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e-Future Reports Record Total Revenue and Earnings for Nine

Increases Software Revenues and Service Fee Income in the First Three

Quarters of 2007 by 57.6% and 65.7% Over the Same Period of 2006

BEIJING, Dec. 17 /Xinhua-PRNewswire/ -- e-Future Information Technology Inc. (Nasdaq: EFUT), a leading front supply chain management software and service company in China, today announced its financial results for the third quarter ended September 30, 2007.

The First Three Quarters of 2007 Highlights

-- Total revenues increased to US$4.7 million, up 31.4% over the same

period of 2006.

-- Software revenues increased to US$3 million, up 57.6% over the same

period of 2006.

-- Service fee income increased to US$0.87 million, up 65.7% over the

same period of 2006.

-- Gross Profit increased to US$2.26 million, up 42% from the same period

of 2006.

-- Operating Profit increased to US$15,042, up 186% from the same period

of 2006.

-- Non-GAAP net income of US$587,557 or US$0.21 per fully diluted share,

increased 120% year-on-year.

-- GAAP Net Loss increased to US$(388,216), largely to expenses and

amortization associated with a US$10 million private placement in

March 2007 as well as acquisitions in the nine months ended September

30 of 2007.

-- As of September 30, 2007, the Company had cash and cash equivalents of

US$13.8 million.

Operational Results Highlights

Recent accomplishments include:

1. We have completed the acquisition of Crownhead and its subsidiary

Guangzhou Royalstone, an innovative leader in China’s supermarket

market, which has significantly improved e-Future’s market share in

China’s Top 100 retailers and global accounts. This transaction will

help e-Future significantly improve 4Q financial performance and be

accretive to e-Future’s earnings per share in 2007.

2. Sales contracts increased 91% over the same period of 2006. Fueled by

the fast growth of China economy and rapid development of the retail

industry, e-Future’s software sales continue to ride the tide of a

robust market.

3. New market penetration in addition to maintaining our competitive

position and expand market share through organic growth in the front

chain market, particularly in the retail and FMCG markets, we are

leveraging existing client base (over 500 retailers and over 200

distributors) into new areas such as B2B service between these

retailers and their suppliers and exploring new media business based on

consumer community.

“The record results for the first three quarters of 2007 demonstrate the ability of e-Future to capture the benefits of a growing market. I am very pleased with the results for the first three quarters of 2007, in particular our 57.6% increase in software licenses over the comparable period in 2006,” said Adam Yan, Chairman and CEO of e-Future. “With our robust organic growth and the synergies of our combined organization which includes the acquisition of Crownhead, we are rapidly improving our position in China’s retail industry and seeing more opportunities ahead. We look forward to a great fourth quarter as the leading software and service provider in China’s front-end supply chain market from manufacturers to consumers.”

Business Outlook

Based upon our robust organic growth, developing innovative business models and selective strategic acquisitions, the Company estimates its total revenues for year 2007 to be between US$9.3 million and US$10 million.

Results for the Nine Months Ended September 30, 2007(1)

e-Future reported total revenues of US$4.7 million for the nine months ended September 30, 2007, representing a 31.4% increase from the corresponding period in 2006.

Software sales for the nine months ended September 30 were US$3.0 million, representing a 57.6% increase from the corresponding period in 2006. The growth was driven by the increases in small and medium-sized businesses and the increased sales on providing products to global customers operating in China.

Service fee income for the nine months ended September 30 was US$0.87million, representing a 65.7% increase from the corresponding period in 2006 due to our efforts on service for installed base clients and increased additional billings after the free service period.

Cost of software as a component of cost of revenues consists of wages, materials, handling charges and other expenses associated with the development of our software. Cost of software was US$0.94 million, representing 81% increase from the corresponding period in 2006. This increase resulted directly from our effort to provide our software and services to new customers who require more new features and functions from our products which requires more labor on the implementation of these products.

Cost of service fee income as a component of cost of revenues includes salaries and related expenses of our consulting organization and an allocation of our facilities and depreciation expenses. Cost of service fee income was US$0.25 million, representing 56.9% increase from the corresponding period in 2006, mainly due to the increase in our service fee income and the increased labor necessary to fulfill our service obligations.

General and administrative expenses consist primarily of costs from our finance and human resources organizations; third party legal and other professional services fees; and an allocation of our facilities costs and depreciation expense. G & A expenses were US$1.18 million, representing a 79% increase from the nine months ended September 30 of 2006, directly resulting from increased expenses from new branches, increased headcount, and additional legal and accounting fees and public relations costs primarily related to becoming a public company.

