Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) The company transformed from a fruit juice producer to a blockchain e-commerce platform, expanding into financial services, while navigating COVID-19 impacts and PRC regulations via a VIE structure - The company has fundamentally transformed its business from fruit juice manufacturing to a **blockchain-based e-commerce platform** (Chain Cloud Mall) and is expanding into **financial services**[9](index=9&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - In **February 2020**, the company completed the sale of its entire fruit juice business segment (HeDeTang HK), which is now treated as a **discontinued operation**[16](index=16&type=chunk)[35](index=35&type=chunk)[226](index=226&type=chunk) - The company is actively pursuing expansion into **financial services** through **strategic acquisitions**, including a Hong Kong-based asset management company (NTAM) and a supply chain financial services company in China (Ticode)[37](index=37&type=chunk)[38](index=38&type=chunk) - The **COVID-19 pandemic significantly impacted operations** in 2020, causing office closures, supply chain disruptions, and hindering marketing strategies, leading to decreased sales and new member enrollment[29](index=29&type=chunk)[30](index=30&type=chunk)[91](index=91&type=chunk) - To comply with **PRC regulations** restricting foreign ownership in e-commerce, the company operates its Chain Cloud Mall through a **Variable Interest Entity (VIE) structure**, controlling the entity via contractual agreements[20](index=20&type=chunk)[21](index=21&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from COVID-19, operational challenges in China due to its VIE structure and unpredictable policies, and internal control weaknesses - The **COVID-19 pandemic** poses a **major risk**, having already caused revenue decline, supply chain disruption, and hindrance of marketing efforts, with future outbreaks potentially causing further harm[90](index=90&type=chunk)[91](index=91&type=chunk) - The company's reliance on a **Variable Interest Entity (VIE) structure** to operate in China is a **key risk**, as PRC authorities deeming arrangements non-compliant could lead to severe penalties or loss of control[155](index=155&type=chunk)[156](index=156&type=chunk)[159](index=159&type=chunk) - A **material weakness in internal controls** over financial reporting has been identified, stemming from a lack of personnel with sufficient U.S. GAAP and SEC reporting experience, which could affect investor confidence[132](index=132&type=chunk)[133](index=133&type=chunk) - The company's common stock has faced **multiple delisting warnings from NASDAQ** for failing to meet minimum bid price, timely filing, and minimum stockholders' equity requirements, although compliance was regained each time[186](index=186&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk) - There is significant ownership concentration, with the Chairman's son, Zeyao Xue, beneficially owning approximately **19.9%** of outstanding common stock, giving him substantial influence over shareholder matters[182](index=182&type=chunk) [Item 2. Properties](index=37&type=section&id=Item%202.%20Properties) The company leases its principal executive office in New York and additional offices in Beijing and Xi'an, China - The company leases its principal executive office in New York and additional offices in Beijing and Xi'an, China[192](index=192&type=chunk) [Item 3. Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) The company is defending a **$7 million** lawsuit from a former placement agent and addresses other litigation related to divested subsidiaries - The company is currently involved in a lawsuit filed by former placement agent FT Global Capital, Inc., which claims approximately **$7 million** in damages for an alleged breach of contract, and the company is defending the action[193](index=193&type=chunk)[194](index=194&type=chunk) - Other legal proceedings described in the report involve former subsidiaries that were transferred with the sale of HeDeTang HK on February 27, 2020[195](index=195&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "FTFT", with **65.29 million** shares outstanding, and no cash dividends are anticipated - The company's common stock is traded on the **Nasdaq Capital Market** under the ticker "**FTFT**"[197](index=197&type=chunk) - The company has **never declared or paid cash dividends** and intends to retain all future earnings for business operations[198](index=198&type=chunk) Equity Compensation Plan Information as of Dec 31, 2020 | Plan Category | Securities to be issued upon exercise (shares) | Weighted average exercise price ($) | Securities remaining for future issuance (shares) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 62,500 | $3.57 | 5,000,000 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, revenue declined **61%** to **$0.37 million** due to COVID-19, while gross margin rose to **90%**, but loss from continuing operations widened to **$53.48 million** due to impairments, despite working capital improving to **$10.34 million** Revenue by Segment (2020 vs. 2019) | Segment | 2020 Revenue (in thousands) | 2019 Revenue (in thousands) | % Change | | :--- | :--- | :--- | :--- | | CCM Shopping Mall Membership | $338 | $542 | -38% | | Sale of goods | $9 | $371 | -98% | | Others | $23 | $28 | -18% | | **Total** | **$370** | **$941** | **-61%** | Gross Margin by Segment (2020 vs. 2019) | Segment | 2020 Gross Margin % | 2019 Gross Margin % | | :--- | :--- | :--- | | CCM Shopping Mall Membership | 99% | 74% | | Sale of goods | 22% | 13% | | Others | -4% | 7% | | **Total** | **90%** | **48%** | - Loss from continuing operations increased significantly to **$53.48 million** in 2020 from **$10.95 million** in 2019, driven by impairment losses on investments and intangible assets, and higher stock compensation expenses[257](index=257&type=chunk)[255](index=255&type=chunk)[254](index=254&type=chunk) - The company's working capital improved dramatically from a deficit of **$102.87 million** in 2019 to a surplus of **$10.34 million** in 2020, primarily due to a reduction in liabilities after the sale of its discontinued operations[258](index=258&type=chunk) - Cash and cash equivalents increased from **$0.19 million** at year-end 2019 to **$9.79 million** at year-end 2020, mainly due to **$16.71 million** generated from financing activities, including stock and debt issuances[258](index=258&type=chunk)[260](index=260&type=chunk) [Item 9A. Controls and Procedures](index=51&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2020, due to a material weakness in financial reporting, now being remediated - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of December 31, 2020[263](index=263&type=chunk) - A **material weakness** was identified in internal control over financial reporting due to a lack of sufficient accounting personnel with expertise in U.S. GAAP and SEC reporting[263](index=263&type=chunk)[266](index=266&type=chunk) - Remediation efforts include engaging U.S. GAAP consultants and hiring a new CFO with more relevant experience[266](index=266&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=53&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The section lists directors and executive officers, including Chairman Yongke Xue and CEO Shanchun Huang, and details