UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number: 001-34502

Future FinTech Group Inc.

(Exact name of registrant as specified in its charter)

Florida		98-0222013
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

Americas Tower, 1177 Avenue of The Americas

Suite 5100, New York, NY

(Address of principal executive offices including zip code)

888-622-1218

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		FTFT		Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No.

Class		Outstanding at August 16, 2024
Common Stock, $0.001 par value per share		20,339,198

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	40
PART II. OTHER INFORMATION		41
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults upon Senior Securities	42
Item 4.	Mine Safety Disclosure	42
Item 5.	Other Information	42
Item 6.	Exhibits	42
SIGNATURES		43

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2024			December 31, 2023

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	9,824,662		$	19,016,198
Short - term investment		-			959,028
Accounts receivable, net		5,256,585			5,705,877
Notes receivable		645,451			-
Advances to suppliers and other current assets		20,518,414			3,829,795
Loan receivables		14,851,402			14,895,086
Other receivables, net		70,994			10,048,248
Amount due from related party		42,426			12,151
Assets related to discontinued operation		-			24,086
TOTAL CURRENT ASSETS	$	51,209,934		$	54,490,469

Property, plant and equipment, net	$	4,590,198		$	4,579,116
Right of use assets - operation lease		1,236,149			1,282,111
Intangible assets		560,579			588,982
Debt investment		701,577			-
Assets related to discontinued operation		-			72
TOTAL NON-CURRENT ASSETS		7,088,503			6,450,281
TOTAL ASSETS	$	58,298,437		$	60,940,750

LIABILITIES

CURRENT LIABILITIES
Accounts payable	$	2,870,133		$	3,301,715
Accrued expenses and other payables		12,792,214			11,774,710
Advances from customers		229,294			303,711
Convertible notes payables		1,144,603			1,100,723
Lease liability - operation lease		398,522			498,736
Amounts due to related parties		296,463			505,046
Liability related to discontinued operation		-			243,721
TOTAL CURRENT LIABILITIES	$	17,731,229		$	17,728,362

NON-CURRENT LIABILITIES
Lease liability - operation lease		855,048			797,344
TOTAL NON-CURRENT LIABILITIES		855,048			797,344
TOTAL LIABILITIES	$	18,586,277		$	18,525,706
Commitments and contingencies (Note 23)
STOCKHOLDER’S EQUITY

Future FinTech Group, Inc, Stockholders’ equity
Common stock, $0.001 par value; 60,000,000 shares authorized; 19,985,410 shares and 17,834,874 shares issued and outstanding as of June 30, 2024 and December 31, 2023 respectively	$	19,985		$	17,835
Additional paid-in capital		236,469,490			233,890,997
Statutory reserve		98,357			98,357
Accumulated deficits		(191,017,843	)		(185,929,662	)
Accumulated other comprehensive loss		(4,255,168	)		(4,094,276	)
Total Future FinTech Group, Inc. stockholders’ equity		41,314,821			43,983,251
Non-controlling interests		(1,602,661	)		(1,568,207	)
TOTAL STOCKHOLDERS’ EQUITY		39,712,160			42,415,044
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		58,298,437			60,940,750

The accompanying notes are an integral part of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue	$	4,202,888		$	3,721,250		$	9,325,855		$	7,085,700
Cost of revenues-third party		2,349,009			2,130,139			5,385,064			3,931,015
Cost of revenues-related party		259,755			348,636			395,395			710,594
Gross profit		1,594,124			1,242,475			3,545,396			2,444,091

Operating Expenses
General and administrative expenses		3,387,338			2,421,805			6,808,836			5,797,633
Research and development expenses		1,728			116,469			2,374			322,468
Selling expenses		151,805			124,075			418,490			251,237
(Recovery) Provision of doubtful debts		(234,969	)		(1,187,403	)		559,360			(1,170,577	)
Total operating expenses		3,305,902			1,474,946			7,789,060			5,200,761

Loss from operations		(1,711,778	)		(232,471	)		(4,243,664	)		(2,756,670	)

Other (expenses) income
Interest income		226,130			245,567			531,397			701,020
Interest expenses		(20,933	)		-			(45,148	)		-
Other expense, net		(292,425	)		(1,515,403	)		(2,010,657	)		(1,560,132	)
Total other expense, net		(87,228	)		(1,269,836	)		(1,524,408	)		(859,112	)

