10-Q

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

2103 Tower A, SK Plaza,

A6 JianGuoMenWai Avenue, Chaoyang District

Beijing, P.R. China 100022

(Address of principal executive offices including zip code)

86-10- 8589-9303

(Registrant’s telephone number, including area code)

N/A

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

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

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

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

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

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

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

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

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

Class	Outstanding at August 12, 2020
Common Stock, $0.001 par value per share	41,734,946

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	27
PART II.  OTHER INFORMATION		28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults upon Senior Securities	32
Item 4.	Mine Safety Disclosure	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		34

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2020			2019
CURRENT ASSETS
Cash and cash equivalents	$	576,303		$	539,316
Accounts receivable		464			4,954
Other receivables, net		44,668			7,489
Inventories		3,044			3,594
Advances to suppliers and other current assets		145,868			1,668,847
Loan receivables		206,512			-
Assets related to discontinued operation		-			92,772,786
TOTAL CURRENT ASSETS	$	976,859		$	94,996,986
Property, plant and equipment, net	$	16,466		$	17,855
Intangible assets, net		6,981,330			5,312,906
Amount due from related parties		3,089,063			3,402,823
Long term investments		12,250,000			12,250,000
TOTAL ASSETS	$	23,313,718		$	115,980,570
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	316,783		$	320,378
Accrued expenses and other payables		2,661,944			2,574,471
Advances from customers		422,994			702,179
Short-term bank loans		844,805			957,990
Loans payable		2,252,556			1,972,909
Advances from issuance of the Company’s Common Stock		500,000			-
Liabilities related to discontinued operations		-			196,261,748
TOTAL CURRENT LIABILITIES	$	6,999,082		$	202,789,675
NON-CURRENT LIABILITIES
Amount due to related parties	$	1,603,177		$	1,268,101
TOTAL LIABILITIES	$	8,602,259		$	204,057,776
Commitments and contingencies (Note 14)
STOCKHOLDER’S EQUITY
Future Fintech Group Inc., Stockholders’ equity
Common stock, $0.001 par value; 60,000,000 shares authorized and 38,494,063 shares issued and outstanding as of June 30, 2020 and 33,810,416 shares issued and outstanding as of December 31, 2019, respectively	$	38,494		$	33,810
Additional paid-in capital		109,739,379			107,852,827
Accumulated deficits		(96,636,617	)		(213,314,612	)
Accumulated other comprehensive income		3,667,726			12,989,408
Total Future FinTech Group Inc. stockholders’ equity		16,808,982			(92,438,567	)
Non-controlling interests		(2,097,523	)		4,361,361
Total stockholders’ equity		14,711,459			(88,077,206	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	23,313,718		$	115,980,570

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

1

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019*			2020			2019*
Revenue	$	113,687		$	257,018		$	313,638		$	417,193
Cost of goods sold		9,359			116,649			9,872			246,210
Gross profit		104,328			140,369			303,766			170,983
Operating Expenses
General and administrative expenses		413,503			868,951			2,332,817			1,816,644
Selling expenses		7,693			492,221			20,474			558,201
Bad debt provision		210,510			-			4,413,564			7,443
Total operating expenses		631,706			1,361,172			6,766,855			2,382,288
Loss from operations		(527,378	)		(1,220,803	)		(6,463,089	)		(2,211,305	)
Other income (expense)
Interest income		62			3,900			188			3,921
Interest expenses		(26,682	)		(21,405	)		(53,819	)		(112,807	)
Other income (expenses)		16,657			(12,630	)		(502,799	)		3,402
Total other income (expenses)		(9,963	)		(30,135	)		(556,430	)		(105,484	)
Loss from Continuing Operations before Income Tax		(537,341	)		(1,250,938	)		(7,019,519	)		(2,316,789	)
Income tax provision		-			75			-			75
Loss from Continuing Operations, net of tax		(537,341	)		(1,251,013	)		(7,019,519	)		(2,316,864	)
Discontinued Operations (Note 9)
Loss from discontinued operations		-			(721,158	)		-			(1,307,608	)
Gain on disposal of discontinued operations		-			-			123,688,874			-
NET INCOME (LOSS)		(537,341	)		(1,972,171	)		116,669,355			(3,624,472	)
Less: Loss attributable to the non-controlling interest		(8,578	)		(382,318	)		(8,640	)		(705,963	)
Net income (loss) attributable to Future Fintech Group, Inc. Common Shareholders	$	(528,763	)	$	(1,589,853	)	$	116,677,995		$	(2,918,509	)
Comprehensive income (loss):
Net income (loss)	$	(537,341	)	$	(1,972,171	)	$	116,669,355		$	(3,624,472	)
Foreign currency translation		(83,155	)		5,757,890			(679,589	)		5,192,088
Comprehensive income (loss)		(620,496	)		3,785,719			115,989,766			1,567,616
Less: Comprehensive income (loss) attributable to non-controlling interest		-			1,056,105			(2,139,179	)		705,963
Comprehensive Income (Loss) Attributable to Future Fintech Group, Inc. Common Shareholders	$	(620,496	)	$	2,729,614		$	118,128,945		$	861,653
Basic Earnings (Loss) per Share:
Basic loss per share from continuing operations	$	(0.02	)	$	(0.03	)	$	(0.20	)	$	(0.05	)
Basic earnings (loss) per share from discontinued operations		-			(0.02	)		3.45			(0.04	)
Basic Earnings (Loss) per Share from Net Income (Loss)	$	(0.02	)		(0.05	)	$	3.25		$	(0.09	)
Diluted Earnings  (Loss) per Share:
Diluted loss per share from continuing operations	$	(0.02	)		(0.03	)	$	(0.19	)	$	(0.05	)
Diluted earnings (loss) per share from discontinued operations		-			(0.02	)		3.39			(0.04	)
Diluted Earnings (Loss) per Share from Net Income (Loss)	$	(0.02	)		(0.05	)	$	3.19		$	(0.09	)
Weighted average number of shares outstanding
Basic		33,334,888			31,174,818			35,867,188			31,174,818
Diluted		34,004,411			31,844,341			36,536,711			31,844,341

* Reclassification- certain reclassifications have been made to the financial statements for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020, with no effect on previously reported net income (loss).

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

2

FUTURE FINTECH GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended June 30
	2020			2019*
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	116,669,355		$	(3,624,472	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		92,341			720,962
Bad debt		4,413,564			7,443
Gain on sale of discontinued operations		(123,688,874	)		-
Share based compensation		1,191,000			-
Changes in operating assets and liabilities
Accounts receivable		4,491			(3,444,336	)
Other receivable		(37,179	)		7,730,081
Advances to suppliers and other current assets		(325,739	)		(158,053	)
Inventories		549			(174,005	)
Accounts payable		(3,595	)		56,289
Accrued expenses		87,473			(11,861,703	)
Change in net assets related to discontinued operations		608,298			10,450,684
Advances from customers		(279,185	)		550,779
Net Cash Provided by (Used in) Operating Activities		(1,267,501	)		253,669
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for short-term loan investment		(206,512	)		-
Net cash used in investing activities		(206,512	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from issuance of the Company’s Common Stock		500,000			-
Proceeds from loans from related parties		468,468			-
Repayment of amount due to related parties		(114,607	)		-
Proceeds from secured convertible promissory note		533,278			503,818
Changes in net assets related to discontinued operations		-			31,803
Proceeds from loans		211,876			-
Proceeds from sale of discontinued operations		85,714			-
Net cash provided by financing activities		1,684,729			535,621
Effect of change in exchange rate		(173,729	)		(755,177	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		36,987			34,113
Cash and cash equivalents, beginning of year		539,316			33,461
Cash and cash equivalents, end of period	$	576,303		$	67,574
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION
Conversion of convertible notes	$	533,278		$	-

● Reclassification- certain reclassifications have been made to the statements of cash flow for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020.

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

3

FUTURE FINTECH GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Three Months ended June 30, 2019

	Common Stock				Additional paid-in			Accumulated			Accumulative other comprehensive			Non- controlling
	Shares		Amount		capital			deficits			income			interests			Total
Balance at March 31, 2019		31,017,083	$	31,017	$	115,336,056		$	(189,414,336	)	$	(9,877,494	)	$	4,250,979		$	(79,673,778	)
Issuance of common stocks as compensation		650,000		650		(650	)		-			-			-			-
Net loss		-		-		-			(1,589,853	)		-			(382,318	)		(1,972,171	)
Foreign currency translation adjustment		-		-		-			-			6,108,033			26,496			6,134,529
Balance at June 30, 2019		31,667,083	$	31,667	$	115,335,406		$	(191,004,189	)	$	(3,769,461	)	$	3,895,157		$	(75,511,420	)

Three Months ended June 30, 2020

	Common Stock				Additional paid-in		Accumulated			Accumulative other comprehensive			Non- controlling
	Shares		Amount		capital		deficits			income			interests			Total
Balance at March 31, 2020		38,140,415	$	38,140	$	109,474,497	$	(96,107,854	)	$	3,750,881		$	(2,088,945	)	$	15,066,719
Issuance of common stocks for conversion of debts		353,648		354		264,882		-			-			-			265,236
Net loss		-		-		-		(528,763	)		-			(8,578	)		(537,341	)
Foreign currency translation adjustment		-		-		-		-			(83,155	)		-			(83,155	)
Balance at June 30, 2020		38,494,063	$	38,494	$	109,739,379	$	(96,636,617	)	$	3,667,726		$	(2,097,523	)	$	14,711,459

Six Months ended June 30, 2019

	Common Stock				Additional paid-in		Accumulated			Accumulative other comprehensive			Non- controlling
	Shares		Amount		capital		deficits			income			interests			Total
Balance at December 31, 2018		31,017,083	$	31,017	$	105,737,256	$	(188,085,680	)	$	(8,961,549	)	$	4,601,121		$	(86,667,835	)
Issuance of common stocks for conversion of debts		650,000		650		9,598,150		-			-			-			9,598,800
Net loss		-		-		-		(2,918,509	)		-			(705,963	)		(3,624,472	)
Foreign currency translation adjustment		-		-		-		-			5,192,088			(1	)		5,192,087
Balance at June 30, 2019		31,667,083	$	31,667	$	115,335,406	$	(191,004,189	)	$	(3,769,461	)	$	3,895,157		$	(75,511,420	)

Six Months ended June 30, 2020

	Common Stock				Additional paid-in		Accumulated			Accumulative other comprehensive			Non- controlling
	Shares		Amount		capital		deficits			income			interests			Total
Balance at December 31, 2019		33,810,416	$	33,810	$	107,825,827	$	(213,314,612	)	$	12,989,408		$	4,361,361		$	(88,077,206	)
Issuance of common stocks for conversion of debts		933,647		934		699,302		-			-			-			700,236
Net income (loss)		-		-		-		116,677,995			-			(8,640	)		116,669,355
Share-based payments		3,750,000		3,750		1,187,250		-			-			-			1,191,000
Foreign currency translation adjustment		-		-		-		-			1,459,527			(2,139,117	)		(679,590	)
Disposal of discontinued operation		-		-		-		-			(10,781,209	)		(4,311,127	)		(15,092,336	)
Balance at June 30, 2020		38,494,063	$	38,494	$	109,739,379	$	(96,636,617	)	$	3,667,726		$	(2,097,523	)	$	14,711,459

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

4

FUTURE FINTECH GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BUSINESS DESCRIPTION

Future FinTech Group Inc. (together with our direct or indirect subsidiaries, “we,” “us,” “our” or “the Company”) is a holding company incorporated under the laws of the State of Florida. The main business of the Company includes an online shopping platform, Chain Cloud Mall (CCM), which is based on blockchain technology; a cross-border e-commerce platform (NONOGIRL) which started its trial operation in March 2020 and formally launched in July 2020; a blockchain-based application incubator and a digital payment system (DCON); and the application and development of blockchain-based e-commerce technology and financial technology.

Prior to 2019, the Company engaged in the production and sales of fruit juice concentrates, fruit juice beverages and other fruit-related products in the People’s Republic of China (“PRC”, or “China”), and overseas markets. Due to the drastically increased production cost and tightened environmental law in China, the Company has transformed its business from fruit juice manufacturing and distribution to a real-name blockchain e-commerce platform that integrates blockchain and internet technology from the end of 2018. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by the Company’s subsidiary, HeDeTang Holdings (HK) Ltd (“HeDeTang HK”), and New Continent International Co., Ltd. on September 18, 2019, the Company sold HeDeTang HK and all its subsidiaries, which mainly engaged in fruit juice related business, to New Continent International Co., Ltd.

On April 23, 2020, Future FinTech (Hong Kong) Limited registered GuangChengJi (Shanghai) Industrial Co., Ltd. (“Guangchengji”) with a registered capital of $30 million in Shanghai, China, which needs to be paid before April 22, 2049 when the business license will expire. The business scope of Guangchengji includes wholesaling of electronic components and equipment, metal materials, petroleum products, import and export business, computer software development, information technology, technology consulting and services, business management consulting and supply chain management.

The Company’s activities are principally conducted by its subsidiaries operating in the PRC. 

2. BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2020 and the results of operations and cash flows for the periods ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2020. The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date.

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

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

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2019 as included in our Annual Report on Form 10-K.

Going Concern

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

The Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. In order to meet its working capital needs through the next twelve months and to fund the growth of the Company, the Company may consider plans to raise additional funds through the issuance of equity or debt. Although the Company intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional financing on terms that are favorable or acceptable to it, if at all.

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

5

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For a detailed discussion about the Company significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in the Company’s consolidated financial statements included in Company’s 2019 Form 10-K. During the three months ended June 30, 2020, there were no significant changes made to the Company’s significant accounting policies. 

Uses of Estimates in the Preparation of Financial Statements

The Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but not limited to, the allowance for doubtful receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our condensed consolidated financial statements.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. ASU 2016-13 will be effective on January 1, 2023. We are currently evaluating the effect of the adoption of ASU 2016-13 and believe it does not have any material impact on our results of operations or financial. 

In August 2020, the FASB issued Accounting Standards Update No. 2020-06 (ASU 2020-06) “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. For public business entities that are not smaller reporting companies, ASU 2020-6 effective fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. We are currently evaluating the effect of the adoption of ASU 2020-06 and believe it does not have any material impact on our results of operations or financial.  

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

4. LOAN RECEIVABLES

As of June 30, 2020, the balance of loan receivables was $0.21 million, which was from Shenzhen Tiantian Haodian Technology Co., Ltd. (“Tiantian Haodian”) On June 28, 2020, Guangchengji, a wholly owned subsidiary of Future FinTech (Hong Kong) Limited, entered into a “Loan Agreement” with Tiantian Haodian. Pursuant to the Loan Agreement, Guangchengji agrees to lend cash up to but not greater than $5 million with Tiantian Haodian at the annual interest rate of 10% from June 28, 2020 to June 27, 2021. The interest is paid quarterly. There is no collateral or guarantee provided by Tiantian Haodian.

6

5. RELATED PARTY TRANSACTION

The Company did not have any sales to related parties for the six months ended June 30, 2020 and June 30, 2019, respectively.

The amount due to the related parties was $1.60 million as of June 30, 2020, which consisted of the followings:

Name of Related Party from Whom Amounts were Received	Amount (US$)		Relationship	Note
Shanchun Huang		416,496	Chief Executive Officer of the Company	Loan payable
Shaanxi Fullmart Convenient Chain Supermarket Co., Ltd. (“Fullmart”)		7,063	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company. Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. holds 16.67% equity of Fullmart.	Accounts payables
Shaanxi Fullmart Convenient Chain Supermarket Management Co., Ltd. (“Fullmar Management”)		134,190	83.33% of the equity share of Fullmart management is owned by  Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd., which is owned 100% by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Accounts payables
Kai Xu		20,484	Chief Operating Officer  of the Company	Payable to employee
InUnion Chain Ltd. (“INU”)		288,695	The Company is the 10% equity shareholder of INU	Accounts payables
Zhi Yan		58,707	Chief Technology Officer of the Company	Payable to employee
Jing chen		4,706	Chief Financial Officer of the Company	Payable to employee
Zeyao Xue		305,725	Son of the Chairman of the Company and a major shareholder of the Company of the Company	Loan payable
Shenzen TianShunDa Equity Investment Fund Management Co., Ltd. (the “TSD”)		310,610	TSD holds 26.36% of the equity interest of SkyPoeple (China), a subsidiary of the Company, which was sold to New Continent International Co., Ltd. on February 27, 2020.	Accounts payables
Weicheng Pan		56,501	Legal representative of GuangChengJi (Shanghai) Co., Ltd., a subsidiary of Future Fintech (Hong Kong) Limited	Loan payable

The amount due from the related parties was $3.09 million as of June 30, 2020, which consisted of the followings:  

Name of Related Party to Whom the Amounts were Paid	Amount (US$)		Relationship	Note
Shaanxi Chunlv Ecological Agriculture Co., Ltd.		2,999,780	Holds 20.0% interest in CCM logistics	Including creditor’s rights of Shaanxi Youyi Co., Ltd  of $3.24 million, which is partially offset by $0.24 million  payable to the Company
Shaanxi Fullmart Commercial Holdings (Xi’an) Co., Ltd.		23,024	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Service fee due
Shaanxi Quangou Convenient Island Co., Ltd.		23,470	Fullmart holds 33.33% its equity	Interest free loan*
Yongke Xue		42,337	Chairman of the Company	Interest free loan*

* The interest free loans have been approved by the Company’s Audit Committee.

7

6. INTANGIBLE ASSETS

On May 1, 2020, the Company launched CCM v3.0, which creates a new value cycle system of online shopping malls with a real-name blockchain system. After the launch of CCM v3.0, the Company reclassified this prepaid asset into intangible assets in the second quarter of 2020, which will be amortized over 10 years.

Also included in the intangible assets is land use right. The government of the PRC, its agencies and collectives hold all land ownership. Companies or individuals are authorized to use the land only through land usage rights granted by the PRC government. Land usage rights can be transferred upon approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land transfer fee. Accordingly, the Company paid in advance for land usage rights. Prepaid land usage rights are being amortized and recorded as lease expenses using the straight-line method over the terms of the leases, which range from 40 to 50 years. The amortization expense was $0.09 million and $0.59 million for the six months ended June 30, 2020.

The following table sets intangible assets of the Company as of June 30, 2020 and December 31, 2019, respectively.

	CCM						Land Use Right
	June 30,			December 31,			June 30,			December 31,
	2020			2019			2020			2019
Cost	$	1,878,664		$	43,004		$	5,761,692		$	5,847,008
Less: Accumulated amortization		(34,843	)		(2,114	)		(624,183	)		(574,992	)
Balance as of June 30, 2020	$	1,843,821			40,890		$	5,137,509		$	5,272,016

The following table summarizes the expected amortization expense for the following years (in thousands):

	Amortization to be
Year ending December 31,	recognized
2020 (excluding the six months ended March 31, 2020)	$	151
2021		303
2022		303
2023		303
2024		303
2025 and thereafter		5,618
Total	$	6,981

7. LONG TERM INVESTMENT

On June 22, 2018, Digipay Fintech Limited (“Digipay”), a wholly-owned subsidiary of the Company acquired 10% ownership interest in InUnion Chain Ltd. (“InUnion”) for an aggregate purchase price of $15 million (the “Purchase Price”) pursuant to a Shares Transfer and IUN Digital Assets Investment Agreement signed with Lake Chenliu, who are the sole owner of InUnion (the “Seller”). The Company issued 5 million of its Common Stock to the Seller on October 19, 2018.

Upon acquiring the InUnion Shares, Digipay have access to, and the use of, certain software, technology and related intellectual property of InUnion without further payment. Digipay also have the right to designate a director nominee to the board of directors of InUnion.

As of December 31, 2019, management assessed the value of the above investment, and recorded an impairment loss of $2.5 million. As of June 30, 2020, the balance of this long-term investment was $12.25 million. 

8

8. COMMON STOCKS ISSUED

On May 13, 2019, the Company issued 500,000 of its Common Stock to two employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Company’s 2017 Omnibus Equity Plan (the “Plan”). On June 5, 2019, the Company issued 150,000 shares of its Common Stock to three employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Plan. 

Common stocks issued in connection with the convertible notes

On January 6, 2020, the Company entered into the Eighth Exchange Agreement (the “Eighth Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”). Pursuant to the Eighth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $145,000 (the “Eighth Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Eighth Partitioned Note for the delivery of 193,333 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On January 15, 2020, the Company entered into the Ninth Exchange Agreement (the “Ninth Exchange Agreement”) with the Lender. Pursuant to the Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $140,000 (the “Ninth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Ninth Partitioned Note. The Company and Lender further agreed to exchange the Partitioned Note for the delivery of 186,666 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On March 11, 2020, the Company entered into the Tenth Exchange Agreement (the “Tenth Exchange Agreement”) with the Lender.

Pursuant to the Tenth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $150,000 (the “Tenth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Partitioned Note for the delivery of 200,000 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On April 17, 2020, the Company entered into the Eleventh Exchange Agreement (the “Eleventh Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).

Pursuant to Eleventh Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $153,750 (the “Eleventh Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Eleventh Partitioned Note. The Company and Lender further agreed to exchange the Eleventh Partitioned Note for the delivery of 205,000 shares of the Company’s Common Stock, according to the terms and conditions of the Eleventh Exchange Agreement.

On June 10, 2020, the Company entered into the Twelfth Exchange Agreement (the “Twelfth Exchange Agreement”) with the Lender.

Pursuant to the Twelfth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $111,486 (the “Twelfth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Twelfth Partitioned Note for the delivery of 148,648 shares of the Company’s Common Stock, according to the terms and conditions of the Twelfth Exchange Agreement.

Consulting Service Agreement

On January 25, 2020, the Company entered into a Consulting Service Agreement (the “Agreement”) with Dragon Investment Holding Limited (Malta) (the “Consultant”), a company incorporated in Malta, pursuant to which Consultant will: (i) help the Company to locate new merger projects globally, develop new merger strategy and provide the Company with at least five (5) merger and acquisition targets that have synergy with the Company’s business and development plans and could clearly contribute to the Company’s strategic goals each year; (ii) help the Company to map out new growth strategies in addition to its current business; (iii) work with the Company to explore new lines of business and associated growth strategies; and (iv) conduct market research and evaluating variable projects and providing feasibility studies per Company’s request from time to time. The term of the Agreement is three years. In consideration of the services to be provided by Consultant to the Company, the Company agrees to pay the Consultant a three-year consulting fee totaling $3 million. The Company shall issue a total of 3,750,000 restricted shares of the Company Common Stock (the “Consultant Shares”) at a price of $0.794 per share, (the closing price of the Agreement date), as the payment for the above mentioned consultant fee to the Consultant. On February 23, 2020, The Company issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately, 1,125,000 and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January 25, 2022 if this Agreement has not been terminated and there has been no breach of the Agreement by the Consultant at such time. If the second and/or third release of the shares mentioned above does not occur, such shares shall be returned to the Company as treasury shares. The shares contemplated in the Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. For the six months ended June 30, 2020, the Company recorded stock related compensation of $1.19 million, based on the stock closing price of $0.794 on the Agreement date, for the 1,500,000 shares which were released to the Consultant immediately upon issuance. The Company will recognize stock related compensation of $1.79 million for the 2,250,000 shares in the future when they are released to the Consultant pursuant to the Agreement. 