Selling and distribution expenses consist primarily of salaries and related costs of our sales and marketing organization: costs of our marketing programs, including advertising, trade shows, and collateral sales materials; and an allocation of our facilities and depreciation expenses. Selling and distribution expenses were US$1.0 million in this period, which essentially remained flat from the corresponding period in 2006.

Research and development expenses which are expensed as incurred, consist primarily of salaries and related costs of our engineering organization; consultants; and an allocation of our facilities and depreciation expense. We believe that our success depends on continued enhancement of our current products and our ability to develop new technologically advanced products that meet the increasingly sophisticated requirements of our customers. R & D expense was US$0.03 million for the nine months ended September 30 of 2007. We are expecting more spending on the development of new software products to meet the evolving complexities of our customers’ businesses.

Operating profit was US$15,042 for the three quarters ended September 30, 2007 which was 186% larger than the operational loss generated during the same period of 2006. We diminished the operating loss caused by the seasonally weak period in first half of the year for the retail industry in China.

Non-GAAP net income excluding amortization of acquired software technology, amortization of intangibles and accretion on convertible notes was US$587,557 or US$0.21 per fully diluted share for the nine months ended September 30 of 2007, representing a 120% increase from the corresponding period in 2006.

Net Income in the nine months ended September 30 of 2007 decreased to US$(388,216) or US$(0.15) per share, as compared to a GAAP net loss of US$(9,693) or US$(0.01) per share for the first three quarters of 2006, due to expenses related to our $10 million private placement and foreign currency transaction loss. Adjusted non-GAAP earnings for the first three quarters of 2007 of US$587,557 or US$0.21 per share, which excludes amortization of acquired software technology and intangibles and accretion on convertible notes, as compared to adjusted non-GAAP earnings per share of US$253,246 or US$0.17 for the first three quarters of 2006.

As of September 30, 2007, the Company had cash and cash equivalents of US$13.8 million. Net operating cash flow and capital expenditures for the nine months ended September 30, 2007 were US$-0.11 million and $0.86 million, respectively. The increase in capital expenditure was due to the acquisitions of Tangcheng and Royalstone.

(1) This announcement contains translations of certain RMB amounts into

U.S. dollars at specified rates solely for the convenience of the

reader. Unless otherwise noted, all translations from RMB to U.S.

dollars are made at a rate of RMB7.5108 to US$1.00, the effective

noon buying rate as of September 30, 2007.

About e-Future Information Technology Inc.

e-Future is a leading software and service provider in China’s front-end supply chain market from manufacturers to consumers, especially in retail and the Fast Moving Consumer Goods (“FMCG”) market for manufacturers, distributors, wholesalers, logistics companies and retailers. e-Future’s clients are centered in the retail, automotive, general household appliance and consumer goods industries.

e-Future now serves more than 800 clients, including over 500 retailers and over 200 distributors and Fortune 500 companies that do business in China including Procter & Gamble, Johnson & Johnson, Kimberly-Clark, the Chang’an Motors and Ford Motors joint venture, B&Q-Kingfisher China, GUCCI China, Aeon-JUSCO China, PARKSON China, SOGO China and Mickey’s Space stores (Disney franchises). Leading local companies include Belle, Lianhua, Suning, Wuhan Zhongbai, Wushang Group, Bubugao, Yonghui and China Duty-Free Stores.

Moreover, e-Future is also one of IBM’s premier business partners in Asia Pacific as well as the partner of SAP, Oracle, Microsoft, JDA and Motorola. e-Future has 19 branch offices in 31 provinces in China with over 600 employees including 250 consultants and service professionals and 270 programmers for software research and development and customization.

FORWARD-LOOKING STATEMENTS

This announcement contains statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements presented in this report, or which management may make orally or in writing from time to time, are based on beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “result,” “should,” “will” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected by the forward-looking statements. We caution you that while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance and are affected by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Some of the risks and uncertainties that may cause e-Future’s actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

-- general risks affecting the Chinese retail industry;

-- failure to effectively manage our growth and expansion or to integrate

acquisitions and developments successfully;

-- risks and uncertainties affecting software development;

-- risks associated with downturns in the Chinese national and local

economies;

-- risks associated with our dependence on key personnel whose continued

service is not guaranteed; and

-- the other risk factors identified in our most recently filed Annual

Report on Form 20-F, including those described under the caption “Risk

Factors.”