Loss from Continuing Operations before Income Tax		(1,799,006	)		(1,502,307	)		(5,768,072	)		(3,615,782	)
Income tax provision		-			(35,878	)		-			(61,552	)
Loss from Continuing Operations		(1,799,006	)		(1,538,185	)		(5,768,072	)		(3,677,334	)

Discontinued Operations
Loss from discontinued operations		-			(105,116	)		-			(213,444	)
Gain on disposal of discontinued operations		-			105,480			645,437			105,480

NET LOSS		(1,799,006	)		(1,537,821	)		(5,122,635	)		(3,785,298	)
Less: Net Loss attributable to non-controlling interests		(38,033	)		(65,817	)		(34,454	)		(136,830	)
Net loss from continued operations attributable to Future Fintech Group, Inc.	$	(1,760,973	)	$	(1,472,004	)	$	(5,088,181	)	$	(3,648,468	)
Other comprehensive income (loss)
Loss from continued operations		(1,799,006	)		(1,538,185	)		(5,768,072	)		(3,677,334	)
Foreign currency translation – continued operations		(113,268	)		(1,492,341	)		(160,892	)		(1,114,569	)
Unrealized holding (losses)/gains on available-for-sale securities		-			(66,558	)		-			114,293
Comprehensive loss - continued operation		(1,912,274	)		(3,097,084	)		(5,928,964	)		(4,677,610	)
Net income (loss) from discontinued operations		-			364			645,437			(107,964	)
Foreign currency translation – discontinued operations		-			3,707			-			30,024
Comprehensive income (loss) - discontinued operation		-			4,071			645,437			(77,940	)
Comprehensive Loss		(1,912,274	)		(3,093,013	)		(5,283,527	)		(4,755,550	)
Less: Net loss attributable to non-controlling interests		(38,033	)		(65,817	)		(34,454	)		(136,830	)
COMPREHENSIVE LOSS ATTRIBUTABLE TO FUTURE FINTECH GROUP INC. STOCKHOLDERS		(1,874,241	)		(3,027,196	)		(5,249,073	)		(4,618,720	)

Earnings (Loss) per share:
Basic loss per share from continued operation	$	(0.09	)	$	(0.10	)	$	(0.29	)	$	(0.24	)
Basic earnings per share from discontinued operation		-			-			0.03			(0.01	)
	$	(0.09	)		(0.10	)	$	(0.26	)	$	(0.25	)

Diluted Earnings (Loss) per share:
Diluted loss per share from continued operation	$	(0.09	)		(0.10	)	$	(0.29	)	$	(0.24	)
Diluted earnings per share from discontinued operation		-			-			0.03			(0.01	)
	$	(0.09	)		(0.10	)	$	(0.26	)	$	(0.25	)
Weighted average number of shares outstanding
Basic		19,985,410			14,645,653			19,926,329			14,645,653
Diluted		20,027,518			14,687,761			19,968,437			14,687,761

Reclassification- certain reclassifications have been made to the financial statements for the period ended June 30, 2023 to conform to the presentation for the period ended June 30, 2024, with no effect on previously reported net income (loss).

The accompanying notes are an integral part of these condensed consolidated financial statements.

Future Fintech Group, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Three Months ended June 30, 2023

												Accumulative
					Additional							Other			Non-
	Common Stock				paid-in		Statutory		Accumulated			comprehensive			controlling
	Shares		Amount		capital		reserve		Deficits			income			interests			Total
Balance at March 31, 2023	14,645,653		$	14,646	$	222,751,657	98,357		$	(154,452,898	)	$	(3,038,065	)	$	(1,350,593	)	$	64,023,104
Net loss from continued operation		-		-		-		-		(1,472,368	)		-			(65,817	)		(1,538,185	)
Net loss from discontinued operations		-		-		-		-		(105,116	)		-			-			(105,116	)
Unrealized holding losses on available-for-sale securities		-		-		-		-		-			(66,558	)		-			(66,558	)
Disposition of discontinued operation		-		-		-		-		105,480			-			-			105,480
Foreign currency translation adjustment				-		-		-		-			(1,488,634	)		-			(1,488,634	)
Balance at June 30, 2023		14,645,653	$	14,646	$	222,751,657		98,357	$	(155,924,902	)	$	(4,593,257	)	$	(1,416,410	)	$	60,930,091

