UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9, 2021
Future FinTech Group Inc.
(Exact name of registrant as specified in its charter)
Florida | 001-34502 | 98-0222013 | ||
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
Americas Tower, 1177 Avenue of The Americas,
Suite 5100, New York, NY 10036
(Address of principal executive offices, including zip code)
888-622-1218
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
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 |
Item 1.01 Entry into a Material Definitive Agreement
On April 9, 2021, Future FinTech Group Inc., a Florida corporation (the “Company”), Future FinTech (Hong Kong) Limited., a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of the Company (“Buyer”), Nice Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”) and Joy Rich Enterprises Limited, a limited company organized under the laws of Hong Kong and 90% shareholder of Nice (“Joy Rich” or the “Seller”) entered into the First Amendment (the “Amendment”) to the Share Exchange Agreement (the “Agreement”), which was originally entered into by the parties on July 13, 2020. Pursuant to the Agreement, the Buyer agreed to acquire 90% of the issued and outstanding ordinary shares of Nice (the “Nice Shares”) from the Seller in exchange for the shares of common stock of the Company, as disclosed in the Form 8-K filed on July 16, 2020.
Pursuant to the Amendment, the parties agree to amend the purchase price and certain earn-out terms as follows: (i) the aggregate purchase price for Nice Shares shall be HK$144,000,000 (the “Purchase Price”) and it shall be paid in the shares of common stock of the Company (the “Company Shares”); (ii) 60% of the Purchase Price or HK$86,400,000 shall be paid in the shares of common stock of the Company based on 95% of the closing price of the Company’s common stock listed on Nasdaq Stock Exchange on the date prior to the date of the Amendment and the foreign exchange rate between HK$ and US$ shall be 7.7:1; (iii) 20% of Purchase Price shall be paid in the shares of common stock of the Company if Nice achieves an Earnings Before Interest and Taxes (the “EBIT”) of HK$14,000,000 (the “2021 EBIT Goal”), as evidenced in its 2021 audited financial statements for fiscal year ended December 31, 2021 audited by the auditor of the Company (the “2021 Earn-Out Shares”); (iv) the final 20% of Purchase Price shall be paid in the shares of common stock of the Company if Nice achieves an EBIT of HK$20,000,000 (the “2022 EBIT Goal”), as evidenced in its 2022 audited financial statements for fiscal year ended December 31, 2022 audited by the auditor of the Company (the “2022 Earn-Out Shares”); (v) if Nice does not achieve the EBIT Goal for a given year, the shortfall between EBIT Goal and the actual EBIT for that year shall be the EBIT Shortfall (the “EBIT Shortfall”) and the amount of an EBIT Shortfall Fee that equals to 10 (ten) times of the EBIT Shortfall amount (the “EBIT Shortfall Fee”) shall be paid in cash by the Seller to the Buyer even though such year’s Earn-Out Shares shall still be issued in full to the Seller.
The description contained herein of the terms of the Amendment does not purport to be complete and is qualified in its entirety by reference to the First Amendment (the “Amendment”) to the Share Exchange Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
Please see the disclosure set forth under Item 1.01, which is incorporated by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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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 hereunto duly authorized.
Future FinTech Group Inc. | ||
Date: April 12, 2021 | By: | /s/ Shanchun Huang |
Name: | Shanchun Huang | |
Title: | Chief Executive Officer |
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Exhibit 10.1
FIRST AMENDMENT TO SHARE EXCHANGE AGREEMENT
THIS FIRST AMENDMENT TO SHARE EXCHANGE AGREEMENT (this “Amendment”) is made this 9th day of April, 2021 by and among Future FinTech Group Inc., a Florida corporation (the “Company”), Future FinTech (Hong Kong) Limited., a limited company organized under the laws of Hong Kong (“Buyer”), Nice Talent Asset Management Limited, a limited company organized under the laws of Hong Kong (“Nice”), and Joy Rich Enterprises Limited, a limited company organized under the laws of Hong Kong (“Joy Rich” or the “Seller”, collectively with the Company, Buyer and Nice, the “Parties” and, each individually, a “Party”).