the company's governance structure - The leadership team includes **Yongke Xue** as Chairman of the Board and **Shanchun Huang** as Chief Executive Officer[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - The Board has an audit committee and a compensation committee, both comprised of independent directors, with Mr. Johnson Lau identified as the "**audit committee financial expert**"[286](index=286&type=chunk)[288](index=288&type=chunk) - The company reported several **late filings** of Section 16(a) beneficial ownership reports for its officers and directors during the fiscal year ended December 31, 2020[283](index=283&type=chunk) [Item 11. Executive Compensation](index=56&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation in 2020 primarily involved salaries and stock awards, with **3 million** shares granted under the 2019 Omnibus Equity Plan - On December 28, 2020, the company granted **3,000,000 shares** under its 2019 Omnibus Equity Plan to nine officers, employees, and a director[292](index=292&type=chunk) 2020 Compensation for Key Personnel | Name and Position | Salary ($) | Stock Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Yongke Xue (Chairman) | - | 500,000 shares | $990,000 (value) | | Shanchun Huang (CEO) | 1 | - | 1 | | Kai Xu (Former COO) | 13,642 | 400,000 shares | 805,642 (incl. value) | | Yang Liu (COO) | 1 | - | 1 | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=59&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of April 12, 2021, **65.29 million** shares were outstanding, with Chairman's son, Zeyao Xue, being the largest beneficial owner at **19.9%** Security Ownership of 5% or Greater Shareholders (as of April 12, 2021) | Name of Beneficial Owner | Percentage Owned | | :--- | :--- | | Zeyao Xue | 19.9% | | Sincerity Group Enterprises Ltd. | 5.1% | | Mengyao Chen | 5.1% | | Shuiliang Xiao | 5.2% | - Zeyao Xue, the son of Chairman Yongke Xue, is the largest beneficial owner with **19.9%** of the company's outstanding common stock[310](index=310&type=chunk) [Item 14. Principal Accounting Fees and Services](index=61&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Total audit fees were **$211,000** in 2020, and the company changed its independent registered public accounting firm multiple times in 2019 and 2020 Principal Accountant Fees | Fee Category | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Audit Fees | $211,000 | $235,000 | | Tax Fees | — | — | | All Other Fees | — | — | | **Total** | **$211,000** | **$235,000** | - The company changed its independent registered public accounting firm **multiple times** in 2019 and 2020, dismissing Wang CPA in April 2020 and engaging BF Borgers CPA PC[317](index=317&type=chunk)[321](index=321&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=64&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index of all exhibits filed as part of the Form 10-K, including corporate governance documents and material contracts [Financial Statements and Supplementary Data](index=70&type=section&id=FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) [Report of Independent Registered Public Accounting Firm](index=70&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued a fair opinion but highlighted a **"Going Concern Uncertainty"** due to recurring losses and identified two Critical Audit Matters - The auditor's report includes a **"Going Concern Uncertainty"** paragraph, citing recurring losses and a net capital deficiency that raise substantial doubt about the company's ability to continue operations[349](index=349&type=chunk) - Critical Audit Matters identified were the valuation and collectability of a new **$5.36 million** loan receivable and the assessment of legal proceeding contingencies[354](index=354&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) [Consolidated Financial Statements](index=72&type=section&id=Consolidated%20Financial%20Statements) Following divestiture, total assets decreased to **$15.9 million** in 2020, liabilities to **$7.2 million**, and stockholders' equity turned positive to **$8.7 million**, with a net income of **$88.9 million** due to a gain on disposal Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total Current Assets | $15.5 | $100.3 | | Total Assets | $15.9 | $116.0 | | Total Current Liabilities | $5.2 | $203.2 | | Total Liabilities | $7.2 | $204.1 | | Total Stockholders' Equity (Deficit) | $8.7 | $(88.1) | Consolidated Statement of Operations Highlights (in millions) | Account | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | $0.37 | $0.94 | | Loss from Continuing Operations | $(30.0) | $(11.1) | | Gain on disposal of discontinued operations | $119.4 | $0 | | Net Income (Loss) | $88.9 | $(27.1) | - Net cash from operating activities was **$3.98 million** in 2020, a significant improvement from **$26.32 million** used in 2019, partly due to the removal of the cash-losing fruit juice business[259](index=259&type=chunk) [Notes to Consolidated Financial Statements](index=78&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's transformation, reiterate the **"Going Concern"** issue, disclose a **$123.69 million** gain on discontinued operations, and outline **$62 million** in subsequent financing activities - The sale of the HeDeTang HK business on Feb 27, 2020, resulted in a gain on disposal of **$123.69 million**, which is the primary reason for the company's reported net income in 2020[226](index=226&type=chunk)[469](index=469&type=chunk) - The company has **significant related party transactions**, including loans payable to the Chairman and other key personnel, and loans receivable from entities related to management[439](index=439&type=chunk)[440](index=440&type=chunk) - Subsequent to year-end 2020, the company conducted three registered direct offerings in January, February, and April 2021, raising aggregate gross proceeds of approximately **$62 million**[517](index=517&type=chunk)[518](index=518&type=chunk)[522](index=522&type=chunk) - In February 2021, the company entered into a Share Exchange Agreement to acquire **60%** of Sichuan Ticode Supply Chain Management Co., Ltd. in exchange for approximately **7.8 million shares** of its common stock[520](index=520&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Financial statements reflect a significant transformation post-fruit juice business disposal, showing net income from the sale despite continuing operations loss, with going concern uncertainty [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's transformation to blockchain e-commerce and fintech, including a **$123.7 million** gain from fruit juice business sale, a new loan, and an SEC investigation - The company has transformed its business from fruit juice manufacturing to a real-name blockchain e-commerce platform (Chain Cloud Mall) and has launched a cross-border e-commerce platform, NONOGIRL[16](index=16&type=chunk)[17](index=17&type=chunk) - On February 27, 2020, the company sold its fruit juice business (HeDeTang HK and its subsidiaries), resulting in a gain on disposal of **$123.69 million**[17](index=17&type=chunk)[68](index=68&type=chunk) - The company entered into a loan agreement to lend up to RMB 35 million (approx. **$5.14 million**) to Shenzhen Tiantian Haodian Technology Co., Ltd. at a **10%** annual interest rate[34](index=34&type=chunk) - On February 21, 2020, the company received a subpoena from