UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(a)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
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☐
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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Soliciting
Material Pursuant to Rule 240.14a-12
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FUTURE
FINTECH GROUP INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies: _____________
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(2)
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Aggregate
number of securities to which transaction applies: _____________
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): _____________
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(4)
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Proposed
maximum aggregate value of transaction: _____________
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(5)
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Total
fee paid: _____________
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Fee
paid previously with preliminary materials:
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box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid: _____________
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(2)
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Form,
Schedule or Registration Statement No.: _____________
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(3)
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Filing
Party: _____________
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Date
Filed: _____________
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Future
FinTech Group Inc.
23F,
China Development Bank Tower
No.
2, Gaoxin 1st Road
Xi’an,
Shaanxi, China 710075
LETTER
FROM THE CHIEF EXECUTIVE OFFICER
Dear
Shareholder:
You
are cordially invited to attend the 2018 Annual Meeting of Shareholders of Future FinTech Group Inc., a Florida corporation (the
“Company” or “Future FinTech”), which will be held at our principal executive offices, located at 23F,
China Development Bank Tower, No. 2, Gaoxin 1st Road, Xi’an, Shaanxi, China, on Thursday, December 6, 2018, at 10:00 A.M.,
local time.
The
Notice of Annual Meeting of Shareholders and Proxy Statement describe the formal business to be transacted at the annual meeting.
Our directors and officers will be present to respond to appropriate questions from shareholders.
Whether
or not you plan to attend the meeting, please vote as soon as possible. You can vote by returning the proxy card in the enclosed
postage-prepaid envelope. This will ensure that your shares will be represented and voted at the meeting, even if you do not attend.
If you attend the meeting, you may revoke your proxy and personally cast your vote. Attendance at the meeting does not of itself
revoke your proxy.
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/s/
Y
ongke Xue
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Yongke
Xue
Chief
Executive Officer
October
15, 2018
Xi’an,
China
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FUTURE
FINTECH GROUP INC.
23F,
China Development Bank Tower,
No.
2 Gaoxin 1st Road
Xi’an,
Shaanxi, China 710075
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
be Held Thursday, December 6, 2018
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Shareholders of Future FinTech Group Inc., a Florida corporation (the “Company”
or “Future FinTech”), will be held at our principal executive offices, located at 23F, China Development Bank Tower,
No. 2, Gaoxin 1st Road, Xi’an, Shaanxi, China, on Thursday, December 6, 2018, at 10:00 A.M., local time, for the following
purposes, as set forth in the attached Proxy Statement:
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(1)
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To
elect five directors to hold office until the next Annual Meeting of Shareholders and
until their successors are elected and qualified;
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(2)
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To
ratify the Audit Committee’s selection of the independent registered public accounting
firm for the fiscal year ending December 31, 2018;
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(3)
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To
approve the compensation of our named executive officers in a non-binding, advisory vote,
as reported in this proxy statement; and
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(4)
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To
transact
such other business as may properly come before the meeting or any adjournment thereof.
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The
Board of Directors of the Company (the “Board of Directors” or the “Board”) has fixed the close of business
on October 15, 2018 as the record date for determining the shareholders entitled to notice of, and to vote at, the Annual Meeting
and any adjournment and postponements thereof (the “Record Date”).
After
careful consideration, the Board of Directors recommends a vote IN FAVOR OF the nominees for director named in the accompanying
proxy statement, a vote IN FAVOR OF the ratification of the Audit Committee’s selection of the independent registered public
accounting firm, and a vote IN FAVOR OF the compensation of our named executive officers.
Shareholders
are cordially invited to attend the Annual Meeting in person. Whether you plan to attend the Annual Meeting or not, please complete,
sign and date the enclosed Proxy Card and return it without delay in the enclosed postage-prepaid envelope. If you do attend the
Annual Meeting, you may withdraw your Proxy and vote personally on each matter brought before the meeting.
By
Order of the Board of Directors
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/s/
Yongke Xue
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Yongke
Xue
Chief
Executive Officer
October
15, 2018
Xi’an,
China
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IMPORTANT
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE. SIGNING AND RETURNING A PROXY WILL NOT PREVENT YOU FROM
VOTING IN PERSON AT THE MEETING.
THANK
YOU FOR ACTING PROMPTLY
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held Thursday, December 6, 2018.
This Proxy Statement and our 2017 Annual Report to Shareholders are available at http://www.ftft.top, which does not have “cookies”
that identify visitors to the site.
PROXY
STATEMENT
FOR
THE ANNUAL MEETING OF SHAREHOLDERS OF
FUTURE
FINTECH GROUP INC.
To
be Held on Thursday, December 6, 2018
The
Board of Directors of Future FinTech Group Inc., a Florida corporation (“Future FinTech” or the “Company”),
is soliciting proxies for the Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held at our
principal executive offices, located at 23F, China Development Bank Tower, No. 2, Gaoxin 1st Road, Xi’an, Shaanxi, China,
on Thursday, December 6, 2018, at 10:00 A.M., local time, and at any adjournments thereof. You are receiving a proxy statement
because you own shares of the Company’s common stock that entitle you to vote at the Annual Meeting. By use of a proxy,
you can vote whether or not you attend the Annual Meeting. The proxy statement describes the matters we would like you to vote
on and provides information on those matters so you can make an informed decision.
Purposes
of the Annual Meeting
The purpose of the Annual Meeting is to: (i)
elect as directors the five nominees named in this proxy statement; (ii) ratify the Audit Committee’s selection of independent
registered public accounting firm; (iii) approve the compensation of our named executive officers in a non-binding, advisory vote;
and (iv) conduct such other business as may properly come before the Annual Meeting. This Proxy Statement and the enclosed proxy
card are intended to be mailed to shareholders on or about October 26, 2018.
Record
Date and Voting Securities
The Board of Directors fixed the close of
business on October 15, 2018 (the “Record Date”) as the record date for shareholders entitled to notice of and to
vote at the Annual Meeting. As of that date, there were 26,017,083 shares of the Company’s common stock (the “Common
Stock”) outstanding and entitled to vote, the holders of which are entitled to one vote per share.