9

9. DISCONTINUED OPERATIONS

HeDeTang HK

On September 18, 2019, HeDeTang HK entered into a Share Transfer Agreement (the “Agreement”) with New Continent International Co., Ltd., (the “Buyer”) a company incorporated in the British Virgin Islands. Pursuant to the terms of the Agreement, the Buyer purchased 100% ownership of HeDeTang HK, which value is primarily derived from HeDeTang HK’s wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd. and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total price of RMB 600,000 (approximately $85,714) (the “Sale Transaction”). The Sale Transaction was closed on February 27, 2020. In accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC Topic 205”), the Company presented the operation results from HeDeTang HK’s and subsidiaries as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued component. The total assets of HeDeTang HK were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $123.69 million. There was no income or loss from HeDeTang HK from January 1, 2020 to the sale.

Huludao Wonder

The discontinued operation presented in the financial statement for the period ended June 30, 2019 includes Huludao Wonder operation, a subsidiary which produces concentrated apple juice. In December 2016, the Company established a winding-down plan to close this operation. Based on the restructuring plan and in accordance with ASC 205-20, the Company presented the operating results from Huludao Wonder as a discontinued operation, as the Company believed that no continued cash flow would be generated by the disposed component (Huludao Wonder) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance with ASC 205-20. In accordance with the restructuring plan, the Company intended to transfer the concentrated fruit juice production equipment in Huludao Wonder to another subsidiary and to sell the land use right and facilities upon favorable circumstances. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by HeDeTang HKand New Continent International Co., Ltd. on September 18, 2019, the ownership of Huludao Wonder was transferred as a subsidiary of HeDeTang HK to New Continent International Co., Ltd.

On March 11, 2020, the Company’s Board of Directors passed a resolution to sell the operation of Globalkey Supply Chain limited and Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian Hengxin”) and close the operation of Digital Online Marketing Limited, Future Digital Fintech (Xi’an) Co., Ltd., SkyPeople Foods Holding Ltd. and Chain Future Digital Tech (Beijing) Co., Ltd. Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation.

10. VARIABLE INTEREST ENTITIES

On July 31, 2019, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited (“CCM Tianjin”), Chain Cloud Mall E-commerce (Tianjin) Co., Ltd., (“E-commerce Tianjin”), and Mr. Zeyao Xue and Mr. Kai Xu, citizens of China and shareholders of E-commerce Tianjin, entered into the following agreements, or collectively, the “Variable Interest Entity Agreements” or “VIE Agreements,” pursuant to which CCM Tianjin has contractual rights to control and operate the business of E-commerce Tianjin (the “VIE”). Therefore, pursuant to ASC 810, E-Commerce Tianjin is included in the Company’s condensed consolidated financial statements since then.

Pursuant to Chinese law and regulations, a foreign owned enterprise cannot apply for and hold a license for operation of certain e-commerce businesses, and the category of business which the Company plans to expand in China. CCM Tianjin is an indirectly wholly foreign owned enterprise of the Company. In order to comply with Chinese law and regulations, CCM Tianjin agreed to provide E-commerce Tianjin an Exclusive Operation and Use Rights Authorization to operate and use the Chain Cloud Mall System owned by CCM Tianjin.

E-commerce Tianjin was incorporated by Mr. Zeyao Xue and Mr. Kai Xu solely for the purpose of holding the operation license of the Chain Cloud Mall System. Mr. Zeyao Xue is a major shareholder of the Company and the son of Mr. Yongke Xue, our Chairman and Chief Executive Officer. Mr. Kai Xu is the Chief Operating Officer of the Company.

For the details about the VIE agreements, refer to Note 15 “Variable Interest Entities,” in the Company’s consolidated financial statements included in Company’s 2019 Form 10-K.

10

11. ACCRUED EXPENSES AND OTHER PAYABLES

The amount of accrued expenses and other payables were $2.66 million and $2.57 million as of June 30, 2020 and December 31, 2019, respectively, which consisted of the followings:

	June 30, 2020		December 31, 2019
Construction expenses payable	$	610,691	$	619,734
Acquisition of Intangibles		308,080		15,374
Legal fee and other professionals		332,587		382,781
Wages and employee reimbursement		571,332		597,140
Suppliers		284,219		388,940
Accrued interest		85,600		85,600
Accrued tax payable		124,311		134,668
Others		345,124		350,234
Total	$	2,661,944	$	2,574,471

12. LOAN PAYABLE

As of June 30, 2020, loan payable were $2.25 million, which consisted of the loan payable of $1.84 million to Shaanxi Zhongcai Pawn Co., Ltd., loan payable of $0.20 million to Shaanxi Entai Bio-Technology Co., Ltd and loan payable $0.21 million to Shenzhen Wangjv Trading Co., Ltd.

Hedetang Farm Product Trading Market (Mei County) Co., Ltd. (“Hedetang Market”), a subsidiary of GlobalKey Tianjin, entered into a loan agreement with Shaanxi Zhongcai Pawn Co., Ltd. ("Zhongcai") in February 2015. Pursuant to the loan agreement, Hedetang Market borrowed $1.84 million from Zhongcai at the monthly interest rate of 0.4%. Hedetang Market provided its land use right as a as a pledge for the loan. Hedetang Market did not return the principal and interest on time pursuant to the loan agreement. Zhongcai filed an enforcement request with Xi’an Intermediate People’s Court in July 2015. In August 2017, the Intermediate Court of Xi’an issued a verdict to seize the pledged land use rights of Hedetang Market for auction. As of the date of this report, the auction sale was successful.  The Company recorded the unpaid amount of $1.84 million as loan payable.

The loan from Shaanxi Entai Bio-Technology Co., Ltd of $0.20 million was an interest free loan and there is not assets pledged for this loan.

On June 15, 2020, the Company entered into a loan agreement with Shenzhen Wangjv Trading Co., Ltd. Pursuant to the loan agreement, the Company borrowed $0.21 million from Shenzhen Wangjv Trading Co., Ltd. at the annual interest rate of 8% for the use of working capital for a year.

13. ADVANCES FROM ISSUANCE OF COMMON STOCK

On June 16, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Qun Xie  (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser in a private placement 500,000 shares (the “Shares”) of the Company’s Common Stock, purchase price of $1.00 per share for an aggregate offering price of $500,000 (the “Private Placement”). The Private Placement will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. On June 30, 2020, Qun Xie paid $500,000, and the Company recorded $500,000 as advances from issuance of the Common Stock in current liability. On August 7, the Company issued 500,000 Shares pursuant to this Agreement.

14. COMMITMENTS AND CONTINGENCIES

Litigation

Legal case with Beijing Bank

On June 29, 2015, SkyPeople China entered into a loan agreement with Beijing Bank. Pursuant to the loan agreement, SkyPeople China borrowed RMB 30 million (approximately $4.36 million) from Beijing Bank. Hongke Xue, Yongke Xue and Xiujun Wang provided guarantees for the loan and Shaanxi Boai Medical Technology Development Co., Ltd. (“Shaanxi Boai”) provided certain real estate property as a pledge for the loan. SkyPeople China did not repay the loan on time and Beijing Bank filed an enforcement request with Xi’an Intermediate People’s Court in June 2017. The Xi’an Intermediate People’s Court seized real estate properties pledged by Shaanxi Boai and Xiujun Wang. In November 2018, the Court sold the real estate property pledged by Xiujun Wang at RMB 1.17 million (approximately $0.17 million). Because the real estate property is Xiujun Wang’s primary home, the Court allocated RMB 0.12 million to Xiujun Wang as transition home leasing fee and deducted outstanding mortgage payments, and the remaining amount was delivered to the Beijing Bank as the repayment. The Court has also made inquiries to the Beijing Bank as to whether it is willing to accept the pledged real estate property of Shaanxi Boai as the repayment of the outstanding loan for the amount of RMB 27.93 million (approximately $4.06 million) but Beijing Bank has refused to take the real property as repayment of the loan and the enforcement action has been terminated by the Court on December 18, 2018. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

11

Legal case with Ningxia Bank

On March 8, 2016, SkyPeople China entered into a loan agreement with Ningxia Bank. Pursuant to the loan agreement, SkyPeople China borrowed RMB 25 million (approximately $3.63 million) from Ningxia Bank. Hongke Xue, Yongke Xue, Lake Chen, Shaanxi Boai Medical Technology Development Co., Ltd. and Shaanxi Qiyiwangguo provided guarantees for the loan. SkyPeople China also pledged 37 pieces of equipment and the related trademarks to Ningxia Bank for the loan. SkyPeople China has not repaid the loan and Ningxia Bank filed an enforcement action with Xi’an Intermediate people’s court in August 2017. The Court has frozen the assets of SkyPeople China that were pledged as guarantee for the loan from being transferred to any third-party, but the freeze does not limit or affect the use of these properties by SkyPeople China for its business. In July 2018, Shaanxi Qiyiwangguo filed a petition to the Court and requested the termination of the enforcement action on the basis that its guarantee of the loan was not valid because the seal used on the guarantee agreement was not authentic and the guarantee was not approved by the shareholders of Shaanxi Qiyiwangguo. On November 27, 2018, Shaanxi Qiyiwangguo withdrew its petition. The Court agreed to such withdrawal and there has been on other progress of this case. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020.  The creditors have no recourse to the current Company.

Legal case with China Construction Bank

On December 23, 2015, SkyPeople China entered into two loan agreements with China Construction Bank. Pursuant to the loan agreements, SkyPeople China borrowed RMB 13.90 million (approximately $2.13 million), and RMB 30 million (approximately $4.59 million) from China Construction Bank, respectively. Shaanxi Boai Medical Technology Development Co., Ltd. (“Boai”), Hongke Xue, Yongke Xue, Xiujun Wang and Yingkou Trusty Fruits Co., Ltd. (“Yingkou”) provided pledges for the loans. SkyPeople China has not repaid the loans and China Construction Bank filed an enforcement action with Xi’an Intermediate People’s Court in March 2017. In December 2017, SkyPeople China received the enforcement notice from the Court. The Court has seized certain parking space and land use rights pledged by Xiujun Wang and Boai and sold the land use right pledged by Boai in auction for approximately RMB 24,835,790 as repayment to China Construction Bank. The Court also seized certain land use rights pledged by Yingkou Trusty Fruits Co., Ltd., but the auction sale for those assets was not successful. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020.  The creditors have no recourse to the current Company.

On May 9, 2016, SkyPeople China entered into loan agreements with China Construction Bank. Pursuant to the loan agreements, SkyPeople China borrowed RMB 22.9 million (approximately $3.50 million) from China Construction Bank. Shaanxi Province Credit Reassurance Company (“Credit Reassurance Company”) provided a guarantee to China Construction Bank for the loan, Hongke Xue and Yongke Xue provided their guarantees, and SkyPeople China provided an office space that it owned to Credit Reassurance Company as a pledge. SkyPeople China has not repaid the loan and Credit Reassurance Company repaid the loan for SkyPeople China. In June 2017, Credit Reassurance filed an enforcement action request with Xi’an Intermediate People’s Court (the “Court”) in June 2017. In December 2017, SkyPeople China received the enforcement notice from the Court. The Court issued a verdict to seize the office space of SkyPeople China for auction sale on December 26, 2017. In February 2018, the auction sale was conducted but not successful. In June 2018, the Court decided to use the pledge property as the repayment for the outstanding loan of RMB 12.21 million (approximately $1.78 million).

Legal case with China Cinda Asset Management Co., Ltd.

In April 2015, China Cinda Asset Management Co., Ltd. Shaanxi Branch (“Cinda Shaanxi Branch”) filed two enforcement proceedings with Xi’an Intermediate People’s Court (the “Court”) against SkyPeople China for alleged defaults pursuant to guarantees by SkyPeople China to its suppliers for a total amount of RMB 39.60 million or approximately $5.8 million.

In September 2014, two long term suppliers of pear, mulberry, and kiwi fruits to SkyPeople China requested that SkyPeople China provide guarantees for their loans with Cinda Shaanxi Branch. Considering the long term business relationship and to ensure the timely supply of raw materials, SkyPeople China agreed to provide guarantees on the value of the raw materials supplied to SkyPeople China. Because Cinda Shaanxi Branch is not a bank authorized to provide loans, it eventually provided financing to the two suppliers through the purchase of accounts receivables of the two suppliers with SkyPeople China. In July 2014, the parties entered into two agreements – an Accounts Receivables Purchase and Debt Restructure Agreement, and Guarantee Agreements for Accounts Receivables Purchase and Debt Restructure. Pursuant to the agreements, Cinda Shaanxi Branch agreed to provide a RMB 100 million credit line on a rolling basis to the two suppliers and SkyPeople China agreed to pay its accounts payables to the two suppliers directly to Cinda Shaanxi Branch and provided guarantees for the two suppliers. In April 2015, Cinda Shaanxi Branch stopped providing financing to the two suppliers and the two suppliers were unable to continue the supply of raw materials to SkyPeople China. Consequently, SkyPeople China stopped making any payment to Cinda Shaanxi Branch.

SkyPeople China has responded to the Court and taken the position that the financings under the agreements are essentially the loans from Cinda Shaanxi Branch to the two suppliers, and because Cinda Shaanxi Branch does not have permits to make loans in China, the agreements are invalid, void and had no legal effect from the beginning. Therefore, SkyPeople China has no obligation to repay the debts owed by the two suppliers to Cinda Shaanxi Branch.

Upon the Court’s suggestion, the parties agreed to a settlement discussion in April 2017. As a part of the settlement discussion, on April 18, 2017, SkyPeople China withdrew its non-enforcement request with the Court without prejudice. As of June 30, 2020, SkyPeople China still have liability of $5.8 million related with these two enforcement proceedings. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

12

Legal case with Cinda Capital Financing Co., Ltd.

In August 2017, Cinda Capital Financing Co., Ltd. (“Cinda”) filed a lawsuit with Beijing 2nd Intermediate People’s Court (the “Beijing Intermediate Court”) against the Company’s indirectly wholly-owned subsidiaries Shaanxi Guoweimei Kiwi Deep Processing Company, Ltd. (“Guoweimei”) and Hedetang Market (Hedetang Market and together with Guoweimei, “Lessees”) requested that Lessees repay RMB 50 million (approximately $7.27 million) in capital lease fees, plus interest. Cinda purchased or paid for refrigerant warehouse and trading hall to the suppliers and vendors and agreed to lease them to the Lessees for a leasing fee of RMB 50 million in December 2016. The capital leasing fee became due on its maturity date of June 2017, with certain land use rights of Lessees in Mei County and equity of Guoweimei as a pledge. The Company disputed that the land use rights for the refrigerant warehouse and trading hall were never sold to or transferred to Cinda, and argues that therefore it is a loan agreement and not a capital lease agreement among the parties. Lessees have taken the position that Cinda is not a bank and does not have government permits required to make loans in China, and the agreements including pledge agreement were invalid, void and without legal effect from the beginning. Therefore, the Company only has the obligations to repay principal but not the interest. In November 2017, Beijing Intermediate Court ruled in favor of Cinda and the Lessees appealed the case to the Beijing Supreme Court. The Beijing Supreme Court held a hearing at the end of July 2018. On December 4, 2018, the Beijing Supreme Court upheld the lower court’s decision. On April 8, 2019, Beijing Intermediate Court issued the verdict for enforcement of the judgment and the plaintiff has the priority rights for the repayment for the pledged land use rights of Lessees in Mei County and equity of Guoweimei. The case is under enforcement procedure and Cinda is in the process of sale the land use rights. Before the land use right is sold, the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

In August 2017, Cinda Capital Financing Co., Ltd. (“Cinda”) filed another lawsuit with Beijing Intermediate Court against the Company’s indirectly wholly-owned subsidiaries Guoweimei and SkyPeople China for repayment of a leasing fee of RMB 84.97 million (approximately $12.35 million) plus interest. In January 2014, Guoweimei and SkyPeople China (the “Equipment Lessees”) signed an Equipment Financial Lease Purchase Agreement with Cinda and an equipment supplier pursuant to which Cinda would provide funds to purchase equipment and the Equipment Lessees would lease the equipment from Cinda. Guoweimei pledged certain land use rights in Mei County to Cinda and Xi’an Hedetang and Hedetang Holding pledged their equities in Guoweimei to Cinda to secure the repayment. Mr. Hongke Xue also provided a personal guarantee for the payment of the leasing fee. Beijing Intermediate Court had two hearings of the case and on March 21, 2018, and it ruled in favor of Cinda to the effect that SkyPeople China and Guoweimei shall pay leasing fees due in the amount of RMB 21.00 million (approximately $3.05 million), as well as leasing fees not yet due in the amount of RMB 63.98 million (approximately $9.30 million), plus attorney’s fees and expenses. Beijing Intermediate Court also ruled that Mr. Hongke Xue is jointly liable for the debt as the guarantor, and that Cinda has priority rights to the pledged land use rights in Mei County and the pledged equities of Guoweimei as well as the ownership of the leasing properties until the leasing fees are paid. SkyPeople China has appealed the decision to the Beijing Supreme Court. The Beijing Supreme Court rejected the appeal and upheld the original verdict on September 7, 2018. The case is under enforcement procedure and Cinda is in the process of sale the seized properties. Before they are sold, the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Fangtian Decoration Co., Ltd

In April 2015, SkyPeople China entered into a loan agreement with Shaanxi Fangtian Decoration Co., Ltd. (“Fangtian”). Pursuant to the loan agreement, SkyPeople China borrowed RMB 3.5 million (approximately $508,780) from Fangtian. SkyPeople China has not repaid the loan and Fangtian filed a lawsuit with Xi’an Yanta District People’s Court (“Yanta District Court”). On August 10, 2017, Yanta District Court ruled against SkyPeople China and determined that SkyPeople China must repay the loan of RMB 3.5 million plus interest RMB of 0.40 million (approximately $585,098). Fangtian has requested court enter into enforcement procedures for the case. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

13

Legal case with Shanghai Pudong Development Bank

On May 4, 2015, SkyPeople China and Xi’an Branch of Shanghai Pudong Development Bank (SPD Bank Xi’an Branch) renewed a Working Capital Loan Contract and Repayment Schedule, according to which both parties agreed that SPD Bank Xi’an Branch loaned RMB 26.9 million (approximately $3.92 million) to SkyPeople China with a term of one year. On the signing date of the Loan Contract, Hongke Xue, Yongke Xue, Xiujun Wang and SPD Bank Xi’an Branch signed a Contract of Guaranty guaranteeing the repayment of loan and undertaking joint liability. According to a Mortgage Contract of Maximum Amount signed between SkyPeople China and SPD Bank Xi’an Branch on April 2, 2013, SkyPeople China provided the property and land use rights of Jingyang factory as the pledge. In October 2015, SPD Bank Xi’an Branch filed an enforcement request with the Intermediate Court of Xi’an and the Court seized the property and the land use rights of Jingyang factory. During the enforcement procedure, SPD Bank Xi’an Branch transferred its creditor’s rights to China Huarong Asset Management Co., Ltd. (“China Huarong”). The Court changed the execution applicant to China Huarong. In March 2019, the Intermediate Court of Xi’an issued a verdict for the transfer of the pledged property and land use rights of Jingyang factory to China Huarong as the repayment of the loan.

Legal case with Shaanxi Fangyuan construction co., Ltd.

Shaanxi Guoweimei Kiwi Deep Processing Co., Ltd (“Guoweimei”), entered into a construction agreement with Shaanxi Fangyuan construction co., Ltd. (“Fangyuan”) in July 2013. On October 8, 2018, Fangyuan filed a lawsuit and requested that Guoweimei pay a project construction fee plus penalty of RMB 56.32 million (approximately $8.22 million). On June 10, 2019, Baoji Intermediate People’s Court issued a verdict that Guoweimei must pay RMB 41.58 million (approximately $6.07 million) plus penalty to Fangyuan, and Fangyuan will enjoy preferential right for the projects in processing zone of National Wholesale and Trading Center in Mei County for Kiwi Fruits developed by Guoweimei. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Zhongkun Construction Co., Ltd.

In May 2015, Hedetang Market and Shaanxi Zhongkun Construction Co., Ltd. (“Zhongkun”) entered into a construction and decoration agreement. On September 5, 2018, Zhongkun filed the lawsuit with Mei County People’s Court (the “Court”) for repayment of construction and decoration fees. The Court issued a civil judgement in November 2018, ordering Hedetang Market to pay project funds of RMB 1.65 million (approximately $0.24 million) to Zhongkun, plus interest. On April 19, 2020, the Court issued a verdict to terminate the enforcement because assets of Hedetang Market had already been seized by Xi’an Yanta District People’s Court and Baoji Intermediate People’s Court, and there were no other assets for enforcement. Currently the Company is still liable for the unpaid amount and the interest.

Legal case with Xi’an Shanmei Food Co., Ltd.

On October 31, 2017, Xi’an Shanmei Food Co., Ltd. filed a lawsuit against Shaanxi Qiyiwangguo, a majority-owned subsidiary of the Company, with Zhouzhi County People’s Court in connection with a Land Lease Agreement entered into by the parties on October 1, 2013. On March 2, 2018, Zhouzhi County People’s Court issued a verdict that: (i) the Land Lease Agreement was thereby terminated; (ii) Shaanxi Qiyiwangguo shall pay Xi’an Shanmei the outstanding leasing fee RMB 0.21 million (approximately $30,762) and (iii) Shaanxi Qiyiwangguo shall return the 29.3 mu industrial use land to Xi’an Shanmei. Shaanxi Qiyiwangguo has appealed the decision to the Xi’an Intermediate People’s Court on the basis that: (x) the land use right was a capital contribution by Xi’an Shanmei for a shareholder of Shaanxi Qiyiwangguo who is also the sole shareholder of Xi’an Shanmei and the Land Lease Agreement was invalid and has no legal effect; (y) Zhouzhi Court did not schedule the hearing for the count claims filed by Shaanxi Qiyiwangguo; and (z) Zhouzhi Court violated certain civil procedures during the trial of the case. Due to the late notice to Zhouzhi Court, the case file was not timely transferred to Xi’an Intermediate Court and no appeal hearing was scheduled. Zhouzhi Court has issued verdict for enforcement procedure and Qiyiwangguo has filed petition of disagreement for the enforcement which is still under Zhouzhi Court’s review. On January 23, 2019, the Court rejected the petition of disagreement and the case has been under enforcement procedure. As of June 30, 2020, Shaanxi Qiyiwanggu has not repaid the amount. Shaanxi Qiyiwanggu was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Nanjing Bailuotong Logistics Services Co., Ltd.

In January 2016 Shaanxi Qiyiwangguo and Nanjing Bailuotong Logistics Services Co., Ltd (“Bailutong”) entered into a transportation agreement to ship fruit juices. Bailutong failed to deliver the juice products and held them after their expiration date. Shaanxi Qiyiwangguo filed a lawsuit against Bailutongwith Zhouzhi county People’s Court, and the Court issued the verdict in February 2018 that: (1) the transportation contract between Shaanxi Qiyiwangguo and Bailutong was terminated, and (2) Bailutong owed RMB0.20 million (approximately $29,715) to Shaanxi Qiyiwangguo for the loss of Shaanxi Qiyiwangguo. Bailutong appealed the case to Xi’an Intermediate People’s Court. Xi’an Intermediate People’s Court rejected the appeal and upheld the original verdict. As of the date of this report, Shaanxi Qiyiwangguo has not received the payment of RMB0.20 million from Bailutong.

14

Legal case with Henan Huaxing Glass Co., Ltd.