the SEC's Division of Enforcement related to its accounting procedures, management oversight, and the sale of HeDeTang holdings, and is cooperating with the investigation[82](index=82&type=chunk)[83](index=83&type=chunk) - The company entered into a Share Exchange Agreement to acquire **90%** of Nice Talent Asset Management Limited, a Hong Kong firm licensed for asset management and advising on securities, pending regulatory approval[86](index=86&type=chunk)[88](index=88&type=chunk) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $11,620,201 | $100,345,801 | | **Total Assets** | $29,236,513 | $115,980,570 | | **Total Current Liabilities** | $7,618,421 | $202,789,675 | | **Total Liabilities** | $9,284,712 | $204,057,776 | | **Total Stockholders' Equity** | $19,951,801 | $(88,077,206) | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Revenue | $43,657 | $357,295 | | Loss from Continuing Operations | $(2,473,891) | $(5,211,436) | | Gain on disposal of discontinued operations | $115,947 | $119,582,658 | | **Net Income (Loss)** | **$(2,438,927)** | **$114,230,428** | | Basic Earnings (Loss) per Share | $(0.07) | $3.09 | - The company's ability to continue as a going concern is in doubt due to recurring operating losses and negative operating cash flows, with continuity depending on successfully executing its new business strategy and achieving profitability[26](index=26&type=chunk)[27](index=27&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to blockchain e-commerce and financial services, with COVID-19 impacting revenue, and significant working capital improvement post-discontinued operations - The company is expanding into financial services, including the planned acquisition of Nice Talent Asset Management Limited and a strategic entry into the challenger bank and digital payment sector[104](index=104&type=chunk)[106](index=106&type=chunk) - The COVID-19 pandemic materially and adversely affected business, especially promotion strategies for the CCM Shopping Mall, which relied on in-person meetings and conferences, leading to a sharp decline in sales[95](index=95&type=chunk)[118](index=118&type=chunk)[128](index=128&type=chunk) Revenue Comparison (in thousands) | Period | 2020 | 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $44 | $342 | $(298) | (87.1)% | | **Nine Months Ended Sep 30** | $357 | $745 | $(388) | (52.1)% | - For the nine months ended Sep 30, 2020, G&A expenses increased due to **$1.19 million** in stock-related expenses for a consulting agreement, while selling expenses decreased significantly due to lower payroll and shipping costs[146](index=146&type=chunk)[147](index=147&type=chunk) - As of September 30, 2020, working capital was **$4.0 million**, a significant improvement from a deficit of **$102 million** a year prior, mainly due to a decrease in current liabilities after the disposal of the fruit juice business[153](index=153&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable for the reporting period - Not applicable[157](index=157&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in accounting personnel, engaging consultants for remediation - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2020[157](index=157&type=chunk) - The ineffectiveness was due to a material weakness: a lack of sufficient accounting personnel with appropriate knowledge and training in U.S. GAAP and SEC reporting[157](index=157&type=chunk) - To remediate the weakness, the company has engaged consultants with U.S. GAAP experience to assist with financial statement preparation[158](index=158&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) There have been no material developments in the company's ongoing legal proceedings during the three months ended September 30, 2020 - There were no material developments in the company's legal proceedings during the third quarter of 2020[161](index=161&type=chunk) - Previously disclosed legal cases related to the sold subsidiary HeDengTang HK are no longer a liability for the company[93](index=93&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable for the reporting period - Not applicable[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds for the period - None[161](index=161&type=chunk) [Defaults upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[161](index=161&type=chunk) [Mine Safety Disclosure](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This section is not applicable to the company - Not applicable[162](index=162&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - None[162](index=162&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as XBRL data files[162](index=162&type=chunk)

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, 2020 ☐ 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 (State or o ...

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 March 31, 2020 ☐ 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) | --- | |------------------------| | | | | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ 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 jur ...

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 September 30, 2019 ☐ 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) | --- | |------------------------------- ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the period ended June 30, 2019 [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The company reports a net loss of $3.62 million for H1 2019 and a significant improvement in operating cash flow Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 20,425,563 | 24,164,227 | | **Total Assets** | 66,279,267 | 62,946,609 | | **Total Current Liabilities** | 110,142,196 | 117,173,578 | | **Total Liabilities** | 142,496,650 | 149,624,445 | | **Total Stockholders' Equity (Deficit)** | (76,217,383) | (86,677,836) | Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2019 ($) | | :--- | :--- | :--- | | Revenue | 279,710 | 475,005 | | Gross Profit | 133,108 | 186,083 | | Loss from Operations | (1,939,244) | (3,311,365) | | Net Loss | (2,078,043) | (3,624,472) | | Net Loss Attributable to Future FinTech | (1,695,725) | (2,918,509) | | Basic and Diluted Loss Per Share | (0.05) | (0.09) | Consolidated Cash Flow Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2018 ($) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | 253,669 | (5,209,610) | | Net cash used in investing activities | 0 | (1,902) | | Net cash provided by financing activities | 503,818 | 155,952 | | **Net (Decrease) Increase in Cash** | **2,310** | **(4,192,649)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the business transformation to a blockchain e-commerce platform and disclose numerous legal proceedings - The company is transforming its business from fruit juice manufacturing to a real-name blockchain e-commerce platform, **Chain Cloud Mall (CCM)**, due to increased production costs and tightened environmental laws in China[14](index=14&type=chunk) - CCM v1.0 was launched on January 22, 2019, and an enhanced version, **CCM v2.0**, was launched on June 1, 2019, featuring more product categories, a better user interface, and higher security[15](index=15&type=chunk)[16](index=16&type=chunk) - To comply with Chinese law regarding foreign ownership in e-commerce, the company established a **Variable Interest Entity (VIE)** structure for its Chain Cloud Mall E-commerce (Tianjin) Co, Ltd