IFMK iFresh Inc

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR iFresh shareholders

Q: What is the purpose of this document?

A: Holders of shares of iFresh’s common stock will be asked to approve the issuance of 9,210,526 shares of common stock in exchange for 1,000 shares of preferred stock owned by Long Deng, and other related proposals. Long Deng is the Chief Executive Officer and a director of iFresh. These transactions are being undertaken in order to allow iFresh to come back into compliance with certain requirements of the Nasdaq Stock Market. If these transactions are not approved, iFresh may not remain listed on the Nasdaq Stock Market.

This proxy statement contains important information about the proposed the other matters to be acted upon at the special meeting of iFresh shareholders. You should read it carefully.

Q: What is being voted on?

A: Below are the proposals on which iFresh shareholders are being asked to vote:

Q: When and where is the special meeting of iFresh shareholders?

A: The special meeting of iFresh shareholders will take place at [●] on [●], 2020, at [●] a.m.

Q: Who may vote at the special meeting of shareholders?

A: Only holders of record of iFresh common stock as of the close of business on [●], 2020 may vote at the special meeting of shareholders. As of [●], 2020, there were [●] shares of iFresh common stock outstanding and entitled to vote. Please see “Special Meeting of iFresh Shareholders — Record Date; Who is Entitled to Vote” for further information.

Q: What is the quorum requirement for the special meeting of shareholders?

A: Shareholders representing a majority of the iFresh common stock issued and outstanding as of the record date and entitled to vote at the special meeting must be present in person or represented by proxy in order to hold the special meeting and conduct business. This is called a quorum. iFresh common stock will be counted for purposes of determining if there is a quorum if the shareholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card. In the absence of a quorum, shareholders representing a majority of the votes present in person or represented by proxy at such meeting may adjourn the meeting until a quorum is present.

Q: What vote is required to approve the Proposals?

A: Approval of the each of the Proposals will each require the affirmative vote of the holders of a majority of the issued and outstanding shares of common stock of iFresh present and entitled to vote at the special meeting. Attending the special meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and, assuming a quorum is present, broker non-votes will have no effect on the Series A Share Exchange Proposal, the Series B Share Exchange Proposal, the Nasdaq Proposal, and the Adjournment Proposal.

Q: How can I vote?

A: If you were a holder of record iFresh common stock on [●], 2020, the record date for the special meeting of iFresh shareholders, you may vote with respect to the applicable proposals in person at the special meeting of iFresh shareholders, or by submitting a proxy by mail so that it is received prior to 9:00 a.m. on [●], 2020, in accordance with the instructions provided to you under “Special Meetings of iFresh Shareholders.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide voting instructions (including any telephone or Internet voting instructions). You should contact your broker, bank or nominee in advance to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting of iFresh shareholders and vote in person, obtain a proxy from your broker, bank or nominee.

Q: If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

A: No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. iFresh believes the Proposals are non-discretionary and, therefore, your broker, bank or nominee cannot vote your shares without your instruction. Broker non-votes will not be considered present for the purposes of establishing a quorum and will have no effect on the Proposals. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your shares; this indication that a bank, broker or nominee is not voting your shares is referred to as a “broker non-vote.” Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your iFresh shares in accordance with directions you provide.

Q: What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

A: iFresh will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the special meeting of iFresh shareholders. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal.

Q: Can I change my vote after I have mailed my proxy card?

A: Yes. You may change your vote at any time before your proxy is voted at the special meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the special meeting in person and casting your vote by ballot or by submitting a written revocation stating that you would like to revoke your proxy that we receive prior to the special meeting. If you hold your shares through a bank, brokerage firm or nominee, you should follow the instructions of your bank, brokerage firm or nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

iFresh Inc.

2-39 54th Avenue

Long Island City, NY

Telephone:

DELIVERY OF DOCUMENTS TO IFRESH shareholders

Pursuant to the rules of the SEC, iFresh and services that it employs to deliver communications to its shareholders are permitted to deliver to two or more shareholders sharing the same address a single copy of the proxy statement, unless iFresh has received contrary instructions from one or more of such shareholders. Upon written or oral request, iFresh will deliver a separate copy of the proxy statement to any shareholder at a shared address to which a single copy of the proxy statement was delivered and who wishes to receive separate copies in the future. Shareholders receiving multiple copies of the proxy statement may likewise request that iFresh deliver single copies of the proxy statement in the future. Shareholders may notify iFresh of their requests by contacting iFresh as follows:

iFresh Inc.