WITNESSETH
WHEREAS, the Parties entered into and executed a Share Exchange Agreement dated July 13, 2020 (the “Agreement”);
WHEREAS, the Parties desire to make certain amendments to the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Amendment of the Agreement. The Parties hereby agree to amend the Agreement as follows:
(A) The section 1.1. (b) of the Agreement shall be deleted in their entirety and replaced with the following:
b. Purchase Price. Whereas, 100% equity interest of Nice have a valuation of HK$189,338,353 as appraised by Greater China Appraisal Limited in February, 2021. The parties agree that a purchase price paid by the Buyer in the aggregate amount of Company Shares equal to HK$144,000,000 (the “Purchase Price”) for 90% of the total issued and outstanding shares of Nice. Sixty percent (60%) of the Purchase Price HK$86,400,000 shall be paid in shares of common stock of the Company to the Seller or its designee who are affiliate of the Seller based on 95% of the closing price of the Company’s common stock listed on Nasdaq Stock Exchange prior to this Amendment (the “Initial Company Shares”). The remaining forty percent (40%) of the Purchase Price shall be paid in accordance with Section 1.1(c) of this Agreement. The Purchase Price will be paid in shares of common stock of the Company to the Seller or its designee who are affiliate of the Seller pursuant to the terms of this Agreement (the “Company Shares”). The amount of Initial Company Shares shall be made to the Seller or its designee in the form of Company Shares no later than thirty (30) calendar days after the Closing Date. The foreign exchange rate between HK$ and US$ shall be 7.7
(B) The section 1.1. (c) of the Agreement shall be deleted in its entirety and replaced with the following:
c. Earn-Out Payments. The Buyer shall pay the remaining forty percent (40%) of Purchase Price in the Company Shares (the “Earn-Out Shares”) to the Seller as follows:
(i) If Nice achieves an Earnings Before Interest and Taxes (the “EBIT”) of HK$14,000,000 (the “2021 EBIT Goal”), as evidenced on the 2021 audited financial statements of Nice for fiscal year ended December 31, 2021 audited by the auditor of the Company, the Buyer shall pay the Seller or its designee who is an affiliate of the Seller 20% of the Purchase Price HK$28,800,000 in shares of common stock of the Company as calculated on: (1)95% of the closing price of the Company’s common stock listed on Nasdaq Stock Exchange prior to this Amendment ; and (2) the exchange rate shall be $1: HK$7.7 (the “2021 Earn-Out Shares”).
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(ii) If Nice achieves an EBIT of HK$20,000,000 (the “2022 EBIT Goal”), as evidenced on the 2022 audited financial statements of Nice for fiscal year ended December 31, 2022 audited by the auditor of the Company, the Buyer shall pay the Seller or its designee who is an affiliate of the Seller the final 20% of the Purchase Price HK$28,800,000 in Company Shares as calculated on: (1) 95% of the closing price of the Company’s common stock listed on Nasdaq Stock Exchange prior to this Amendment ; and (2) the exchange rate shall be $1:HK$7.7 (the “2022 Earn-Out Shares”).
(iii) If Nice achieves lower than EBIT Goal for a given year, the shortfall between EBIT Goal for that year and the actual EBIT for that corresponding year shall be the EBIT Shortfall (the “EBIT Shortfall”). If an EBIT Shortfall occurs for a given year, the amount of such year’s Earn-Out Shares shall still be issued in full to the Seller or its designee who are affiliate of the Seller in accordance with Section 1.1(c)(i) or (ii)of this Agreement for that given year, but an EBIT Shortfall Fee that equals to 10 (ten) times of the EBIT Shortfall amount (the “EBIT Shortfall Fee”) shall be paid in cash by the Seller to the Buyer, before the Earn-Out Shares for that year are issued to the Seller or its designee. Under no circumstances shall the Buyer or the Company be entitled to request for any return of Company Shares previously already issued to the Seller or its designee.
(iv) The amount of Company Shares to be issued pursuant to subsections (i) and (ii) shall be referred to as “Earn-Out Payments”. The Earn-Out Payments, if required pursuant to the term of this Agreement, shall be made to the Seller or its designee in the form of Company Shares no later than thirty (30) calendar days (referred as an “Earn-Out Payment Date”) after the end of fiscal year’s audited financial statements are delivered to the Company. Notwithstanding anything contained herein to the contrary, if the issuance of any Earn-Out Shares could cause the total number of Company Shares exceeding 19.99% of the outstanding number of shares of common stock of the Company on the date of such issuance (the “19.99% Limit”), the amount of purchase price that exceeds the 19.99% Limit shall be paid from the Buyer to the Seller in cash in U.S. Dollar pursuant to the exchange rate specified under this section 1.1(c)(i) accordingly.