subsidiary[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - The company's Huludao Wonder operation, which produced concentrated apple juice, has been classified as a **discontinued operation** since December 2016 due to sustained losses[116](index=116&type=chunk) - The company is involved in numerous litigation and enforcement proceedings, primarily concerning **unpaid loans, guarantees, and lease agreements** with various banks and creditors[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the strategic shift to blockchain e-commerce, analyzing revenue declines and liquidity constraints [Overview of Our Business](index=36&type=section&id=Overview%20of%20Our%20Business) The company is transitioning to the Chain Cloud Mall (CCM) platform, which generates revenue from membership fees and sales - The company formally launched its blockchain shared shopping mall, **Chain Cloud Mall (CCM) v1.0**, on January 22, 2019, and upgraded to v2.0 on June 1, 2019[168](index=168&type=chunk)[169](index=169&type=chunk) - The CCM platform grew from approximately 164 users at the end of 2018 to **4,014 users** by June 30, 2019[173](index=173&type=chunk) - From its trial period to August 31, 2019, the CCM platform generated approximately **$1.24 million in proceeds** from membership fees and merchandise sales, with 5,977 members[179](index=179&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Financial results show a 65% year-over-year revenue decline due to the strategic shift away from the fruit juice business Revenue by Segment - Three Months Ended June 30 (in thousands) | Segment | 2019 ($) | 2018 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fruit related products | 23 | 758 | (735) | -97% | | CCM Shopping Mall Membership | 109 | 0 | 109 | 100% | | Sales of goods | 148 | 0 | 148 | 100% | | **Total** | **280** | **788** | **(508)** | **-65%** | Revenue by Segment - Six Months Ended June 30 (in thousands) | Segment | 2019 ($) | 2018 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fruit related products | 44 | 1,259 | (1,215) | -97% | | CCM Shopping Mall Membership | 131 | 0 | 131 | 100% | | Sales of goods | 286 | 0 | 286 | 100% | | **Total** | **475** | **1,350** | **(875)** | **-65%** | - General and administrative expenses for the six months ended June 30, 2019, **decreased by 42% to $2.90 million**, primarily due to lower depreciation and amortization expenses[211](index=211&type=chunk)[212](index=212&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company reports cash of $0.26 million and a negative working capital of $90 million as of June 30, 2019 - Cash and cash equivalents stood at **$0.26 million** as of June 30, 2019[218](index=218&type=chunk) - Working capital was **negative $90 million** as of June 30, 2019, a decrease of $32 million from the negative $58 million reported as of June 30, 2018[219](index=219&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable for the reporting period - This section is not applicable for the reporting period[221](index=221&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Based on an evaluation as of June 30, 2019, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective**[222](index=222&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's **internal control over financial reporting**[223](index=223&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section details numerous ongoing legal proceedings and enforcement actions related to loan defaults and guarantees - The company's subsidiary, SkyPeople China, is involved in multiple enforcement actions for unpaid loans, including **RMB 30 million** from Beijing Bank and **RMB 43.9 million** from China Construction Bank[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - China Cinda Asset Management filed enforcement proceedings for alleged defaults on guarantees totaling approximately **$5.8 million**[229](index=229&type=chunk)[232](index=232&type=chunk) - Cinda Capital Financing filed two lawsuits for unpaid leasing fees totaling approximately **$7.27 million** and **$12.35 million**, respectively[234](index=234&type=chunk)[235](index=235&type=chunk) - A lawsuit brought by a former consultant seeking damages and 2% of the company's shares was **dismissed by the District Court of Connecticut**, but the decision is under appeal[247](index=247&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This item is not applicable for the reporting period - This section is not applicable for the reporting period[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None reported for the period[249](index=249&type=chunk) [Defaults upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None reported for the period[249](index=249&type=chunk) [Mine Safety Disclosure](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable for the reporting period - This section is not applicable[249](index=249&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None reported for the period[249](index=249&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications and XBRL interactive data files - Exhibits filed include CEO and CFO certifications and XBRL data files[249](index=249&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Future FinTech Group Inc. [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Future FinTech Group Inc. for the period ended March 31, 2019, including balance sheets, statements of operations and comprehensive income (loss), and cash flows. It also includes detailed notes explaining the basis of presentation, business description, accounting policies, and specific financial items. [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This table provides a snapshot of the company's financial position, including assets, liabilities, and equity, as of March 31, 2019, and December 31, 2018 | Metric | March 31, 2019 (Unaudited) | December 31, 2018 | | :-------------------------- | :------------------------- | :------------------ | | Cash and cash equivalents | $514,498 | $253,804 | | Total Current Assets | $19,967,622 | $24,164,227 | | Total Assets | $67,270,696 | $62,946,609 | | Total Current Liabilities | $113,908,612 | $117,173,578 | | Total Liabilities | $146,944,474 | $149,624,445 | | Total Equity | $(79,673,778) | $(86,677,836) | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) This table details the company's financial performance, including revenue, gross profit, and net loss, for the three months ended March 31, 2019, and 2018 | Metric | Three months Ended March 31, 2019 | Three months Ended March 31, 2018 | | :------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue | $196,329 | $562,146 | | Gross profit | $53,255 | $62,586 | | Loss from operations | $(1,510,715) | $(2,780,742) | | Loss from Continuing Operations before Income Tax | $(1,678,798) | $(3,233,340) | | NET LOSS ATTRIBUTABLE TO FUTURE FINTECH GROUP INC. STOCKHOLDERS | $(1,328,656) | $(2,791,926) | | Basic loss per share from net income | $(0.04) | $(0.42) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS)) This table summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2019, and 2018 | Metric | Three months Ended March 31, 2019 | Three months Ended March 31, 2018 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $287,485 | $(487,226) | | Net cash used in investing activities | $0 | $(1,978) | | Net cash provided by financing activities | $499,992 | $0 | | NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $260,695 | $(1,055,455) | | Cash and cash equivalents, end of period | $514,498 | $3,531,302 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Presentation](index=7&type=section&id=1.