be
significantlyaccrued dilutedexpenses and theother value of our securities will significantly decline or become worthless.payables.
An occurrence of an uncontrollable event
such as the COVID-19 pandemic may negatively affect our operations and financial results.
In recent years, there have been outbreaks of
epidemics in various countries. At the end of 2019, there was an outbreak of a novel strain of coronavirus (COVID-19), which has been
spread rapidly to many parts of the world, including China, Hong Kong, UK and the U.S. In March 2020, the World Health Organization declared
COVID-19 a pandemic. The COVID-19 pandemic resulted in, among other things, quarantines, travel restrictions, and the temporary closure
of office buildings and facilities in China, Hong Kong, UK and in the U.S.
A large part of our revenues are generated in
China and Hong Kong. Consequently, our results of operations was adversely affected during the outbreak, especially between 2020 and 2022. There
have been outbreaks of Omicron variant in various cities in China in 2022 which 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.
A widespread pandemic
could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect
our liquidity. In addition, a recession or market correction resulting pandemic could materially negatively affect our business and the
value of our common stock.
In general, our business could be adversely affected
by the epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A
virus, the Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, governments and other organizations may adopt
regulations and policies that could lead to severe disruption to our daily operations, including temporary closure of our offices and
other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including but not limited to,
temporarily closing down business, limiting business hours, and setting restrictions on travel and/or visits with clients and partners
for a prolonged period of time. Various impacts arising from severe conditions may cause business disruption, resulting in material, adverse
effects to our financial condition and results of operations.
Our listing readiness and preparatory consulting services business is in an early stage and is subject to regulatory interpretation and execution risks, and our ability to develop this business may be affected by regulatory developments and market conditions.
We have recently expanded into listing readiness and preparatory consulting services, which are conducted primarily through our Hong Kong subsidiary, Future FinTech (Hong Kong) Limited, a company incorporated in Hong Kong. In certain limited circumstances, these services may also involve our PRC subsidiary, Future Information Service (Shenzhen) Co., Ltd., a company organized under the laws of the People’s Republic of China. All activities relating to this business have been conducted outside of the United States and are expected to continue to be conducted outside of the United States. These services consist of corporate consulting support to private companies that are evaluating or preparing for a potential public listing, including assistance with internal control readiness, financial reporting preparation, corporate governance structuring, coordination with auditors and legal counsel, general preparatory matters relating to listing readiness, and assistance in completing the proposed offering and listing. Neither we, nor our subsidiaries, Future FinTech (Hong Kong) Limited and Future Information Service (Shenzhen) Co., Ltd., engage in underwriting, securities brokerage, placement agent services, or investor solicitation activities in the United States or in any other jurisdiction where we do not hold the required license or registration. Any securities offerings undertaken by our clients are conducted by licensed underwriters, broker-dealers, or other appropriately registered financial institutions retained directly by such clients.
Although we believe our activities are structured as consulting services and are conducted in a manner intended to avoid requiring securities brokerage or similar licenses, the application of securities laws and related regulations in various jurisdictions may involve fact-specific determinations and regulatory interpretation. If regulatory authorities were to determine that additional licensing, registration, or approvals are required in connection with our activities, we could be required to modify our business model, obtain additional approvals, incur increased compliance costs, or suspend certain services.
In addition, this business line is in an early stage of development. As of the date of this report, Future FinTech (Hong Kong) Limited and Future Information Service (Shenzhen) Co., Ltd. have entered into consulting agreements with a limited number of clients. For the fiscal year ended December 31, 2025, the company recognized revenue of $135,605.61. the Company did not recognize any revenue from these services. Client projects remain in preliminary stages, and there can be no assurance that such engagements will progress to completed public listings or generate significant revenue in future periods. Our ability to develop this business will depend on market conditions, client readiness, regulatory developments, and our ability to execute our consulting engagements effectively.
ZeyaoShanchun XueHuang has control over key decision
making as a result of his control of a substantial amount of our voting stock.
