Future FinTech Group Inc
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 19, 2024
FTFT$3.29-13.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-19.
0001213900-24-070725
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0001213900-24-100164
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 101 current paragraphs.
66 unchanged; 30 reworded; 5 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Revenue for the three months ended September 30, 2024 decreased to approximately $5.18 million from approximately $23.74 million for the same period of the last year. The decrease in revenue for the three months ended September 30, 2024 was primarily due to decrease revenue from supply chain financing/trading, as the real estate, infrastructure and overall economy in China have slowed down in 2024. The demand for sand and steel has dropped during three months ended September 30, 2024 comparing to the same period of 2023, and coal price has decreased in China and the market demand has also decreased during the third quarter 2024 as comparing to the same period of 2023.
Current report
Selling expenses increased by $0.01 million during the three months ended September 30, 2024, compared to the same period of last fiscal year.
Current report
Comparison of Nine Months ended September 30, 2024 and 2023:
Current report
Revenue for the nine months ended September 30, 2024 decreased to approximately $14.5 million from approximately $30.82 million for the same period of the last year. The decrease in revenue for the nine months ended September 30, 2024 was primarily due to decrease revenue from supply chain financing/trading, as the real estate, infrastructure and overall economy in China have slowed down in 2024. The demand for sand and steel has dropped during nine months ended September 30, 2024 comparing to the same period of 2023, and coal price has decreased in China and the market demand has also decreased during three quarters in 2024 as comparing to the same period of 2023.
Current report
Overall gross profit increased to $5.06 million for nine months ended September 30, 2024 from $3.86 million for the same period of 2023. The increase is mainly due to others including debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.60 million and cryptocurrency mining service income of $0.65 million, as we did not have such income in 2023. Overall gross margin as a percentage of revenue was 34.89% for the nine months ended September 30, 2024, an increase of 22.38% from 12.51% for the same period of last fiscal year, mainly due to higher profit margin from supply chain financing/trading business for the nine months ended September 30, 2024, comparing to the same period of 2023, which was mainly due to higher supply chain financing/trading cost in 2023.
Removed paragraphs (5)
Previous report
Supply chain financing/trading decreased $0.31 million from $0.37 million for the three months ended June 30, 2023 to $0.06 million for the same period of 2024. It was due to coal prices have decreased in China and the market demand has also decreased in the second quarter 2024.
Previous report
Selling expenses increased by $0.03 million during the three months ended June 30, 2024, compared to the same period of last fiscal year.
Previous report
Comparison of Six Months ended June 30, 2024 and 2023:
Previous report
Supply chain financing/trading increased $0.03 million from $0.48 million for the six months ended June 30, 2023 to $0.51 million for the same period of 2024.
Previous report
Overall gross profit increased to $3.55 million for six months ended June 30, 2024 from $2.44 million for the same period of 2023. The increase is mainly due to the increase of gross profits from asset management service business others which is in line with the increase of revenues for these two business segments during six months ended June 30, 2024. Overall gross margin as a percentage of revenue was 38.02% for the six months ended June 30, 2024, an increase of 3.52% from 34.49% for the same period of last fiscal year, increase in profit margin for our asset management business as it has more large clients which was offset by the decrease in profit margin for our supply chain financing/trading business as its revenue mostly came from sales of goods with ownership during six months ended June 30, 2024, which has much lower profit margin than the revenue from agent service fees that we mostly generated from the same period of 2023.
Reworded paragraphs (30)
Previous wording
The Company currently has eight directly controlled subsidiaries: DigiPay FinTech Limited (“DigiPay”), a company incorporated under the laws of the British Virgin Islands, Future FinTech (Hong Kong) Limited, a company incorporated under the laws of Hong Kong, Tianjin Future Private Equity Fund Management Partnership, a Limited Partnership under the laws of China, FTFT UK Limited, a company incorporated under the laws of United Kingdom, Future Fintech Digital Capital Management, LLC, a company incorporated under the laws of Connecticut, Future Fintech Digital Number One GP, LLC, a company incorporated under the laws of Connecticut, Future FinTech Labs Inc., a company incorporated under the laws of New York, and FTFT SuperComputing Inc. a company incorporated under the laws of Ohio.