(C) The section 1.2 of the Agreement shall be deleted in its entirety and replaced with the following:
Section 1.2 Closing. The closing of the Share Exchange Transaction (the “Closing”) shall take place at 10:00 a.m. EST on the business day after this Agreement has been executed by the Seller, Nice, the Buyer and the Company, and the last condition listed in Article VII and Article VIII has been fulfilled or waived, or at such other time and date as the parties shall agree in writing (the “Closing Date”), but no later than December 31, 2021. The Seller shall deliver to the Buyer within five (5) business days after the Closing, the original stock certificates representing the Nice Shares, duly endorsed in blank for transfer or accompanied by appropriate stock powers duly executed in blank. In full consideration for the Nice Shares, the Company shall issue the Initial Company Shares to the Seller, as detailed on Exhibit A hereto.
(D) The section 7.6 of the Agreement shall be deleted in its entirety and replaced with the following:
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Section 7.6 Conditions Precedent If the condition referred in Section 7.3 (approval of substantial share application of the Buyer and the Company by the Securities and Futures Commission of Hong Kong) has not been fulfilled on or before December 31, 2021, or such later date as the Seller, Nice, the Company and the Buyer may agree in writing, this Share Exchange Agreement shall cease to be effective and thereafter neither party shall have any obligations and liabilities towards each other thereunder save for any antecedent breaches of the terms thereof.
(E) The address for the Company, Buyer and its counsel under section 10.5 of the Agreement shall be deleted in its entirety and replaced with the following:
If to the Buyer, to:
Future Fintech (Hong Kong) Limited
Americas Tower, 1177 Avenue of The Americas,
Suite 5100, New York, NY 10036
Tel:+1-888-622-1218
Attn: Shanchun Huang
If to the Company, to:
Future Fintech Group Inc.
Americas Tower, 1177 Avenue of The Americas,
Suite 5100, New York, NY 10036
Tel:+1-888-622-1218
Attn: Shanchun Huang, Chief Executive Officer
with a copy (not constituting notice) to:
FisherBroyles, LLP
1200 G Street, NW
Suite 800
Washington, D.C. 20005
Attn: Jeffrey Li
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(F) The Exhibit A of the Agreement shall be deleted in its entirety and replaced with the following:
Seller | Shares of Nice to be delivered to Buyer | Initial Company Shares of the Company to be issued to Seller on the Closing Date | 2021 Earn-Out Shares | 2022 Earn-Out Shares | ||||||||||
JOY RICH ENTERPRISES LIMITED | 162 | 2,244,156 | 748,052 | 748,052 | ||||||||||
Total | 162 | 3,740,260 |
The 95% of closing price of the Company’s common stock listed on Nasdaq Stock Exchange prior to this Amendment is at $ 5.00
Exchange between US$ and HK$ shall be 1:7.7
2. Effect of Amendment. Except as expressly set forth herein, all terms of the Agreement remain in full force and effect, and constitute the legal, valid, binding and enforceable obligations of the parties thereto.
3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York, without respect to any principles of conflict of law.
4. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.
(SIGNATURE PAGE TO FOLLOW)
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Share Exchange Agreement as of the date first above written.
FUTURE FINTECH GROUP INC. | ||
By: | /s/ Shanchun Huang | |
Name: | Shanchun Huang | |
Title: | CEO | |
FUTURE FINTECH (HONG KONG) LIMITED | ||
By: | /s/ Li Ying | |
Name: | Li Ying | |
Title: | Director | |
NICE TALENT ASSET MANAGEMENT LIMITED | ||
By: | /s/ Chan Siu Kei | |
Name: | Chan Siu Kei | |
Title: | Director | |
JOY RICH ENTERPRISES LIMITED | ||
Signature: | /s/ You Wing Hei | |
Name: | Yiu Wing Hei | |
By: | ||
Its: |
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