Quorum
A
quorum is the minimum number of shares required to hold a meeting. A majority of the shares of our common stock issued and outstanding
and entitled to vote must be represented in person or by proxy at the meeting to establish a quorum. Both abstentions and broker
non-votes are counted as present for determining the presence of a quorum. Broker non-votes, however, are not counted as shares
present and entitled to be voted with respect to the matter on which the broker has not voted. Thus, broker non-votes will not
affect the outcome of any of the matters to be voted on at the Annual Meeting. Generally, broker non-votes occur when shares held
by a broker for a beneficial owner are not voted with respect to a particular proposal because (1) the broker has not received
voting instructions from the beneficial owner and (2) the broker lacks discretionary voting power to vote such shares.
Voting
Generally
Holders of record of shares of the Company’s
Common Stock as of the Record Date are entitled to one vote per share on each matter to be considered and voted upon at the Annual
Meeting. As of the Record Date, there were 26,017,083 shares of Common Stock issued, outstanding and entitled to be voted, which
were held by approximately 79 holders of record.
Our
Second Amended and Restated Articles of Incorporation state that there is no cumulative voting in the election of directors. The
affirmative vote of the holders of shares of Common Stock representing a plurality of the votes cast at the Annual Meeting at
which a quorum is present is required for the election of the directors listed below. Abstentions and non-votes will be counted
for purposes of determining the presence of a quorum, but will not be counted as a vote for the election as a director of any
nominee.
Votes cast in person or by proxy at the Annual
Meeting will be tabulated at the Annual Meeting. All valid, unrevoked proxies will be voted as directed. In the absence of instructions
to the contrary, properly executed proxies will be voted (i) for the election of each of the nominees for director set forth herein,
(ii) for the ratification of Wang Certified Public Accountant, P.C., as our independent registered public accounting firm; and
(iii) for the approval of the compensation of our named executive officers in a non-binding, advisory vote.
If
any matters other than those addressed on the proxy card are properly presented for action at the Annual Meeting, the persons
named in the proxy card will have the discretion to vote on those matters in their best judgment, unless authorization is withheld.
Many
of our shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own names. As
summarized below, there are some distinctions between shares held of record and those owned beneficially.
Shareholder
of Record.
If your shares are registered directly in your name with our transfer agent, Continental Stock Transfer, you are
considered the shareholder of record with respect to those shares. As a shareholder of record, you have the right to grant your
voting proxy directly to us or to vote in person at the Annual Meeting. As the shareholder of record, you may vote in person at
the Annual Meeting or vote by proxy using the accompanying proxy card. Whether or not you plan to attend the Annual Meeting, we
urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you
have already voted by proxy.
By
Mail — shareholders must request a paper copy of the proxy materials to receive a proxy card and follow the instructions
given for mailing. A paper copy of the proxy materials may be obtained by logging onto
www.proxyvote.com
and
following the instructions given. To vote using the proxy card, simply print the proxy card, complete, sign and date it and return
it promptly to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. In the alternative, the proxy card
can be mailed directly to the Company: Corporate Secretary at 23F, China Development Bank Tower, No. 2, Gaoxin 1st Road, Xi’an,
Shaanxi, China, 710075.
Online
– shareholders may submit a proxy online using the website listed on the proxy card. Please have your proxy card in hand
when you log onto the website. Online voting facilities will close and no longer be available on the date and time specified on
the proxy card.
In
Person — shareholders may vote in person at the Annual Meeting. To vote in person, come to the Annual Meeting and we will
give you a ballot when you arrive. The Board recommends that you vote using one of the other voting methods, given that it is
not practical for most stockholders to attend the Annual Meeting.
Please
note that the notice letter you received directing you to the website at which the proxy materials are available is not the proxy
card and should not be used to submit your vote
.
If
you do not return a signed proxy card, vote online or attend the meeting and vote in person, your shares will not be voted. Shares
of our common stock represented by properly executed proxies that are received by us and are not revoked will be voted at the
Annual Meeting in accordance with the instructions contained therein. If you return a signed and dated proxy card and instructions
are not given, such proxies will be voted
FOR
the election of each nominee for director named herein,
FOR
ratification
of the selection of Wang Certified Public Accountant, P.C., as our independent registered public accounting firm, and
FOR
the
proposal to approve, on a non-binding, advisory basis, the compensation of our named executive officers set forth in this proxy
statement. In addition, we reserve the right to exercise discretionary authority to vote proxies, in the manner determined by
us, in our sole discretion, on any matters brought before the Annual Meeting for which we did not receive adequate notice under
the proxy rules promulgated by the Securities and Exchange Commission (“SEC”).
Beneficial
Holder.
If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner
of the shares held in street name, and these proxy materials are being forwarded to you by your broker or nominee who is considered
the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker on how
to vote and are also invited to attend the meeting. However, since you are not the shareholder of record, you may not vote these
shares in person at the meeting. Your broker or nominee has enclosed a proxy card for your use.
Required
Vote
The
nominees for election as directors at the Annual Meeting will be elected by a plurality of the votes cast at the meeting. This
means that the director nominee with the most votes for a particular slot is elected for that slot. Votes withheld from one or
more director nominees will have no effect on the election of any director from whom votes are withheld. The approval of each
of the other proposals require the affirmative vote of a majority of the shares represented at the meeting and entitled to vote
on that proposal.
If
you are a beneficial owner and do not provide the shareholder of record with voting instructions, your shares may constitute “broker
non-votes.” A “broker non-vote” occurs when a bank, broker or other holder of record holding shares for a beneficial
owner does not vote on a particular proposal because that holder does not have discretionary voting power and has not received
instructions from the beneficial owner.
Under
applicable regulations, if a broker holds shares on your behalf, and you do not instruct your broker how to vote those shares
on a matter considered “routine,” the broker may generally vote your shares for you. A “broker non-vote”
occurs when a broker has not received voting instructions from you on a “non-routine” matter, in which case the broker
does not have authority to vote your shares with respect to such matter. Rules that govern how brokers vote your shares have recently
changed. Unless you provide voting instructions to a broker holding shares on your behalf, your broker may no longer use discretionary
authority to vote your shares on any of the matters to be considered at the Annual Meeting other than the ratification of our
independent registered public accounting firm. Please vote your proxy so your vote can be counted.