Mr.ZeyaoShanchun Xue,Huang, indirectly and directly beneficially
owns 385,287 2,250,000
shares, or approximately 12.6%,42.93% of our outstanding common stock as of AprilMarch 11,16, 2025.2026. Wealth Index Capital Limited (the “WICL”)
is the record shareholder directly holds 2,250,000 shares of the Company’s common stock, representing approximately 42.93% of the
Company’s 5,240,544 outstanding shares of common stock as of March 16, 2026 based on information from the Company’s transfer
agent. Mr. ZeyaoShanchun Xue’sHuang is the sole member of WICL, holds 100% ownership in WICL. As such, Mr. Huang may be deemed a beneficial owner
of the 2,250,000 shares of the Company’s common stock directly held by WICL pursuant to Section 13(d)(3) of the Act. Mr. Shanchun
Huang’s beneficial ownership
of 12.6%42.93% of Future FinTech’s issued and outstanding common stock will likely give him the ability
to control the outcome of matters
submitted to shareholders for approval, including but not limited to the election of directors and any
merger, consolidation, or sale
of all or substantially all of the Company’s assets. This concentrated control could delay, defer,
or prevent a change of control,
merger, consolidation, or sale of all or substantially all of the Company’s assets that other shareholders
support, or conversely
this concentrated control could result in the consummation of such a transaction that other shareholders do not
support. This concentrated
control could also discourage a potential investor from acquiring the common stock of the Company due to the
limited voting power of such
shares. As a shareholder, even a controlling shareholder, Mr. ZeyaoShanchun XueHuang is entitled to vote his shares,
and shares over which he has voting
control, in his own interests, which may not always be in the interests of our shareholders generally.
For more information regarding these and other
provisions, see the exhibit titled “Description of Our Securities —- Anti-Takeover Effects of Certain Provisions of Florida
Law.”
On January 8, 2026, 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-4 reverse stock split of the Company’s authorized shares of common stock from 600,000,000 shares to 150,000,000 shares, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). The common stock will continue to be $0.001 par value. The Company will round up the fractional shares that result from the Reverse Stock Split and no fractional shares will be issued in connection with the 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 Reverse Stock Split. The current pre-split number of shares of commons stock outstanding is 20,193,311 and the post-split number of shares outstanding will be approximately 5,048,328. 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 January 8, 2026.
We have implemented a reverse stock split to address Nasdaq minimum bid price requirements, and there can be no assurance that our common stock will maintain compliance with Nasdaq listing standards.
Our common stock is listed on The Nasdaq Stock Market. Nasdaq requires, among other things, that listed companies maintain a minimum bid price of $1.00 per share. In order to address prior or potential non-compliance with the minimum bid price requirement, we effected a 1-for-4 reverse stock split on January 20, 2026. Although the reverse stock split increased the per-share trading price of our common stock, there can be no assurance that the bid price of our common stock will remain at or above the minimum level required by Nasdaq.
Reverse stock splits do not directly affect the underlying value of a company and are often viewed negatively by the market. The market price of our common stock may decline following the reverse stock split for a variety of reasons, including market perceptions regarding our business, reduced liquidity due to a lower number of shares outstanding, general market conditions, or other factors unrelated to our financial performance. If the bid price of our common stock were to fall below $1.00 per share for an extended period in the future, we could again be subject to deficiency notices, compliance periods, or potential delisting proceedings by Nasdaq.
A delisting of our common stock from Nasdaq could materially and adversely affect the liquidity and market price of our securities, limit our ability to raise capital, reduce analyst coverage, and decrease investor confidence. While we intend to monitor our continued compliance with Nasdaq listing requirements, we may not be able to maintain compliance with the minimum bid price requirement or other listing standards in the future.
Management's Discussion & Analysis (MD&A)
New heading “Fast-Moving Consumer Goods (“FMCG”)”
New heading “Trading Commission and Consulting services”
New heading “Critical Accounting Policies and Estimates”
New heading “Uses of Estimates in the Preparation of Financial Statements”
New heading “Other Income (Expense), Net”
New heading “Gain on Disposal of Discontinued Operations”
New heading “Working Capital”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
New heading “Contractual Obligations”
Removed heading “Asset Management, Brokerage and Investment Banking Services in Hong Kong.”
Removed heading “Impact of COVID-19 on our Business”
Removed heading “Use of Estimates”
Removed heading “Noncontrolling Interests”
Largest changes
“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. …”see in full comparison
“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. Currently, we are required to file with CSRC for any offerings under New Overseas Listing Rules. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (123)
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:
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.