Shaanxi Qiyiwangguo entered into an agreement with Henan Huaxing Glass Co., Ltd. (“Huaxing”) in May 2014 for Huaxing to supply glass bottles to Shaanxi Qiyiwangguo. However, due to the disputes regarding the quality of products supplied by Huaxing, Shaanxi Qiyiwangguo did not pay the prices for certain glass bottles. In August 2017, Huaxing filed a lawsuit and the court ruled that Shaanxi Qiyiwangguo owed Huaxing RMB 203,742 (approximately $29,743) in July 2018. During the enforcement process, the parties reached a settlement agreement but Shaanxi Qiyiwangguo failed to pay the amount due and now the case is still in the court enforcement process. As of June 30, 2020, Shaanxi Qiyiwanggu has not repaid the amount. Shaanxi Qiyiwanggu was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Huludao Banking Co., Ltd.

In September 2016, the Suizhong Branch of Huludao Banking Co., Ltd. (“Suizhong Branch”) filed a lawsuit with Huludao Intermediate People’s Court (the “Huludao Court”) against the Company’s indirectly wholly-owned subsidiary Huludao Wonder Fruit Co., Ltd. (“Wonder Fruit”) and requested that Wonder Fruit repay a RMB 40 million (approximately $5.81 million) bank loan, plus interest. The loan became due on its maturity date of December 9, 2016. On December 19, 2016, the Huludao Court accepted the case. The Company has been disputing the interest rate of the loan with Suizhong Branch, and has not repaid the loan to date. Wonder Fruit believes that the interest charged by Suizhong Branch is 100% higher than the base rate set by People’s Bank of China and is not consistent with the China People’s Bank’s base interest and floating rate. The Huludao Court has seized land use rights, buildings and equipment of Wonder Fruit that were pledged as guarantee for the loan and has organized two auction sales for these assets in January and February of 2018, but both auction sales have been unsuccessful in finding a buyer. On July 19, 2018, the Court issued a verdict ordering Huludao Wonder to transfer its land use rights, building, equipment, electronic and transportation assets to Zuizhong Branch as payment of the outstanding principal, auction and evaluation fees and some interest of the loan for RMB 42.64 million (approximately $6.22 million). As of June 30, 2020, there was RMB 11.95 million (approximately $1.74 million) in interest on the loan unpaid. Huludao Wonder was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Andrew Chien

In September 2017, Andrew Chien, a former consultant of SkyPeople China, brought a lawsuit against the Company and Mr. Hongke Xue in the District Court of Connecticut (the “Court”). The complaint was not properly served and the Company learned of the litigation in December 2017. In the complaint, Mr. Chien has made several claims, most of which attempt to hold the Company liable under novel legal theories that relate back to an alleged breach of a consulting agreement between SkyPeople China and Chien from August 2006. Mr. Chien claimed approximately $257,000 damages and interest plus 2.00% of the Company’s then-outstanding shares. Mr. Chien has unsuccessfully attempted to sue the Company on the breach of the same consulting agreement several times in the courts of Connecticut and New York, and these cases have been dismissed. The Company has filed a motion to dismiss (“MTD”) and all proceedings are stayed pending determination of the MTD. On August 31, 2018, the Court granted our MTD. On September 10, 2018, Mr. Chien filed a motion for reconsideration. On September 28, 2018, the Court denied Mr. Chien’s motion for reconsideration. On October 26, 2018, Mr. Chien appealed the case to the United States Court of Appeals for the Second Circuit.  The Court of Appeals affirmed the trial court’s dismissal of the action on January 22, 2020, and denied Mr. Chien’s petition for en banc rehearing on March 27, 2020.  Mr. Chien’s time to pursue a discretionary appeal to the Supreme Court of the United States has lapsed and the case is closed.

Legal case with Luwei

In 2018, Mr. Luwei, an individual, filed a claim for arbitration against SkyPeople China in Xi’an Arbitration Commission for breach of contract pursuant to a new share purchase agreement and a share redemption agreement. On April 11, 2019, Xi’an Arbitration Commission made its decision and ordered SkyPeople China to repay RMB 3 million investment to Luwei. Mr. Luwei applied with Intermediate Court of Xi’an (the “Court”) for enforcement of the arbitration award which process was terminated by the Court due to no assets for enforcement. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Overseas Investment Development Corp.

In November 2019, Shaanxi Overseas Investment Development Corp (“Shaanxi Overseas Investment”) filed a lawsuit against SkyPeople China, Hongke Xue and Shenzhen Tian Shun Da Equity Investment Fund Management Co., Ltd. (“Shenzhen Tian Shun Da”) pursuant to an investment agreement entered in March 2016. According to the agreement, Shaanxi Overseas Investment agreed to invest RMB 5 million for the preferred shares of SkyPeople China with an annual interest rate of 2.38%. Shenzhen Tian Shun Da pledged 1.17% of the shares SkyPeople China that it owned and Hongke Xue provided guarantee for the performance of agreement by SkyPeople China. SkyPeople China failed to make the interests payment and Shaanxi Overseas Investment filed the lawsuit for breach of agreement. On December 26, 2019, Yanta District Court of Xi’an City (the “Court”) ordered SkyPeople China to pay Shaanxi Overseas Investment the preferred share redemption amount of RMB 5 million plus penalty which is calculated based upon the RMB 5 million at a rate of 24% a year. The Court also ruled that Shaanxi Overseas Investment may sell the pledged shares owned by Shenzhen Tianshun Da as the repayment for SkyPeople China and Hongkong Xue shall also assume the repayment obligation as guarantor. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

15

Legal case with Shaanxi Wanyuan Construction Co., Ltd.

In July 2019, Shaanxi Wanyuan Construction Co., Ltd. (“Wanyuan) filed a lawsuit with Shaanxi Baoji Municipal Intermediate People’s Court (the “Baoji Court”) against Guoweimei for repayment of construction and decoration costs of RMB 55.07 million pursuant to a Construction and Decoration Agreement entered by the parties in May 2017. In July 2019, the Baoji Court ordered Guoweimei to pay construction and decoration costs of RMB55.07 million to Wanyuan, plus interest. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

15. RISKS AND UNCERTAINTIES

Impact of COVID 19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world. Substantially all of our revenues are generated in China. The Company’s results of operations has affected by the outbreak of COVID-19 in China.  In early 2020, Chinese government took emergency measures to combat the spread of the virus, including quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China, which has adversely affected the Company’s business and services and results of operations. Our suppliers have negatively been affected, and could continue to be negatively affected in their ability to supply and ship products to our customers. Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from us, which may materially adversely impact our revenue. The business operations of the third parties’ stores on our platform have been and could continue to be negatively impacted by the outbreak, which may negatively impact their operations and business, which may in turn adversely affect the business of our platform as a whole as well as our financial condition and operating results. Some of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions, Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we require additional capital.

The Company’s promotion strategy of the CCM Shopping Mall previously mainly relied on the training of members and distributors through meetings and conferences. Although China has already begun to recover from the outbreak of COVID-19,  the Chinese government still put a restriction on large gatherings. These restrictions made the promotion strategy for CCM Shopping Mall difficult to implement.

Consequently, our results of operations has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Chinese and global economy. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control. 

16

PRC Regulations

We conduct substantially all of our operations and generate most of our revenue in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. The PRC economy is in transition from a planned economy to a market oriented economy subject to plans adopted by the government that set national economic development goals. Policies of the PRC government can have significant effects on economic conditions in the PRC.

Currency risks

A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

Credit risks

The Company extends unsecured credit to its customers in the normal course of business and generally does not require collateral. As a result, management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of accounts receivable. In the analysis, management primarily considers the age of the customer’s receivable and also considers the credit worthiness of the customer, the economic conditions of the customer’s industry, and general economic conditions and trends, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts.  If judgments regarding the collectability of accounts receivables are incorrect, adjustments to the allowance may be required, which would reduce profitability.   

16. SUBSEQUENT EVENTS

In July 2020, the Company entered a series of loan agreements with fourteen individuals for a total amount of $4.961 million. On August 4, 2020, the Company entered into a Debt Repayment Agreement with these individuals (the “Creditors”), pursuant to which the Company agreed to repay $4,961,000 debt owed to the Creditors in the form of shares of Common Stock of the Company for an aggregate of 2,740,883 shares at a price of $1.81 per share (the “Debt Repayment”). The Debt Repayment will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. The Company issued 2,740,883 shares of its Common Stock to the Creditors on August 12, 2020.

On June 28, 2020, Guangchengji entered  into a “Loan Agreement” with Shenzhen Tiantian Haodian. (Refer to Note 4- “Loan Receivables”). Pursuant to the Loan Agreement, Guangchengji transferred $0.21 million to Guangchengji on June 29, 2020 and $4.73 million in July 2020.

On July 13, 2020, the Company and Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company entered into a Share Exchange Agreement with Nice Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”), which is licensed under the Security and Futures Commission of Hong Kong for assets management, and Joy Rich Enterprises Limited, a limited company organized under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich”), pursuant to which the Company agreed to acquire 90% of the issued and outstanding ordinary shares of Nice (the “Nice Shares”) from Joy Rich in exchange for the Company’s Common Stock.

17

Pursuant to the terms of the Share Exchange Agreement, the parties agreed: (i) the aggregate purchase price for Nice Shares shall be HK$54 million (approximately $6.97 million, the “Purchase Price”) and it shall be paid in the Company’s Common Stock; (ii) 40% of the Purchase Price HK$21.6 million (approximately $2.79 million) shall be paid in the shares of common stock of the Company based on the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to the date of the Agreement and the foreign exchange rate between HK$ and US$ shall be the rate published by Bloomberg on the date of the Agreement; (iii) 30% of Purchase Price shall be paid in the Company Common Stock (the “2020 Earn-Out Shares”) if Nice meets certain earnings goal for 2020 (the “2020 Earnings Goal”); (iv) the 2020 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2020 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2020; (v) additional 30% of Purchase Price shall be paid in the shares of common stock the Company (the “2021 Earn-Out Shares”) if Nice meets certain earnings goal for 2021 (the “2021 Earnings Goal”); (vi) the 2021 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2021 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2021; (vii) if Nice does not achieve its earnings goal for a given year, the parties agree to have forbearance clause that the amount of such year’s earn-out shares shall not be reduced for that year if Nice achieves at least sixty percent (60%) of its given year earnings goal and if Nice achieves lower than 60% earnings goal for a given year, the amount of such year’s earn-out shares shall be reduced to zero. The Company Shares will be issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

On July 22, 2020, the Company established Future Commercial Management (Beijing) Co., Ltd. Its scope of business includes management and consulting services.

On July 28, 2020, the Company, entered into a Standstill Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).

Pursuant to the Standstill Agreement, Lender agreed to refrain and forbear temporarily from making redemptions under certain Secured Promissory Note that was sold and issued by the Company to the Lender on December 19, 2019 in the original principal amount of $1,060,000 (the “Note”). Lender agreed not to redeem any portion of the Note (the “Standstill”) for a period beginning on the date of the Agreement and ending on the date that is ninety (90) days from the date of the Agreement. As a material inducement and partial consideration for Lender’s agreement to enter into the Agreement, the Company agreed that the outstanding balance of the Note shall be increased by nine percent (9%) on the date of the Agreement (the “Standstill Fee”). The Company and Lender agreed that, following the application of the Standstill Fee, the outstanding balance of the Note is $1,209,636.  

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the SEC (collectively the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “may”, “will”, “should”, “would”, “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to Company or Company’s management identify forward-looking statements. Such statements reflect the current view of Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors (including the statements in the section “results of operations” below), and any businesses that Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading “Risk Factors” and those listed in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) and in this Form 10-Q. The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report and in our 2019 Form 10-K.

Although the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this report, which attempts to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations, and prospects.

Overview of Our Business  

Future FinTech is a holding company incorporated under the laws of the State of Florida. The Company historically engaged in the production and sale of fruit juice concentrates (including fruit purees and fruit juices), fruit beverages (including fruit juice beverages and fruit cider beverages) in the PRC. Due to drastically increased production costs and tightened environmental laws in China, the Company had transformed its business from fruit juice manufacturing and distribution to a real-name blockchain e-commerce platform that integrates blockchain and internet technology. The main business of the Company includes an online shopping platform, Chain Cloud Mall (CCM), which is based on blockchain technology; a cross-border e-commerce platform (NONOGIRL) which started its trial operation in March 2020 and formally launched in July 2020; a blockchain-based application incubator and a digital payment system (DCON); and the application and development of blockchain-based e-commerce technology and financial technology.

Chain Cloud Mall adopts a “multi-vendor hosted stores + platform self-hosted stores” model. The platform supports various marketing methods, including point rewards programs, coupons, live webcasts, game interaction, and social media sharing. Besides the blockchain-powered features, CCM is also fully equipped with the same functions and services that other Chinese leading traditional e-commerce platforms provide.

Based on blockchain technology, CCM is established to transform the relationship between companies and consumers from traditional selling and buying relationships to a value-sharing relationship. The platform will fairly distribute the benefit of the entire mall to users who engaged in the promotion, development, and consumption based on their contributions to the platform. The members of CCM are not only consumers and entrepreneurs but also participants, promoters and beneficiaries. The CCM shared shopping mall platform is designed to be a block-chain based shopping mall for merchants and goods, not the exchange of digital currencies, and it currently only accepts payment from credit cards, Alipay and WeChat.

Chain Cloud Mall is an enterprise and customer interactive and comprehensive shopping and sales service platform. It is an open network promotion system with a blockchain based anti-counterfeit system including referral point and discount points issuance and settlement. The new business model creates a completely new source of data traffic for enterprises on our platform.

19

Merchants on the Chain Cloud Mall issue their own blockchain points and anti-counterfeiting QR codes. Every product comes with unique anti-counterfeiting QR codes on the label. Customers collect the points issued by the merchants by scanning products with their mobile phones on the anti-counterfeiting QR code. These QR codes are generated by blockchain system of Chain Cloud Mall and provided to merchants. The successful collection of the merchant points confirms that the authentication of product from such enterprise. The Chain Cloud Mall to record and provide Chain Cloud Mall points to its members upon a successful new member and/or product referral, which can be used as credit when making purchases on CCM. It incentivizes its members to promote the platform and share the products with their social contacts, which in turn increases the sales through Chain Cloud Mall and helps the Company generate greater value.

CCM shopping mall membership

Members are the key participants on CCM and drivers of its growth. Our members typically pay to gain access to a dedicated app that provides access to a curated selection of products, exclusive membership benefits, and features, including discounted prices and point rewards. Members can refer others to become members and are rewarded for doing so. Members can also promote products on various social platforms and are rewarded if those users purchase our products. Currently, there are three kinds of membership programs, Diamond Elite, Gold Elite and Silver Elite, with different membership fees and benefits. The higher membership fee provides more benefits to the members.

Sales of Goods

We have a unique real-name and membership–based blockchain e-commerce shopping platform that integrates blockchain, internet technology and distinguishes itself by utilizing the automatic value distribution system of the blockchain and sharing the value of the platform to all the participants in the system.

Our latest CCM v3.0 creates a new value cycle system of online shopping mall with the real-name blockchain system with following characteristics:

1. Blockchain anti-counterfeiting

Using real-name blockchain technology to carry out anti-counterfeiting for products produced by the enterprises. The essence of anti-counterfeiting is to determine the person responsible for the product. Using real-name blockchain system, it provides the assurance to our customers to the authentication of the products they purchase and solve the problem of counterfeiting products in online shopping mall.

2. Blockchain points settlement leads to secondary data traffic

Blockchain points are also discount coupons for merchants, guiding customers to the platform of the merchants, and provide them discounts when purchasing. This process is called secondary data traffic. Every company is aware of the importance of maintaining old customers. Blockchain anti-counterfeiting technology through scanning of QR codes by the customers helps companies identify such customers and allows them to systematically maintain contacts with such customers.

3. Points promotion system

Points promotion system brings secondary data traffic comes with volume and high turnover ratio. All such sales are directed to the merchants’ stores when customers possess and use merchants coupons. With a high level of user stickiness, customers are likely to purchase products again and collect more blockchain points.

4. Member community system to build a high value community

Anti-counterfeiting technology plus the Company’s secondary data traffic platform have created great value for the merchants that have stores on our platform. By gathering all loyal customers to a merchant’s store, we can build a standard value community. With the common interest, the value community of a merchants can form a self-organizing system with customer groups to maximize the interests of such merchant.

Approximately $2,853 and $286,000 was recognized as revenue from orders on sales of the Company’s own products on the platform for the six months ended June 30, 2020 and June 30, 2019, respectively.

20

Impact of COVID-19 on our Business

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world. COVID-19 has materially and adversely affected our business during the six months ended June 30, 2020. In early 2020, Chinese government took emergency measures to combat the spread of the virus, including quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China.

Substantially all of our revenues are generated in China.  In response to the evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines of local authorities as it prioritizes the health and safety of its employees, contractors, suppliers and business partners. Our offices in China was closed and all of the Company’s employees worked from home from Chinese New Year at the end of January until late March 2020. The quarantines, travel restrictions, and the temporary closure of office buildings have negatively impacted our business. Our suppliers have negatively been affected, and could continue to be negatively affected in their ability to supply and ship products to our customers. Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from us, which may materially adversely impact our revenue. The business operations of the third parties’ stores on our platform have been and could continue to be negatively impacted by the outbreak, which may negatively impact their operations and business, which may in turn adversely affect the business of our platform as a whole as well as our financial condition and operating results. The outbreak has had and might continue to have disruption to our supply chain, logistics providers, customers or our marketing activities which could materially adversely impact our business and results of operations, including causing  our suppliers to cease manufacturing products for a period of time or materially delay delivery to us and customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us. Some of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions. If the SMEs that we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak, our revenues and business operations may be materially and adversely impacted.

The global economy has also been materially negatively affected by the COVID-19 and there is continued severe uncertainty about the duration and intensity of its impacts. The Chinese and global growth forecast is extremely uncertain, which would seriously affect customer spending on our shopping mall.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of the Company’s Common Stock.

21

Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we require additional capital. We currently believe that our financial resources will be adequate to see us through the outbreak. However, in the event that we do need to raise capital in the future, outbreak-related instability in the securities markets could adversely affect our ability to raise additional capital.

Consequently, our results of operations has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Chinese and global economy. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control. 

SEC Subpoena

On February 21, 2020, the Company received a subpoena from the SEC’s Division of Enforcement requiring us to produce documents and detailed information relating to, among other things, the Company’s accounting procedures, management oversight, and the sale of HeDeTang holdings (HK) Ltd. to New Continent International Co., Ltd. The subpoena required the Company to produce all responsive documents created during, or concerning, the period January 1, 2016 to the present, unless otherwise specified.

The Company is cooperating with the SEC’s investigation and has provided responsive documents and information requested in the subpoena. In the event the Company locates additional responsive documents, we expect to produce them promptly to the SEC. We will also make officers or other employees available to be interviewed by the SEC with regard to the subject matters identified in the subpoena.

The Company is unable to predict, what action, if any, might be taken in the future by the SEC or any other governmental authority as a result of the subpoenas. There can be no assurance that the SEC will not commence an enforcement action against us or members of our management, or as to the ultimate resolution of any enforcement action that the SEC may decide to bring. Under applicable law, the SEC has the ability to impose significant sanctions on companies and individuals who are found to have violated the provisions of applicable federal securities laws, including cease and desist orders, civil money penalties, and barring individuals from serving as directors or officers of public companies. We have expended significant financial and managerial resources responding to the SEC subpoena. Defending any enforcement action brought by the SEC against us would involve further significant expenditures and the resolution of any such enforcement action could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Results of Operations

Comparison of Three Months ended June 30, 2020 and 2019:

Revenue

The following table presents our consolidated revenues for the three months ended June 30, 2020 and 2019, respectively (in thousands):

	Three months ended June 30,				Change
	2020		2019		Amount			%
CCM Shopping Mall Membership	$	105		109	$	(4	)		(3.7	)%
Sales of goods		2		148		(146	)		(98.6	)%
Other		7		-		7			100	%
Total	$	114	$	257	$	(143	)		(55.6	)%

The decrease in revenue for the three months ended June 30, 2020 was mainly due to the decrease in sales from sales of goods.

Sale of goods decreased from $148 thousand for the three months ended June 30, 2019 to $2 thousand for the three months ended June 30, 2020. The Company’s promotion strategy previously mainly relied on the training of members and distributors through meetings and conferences. Due to the outbreak of COVID-19 in 2020, the Chinese government put a restriction on large gatherings. These restrictions made the promotion strategy for CCM Shopping Mall difficult to implement. As a result, there was a decrease in the sales of good due to the lack of ability to promote the use of the CCM shopping mall through existing marketing strategies.

Revenue from CCM Shopping Mall Membership decreased slightly to $105 thousand for the three months ended June 30, 2020 from $109 thousand for the same period of last fiscal year.

In the second quarter of 2020, the Company launched CCM v3.0. With the new application, the Company charges RMB 1,000 (approximately $142) per year to the suppliers, who agree to adopt the QRO anti-counterfeiting code for their products, which they sell in CCM. CCM members that serve as agents to sell products from CCM suppliers are charged a one-time agent fee of RMB 3,820 (approximately $543) by CCM. CCM also charges commission on  the products sold on the platform, and a service fee  to the agent and merchants, who receive payments  through CCM from the money collected from the sale of goods. All the above income is classified as other income, which is $7 thousand for the six months ended June 30, 2020.

22

Gross Margin

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 three months ended June 30, 2020 and 2019, respectively (in thousands):

	Three months ended  June 30,
	2020					2019
	Gross profit		Gross margin			Gross  profit		Gross margin
CCM Shopping Mall Membership	$	100		95.2	%	$	97		89.0	%
Sales of goods		2		100	%		43		29.1	%
Other		2		28.6	%		-		-
Total	$	104		91.2	%	$	140		54.5	%

Overall gross margin as a percentage of revenue was 91.2% for the three ended June 30, 2020, an increase of 36.7% compared to 54.5% for the same period of last fiscal year. The increase in gross margin as a percentage of revenue was mainly attributable to the increase in the revenue percentage of CCM Shopping Mall Membership relative to the total revenue. CCM Shopping Mall Membership has a higher gross margin. As a percentage of total revenue, revenue from CCM shopping mall membership was 96.2% and 69.3% for the three months ended June 30, 2020 and June 30, 2019, respectively. 

In terms of dollar value, the overall gross profit for the three ended June 30, 2020 was $104 thousand, a decrease of $36 thousand, compared $140 thousand for the same period of last fiscal year. The decrease in the dollar value of overall gross margin was mainly due to the decrease in revenue from the Sales of Goods.

Operating Expenses

The following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the three months ended June 30, 2020 and 2019, respectively: (in thousands)

	Second quarter of 2020					Second quarter of 2019
	Amount		% of revenue			Amount		% of revenue
General and administrative	$	413		363.7	%	$	869		338.1	%
Selling expenses		8		6.8	%		492		191.5	%
Bad debt provision		211		185.2	%		-		-
Total operating expenses	$	632		555.7	%	$	1,361		529.6	%

General and administrative expenses decreased by $456 thousand, or 52.5%, from $869 thousand to $413 thousand for the three months ended June 30, 2020, compared to the same period of last fiscal year. The decrease in general and administrative expenses was mainly due to the decrease in payroll related expenses as a  result of the Company’s cost control efforts.