Unless
otherwise required by the Company’s Second Amended and Restated Articles of Incorporation, as amended, Bylaws, the Florida
Business Corporation Act, or by other applicable law, any other proposal that is properly brought before the Annual Meeting will
require approval by the affirmative vote of a majority of all votes cast at the Annual Meeting. With respect to any such proposal,
neither abstentions nor broker non-votes will be counted as votes cast for purposes of determining whether the proposal has received
sufficient votes for approval.
Directors
and executive officers of the Company beneficially hold approximately 1,671,955 shares of Company Common Stock, or 6.4% of all
the votes entitled to be cast at the Annual Meeting.
Deadline
for Voting by Proxy
In
order to be counted, votes cast by proxy must be received prior to the Annual Meeting.
Revocability
of Proxies
Shareholders
are requested to date, sign and return the enclosed proxy card to make certain their shares will be voted at the Annual Meeting.
Any proxy given may be revoked by the shareholder at any time before it is voted by delivering written notice of revocation to
the Secretary of the Company, by filing with the Secretary of the Company a proxy bearing a later date, or by attending the Annual
Meeting and voting in person. All proxies properly executed and returned will be voted in accordance with the instructions specified
thereon.
Ho
u
seholding
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy
materials with respect to two or more shareholders sharing the same address by delivering a single set of proxy materials. This
process, which is commonly referred to as “householding,” potentially results in extra convenience for shareholders
and cost savings for companies. The Company has adopted the SEC-approved “householding” procedure.
Upon
written or oral request, the Company will deliver promptly a separate copy of the Notice of Annual Meeting of Shareholders to
any shareholder at a shared address to which the Company delivered a single copy of any of these documents. If, at any time, you
no longer wish to participate in “householding” and would prefer to receive a separate set of proxy materials, you
may:
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●
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Send
a written request to the Company’s Corporate Secretary at 23F, China Development Bank Tower, No. 2, Gaoxin 1st Road,
Xi’an, Shaanxi, China, 710075, or call 86-29-81878277 if you are a shareholder of record; or
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●
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Notify
your broker, if you hold your common shares under street name.
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If
you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding,
please contact the Company using the mailing address and phone number above. Shareholders who hold shares in street name may contact
their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
Future
FinTech Information
Our
principal executive offices are located at 23F, China Development Bank Tower, No. 2, Gaoxin 1st Road, Xi’an, Shaanxi, China,
710075. The telephone number of our principal offices is 86-29-81878277.
PROPOSAL
1 – ELECTION OF BOARD OF DIRECTORS
Directors
Based
on the Company’s nominations process, a majority of the independent members of the Board shall recommend to the Board for
nomination by the Board such candidates as said majority of the independent directors, in the exercise of their judgment, have
found to be well qualified and willing and available to serve. A majority of our independent directors of the Board has recommended
and the Board has nominated the persons listed below for election to the Board at the Annual Meeting, to hold office until the
next Annual Meeting and until their respective successors are elected and qualified. It is not contemplated that any of the nominees
will be unable or unwilling to serve as a director, but, if that should occur, the persons designated as proxies will vote in
accordance with their best judgment. In no event will proxies be voted for a greater number of persons than the number of nominees
named in this Proxy Statement.
All
shares represented by valid proxies, and not revoked before they are exercised, will be voted in the manner specified therein.
If a valid proxy is submitted but no vote is specified, the Proxy will be voted FOR the election of each of the five nominees
for election as directors. Please note that your broker will not be permitted to vote on your behalf on the election of directors
unless you provide specific instructions by completing and returning the voting instruction form. For your vote to be counted,
you will need to communicate your voting decisions to your broker or other nominee before the date of the Annual Meeting or obtain
a legal proxy to vote your shares at the meeting. Although all nominees are expected to serve if elected, if any nominee is unable
to serve, then the persons designated as proxies will vote for the remaining nominees and for such replacements, if any, as may
be nominated by our Board, who currently serves the functions of a nominating committee as the Board does not have a standing
nominating committee. Proxies cannot be voted for a greater number of persons than the number of nominees specified herein (five
persons). Cumulative voting is not permitted.
The
affirmative vote of the holders of shares of Common Stock representing a plurality of the votes cast at the Meeting at which a
quorum is present is required for the election of the directors listed below.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL FIVE NOMINEES LISTED BELOW.
The
following sets forth the information regarding our director nominees as of October 11, 2018, including the names of each of the
five nominees for election as a director, such person’s position, age, the year such person became a director of the Company,
and additional biographical data.
Name
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Age
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Position
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Service From
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Yongke Xue (1)
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50
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Chairman, Chief Executive Officer and Director
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February, 2008
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Zhi Yan (3)
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42
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Director, Chief Technology Officer
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February, 2018
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Johnson Lau (2)
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44
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Director (Independent)
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December, 2014
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Yiliang Li (2)
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55
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Director (Independent)
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May, 2018
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Fuyou Li (2)
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64
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Director (Independent)
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May, 2015
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(1)
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On
September 2, 2016, Mr. Yongke Xue resigned from his position as the Chief Executive Officer
of the Company and Chairman of the Board of the Directors of the Company. Mr. Yongke
Xue was appointed Chief Executive Officer and Chairman on December 24, 2014, and resigned
as Chief Executive Officer and Chairman of the Company on September 2, 2016.On January
5, 2018, Mr. Yongke Xue was reappointed as the Company’s Chief Executive Officer
and Chairman effective on January 31, 2018.
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(2)
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Member
of the Audit Committee and Compensation Committee of the Board.
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(3)
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Mr.
Yan has served as the Company’s Chief Technology Officer since February 2018, and
was appointed to the Company’s Board of Directors on October 10, 2018 to fill the
vacancy created by the resignation of Xiaofeng Dai.
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Yongke
Xue, Chairman of the Board of Directors and Chief Executive Officer
Mr.