%20Basis%20of%20Presentation) This note outlines the accounting principles and rules used in preparing the unaudited interim financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, reflecting normal recurring adjustments. The results for Q1 2019 are not indicative of future periods, and the December 31, 2018 balance sheet is derived from audited statements[10](index=10&type=chunk)[11](index=11&type=chunk) [2. Business Description](index=8&type=section&id=2.%20Business%20Description) This note describes the company's business activities, strategic transformation, and organizational structure [Business Overview & Transformation](index=8&type=section&id=Business%20Overview%20%26%20Transformation) The company is transitioning from fruit juice manufacturing to a blockchain e-commerce platform, GlobalKey SharedMall (CCM) - The Company is transforming its business from fruit juice manufacturing and distribution to a real-name blockchain e-commerce platform, GlobalKey SharedMall (Chain Cloud Mall or CCM), due to increased production costs and tightened environmental laws in China[12](index=12&type=chunk)[13](index=13&type=chunk) - CCM v1.0 launched on January 22, 2019, and v2.0 launched on June 1, 2019, offering wider product categories, improved user interface, and enhanced security. The platform uses a 'multi-vendor hosted stores + platform self-hosted stores' model[13](index=13&type=chunk)[14](index=14&type=chunk) - Beyond the blockchain e-commerce platform, the Company also operates a supply chain, logistics, and trading business for fruit juice and other products, and a digital payment system 'DCON' backed by blockchain technology[15](index=15&type=chunk) [Organizational Structure](index=8&type=section&id=Organizational%20Structure) The company operates through various subsidiaries in the PRC, reflecting a complex and evolving business structure - The Company's activities are primarily conducted by subsidiaries in the PRC, with a complex organizational structure involving numerous entities with diverse business scopes, including food processing, agriculture, trading, and fintech[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - Recent additions to the organizational structure include entities focused on blockchain technology development, e-commerce platforms, and digital payment systems, reflecting the Company's strategic shift[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Variable Interest Entity (VIE) Agreements](index=13&type=section&id=Variable%20Interest%20Entity%20(VIE)%20Agreements) The company uses VIE agreements to control and consolidate the operations of its e-commerce subsidiary in China due to foreign ownership restrictions - On July 31, 2019, the Company's wholly-owned subsidiary, CCM Tianjin, entered into Variable Interest Entity (VIE) Agreements with Chain Cloud Mall E-commerce (Tianjin) Co., Ltd. (E-commerce Tianjin) and its shareholders (Mr. Zeyao Xue and Mr. Kai Xu)[51](index=51&type=chunk) - These VIE agreements grant CCM Tianjin contractual rights to control and operate E-commerce Tianjin's business, receive substantially all economic benefits, and have an exclusive option to purchase equity interests, in compliance with Chinese laws restricting foreign ownership in certain e-commerce businesses[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Key agreements include an Exclusive Purchase Option Agreement, Equity Pledge Agreement, and Exclusive Technology Consulting and Service Agreement, ensuring control, economic benefits, and security for CCM Tianjin[56](index=56&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) [Principles of Consolidation](index=16&type=section&id=Principles%20of%20Consolidation) The consolidated financial statements include the company and its subsidiaries, with intercompany transactions eliminated, prepared under U.S. GAAP - The consolidated financial statements include the accounts of the Company and its subsidiaries, with all material intercompany accounts and transactions eliminated. Financial statements are prepared in accordance with U.S. GAAP, with necessary adjustments made from PRC statutory accounts[62](index=62&type=chunk)[63](index=63&type=chunk) [Uses of estimates in the preparation of financial statements](index=17&type=section&id=Uses%20of%20estimates%20in%20the%20preparation%20of%20financial%20statements) Management makes estimates and assumptions in preparing financial statements, which may lead to actual results differing from these estimates - The preparation of financial statements requires management to make estimates and assumptions, particularly in areas such as allowance for doubtful accounts, useful life of assets, staff benefits, and deferred income taxes. Actual results may differ from these estimates[65](index=65&type=chunk) [Going Concern](index=17&type=section&id=Going%20Concern) The company's ability to continue as a going concern relies on the successful execution of its new business strategy and achieving profitability - The Company's ability to continue as a going concern depends on the successful execution of its new business strategy and achieving profitable operations. The financial statements do not include adjustments that might be necessary if the Company cannot continue as a going concern[66](index=66&type=chunk)[69](index=69&type=chunk) - For the first quarter of 2019, the Company began recognizing revenue from its new blockchain-based e-commerce platform[69](index=69&type=chunk) [Shipping and Handling Costs](index=17&type=section&id=Shipping%20and%20Handling%20Costs) Shipping and handling amounts billed to customers are revenue, while expenses are reported as a component of selling expenses - Shipping and handling amounts billed to customers are included in sales revenues, while expenses incurred are reported as a component of selling expenses. For Q1 2019, these expenses were **$3,243**, a decrease from **$8,614** in Q1 2018[70](index=70&type=chunk) [Leases](index=17&type=section&id=Leases) Leases are classified as capital or operating at inception, with rent expense recorded over the lease term - Leases are classified as capital or operating at inception per ASC Topic 840. For leases with rent escalations, monthly rent expense is recorded as the total payments over the lease term, with differences adjusted to a deferred rent account[71](index=71&type=chunk) [Earnings (loss) per share](index=17&type=section&id=Earnings%20(loss)%20per%20share) Basic EPS is calculated by dividing net income by weighted average common shares, while diluted EPS includes potential common shares - Basic EPS is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Diluted EPS accounts for all dilutive potential common shares[72](index=72&type=chunk) [Recent Accounting Pronouncements](index=17&type=section&id=Recent%20Accounting%20Pronouncements) The company adopted several new accounting standards, none of which had a material effect on its financial statements - The Company adopted ASU 2018-15 (Intangibles - Goodwill and Other - Internal-use Software) and ASU 2018-07 (Compensation – Stock Compensation), neither of which had a material effect on operations, financial position, or cash flows[73](index=73&type=chunk)[74](index=74&type=chunk) - ASU 2018-02 (Income Statement-Reporting Comprehensive Income) was adopted, allowing reclassification of stranded tax effects from accumulated other comprehensive income to retained earnings due to the Tax Cuts and Jobs Act, but it also had no material effect[76](index=76&type=chunk) [3. Inventories](index=19&type=section&id=3.