Selling expenses decreased by $484 thousand, or 98.4%, from $492 thousand to $8 thousand for the three months ended June 30, 2020, compared to the same period of the last fiscal year. The decrease was mainly due to a decrease in payroll related expenses for the sales staff, which now is mainly based on performance-based commission. In addition, the shipping expenses decreased as a result of a decreased in the sales volume in the second quarter of 2020.

Bad debt provision was $211 thousand for the three months ended June 30, 2020, which was mainly for the other receivables, which are more than three months past due.

Other Income (Expense), Net

Other expenses, net decreased by $20,179 to $9,963 for the three months ended June 30, 2020 from $30,135 in the same period of the last fiscal year, primarily due to an increase in exchange gains.

23

Income Tax

We did not have tax provision for the three months ended June 30, 2020, as the Company incurred losses in the second quarter of 2020. Income tax provision was $75 for the three months ended June 30, 2019.

Non-controlling Interests 

As of June 30, 2020, Shaanxi Chunlv Ecological Agriculture Co., Ltd. holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited (“CCM Logistics”), CCM Logistics holds 10% interest in ) Hedetang Farm Products Trading Market (Mei County) Co., Ltd., Nature Worldwide Resources Ltd. held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds 45% interest in Zhonglian Hengxin.

Loss from Continuing Operations

Loss from operations was $0.54 million for the three months ended June 30, 2020, a decrease of $0.71 million, as compared $1.25 million for the same period of the last fiscal year. The decrease was mainly due to the decrease in operating expenses, which was partially offset by a decrease in gross margin, as discussed earlier.

Loss per Share

Basic and diluted loss per share from continuing operations were $0.20 and $0.20 for the three months ended June 30, 2020, respectively, as compared to a loss of $0.03 and $0.03 for the same periods of 2019, respectively. Basic and diluted income per share attributable to discontinued operations was $0 and $0 for the three months ended June 30, 2020 respectively. Basic and diluted loss per share attributable to discontinued operations was $0.02 and $0.02 for the three months ended June 30, 2019, respectively.

Comparison of Six Months ended June 30, 2020 and 2019:

Revenue

The following table presents our consolidated revenues for the six months ended June 30, 2020 and 2019, respectively (in thousands):

	Six months ended June 30,				Change
	2020		2019		Amount			%
CCM Shopping Mall Membership	$	303	$	131	$	172			131.3	%
Sales of goods		3		286		(276	)		(96.5	)%
Other		8		-		-			-
Total	$	314	$	417	$	(104	)		(24.7	)%

Revenue for the six months ended June 30, 2020 was $314 thousand as compared to $417 thousand for the same period in 2019, a decrease of $104 thousand million, or 24.7%. The decrease was due to a decrease in sales of goods, which was partially offset by the growth of our business section of CCM shopping mall membership.

Sale of goods decreased from $286 thousand for the six months ended June 30, 2019 to $3 thousand for the six months ended June 30, 2020. The decrease was mainly due to the negative impact of COVID-19 during this period, as the staff could not work in the office and shipments stopped. In addition, the Company is lack of ability to promote the use of the CCM shopping mall through existing marketing strategies.

As a percentage of total revenue, revenue from CCM shopping mall membership was 96.5% and 31.4% for the six months ended June 30, 2020 and June 30, 2019, respectively. The absolute amount of revenue from CCM shopping mall membership increased by $172 thousand from $131 thousand to $303 thousand for the six months ended June 30, 2020 compared to the same periods of the last fiscal year.

In the second quarter of 2020, the Company launched CCM v3.0. With the new application, the Company charges RMB 1,000 (approximately $142) per year to the supplier, who agrees to adopt the QRO anti-counterfeiting code for their products, which they sell in CCM. CCM members, who want to serve as agents to sell products from CCM suppliers, get charged a one-time agent fee of RMB 3,820 (approximately $543). CCM also charges commission on the products sold on the platform, and a service fee to the agent and suppliers, who get paid by CCM from the money collected from the sale of goods. All the above income is classified as other income, which is $8 thousand for the six months ended June 30, 2020.

24

Gross Margin

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, 2020 and 2019, respectively (in thousands):

	Six months ended  June 30,
	2020					2019
	Gross profit		Gross margin			Gross  profit		Gross margin
CCM Shopping Mall Membership	$	299		98.7	%	$	118		90.0	%
Sales of goods		2		66.7	%		53		18.5	%
Others		3		42.9	%		-		-
Total	$	304		96.8	%	$	171		41.0	%

Overall gross margin as a percentage of revenue was 96.8% for the six months ended June 30, 2020, an increase of 55.8% compared 41.0% for the same period of last fiscal year. The increase in gross margin as a percentage of revenue was mainly attributable to the decrease in the revenue percentage of sales of goods relative to the total revenue. Sale of goods has a lower margin. As a percentage of total revenue, revenue from sales of goods was 0.7% and 31.0% for the six months ended June 30, 2020 and June 30, 2019, respectively.  In terms of dollar value, the overall gross profit for the six ended June 30, 2020 was $304 thousand, an increase of $133 thousand, compared $171 thousand for the same period of last fiscal year. The increase in the dollar value of overall gross margin was mainly due to the increase in revenue from the CCM Shopping Mall Membership.

Operating Expenses

The following table presents our consolidated operating expenses and operating expenses as a percentage of revenue for the six months ended June 30, 2020 and 2019, respectively: (in thousands)

	First half of 2020					First half of 2019
	Amount		% of revenue			Amount		% of revenue
General and administrative	$	2,333		743.8	%	$	1,817		435.4	%
Selling expenses		20		6.5	%		558		133.8	%
Bad debt provision		4,414		1,407.2	%		7		1.8	%
Total operating expenses	$	6,767		2,157.5	%	$	2,382		571.0	%

General and administrative expenses increased by $516 thousand, or 28.4%, to $2,333 thousand for the six months ended June 30, 2020 compared to $1,817 thousand in the same period of the last fiscal year. The increase in general and administrative expenses was mainly due to stock related expenses of $1,191 thousand that the Company recorded during first quarter of 2020, for a Consulting Service Agreement that the Company entered into on January 25, 2020 with Dragon Investment Holding Limited (Malta), which was partially offset by the decrease in payroll related expenses as a result of the Company’s cost control efforts.

Selling expenses decreased by $538 thousand, or 96.4%, to $20 thousand for the six months ended June 30, 2020, compared to $558 thousand for the same period of the last fiscal year. The decrease was mainly due to a decrease in in payroll related expenses for the sales staff, which now is mainly on performance based compensation. In addition, the shipping expenses decreased as a result of a decreased in the sales volume during the six months ended June 30, 2020.

Bad debt provision was $4,414 thousand and $7 thousand for the six months ended June 30, 2020 and June 30,2019, respectively. Bad debt provision incurred during the six months ended June 30, 2020 was mainly for the other receivables from HeDeTang HK, which was sold to New Continent International Co., Ltd. during the first quarter of 2020.

Other Income (Expense), Net

Other expenses, net increased by $0.45 million to $0.56 million for the six months ended June 30, 2020 from $0.11 million in the same period of the last fiscal year, primarily due to currency exchange loss related with the sale of HeDeTang HK.

25

Income Tax

We did not have tax provision for the six months ended June 30, 2020, as the Company suffered losses in this period. Provision for income taxes were $75 for the six months ended June 30, 2019.

Non-controlling Interests 

As of June 30, 2020, Shaanxi Chunlv Ecological Agriculture Co., Ltd. holds 20.0% interest in Chain Cloud Mall Logistics Center (Shaanxi) Co., Limited (“CCM Logistics”), CCM Logistics holds 10% interest in Hedetang Farm Products Trading Market (Mei County) Co., Ltd., Nature Worldwide Resources Ltd. held a 40% interest in DCON Digipay, and Shaanxi Yinlian holds 45% interest in Zhonglian Hengxin.

Loss from Continuing Operations

Loss from continuing operations increased by $4.70 million from $2.32 million for the six months ended June 30, 2019 to $7.02 million for the same period of 2020 mainly due to an increase in stock related expenses and bad debt expenses, as discussed previously. 

Gain on disposal of discontinued operations

Gain on disposal of discontinued operation was $123.69 million for the three months ended June 30, 2020, which was related with sale of HeDeTang HK to New Continent International Co., Ltd. during the first quarter of 2020. The total assets of HeDeTang HK were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $123.69 million. There was no income or loss from HeDeTang HK from January 1, 2020 to the sale.

Loss per Share

Basic and diluted loss per share from continuing operations were $0.20 and $0.19 for the six months ended June 30, 2020, respectively, as compared to a loss of $0.05 and $0.05 for the same periods of 2019, respectively. Basic and diluted income per share attributable to discontinued operations was $3.45 and $3.39 for the six months ended June 30, 2020 respectively. Basic and diluted loss per share attributable to discontinued operations was $0.04 and $0.04 for the six months ended June 30, 2019 respectively.

Liquidity and Capital Resources

As of June 30, 2020, we had cash and cash equivalents of $0.58 million, as compared to $0.54 million as of December 31, 2019.

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 negative $6.02 million, as of June 30, 2020, an increase of $89.70 million from working capital of negative $89.72 million as of June 30, 2019, mainly due to a decrease in current liabilities. 

Net cash used in operating activities increased by $1.66 million to $1.41million for the six months ended June 30, 2020 from a cash inflow of $0.25 million for the same period of the last fiscal year. The increase in net cash used by operating activities was primarily due to a decrease in cash provided by the discontinued operations for six months ended June 30, 2020 as compared to the same period of last fiscal year.

Net cash used in investing activities was $0 for the six months ended June 30, 2020 and June 30, 2019, respectively.

Net cash provided in financing activities for the six months ended June 30, 2020 was $1.68 million representing an increase of $1.14 million, as compared to cash provided by financing activities of $0.54 million during the six months ended June 30, 2019. The increase in cash provided by financing activities was mainly attributable to the increase in proceeds from related party loan and payment of $0.50 million that the Company received for the issuance of the Company’s Common Stock pursuant to the Securities Purchase Agreement that the Company entered with Qun Xie on June 16, 2020.

Off-balance sheet arrangements

As of June 30, 2020, we did not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

26

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal interim financial officer, respectively, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2020, our disclosure controls and procedures were not effective due to a material weakness in our internal control over financial reporting.  Specifically, we currently lack sufficient accounting personnel with the appropriate level of knowledge, experience and training in U.S. GAAP and SEC reporting requirements.

Changes to Internal Control over Financial Reporting

We have taken, and are taking, certain actions to remediate the material weakness related to our lack of U.S. GAAP experience. We have engaged consultants with U.S. GAAP knowledge and experience to supplement our current internal accounting personnel and assist us in the preparation of our financial statements to ensure that our financial statements are prepared in accordance with U.S. GAAP.

Other than discussed above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

27

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As described in our Annual Report for the year ended December 31, 2019 and the footnotes of this Quarterly Report, we are party to a number of legal proceedings. There have been no material developments in those proceedings during the three months ended June 30, 2020.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None. 

Item 3. Defaults upon Senior Securities

None.

28

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
10.1	Loan Agreement by and between GuangChengJi (Shanghai) Industrial Co., Ltd. and Shenzhen Wangjv Trading Co., Ltd. dated June 15, 2020.*
10.2	Loan Agreement by and between GuangChengJi (Shanghai) Industrial Co., Ltd. and Shenzhen Tiantian Haodian Technology Co., Ltd. dated June 28, 2020. *
10.3	Form of Loan Agreement by and among the GuangChengJi (Shanghai) Industrial Co., Ltd. and fourteen individuals in July 2020.*
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule15d-14(a) of the Securities Exchange Act of 1934, as amended*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
101.INS	XBRL Instance Document*
101.SCH	XBRL Schema Document*
101.CAL	XBRL Calculation Linkbase Document*
101.DEF	XBRL Definition Linkbase Document*
101.LAB	XBRL Label Linkbase Document*
101.PRE	XBRL Presentation Linkbase Document*

* filed herewith

+ Furnished herewith

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FUTURE FINTECH GROUP INC.
By:	/s/ Shanchun Huang
	Shanchun Huang
	Chief Executive Officer
	(Principal Executive Officer)
	August 14, 2020
By:	/s/ Jing Chen
	Jing Chen
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
	August 14, 2020

30

EX-10.1

Exhibit 10.1

Loan Agreement

Party A (Lender): Shenzhen Wangjv Trading Ltd.

Legal representative: Weng Yipeng

Address: Jingji Binhe, Xiasha Village, No. 9289 Binhe Road, Xiasha Community, Shatou Street, Futian District, Shenzhen

Party B (Borrower): Guangchengji (Shanghai) Industrial Co., Ltd.

Legal representative: Pan Weicheng

Unified Social Credit Code:

Based on the principles of equality, voluntariness, honesty and credibility, both parties reached the following agreement through friendly negotiation：

1. Party A agrees to lend to Party B cash up to but not greater than RMB 2,000,000 (Two million Yuan) with its own fund, or fund from its shareholders, partners or others. The actual loan amount is the cash transferred.

2. Purpose of the loan: For Party B's daily operations and expansion of business.

3. Loan period: The loan period is 12 months, from June 15, 2020 to June 14, 2021. If the loan is paid in installments, the date of the last loan should be received no later than December 31, 2020.

4. Loan interest: The loan interest is an annual interest rate of 8%, calculated based on the actual amount received. If the loan is received in installments, the interest shall be calculated based on the actual date when Party B receives the loan. Interest shall be paid every six months. If party B cannot remit payment on time due to special circumstances both parties can agree another payment time.

5. Party A or a third party appointed by Party A should deposit the loan to the following bank appointed by Party B:

Account name: Guangchengji (Shanghai) Industrial Co., Ltd.

Account number:

Bank: Bank of China Shanghai Pudong Avenue Sub-branch

6. Representations and Warranties:

6.1 Party B must use the loan legally in accordance with the purposes specified in this agreement, and must not use it for other purposes, or use the loan for illegal activities.

6.2 the purpose of the loan is to for Party B’s daily operations and expansion of business.

7. Settlement of Contract disputes

7.1 Disputes arising during the implementation of this Agreement shall be settled through friendly negotiation between the parties, or mediated by the arbitration institution appointed by both parties. If negotiation or mediation fails, a lawsuit may be filed in the people's court where Party A is located or Beijing Peoples’ Court or Hong Kong District court.

8. This agreement will become effective after being signed or stamped by both parties. This contract has two copies, with each party holding one copy. The text of the contract has the same legal effect.

Party A: Shenzhen Wangjv Trading Ltd.

Seal of Shenzhen Wangjv Trading Ltd.

Date of signing: June 15, 2020

Party B: Guangchengji (Shanghai) Industrial Co., Ltd.

Seal of Guangchengji (Shanghai) Industrial Co., Ltd.

Date of signing: June 15, 2020

EX-10.2

Exhibit 10.2

Loan Agreement

Party A (Lender): Guangchengji (Shanghai) Industrial Co., Ltd.

Legal representative: Pan Weicheng

Address: No. 1098 Chuansha Road, Pudong New Area, Shanghai, China

Party B (Borrower): Shenzhen Tiantian Haodian Technology Co., Ltd.

Legal representative: Chen Zhiping

Address: Qianwan 1st Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, Guangdong province, China

As:

1. The legal representatives of both parties represent legally existing entities in China in accordance with the "Contract Law of the People's Republic of China" and other related laws and regulations. They both have the legal rights and ability to authorize and sign this agreement and have been granted the necessary approvals to sign for the obligations under this Agreement. The obligations assumed by both parties from this Agreement are legal and effective, and there are no conflicts with obligations from other agreements and there is no conflict with Chinese laws, regulations and related administrative regulations.

2. Party B is an experienced company in investment in the U.S. companies. Party A intends to form a long-term strategic partnership with Party B and does not rule out cooperation with Party B in the form of equity investment in the future.

3. This agreement is entered into through negotiation between the two parties, and it is hereby implemented for mutual compliance.

Article 1 Rights and Obligations of Both Parties

1.1 Party A agrees to lend to Party B its own funds in the form of loans. The total loan amount lent by Party A to Party B shall not exceed RMB 35,000,000 (thirty five million Yuan). The actual loan amount is the cash transferred.

1.2 Purpose of the loan: For Party B's daily operations and the expansion of the business.

1.3 Loan period: The loan period is 12 months, from June 28, 2020 to June 27, 2021. If the loan is paid in installments, the date of the last loan should be received no later than December 31, 2020.

1.4 Loan interest: The loan interest is an annual interest rate of 10%, calculated based on the actual amount received. If the loan is received in installments, the interest shall be calculated based on the actual date when Party B receives the cash.

1.5 Interest settlement date: The 25th of each quarter is the interest settlement date, which is, March 25, June 25, September 25, and December 25. Party B shall remit the interest payment to Party A’s bank account. Party B shall issue a receipt to Party B within five working days of receiving the interest payment.

1.6 Bank Information of Party A and Party B:

Party A:

Account name: Guangchengji (Shanghai) Industrial Co., Ltd.

Account number:

Bank: Bank of China Shanghai Pudong Avenue Sub-branch

Party B:

Account name: Shenzhen Tiantian Haodian Technology Co., Ltd.

Account number:

Bank: China Construction Bank Co., Ltd. Shenzhen Capitol Branch

1

Article 2 Representation and Warranties

2.1 Party B guarantees the safety of Party A’s principal and the 10% interest (guaranteed capital and interest).

2.2 Party A can require Party B to repay the loan in advance upon giving a 30 day notice, and the interest will be reduced accordingly.

2.3 Party B must use the loan legally in accordance with the purposes specified in this agreement, and must not use it for other purposes, or use the loan for illegal activities.

Article 3 Liability for breach of contract

3.1 If Party B violates any provisions and guarantees of this Agreement and causes Party A or other compensated parties to suffer losses, liabilities and expenses, Party B shall compensate Party A or other compensated parties (including but not limited to reimbursement to Party A or other compensated parties all expenses incurred by Party for the investigation, preparation and defense of this compensation clause), so as to protect Party A or other compensated parties from damage.

3.2 For any payment that Party B should pay to Party A in accordance with this Agreement, if Party A fails to pay in full on time as agreed in this Agreement, Party B will pay 0.005%/day penalty based on the amount of the delayed payment.

Article 4 Application of Law and Dispute Resolution

4.1 The conclusion, validity, interpretation, execution and dispute resolution of this Agreement are all subject to Chinese law.

4.2 Disputes arising during the implementation of this Agreement shall be settled through friendly negotiation between the parties, or mediated by the arbitration institution where Party A is located. If negotiation or mediation fails, a lawsuit may be filed in the people's court where Party A is located.

Article 5 Notification and Service

5.1 All notices or other communications under this Agreement shall be made in written form in Chinese, and sent to the other party of this agreement by post or by e-mail. If sent by post, it will be deemed to have been delivered on the third working day after the post is sent. Any notice will become effective as soon as it is served.

5.2 The notification addresses of the parties to this agreement are as follows:

Party A: Guangchengji (Shanghai) Industrial Co., Ltd.

Recipient: Pan Weicheng

Address: No.157 Linhe West Road, Tianhe District, Guangzhou Fixed Telephone: 020-87534735

Mobile phone:

Email address:

2

Party B: Shenzhen Tiantian Haodian Technology Co., Ltd.

Recipient: Chen Zhiping

Address: Qianwan 1st Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, Guangdong province, China

Telephone:

Mobile phone:

Email address:

5.3 If the above-mentioned correspondence address, recipient and email address of any party is changed, the other party shall be notified within three working days from the date of the change.

Article 6 Entry into force, modification and termination of the agreement

6.1 This agreement will become effective after being signed and stamped by the legal representatives of both parties. This contract is in quadruplicate, with each party holding two copies. The text of the contract has the same legal effect.

6.2 Party A may notify Party B to terminate this agreement giving 30 days notice and Party B shall pay the principal and interest to Party A on time.

(The following has no text, it is the signature page of Guangchengji (Shanghai) Industrial Co., Ltd. and Shenzhen Tiantian Haodian Technology Co., Ltd.)

Party A (Lender): Guangchengji (Shanghai) Industrial Co., Ltd.

Signature of Legal Representative:

Date of signing:

Party B (Borrower): Shenzhen Tiantian Haodian Technology Co., Ltd.

Signature of Legal Representative:

Date of signing:

3

EX-10.3

Exhibit 10.3

Loan Agreement

Party A (Borrower): Guangchengji (Shanghai) Industrial Co., Ltd.

Legal representative: Pan Weicheng

Unified Social Credit Code:

Party B (Lender):

ID No:

Based on the principles of equality, voluntariness, honesty and credibility, both parties reached the following agreement through friendly negotiation：

1. Party B agrees to lend to Party A RMB _____ . The actual loan amount is the cash transferred.

2. Purpose of the loan: For Party A's daily operations and expansion of business.

3. Loan period: The loan period is 12 months, from July __, 2020 to July ___, 2021. If the loan is paid in installments, the date of the last loan should be received no later than December 31, 2020.

4. Loan interest: The loan interest is an annual interest rate of 8%, calculated based on the actual amount received. If the loan is received in installments, the interest shall be calculated based on the actual date when Party B receives the loan. Interest shall be paid quarterly. If party A cannot remit payment on time due to special circumstances both parties can agree another payment time.

5. Party B or a third party appointed by Party B should deposit the loan to the following bank appointed by Party A:

Account name: Guangchengji (Shanghai) Industrial Co., Ltd.

Account number:

Bank: Bank of China Shanghai Pudong Avenue Sub-branch

6. Representations and Warranties:

6.1 Party A must use the loan legally in accordance with the purposes specified in this agreement, and must not embezzle it for other purposes, or use the loan for illegal activities.

6.2 the purpose of the loan is to for Party A's daily operations and expansion of business.

7. Settlement of Contract disputes

7.1 Disputes arising during the implementation of this Agreement shall be settled through friendly negotiation between the parties, or mediated by the arbitration institution appointed by both parties. If negotiation or mediation fails, a lawsuit may be filed in the people's court where Party A is located or Beijing Peoples’ Court or Hong Kong District court.

8. This agreement will become effective after being signed or stamped by both parties. This contract has two copies, with each party holding one copy. The text of the contract has the same legal effect.

Party A (Lender): Guangchengji (Shanghai) Industrial Co., Ltd.

Seal of Guangchengji (Shanghai) Industrial Co., Ltd.