Yongke Xue was reappointed as our Chairman and Chief Executive Officer effective January 31, 2018. Mr. Xue previously served as
our Chief Executive Officer from February 26, 2008 to February 18, 2013, and from December 24, 2014 to September 2, 2016. Mr.
Yongke Xue has served as the director of SkyPeople (China) since December 2005. Mr. Xue served as the general manager of
Hede from December 2005 to June 2007. Prior to that, he served as the business director of the investment banking division of
Hualong Securities Co., Ltd. from April 2001 to December 2005. He also acted as the vice general manager of Shaanxi Huaye Foods
Co., Ltd. from July 1998 to March 2001. Mr. Xue graduated from Xi’an Jiaotong University with an MBA in 2000. Mr. Xue
graduated with a Bachelor’s degree in Metal Material & Heat Treatment from National University of Defense Technology
in July 1989. The Board believes that Mr. Xue’s vision, leadership and extensive knowledge of the Company is essential to
the development of its strategic vision.
Zhi
Yan
Mr.
Yan has served as the Company’s CTO since February 2018. Since September 2017, Mr. Yan has also served as the director of
Nova Realm Limited, in which the Company has a 5% equity interest. From August 2013 to July 2016, Mr. Yan served as a partner
of Li’an (Beijing) Science and Technology Ltd., and from March 2010 to August 2013, he established and operated Weiwang
Science and Technology Ltd. to develop an interactive reading system that makes long literary pieces easier to read. Mr. Yan has
a degree in Aircraft Design and Fluid Mechanics from Beijing University of Aeronautics and Astronautics. The Board believes that
Mr. Yan’s experience in blockchain technologies, cryptocurrencies and scientific and technological development projects
will benefit the Company’s new and developing lines of business.
Yiliang
Li
Mr.
Li has served as the Chairman of Dagong (Beijing) International Fund Management Co., Ltd. (“Dagong Beijing”) since
October, 2015. From January, 2013 to October, 2015, Mr. Li was the head of the preparation committee for the establishment of
Dagong Beijing. Mr. Li has also served as the Chairman of China Consumer Economy Association since December, 2017. Mr. Li received
his Bachelor Degree of Engineering from Shandong University of Technology in 1982 and his Master Degree of Political Economics
in 1995. The Board believes that Mr. Li’s significant business experience and connections to investment funds will be an
asset to the Company and the Board.
Fuyou
Li
On
May 8, 2015, the Company’s Board of Directors appointed Mr. Fuyou Li as a member of the Company’s Board of Directors
effective as of that date. The Board of Directors also appointed Mr. Li as a member of both audit committee and compensation committee.
Mr. Li graduated from Xi’an Jiaotong University with a doctor’s degree in economics. He has taught international finance
as a professor in Xi’an Jiaotong University for the past 7 years. In determining that Mr. Li should serve on the Company’s
Board of Directors, the Board considered, among other qualifications, his professional background and expertise in international
finance.
Johnson
Lau
On
December 23, 2014, the Board appointed Johnson Lau as a member of the Board of Directors of the Company and also the Chairman
of Audit committee.
Mr.
Lau is the Chief Financial Officer of China Golden Classic Group Limited (“China Golden”), a company listed in Hong
Kong Stock Exchange Limited (HKEX: 8281.HK). Mr. Lau is a Certified Public Accountant of the Hong Kong Institute of Certified
Public Accountants and CPA Australia. Mr. Lau has over 20 years of experience in the accounting profession. Mr. Lau started his
career in Deloitte in Hong Kong and Beijing from 1997 to 2004. Prior to joining China Golden in July 2015, Mr. Lau worked in various
public companies in the United States and England as Director of Finance and CFO for over ten years. He holds a bachelor degree
in commerce from Monash University, Australia. The Board believes that Mr. Lau’s extensive knowledge and experience in accounting
and his public company experience is important to the Company’s internal controls and financial reporting and its status
as a US traded public company.
CORPORATE
GOVERNANCE
Pursuant
to the Company’s Bylaws and the Florida Business Corporation Act, the Company’s business and affairs are managed under
the direction of the Board. Directors are kept informed on the Company’s business through discussions with management, including
the Chief Executive Officer and other senior officers, by reviewing materials provided to them and by participating in meetings.
Our
Board meets on a regular basis during the year to review significant developments affecting us and to act on matters requiring
Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. Members
of senior management regularly attend Board meetings to report on and discuss their respective areas of responsibility. The Board
held 29 regularly scheduled and special meetings during fiscal year 2017. All of the directors attended (in person or by telephone)
25 of the Board meetings and all directors attended any meetings of committees of the Board on which they served during the fiscal
year. Directors are expected to use their best efforts to be present at the shareholders annual meeting. All of our directors
attended the December 28, 2017 shareholders annual meeting.
Independent
Directors
The
Company’s Common Stock is listed on the NASDAQ Global Market. NASDAQ requires that a majority of the Company’s directors
be “independent,” as defined by the NASDAQ’s rules. Generally, a director does not qualify as an independent
director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years
had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business
with the Company. The Board of Directors has determined that a majority of the Company’s directors are independent directors
under the NASDAQ rules. The Company’s independent directors are: Yiliang Li, Johnson Lau and Fuyou Li.
Our
Board of Directors, which is elected by our shareholders, is our ultimate decision-making body, except with respect to those matters
reserved to our shareholders. The Board selects the officers who are charged with the conduct of our business, and has responsibility
for establishing broad corporate policies and for our overall performance. The Board is not involved in operating details on a
day-to-day basis. The Board is advised of our business through regular reports and analyses and discussions with our principal
executive officer and other officers.
Code
of Ethics and Governance Program
We
have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those
officers responsible for financial reporting. Our code of business conduct and ethics is available on our website at www.ftft.top
and may be found by first clicking on “Investors,” then “Corporate Governance” and then “Governance
Documents.” We intend to disclose any amendments to the code, or any waivers of its requirements, on our website.
Committees
of the Board and Attendance at Meetings
The
Board held 29 regularly scheduled and special meetings during fiscal year 2017. All of the directors attended (in person or by
telephone) 25 of the Board meetings and all directors attended any meetings of committees of the Board on which they served during
the fiscal year. Directors are expected to use their best efforts to be present at the shareholders annual meeting. All of our
directors attended the December 28, 2017 shareholders annual meeting.