Three Months ended June 30, 2024

												Accumulative
	Common Stock				Additional paid-in		Statutory		Accumulated			Other comprehensive			Non- controlling
	Shares		Amount		capital		reserve		Deficits			income			interests			Total
Balance at December 31, 2023		19,985,410	$	19,985	$	236,469,490		98,357	$	(189,256,870	)	$	(4,141,900	)	$	(1,564,628	)	$	41,624,434
Net loss from continued operation		-		-		-		-		(1,760,973	)		-			(38,033	)		(1,799,006	)
Foreign currency translation adjustment		-		-		-		-		-			(113,268	)		-			(113,268	)
Balance at June 30, 2024		19,985,410	$	19,985	$	236,469,490		98,357	$	(191,017,843	)	$	(4,255,168	)	$	(1,602,661	)	$	39,712,160

Six Months ended June 30, 2023

												Accumulative
					Additional							Other			Non-
	Common Stock				paid-in		Statutory		Accumulated			comprehensive			controlling
	Shares		Amount		capital		reserve		Deficits			income			interests			Total
Balance at December 31, 2022		14,645,653	$	14,646	$	222,751,657		98,357	$	(152,276,434	)	$	(3,623,005	)	$	(1,279,580	)	$	65,685,641
Net loss from continued operation		-		-		-		-		(3,540,504	)		-			(136,830	)		(3,677,334	)
Net loss from discontinued operations		-		-		-		-		(213,444	)		-			-			(213,444	)
Unrealized holding gains/(losses) on available-for-sale securities		-		-		-		-		-			114,293			-			114,293
Disposition of discontinued operation		-		-		-		-		105,480			30,024			-			135,504
Foreign currency translation adjustment				-		-		-		-			(1,114,569	)		-			(1,114,569	)
Balance at June 30, 2023		14,645,653	$	14,646	$	222,751,657		98,357	$	(155,924,902	)	$	(4,593,257	)	$	(1,416,410	)	$	60,930,091

Six Months ended June 30, 2024

												Accumulative
					Additional							Other			Non-
	Common Stock				paid-in		Statutory		Accumulated			comprehensive			controlling
	Shares		Amount		capital		reserve		Deficits			income			interests			Total
Balance at December 31, 2023		17,834,874	$	17,835	$	233,890,997	$	98,357	$	(185,929,662	)	$	(4,094,276	)	$	(1,568,207	)	$	42,415,044
Net loss from continued operation		-		-		-		-		(5,733,618	)		-			(34,454	)		(5,768,072	)
Issuance of common stocks-cash		2,150,536		2,150		2,578,493		-		-			-			-			2,580,643
Disposition of discontinued operation		-		-		-		-		645,437			-			-			645,437
Foreign currency translation adjustment		-		-		-		-		-			(160,892	)		-			(160,892	)
Balance at June 30, 2024		19,985,410	$	19,985	$	236,469,490		98,357	$	(191,017,843	)	$	(4,255,168	)	$	(1,602,661	)	$	39,712,160

The accompanying notes are an integral part of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended June 30,
	2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,122,635	)	$	(3,785,298	)
Net income (loss) from discontinued operation		645,437			(107,964	)
Net loss from continuing operations		(5,768,072	)		(3,677,334	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		139,632			141,985
Amortization		28,518			28,518
Provision of doubtful debts		559,360			17,085
Investment loss		9,337			-
Interest expenses related to convertible note		43,880			-
Changes in operating assets and liabilities
Accounts receivable		769,772			5,097,202
Notes receivable		(645,451	)		-
Other receivable		9,097,414			(2,714,408	)
Advances to suppliers and other current assets		(16,688,619	)		(15,265,881	)
Operating lease assets and liabilities		3,452			-
Accounts payable		(431,582	)		(3,206,643	)
Accrued expenses and other payables		1,017,504			(858,732	)
Advances from customers		(74,417	)		13,478,603
Net cash used in operating activities from continued operations		(11,939,272	)		(6,959,605	)
Net cash provided in operating activities from discontinued operations		425,874			1,071,947