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 U.S. The Company had a contractual arrangements with a VIE E-Commerce Tianjin in China, which has generated minimal revenue
and business since 2021 due to the negative impact caused by COVID-19. The Company started the process to close it down in November 2023
and completed deregistration and dissolution of the VIE with local authority on March 7, 2024. 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. In order to
retain talent in view of the increased turnover in the industry in Hong Kong, top performers of NTAM who had worked with the company for
years were granted the right to subscribe for new shares of NTAM with cash. As a result, in July 2023, 19 shares of NTAM were issued to
Ms. Lau Kwai Chun at a cash consideration of HK$1,786,301 and in December 2023, 11 shares of NTAM were issued to Aspenwood Capital Partner
Limited at a cash consideration of HK$1,034,174. Due to the abovementioned 30 new shares issuance, the Company’s holding of NTAM
decreased from 90% to 77.14%. In August 2024, NTAM issued additional 168 shares with HK$17,900 each for a total of HK$3,007,200 by way
of rights subscription offer to three existing shareholders of NTAM and Future Fintech (Hong Kong) Limited did not participate in the
subscription and an outsider investor purchased the shares. After the right subscription, the shareholding percentage of NTAM by Future
Fintech (Hong Kong) Limited decreased from 77.14% to 42.86%. In November 2024, the Company sold its remaining 42.86% ownership of
NTAM to a third party for HK$2.4 million and is no longer in asset management business in Hong Kong.
On April 18, 2022, the
Company and Future Fintech (Hong Kong) Limited, a wholly owned subsidiary of the Company jointly acquired 100% equity interest of
KAZAN S.A., a company incorporated in Republic of Paraguay for $288. The Company owns 90% and FTFT HK owns 10% of Kazan S.A.,
respectively. Kazan S.A. 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)
Co. Ltd.’, respectively.
On September 4, 2024, the Company deregistered
and dissolved the Tianjin Future Private Equity Fund Management Partnership, a Limited Partnership under the laws of China.
On December 6, 2024, the Company and FTFT SuperComputing
Inc. a wholly owned subsidiary of the Company (“FTFT SuperComputing”) entered into a Stock Purchase Agreement (the “Agreement”)
with DDMM Capital LLC (the “Buyer”). Pursuant to the terms of the Agreement, the Company sold all of the issued and
outstanding shares of FTFT SuperComputing to the Buyer for a purchase price that equals to: (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
of COVID-19. CCM has generated minimal revenue and business since 2021, despite the Company transformed the member-based business
model of CCM to a sale agent based “Enterprise Communication as A Service” or eCAAS platform during the second quarter of
2021. 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: (i) any data
processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes
personal information of over 1 million people provides personal information 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
authorities; (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
market. On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secretes Protection and the
National Archives Administration released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the
Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Administration Provisions, which took
effect on March 31, 2023. 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. Any
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
report.
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. Currently,
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 CompanyWe currently hashave one directly controlled subsidiary,
subsidiaries: Future FinTech (Hong Kong) Limited, a company incorporated under the laws of 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.
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.
Since the second quarter
of 2021, we startedhave engaged
in the coal supply chain financing service and trading business,business. whichSince currentlythe includesthird coal,quarter of 2021, we have engaged in aluminum ingots,ingots sand and steelsupply
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.
We focus on bulk commodity goods such as sand,coal,
steel,aluminum coalingots, sand and aluminum ingotssteel and take large state-owned or listed companies as the core service targets; Wewe 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 loweran marginagent service fee for the transaction. For the sale of goods where we obtain control of the goods before transferring
them it
to the customer, we recognize revenue based on the gross revenue amount billed to customers as sales of goods. We consider multiple
factors factors
when determining whether we obtain control of third-partythe 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 is obtained throughout the transactions. We select
the 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. Our consulting services includes but not limited to debt recovery consulting service, listing and financing consulting service etc.
Critical Accounting Policies and Estimates
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
Management”. 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
Kong.
NTAM mainly engages in following asset management services for its
clients:
(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. 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.
On June 16, 2023, QR (HK) Limited was dissolved
and deregistered.