Date of signing: July __, 2020

Party B (Borrower):

Date of signing: July __, 2020

EX-31.1

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION FOR FORM 10-Q (CEO) CERTIFICATION

I, Shanchun Huang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Future FinTech Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to the Company by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 14, 2020	By:	/s/ Shanchun Huang
		Shanchun Huang
		Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION FOR FORM 10-Q (CFO) CERTIFICATION

I, Jing Chen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Future FinTech Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to the Company by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 14, 2020	By:	/s/ Jing Chen
		Jing Chen
		Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION (CEO) 1350

FUTURE FINTECH GROUP INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Future FinTech Group Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shanchun Huang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2020	/s/Shanchun Huang
	Shanchun Huang
	Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION (CFO) 1350

FUTURE FINTECH GROUP INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Future FinTech Group Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof, the “Report”, I, Jing Chen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2020	/s/ Jing Chen
	Jing Chen
	Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 12, 2020
Document Information Line Items
Entity Registrant Name	Future FinTech Group Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		41,734,946
Amendment Flag	false
Entity Central Index Key	0001066923
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	001-34502
Entity Incorporation, State or Country Code	FL
Entity Interactive Data Current	Yes

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Cash and cash equivalents	$ 576,303	$ 539,316
Accounts receivable	464	4,954
Other receivables, net	44,668	7,489
Inventories	3,044	3,594
Advances to suppliers and other current assets	145,868	1,668,847
Loan receivables	206,512
Assets related to discontinued operation		92,772,786
TOTAL CURRENT ASSETS	976,859	94,996,986
Property, plant and equipment, net	16,466	17,855
Intangible assets, net	6,981,330	5,312,906
Amount due from related parties	3,089,063	3,402,823
Long term investments	12,250,000	12,250,000
TOTAL ASSETS	23,313,718	115,980,570
Accounts payable	316,783	320,378
Accrued expenses and other payables	2,661,944	2,574,471
Advances from customers	422,994	702,179
Short-term bank loans	844,805	957,990
Loans payable	2,252,556	1,972,909
Advances from issuance of the Company’s Common Stock	500,000
Liabilities related to discontinued operations		196,261,748
TOTAL CURRENT LIABILITIES	6,999,082	202,789,675
Amount due to related parties	1,603,177	1,268,101
TOTAL LIABILITIES	8,602,259	204,057,776
Commitments and contingencies (Note 14)
STOCKHOLDER’S EQUITY
Common stock, $0.001 par value; 60,000,000 shares authorized and 38,494,063 shares issued and outstanding as of June 30, 2020 and 33,810,416 shares issued and outstanding as of December 31, 2019, respectively	38,494	33,810
Additional paid-in capital	109,739,379	107,852,827
Accumulated deficits	(96,636,617)	(213,314,612)
Accumulated other comprehensive income	3,667,726	12,989,408
Total Future FinTech Group Inc. stockholders’ equity	16,808,982	(92,438,567)
Non-controlling interests	(2,097,523)	4,361,361
Total stockholders’ equity	14,711,459	(88,077,206)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 23,313,718	$ 115,980,570

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	38,494,063	33,810,416
Common stock, shares outstanding	38,494,063	33,810,416

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	[1]	Jun. 30, 2020	Jun. 30, 2019	[1]
Income Statement [Abstract]
Revenue	$ 113,687	$ 257,018		$ 313,638	$ 417,193
Cost of goods sold	9,359	116,649		9,872	246,210
Gross profit	104,328	140,369		303,766	170,983
Operating Expenses
General and administrative expenses	413,503	868,951		2,332,817	1,816,644
Selling expenses	7,693	492,221		20,474	558,201
Bad debt provision	210,510			4,413,564	7,443
Total operating expenses	631,706	1,361,172		6,766,855	2,382,288
Loss from operations	(527,378)	(1,220,803)		(6,463,089)	(2,211,305)
Other income (expense)
Interest income	62	3,900		188	3,921
Interest expenses	(26,682)	(21,405)		(53,819)	(112,807)
Other income (expenses)	16,657	(12,630)		(502,799)	3,402
Total other income (expenses)	(9,963)	(30,135)		(556,430)	(105,484)
Loss from Continuing Operations before Income Tax	(537,341)	(1,250,938)		(7,019,519)	(2,316,789)
Income tax provision		75			75
Loss from Continuing Operations, net of tax	(537,341)	(1,251,013)		(7,019,519)	(2,316,864)
Discontinued Operations (Note 9)
Loss from discontinued operations		(721,158)			(1,307,608)
Gain on disposal of discontinued operations				123,688,874
NET INCOME (LOSS)	(537,341)	(1,972,171)		116,669,355	(3,624,472)	[2]
Less: Loss attributable to the non-controlling interest	(8,578)	(382,318)		(8,640)	(705,963)
Net income (loss) attributable to Future Fintech Group, Inc. Common Shareholders	(528,763)	(1,589,853)		116,677,995	(2,918,509)
Comprehensive income (loss):
Net income (loss)	(537,341)	(1,972,171)		116,669,355	(3,624,472)	[2]
Foreign currency translation	(83,155)	5,757,890		(679,589)	5,192,088
Comprehensive income (loss)	(620,496)	3,785,719		115,989,766	1,567,616
Less: Comprehensive income (loss) attributable to non-controlling interest		1,056,105		(2,139,179)	705,963
Comprehensive Income (Loss) Attributable to Future Fintech Group, Inc. Common Shareholders	$ (620,496)	$ 2,729,614		$ 118,128,945	$ 861,653
Basic Earnings (Loss) per Share:
Basic loss per share from continuing operations (in Dollars per share)	$ (0.02)	$ (0.03)		$ (0.20)	$ (0.05)
Basic earnings (loss) per share from discontinued operations (in Dollars per share)		(0.02)		3.45	(0.04)
Basic Earnings (Loss) per Share from Net Income (Loss) (in Dollars per share)	(0.02)	(0.05)		3.25	(0.09)
Diluted Earnings (Loss) per Share:
Diluted loss per share from continuing operations (in Dollars per share)	(0.02)	(0.03)		(0.19)	(0.05)
Diluted earnings (loss) per share from discontinued operations (in Dollars per share)		(0.02)		3.39	(0.04)
Diluted Earnings (Loss) per Share from Net Income (Loss) (in Dollars per share)	$ (0.02)	$ (0.05)		$ 3.19	$ (0.09)
Weighted average number of shares outstanding
Basic (in Shares)	33,334,888	31,174,818		35,867,188	31,174,818
Diluted (in Shares)	34,004,411	31,844,341		36,536,711	31,844,341

[1] Reclassification- certain reclassifications have been made to the financial statements for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020, with no effect on previously reported net income (loss).

[2] Reclassification- certain reclassifications have been made to the statements of cash flow for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020.

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	[2]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 116,669,355	$ (3,624,472)	[1]
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	92,341	720,962
Bad debt	4,413,564	7,443
Gain on sale of discontinued operations	(123,688,874)
Share based compensation	1,191,000
Changes in operating assets and liabilities
Accounts receivable	4,491	(3,444,336)
Other receivable	(37,179)	7,730,081
Advances to suppliers and other current assets	(325,739)	(158,053)
Inventories	549	(174,005)
Accounts payable	(3,595)	56,289
Accrued expenses	87,473	(11,861,703)
Change in net assets related to discontinued operations	608,298	10,450,684
Advances from customers	(279,185)	550,779
Net Cash Provided by (Used in) Operating Activities	(1,267,501)	253,669
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for short-term loan investment	(206,512)
Net cash used in investing activities	(206,512)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from issuance of the Company’s Common Stock	500,000
Proceeds from loans from related parties	468,468
Repayment of amount due to related parties	(114,607)
Proceeds from secured convertible promissory note	533,278	503,818
Changes in net assets related to discontinued operations		31,803
Proceeds from loans	211,876
Proceeds from sale of discontinued operations	85,714
Net cash provided by financing activities	1,684,729	535,621
Effect of change in exchange rate	(173,729)	(755,177)
NET INCREASE IN CASH AND CASH EQUIVALENTS	36,987	34,113
Cash and cash equivalents, beginning of year	539,316	33,461
Cash and cash equivalents, end of period	576,303	67,574
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest
Cash paid for income taxes
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION
Conversion of convertible notes	$ 533,278

[1] Reclassification- certain reclassifications have been made to the financial statements for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020, with no effect on previously reported net income (loss).

[2] Reclassification- certain reclassifications have been made to the statements of cash flow for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020.

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional paid-in capital	Accumulated deficits	Accumulative other comprehensive income	Non- controlling interests	Total
Balance at Dec. 31, 2018	$ 31,017	$ 105,737,256	$ (188,085,680)	$ (8,961,549)	$ 4,601,121	$ (86,667,835)
Balance (in Shares) at Dec. 31, 2018	31,017,083
Issuance of common stocks as compensation	$ 650	9,598,150				9,598,800
Issuance of common stocks as compensation (in Shares)	650,000
Net income (loss)			(2,918,509)		(705,963)	(3,624,472)	[1],[2]
Foreign currency translation adjustment				5,192,088	(1)	5,192,087
Balance at Jun. 30, 2019	$ 31,667	115,335,406	(191,004,189)	(3,769,461)	3,895,157	(75,511,420)
Balance (in Shares) at Jun. 30, 2019	31,667,083
Balance at Mar. 31, 2019	$ 31,017	115,336,056	(189,414,336)	(9,877,494)	4,250,979	(79,673,778)
Balance (in Shares) at Mar. 31, 2019	31,017,083
Issuance of common stocks as compensation	$ 650	(650)
Issuance of common stocks as compensation (in Shares)	650,000
Net income (loss)			(1,589,853)		(382,318)	(1,972,171)	[1]
Foreign currency translation adjustment				6,108,033	26,496	6,134,529
Balance at Jun. 30, 2019	$ 31,667	115,335,406	(191,004,189)	(3,769,461)	3,895,157	(75,511,420)
Balance (in Shares) at Jun. 30, 2019	31,667,083
Balance at Dec. 31, 2019	$ 33,810	107,825,827	(213,314,612)	12,989,408	4,361,361	(88,077,206)
Balance (in Shares) at Dec. 31, 2019	33,810,416
Issuance of common stocks as compensation	$ 934	699,302				700,236
Issuance of common stocks as compensation (in Shares)	933,647
Net income (loss)			116,677,995		(8,640)	116,669,355
Share-based payments	$ 3,750	1,187,250				1,191,000
Share-based payments (in Shares)	3,750,000
Foreign currency translation adjustment				1,459,527	(2,139,117)	(679,590)
Disposal of discontinued operation				(10,781,209)	(4,311,127)	(15,092,336)
Balance at Jun. 30, 2020	$ 38,494	109,739,379	(96,636,617)	3,667,726	(2,097,523)	14,711,459
Balance (in Shares) at Jun. 30, 2020	38,494,063
Balance at Mar. 31, 2020	$ 38,140	109,474,497	(96,107,854)	3,750,881	(2,088,945)	15,066,719
Balance (in Shares) at Mar. 31, 2020	38,140,415
Issuance of common stocks as compensation	$ 354	264,882				265,236
Issuance of common stocks as compensation (in Shares)	353,648
Net income (loss)			(528,763)		(8,578)	(537,341)
Foreign currency translation adjustment				(83,155)		(83,155)
Balance at Jun. 30, 2020	$ 38,494	$ 109,739,379	$ (96,636,617)	$ 3,667,726	$ (2,097,523)	$ 14,711,459
Balance (in Shares) at Jun. 30, 2020	38,494,063

[1] Reclassification- certain reclassifications have been made to the financial statements for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020, with no effect on previously reported net income (loss).

[2] Reclassification- certain reclassifications have been made to the statements of cash flow for the period ended June 30, 2019 to conform to the presentation for the period ended June 30, 2020.

XML

Business Description

6 Months Ended

Jun. 30, 2020

Business Description [Abstract]

BUSINESS DESCRIPTION

1. BUSINESS DESCRIPTION

Future FinTech Group Inc. (together with our direct or indirect subsidiaries, “we,” “us,” “our” or “the Company”) is a holding company incorporated under the laws of the State of Florida. The main business of the Company includes an online shopping platform, Chain Cloud Mall (CCM), which is based on blockchain technology; a cross-border e-commerce platform (NONOGIRL) which started its trial operation in March 2020 and formally launched in July 2020; a blockchain-based application incubator and a digital payment system (DCON); and the application and development of blockchain-based e-commerce technology and financial technology.

Prior to 2019, the Company engaged in the production and sales of fruit juice concentrates, fruit juice beverages and other fruit-related products in the People’s Republic of China (“PRC”, or “China”), and overseas markets. Due to the drastically increased production cost and tightened environmental law in China, the Company has transformed its business from fruit juice manufacturing and distribution to a real-name blockchain e-commerce platform that integrates blockchain and internet technology from the end of 2018. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by the Company’s subsidiary, HeDeTang Holdings (HK) Ltd (“HeDeTang HK”), and New Continent International Co., Ltd. on September 18, 2019, the Company sold HeDeTang HK and all its subsidiaries, which mainly engaged in fruit juice related business, to New Continent International Co., Ltd.

On April 23, 2020, Future FinTech (Hong Kong) Limited registered GuangChengJi (Shanghai) Industrial Co., Ltd. (“Guangchengji”) with a registered capital of $30 million in Shanghai, China, which needs to be paid before April 22, 2049 when the business license will expire. The business scope of Guangchengji includes wholesaling of electronic components and equipment, metal materials, petroleum products, import and export business, computer software development, information technology, technology consulting and services, business management consulting and supply chain management.

The Company’s activities are principally conducted by its subsidiaries operating in the PRC. 

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2020 and the results of operations and cash flows for the periods ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2020. The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date.

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

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

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2019 as included in our Annual Report on Form 10-K.

Going Concern

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

The Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. In order to meet its working capital needs through the next twelve months and to fund the growth of the Company, the Company may consider plans to raise additional funds through the issuance of equity or debt. Although the Company intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional financing on terms that are favorable or acceptable to it, if at all.

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

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For a detailed discussion about the Company significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in the Company’s consolidated financial statements included in Company’s 2019 Form 10-K. During the three months ended June 30, 2020, there were no significant changes made to the Company’s significant accounting policies. 

Uses of Estimates in the Preparation of Financial Statements

The Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but not limited to, the allowance for doubtful receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our condensed consolidated financial statements.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. ASU 2016-13 will be effective on January 1, 2023. We are currently evaluating the effect of the adoption of ASU 2016-13 and believe it does not have any material impact on our results of operations or financial. 

In August 2020, the FASB issued Accounting Standards Update No. 2020-06 (ASU 2020-06) “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. For public business entities that are not smaller reporting companies, ASU 2020-6 effective fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. We are currently evaluating the effect of the adoption of ASU 2020-06 and believe it does not have any material impact on our results of operations or financial.  

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

XML

Loan Receivables

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

LOAN RECEIVABLES

4. LOAN RECEIVABLES

As of June 30, 2020, the balance of loan receivables was $0.21 million, which was from Shenzhen Tiantian Haodian Technology Co., Ltd. (“Tiantian Haodian”) On June 28, 2020, Guangchengji, a wholly owned subsidiary of Future FinTech (Hong Kong) Limited, entered into a “Loan Agreement” with Tiantian Haodian. Pursuant to the Loan Agreement, Guangchengji agrees to lend cash up to but not greater than $5 million with Tiantian Haodian at the annual interest rate of 10% from June 28, 2020 to June 27, 2021. The interest is paid quarterly. There is no collateral or guarantee provided by Tiantian Haodian.

XML

Related Party Transaction

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTION

5. RELATED PARTY TRANSACTION

The Company did not have any sales to related parties for the six months ended June 30, 2020 and June 30, 2019, respectively.

The amount due to the related parties was $1.60 million as of June 30, 2020, which consisted of the followings:

Name of Related Party from Whom Amounts were Received	Amount (US$)		Relationship	Note
Shanchun Huang		416,496	Chief Executive Officer of the Company	Loan payable
Shaanxi Fullmart Convenient Chain Supermarket Co., Ltd. (“Fullmart”)		7,063	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company. Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. holds 16.67% equity of Fullmart.	Accounts payables
Shaanxi Fullmart Convenient Chain Supermarket Management Co., Ltd. (“Fullmar Management”)		134,190	83.33% of the equity share of Fullmart management is owned by  Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd., which is owned 100% by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Accounts payables
Kai Xu		20,484	Chief Operating Officer  of the Company	Payable to employee
InUnion Chain Ltd. (“INU”)		288,695	The Company is the 10% equity shareholder of INU	Accounts payables
Zhi Yan		58,707	Chief Technology Officer of the Company	Payable to employee
Jing chen		4,706	Chief Financial Officer of the Company	Payable to employee
Zeyao Xue		305,725	Son of the Chairman of the Company and a major shareholder of the Company of the Company	Loan payable
Shenzen TianShunDa Equity Investment Fund Management Co., Ltd. (the “TSD”)		310,610	TSD holds 26.36% of the equity interest of SkyPoeple (China), a subsidiary of the Company, which was sold to New Continent International Co., Ltd. on February 27, 2020.	Accounts payables
Weicheng Pan		56,501	Legal representative of GuangChengJi (Shanghai) Co., Ltd., a subsidiary of Future Fintech (Hong Kong) Limited	Loan payable

The amount due from the related parties was $3.09 million as of June 30, 2020, which consisted of the followings:  

Name of Related Party to Whom the Amounts were Paid	Amount (US$)		Relationship	Note
Shaanxi Chunlv Ecological Agriculture Co., Ltd.		2,999,780	Holds 20.0% interest in CCM logistics	Including creditor’s rights of Shaanxi Youyi Co., Ltd  of $3.24 million, which is partially offset by $0.24 million  payable to the Company
Shaanxi Fullmart Commercial Holdings (Xi’an) Co., Ltd.		23,024	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Service fee due
Shaanxi Quangou Convenient Island Co., Ltd.		23,470	Fullmart holds 33.33% its equity	Interest free loan*
Yongke Xue		42,337	Chairman of the Company	Interest free loan*

* The interest free loans have been approved by the Company’s Audit Committee.

XML

Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

On May 1, 2020, the Company launched CCM v3.0, which creates a new value cycle system of online shopping malls with a real-name blockchain system. After the launch of CCM v3.0, the Company reclassified this prepaid asset into intangible assets in the second quarter of 2020, which will be amortized over 10 years.

Also included in the intangible assets is land use right. The government of the PRC, its agencies and collectives hold all land ownership. Companies or individuals are authorized to use the land only through land usage rights granted by the PRC government. Land usage rights can be transferred upon approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land transfer fee. Accordingly, the Company paid in advance for land usage rights. Prepaid land usage rights are being amortized and recorded as lease expenses using the straight-line method over the terms of the leases, which range from 40 to 50 years. The amortization expense was $0.09 million and $0.59 million for the six months ended June 30, 2020.

The following table sets intangible assets of the Company as of June 30, 2020 and December 31, 2019, respectively.

	CCM						Land Use Right
	June 30,			December 31,			June 30,			December 31,
	2020			2019			2020			2019
Cost	$	1,878,664		$	43,004		$	5,761,692		$	5,847,008
Less: Accumulated amortization		(34,843	)		(2,114	)		(624,183	)		(574,992	)
Balance as of June 30, 2020	$	1,843,821			40,890		$	5,137,509		$	5,272,016

The following table summarizes the expected amortization expense for the following years (in thousands):

	Amortization to be
Year ending December 31,	recognized
2020 (excluding the six months ended March 31, 2020)	$	151
2021		303
2022		303
2023		303
2024		303
2025 and thereafter		5,618
Total	$	6,981

XML

Long Term Investment

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

LONG TERM INVESTMENT

7. LONG TERM INVESTMENT

On June 22, 2018, Digipay Fintech Limited (“Digipay”), a wholly-owned subsidiary of the Company acquired 10% ownership interest in InUnion Chain Ltd. (“InUnion”) for an aggregate purchase price of $15 million (the “Purchase Price”) pursuant to a Shares Transfer and IUN Digital Assets Investment Agreement signed with Lake Chenliu, who are the sole owner of InUnion (the “Seller”). The Company issued 5 million of its Common Stock to the Seller on October 19, 2018.

Upon acquiring the InUnion Shares, Digipay have access to, and the use of, certain software, technology and related intellectual property of InUnion without further payment. Digipay also have the right to designate a director nominee to the board of directors of InUnion.

As of December 31, 2019, management assessed the value of the above investment, and recorded an impairment loss of $2.5 million. As of June 30, 2020, the balance of this long-term investment was $12.25 million. 

XML

Common Stocks Issued

6 Months Ended

Jun. 30, 2020

Common Stocks Issued [Abstract]

COMMON STOCKS ISSUED

8. COMMON STOCKS ISSUED

On May 13, 2019, the Company issued 500,000 of its Common Stock to two employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Company’s 2017 Omnibus Equity Plan (the “Plan”). On June 5, 2019, the Company issued 150,000 shares of its Common Stock to three employees granted in December 2018 by the Compensation Committee of the Board pursuant to the Plan. 

Common stocks issued in connection with the convertible notes

On January 6, 2020, the Company entered into the Eighth Exchange Agreement (the “Eighth Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”). Pursuant to the Eighth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $145,000 (the “Eighth Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Eighth Partitioned Note for the delivery of 193,333 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On January 15, 2020, the Company entered into the Ninth Exchange Agreement (the “Ninth Exchange Agreement”) with the Lender. Pursuant to the Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $140,000 (the “Ninth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Ninth Partitioned Note. The Company and Lender further agreed to exchange the Partitioned Note for the delivery of 186,666 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On March 11, 2020, the Company entered into the Tenth Exchange Agreement (the “Tenth Exchange Agreement”) with the Lender.

Pursuant to the Tenth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $150,000 (the “Tenth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Partitioned Note for the delivery of 200,000 shares of the Company’s Common Stock, according to the terms and conditions of the Exchange Agreement.

On April 17, 2020, the Company entered into the Eleventh Exchange Agreement (the “Eleventh Exchange Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).

Pursuant to Eleventh Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $153,750 (the “Eleventh Partitioned Note”) from a Secured Convertible Promissory Note (the “Note”) issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Eleventh Partitioned Note. The Company and Lender further agreed to exchange the Eleventh Partitioned Note for the delivery of 205,000 shares of the Company’s Common Stock, according to the terms and conditions of the Eleventh Exchange Agreement.

On June 10, 2020, the Company entered into the Twelfth Exchange Agreement (the “Twelfth Exchange Agreement”) with the Lender.

Pursuant to the Twelfth Exchange Agreement, the Company and Lender agreed to partition a new Secured Convertible Promissory Note in the original principal amount of $111,486 (the “Twelfth Partitioned Note”) from the Note issued by the Company on March 26, 2019. The outstanding balance of the Note shall be reduced by an amount equal to the outstanding balance of the Partitioned Note. The Company and Lender further agreed to exchange the Twelfth Partitioned Note for the delivery of 148,648 shares of the Company’s Common Stock, according to the terms and conditions of the Twelfth Exchange Agreement.

Consulting Service Agreement

On January 25, 2020, the Company entered into a Consulting Service Agreement (the “Agreement”) with Dragon Investment Holding Limited (Malta) (the “Consultant”), a company incorporated in Malta, pursuant to which Consultant will: (i) help the Company to locate new merger projects globally, develop new merger strategy and provide the Company with at least five (5) merger and acquisition targets that have synergy with the Company’s business and development plans and could clearly contribute to the Company’s strategic goals each year; (ii) help the Company to map out new growth strategies in addition to its current business; (iii) work with the Company to explore new lines of business and associated growth strategies; and (iv) conduct market research and evaluating variable projects and providing feasibility studies per Company’s request from time to time. The term of the Agreement is three years. In consideration of the services to be provided by Consultant to the Company, the Company agrees to pay the Consultant a three-year consulting fee totaling $3 million. The Company shall issue a total of 3,750,000 restricted shares of the Company Common Stock (the “Consultant Shares”) at a price of $0.794 per share, (the closing price of the Agreement date), as the payment for the above mentioned consultant fee to the Consultant. On February 23, 2020, The Company issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately, 1,125,000 and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January 25, 2022 if this Agreement has not been terminated and there has been no breach of the Agreement by the Consultant at such time. If the second and/or third release of the shares mentioned above does not occur, such shares shall be returned to the Company as treasury shares. The shares contemplated in the Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. For the six months ended June 30, 2020, the Company recorded stock related compensation of $1.19 million, based on the stock closing price of $0.794 on the Agreement date, for the 1,500,000 shares which were released to the Consultant immediately upon issuance. The Company will recognize stock related compensation of $1.79 million for the 2,250,000 shares in the future when they are released to the Consultant pursuant to the Agreement. 