Current wording
The Company currently has eight directly controlled subsidiaries: DigiPay FinTech Limited (“DigiPay”), a company incorporated under the laws of the British Virgin Islands, Future FinTech (Hong Kong) Limited, a company incorporated under the laws of Hong Kong, GlobalKey Shared Mall Limited, a company incorporated under the laws of Cayman Islands (“GlobalKey Shared Mall”), FTFT UK Limited, a company incorporated under the laws of United Kingdom, Future Fintech Digital Capital Management, LLC, a company incorporated under the laws of Connecticut, Future Fintech Digital Number One GP, LLC, a company incorporated under the laws of Connecticut, Future FinTech Labs Inc., a company incorporated under the laws of New York, and FTFT SuperComputing Inc. a company incorporated under the laws of Ohio.
Previous wording
NTAM’s main revenue is generated from providing professional advice to clients and management fees for managing the investment of the clients. As of June 30, 2024, NTAM has approximately US$348 million assets under its management.
Current wording
NTAM’s main revenue is generated from providing professional advice to clients and management fees for managing the investment of the clients. As of September 30, 2024, NTAM has approximately US$367 million assets under its management.
Previous wording
The increase in revenue for the three months ended June 30, 2024 was primarily due to more revenue from asset management service, as the Company hired more seasoned account managers to boost the services and the revenues.
Current wording
Asset management service revenues increased $0.44 million from $3.27 million for the three months ended September 30, 2023 to $3.71 million for the same period of 2024, as the Company hired more seasoned account managers to boost the services and the revenues.
Previous wording
Other revenues increased from $0.10 million for the three months ended June 30, 2023 to $0.35 million for the same period of 2024, mainly due to the increased debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.20 million, as we did not have such income in the second quarter 2023.
Current wording
Other revenues increased from $0.47 million for the three months ended September 30, 2023 to $1.04 million for the same period of 2024, mainly due to the increased debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.50 million, as we did not have such income in the third quarter 2023.
Previous wording
Overall gross profit increased to $1.59 million for three months ended June 30, 2024 from $1.24 million for the same period of 2023. The increase is mainly due to the increase of gross profits from asst management service and others business which is in line with the increase of revenues for these business segments during the second quarter of 2024. Overall gross margin as a percentage of revenue was 37.93% for the three months ended June 30, 2024, an increase of 4.54% from 33.39% for the same period of last fiscal year, mainly due to increase in profit margin for our others business, as we generated certain new revenues that we did not have during the second quarter 2023.
Current wording
Overall gross profit increased to $1.51 million for three months ended September 30, 2024 from $1.41 million for the same period of 2023. The increase is mainly due to the increase of gross profit from others business which is in line with the increase of revenues for such business segment during the third quarter of 2024. Overall gross margin as a percentage of revenue was 29.25% for the three months ended September 30, 2024, an increase of 22.42% from 5.95% for the same period of last fiscal year, mainly due to higher profit margin from supply chain financing/trading business and other businesses for the three months ended September 30, 2024, comparing to the same period of 2023, which was mainly due to higher supply chain financing/trading cost in 2023, and the increased debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.50 million in third quarter of 2024 as we did not have such income in the third quarter 2023.
Previous wording
General and administrative expenses increased by $1.01 million, or 17.44%, to $6.81 million for the six months ended June 30, 2024 from $5.80 million for the same period of last fiscal year. The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for litigation with FT Global and internal control training fees.
Current wording
General and administrative expenses decreased by $0.47 million, or 12.45%, to $3.32 million for the three months ended September 30, 2024, from $3.79 million for the same period of last fiscal year. The decrease in general and administrative expenses was mainly due to decreased professional service fees and rental fee.