On December 5, 2023, FTFT PARAGUAY S.A. was dissolved.
On March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered. The loss on disposal was $45,487.54.
On September 4, 2024, Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership) was dissolved and deregistered. The loss on disposal was $22.46.
On NovemberOctober 27,18, 2024, Nice Talent Asset Management
Limited (“NTAM”) was disposed of for a consideration of US$ 0.31$0.31 million (HK$2.40 million). The loss on disposal was $2.32 million.
On December 9,6, 2024, FTFT SuperComputingSuper Computing Inc.
was disposed of for a consideration of US$1.97 million, of which (i) the assumption of the obligations of FTFT SuperComputingSuper 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.
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
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
The Company’s businesses mainly are Supply
Chain Financing and Trading Services and Asset Management Services.
Use of Estimates
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Change in Independent Registered Public Accounting Firm”
New heading “Results of Operations”
New heading “Net income (loss) from continuing operations”
New heading “Comparison of Six Months Ended June 30, 2026 and 2025:”
New heading “Operating Expenses”
New heading “Other Income, Net”
Largest changes
“Fortune's audit reports on the Company's consolidated financial statements as of and for the fiscal years ended December 31, 2025 and December 31, 2024 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that each such report contained an explanatory paragraph regarding the Company's ability to continue as a going concern. …”see in full comparison
“Revenue from supply chain financing/trading decreased by $1,341, or 100.00%, from $1,341 for the three months ended March 31, 2025 to $ nil for the three months ended March 31, 2026. The decrease was due to our management’s decision to temporarily suspend these operations resulting from lower coal prices and reduced market demand in China during the three months ended March 31, 2026.”see in full comparison
“Revenue from supply chain financing/trading decreased by $1,341, or 100.00%, from $1,341 for the six months ended June 30, 2025 to $ nil for the six months ended June 30, 2026. 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 six months ended June 30, 2026.”see in full comparison
Full comparison: every changed paragraph (72)
As of MarchJune 31,30, 2026, our principal business operations
consist of: sale of fast-moving consumer goods; commission-based trading and consulting services; and supply chain financing and trading.
Since the second quarter of 2021, we have engaged
engaged in the coal supply chain financing service and trading business in China. During fiscal year 2025, we significantly scaled down this
business business
segment due to reduced activity in the domestic bulk commodity trading market in China and management’s reassessment of
credit exposure
and capital allocation priorities. During the threesix months ended MarchJune 31,30, 2026, we generated no revenue from this segment.
We continue
to evaluate market conditions and our strategic focus, and there can be no assurance that we will resume this business at
historical levels
or that future market conditions will support meaningful growth in this segment.
We also provide business and financial consulting
services, including
listing-readiness and preparatory consulting services. As described in our 2025 Form 10-K, this business line remains
in an early stage
of development and is conducted primarily through Future FinTech (Hong Kong) Limited and, in certain limited circumstances,
Future Information
Service (Shenzhen) Co., Ltd. During the threesix months ended MarchJune 31,30, 2026, revenue from trading commission and consulting
services increased
compared to the same period in 2025, primarily due to revenue recognized from a new consulting services project during
the period. Neither
we nor our subsidiaries engage in underwriting, securities brokerage, placement agent services, investor solicitation,
or similar activities
in the United States or in any other jurisdiction where we do not hold the required license or registration.
As disclosed in our 2025 Form 10-K, in September 2025, our Board of
Directors approved a proposal to pursue a potential acquisition of TansGen SC Tech Limited as part of our ongoing strategic transition
and expansion initiatives. The proposed acquisition of TansGen SC Tech Limited has been terminated, and the Company is currently searching
for other suitable acquisition targets. As of MarchJune 31,30, 2026, no definitive acquisition agreement had been executed, and the Company continued
to conduct
financial, legal and operational due diligence and valuation procedures. The execution of any definitive agreement remains
subject to
completion of due diligence, negotiation of final terms, regulatory approvals, if applicable, and other customary conditions.
There can
be no assurance that a definitive agreement will be executed, that the proposed acquisition will be completed, or that, if completed,
the transaction will achieve the anticipated strategic or financial benefits.