2-39 54th Avenue

Long Island City, NY

Attn:
Telephone:

SECURITIES AND DIVIDENDS

iFresh’s shares are quoted on the Nasdaq Stock Market under the symbol “IFMK.”

iFresh has not paid any cash dividends on its common stock to date. The payment of cash dividends in the future will be dependent upon iFresh’s revenues and earnings, if any, capital requirements and general financial conditions. The payment of any dividends is within the discretion of its then board of directors. It is the present intention of iFresh’s board of directors to retain all earnings, if any, for use in its business operations and, accordingly, iFresh’s board does not anticipate declaring any dividends in the foreseeable future.

SPECIAL MEETING OF iFresh SHAREHOLDERS

General

We are furnishing this proxy statement to the iFresh shareholders as part of the solicitation of proxies by our board of directors for use at the special meeting of iFresh shareholders to be held on [●], 2020, and at any adjournment or postponement thereof. This proxy statement is first being furnished to our shareholders on or about [●], 2020 in connection with the vote on the proposals described herein. This document provides you with the information you need to know to be able to vote or instruct your vote to be cast at the special meeting.

Date, Time and Place

The special meeting of shareholders will be held on [●], 2020 at [●] a.m., at [●], or such other date, time and place to which such meeting may be adjourned or postponed.

Purpose of the Special Meeting of iFresh Shareholders

At the special meeting of shareholders, we are asking holders of iFresh common stock to approve the following proposals:

The proposals above are sometimes collectively referred to herein as the “Proposals.”

Recommendation of iFresh’s Board of Directors

iFresh’s board of directors:

Record Date; Who is Entitled to Vote

We have fixed the close of business on [●], 2020, as the “record date” for determining those iFresh shareholders entitled to notice of and to vote at the special meeting. As of the close of business on [●], 2020, there were [●] shares of iFresh common stock outstanding and entitled to vote. Each holder of iFresh common stock is entitled to one vote per share on each of the Proposals.

Quorum and Required Vote for Shareholder Proposals

A quorum of iFresh shareholders is necessary to hold a valid meeting. A quorum will be present at the special meeting of iFresh shareholders if a majority of the iFresh common stock issued and outstanding and entitled to vote at the special meeting is represented in person or by proxy. Abstentions present in person and by proxy will count as present for the purposes of establishing a quorum but broker non-votes will not.

Approval of the each of the Proposals will each require the affirmative vote of the holders of a majority of the issued and outstanding shares of common stock of iFresh present and entitled to vote at the special meeting. Attending the special meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and, assuming a quorum is present, broker non-votes will have no effect on the Series A Share Exchange Proposal, the Series B Share Exchange Proposal, the Nasdaq Proposal, and the Adjournment Proposal.

Voting Your Shares

Each share of iFresh common stock that you own in your name entitles you to one vote for each proposal on which such shares are entitled to vote at the special meeting. Your proxy card shows the number of shares of our common stock that you own.

There are two ways to ensure that your shares of iFresh common stock are voted at the special meeting:

You can cause your shares to be voted by signing and returning the enclosed proxy card. If you submit your proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted, as recommended by our board, “FOR” the adoption of the Proposals. Votes received after a matter has been voted upon at either of the special meetings will not be counted.

You can attend the special meetings and vote in person. We will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares.

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF THE PROPOSALS.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

you may send another proxy card with a later date;

if you are a record holder, you may notify our corporate secretary in writing before the special meeting that you have revoked your proxy; or

you may attend the special meeting, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

[If you have any questions about how to vote or direct a vote in respect of your shares of our common stock, you may call [●], our proxy solicitor, at [●], or iFresh at [●].]

No Additional Matters May Be Presented at the Special Meeting

This special meeting has been called only to consider the approval of the Proposals. Under iFresh’s Amended and Restated Certificate of Incorporation, other than procedural matters incident to the conduct of the special meeting, no other matters may be considered at the special meeting if they are not included in the notice of the special meeting.

Proxies and Proxy Solicitation Costs

We are soliciting proxies on behalf of our board of directors. This solicitation is being made by mail but also may be made by telephone or in person. iFresh and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Any solicitation made and information provided in such a solicitation will be consistent with the written proxy statement and proxy card. [●], a proxy solicitation firm that iFresh has engaged to assist it in soliciting proxies, will be paid its customary fee of approximately $[●] and out-of-pocket expenses.

iFresh will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. iFresh will reimburse them for their reasonable expenses.

If you send in your completed proxy card, you may still vote your shares in person if you revoke your proxy before it is exercised at the special meeting.

THE SERIES A SHARE EXCHANGE PROPOSAL

Overview

On December 11, 2019, iFresh entered into an agreement with Long Deng pursuant to which it issued 1,000 shares of its preferred stock to Mr. Deng in exchange for the cancellation of $3,500,000 of liabilities. The shares of preferred stock are only convertible into shares of common stock if the conversion is approved by iFresh’s stockholders. If the conversion is approved, the preferred stock will result in the issuance of 9,210,526 shares of common. Long Deng is the Chief Executive Officer and a director of iFresh.