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

9. DISCONTINUED OPERATIONS

HeDeTang HK

On September 18, 2019, HeDeTang HK entered into a Share Transfer Agreement (the “Agreement”) with New Continent International Co., Ltd., (the “Buyer”) a company incorporated in the British Virgin Islands. Pursuant to the terms of the Agreement, the Buyer purchased 100% ownership of HeDeTang HK, which value is primarily derived from HeDeTang HK’s wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd. and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total price of RMB 600,000 (approximately $85,714) (the “Sale Transaction”). The Sale Transaction was closed on February 27, 2020. In accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC Topic 205”), the Company presented the operation results from HeDeTang HK’s and subsidiaries as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued component. The total assets of HeDeTang HK were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $123.69 million. There was no income or loss from HeDeTang HK from January 1, 2020 to the sale.

Huludao Wonder

The discontinued operation presented in the financial statement for the period ended June 30, 2019 includes Huludao Wonder operation, a subsidiary which produces concentrated apple juice. In December 2016, the Company established a winding-down plan to close this operation. Based on the restructuring plan and in accordance with ASC 205-20, the Company presented the operating results from Huludao Wonder as a discontinued operation, as the Company believed that no continued cash flow would be generated by the disposed component (Huludao Wonder) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance with ASC 205-20. In accordance with the restructuring plan, the Company intended to transfer the concentrated fruit juice production equipment in Huludao Wonder to another subsidiary and to sell the land use right and facilities upon favorable circumstances. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by HeDeTang HKand New Continent International Co., Ltd. on September 18, 2019, the ownership of Huludao Wonder was transferred as a subsidiary of HeDeTang HK to New Continent International Co., Ltd.

On March 11, 2020, the Company’s Board of Directors passed a resolution to sell the operation of Globalkey Supply Chain limited and Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian Hengxin”) and close the operation of Digital Online Marketing Limited, Future Digital Fintech (Xi’an) Co., Ltd., SkyPeople Foods Holding Ltd. and Chain Future Digital Tech (Beijing) Co., Ltd. Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation.

XML

Variable Interest Entities

6 Months Ended

Jun. 30, 2020

Variable Interest Entities [Abstract]

VARIABLE INTEREST ENTITIES

10. VARIABLE INTEREST ENTITIES

On July 31, 2019, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited (“CCM Tianjin”), Chain Cloud Mall E-commerce (Tianjin) Co., Ltd., (“E-commerce Tianjin”), and Mr. Zeyao Xue and Mr. Kai Xu, citizens of China and shareholders of E-commerce Tianjin, entered into the following agreements, or collectively, the “Variable Interest Entity Agreements” or “VIE Agreements,” pursuant to which CCM Tianjin has contractual rights to control and operate the business of E-commerce Tianjin (the “VIE”). Therefore, pursuant to ASC 810, E-Commerce Tianjin is included in the Company’s condensed consolidated financial statements since then.

Pursuant to Chinese law and regulations, a foreign owned enterprise cannot apply for and hold a license for operation of certain e-commerce businesses, and the category of business which the Company plans to expand in China. CCM Tianjin is an indirectly wholly foreign owned enterprise of the Company. In order to comply with Chinese law and regulations, CCM Tianjin agreed to provide E-commerce Tianjin an Exclusive Operation and Use Rights Authorization to operate and use the Chain Cloud Mall System owned by CCM Tianjin.

E-commerce Tianjin was incorporated by Mr. Zeyao Xue and Mr. Kai Xu solely for the purpose of holding the operation license of the Chain Cloud Mall System. Mr. Zeyao Xue is a major shareholder of the Company and the son of Mr. Yongke Xue, our Chairman and Chief Executive Officer. Mr. Kai Xu is the Chief Operating Officer of the Company.

For the details about the VIE agreements, refer to Note 15 “Variable Interest Entities,” in the Company’s consolidated financial statements included in Company’s 2019 Form 10-K.

XML

Accrued Expenses and Other Payables

6 Months Ended

Jun. 30, 2020

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

ACCRUED EXPENSES AND OTHER PAYABLES

11. ACCRUED EXPENSES AND OTHER PAYABLES

The amount of accrued expenses and other payables were $2.66 million and $2.57 million as of June 30, 2020 and December 31, 2019, respectively, which consisted of the followings:

	June 30, 2020		December 31, 2019
Construction expenses payable	$	610,691	$	619,734
Acquisition of Intangibles		308,080		15,374
Legal fee and other professionals		332,587		382,781
Wages and employee reimbursement		571,332		597,140
Suppliers		284,219		388,940
Accrued interest		85,600		85,600
Accrued tax payable		124,311		134,668
Others		345,124		350,234
Total	$	2,661,944	$	2,574,471

XML

Loan Payable

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

LOAN PAYABLE

12. LOAN PAYABLE

As of June 30, 2020, loan payable were $2.25 million, which consisted of the loan payable of $1.84 million to Shaanxi Zhongcai Pawn Co., Ltd., loan payable of $0.20 million to Shaanxi Entai Bio-Technology Co., Ltd and loan payable $0.21 million to Shenzhen Wangjv Trading Co., Ltd.

Hedetang Farm Product Trading Market (Mei County) Co., Ltd. (“Hedetang Market”), a subsidiary of GlobalKey Tianjin, entered into a loan agreement with Shaanxi Zhongcai Pawn Co., Ltd. ("Zhongcai") in February 2015. Pursuant to the loan agreement, Hedetang Market borrowed $1.84 million from Zhongcai at the monthly interest rate of 0.4%. Hedetang Market provided its land use right as a as a pledge for the loan. Hedetang Market did not return the principal and interest on time pursuant to the loan agreement. Zhongcai filed an enforcement request with Xi’an Intermediate People’s Court in July 2015. In August 2017, the Intermediate Court of Xi’an issued a verdict to seize the pledged land use rights of Hedetang Market for auction. As of the date of this report, the auction sale was successful.  The Company recorded the unpaid amount of $1.84 million as loan payable.

The loan from Shaanxi Entai Bio-Technology Co., Ltd of $0.20 million was an interest free loan and there is not assets pledged for this loan.

On June 15, 2020, the Company entered into a loan agreement with Shenzhen Wangjv Trading Co., Ltd. Pursuant to the loan agreement, the Company borrowed $0.21 million from Shenzhen Wangjv Trading Co., Ltd. at the annual interest rate of 8% for the use of working capital for a year.

XML

Advances from Issuance of Common Stock

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

ADVANCES FROM ISSUANCE OF COMMON STOCK

13. ADVANCES FROM ISSUANCE OF COMMON STOCK

On June 16, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Qun Xie  (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser in a private placement 500,000 shares (the “Shares”) of the Company’s Common Stock, purchase price of $1.00 per share for an aggregate offering price of $500,000 (the “Private Placement”). The Private Placement will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. On June 30, 2020, Qun Xie paid $500,000, and the Company recorded $500,000 as advances from issuance of the Common Stock in current liability. On August 7, the Company issued 500,000 Shares pursuant to this Agreement.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES

Litigation

Legal case with Beijing Bank

On June 29, 2015, SkyPeople China entered into a loan agreement with Beijing Bank. Pursuant to the loan agreement, SkyPeople China borrowed RMB 30 million (approximately $4.36 million) from Beijing Bank. Hongke Xue, Yongke Xue and Xiujun Wang provided guarantees for the loan and Shaanxi Boai Medical Technology Development Co., Ltd. (“Shaanxi Boai”) provided certain real estate property as a pledge for the loan. SkyPeople China did not repay the loan on time and Beijing Bank filed an enforcement request with Xi’an Intermediate People’s Court in June 2017. The Xi’an Intermediate People’s Court seized real estate properties pledged by Shaanxi Boai and Xiujun Wang. In November 2018, the Court sold the real estate property pledged by Xiujun Wang at RMB 1.17 million (approximately $0.17 million). Because the real estate property is Xiujun Wang’s primary home, the Court allocated RMB 0.12 million to Xiujun Wang as transition home leasing fee and deducted outstanding mortgage payments, and the remaining amount was delivered to the Beijing Bank as the repayment. The Court has also made inquiries to the Beijing Bank as to whether it is willing to accept the pledged real estate property of Shaanxi Boai as the repayment of the outstanding loan for the amount of RMB 27.93 million (approximately $4.06 million) but Beijing Bank has refused to take the real property as repayment of the loan and the enforcement action has been terminated by the Court on December 18, 2018. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Ningxia Bank

On March 8, 2016, SkyPeople China entered into a loan agreement with Ningxia Bank. Pursuant to the loan agreement, SkyPeople China borrowed RMB 25 million (approximately $3.63 million) from Ningxia Bank. Hongke Xue, Yongke Xue, Lake Chen, Shaanxi Boai Medical Technology Development Co., Ltd. and Shaanxi Qiyiwangguo provided guarantees for the loan. SkyPeople China also pledged 37 pieces of equipment and the related trademarks to Ningxia Bank for the loan. SkyPeople China has not repaid the loan and Ningxia Bank filed an enforcement action with Xi’an Intermediate people’s court in August 2017. The Court has frozen the assets of SkyPeople China that were pledged as guarantee for the loan from being transferred to any third-party, but the freeze does not limit or affect the use of these properties by SkyPeople China for its business. In July 2018, Shaanxi Qiyiwangguo filed a petition to the Court and requested the termination of the enforcement action on the basis that its guarantee of the loan was not valid because the seal used on the guarantee agreement was not authentic and the guarantee was not approved by the shareholders of Shaanxi Qiyiwangguo. On November 27, 2018, Shaanxi Qiyiwangguo withdrew its petition. The Court agreed to such withdrawal and there has been on other progress of this case. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020.  The creditors have no recourse to the current Company.

Legal case with China Construction Bank

On December 23, 2015, SkyPeople China entered into two loan agreements with China Construction Bank. Pursuant to the loan agreements, SkyPeople China borrowed RMB 13.90 million (approximately $2.13 million), and RMB 30 million (approximately $4.59 million) from China Construction Bank, respectively. Shaanxi Boai Medical Technology Development Co., Ltd. (“Boai”), Hongke Xue, Yongke Xue, Xiujun Wang and Yingkou Trusty Fruits Co., Ltd. (“Yingkou”) provided pledges for the loans. SkyPeople China has not repaid the loans and China Construction Bank filed an enforcement action with Xi’an Intermediate People’s Court in March 2017. In December 2017, SkyPeople China received the enforcement notice from the Court. The Court has seized certain parking space and land use rights pledged by Xiujun Wang and Boai and sold the land use right pledged by Boai in auction for approximately RMB 24,835,790 as repayment to China Construction Bank. The Court also seized certain land use rights pledged by Yingkou Trusty Fruits Co., Ltd., but the auction sale for those assets was not successful. As of June 30, 2020, SkyPeople China still owe the unpaid amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020.  The creditors have no recourse to the current Company.

On May 9, 2016, SkyPeople China entered into loan agreements with China Construction Bank. Pursuant to the loan agreements, SkyPeople China borrowed RMB 22.9 million (approximately $3.50 million) from China Construction Bank. Shaanxi Province Credit Reassurance Company (“Credit Reassurance Company”) provided a guarantee to China Construction Bank for the loan, Hongke Xue and Yongke Xue provided their guarantees, and SkyPeople China provided an office space that it owned to Credit Reassurance Company as a pledge. SkyPeople China has not repaid the loan and Credit Reassurance Company repaid the loan for SkyPeople China. In June 2017, Credit Reassurance filed an enforcement action request with Xi’an Intermediate People’s Court (the “Court”) in June 2017. In December 2017, SkyPeople China received the enforcement notice from the Court. The Court issued a verdict to seize the office space of SkyPeople China for auction sale on December 26, 2017. In February 2018, the auction sale was conducted but not successful. In June 2018, the Court decided to use the pledge property as the repayment for the outstanding loan of RMB 12.21 million (approximately $1.78 million).

Legal case with China Cinda Asset Management Co., Ltd.

In April 2015, China Cinda Asset Management Co., Ltd. Shaanxi Branch (“Cinda Shaanxi Branch”) filed two enforcement proceedings with Xi’an Intermediate People’s Court (the “Court”) against SkyPeople China for alleged defaults pursuant to guarantees by SkyPeople China to its suppliers for a total amount of RMB 39.60 million or approximately $5.8 million.

In September 2014, two long term suppliers of pear, mulberry, and kiwi fruits to SkyPeople China requested that SkyPeople China provide guarantees for their loans with Cinda Shaanxi Branch. Considering the long term business relationship and to ensure the timely supply of raw materials, SkyPeople China agreed to provide guarantees on the value of the raw materials supplied to SkyPeople China. Because Cinda Shaanxi Branch is not a bank authorized to provide loans, it eventually provided financing to the two suppliers through the purchase of accounts receivables of the two suppliers with SkyPeople China. In July 2014, the parties entered into two agreements – an Accounts Receivables Purchase and Debt Restructure Agreement, and Guarantee Agreements for Accounts Receivables Purchase and Debt Restructure. Pursuant to the agreements, Cinda Shaanxi Branch agreed to provide a RMB 100 million credit line on a rolling basis to the two suppliers and SkyPeople China agreed to pay its accounts payables to the two suppliers directly to Cinda Shaanxi Branch and provided guarantees for the two suppliers. In April 2015, Cinda Shaanxi Branch stopped providing financing to the two suppliers and the two suppliers were unable to continue the supply of raw materials to SkyPeople China. Consequently, SkyPeople China stopped making any payment to Cinda Shaanxi Branch.

SkyPeople China has responded to the Court and taken the position that the financings under the agreements are essentially the loans from Cinda Shaanxi Branch to the two suppliers, and because Cinda Shaanxi Branch does not have permits to make loans in China, the agreements are invalid, void and had no legal effect from the beginning. Therefore, SkyPeople China has no obligation to repay the debts owed by the two suppliers to Cinda Shaanxi Branch.

Upon the Court’s suggestion, the parties agreed to a settlement discussion in April 2017. As a part of the settlement discussion, on April 18, 2017, SkyPeople China withdrew its non-enforcement request with the Court without prejudice. As of June 30, 2020, SkyPeople China still have liability of $5.8 million related with these two enforcement proceedings. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Cinda Capital Financing Co., Ltd.

In August 2017, Cinda Capital Financing Co., Ltd. (“Cinda”) filed a lawsuit with Beijing 2nd Intermediate People’s Court (the “Beijing Intermediate Court”) against the Company’s indirectly wholly-owned subsidiaries Shaanxi Guoweimei Kiwi Deep Processing Company, Ltd. (“Guoweimei”) and Hedetang Market (Hedetang Market and together with Guoweimei, “Lessees”) requested that Lessees repay RMB 50 million (approximately $7.27 million) in capital lease fees, plus interest. Cinda purchased or paid for refrigerant warehouse and trading hall to the suppliers and vendors and agreed to lease them to the Lessees for a leasing fee of RMB 50 million in December 2016. The capital leasing fee became due on its maturity date of June 2017, with certain land use rights of Lessees in Mei County and equity of Guoweimei as a pledge. The Company disputed that the land use rights for the refrigerant warehouse and trading hall were never sold to or transferred to Cinda, and argues that therefore it is a loan agreement and not a capital lease agreement among the parties. Lessees have taken the position that Cinda is not a bank and does not have government permits required to make loans in China, and the agreements including pledge agreement were invalid, void and without legal effect from the beginning. Therefore, the Company only has the obligations to repay principal but not the interest. In November 2017, Beijing Intermediate Court ruled in favor of Cinda and the Lessees appealed the case to the Beijing Supreme Court. The Beijing Supreme Court held a hearing at the end of July 2018. On December 4, 2018, the Beijing Supreme Court upheld the lower court’s decision. On April 8, 2019, Beijing Intermediate Court issued the verdict for enforcement of the judgment and the plaintiff has the priority rights for the repayment for the pledged land use rights of Lessees in Mei County and equity of Guoweimei. The case is under enforcement procedure and Cinda is in the process of sale the land use rights. Before the land use right is sold, the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

In August 2017, Cinda Capital Financing Co., Ltd. (“Cinda”) filed another lawsuit with Beijing Intermediate Court against the Company’s indirectly wholly-owned subsidiaries Guoweimei and SkyPeople China for repayment of a leasing fee of RMB 84.97 million (approximately $12.35 million) plus interest. In January 2014, Guoweimei and SkyPeople China (the “Equipment Lessees”) signed an Equipment Financial Lease Purchase Agreement with Cinda and an equipment supplier pursuant to which Cinda would provide funds to purchase equipment and the Equipment Lessees would lease the equipment from Cinda. Guoweimei pledged certain land use rights in Mei County to Cinda and Xi’an Hedetang and Hedetang Holding pledged their equities in Guoweimei to Cinda to secure the repayment. Mr. Hongke Xue also provided a personal guarantee for the payment of the leasing fee. Beijing Intermediate Court had two hearings of the case and on March 21, 2018, and it ruled in favor of Cinda to the effect that SkyPeople China and Guoweimei shall pay leasing fees due in the amount of RMB 21.00 million (approximately $3.05 million), as well as leasing fees not yet due in the amount of RMB 63.98 million (approximately $9.30 million), plus attorney’s fees and expenses. Beijing Intermediate Court also ruled that Mr. Hongke Xue is jointly liable for the debt as the guarantor, and that Cinda has priority rights to the pledged land use rights in Mei County and the pledged equities of Guoweimei as well as the ownership of the leasing properties until the leasing fees are paid. SkyPeople China has appealed the decision to the Beijing Supreme Court. The Beijing Supreme Court rejected the appeal and upheld the original verdict on September 7, 2018. The case is under enforcement procedure and Cinda is in the process of sale the seized properties. Before they are sold, the subsidiaries of SkyPeople China still owns the seized properties and the liabilities to Cinda. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Fangtian Decoration Co., Ltd

In April 2015, SkyPeople China entered into a loan agreement with Shaanxi Fangtian Decoration Co., Ltd. (“Fangtian”). Pursuant to the loan agreement, SkyPeople China borrowed RMB 3.5 million (approximately $508,780) from Fangtian. SkyPeople China has not repaid the loan and Fangtian filed a lawsuit with Xi’an Yanta District People’s Court (“Yanta District Court”). On August 10, 2017, Yanta District Court ruled against SkyPeople China and determined that SkyPeople China must repay the loan of RMB 3.5 million plus interest RMB of 0.40 million (approximately $585,098). Fangtian has requested court enter into enforcement procedures for the case. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shanghai Pudong Development Bank

On May 4, 2015, SkyPeople China and Xi’an Branch of Shanghai Pudong Development Bank (SPD Bank Xi’an Branch) renewed a Working Capital Loan Contract and Repayment Schedule, according to which both parties agreed that SPD Bank Xi’an Branch loaned RMB 26.9 million (approximately $3.92 million) to SkyPeople China with a term of one year. On the signing date of the Loan Contract, Hongke Xue, Yongke Xue, Xiujun Wang and SPD Bank Xi’an Branch signed a Contract of Guaranty guaranteeing the repayment of loan and undertaking joint liability. According to a Mortgage Contract of Maximum Amount signed between SkyPeople China and SPD Bank Xi’an Branch on April 2, 2013, SkyPeople China provided the property and land use rights of Jingyang factory as the pledge. In October 2015, SPD Bank Xi’an Branch filed an enforcement request with the Intermediate Court of Xi’an and the Court seized the property and the land use rights of Jingyang factory. During the enforcement procedure, SPD Bank Xi’an Branch transferred its creditor’s rights to China Huarong Asset Management Co., Ltd. (“China Huarong”). The Court changed the execution applicant to China Huarong. In March 2019, the Intermediate Court of Xi’an issued a verdict for the transfer of the pledged property and land use rights of Jingyang factory to China Huarong as the repayment of the loan.

Legal case with Shaanxi Fangyuan construction co., Ltd.

Shaanxi Guoweimei Kiwi Deep Processing Co., Ltd (“Guoweimei”), entered into a construction agreement with Shaanxi Fangyuan construction co., Ltd. (“Fangyuan”) in July 2013. On October 8, 2018, Fangyuan filed a lawsuit and requested that Guoweimei pay a project construction fee plus penalty of RMB 56.32 million (approximately $8.22 million). On June 10, 2019, Baoji Intermediate People’s Court issued a verdict that Guoweimei must pay RMB 41.58 million (approximately $6.07 million) plus penalty to Fangyuan, and Fangyuan will enjoy preferential right for the projects in processing zone of National Wholesale and Trading Center in Mei County for Kiwi Fruits developed by Guoweimei. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Zhongkun Construction Co., Ltd.

In May 2015, Hedetang Market and Shaanxi Zhongkun Construction Co., Ltd. (“Zhongkun”) entered into a construction and decoration agreement. On September 5, 2018, Zhongkun filed the lawsuit with Mei County People’s Court (the “Court”) for repayment of construction and decoration fees. The Court issued a civil judgement in November 2018, ordering Hedetang Market to pay project funds of RMB 1.65 million (approximately $0.24 million) to Zhongkun, plus interest. On April 19, 2020, the Court issued a verdict to terminate the enforcement because assets of Hedetang Market had already been seized by Xi’an Yanta District People’s Court and Baoji Intermediate People’s Court, and there were no other assets for enforcement. Currently the Company is still liable for the unpaid amount and the interest.

Legal case with Xi’an Shanmei Food Co., Ltd.

On October 31, 2017, Xi’an Shanmei Food Co., Ltd. filed a lawsuit against Shaanxi Qiyiwangguo, a majority-owned subsidiary of the Company, with Zhouzhi County People’s Court in connection with a Land Lease Agreement entered into by the parties on October 1, 2013. On March 2, 2018, Zhouzhi County People’s Court issued a verdict that: (i) the Land Lease Agreement was thereby terminated; (ii) Shaanxi Qiyiwangguo shall pay Xi’an Shanmei the outstanding leasing fee RMB 0.21 million (approximately $30,762) and (iii) Shaanxi Qiyiwangguo shall return the 29.3 mu industrial use land to Xi’an Shanmei. Shaanxi Qiyiwangguo has appealed the decision to the Xi’an Intermediate People’s Court on the basis that: (x) the land use right was a capital contribution by Xi’an Shanmei for a shareholder of Shaanxi Qiyiwangguo who is also the sole shareholder of Xi’an Shanmei and the Land Lease Agreement was invalid and has no legal effect; (y) Zhouzhi Court did not schedule the hearing for the count claims filed by Shaanxi Qiyiwangguo; and (z) Zhouzhi Court violated certain civil procedures during the trial of the case. Due to the late notice to Zhouzhi Court, the case file was not timely transferred to Xi’an Intermediate Court and no appeal hearing was scheduled. Zhouzhi Court has issued verdict for enforcement procedure and Qiyiwangguo has filed petition of disagreement for the enforcement which is still under Zhouzhi Court’s review. On January 23, 2019, the Court rejected the petition of disagreement and the case has been under enforcement procedure. As of June 30, 2020, Shaanxi Qiyiwanggu has not repaid the amount. Shaanxi Qiyiwanggu was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Nanjing Bailuotong Logistics Services Co., Ltd.