%20Inventories) This table details the composition and value of the company's inventories, including raw materials and finished goods, at period-end | Category | March 31, 2019 (Unaudited) | December 31, 2018 (Audited) | | :------------------------ | :------------------------- | :-------------------------- | | Raw materials and packaging | $77 thousand | $25 thousand | | Finished goods | $120 thousand | $38 thousand | | Total Inventories | $198 thousand | $63 thousand | [4. Related Party Transaction](index=20&type=section&id=4.%20Related%20Party%20Transaction) This note discloses that the company had no sales to related parties and corresponding zero receivables for the reported periods - The Company reported no sales to related parties for the three months ended March 31, 2019, or March 31, 2018, with corresponding **zero accounts receivable balances**[80](index=80&type=chunk) [5. Concentrations](index=20&type=section&id=5.%20Concentrations) This note discusses the company's customer and supplier concentration, highlighting changes in dependency over time - Customer concentration decreased significantly: sales to the five largest customers accounted for approximately **26% of net sales** in Q1 2019, down from **100%** in Q1 2018. One customer represented **12% of total sales** in Q1 2019, compared to over **87%** by one customer in Q1 2018[81](index=81&type=chunk) - Supplier concentration also changed: one supplier accounted for over **14% of purchases** in Q1 2019, whereas no single supplier exceeded **10%** in Q1 2018[82](index=82&type=chunk) [6. Issuance of common stock and warrants](index=20&type=section&id=6.%20Issuance%20of%20common%20stock%20and%20warrants) This note details the issuance of common stock and warrants, including their purpose and the proceeds or value received - In April 2017, the Company issued **862,097 shares** of common stock at **$3.10 per share** for **$2,672,500 gross proceeds**, along with warrants to purchase an equal number of shares at an exercise price of **$5.20**[83](index=83&type=chunk)[84](index=84&type=chunk) - In November 2017, a subsidiary acquired creditor's rights for approximately **$27.3 million**, paid partly in cash (**$16.4 million**) and partly in Company common stock (**$10.9 million**)[89](index=89&type=chunk) - In January 2018, the Company issued **1,200,000 shares** of common stock (**$9.6 million value**) to acquire a **60% ownership interest** in DCON digital assets, a blockchain platform[97](index=97&type=chunk)[98](index=98&type=chunk) [7. Intangible Assets](index=24&type=section&id=7.%20Intangible%20Assets) This note describes the company's intangible assets, specifically a digital asset related to the DCON blockchain platform, and its amortization - The Company recognized a digital asset related to the DCON blockchain platform as an intangible asset at a purchase price of **$9,600,000**, amortized over **5 years**. Amortization for Q1 2019 was **$480,000**[110](index=110&type=chunk)[111](index=111&type=chunk) [8. Other Receivables](index=24&type=section&id=8.%20Other%20Receivables) This note details a significant deposit paid for a potential kiwifruit orchard purchase, expected to complete in 2020 - The Company paid a RMB 200 million (approximately **$30 million**) deposit in Q2 2016 for the potential purchase of a kiwifruit orchard, with the purchase expected to complete in 2020, pending valuation and approvals[112](index=112&type=chunk) [9. Long-term Assets](index=24&type=section&id=9.%20Long-term%20Assets) This note outlines significant long-term lease payments made for agricultural land, recorded as deposits - The Company made significant long-term lease payments for agricultural land: RMB 250 million (approx. **$37.4 million**) for a **20,000 mu** kiwifruit orchard lease (**30 years**) and RMB 160 million (approx. **$24.0 million**) for an **8,000 mu** orange orchard lease (**20 years**), both recorded as deposits[113](index=113&type=chunk)[114](index=114&type=chunk) [10. Discontinued Operation](index=26&type=section&id=10.%20Discontinued%20Operation) This note explains the classification and winding down of the Huludao Wonder operation due to sustained losses and debt settlement - The Huludao Wonder operation, a concentrated apple juice subsidiary, was classified as a discontinued operation in December 2016 due to sustained operating losses and a winding-down plan. As of March 31, 2019, it no longer incurred income or expenses[116](index=116&type=chunk)[117](index=117&type=chunk) - Huludao Wonder settled its long-term debt in 2018 by transferring its fixed assets to the bank, eliminating future significant cash flows from this discontinued component[116](index=116&type=chunk)[117](index=117&type=chunk) [11. Segment Reporting](index=26&type=section&id=11.%20Segment%20Reporting) This note provides financial information by operating segment, reflecting the company's strategic shift to blockchain e-commerce - Starting fiscal 2019, the Company operates in four segments: shared shopping mall membership fee, fruit related products, sales of goods, and others, reflecting a shift from traditional fruit juice business to blockchain-based e-commerce[118](index=118&type=chunk)[119](index=119&type=chunk) Revenue by Segment (in thousands) | Segment | Q1 2019 Revenue (in thousands) | Q1 2018 Revenue (in thousands) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Fruit Related Products | $22 | $501 | | CCM Shopping Mall Membership | $22 | $- | | Sales of Goods | $138 | $- | | Others | $14 | $61 | | Total Revenue from external customers | $196 | $562 | Gross Profit by Segment (in thousands) | Segment | Q1 2019 Gross Profit (in thousands) | Q1 2018 Gross Profit (in thousands) | | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Fruit Related Products | $2 | $46 | | CCM Shopping Mall Membership | $20 | $- | | Sales of Goods | $17 | $- | | Others | $14 | $17 | | Total Segment Gross Profit | $53 | $63 | [12. Commitments And Contingencies (Litigation)](index=28&type=section&id=12.%20Commitments%20And%20Contingencies) This note details the company's involvement in multiple legal proceedings, primarily related to loan defaults and lease fees, with significant judgments against it - The Company and its subsidiaries are involved in multiple legal proceedings, primarily related to unpaid loans and lease fees, with several cases resulting in court rulings against the Company and enforcement actions involving seized assets[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) - Significant liabilities include a **$5.8 million** expense and liability recorded in Q3 2018 for alleged defaults on supplier guarantees with Cinda Shaanxi Branch, and judgments totaling approximately **$19.62 million** (RMB 50 million + RMB 84.97 million) for capital lease fees and equipment financial lease fees with Cinda Capital Financing Co. Ltd[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - A former consultant, Andrew Chien, filed a lawsuit claiming **$257,000** in damages and **2% of outstanding shares**, which was dismissed by the District Court of Connecticut in August 2018, with an appeal currently awaiting decision[147](index=147&type=chunk) [13. Entry into a Material Definitive Agreement](index=34&type=section&id=13.