Change in Independent Registered Public Accounting Firm
On July 6, 2026, the Audit Committee of the Board of Directors of the Company approved the dismissal of Fortune CPA Inc. ("Fortune") as the Company's independent registered public accounting firm and approved the engagement of Wei, Wei & Co., LLP ("Wei, Wei & Co.") as the Company's independent registered public accounting firm, effective immediately, including to act as the Company's auditor for the fiscal year ending December 31, 2026. Fortune had served as the Company's independent registered public accounting firm since August 2023.
Fortune's audit reports on the Company's consolidated financial statements as of and for the fiscal years ended December 31, 2025 and December 31, 2024 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that each such report contained an explanatory paragraph regarding the Company's ability to continue as a going concern. During the Company's two most recent fiscal years and the subsequent interim period through July 6, 2026, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) with Fortune on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, and no reportable events (as described in Item 304(a)(1)(v) of Regulation S-K), except for the previously disclosed material weakness in the Company's internal control over financial reporting relating to insufficient staff with the appropriate level of knowledge, training and experience in U.S. GAAP and SEC reporting requirements. During the Company's two most recent fiscal years and the subsequent period from January 1, 2026 through July 6, 2026, the Company did not consult with Wei, Wei & Co. regarding any of the matters or events set forth in Item 304(a)(2)(i) or 304(a)(2)(ii) of Regulation S-K.
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$25,000 after a court auction sale. The gain on disposal was $28.26 million.
Segment Information Reclassification
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 equivalentsequivalents,
and restricted cash and short-term investments are classified within level 1 of the fair value hierarchy because they are valued using quoted
quoted market prices.
Other comprehensive income (loss) for the three
and six months ended MarchJune 31,30, 2026 and 2025 represented foreign currency translation adjustments and were included in the unaudited condensed
consolidated statements of operation and comprehensive loss.income (loss).
Results of Operations
ResultsComparison of Operations for the Three Months
Ended MarchJune 31, 30,
2026 and 2025
The following table summarizes our operating
results results
for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and sets forth the dollar and percentage increase or (decrease)
between between
the periods.
The following table sets forth the breakdown
of of
our revenues for the three months ended MarchJune 31,30, 2026 and 2025, respectively:
Revenue from sales of FMCG decreased by $364,349,$287,419,
or 76.47%,74.14%, from $476,451$387,684 for the three months ended MarchJune 31,30, 2025 to $112,102$100,265 for the three months ended MarchJune 31,30, 2026. The decrease
was primarily due to intensified competition from other FMCG sellers on the e-commerce platform. Meanwhile, we reduced investment in
marketing marketing
activities as a result of the implementation of cost-control measures, which also adversely affected sales conversion.
Revenue from trading commission and consulting
services increased by $36,171,$26,368, or 56.22%,12.75%, from $64,339$206,776 for the three months ended MarchJune 31,30, 2025 to $100,510$233,144 for the three months ended
MarchJune 31,30, 2026. The increase was mainly due to a new consulting services project with related revenue amortizedrecognized over the service term
in the three months ended
June March 31,30, 2026, and no similar project occurred during the three months ended MarchJune 31,30, 2025.
Revenue from supply chain financing/trading decreased
by $1,341, or 100.00%, from $1,341 for the three months ended March 31, 2025 to $ nil for the three months ended March 31, 2026. The decrease
was due to our management’s decision to temporarily suspend these operations resulting from lower coal prices and reduced market
demand in China during the three months ended March 31, 2026.
The following table sets forth the breakdown
of of
the gross profit for the three months ended MarchJune 31,30, 2026 and 2025, respectively:
Overall gross profit increased slightly by $2,177,$14,774, or
or 3.07%,8.25%, to $73,203$193,832 for the three months ended MarchJune 31,30, 2026 from $71,026$179,058 for the three months ended MarchJune 31,30, 2025. The increase was
primarily due to the increase inhigher gross profit from trading commission and consulting servicesservices, which was in line with the increase inhigher revenue generated
forby this business segment for the three months ended MarchJune 31,30, 2026. AlthoughThe increase was partially offset by lower gross profit from FMCG,
driven by the revenue fromdecline theof FMCGthis segment decreasedfor significantly for
the three months ended MarchJune 31,30, 2026,2026. gross profit from this business segment did not decrease simultaneously due to its low gross margin.