In January 2016 Shaanxi Qiyiwangguo and Nanjing Bailuotong Logistics Services Co., Ltd (“Bailutong”) entered into a transportation agreement to ship fruit juices. Bailutong failed to deliver the juice products and held them after their expiration date. Shaanxi Qiyiwangguo filed a lawsuit against Bailutongwith Zhouzhi county People’s Court, and the Court issued the verdict in February 2018 that: (1) the transportation contract between Shaanxi Qiyiwangguo and Bailutong was terminated, and (2) Bailutong owed RMB0.20 million (approximately $29,715) to Shaanxi Qiyiwangguo for the loss of Shaanxi Qiyiwangguo. Bailutong appealed the case to Xi’an Intermediate People’s Court. Xi’an Intermediate People’s Court rejected the appeal and upheld the original verdict. As of the date of this report, Shaanxi Qiyiwangguo has not received the payment of RMB0.20 million from Bailutong.

Legal case with Henan Huaxing Glass Co., Ltd.

Shaanxi Qiyiwangguo entered into an agreement with Henan Huaxing Glass Co., Ltd. (“Huaxing”) in May 2014 for Huaxing to supply glass bottles to Shaanxi Qiyiwangguo. However, due to the disputes regarding the quality of products supplied by Huaxing, Shaanxi Qiyiwangguo did not pay the prices for certain glass bottles. In August 2017, Huaxing filed a lawsuit and the court ruled that Shaanxi Qiyiwangguo owed Huaxing RMB 203,742 (approximately $29,743) in July 2018. During the enforcement process, the parties reached a settlement agreement but Shaanxi Qiyiwangguo failed to pay the amount due and now the case is still in the court enforcement process. As of June 30, 2020, Shaanxi Qiyiwanggu has not repaid the amount. Shaanxi Qiyiwanggu was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Huludao Banking Co., Ltd.

In September 2016, the Suizhong Branch of Huludao Banking Co., Ltd. (“Suizhong Branch”) filed a lawsuit with Huludao Intermediate People’s Court (the “Huludao Court”) against the Company’s indirectly wholly-owned subsidiary Huludao Wonder Fruit Co., Ltd. (“Wonder Fruit”) and requested that Wonder Fruit repay a RMB 40 million (approximately $5.81 million) bank loan, plus interest. The loan became due on its maturity date of December 9, 2016. On December 19, 2016, the Huludao Court accepted the case. The Company has been disputing the interest rate of the loan with Suizhong Branch, and has not repaid the loan to date. Wonder Fruit believes that the interest charged by Suizhong Branch is 100% higher than the base rate set by People’s Bank of China and is not consistent with the China People’s Bank’s base interest and floating rate. The Huludao Court has seized land use rights, buildings and equipment of Wonder Fruit that were pledged as guarantee for the loan and has organized two auction sales for these assets in January and February of 2018, but both auction sales have been unsuccessful in finding a buyer. On July 19, 2018, the Court issued a verdict ordering Huludao Wonder to transfer its land use rights, building, equipment, electronic and transportation assets to Zuizhong Branch as payment of the outstanding principal, auction and evaluation fees and some interest of the loan for RMB 42.64 million (approximately $6.22 million). As of June 30, 2020, there was RMB 11.95 million (approximately $1.74 million) in interest on the loan unpaid. Huludao Wonder was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Andrew Chien

In September 2017, Andrew Chien, a former consultant of SkyPeople China, brought a lawsuit against the Company and Mr. Hongke Xue in the District Court of Connecticut (the “Court”). The complaint was not properly served and the Company learned of the litigation in December 2017. In the complaint, Mr. Chien has made several claims, most of which attempt to hold the Company liable under novel legal theories that relate back to an alleged breach of a consulting agreement between SkyPeople China and Chien from August 2006. Mr. Chien claimed approximately $257,000 damages and interest plus 2.00% of the Company’s then-outstanding shares. Mr. Chien has unsuccessfully attempted to sue the Company on the breach of the same consulting agreement several times in the courts of Connecticut and New York, and these cases have been dismissed. The Company has filed a motion to dismiss (“MTD”) and all proceedings are stayed pending determination of the MTD. On August 31, 2018, the Court granted our MTD. On September 10, 2018, Mr. Chien filed a motion for reconsideration. On September 28, 2018, the Court denied Mr. Chien’s motion for reconsideration. On October 26, 2018, Mr. Chien appealed the case to the United States Court of Appeals for the Second Circuit.  The Court of Appeals affirmed the trial court’s dismissal of the action on January 22, 2020, and denied Mr. Chien’s petition for en banc rehearing on March 27, 2020.  Mr. Chien’s time to pursue a discretionary appeal to the Supreme Court of the United States has lapsed and the case is closed.

Legal case with Luwei

In 2018, Mr. Luwei, an individual, filed a claim for arbitration against SkyPeople China in Xi’an Arbitration Commission for breach of contract pursuant to a new share purchase agreement and a share redemption agreement. On April 11, 2019, Xi’an Arbitration Commission made its decision and ordered SkyPeople China to repay RMB 3 million investment to Luwei. Mr. Luwei applied with Intermediate Court of Xi’an (the “Court”) for enforcement of the arbitration award which process was terminated by the Court due to no assets for enforcement. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Overseas Investment Development Corp.

In November 2019, Shaanxi Overseas Investment Development Corp (“Shaanxi Overseas Investment”) filed a lawsuit against SkyPeople China, Hongke Xue and Shenzhen Tian Shun Da Equity Investment Fund Management Co., Ltd. (“Shenzhen Tian Shun Da”) pursuant to an investment agreement entered in March 2016. According to the agreement, Shaanxi Overseas Investment agreed to invest RMB 5 million for the preferred shares of SkyPeople China with an annual interest rate of 2.38%. Shenzhen Tian Shun Da pledged 1.17% of the shares SkyPeople China that it owned and Hongke Xue provided guarantee for the performance of agreement by SkyPeople China. SkyPeople China failed to make the interests payment and Shaanxi Overseas Investment filed the lawsuit for breach of agreement. On December 26, 2019, Yanta District Court of Xi’an City (the “Court”) ordered SkyPeople China to pay Shaanxi Overseas Investment the preferred share redemption amount of RMB 5 million plus penalty which is calculated based upon the RMB 5 million at a rate of 24% a year. The Court also ruled that Shaanxi Overseas Investment may sell the pledged shares owned by Shenzhen Tianshun Da as the repayment for SkyPeople China and Hongkong Xue shall also assume the repayment obligation as guarantor. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

Legal case with Shaanxi Wanyuan Construction Co., Ltd.

In July 2019, Shaanxi Wanyuan Construction Co., Ltd. (“Wanyuan) filed a lawsuit with Shaanxi Baoji Municipal Intermediate People’s Court (the “Baoji Court”) against Guoweimei for repayment of construction and decoration costs of RMB 55.07 million pursuant to a Construction and Decoration Agreement entered by the parties in May 2017. In July 2019, the Baoji Court ordered Guoweimei to pay construction and decoration costs of RMB55.07 million to Wanyuan, plus interest. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company.

XML

Risks and Uncertainties

6 Months Ended

Jun. 30, 2020

Risks and Uncertainties [Abstract]

RISKS AND UNCERTAINTIES

15. RISKS AND UNCERTAINTIES

Impact of COVID 19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world. Substantially all of our revenues are generated in China. The Company’s results of operations has affected by the outbreak of COVID-19 in China.  In early 2020, Chinese government took emergency measures to combat the spread of the virus, including quarantines, travel restrictions, and the temporary closure of office buildings and facilities in China, which has adversely affected the Company’s business and services and results of operations. Our suppliers have negatively been affected, and could continue to be negatively affected in their ability to supply and ship products to our customers. Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase products and services from us, which may materially adversely impact our revenue. The business operations of the third parties’ stores on our platform have been and could continue to be negatively impacted by the outbreak, which may negatively impact their operations and business, which may in turn adversely affect the business of our platform as a whole as well as our financial condition and operating results. Some of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions, Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we require additional capital.

The Company’s promotion strategy of the CCM Shopping Mall previously mainly relied on the training of members and distributors through meetings and conferences. Although China has already begun to recover from the outbreak of COVID-19,  the Chinese government still put a restriction on large gatherings. These restrictions made the promotion strategy for CCM Shopping Mall difficult to implement.

Consequently, our results of operations has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Chinese and global economy. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control. 

PRC Regulations

We conduct substantially all of our operations and generate most of our revenue in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. The PRC economy is in transition from a planned economy to a market oriented economy subject to plans adopted by the government that set national economic development goals. Policies of the PRC government can have significant effects on economic conditions in the PRC.

Currency risks

A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

Credit risks

The Company extends unsecured credit to its customers in the normal course of business and generally does not require collateral. As a result, management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of accounts receivable. In the analysis, management primarily considers the age of the customer’s receivable and also considers the credit worthiness of the customer, the economic conditions of the customer’s industry, and general economic conditions and trends, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts.  If judgments regarding the collectability of accounts receivables are incorrect, adjustments to the allowance may be required, which would reduce profitability.   

XML

Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS

In July 2020, the Company entered a series of loan agreements with fourteen individuals for a total amount of $4.961 million. On August 4, 2020, the Company entered into a Debt Repayment Agreement with these individuals (the “Creditors”), pursuant to which the Company agreed to repay $4,961,000 debt owed to the Creditors in the form of shares of Common Stock of the Company for an aggregate of 2,740,883 shares at a price of $1.81 per share (the “Debt Repayment”). The Debt Repayment will be completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. The Company issued 2,740,883 shares of its Common Stock to the Creditors on August 12, 2020.

On June 28, 2020, Guangchengji entered  into a “Loan Agreement” with Shenzhen Tiantian Haodian. (Refer to Note 4- “Loan Receivables”). Pursuant to the Loan Agreement, Guangchengji transferred $0.21 million to Guangchengji on June 29, 2020 and $4.73 million in July 2020.

On July 13, 2020, the Company and Future FinTech (Hong Kong) Limited, a wholly owned subsidiary of the Company entered into a Share Exchange Agreement with Nice Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”), which is licensed under the Security and Futures Commission of Hong Kong for assets management, and Joy Rich Enterprises Limited, a limited company organized under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich”), pursuant to which the Company agreed to acquire 90% of the issued and outstanding ordinary shares of Nice (the “Nice Shares”) from Joy Rich in exchange for the Company’s Common Stock.

Pursuant to the terms of the Share Exchange Agreement, the parties agreed: (i) the aggregate purchase price for Nice Shares shall be HK$54 million (approximately $6.97 million, the “Purchase Price”) and it shall be paid in the Company’s Common Stock; (ii) 40% of the Purchase Price HK$21.6 million (approximately $2.79 million) shall be paid in the shares of common stock of the Company based on the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to the date of the Agreement and the foreign exchange rate between HK$ and US$ shall be the rate published by Bloomberg on the date of the Agreement; (iii) 30% of Purchase Price shall be paid in the Company Common Stock (the “2020 Earn-Out Shares”) if Nice meets certain earnings goal for 2020 (the “2020 Earnings Goal”); (iv) the 2020 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2020 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2020; (v) additional 30% of Purchase Price shall be paid in the shares of common stock the Company (the “2021 Earn-Out Shares”) if Nice meets certain earnings goal for 2021 (the “2021 Earnings Goal”); (vi) the 2021 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2021 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2021; (vii) if Nice does not achieve its earnings goal for a given year, the parties agree to have forbearance clause that the amount of such year’s earn-out shares shall not be reduced for that year if Nice achieves at least sixty percent (60%) of its given year earnings goal and if Nice achieves lower than 60% earnings goal for a given year, the amount of such year’s earn-out shares shall be reduced to zero. The Company Shares will be issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

On July 22, 2020, the Company established Future Commercial Management (Beijing) Co., Ltd. Its scope of business includes management and consulting services.

On July 28, 2020, the Company, entered into a Standstill Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).

Pursuant to the Standstill Agreement, Lender agreed to refrain and forbear temporarily from making redemptions under certain Secured Promissory Note that was sold and issued by the Company to the Lender on December 19, 2019 in the original principal amount of $1,060,000 (the “Note”). Lender agreed not to redeem any portion of the Note (the “Standstill”) for a period beginning on the date of the Agreement and ending on the date that is ninety (90) days from the date of the Agreement. As a material inducement and partial consideration for Lender’s agreement to enter into the Agreement, the Company agreed that the outstanding balance of the Note shall be increased by nine percent (9%) on the date of the Agreement (the “Standstill Fee”). The Company and Lender agreed that, following the application of the Standstill Fee, the outstanding balance of the Note is $1,209,636.  

XML

Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Uses of Estimates in the Preparation of Financial Statements

Uses of Estimates in the Preparation of Financial Statements

The Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but not limited to, the allowance for doubtful receivable, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our condensed consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. ASU 2016-13 will be effective on January 1, 2023. We are currently evaluating the effect of the adoption of ASU 2016-13 and believe it does not have any material impact on our results of operations or financial. 

In August 2020, the FASB issued Accounting Standards Update No. 2020-06 (ASU 2020-06) “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. For public business entities that are not smaller reporting companies, ASU 2020-6 effective fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. We are currently evaluating the effect of the adoption of ASU 2020-06 and believe it does not have any material impact on our results of operations or financial.  

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

XML

Related Party Transaction (Tables)

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Schedule of related party transactions to whom the amounts were paid

Name of Related Party from Whom Amounts were Received	Amount (US$)		Relationship	Note
Shanchun Huang		416,496	Chief Executive Officer of the Company	Loan payable
Shaanxi Fullmart Convenient Chain Supermarket Co., Ltd. (“Fullmart”)		7,063	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company. Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. holds 16.67% equity of Fullmart.	Accounts payables
Shaanxi Fullmart Convenient Chain Supermarket Management Co., Ltd. (“Fullmar Management”)		134,190	83.33% of the equity share of Fullmart management is owned by  Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd., which is owned 100% by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Accounts payables
Kai Xu		20,484	Chief Operating Officer  of the Company	Payable to employee
InUnion Chain Ltd. (“INU”)		288,695	The Company is the 10% equity shareholder of INU	Accounts payables
Zhi Yan		58,707	Chief Technology Officer of the Company	Payable to employee
Jing chen		4,706	Chief Financial Officer of the Company	Payable to employee
Zeyao Xue		305,725	Son of the Chairman of the Company and a major shareholder of the Company of the Company	Loan payable
Shenzen TianShunDa Equity Investment Fund Management Co., Ltd. (the “TSD”)		310,610	TSD holds 26.36% of the equity interest of SkyPoeple (China), a subsidiary of the Company, which was sold to New Continent International Co., Ltd. on February 27, 2020.	Accounts payables
Weicheng Pan		56,501	Legal representative of GuangChengJi (Shanghai) Co., Ltd., a subsidiary of Future Fintech (Hong Kong) Limited	Loan payable

Schedule of related party transactions to whom the amounts were paid

Name of Related Party to Whom the Amounts were Paid	Amount (US$)		Relationship	Note
Shaanxi Chunlv Ecological Agriculture Co., Ltd.		2,999,780	Holds 20.0% interest in CCM logistics	Including creditor’s rights of Shaanxi Youyi Co., Ltd  of $3.24 million, which is partially offset by $0.24 million  payable to the Company
Shaanxi Fullmart Commercial Holdings (Xi’an) Co., Ltd.		23,024	Shaanxi Fullmart Commercial Holding (Xi’an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.	Service fee due
Shaanxi Quangou Convenient Island Co., Ltd.		23,470	Fullmart holds 33.33% its equity	Interest free loan*
Yongke Xue		42,337	Chairman of the Company	Interest free loan*

XML

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	CCM						Land Use Right
	June 30,			December 31,			June 30,			December 31,
	2020			2019			2020			2019
Cost	$	1,878,664		$	43,004		$	5,761,692		$	5,847,008
Less: Accumulated amortization		(34,843	)		(2,114	)		(624,183	)		(574,992	)
Balance as of June 30, 2020	$	1,843,821			40,890		$	5,137,509		$	5,272,016

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Amortization to be
Year ending December 31,	recognized
2020 (excluding the six months ended March 31, 2020)	$	151
2021		303
2022		303
2023		303
2024		303
2025 and thereafter		5,618
Total	$	6,981

XML

Accrued Expenses and Other Payables (Tables)

6 Months Ended

Jun. 30, 2020

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

Schedule of expenses and other payables

	June 30, 2020		December 31, 2019
Construction expenses payable	$	610,691	$	619,734
Acquisition of Intangibles		308,080		15,374
Legal fee and other professionals		332,587		382,781
Wages and employee reimbursement		571,332		597,140
Suppliers		284,219		388,940
Accrued interest		85,600		85,600
Accrued tax payable		124,311		134,668
Others		345,124		350,234
Total	$	2,661,944	$	2,574,471

XML

Business Description (Details)	1 Months Ended
	Apr. 23, 2020
Business Description [Abstract]
Description of business transaction	Future FinTech (Hong Kong) Limited registered GuangChengJi (Shanghai) Industrial Co., Ltd. (“Guangchengji”) with a registered capital of $30 million in Shanghai, China, which needs to be paid before April 22, 2049 when the business license will expire. The business scope of Guangchengji includes wholesaling of electronic components and equipment, metal materials, petroleum products, import and export business, computer software development, information technology, technology consulting and services, business management consulting and supply chain management.

XML

Loan Receivables (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Loan Receivables (Details) [Line Items]
Invest of cash	$ 5,000
Annual interest rate	10.00%
Shenzhen Tiantian Haodian Technology [Member]
Loan Receivables (Details) [Line Items]
Loan receivables	$ 210

XML

Related Party Transaction (Details) - Related Parties [Member]	Jun. 30, 2020 USD ($)
Related Party Transaction (Textual)
Dur to related party	$ 1,600,000
Due from the related parties	$ 3,090,000

XML

Related Party Transaction (Details) - Schedule of related party transactions from whom amounts were received	6 Months Ended
	Jun. 30, 2020 USD ($)
Shanchun Huang [Member]
Related Party Transaction [Line Items]
Amount	$ 416,496
Relationship	Chief Executive Officer of the Company
Note	Loan payable
Shaanxi Fullmart Convenient Chain Supermarket [Member]
Related Party Transaction [Line Items]
Amount	$ 7,063
Relationship	Shaanxi Fullmart Commercial Holding (Xi'an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company. Shaanxi Fullmart Commercial Holding (Xi'an) Co., Ltd. holds 16.67% equity of Fullmart.
Note	Accounts payables
Shaanxi Fullmart Convenient Chain Supermarket Management Co., Ltd. [Member]
Related Party Transaction [Line Items]
Amount	$ 134,190
Relationship	83.33% of the equity share of Fullmart management is owned by Shaanxi Fullmart Commercial Holding (Xi'an) Co., Ltd., which is owned 100% by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.
Note	Accounts payables
Kai Xu [Member]
Related Party Transaction [Line Items]
Amount	$ 20,484
Relationship	Chief Operating Officer of the Company
Note	Payable to employee
InUnion Chain Ltd. [Member]
Related Party Transaction [Line Items]
Amount	$ 288,695
Relationship	The Company is the 10% equity shareholder of INU
Note	Accounts payables
Zhi Yan [Member]
Related Party Transaction [Line Items]
Amount	$ 58,707
Relationship	Chief Technology Officer of the Company
Note	Payable to employee
Jing chen [Member]
Related Party Transaction [Line Items]
Amount	$ 4,706
Relationship	Chief Financial Officer of the Company
Note	Payable to employee
Zeyao Xue [Member]
Related Party Transaction [Line Items]
Amount	$ 305,725
Relationship	Son of the Chairman of the Company and a major shareholder of the Company of the Company
Note	Loan payable
Shenzen TianShunDa Equity Investment Fund Management Co., Ltd. [Member]
Related Party Transaction [Line Items]
Amount	$ 310,610
Relationship	TSD holds 26.36% of the equity interest of SkyPoeple (China), a subsidiary of the Company, which was sold to New Continent International Co., Ltd. on February 27, 2020.
Note	Accounts payables
Weicheng Pan [Member]
Related Party Transaction [Line Items]
Amount	$ 56,501
Relationship	Legal representative of GuangChengJi (Shanghai) Co., Ltd., a subsidiary of Future Fintech (Hong Kong) Limited
Note	Loan payable

XML

Related Party Transaction (Details) - Schedule of related party transactions to whom the amounts were paid	6 Months Ended
	Jun. 30, 2020 USD ($)
Shaanxi Chunlv Ecological Agriculture Co. Ltd. [Member]
Related Party Transaction (Details) - Schedule of related party transactions to whom the amounts were paid [Line Items]
Amount	$ 2,999,780
Relationship	Holds 20.0% interest in CCM logistics
Note	Including creditor's rights of Shaanxi Youyi Co., Ltd of $3.24 million, which is partially offset by $0.24 million payable to the Company
Quangoutong Commercial Holdings (Xi’an) Co., Ltd [Member]
Related Party Transaction (Details) - Schedule of related party transactions to whom the amounts were paid [Line Items]
Amount	$ 23,024
Relationship	Shaanxi Fullmart Commercial Holding (Xi'an) Co., Ltd. was 100% owned by Xiu Jun Wang, the ex-wife of Yongke Xue, the Chairman of the Company.
Note	Service fee due
Shaanxi Quangou Convenient Island Co. Ltd. [Member]
Related Party Transaction (Details) - Schedule of related party transactions to whom the amounts were paid [Line Items]
Amount	$ 23,470
Relationship	Fullmart holds 33.33% its equity
Note	Interest free loan*	[1]
Yongke Xue [Member]
Related Party Transaction (Details) - Schedule of related party transactions to whom the amounts were paid [Line Items]
Amount	$ 42,337
Relationship	Chairman of the Company
Note	Interest free loan*	[1]

[1] The interest free loans have been approved by the Company's Audit Committee.