Audit
Committee and Report of the Audit Committee
On
April 25, 2008, the Board formed an audit committee. Messrs. Johnson Lau, Yiliang Li and Fuyou Li currently serve on the audit
committee, which is chaired by Mr. Lau. Each member of the audit committee is “independent” as that term is defined
in the rules of the SEC and within the meaning of such term as defined under the rules of the NASDAQ Global Market. The Board
has determined that each audit committee member has sufficient knowledge in financial and auditing matters to serve on the audit
committee. The audit committee held nine meetings during fiscal year 2017. Our Board has determined that Mr. Lau is an “audit
committee financial expert,” as defined under the applicable SEC rules. The audit committee has a written charter, which
is available on the Company’s website at http://www.ftft.top.
Management
is responsible for the Company’s internal controls and the financial reporting process. The independent accounting firm
is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing reports thereon.
The audit committee’s responsibility is to monitor these processes. The audit committee meets with management, the leader
of the internal audit function, and the independent accounting firm to facilitate communication. In addition, the audit committee
appoints the Company’s independent accounting firm and pre-approves all audit and non-audit services to be performed by
the independent accounting firm.
In
this context, the audit committee has discussed with the Company’s independent accounting firm the overall scope and plans
for the independent audit. The audit committee reviewed and discussed the audited financial statements with management. Management
represented to the audit committee that the Company’s consolidated financial statements were prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”). Discussions about the Company’s audited financial statements
included the independent accounting firm’s judgments about the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The audit committee also
discussed with the independent accounting firm the other matters required to be discussed by PCAOB Auditing Standard No. 16 (Communications
with Audit Committees). The Company’s independent accounting firm provided to the audit committee the written disclosures
and the letter required by the PCAOB, and the committee discussed the independent accounting firm’s independence with management
and the independent accounting firm.
Based
on: (i) the audit committee’s discussion with management and the independent accounting firm; (ii) the audit committee’s
review of the representations of management; and (iii) the report of the independent accounting firm to the audit committee, the
audit committee recommended to the Board that the audited consolidated financial statements be included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC.
Compensation
Committee
On
April 25, 2008, the Board formed a compensation committee. Messrs. Johnson Lau, Yiliang Li and Fuyou Li currently serve on the
compensation committee, which is chaired by Mr. Lau. Each member of the compensation committee is “independent” as
that term is defined in the SEC rules and within the meaning of such term as defined under the rules of the NASDAQ Global Market,
a “nonemployee director” for purposes of Section 16 of the Exchange Act and an “outside director” for
purposes of Section 162(m) of the Tax Reform Act of 1986, as amended. No interlocking relationship exists between the Board or
the compensation committee and the Board or compensation committee of any other company, nor has any interlocking relationship
existed during the last fiscal year. The compensation committee held two meeting during fiscal year 2017. All of the members of
the compensation committee attended that meeting. The compensation committee has a written charter, which is available on the
Company’s website at http://www.ftft.top/.
Our
Board has delegated to the compensation committee the responsibility, among other things, to determine any and all compensation
payable to our executive officers, including annual salaries, incentive compensation, long-term incentive compensation and any
other compensation, and to administer our equity and incentive compensation plans applicable to our executive officers. Decisions
regarding executive compensation made by the compensation committee are considered final and are not generally subject to Board
review or ratification. Under the terms of its written charter, the compensation committee has the power and authority to delegate
any of its duties and responsibilities to subcommittees as the compensation committee may deem appropriate in its sole discretion.
Historically, the compensation committee has not generally delegated any of its duties and responsibilities to subcommittees,
but rather has taken such actions as a committee, as a whole. Deliberations and decisions by the compensation committee concerning
executive officers are made by the compensation committee, without the presence of the any executive officer of the Company.
Other
Committees
The
Board may on occasion establish other committees, as it deems necessary or required. We do not currently have a standing nominating
committee, or a committee performing similar functions. The independent directors of our Board currently serve this function.
Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees
can be adequately performed by the Board. The Board will assess all candidates, whether submitted by management or shareholders,
and make recommendations for election or appointment. There have been no material changes to the procedures by which security
holders may recommend nominees to the Board.
Board
Leadership Structure
Our
Board of Directors is currently comprised of five members, including three independent directors who serve as members of our audit
committee and compensation committee. Our Board leadership structure consists of a Chairman of the Board, who is also our CEO.
Specifically, our Board of Directors is led by Mr. Yongke Xue, who has been serving as the Chairman of the Board since January
2018. Also, in his capacity as our Chief Executive Officer, Mr. Yongke Xue is able to draw on his intimate knowledge of the daily
operations of the Company and its relationships with customers and employees. Calling upon this knowledge, Mr. Yongke Xue is able
to utilize the in-depth focus and perspective gained in running the company to effectively and efficiently serve on our Board.
Board
independence and oversight of the senior management of the Company are enabled by the presence of independent directors who have
a wide range of expertise and skills and have oversight over critical functions of the Company, such as the review of business
development, evaluation and compensation of executive management, the nomination of directors. We do not have a lead independent
director. Our independent directors collectively provide additional strength and balance to our Board leadership structure.
Risk
Management
The
Chief Executive Officer and senior management are primarily responsible for identifying and managing the risks facing the Company
under the oversight and supervision of the Board. The Chief Executive Officer reports to the Board of Directors regarding any
risks identified and steps it is taking to manage those risks. In addition, the Audit Committee assists the Board in fulfilling
its oversight responsibilities with respect to risk in the areas of financial reporting and internal controls. The Compensation
Committee assists the Board in fulfilling its oversight responsibilities with respect to risk in the area of compensation policies
and practices. Other general business risks such as economic, regulatory and permitting are monitored by the full Board.
Communications
with Directors
Shareholders
may communicate with the Board or to one or more individual members of the Board by writing Future FinTech Group Inc., 23F, China
Development Bank Tower, No. 2, Gaoxin 1
st
Road, Xi’an, Shaanxi, China, 710075, Attention: Corporate Secretary.