The risks set forth above are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can it assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Investors should also refer to our most recent Annual Report on Form 20-F for future periods and reports on Form 6-K as we file them with the Securities and Exchange Commission, and to other materials we may furnish to the public from time to time through Forms 6-K or otherwise, for a discussion of risks and uncertainties that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. We expressly disclaim any responsibility to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or otherwise, and you should not rely upon these forward-looking statements after the date of this report.

Use of Non-GAAP Financial Information

e-Future uses non-GAAP measures of performance, including adjusted operating income, EBITDA (earnings before interest, taxes, depreciation and amortization) and earnings per share, in its public statements. Management uses, and chooses to disclose, these non-GAAP financial measures because it believes that (i) such measures provide an additional analytical tool to clarify e-Future’s results from operations and help e-Future to identify underlying trends in its results of operations; (ii) e-Future uses non-GAAP earnings measures, including EBITDA, as a measure of profitability because such measures help e-Fuure compare its performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by e-Future’s management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting.

Set forth below are additional reasons why specific items are excluded from the Company’s non-GAAP financial measures:

-- Amortization charges for acquired technology are excluded because they

result from prior acquisitions, rather than ongoing operations, and

absent additional acquisitions, are expected to decline over time.

-- e-Future excludes depreciation and amortization of intangibles because

they are non-cash expenses, and while tangible and intangible assets

support its business, it does not believe the related depreciation and

amortization costs are directly attributable to the operating

performance of its business.

-- Adjustments to accretion on convertible notes and record a change in

the fair value of a related conversion feature are non-routine

transactions, not directly related to e-Future’s core business of

selling software and related services and hardware.

Material Limitations (and Compensation thereof) Associated with the Use of Non-GAAP Financial Measures

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for e-Future’s GAAP results. In the future, e-Future expects to continue reporting non-GAAP financial measures excluding items described above and e-Future expects to continue to incur expenses similar to the non-GAAP adjustments described above. Accordingly, exclusion of these and other similar items in its non-GAAP presentation should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

e-Future compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. e-Future also provides reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure, and it encourages investors to carefully review those reconciliations.

E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

Chinese Yuan (Renminbi) U.S. Dollars

December 31, September 30, September 30, 2007

2006 2007 (Historical) (Pro Forma)