XML

Intangible Assets (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Intangible Assets (Details) [Line Items]
Leases Term, Useful life	10 years
Minimum [Member]
Intangible Assets (Details) [Line Items]
Leases Term, Useful life	40 years
Amortization expense (in Dollars)	$ 90
Maximum [Member]
Intangible Assets (Details) [Line Items]
Leases Term, Useful life	50 years
Amortization expense (in Dollars)	$ 590

XML

Intangible Assets (Details) - Schedule of intangible assets - USD ($)	Jun. 30, 2020	Dec. 31, 2019
CCM [Member]
Cost	$ 1,878,664	$ 43,004
Less: Impairment Loss	(34,843)	(2,114)
Balance as of June 30, 2020	1,843,821	40,890
Land Use Right [Member]
Cost	5,761,692	5,847,008
Less: Impairment Loss	(624,183)	(574,992)
Balance as of June 30, 2020	$ 5,137,509	$ 5,272,016

XML

Intangible Assets (Details) - Schedule of amortization expense	Jun. 30, 2020 USD ($)
Schedule of amortization expense [Abstract]
2020 (excluding the six months ended March 31, 2020)	$ 151
2021	303
2022	303
2023	303
2024	303
2025 and thereafter	5,618
Total	$ 6,981

XML

Long Term Investment (Details) - USD ($) $ in Thousands, shares in Millions	12 Months Ended
	Dec. 31, 2019	Jun. 30, 2020	Oct. 19, 2018	Jun. 22, 2018
Debt Disclosure [Abstract]
Ownership interest				10.00%
Purchase price				$ 15,000
Shares issued (in Shares)			5
Finance lease, impairment loss	$ 2,500
Long term investment		$ 12,250

XML

Common Stocks Issued (Details) - USD ($)									1 Months Ended	6 Months Ended
	Jun. 10, 2020	Mar. 11, 2020	Feb. 23, 2020	Jan. 25, 2020	Jan. 15, 2020	Jan. 06, 2020	Jun. 05, 2019	May 13, 2019	Apr. 17, 2020	Jun. 30, 2020	Dec. 31, 2019
Common Stocks Issued (Textual)
Common stock issue as bonus							150,000	500,000
Common stock, par value (in Dollars per share)										$ 0.001	$ 0.001
Consulting Service Agreement [Member]
Common Stocks Issued (Textual)
Conversion of stock				3,750,000
Term of agreement				3 years
Consulting fee totaling (in Dollars)				$ 3,000,000
Common stock, par value (in Dollars per share)				$ 0.794
Description of shares			The Company issued the Consultant Shares pursuant to the Agreement, of which 1,500,000 shares were released to the Consultant immediately, 1,125,000 and 1,125,000 shares, respectively, will be held by the Company and released to the Consultant on January 25, 2021 and January 25, 2022 if this Agreement has not been terminated and there has been no breach of the Agreement by the Consultant at such time. If the second and/or third release of the shares mentioned above does not occur, such shares shall be returned to the Company as treasury shares. The shares contemplated in the Agreement were issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.
Stock related compensation, description										the Company recorded stock related compensation of $1.19 million, based on the stock closing price of $0.794 on the Agreement date, for the 1,500,000 shares which were released to the Consultant immediately upon issuance. The Company will recognize stock related compensation of $1.79 million for the 2,250,000 shares in the future when they are released to the Consultant pursuant to the Agreement.
Purchase Agreement [Member]
Common Stocks Issued (Textual)
Original principal amount (in Dollars)						$ 145,000
Conversion of stock						193,333
Ninth Exchange Agreement [Member]
Common Stocks Issued (Textual)
Original principal amount (in Dollars)					$ 140,000
Conversion of stock					186,666
Tenth Exchange Agreement [Member]
Common Stocks Issued (Textual)
Original principal amount (in Dollars)		$ 150,000
Conversion of stock		200,000
Eleventh Exchange Agreement [Member]
Common Stocks Issued (Textual)
Original principal amount (in Dollars)									$ 153,750
Conversion of stock									205,000
Twelfth Exchange Agreement [Member]
Common Stocks Issued (Textual)
Original principal amount (in Dollars)	$ 111,486
Conversion of stock	148,648

XML

Discontinued Operations (Details)	1 Months Ended
	Sep. 18, 2019
Discontinued Operations (Textual)
Discontinued operation, description	Pursuant to the terms of the Agreement, the Buyer purchased 100% ownership of HeDeTang HK, which value is primarily derived from HeDeTang HK’s wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd. and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total price of RMB 600,000 (approximately $85,714) (the “Sale Transaction”). The Sale Transaction was closed on February 27, 2020. In accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC Topic 205”), the Company presented the operation results from HeDeTang HK’s and subsidiaries as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued component. The total assets of HeDeTang HK were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $123.69 million. There was no income or loss from HeDeTang HK from January 1, 2020 to the sale. Huludao Wonder The discontinued operation presented in the financial statement for the period ended June 30, 2019 includes Huludao Wonder operation, a subsidiary which produces concentrated apple juice. In December 2016, the Company established a winding-down plan to close this operation. Based on the restructuring plan and in accordance with ASC 205-20, the Company presented the operating results from Huludao Wonder as a discontinued operation, as the Company believed that no continued cash flow would be generated by the disposed component (Huludao Wonder) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance with ASC 205-20. In accordance with the restructuring plan, the Company intended to transfer the concentrated fruit juice production equipment in Huludao Wonder to another subsidiary and to sell the land use right and facilities upon favorable circumstances. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by HeDeTang HKand New Continent International Co., Ltd. on September 18, 2019, the ownership of Huludao Wonder was transferred as a subsidiary of HeDeTang HK to New Continent International Co., Ltd. On March 11, 2020, the Company’s Board of Directors passed a resolution to sell the operation of Globalkey Supply Chain limited and Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian Hengxin”) and close the operation of Digital Online Marketing Limited, Future Digital Fintech (Xi’an) Co., Ltd., SkyPeople Foods Holding Ltd. and Chain Future Digital Tech (Beijing) Co., Ltd.

XML

Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accrued Expenses (Textual)
Accrued expenses and other payables	$ 2,660	$ 2,570

XML

Accrued Expenses and Other Payables (Details) - Schedule of expenses and other payables - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Schedule of expenses and other payables [Abstract]
Construction expenses payable	$ 610,691	$ 619,734
Acquisition of Intangibles	308,080	15,374
Legal fee and other professionals	332,587	382,781
Wages and employee reimbursement	571,332	597,140
Suppliers	284,219	388,940
Accrued interest	85,600	85,600
Accrued tax payable	124,311	134,668
Others	345,124	350,234
Total	$ 2,661,944	$ 2,574,471

XML

Loan Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 15, 2020
Loans payable	$ 2,250
Shenzhen Wangjv Trading [Member]
Loans payable	210
Interest rate		8.00%
Termination loans		$ 210
Shaanxi Zhongcai Pawn Co. Ltd. [Member]
Loans payable	1,840
Shaanxi Entai Bio-Technology Co. Ltd. [Member]
Loans payable	200
Interest free loan amount	200
Hedetang Market [Member]
Market borrowed	$ 1,840
Interest rate	0.40%
Loan unpaid	$ 1,840

XML

Advances from Issuance of Common Stock (Details) - USD ($)		1 Months Ended
	Aug. 07, 2020	Jun. 16, 2020
Issuance of common stock		$ 500,000
Employee Stock Ownership Plan (ESOP), Fair Value of Shares Subject to Repurchase Obligation	$ 500,000
Private Placement [Member]
Private placement common shares (in Shares)		500,000
Common stock purchase price (in Dollars per share)		$ 1.00
Private placement common shares value		$ 500,000
Subsequent Event [Member]
Private placement common shares (in Shares)	500,000

XML

Commitments and Contingencies (Details)							1 Months Ended											6 Months Ended	12 Months Ended
	Oct. 08, 2018	Mar. 02, 2018	Aug. 10, 2017 USD ($)	Aug. 10, 2017 CNY (¥)	May 09, 2016 USD ($)	May 09, 2016 CNY (¥)	Nov. 30, 2019	Jul. 31, 2019	Nov. 30, 2018	Sep. 30, 2017 USD ($)	Aug. 31, 2017 USD ($)	Sep. 30, 2016	Jan. 31, 2016 USD ($)	Jan. 31, 2016 CNY (¥)	Dec. 23, 2015 CNY (¥)	May 31, 2015	Sep. 30, 2014	Jun. 30, 2020 USD ($)	Dec. 31, 2018 USD ($)	Aug. 31, 2017 CNY (¥)	Aug. 30, 2017 USD ($)	Aug. 30, 2017 CNY (¥)	May 09, 2016 CNY (¥)	Mar. 06, 2016 USD ($)	Mar. 06, 2016 CNY (¥)	Jun. 29, 2015 USD ($)	Jun. 29, 2015 CNY (¥)	May 04, 2015 USD ($)	May 04, 2015 CNY (¥)	Apr. 30, 2015 USD ($)	Apr. 30, 2015 CNY (¥)	Apr. 15, 2015 USD ($)	Apr. 15, 2015 CNY (¥)
Commitments and Contingencies (Textual)
Litigation, description									the Court sold the real estate property pledged by Xiujun Wang at RMB 1.17 million (approximately $0.17 million). Because the real estate property is Xiujun Wang’s primary home, the Court allocated RMB 0.12 million to Xiujun Wang as transition home leasing fee and deducted outstanding mortgage payments, and the remaining amount was delivered to the Beijing Bank as the repayment. The Court has also made inquiries to the Beijing Bank as to whether it is willing to accept the pledged real estate property of Shaanxi Boai as the repayment of the outstanding loan for the amount of RMB 27.93 million (approximately $4.06 million) but Beijing Bank has refused to take the real property as repayment of the loan and the enforcement action has been terminated by the Court on December 18, 2018.		Beijing Intermediate Court had two hearings of the case and on March 21, 2018, and it ruled in favor of Cinda to the effect that SkyPeople China and Guoweimei shall pay leasing fees due in the amount of RMB 21.00 million (approximately $3.05 million), as well as leasing fees not yet due in the amount of RMB 63.98 million (approximately $9.30 million), plus attorney’s fees and expenses.
Bank Of Beijing [Member]
Commitments and Contingencies (Textual)
Loan borrowed																										$ 4,360,000	¥ 30,000,000
Ningxia Bank [Member]
Commitments and Contingencies (Textual)
Loan borrowed																								$ 3,630,000	¥ 25,000,000
China Construction Bank [Member]
Commitments and Contingencies (Textual)
Loan borrowed					$ 3,500,000																		¥ 22,900,000
Agreement, description															SkyPeople China entered into two loan agreements with China Construction Bank. Pursuant to the loan agreements, SkyPeople China borrowed RMB 13.90 million (approximately $2.13 million), and RMB 30 million (approximately $4.59 million) from China Construction Bank, respectively.
Repayments of debt					$ 1,780,000	¥ 12,210,000									¥ 24,835,790
China Cinda Asset Management Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Line of credit, description																	two long term suppliers of pear, mulberry, and kiwi fruits to SkyPeople China requested that SkyPeople China provide guarantees for their loans with Cinda Shaanxi Branch. Considering the long term business relationship and to ensure the timely supply of raw materials, SkyPeople China agreed to provide guarantees on the value of the raw materials supplied to SkyPeople China. Because Cinda Shaanxi Branch is not a bank authorized to provide loans, it eventually provided financing to the two suppliers through the purchase of accounts receivables of the two suppliers with SkyPeople China. In July 2014, the parties entered into two agreements – an Accounts Receivables Purchase and Debt Restructure Agreement, and Guarantee Agreements for Accounts Receivables Purchase and Debt Restructure. Pursuant to the agreements, Cinda Shaanxi Branch agreed to provide a RMB 100 million credit line on a rolling basis to the two suppliers and SkyPeople China agreed to pay its accounts payables to the two suppliers directly to Cinda Shaanxi Branch and provided guarantees for the two suppliers. In April 2015, Cinda Shaanxi Branch stopped providing financing to the two suppliers and the two suppliers were unable to continue the supply of raw materials to SkyPeople China. Consequently, SkyPeople China stopped making any payment to Cinda Shaanxi Branch.
Cinda Capital Financing Co. Ltd. [Member]
Commitments and Contingencies (Textual)
Lease, description											Lessees repay RMB 50 million (approximately $7.27 million) in capital lease fees, plus interest. Cinda purchased or paid for refrigerant warehouse and trading hall to the suppliers and vendors and agreed to lease them to the Lessees for a leasing fee of RMB 50 million in December 2016.
Lessees repayment											$ 12,350,000									¥ 84,970,000
China Cinda Asset Management Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Guarantee amount																														$ 5,800,000	¥ 39,600,000
SkyPeople China [Member]
Commitments and Contingencies (Textual)
Settlement liability																		$ 5,800,000
Shaanxi Fangtian Decoration Co. Ltd [Member]
Commitments and Contingencies (Textual)
Loan borrowed																																$ 508,780	¥ 3.5
Repayments of debt | ¥				¥ 3,500,000
Debt Instrument, Periodic Payment, Interest (in Yuan Renminbi) | ¥				¥ 400,000
Repayment of bank loan, plus interest			$ 585,098
Shanghai Pudong Development Bank [Member]
Commitments and Contingencies (Textual)
Loan borrowed																												$ 3,920,000	¥ 26,900,000
Debt instrument, term																												1 year	1 year
Shaanxi Fangyuan construction co., Ltd. [Member]
Commitments and Contingencies (Textual)
Litigation, description	Fangyuan filed a lawsuit and requested that Guoweimei pay a project construction fee plus penalty of RMB 56.32 million (approximately $8.22 million). On June 10, 2019, Baoji Intermediate People’s Court issued a verdict that Guoweimei must pay RMB 41.58 million (approximately $6.07 million) plus penalty to Fangyuan, and Fangyuan will enjoy preferential right for the projects in processing zone of National Wholesale and Trading Center in Mei County for Kiwi Fruits developed by Guoweimei.
Shaanxi Zhongkun Construction Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Construction and decoration fee, description																The Court issued a civil judgement in November 2018, ordering Hedetang Market to pay project funds of RMB 1.65 million (approximately $0.24 million) to Zhongkun, plus interest.
Xi’an Shanmei Food Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Litigation, description		(i) the Land Lease Agreement was thereby terminated; (ii) Shaanxi Qiyiwangguo shall pay Xi’an Shanmei the outstanding leasing fee RMB 0.21 million (approximately $30,762) and (iii) Shaanxi Qiyiwangguo shall return the 29.3 mu industrial use land to Xi’an Shanmei. Shaanxi Qiyiwangguo has appealed the decision to the Xi’an Intermediate People’s Court on the basis that: (x) the land use right was a capital contribution by Xi’an Shanmei for a shareholder of Shaanxi Qiyiwangguo who is also the sole shareholder of Xi’an Shanmei and the Land Lease Agreement was invalid and has no legal effect; (y) Zhouzhi Court did not schedule the hearing for the count claims filed by Shaanxi Qiyiwangguo; and (z) Zhouzhi Court violated certain civil procedures during the trial of the case.
Nanjing Bailuotong Logistics Services Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Amount claimed under lawsuit													$ 29,715	¥ 200,000
Leasing fees not yet due													$ 200,000
Henan Huaxing Glass Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Loan borrowed																					$ 29,743	¥ 203,742
Huludao Banking Co. Ltd. [Member]
Commitments and Contingencies (Textual)
Litigation, description												the Suizhong Branch of Huludao Banking Co., Ltd. (“Suizhong Branch”) filed a lawsuit with Huludao Intermediate People’s Court (the “Huludao Court”) against the Company’s indirectly wholly-owned subsidiary Huludao Wonder Fruit Co., Ltd. (“Wonder Fruit”) and requested that Wonder Fruit repay a RMB 40 million (approximately $5.81 million) bank loan, plus interest. The loan became due on its maturity date of December 9, 2016. On December 19, 2016, the Huludao Court accepted the case. The Company has been disputing the interest rate of the loan with Suizhong Branch, and has not repaid the loan to date. Wonder Fruit believes that the interest charged by Suizhong Branch is 100% higher than the base rate set by People’s Bank of China and is not consistent with the China People’s Bank’s base interest and floating rate. The Huludao Court has seized land use rights, buildings and equipment of Wonder Fruit that were pledged as guarantee for the loan and has organized two auction sales for these assets in January and February of 2018, but both auction sales have been unsuccessful in finding a buyer. On July 19, 2018, the Court issued a verdict ordering Huludao Wonder to transfer its land use rights, building, equipment, electronic and transportation assets to Zuizhong Branch as payment of the outstanding principal, auction and evaluation fees and some interest of the loan for RMB 42.64 million (approximately $6.22 million). As of June 30, 2020, there was RMB 11.95 million (approximately $1.74 million) in interest on the loan unpaid. Huludao Wonder was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company. Legal case with Andrew Chien In September 2017, Andrew Chien, a former consultant of SkyPeople China, brought a lawsuit against the Company and Mr. Hongke Xue in the District Court of Connecticut (the “Court”). The complaint was not properly served and the Company learned of the litigation in December 2017. In the complaint, Mr. Chien has made several claims, most of which attempt to hold the Company liable under novel legal theories that relate back to an alleged breach of a consulting agreement between SkyPeople China and Chien from August 2006. Mr. Chien claimed approximately $257,000 damages and interest plus 2.00% of the Company’s then-outstanding shares. Mr. Chien has unsuccessfully attempted to sue the Company on the breach of the same consulting agreement several times in the courts of Connecticut and New York, and these cases have been dismissed. The Company has filed a motion to dismiss (“MTD”) and all proceedings are stayed pending determination of the MTD. On August 31, 2018, the Court granted our MTD. On September 10, 2018, Mr. Chien filed a motion for reconsideration. On September 28, 2018, the Court denied Mr. Chien’s motion for reconsideration. On October 26, 2018, Mr. Chien appealed the case to the United States Court of Appeals for the Second Circuit. The Court of Appeals affirmed the trial court’s dismissal of the action on January 22, 2020, and denied Mr. Chien’s petition for en banc rehearing on March 27, 2020. Mr. Chien’s time to pursue a discretionary appeal to the Supreme Court of the United States has lapsed and the case is closed. Legal case with Luwei In 2018, Mr. Luwei, an individual, filed a claim for arbitration against SkyPeople China in Xi’an Arbitration Commission for breach of contract pursuant to a new share purchase agreement and a share redemption agreement. On April 11, 2019, Xi’an Arbitration Commission made its decision and ordered SkyPeople China to repay RMB 3 million investment to Luwei. Mr. Luwei applied with Intermediate Court of Xi’an (the “Court”) for enforcement of the arbitration award which process was terminated by the Court due to no assets for enforcement. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company. Legal case with Shaanxi Overseas Investment Development Corp. In November 2019, Shaanxi Overseas Investment Development Corp (“Shaanxi Overseas Investment”) filed a lawsuit against SkyPeople China, Hongke Xue and Shenzhen Tian Shun Da Equity Investment Fund Management Co., Ltd. (“Shenzhen Tian Shun Da”) pursuant to an investment agreement entered in March 2016. According to the agreement, Shaanxi Overseas Investment agreed to invest RMB 5 million for the preferred shares of SkyPeople China with an annual interest rate of 2.38%. Shenzhen Tian Shun Da pledged 1.17% of the shares SkyPeople China that it owned and Hongke Xue provided guarantee for the performance of agreement by SkyPeople China. SkyPeople China failed to make the interests payment and Shaanxi Overseas Investment filed the lawsuit for breach of agreement. On December 26, 2019, Yanta District Court of Xi’an City (the “Court”) ordered SkyPeople China to pay Shaanxi Overseas Investment the preferred share redemption amount of RMB 5 million plus penalty which is calculated based upon the RMB 5 million at a rate of 24% a year. The Court also ruled that Shaanxi Overseas Investment may sell the pledged shares owned by Shenzhen Tianshun Da as the repayment for SkyPeople China and Hongkong Xue shall also assume the repayment obligation as guarantor. As of June 30, 2020, SkyPeople China has not repaid the amount. SkyPeople China was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020. The creditors have no recourse to the current Company. Legal case with Shaanxi Wanyuan Construction Co., Ltd. In July 2019, Shaanxi Wanyuan Construction Co., Ltd. (“Wanyuan) filed a lawsuit with Shaanxi Baoji Municipal Intermediate People’s Court (the “Baoji Court”) against Guoweimei for repayment of construction and decoration costs of RMB 55.07 million pursuant to a Construction and Decoration Agreement entered by the parties in May 2017. In July 2019, the Baoji Court ordered Guoweimei to pay construction and decoration costs of RMB55.07 million to Wanyuan, plus interest. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd. on February 27, 2020.
Andrew Chien [Member]
Commitments and Contingencies (Textual)
Amount claimed under lawsuit										$ 257,000
Percentage of outstanding shares										2.00%
Luwei [Member]
Commitments and Contingencies (Textual)
Repayments of debt																			$ 3,000,000
Overseas Investment Development Corp. [Member]
Commitments and Contingencies (Textual)
Agreement, description							According to the agreement, Shaanxi Overseas Investment agreed to invest RMB 5 million for the preferred shares of SkyPeople China with an annual interest rate of 2.38%. Shenzhen Tian Shun Da pledged 1.17% of the shares SkyPeople China that it owned and Hongke Xue provided guarantee for the performance of agreement by SkyPeople China. SkyPeople China failed to make the interests payment and Shaanxi Overseas Investment filed the lawsuit for breach of agreement. On December 26, 2019, Yanta District Court of Xi’an City (the “Court”) ordered SkyPeople China to pay Shaanxi Overseas Investment the preferred share redemption amount of RMB 5 million plus penalty which is calculated based upon the RMB 5 million at a rate of 24% a year.
Shaanxi Wanyuan Construction Co., Ltd. [Member]
Commitments and Contingencies (Textual)
Construction and decoration fee, description								(“Wanyuan) filed a lawsuit with Shaanxi Baoji Municipal Intermediate People’s Court (the “Baoji Court”) against Guoweimei for repayment of construction and decoration costs of RMB 55.07 million pursuant to a Construction and Decoration Agreement entered by the parties in May 2017. In July 2019, the Baoji Court ordered Guoweimei to pay construction and decoration costs of RMB55.07 million to Wanyuan, plus interest. As of June 30, 2020, Guoweimei has not repaid the amount. Guoweimei was one of the subsidiaries transferred along with HeDengTang HK to New Continent International Co., Ltd.

XML

Subsequent Events (Details) - USD ($)			1 Months Ended
	Aug. 12, 2020	Jul. 13, 2020	Jul. 31, 2020	Jul. 28, 2020	Jun. 30, 2020	Jun. 28, 2020	Dec. 31, 2019
Subsequent Events (Textual)
Common stock shares (in Shares)					38,494,063		33,810,416
Loan agreement amiount				$ 4,730,000		$ 210,000
Subsequent Event [Member]
Subsequent Events (Textual)
Loan total amount			$ 4,961,000
Common stock shares (in Shares)	2,740,883
Shares per value (in Dollars per share)			$ 1.81
Percentage of sharesholder		90.00%
Percentage of issued and outstanding ordinary shares		90.00%
Repayments debt amount			$ 4,961,000
Common stock creditors shares (in Shares)			2,740,883
Standstill Agreements [Member] | Subsequent Event [Member]
Subsequent Events (Textual)
Promissory note principal amount				$ 1,060,000
Percentage of standstill fees				9.00%
Balance outstanding				$ 1,209,636
Share Exchange Agreement [Member]
Subsequent Events (Textual)
Purchase agreement, description	(i) the aggregate purchase price for Nice Shares shall be HK$54 million (approximately $6.97 million, the “Purchase Price”) and it shall be paid in the Company’s Common Stock; (ii) 40% of the Purchase Price HK$21.6 million (approximately $2.79 million) shall be paid in the shares of common stock of the Company based on the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to the date of the Agreement and the foreign exchange rate between HK$ and US$ shall be the rate published by Bloomberg on the date of the Agreement; (iii) 30% of Purchase Price shall be paid in the Company Common Stock (the “2020 Earn-Out Shares”) if Nice meets certain earnings goal for 2020 (the “2020 Earnings Goal”); (iv) the 2020 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2020 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2020; (v) additional 30% of Purchase Price shall be paid in the shares of common stock the Company (the “2021 Earn-Out Shares”) if Nice meets certain earnings goal for 2021 (the “2021 Earnings Goal”); (vi) the 2021 Earn-Out Shares shall be issued based upon the average closing price of the Company’s Common Stock listed on Nasdaq Stock Exchange for the ten (10) trading days prior to December 31, 2021 and the exchange rate between HK$ and US$ shall be the rate published by Bloomberg on December 31, 2021; (vii) if Nice does not achieve its earnings goal for a given year, the parties agree to have forbearance clause that the amount of such year’s earn-out shares shall not be reduced for that year if Nice achieves at least sixty percent (60%) of its given year earnings goal and if Nice achieves lower than 60% earnings goal for a given year, the amount of such year’s earn-out shares shall be reduced to zero. The Company Shares will be issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.