Assuming all the transactions being presented to stockholders in this proxy statement close, Mr. Deng will own approximately [●]% of iFresh.

This agreement was entered into by iFresh as part of a plan to allow it to regain compliance with the stockholder’s equity requirement of Nasdaq Listing Rule 5550(b).

Required Vote

Approval of the Series A Share Exchange Proposal requires the affirmative vote of the holders of a majority of the shares of iFresh common stock.

Board Recommendation

The board of directors recommends a vote “FOR” adoption of the Series A Share Exchange Proposal.

THE SERIES B SHARE EXCHANGE PROPOSAL

Overview

On March 26, 2020, we entered into an agreement (the “Acquisition Agreement”) with Kairui Tong and Hao Huang (collectively, the “Sellers”) and Hubei Rongentang Wine Co., Ltd. and Hubei Rongentang Herbal Wine Co., Ltd., pursuant to which the Sellers sold their 100% interest in Hubei Rongentang Wine Co., Ltd. and Hubei Rongentang Herbal Wine Co., Ltd. (collectively, the “Target Companies”) to us in exchange for 3,852,372 shares of the Company’s common stock and 1,000 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”). Upon approval of the Company’s shareholders, the 1,000 shares of Series B Preferred Stock will be converted into 3,834,796 shares of our common stock. The closing took place on April 22, 2020.

This agreement was entered into by iFresh as part of a plan to allow it to regain compliance with the stockholder’s equity requirement of Nasdaq Listing Rule 5550(b).

Required Vote

Approval of the Series B Share Exchange Proposal requires the affirmative vote of the holders of a majority of the shares of iFresh common stock.

Board Recommendation

The board of directors recommends a vote “FOR” adoption of the Series B Share Exchange Proposal.

THE NASDAQ PROPOSAL

Background and Overview

Pursuant to the Series A Share Exchange Proposal, iFresh is required to issue more than 20% of its issued and outstanding shares of common stock. Because of the issuance of in excess of 20% of the outstanding shares of common stock of iFresh, we are required to obtain stockholder approval in order to comply with Nasdaq Listing Rules 5635(a) and (d).

Pursuant to the Series B Share Exchange Proposal, iFresh is required to issue more than 20% of its issued and outstanding shares of common stock. Because of the issuance of in excess of 20% of the outstanding shares of common stock of iFresh, we are required to obtain stockholder approval in order to comply with Nasdaq Listing Rules 5635(a) and (d).

Under Nasdaq Listing Rule 5635(a), stockholder approval is required prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering and (A) such securities have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock); or (B) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.

Under Nasdaq Listing Rule 5635(d), stockholder approval is required for a transaction other than a public offering involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) at a price that is less than the market value of the stock if the number of shares of common stock to be issued is or may be equal to 20% or more of the common stock, or 20% or more of the voting power, outstanding before the issuance.

Effect of Proposal on Current Stockholders

If the Nasdaq Proposal is adopted, iFresh would issue shares representing more than 20% of its outstanding common stock in connection with the Series A Share Exchange Proposal and the Series B Shares Exchange Proposal. The issuance of such shares would result in significant dilution to the iFresh stockholders and would afford such stockholders a smaller percentage interest in the voting power, liquidation value and aggregate book value of iFresh. The Series A Preferred Stock and the Series B Preferred Stock may not be converted in the absence of stockholders approval. Such securities were issued to enable iFresh to regain compliance with Nasdaq rules, which it did.

Required Vote

Approval of the Nasdaq Proposal requires the affirmative vote of the holders of a majority of the shares of iFresh common stock represented in person or by proxy at the special meeting of iFresh stockholders and entitled to vote thereon.

Board Recommendation

The board of directors recommends a vote “FOR” adoption of the Nasdaq Proposal.

THE ADJOURNMENT PROPOSAL

Purpose of the Adjournment Proposal

In the event there are not sufficient votes for, or otherwise in connection with, the adoption of the Proposals, the iFresh board of directors may adjourn the special meeting to a later date, or dates, if necessary, to permit further solicitation of proxies.

Required Vote

Approval of the Adjournment Proposal requires the affirmative vote of the majority of the holders of iFresh common stock as of the record date represented in person or by proxy at the special meeting of iFresh shareholders and entitled to vote thereon. Adoption of the Adjournment Proposal is not conditioned upon the adoption of any of the other proposals.

Board Recommendation

The board of directors recommends a vote “FOR” adoption of the Adjournment Proposal.