As appropriate, communications received from shareholders are forwarded directly to the Board, or to any individual member or
members, depending on the facts and circumstances outlined in the communication. The Board has authorized the Secretary, in her
discretion, to exclude communications that are patently unrelated to the duties and responsibilities of the Board, such as spam,
junk mail and mass mailings. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be
excluded, with the provision that any communication that is filtered out by the Secretary pursuant to the policy will be made
available to any non-management director upon request. Individual directors are not permitted to communicate with shareholders
or others outside the Company unless they are deemed authorized persons under the Company’s corporate disclosure policy.
Compensation
Committee Interlocks and Insider Participation
None
of the Company’s executive officers has served as a member of a compensation committee, or other committee serving an equivalent
function, of any other entity whose executive officers serve as a director of the Company or member of the Company’s compensation
committee.
Family
Relationships
There
are no other family relationships between any current executive officer or director of the Company.
Executive
Officers
The
following table sets forth as of October 11, 2018, the names, positions and ages of our current executive officers. Our officers
are elected by the Board of Directors and their terms of office are, except to the extent governed by an employment contract,
at the discretion of the Board of Directors.
Name
|
|
Age
|
|
Principal Occupation
|
Yongke Xue (1)
|
|
50
|
|
Chairman of the Board & Chief Executive Officer
|
Hanjun Zheng (2)
|
|
45
|
|
Interim Chief Financial Officer
|
|
(1)
|
On
September 2, 2016, the Board appointed Hongke Xue to serve as the Chief Executive Officer
of the Company and Chairman of the Board. Mr. Hongke Xue previously served as the Company’s
Chief Executive Officer from February 18, 2013 to December 24, 2014. Mr.
Hongke Xue was reappointed as the Company’s Chief Executive Officer on September
2, 2016.
|
|
(2)
|
Mr.
Hanjun Zheng was appointed as our Interim Chief Financial Officer effective on November
27, 2015.
|
Yongke
Xue
Mr.
Yongke Xue’s biography is set forth above under the Section entitled “Board of Directors.”
Hanjun
Zheng
Mr.
Hanjun Zheng was appointed by the Board as Interim Chief Financial Officer on November 27, 2015. Since December, 2009, Mr. Zheng
has been serving as the Chief Financial Officer of SkyPeople Juice Group Co., Ltd. a company organized under the laws of China
and a 73.42% indirectly-owned subsidiary of the Company. Mr. Zheng was the deputy general manager at Jingyang Branch of SkyPeople
Juice Group Co., Ltd. from March, 2006 to November 2009. From May, 1994 to February, 2006, Mr. Zheng was the Financial Accounting
Manager at Shaanxi Provincial Fruit Juice Processing Factory, a state-owned enterprise in Shaanxi, China. Mr. Zheng earned his
bachelor degree in accounting by passing Chinese National Self-Examination in Financial Accounting in 1996. Mr. Zheng graduated
from Shaanxi Technical College of Finance and Economics and received his junior college degree in Financial Accounting in 1994.
Mr. Zheng received additional training in Advanced Business Management and Advanced Financial and Accounting Management at Jiaotong
University in March, 2011 and July, 2012, respectively. There is no family relationship between Mr. Zheng and any of the Company’s
directors and officers. The Board believes that Mr. Zheng’s strong experience in accounting and financial reporting
is important to the Company since the Company is listed in the United States.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act, requires that directors, certain officers of the Company and more than ten percent shareholders file
reports of ownership and changes in ownership with the Commission as to the Company’s securities beneficially owned by them.
Such persons are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.
Based
solely on its review of copies of such forms received by the Company, or on written representations from certain reporting persons,
the Company believes that all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent
shareholders were complied with during the fiscal year ended December 31, 2017, except for the following: Yongke Xue did not file
a Form 4 for the transactions reported by him in that Amendment No. 3 to Schedule 13D filed by Mr. Xue on June 28, 2017; and Yongke
Xue and Zeyao Xue did not file Forms 4 (and in the case of Zeyao Xue, Form 3) for the transactions reported by them in that Amendment
No. 5 to Schedule 13D filed by them on October 6, 2017.
Involvement
in Certain Legal Proceedings
None
of our directors or executive officers has, during the past ten years:
|
Ø
|
been
convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other
minor offences);
|
|
Ø
|
had
any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or
within two years prior to that time;
|
|
Ø
|
been
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction
or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement
in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities,
or to be associated with persons engaged in any such activity;
|
|
Ø
|
been
found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated;
|
|
Ø
|
been
the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an
alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement
or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
|
Ø
|
been
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined
in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons associated with a member.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Review,
Approval or Ratification of Transactions with Related Parties
On
September 30, 2008, our Board of Directors approved a statement of policies and procedures with respect to related party transactions,
which was amended on July 11, 2011. A copy of the amended and restated statement of policies and procedures is available on the
Company’s website at http://www.ftft.top/.
The
statement of policies and procedures with respect to related party transactions, as amended, requires the audit committee to review
the material facts of all interested transactions, as further described below, unless an exception applies, and either approve
or disapprove of our entry into an interested transaction. If the audit committee’s advance approval of an interested transaction
is not feasible, then such interested transaction shall be considered at the audit committee’s next regularly scheduled
meeting and, if the audit committee determines it to be appropriate, then such interested transaction shall be ratified.
In
determining whether to approve or ratify an interested transaction, the audit committee will take into account, among other factors
it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated
third party under the same or similar circumstances and the extent of the related party’s interest in the transaction, as
described below. Pursuant to the statement of policies and procedures with respect to related party transactions, no director
shall participate in any discussion or approval of an interested transaction for which he or she is a related party, except that
such director shall provide all material information concerning the interested transaction to the audit committee. If an interested
transaction is ongoing, the audit committee may establish guidelines for our management to follow in our ongoing dealings with
the related party. Thereafter, the audit committee, on at least an annual basis, shall review and assess ongoing relationships
with the related party to see that such related party is in compliance with the audit committee’s guidelines and that the
interested transaction remains appropriate.