Overall gross margin as a percentage of revenue
was 34.43%58.14% for the three months ended MarchJune 31,30, 2026, representing an increase of 21.33
28.02 percentage points from 13.10%30.12% for the three months
ended June 30, 2025, mainly due to a larger proportion of higher-margin consulting services revenue for the three months ended MarchJune 31, 2025, mainly due to the increase in proportion of consulting services30,
revenue with higher gross margin for the three months ended March 31, 2026.
The following table sets forth the breakdown
of of
our operating expenses and operating expenses as a percentage of revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively:
General and administrative expenses decreased
by $168,241, or 10.72%, from $1,570,100 for the three months ended March 31, 2025 to $1,401,859 for the three months ended March 31, 2026.
The decrease was primarily attributable to reduced commission expenses that recognized in the three months ended March 31, 2025, but did
not recur in the same period this year. The decrease was partially offset by an increase in travelling and business entertainment expenses
driven by our new business expansion.
Stock compensation expense decreased by $1,085,000
or 100.00%, from $1,085,000 for the three months ended March 31, 2025 to $ nil for the three months ended March 31, 2026. 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 three months ended March 31, 2025.
SellingGeneral and administrative expenses decreased
by $56,450,$221,323, or 29.46%,
25.98%, from $191,630$852,026 for the three months ended MarchJune 31,30, 2025 to $135,180$630,703 for the three months ended MarchJune 31,30, 2026.
The decrease was primarily
attributable to reduced business entertainmentcommission expenses and othertravelling relevantexpense sellingthat expensesrecognized as a result ofin the implementationthree ofmonths cost-controlended
measures.June 30, 2026.
Stock compensation expense increased by $1,387,500 or 100.00%, from $ nil for the three months ended June 30, 2025 to $1,387,500 for the three months ended June 30, 2026. On May 29, 2026, the Compensation Committee of the Board of Directors of the Company granted 312,500 shares of common stock, pursuant to the Company’s 2025 Omnibus Equity Plan, to certain officers and employees of the Company and its subsidiaries. As the closing price of the Company stock was $4.44 on June 3, 2026, the Company recorded an expense of $1.39 million in the three months ended June 30, 2026.
Selling expenses decreased by $172,125, or 69.11%, from $249,048 for the three months ended June 30, 2025 to $76,923 for the three months ended June 30, 2026. The decrease was primarily attributable to reduced business entertainment expenses and other relevant selling expenses as a result of the implementation of cost-control measures.
Allowance for credit losses/doubtful accounts decreased by $393,167, or 99.88%, from $393,651 for the three months ended June 30, 2025 to $484 for the three months ended June 30, 2026. The decrease was primarily due to the management’s efforts to collection of long overdue receivables from our customers, resulting in a smaller allowance for credit losses during the three months ended June 30, 2026. Our management will continue monitoring and putting effort into the collection of receivables to lower the level of the allowance.
Allowance for (net recovery of) credit losses/doubtful
accounts decreased by $27,999,779, or 100.50%, from an allowance for credit losses/doubtful accounts of $27,860,839 for the three months
ended March 31, 2025 to a recovery of credit losses/doubtful accounts of $138,940 for the three months ended March 31, 2026. The decrease
was due to the provision for bad debts on related party receivables in connection with the disposal of a subsidiary during the three months
ended March 31, 2025. Our management will continue monitoring and putting effort into the collection of receivables to lower the level
of the allowance.
Other Income (ExpenseExpenses), Net
Net other income decreased by $3,086,554, or 100.92%, from net other income of $3,058,504 for the three months ended June 30, 2025 to net other expenses of $28,050 for the three months ended June 30, 2026. The decrease was primarily attributable to the gain on debt restructuring during the three months ended June 30, 2025. On June 17, 2025, we entered into a settlement and forbearance agreement (“the Agreement”) with FT Global. Pursuant to the Agreement, we were required to pay an aggregate settlement amount of $4.0 million and issue a total of 107,368 shares of common stock. Upon the debt restructuring, we recognized a gain of $3.07 million, which was recorded as gain on debt restructuring in the unaudited condensed consolidated statement of operations and comprehensive income (loss).