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(354,837	)		(128,098	)
Disposal of property and equipment		191,766			-
Repayment for loan receivable		-			14,767,621
Debt investment		(701,577	)		-
Payment for short term investment		946,669			-
Net cash provided by investing activities from continued operations		82,021			14,639,523

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock, net of issuance costs		2,580,643			-
Proceeds from amounts due from related parties, net		-			97,523
Repayment of amounts due to related parties, net		(238,858	)		(112,447	)
Net cash provided by (used in) financing activities from continued operations		2,341,785			(14,924	)

Effect of change in exchange rate		(101,944	)		(1,598,206	)

NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH		(9,191,536	)		7,138,735
Cash and cash equivalents, from the continuing operations beginning of year		19,016,198			29,648,236
Less: Cash and cash equivalents from the discontinued operations, end of year		-			(50,585	)
Cash and cash equivalents, from the continuing operations end of year	$	9,824,662		$	36,736,386

SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION
Issuance of common stocks (Note 20)	$	2,580,644		$	-
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes	$	6,208		$	713,501

The accompanying notes are an integral part of these condensed consolidated financial statements.

FUTURE FINTECH GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. CORPORATE INFORMATION

Future FinTech Group Inc. (the “Company”) is a holding company incorporated under the laws of the State of Florida. 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 the PRC. 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 financial technology related service businesses. The main business of the Company includes 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.

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 changed to ‘FTFT International Securities and Futures Limited’ and ‘FTFT Information Services (Shenzhen) Co. Ltd.’, respectively, as a part of the closing.

On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100% equity interest of Alpha International Securities (HONG KONG) Limited a company incorporated in Hong Kong for $1,791,174 (HKD14,010,421), which is in the securities business. The Company has changed its name from Alpha International Securities (HONG KONG) Limited to FTFT International Securities and Futures Limited on November 1, 2023.

On October 30, 2023, Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company acquired 100% equity interest of Alpha Information Services (Shenzhen) Co., Ltd for $210,788 (HKD1,649,528), which provides information services for FTFT International Securities and Futures Limited. The Company has changed its name from Alpha Information Services (Shenzhen) Co., Ltd to Future information service (Shenzhen) Co., Ltd on November 3, 2023.

The Company’s business and operations are principally conducted by its subsidiaries in the PRC and Hong Kong.

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 “Reverse Stock Split”). The common stock continues to be $0.001 par value. The Company rounded up to the next full share of the Company’s shares of common stock any fractional shares that result from the Reverse Stock Split and no fractional shares were issued in connection with the Reverse Stock Split and no cash or other consideration was paid in connection with any fractional shares that would otherwise have resulted from the Reverse Stock Split. No changes have been 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 on February 1, 2023. The Reverse Stock Split and Amendment were authorized and approved by the Board of Directors of the Company without shareholders’ approval, pursuant to 607.10025 of the Florida Business Corporation Act of the State of Florida.

The reverse stock split would be reflected in our June 30, 2024 and December 31, 2023 statements of changes in stockholders’ equity, and in per share data for all periods presented.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2024 and the results of operations and cash flows for the periods ended June 30, 2024 and 2023. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2024. The balance sheet at December 31, 2023 has been derived from the audited financial statements at that date.

Our contractual arrangements with the VIE and their respective shareholders allow us to (i) exercise effective control over the VIE, (ii) receive substantially all of the economic benefits of the VIE, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIE when and to the extent permitted by PRC law.

As a result of our direct ownership in our wholly owned subsidiary and the contractual arrangements with the VIE, we are regarded as the primary beneficiary of the VIE, and we treat it and its subsidiaries as our consolidated affiliated entities under U.S. GAAP. We have consolidated the financial results of the VIE in our condensed consolidated financial statements in accordance with U.S. GAAP

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2023 as included in our Annual Report on Form 10-K.

Discontinued Operations

On June 16, 2023, QR (HK) Limited was dissolved and deregistered.

On December 5, 2023, FTFT PARAGUAY S.A. was dissolved.

On March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered.

Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation.

Segment Information Reclassification

The Company classified business segment into supply chain financing and trading and asset management services, and others.