For
purposes of the statement of policies and procedures with respect to related party transactions:
|
●
|
an
“interested transaction” is a transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated
under the Securities and Exchange Act of 1934, as amended, and
|
|
●
|
a
“related party” has the meaning ascribed to the term “related person” under Item 404 of Regulation
S-K promulgated under the Securities and Exchange Act of 1934, as amended.
|
Notwithstanding
the foregoing, each of the following interested transactions shall be deemed to be pre-approved by the audit committee, even if
the aggregate amount involved exceeds $50,000:
|
●
|
Employment
of executive officers.
Any employment of an executive officer if either (i) the related compensation is required
to be reported in our proxy statement under Item 402 of the Commission’s compensation disclosure requirements generally
applicable to “named executive officers” or (ii) the executive officer is not an immediate family member of another
executive officer or director, the related compensation would be reported in our proxy statement under Item 402 of the Commission’s
compensation disclosure requirements if the executive officer was a “named executive officer” and our compensation
committee approved or recommended that the board of directors approve such compensation.
|
|
●
|
Director
compensation.
Any compensation paid to a director if the compensation is required to be reported in our proxy statement
under Item 402 of the Commission’s compensation disclosure requirements.
|
|
●
|
Certain
transactions with other companies.
Any transaction with another company at which a related party’s only relationship
is as an employee other than an executive officer, director or beneficial owner of less than 10% of that company’s shares,
if the aggregate amount involved does not exceed 2% of that company’s total annual revenue.
|
|
●
|
Certain
charitable contributions.
Any charitable contribution, grant or endowment by us to a charitable organization, foundation
or university at which a related party’s only relationship is as an employee other than an executive officer or a director,
if the aggregate amount involved does not exceed the lesser of $50,000 or 2% of the charitable organization’s total
annual receipts.
|
|
●
|
Transactions
where all shareholders receive proportional benefits.
Any transaction where the related party’s interest arises
solely from the ownership of our Common Stock and all holders of our Common Stock received the same benefit on a pro rata
basis, such as dividends.
|
|
●
|
Transactions
involving competitive bids.
Any transaction involving a related party where the rates or charges involved are determined
by competitive bids.
|
|
●
|
Regulated
transactions.
Any transaction with a related party involving the rendering of services as a common or contract carrier
or public utility, at rates or charges fixed in conformity with law or governmental authority.
|
|
●
|
Certain
banking-related services.
Any transaction with a related party involving services as a bank depositary of funds,
transfer agent, registrar, trustee under a trust indenture or similar services.
|
Related
Party Transactions since January 1, 2017
Sales
The
company’s subsidiary sold fruit beverages to a related entity, Shaanxi Fullmart Convenient Chain Supermarket Co., Ltd. (“Fullmart”)
for approximately $62,000 and $360,184 for the year ended December 31, 2017 and 2016, respectively. The sales to this related
party were consistent with pricing and terms offered to third parties. The remained accounts receivable balances were $0and $308,304
as of December 31, 2017 and 2016, respectively. Fullmart is a company indirectly owned by a member of our Board of Directors,
Mr. Yongke Xue.
Long-term
loan – related party
There
were no short-term loans to a related party as of December 31, 2017.
On February 18, 2013, SkyPeople (China) entered into
a loan agreement with SkyPeople International Holdings Group Limited (the “Lender”). The Lender indirectly holds 50.2%
interest in the Company at the time of the loan agreement. Mr. Yongke Xue (“Y. K. Xue”), then the Chairman and Chief
Executive Officer (“CEO”) of the Company and currently a Member of the Company’s Board of Directors (the “Board”)
and Mr. Hongke Xue, our Chairman and CEO, indirectly and beneficially own 80.0% and 9.4% of the equity interest in the Lender,
respectively. Pursuant to the Agreement, the Lender agreed to extend to the Company a one-year unsecured term loan with a principal
amount of $8.0 million at an interest rate of 6% per annum. During 2013, the Company received $8.0 million from the Lender. In
February 2014, both parties extended this loan for another two years under the original terms of the agreement.
On
October 16, 2015, the Company entered into a Share Purchase Agreement with the Lender to sell 5,321,600 shares of the common stock
of the Company (pre-Reverse Split Stock) at the price of $7,982,400, and which was paid by cancellation of the loan by the Lender.
On March 10, 2016, the Lender canceled the loan and the shares were issued to the Lender.
SECURITY
OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS OF FUTURE FINTECH GROUP INC.
The
following table sets forth information concerning beneficial ownership of our Common Stock as of October 12, 2018 by:
|
●
|
each
shareholder or group of affiliated shareholders who owns more than 5% of our Common Stock;
|
|
●
|
each
of our named executive officers;
|
|
●
|
each
of our directors; and
|
|
●
|
all
of our directors and executive officers as a group.
|
The
following table lists the number of shares and percentage of shares beneficially owned based on 26,017,083 shares of our Common
Stock outstanding as of October 12, 2018.
Beneficial
ownership is determined in accordance with the SEC rules, and generally includes voting power and/or investment power with respect
to the securities held. Shares of Common Stock subject to options and warrants currently exercisable or exercisable within 60
days of October 12, 2018 or issuable upon conversion of convertible securities which are currently convertible or convertible
within 60 days of October 12, 2018 are deemed outstanding and beneficially owned by the person holding those options, warrants
or convertible securities for purposes of computing the number of shares and percentage of shares beneficially owned by that person,
but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated
in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting
and investment power with respect to all shares of our Common Stock shown as beneficially owned by them.
Unless
otherwise indicated in the footnotes, the principal address of each of the shareholders, named executive officers, and directors
below is c/o Future FinTech Group Inc., 23F, China Development Bank Tower, No. 2 Gaoxin 1
st
Road, Xi’an, Shaanxi
Province, PRC 710075.