Net income (loss) from continuing operations
Net income from continuing operations decreased by $3,672,665, or 210.73%, from net income of $1,742,837 for the three months ended June 30, 2025 to net loss of $1,929,828 for the three months ended June 30, 2026. The decrease was primarily due to the decrease in gain on debt restructuring as discussed above.
Comparison of Six Months Ended June 30, 2026 and 2025:
The following table summarizes our operating results for the six months ended June 30, 2026 and 2025, respectively, and sets forth the dollar and percentage increase or (decrease) between the periods.
Revenue
The following table sets forth the breakdown of our revenues for the six months ended June 30, 2026 and 2025, respectively:
Revenue from sales of FMCG decreased by $651,768, or 75.42%, from $864,135 for the six months ended June 30, 2025 to $212,367 for the six months ended June 30, 2026. The decrease was primarily due to intensified competition from other FMCG sellers on the e-commerce platform. Meanwhile, we reduced investment in marketing activities as a result of the implementation of cost-control measures, which also adversely affected sales conversion.
Revenue from trading commission and consulting services increased by $62,539, or 23.07%, from $271,115 for the six months ended June 30, 2025 to $333,654 for the six months ended June 30, 2026. The increase was mainly due to a new consulting services project with related revenue recognized in the six months ended June 30, 2026, and no similar project occurred during the six months ended June 30, 2025.
Revenue from supply chain financing/trading decreased by $1,341, or 100.00%, from $1,341 for the six months ended June 30, 2025 to $ nil for the six months ended June 30, 2026. 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 six months ended June 30, 2026.
Gross Profit
The following table sets forth the breakdown of the gross profit for the six months ended June 30, 2026 and 2025, respectively:
Overall gross profit increased by $16,951, or 6.78%, to $267,035 for the six months ended June 30, 2026 from $250,084 for the six months ended June 30, 2025. The increase was primarily due to the increase in gross profit from trading commission and consulting services, which was in line with the increase in revenue for this business segment for the six months ended June 30, 2026. Although revenue from the FMCG segment decreased significantly for the six months ended June 30, 2026, gross profit from this business segment did not decrease simultaneously due to its low gross margin. Overall gross margin as a percentage of revenue was 48.91% for the six months ended June 30, 2026, representing an increase of 26.91 percentage points from 22.00% for the six months ended June 30, 2025, mainly due to a larger proportion of higher-margin consulting services revenue for the six months ended June 30, 2026.
Operating Expenses
The following table sets forth the breakdown of our operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2026 and 2025, respectively:
General and administrative expenses decreased by $389,564, or 16.08%, from $2,422,126 for the six months ended June 30, 2025 to $2,032,562 for the six months ended June 30, 2026. The decrease was primarily attributable to commission expenses recognized in the six months ended June 30, 2025 that did not recur in the same period of 2026. The decrease was partially offset by an increase in business entertainment expenses driven by our new business expansion.
Stock-based compensation expenses increased by $302,500 or 27.88%, from $1,085,000 for the six months ended June 30, 2025 to $1,387,500 for the six months ended June 30, 2026. The increase was primarily attributable to a larger number of shares granted (312,500 shares in June 2026 compared to 31,250 shares in March 2025, in each case as adjusted for the reverse stock splits), partially offset by a lower grant-date share price ($4.44 compared to $34.72, as adjusted).
Selling expenses decreased by $228,575, or 51.87%, from $440,678 for the six months ended June 30, 2025 to $212,103 for the six months ended June 30, 2026. The decrease was primarily attributable to reduced business entertainment expenses and other relevant selling expenses as a result of the implementation of cost-control measures.
Allowance for credit losses/doubtful accounts decreased by $28,392,946, or 100.49%, from an allowance for credit losses/doubtful accounts of $28,254,490 for the six months ended June 30, 2025 to a net recovery of credit losses/doubtful accounts of $138,456 for the six months ended June 30, 2026. The decrease was due to the provision for bad debts on related party receivables in connection with the disposal of a subsidiary during the six months ended June 30, 2025. Our management will continue monitoring and putting effort into the collection of receivables to lower the level of the allowance.