Previous wording
Bad debt provision decreased by $0.95 million during the three months ended June 30, 2024, compared to the same period of last fiscal year. The decrease was due to bad debt recovery recognized in previous years and a different bad debt provision accounting treatment method used in 2024.
Current wording
Bad debt provision increased by $3.37 million during the three months ended September 30, 2024, compared to the same period of last fiscal year. The increase was due to bad debt recovery recognized in previous years and a different bad debt provision accounting treatment method used in 2024.
Previous wording
The Company recorded $0.002 million of research and development expenses. Research and development expenses include salaries, contracted services, as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design new products and services, and enhance our existing products and services to our clients. Research and development expenses decreased by $0.11 million during the three months ended June 30, 2024, compared to the same period of last fiscal year. The decrease in research and development expenses was mainly due to decreased salaries.
Current wording
The Company recorded $655 of research and development expenses. Research and development expenses include salaries, contracted services, as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design new products and services, and enhance our existing products and services to our clients. Research and development expenses decreased by $0.02 million during the three months ended September 30, 2024, compared to the same period of last fiscal year. The decrease in research and development expenses was mainly due to decreased salaries.
Previous wording
Other expenses, net decreased by $1.18 million to $0.09 million for the three months ended June 30, 2024 from $1.27 million in the same period of the last fiscal year, primarily due to the escrow payment of a civil penalty for the amount of $1,650,000 during the three months ended June 30, 2023 for the settlement with the Securities and Exchange Commission and impact of exchange gains and losses.
Current wording
Other expenses, net increased by $0.23 million to $0.38 million for the three months ended September 30, 2024 from $0.15 million in the same period of the last fiscal year, primarily due to change of foreign currency exchange rate and impact of exchange gains and losses.
Previous wording
Tax provision decreased by $0.04 million for the three months ended June 30, 2024, primarily due to decreased revenue.
Current wording
Tax provision decreased by $10,735 for the three months ended September 30, 2024, primarily due to decreased revenue.
Previous wording
Net loss from continue operation increased by $0.26 million from $1.54 million for the three months ended June 30, 2023 to $1.80 million for the same period of 2024 mainly due to the increase in operating expenses, as discussed above.
Current wording
Net loss from continue operation increased by $2.54 million from $2.39 million for the three months ended September 30, 2023 to $4.93 million for the same period of 2024 mainly due to the increase in operating expenses, as discussed above.
Previous wording
The following table presents our consolidated revenues for the six months ended June 30, 2024 and 2023, respectively:
Current wording
The following table presents our consolidated revenues for the nine months ended September 30, 2024 and 2023, respectively:
Previous wording
The increase in revenue for the six months ended June 30, 2024 was primarily due to more revenue from asset management service, as the Company hired more seasoned account managers to boost the services and the revenues.
Current wording
Asset management service increased $2.18 million from $9.69 million for the nine months ended September 30, 2023 to $11.88 million for the same period of 2024. It was due to the Company hired more seasoned account managers to boost the services and the revenues.
Previous wording
Other revenues increased from $0.19 million for the six months ended June 30, 2023 to $0.65 million for the same period of 2024, mainly due to the increased debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.44 million, as we did not have such income during the six months ended June 30, 2023.
Current wording
Other revenues increased from $0.66 million for the nine months ended September 30, 2023 to $1.69 million for the same period of 2024, mainly due to the increased debt recovery consulting service fee as well as U.S. dollar bond service income of approximately $0.60 million and cryptocurrency mining service income of $0.65 million, as we did not have such income in 2023.