Uses of Estimates in the Preparation of Financial Statements

The Company’s condensed 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 condensed 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 not limited to, the allowance for doubtful receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets provision for staff benefit, 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 condensed consolidated financial statements.

Going Concern

The Company’s financial statements are prepared assuming that the Company will continue as a going concern.

The Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. The Company’s operating losses amounted $5.79 million, and it had negative operating cash flows amounted $11.94 million as of June 30, 2024. These factors raise substantial doubts about the Company’s ability to continue as a going concern. The Company has raised funds through issuance of convertible notes and common stock.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Research and development

Research and development expenses include salaries, contracted services, as well as the related expenses for our research and product development team, and expenditures relating to our efforts to develop, design, and enhance our service to our clients. The Company expenses research and development costs as they are incurred.

Impairment of Long-Lived Assets

In accordance with the ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, 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.

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.

Our cash and cash equivalents and restricted cash and short-term investments are classified within level 1 of the fair value hierarchy because they are value using quoted market price.

Earnings Per Share

Under ASC 260-10, Earnings Per Share, basic EPS excludes dilution for Common Stock equivalents and is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of Common Stock outstanding for the period.

Diluted EPS is calculated by using the treasury stock method, assuming conversion of all potentially dilutive securities, such as stock options and warrants. Under this method, (i) exercise of options and warrants is assumed at the beginning of the period and shares of Common Stock are assumed to be issued, (ii) the proceeds from exercise are assumed to be used to purchase Common Stock at the average market price during the period, and (iii) the incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted EPS computation. The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table.

For the six months ended June 30, 2024:

	Income			Share		Pre-share amount

Loss from continued operations attributable to Future Fintech Group, Inc.	$	(5,733,618	)		19,926,329	$	(0.29	)
Income from discontinued operations attributable to Future Fintech Group, Inc.		645,437			19,926,329		0.03

Basic EPS:
Loss to common stockholders from continuing operations		(5,733,618	)		19,926,329		(0.29	)
Income available to common stockholders from discontinued operations	$	645,437			19,926,329	$	0.03

Dilutive EPS:

Warrants		-			42,108		-
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continued operations attributable to Future Fintech Group, Inc.		(5,733,618	)		19,968,437		(0.29	)
Diluted earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations		645,437			19,968,437		0.03

For the six months ended June 30, 2023:

	Income			Share		Pre-share amount

Loss from continued operations attributable to Future Fintech Group, Inc.	$	(3,540,504	)		14,645,653	$	(0.24	)
Loss from discontinued operations attributable to Future Fintech Group, Inc.		(107,964	)		14,645,653		(0.01	)

Basic EPS:
Loss to common stockholders from continuing operations		(3,540,504	)		14,645,653		(0.24	)
Loss available to common stockholders from discontinued operations	$	(107,964	)		14,645,653	$	(0.01	)

Dilutive EPS:

Warrants		-			42,108		-
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continued operations attributable to Future Fintech Group, Inc.		(3,540,504	)		14,687,761		(0.24	)
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations		(107,964	)		14,687,761		(0.01	)

For the three months ended June 30, 2024:

	Income			Share		Pre-share amount

Loss from continued operations attributable to Future Fintech Group, Inc.	$	(1,760,973	)		19,985,410	$	(0.09	)
Income from discontinued operations attributable to Future Fintech Group, Inc.		-			19,985,410		-

Basic EPS:
Loss to common stockholders from continuing operations		(1,760,973	)		19,985,410		(0.09	)
Income available to common stockholders from discontinued operations	$	-			19,985,410	$	-

Dilutive EPS:

Warrants		-			42,108		-
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continued operations attributable to Future Fintech Group, Inc.		(1,760,973	)		20,027,518		(0.09	)
Diluted earnings per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations		-			20,027,518		-

For the three months ended June 30, 2023:

	Income			Share		Pre-share amount

Net loss from continuing operations attributable to Future Fintech Group, Inc.	$	(1,472,368	)		14,645,653	$	(0.10	)
Net income from discontinuing operations attributable to Future Fintech Group, Inc.	$	364			14,645,653		-

Basic EPS:

SEC Form 10-Q filed by Future FinTech Group Inc.