Other Income, Net
Net other income decreased by $48,760,$3,135,314, or
49.49%,99.31%, from net other income of $98,528$3,157,032 for the threesix months ended MarchJune 31,30, 2025 to $49,768$21,718 for the threesix months ended MarchJune 31,30, 2026.
2026. The decrease was primarily attributable to lowerthe investmentgain income resulting from a decreased weighted averageon debt investment
balancerestructuring during thisthe period,six months ended June 30, 2025 as wellwe asentered into
a settlement and forbearance agreement with FT Global. The decrease was also attributable to the higher interest expenses caused by the
convertible notes payablespayable issued in July 2025, September 2025 and SeptemberMay 2025.2026. The
decrease was partially offset by an increase in interest
income recognized effective December 2025 for the threesix months ended MarchJune 31,
30, 2026, and no such income was incurred during the threesix months
ended MarchJune 31,30, 2025.
Net loss from continuing operations decreased
by $29,262,887,$25,590,222, or 95.82%,88.87%, from $30,538,015$28,795,178 for the threesix months ended MarchJune 31,30, 2025 to $1,275,128$3,204,956 for the threesix months ended MarchJune 31,30, 2026.
2026. The decrease was primarily due to the decrease in allowance for credit losses/doubtful accounts as discussed above.
NetGain Incomeon fromdisposal Discontinuedof Operationsdiscontinued operations
NetGain incomeon fromdisposal of discontinued operations before
non-controlling interestsoperation was $27.83
$28.26 million for the threesix months ended MarchJune 31,30, 2025, which was related to the transfer of FTFT UK LIMITED,
FTFT Finance UK Limited,
Future Fintech Digital Number One US, LP, Future Fintech Digital Number One Offshore, LLC (Cayman), Future Fintech
Digital Number One
GP, LLC (USA), FTFT Digital Number One, Ltd. (Cayman), Future FinTech Labs Inc, Future Fintech Digital Capital, FTFT
CAPITAL INVESTMENTS,
DigiPay FinTech Limited, DCON DigiPay Limited-JPN,Limited-JPN and Global Key Shared Mall Ltd..Ltd.
For the threesix months ended MarchJune 31,30, 2026,
basic basic
and diluted loss per share from continuing operations were both $0.25,$2.27, as compared to loss per share of $49.92$162.66 (both basic and
diluted)
for the threesame period last year. For the six months ended MarchJune 31, 2025. For the three months ended March 31,30, 2026, basic and diluted earnings per share from discontinued
operations were both $ nil, as compared to basic and diluted earnings per share of $42.44$147.29 and $42.37$147.07 for the threesame monthsperiod endedlast Marchyear,
31, 2025, respectively.
We currently finance our business operations
primarily 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
March 31,June 30, 2026, we had cash, cash equivalents and restricted cash of $3.68$4.22 million, representing a decrease of $1.40$0.86 million
from $5.08 million as of December
31, 2025.
On July 30, 2026, we received aggregate gross proceeds of $30,000,000 from the private placement of 30,000,000 shares of our common stock described in Note 23 to our unaudited condensed consolidated financial statements. We intend to use the net proceeds of the private placement for working capital and general corporate purposes. In addition, following the completion of the transfer of the 20% equity interest in Xi’an Changshida Information Technology Co., Ltd. on July 3, 2026, the cash consideration of RMB 40,000,000 (approximately $5.6 million) and the share consideration became payable in accordance with the related share purchase agreement, and the remaining cash installments of approximately $1.02 million under the FT Global settlement are payable through December 2026.
Our working capital has historically been generated
from our operating cash flows, advances from our customers and convertible notes. Our working capital decreasedwas slightly$43.14 bymillion $0.30as million,of June 30,
from2026, representing an increase of $0.59 million compared with working capital of $42.55 million as of December 31, 20252025. The increase
was primarily attributable to $42.25foreign millionexchange rate impacts on investment funds and a decrease in current liabilities, such as ofaccounts
payable Marchand 31,accrued 2026.expenses and other payables.
FTFT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-03 | Li Hu |
Grant/award | 50,000 | — | — |
| 2026-06-03 | Ouyang Ting |
Grant/award | 50,000 | — | — |
Well-known investors holding FTFT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 66,447 | $43.9K | 0.0% | New position |