ASSETS Audited Unaudited Unaudited Unaudited

Current assets

Cash and cash

equivalents RMB 61,464,737 RMB 104,265,256 $13,882,044 $12,430,269

Trade receivables,

less allowance

for doubtful

accounts of

RMB2,109,910 and

RMB3,250,871

respectively 4,452,959 8,693,018 1,157,402 1,157,402

Refundable value

added tax 2,470,941 2,753,271 366,575 366,575

Deposits 44,943 264,354 35,197 35,197

Advances to employees 1,198,601 3,151,731 419,627 419,627

Advances to suppliers 443,030 443,030 58,986 58,986

Other receivables 171,120 3,319,838 442,009 442,009

Prepaid expenses 534,755 417,330 55,564 55,564

Inventory 4,121,136 12,131,061 1,615,149 1,615,149

Total current assets 74,902,222 135,438,889 18,032,553 16,580,778

Non-current assets

Long-term investments -- 4,588,972 610,983 610,983

Deferred loan costs,

net of RMB1,237,142 of

amortization -- 10,279,573 1,368,639 1,368,639

Property and equipment,

net of accumulated

depreciation of

RMB4,690,856 and

RMB5,027,890,

respectively 1,014,581 2,029,619 270,227 270,227

Intangible assets,

net of accumulated

amortization of

RMB8,678,751 and

RMB12,743,682,

respectively 7,108,244 51,841,715 6,902,289 6,902,289

Goodwill -- 44,143,912 5,877,392 5,877,392

Total non-current

assets 8,122,825 112,883,791 15,029,530 15,029,530

Total assets RMB 83,025,047 RMB 248,322,680 $33,062,083 $31,610,308

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Trade accounts

payable RMB 1,230,782 RMB 2,692,733 $358,516 $358,516

Accrued expenses 3,941,618 4,986,869 663,960 663,960

Taxes payable 5,182,615 5,168,172 688,099 688,099

Advances from

customers 8,121,043 17,138,346 2,281,827 2,281,827

Royalstone acquisition

obligation, current

portion -- 62,611,099 8,336,142 8,336,142

Make-whole obligation,

current portion -- 1,995,762 265,719 132,859

Convertible note payable,

current portion -- 7,004,384 932,575 466,287

Total current

liabilities 18,476,058 101,597,365 13,526,838 12,927,690

Long-term liabilities

Royalstone acquisition

obligation, net of

current portion -- 6,416,970 854,366 854,366

Make-whole

obligation, net of

current portion -- 19,812,221 2,637,831 1,318,916

12% RMB75,108,000

($10,000,000) convertible

note payable, net of

RMB53,379,624 unamortized

discount based on an

imputed interest rate of

28.9%, net of current

portion -- 14,723,992 1,960,376 980,188

Deferred income taxes -- 5,282,076 703,264 703,264

Total long-term

liabilities -- 46,235,259 6,155,837 3,856,734

Shareholders’ equity

Ordinary shares, $0.0756

U.S. dollars (RMB0.6257)

par value; 6,613,756 shares

authorized; 2,633,500 shares

and 2,633,500 shares

outstanding (2,833,580

shares pro forma),

respectively 1,647,781 1,647,781 219,388 234,514

Additional paid-in

capital 77,726,236 116,092,037 15,456,681 20,441,555

Statutory reserves 3,084,020 3,084,020 410,611 410,611

Accumulated foreign

currency translation

adjustment (491,079) -- -- --

Accumulated deficit (17,417,969) (20,333,783) (2,707,272) (6,260,796)

Total shareholders’

equity 64,548,989 100,490,056 13,379,408 14,825,884

Total liabilities and

shareholders’

equity RMB 83,025,047 RMB 248,322,680 $33,062,083 $31,610,308

E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED INCOME STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2007

Chinese Yuan (Renminbi) U.S. Dollars

September 30, September 30, 2007

2006 2007 (Historical) (Pro Forma)

Revenues Unaudited Unaudited Unaudited Unaudited

Software sales RMB14,374,457 RMB22,657,547 $3,016,662 $3,016,662

Hardware sales 8,757,746 6,381,792 849,683 849,683

Service fee income 3,936,185 6,521,734 868,314 868,314

Total Revenues 27,068,387 35,561,073 4,734,659 4,734,659

Cost of revenues

Cost of software 3,898,742 7,049,427 938,572 938,572

Cost of hardware 7,874,452 5,406,305 719,804 719,804

Cost of service fee

income 1,214,875 1,906,683 253,859 253,859

Amortization of

acquired technology -- 2,229,127 296,790 296,790

Amortization of

software costs 2,078,163 1,986,882 264,537 264,537

Total Cost of Revenue 15,066,231 18,578,424 2,473,562 2,473,562

Gross Profit 12,002,156 16,982,648 2,261,097 2,261,097

Expenses

Research and

development -- 242,764 32,322 32,322

General and

administrative 4,948,093 8,857,730 1,179,332 1,179,332

Selling and

distribution

expenses 7,185,396 7,769,176 1,034,401 1,034,401

Total Expenses 12,133,489 16,869,670 2,246,055 2,246,055

Profit (Loss) from

operations (131,333) 112,978 15,042 15,042

Interest income 29,537 2,768,835 368,647 368,647

Interest expense 25,188 (1,286,226) (171,250) (3,724,774)

Amortization of discount

on notes payable

-- (3,112,821) (414,446) (414,446)

Amortization of loan costs -- (1,237,142) (164,715) (164,715)

Profit (Loss) on

investments -- 140,147 18,659 18,659

Foreign currency

transaction losses (301,585) (40,153) (40,153)

Net loss RMB(76,609) RMB(2,915,814) $(388,216) $(3,941,740)

Earnings per ordinary share

Basic RMB(0.05) RMB(1.11) $(0.15) $(1.50)

Diluted RMB(0.05) RMB(1.11) $(0.15) $(1.50)

E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2007

Chinese Yuan (Renminbi) U.S. Dollars

September 30, September 30, September 30,

2006 2007 2007

Cash flows from operating

activities: Unaudited Unaudited Unaudited

Net income (loss) RMB(76,609) RMB(2,915,813) $(388,216)

Adjustments to reconcile net

income (loss) to net cash

provided by (used in)

operating activities:

Depreciation 294,818 337,034 44,873

Amortization of intangible

assets 2,078,163 4,216,008 561,326

Amortization of discount on

notes payable -- 3,112,821 414,446

Amortization of deferred loan

costs -- 1,237,142 164,715

Change in assets and

liabilities:

Accounts receivable 1,865,282 (4,240,059) (564,528)

Refundable value added tax 1,151,601 (282,330) (37,590)

Deposits 314,429 (219,411) (29,213)

Advances to employees 313,079 (1,953,130) (260,043)

Advances to suppliers (157,690) -- --

Other receivables (8,431) (3,148,718) (419,225)

Prepaid expenses 160,265 117,425 15,634

Inventories (4,350,198) (8,009,925) (1,066,454)

Trade payables (1,117,145) 1,461,951 194,647

Accrued expenses (1,129,487) 1,045,251 139,166

Taxes payable (173,557) (14,443) (1,923)

Advances from customers 2,453,876 9,017,303 1,200,578

Decrease in accrued make-whole

obligations -- (610,931) (81,340)

Net cash provided by operating

activities 1,618,396 (849,825) (113,147)

Cash flows from investing activities:

Purchases of property and

equipment (337,184) (2,346,296) (312,390)

Payments for software (2,449,318) (4,109,748) (547,179)

Long-term investments -- (4,588,972) (610,983)

Payment to purchase net assets

of Royalstone -- (9,981,954) (1,329,013)

Loan to Guarantor 800,000 -- --

Net cash used in investing

activities (1,986,502) (21,026,970) (2,799,565)

Cash flows from financing

activities:

Issuance of ordinary shares

for cash, net of offering

costs paid (250,024) -- --

Proceeds from issuance of

convertible notes payable, net

of loan costs paid -- 67,025,162 8,923,838

Repayment of short term loan (2,800,000) -- --

Net cash provided by (used in)

financing activities (3,050,024) 67,025,162 8,923,838

Effect of exchange rate

changes on cash -- (2,347,848) (312,596)

Net increase in cash (3,418,130) 42,800,519 5,698,530

Cash and cash equivalents at

beginning of period 8,834,817 61,464,737 8,183,514

Cash and cash equivalents at

end of period RMB5,416,687 RMB104,265,256 $13,882,044

Supplemental cash flow

information

Interest paid RMB66,593 RMB1,286,226 $171,250

E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY

NON-GAAP MEASURES OF PERFORMANCE

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2007

Chinese Yuan (Renminbi) U.S. Dollars

September 30, September 30, September 30,

2006 2007 2007

NON-GAAP OPERATING INCOME (LOSS)

AND ADJUSTED EBITDA Unaudited Unaudited Unaudited

Operating income (loss)

(GAAP Basis) RMB(131,333) RMB112,978 $15,042

Adjustments for non-GAAP measures of

performance:

Add back amortization of acquired

software technology -- 2,229,127 296,790

Add back amortization of intangibles 2,078,163 1,986,882 264,537

Adjusted non-GAAP operating income 1,946,830 4,328,987 576,368

Add back depreciation 294,818 337,034 44,873

Adjusted EBITDA (Earnings before

interest, taxes, depreciation and

amortization) RMB2,241,649 RMB4,666,021 $621,241

NON-GAAP OPERATING INCOME (LOSS) AND

ADJUSTED EBITDA, as a percentage of

revenue

Operating income (loss) (GAAP BASIS) % (0.5) % 0.3 % 0.3

Adjustments for non-GAAP measures of

performance:

Amortization of acquired software

technology % -- % 6.3 % 6.3

Amortization of intangibles % 7.7 % 5.6 % 5.6

Adjusted non-GAAP operating income % 7.2 % 12.2 % 12.2

Depreciation % 1.1 % 0.9 % 0.9

Adjusted EBITDA (Earnings before

interest, taxes, depreciation and

amortization) % 8.3 % 13.1 % 13.1

NON-GAAP EARNINGS PER SHARE

Net Income(Loss) RMB(76,609) RMB(2,915,814) $(388,216)

Amortization of acquired software

technology -- 2,229,127 296,790

Amortization of intangibles 2,078,163 1,986,882 264,537

Accretion on convertible notes -- 3,112,821 414,446

Adjusted Net income 2,001,553 4,413,016 587,557

Adjusted non-GAAP diluted earnings

per share RMB1.33 RMB1.60 $0.21

Shares used to compute non-GAAP

diluted earnings per share 1,500,000 2,762,094 2,762,094

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