%20Entry%20into%20a%20Material%20Definitive%20Agreement) This note describes a significant securities purchase agreement involving a secured convertible promissory note with Iliad Research and Trading, L.P. - On March 26, 2019, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., issuing a Secured Convertible Promissory Note with a principal amount of **$1,070,000**, bearing **8% interest** and convertible at **$3.00 per share**[149](index=149&type=chunk)[151](index=151&type=chunk) - The purchase price was paid through an initial cash payment of **$500,000** and an Investor Note, with the second cash payment of **$503,817.92** received on May 2, 2019[149](index=149&type=chunk)[150](index=150&type=chunk) [14. Subsequent Events](index=34&type=section&id=14.%20Subsequent%20Events) This note reports on key events occurring after the balance sheet date, including a CFO appointment and a subsidiary sale agreement - On May 16, 2019, Ms. Jing (Veronica) Chen was appointed as the Chief Financial Officer (CFO) of the Company, with an annual compensation of RMB 624,000 (approximately **$90,620**)[152](index=152&type=chunk)[155](index=155&type=chunk) - On September 18, 2019, SkyPeople Foods Holdings Limited agreed to sell all shares of HeDeTang Holdings (HK) Ltd. to New Continent International Co., Ltd. for approximately **US$85,714**, subject to shareholder approvals[156](index=156&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2019, emphasizing the ongoing business transformation from fruit juice production to a blockchain-based e-commerce platform. It discusses revenue shifts, gross margin changes, operating expenses, and liquidity, highlighting the impact of the new business strategy. [Disclaimer Regarding Forward-Looking Statements](index=36&type=section&id=DISCLAIMER%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This disclaimer advises readers that the report contains forward-looking statements subject to risks and uncertainties, which the company does not commit to update - The report contains forward-looking statements based on management's beliefs and assumptions, which are subject to risks and uncertainties. Readers are cautioned not to place undue reliance on these statements, and the Company does not intend to update them except as required by law[158](index=158&type=chunk)[159](index=159&type=chunk) [Overview of Our Business](index=36&type=section&id=Overview%20of%20Our%20Business) This section provides an overview of the company's business, focusing on its strategic transformation and traditional fruit juice operations [Business Transformation & Blockchain E-commerce](index=36&type=section&id=Business%20Transformation%20%26%20Blockchain%20E-commerce) The company is transforming its business model to a blockchain-based e-commerce platform, GlobalKey SharedMall (CCM) - The Company is actively transforming from fruit-related products to a blockchain-based e-commerce platform, GlobalKey SharedMall (CCM), launched in January 2019 (v1.0) and June 2019 (v2.0)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - CCM utilizes blockchain for an automatic value distribution system, sharing platform value with participants, and features an unalterable anti-counterfeit code for product authenticity and direct manufacturer-customer links[163](index=163&type=chunk)[164](index=164&type=chunk) - The platform generates revenue from fixed membership fees (Diamond Elite and Silver Elite programs) and product sales, with members earning CCM-Points for referrals and purchases, which can be used as coupons[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - As of June 30, 2019, CCM had approximately **4,014 users**, growing from **164 users** at December 31, 2018. For Q1 2019, the platform generated approximately **$311,101** from **1,209 members** and **1,226 orders**[166](index=166&type=chunk)[172](index=172&type=chunk) [Fruit Juice Business](index=38&type=section&id=Fruit%20Juice%20Business) The traditional fruit juice business, now a smaller segment, is seasonal and relies on local raw material purchases - The traditional fruit juice business, including concentrates, beverages, and other fruit-related products, is now classified under 'fruit related products' and represented **38% of revenue** in Q1 2019, a significant decrease from **89%** in Q1 2018[172](index=172&type=chunk)[173](index=173&type=chunk) - The fruit juice business is highly seasonal, dependent on fruit harvesting, and uses raw materials like apples, pears, and kiwifruits purchased from local markets[172](index=172&type=chunk)[174](index=174&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, gross margin, and operating expenses, for the reported periods [Revenue](index=39&type=section&id=Revenue) This section analyzes the company's revenue performance, highlighting shifts between traditional and new business segments | Segment | Q1 2019 Revenue (in thousands) | Q1 2018 Revenue (in thousands) | Change Amount (in thousands) | % Change | | :--------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :------- | | Fruit related products | $22 | $501 | $(479) | (96)% | | CCM Shopping Mall Membership | $22 | $- | $22 | 100% | | Sales of goods | $138 | $- | $138 | 100% | | Others | $14 | $61 | $(47) | 77% | | Total | $196 | $562 | $(365) | 65% | - Total gross revenue decreased by **65%** (**$365 thousand**) in Q1 2019 compared to Q1 2018, primarily due to a **96% decrease** in fruit-related product sales as a result of business transformation[178](index=178&type=chunk)[180](index=180&type=chunk) - New business segments, CCM membership and sales of goods through e-commerce platforms, generated **100% new revenue** in Q1 2019, reflecting the Company's strategic shift[181](index=181&type=chunk) [Gross Margin](index=41&type=section&id=Gross%20Margin) This section examines changes in the company's gross profit and gross margin across different business segments | Segment | Q1 2019 Gross Profit (in thousands) | Q1 2019 Gross Margin | Q1 2018 Gross Profit (in thousands) | Q1 2018 Gross Margin | | :--------------------------- | :---------------------------------- | :------------------- | :---------------------------------- | :------------------- | | Fruit related products | $2 | 9% | $46 | 20% | | CCM Shopping Mall Membership | $20 | 90% | $- | - | | Sales of goods | $17 | 12% | $- | - | | Others | $14 | 100% | $17 | 11% | | Total/Overall | $53 | 27% | $63 | 28% | - Consolidated gross profit decreased by **$0.01 million** to **$0.05 million** in Q1 2019, with the overall gross margin slightly decreasing from **28% to 27%**[184](index=184&type=chunk) - The gross margin for fruit-related products significantly decreased from **20% to 9%** due to lower production activities leading to a higher percentage of fixed costs[185](index=185&type=chunk) [Operating Expenses](index=41&type=section&id=Operating%20Expenses) This section details the company's operating expenses, including general and administrative, selling, and R&D costs | Expense Category | Q1 2019 Amount (in thousands) | Q1 2019 % of Revenue | Q1 2018 Amount (in thousands) | Q1 2018 % of Revenue | | :--------------------------- | :---------------------------- | :------------------- | :---------------------------- | :------------------- | | General and administrative | $1,482 | 745% | $2,750 | 489% | | Selling expenses | $80 | 41% | $93 | 17% | | R&D expenses | $24 | 12% | $- | - | | Impairment Loss | $(23) | -12% | $- | - | | Total operating expenses | $1,564 | 797% | $2,843 | 506% | - Total operating expenses decreased by **$1.51 million** in Q1 2019, primarily driven by a **$1.27 million decrease** in general and administrative expenses due to lower depreciation and amortization costs following an impairment in fiscal year 2018[188](index=188&type=chunk)[189](index=189&type=chunk) - R&D expenses of **$0.024 million** were incurred in Q1 2019 for developing and maintaining the blockchain-based CCM Shared Shopping Mall, compared to none in Q1 2018[190](index=190&type=chunk) [Other Income (Expense), Net](index=42&type=section&id=Other%20Income%20(Expense),%20Net) This section discusses non-operating income and expenses, primarily focusing on changes in interest expenses - Other expenses decreased by **$0.28 million** to **$0.17 million** in Q1 2019, mainly due to a **$0.25 million reduction** in interest expenses. This reduction resulted from the discontinued Huludao Wonder operation repaying its bank loan principal by transferring fixed assets in 2018[192](index=192&type=chunk)[193](index=193&type=chunk) [Income Tax](index=42&type=section&id=Income%20Tax) This section reports on the company's income tax provision, noting no provision due to incurred losses - The Company reported no income tax provision for the three months ended March 31, 2019, or 2018, as it incurred a loss in both periods[194](index=194&type=chunk) [Non-controlling Interests](index=42&type=section&id=Non-controlling%20Interests) This section explains the decrease in net income attributable to non-controlling interests - Net income attributable to non-controlling interests decreased, primarily due to a decrease in net income generated from Shaanxi Qiyiwangguo and SkyPeople (China)[195](index=195&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, working capital, and overall ability to meet short-term obligations - As of March 31, 2019, cash and cash equivalents increased to **$0.51 million** from **$0.25 million** at December 31, 2018. However, working capital was negative **$93.94 million**, a decrease of **$37.02 million** from negative **$56.92 million** in Q1 2018, mainly due to a decrease in current assets from revaluation of accounts receivable[195](index=195&type=chunk) [Off-balance sheet arrangements](index=43&type=section&id=Off-balance%20sheet%20arrangements) This section confirms the absence of any off-balance sheet arrangements for the company as of the reporting date - As of March 31, 2019, the Company did not have any off-balance sheet arrangements[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company. - The Company states that quantitative and qualitative disclosures about market risk are not applicable[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's disclosure controls and procedures and reports on any changes to internal control over financial reporting. [Disclosure Controls and Procedures](index=43&type=section&id=Disclosure%20Controls%20and%20Procedures) Management evaluated and concluded that the company's disclosure controls and procedures were effective as of March 31, 2019 - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2019, and concluded they were effective[196](index=196&type=chunk) [Changes to Internal Control over Financial Reporting](index=43&type=section&id=Changes%20to%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes to the company's internal control over financial reporting during the period - There have been no changes to the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[197](index=197&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information, including legal proceedings, risk factors, and other required disclosures. [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section provides a detailed overview of various ongoing legal proceedings involving the Company and its subsidiaries, primarily related to loan defaults, lease fee disputes, and construction payment disagreements. Many cases have resulted in court judgments against the Company, leading to enforcement actions and asset seizures. - SkyPeople China is involved in multiple loan default lawsuits with banks (Beijing Bank, Ningxia Bank, China Construction Bank, SPD Bank Xi'an Branch), resulting in seized real estate, equipment, and land use rights as collateral or repayment[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - The Company faces enforcement proceedings from Cinda Shaanxi Branch for alleged defaults on supplier guarantees totaling approximately **$5.8 million**, with settlement negotiations ongoing[203](index=203&type=chunk)[206](index=206&type=chunk) - Subsidiaries Guoweimei and Trading Market Mei County Co. are subject to lawsuits from Cinda Capital Financing Co. Ltd. for unpaid capital lease fees and equipment financial lease fees, with court rulings upholding Cinda's claims and enforcement procedures underway[207](index=207&type=chunk)[208](index=208&type=chunk) - Several other subsidiaries are involved in disputes over construction fees, land lease agreements, and transportation contracts, leading to court judgments and ongoing enforcement efforts[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there are no new or updated risk factors to report in this quarterly filing, referring to previous disclosures. - The Company states that Item 1A. Risk Factors is not applicable for this report, implying no new material risk factors have arisen since the last annual report[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds to disclose for the period. - The Company reports no unregistered sales of equity securities and use of proceeds for the period[221](index=221&type=chunk) [Item 3. Defaults upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report. - The Company reports no defaults upon senior securities for the period[221](index=221&type=chunk) [Item 4. Mine Safety Disclosure](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This section indicates that mine safety disclosure is not applicable to the Company's operations. - The Company states that mine safety disclosure is not applicable[221](index=221&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to disclose. - The Company reports no other information to disclose[221](index=221&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents. - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and various XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[221](index=221&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section contains the official signatures of the company's executive officers, certifying the report's accuracy. [Signatures](index=51&type=section&id=SIGNATURES) The report is duly signed on behalf of Future FinTech Group Inc. by its Chief Executive Officer, Yongke Xue, and Chief Financial Officer, Jing Chen, on September 30, 2019. - The report was signed by Yongke Xue, Chief Executive Officer, and Jing Chen, Chief Financial Officer, on September 30, 2019[223](index=223&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ 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) Emerging growth company ☐ If an emergi ...