Previous wording
The following table presents the consolidated gross profit of each of our main products and services and the consolidated gross profit margin, which is gross profit as a percentage of the related revenues, for the six months ended June 30, 2024 and 2023, respectively:
Current wording
The following table presents the consolidated gross profit of each of our main products and services and the consolidated gross profit margin, which is gross profit as a percentage of the related revenues, for the nine months ended September 30, 2024 and 2023, respectively:
Previous wording
The following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2024 and 2023, respectively: (in thousands)
Current wording
The following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the nine months ended September 30, 2024 and 2023, respectively: (in thousands)
Previous wording
General and administrative expenses increased by $0.97 million, or 39.87%, to $3.39 million for the three months ended June 30, 2024, from $2.42 million for the same period of last fiscal year. The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for litigation with FT Global and internal control training fees.
Current wording
General and administrative expenses increased by $0.54 million, or 5.62%, to $10.13 million for the nine months ended September 30, 2024 from $9.59 million for the same period of last fiscal year. The increase in general and administrative expenses was mainly due to increased professional service fees for lawyers for litigation with FT Global and internal control training fees.
Previous wording
Selling expenses increased by $0.17 million during the three months ended June 30, 2024, compared to the same period of last fiscal year. The increase in selling expenses was mainly due to increased employee bonuses.
Current wording
Selling expenses increased by $0.18 million during the nine months ended September 30, 2024, compared to the same period of last fiscal year. The increase in selling expenses was mainly due to increased employees’ salaries.
Previous wording
Bad debt provision decreased by $1.73 million during the six months ended June 30, 2024, compared to the same period of last fiscal year. The decrease was due to bad debt recovery recognized in previous years and a different bad debt provision accounting treatment method used in 2024.
Current wording
Bad debt provision increased by $5.09 million during the nine months ended September 30, 2024, compared to the same period of last fiscal year. The increase was due to bad debt recovery recognized in previous years and a different bad debt provision accounting treatment method used in 2024.
Previous wording
The Company recorded $0.002 million of research and development expenses during six months ended June 30, 2024. Research and development expenses include salaries, contracted services, as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design new products and services, and enhance our existing products and services to our clients. Research and development expenses decreased by $0.32 million during the three months ended June 30, 2024, compared to the same period of last fiscal year. The decrease in research and development expenses was mainly due to decreased salaries.
Current wording
The Company recorded $3,029 of research and development expenses during nine months ended September 30, 2024. Research and development expenses include salaries, contracted services, as well as the related expenses of our research and product development team, and expenditures relating to our efforts to develop, design new products and services, and enhance our existing products and services to our clients. Research and development expenses decreased by $0.34 million during the nine months ended September 30, 2024, compared to the same period of last fiscal year. The decrease in research and development expenses was mainly due to decreased salaries.
Previous wording
Other expenses, net increased by $0.67 million to $1.52 million for the six months ended June 30, 2024 from $0.89 million in the same period of the last fiscal year, primarily due to the escrow payment of a civil penalty for the amount of $1,650,000 during the three months ended June 30, 2023 for the settlement with the Securities and Exchange Commission and impact of exchange gains and losses.
Current wording
Other expenses, net increased by $0.43 million to $1.15 million for the nine months ended September 30, 2024 from $0.71 million in the same period of the last fiscal year, primarily due to primarily due to civil penalty payments for the settlement with the Securities and Exchange Commission, and change of foreign currency exchange rate and impact of exchange gains and losses.
Previous wording
Tax provision decreased by $0.06 million for the six months ended June 30, 2024, primarily due to decreased revenue.
Current wording
Tax provision decreased by $0.07 million for the nine months ended September 30, 2024, primarily due to decreased revenue.
Previous wording
Net loss from continue operation increased by $2.09 million from $3.68 million for the six months ended June 30, 2023 to $5.77 million for the same period of 2024 mainly due to the increase in operating expenses, as discussed above.
Current wording
Net loss from continue operation increased by $4.63 million from $6.07 million for the nine months ended September 30, 2023 to $10.70 million for the same period of 2024 mainly due to the increase in operating expenses, as discussed above.
Previous wording
Gain on disposal of discontinued operation was $0.65 million for the six months ended June 30, 2024, which was related to the dissolution and deregistration of Chain Cloud Mall Network and Technology (Tianjin) Co., Limited.
Current wording
Gain on disposal of discontinued operation was $0.64 million for the nine months ended September 30, 2024, which was related to the dissolution and deregistration of Chain Cloud Mall Network and Technology (Tianjin) Co., Limited and Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership).
Previous wording
Basic and diluted loss per share from continuing operations were $0.29 and $0.29 for the six months ended June 30, 2024, respectively, as compared to a loss of $0.24 and $0.24 for the same periods of 2023, respectively. Basic and diluted income per share attributable to discontinued operations was $0.03 and $0.03 for the six months ended June 30, 2024, respectively. Basic and diluted earnings per share attributable to discontinued operations was $0.01 and $0.01 for the six months ended June 30, 2023, respectively.
Current wording
Basic and diluted loss per share from continuing operations were $0.53 and $0.53 for the nine months ended September 30, 2024, respectively, as compared to a loss of $0.40 and $0.40 for the same periods of 2023, respectively. Basic and diluted income per share attributable to discontinued operations was $0.03 and $0.03 for the nine months ended September 30, 2024, respectively. Basic and diluted loss per share attributable to discontinued operations was $0.01 and $0.01 for the nine months ended September 30, 2023, respectively.
Previous wording
As of June 30, 2024, we had cash and restricted cash of $9.82 million, as compared to $19.02 million as of December 31, 2023. The decrease in cash, cash equivalents and restricted cash was mainly due to increased other current asset from the six months ended June 30, 2024.
Current wording
As of September 30, 2024, we had cash and restricted cash of $6.52 million, as compared to $19.02 million as of December 31, 2023. The decrease in cash, cash equivalents and restricted cash was mainly due to increased other current asset from the nine months ended September 30, 2024.
Previous wording
Our working capital has historically been generated from our operating cash flows, advances from our customers and loans from bank facilities. Our working capital was $33.48 million as of June 30, 2024, a decrease of $7.61 million from working capital of $41.79 million as of June 30, 2023, mainly due to the decrease in current assets and an increase in current liabilities.
Current wording
Our working capital has historically been generated from our operating cash flows, advances from our customers and loans from bank facilities. Our working capital was $28.29 million as of September 30, 2024, a decrease of $10.85 million from working capital of $39.14 million as of September 30, 2023, mainly due to the decrease in current assets and an increase in current liabilities.
Previous wording
Net cash used in operating activities increased by $4.98 million to $11.94 million for the six months ended June 30, 2024 from $6.96 million for the same period of the last fiscal year. The increase in net cash used by operating activities was primarily due to increase in accounts receivable and advances to suppliers and other current assets.
Current wording
Net cash used in operating activities increased by $6.10 million to $13.52 million for the nine months ended September 30, 2024 from $7.43 million for the same period of the last fiscal year. The increase in net cash used by operating activities was primarily due to increase in advances to suppliers and other current assets.
Previous wording
Net cash provided by investing activities decreased $14.56 million to $0.08 million for the six months ended June 30, 2024 from $14.64 million for the same period of the last fiscal year. It was due to decrease in repayment for loan receivable.
Current wording
Net cash used in investing activities increased $14.94 million to $1.18 million for the nine months ended September 30, 2024 from positive $13.76 million for the same period of the last fiscal year. It was due to decrease in repayment for loan receivable.
Previous wording
Net cash provided in financing activities for the six months ended June 30, 2024 was $2.34 million representing an increase of $2.36 million, as compared to cash used in financing activities of $0.01 million during the six months ended June 30, 2023. The increase in cash provided by financing activities was mainly due to proceeds from the issuance of common stock from a private placement, net of issuance costs.
Current wording
Net cash provided in financing activities for the nine months ended September 30, 2024 was $1.32 million representing an increase of $4.23 million, as compared to cash used in financing activities of $2.91 million during the nine months ended September 30, 2023. The increase in cash provided by financing activities was mainly due to proceeds from the issuance of common stock from a private placement, net of issuance costs.