Shares Beneficially Owned
|
|
Name of Beneficial Owner
|
|
Number
|
|
|
Percent
|
|
Directors, Named Executive Officers and 5% Shareholders
|
|
|
|
|
|
|
|
|
Yongke Xue (1)
|
|
|
1,671,955
|
|
|
|
6.4
|
%
|
Zhi Yan
|
|
|
—
|
|
|
|
—
|
|
Yiliang Li
|
|
|
—
|
|
|
|
—
|
|
Hanjun Zheng
|
|
|
—
|
|
|
|
—
|
|
Fuyou Li
|
|
|
—
|
|
|
|
—
|
|
Johnson Lau
|
|
|
—
|
|
|
|
—
|
|
All current directors and executive officers as a group (6 persons)
|
|
|
1,671,955
|
|
|
|
6.4
|
%
|
Zeyao Xue (2)
|
|
|
13,034,114
|
|
|
|
50.0
|
%
|
Mengyao Chen (3)
|
|
|
3,323,225
|
|
|
|
12.77
|
%
|
Shuiliang Xiao (4)
|
|
|
3,409,466
|
|
|
|
13.11
|
%
|
|
|
|
19,766,805
|
|
|
|
75.98
|
%
|
(1)
|
Consists
of (i) 1,488,570 shares owned directly by Golden Dawn International Limited, a British Virgin Islands company, (ii) 183,385
shares owned directly by China Tianren Organic Food Holding. Each of Golden Dawn International Limited and China
Tianren Organic Good Holding are indirect subsidiaries of V.X. Fortune Capital Limited, a British Virgin Islands company.
Yongke Xue is the sole director of V.X. Fortune Capital Limited.
|
|
|
(2)
|
Mr.
Zeyao Xue, the son of Yongke Xue, holds all of the issued and outstanding capital stock of Fancylight Limited, which is the
indirect owner of those shares held by Golden Dawn International Limited and China Tianren Organic Food Holding. As
such, Mr. Zeyao Xue shares beneficial ownership of 1,671,955of his shares with Mr. Yongke Xue.
|
|
|
(3)
|
The
shares were issued to Mengyao Chen, pursuant to a Creditor’s Rights Transfer Agreement between Hedetang Foods (China)
Co., Ltd., a wholly owned subsidiary of the Company and Shaanxi Fu Chen Venture Capital Management Co., Ltd., dated November
2, 2017, which was filed with SEC in a Form 8-K dated November 6, 2017.
|
(4)
|
The
shares were issued to Shuiliang Xiao, pursuant to two Creditor’s Rights Transfer Agreements between Hedetang Foods (China)
Co., Ltd., a wholly owned subsidiary of the Company and Shaanxi Chunlv Ecological Agriculture Co., Ltd., dated November 2,
2017, which was filed with SEC in a Form 8-K dated November 6, 2017.
|
Equity
Compensation Plan
The
following table sets forth information as of December 31, 2017, with respect to our equity compensation plans previously approved
by shareholders and equity compensation plans not previously approved by shareholders.
|
|
Equity Compensation Plan Information
|
|
Plan Category
|
|
Number
of
securities
to be
issued upon
exercise of
outstanding
options,
warrants
and rights
|
|
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
|
|
Number
of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected
in column
(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
I
|
|
Equity
compensation plans approved by shareholders (1)
|
|
|
62,500
|
|
|
$
|
3.57
|
(2)
|
|
|
--
|
|
Equity
compensation plans not approved by shareholders
|
|
|
N/A
|
|
|
$
|
N/A
|
|
|
|
--
|
|
Total
|
|
|
N/A
|
|
|
$
|
N/A
|
|
|
|
--
|
|
(1)
|
Consists
of equity incentive plans, which were approved by the Company’s shareholders at its annual meetings on August 18, 2011,
November 19, 2015 and March 13, 2018. On February 28, 2017, the Company issued options to purchase 62,500 shares of the Company’s
common stock with an exercise price equal to the fair market value of the Company’s Common Stock (as defined under the
2011 Stock Incentive Plan in conformity with Regulation 409A of the Internal Revenue Code of 1986, as amended) at the date
of grant to three of the Company’s employees pursuant to the 2011 Stock Incentive Plan, which was approved by the Company’s
shareholders at the annual stockholders meeting on August 18, 2011. These options vested immediately on the grant date with
a fair market value of $223,375 based on the fair value of $3.57 per share, which was determined by using the Black Scholes
option pricing model. The Company recognized stock-based compensation expense of $223,375 in the first quarter of fiscal year
2017 under the 2011 Stock Incentive Plan. As of December 31, 2017, there were 1,300,000 shares available for issuance under
the Company’s 2017 Omnibus Equity Plan.
|
|
|
(2)
|
The
exercise price of options granted and stock appreciation rights under the Plan may be no less than the fair market value of
the Company’s Stock on the date of grant. On March 29, 2017, the Company issued 250,000 shares of the Company’s
unrestricted common stock to six of the Company’s employees pursuant to our Omnibus Equity Plan, which was approved
by the Company’s shareholders at the annual stockholders meeting on November 19, 2015. The Company recorded an expense
of $250 in the first quarter of fiscal year 2017 under the 2015 Omnibus Equity Plan, reflecting a par value of $0.001 per
share of the Company’s common stock.
|
COMPENSATION
Summary
Compensation of Named Executive Officers
Our
executive officers do not receive any compensation for serving as executive officers of the Company. Our CFO is compensated by
and through SkyPeople (China). The following table sets forth information concerning cash and non-cash compensation paid by SkyPeople
(China) to our named executive officers for 2017 and 2016, respectively.
Name and Principal
Position
|
|
Year
Ended
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Yongke Xue (1)
|
|
12/31/2017
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Yongke Xue (1)
|
|
12/31/2016
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hongke Xue (1)
|
|
12/31/2017
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Hongke Xue (1)
|
|
12/31/2016
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hanjun Zheng(2)
|
|
12/31/2017
|
|
$
|
12,863
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
12,863
|
|
|
|
12/31/2016
|
|
$
|
12,352
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
12,352
|
|
(1)
|
Mr.
Yongke Xue resigned as CEO of the Company on February 18, 2013 and Mr. Hongke Xue was appointed as the CEO of the Company
at the same time. Mr. Hongke Xue resigned as CEO on December 24, 2014, and Mr. Yongke Xue was reappointed as the CEO of the
Company at the same time. Mr. Yongke Xue again resigned as CEO on September 2, 2016, and Mr. Hongke Xue was appointed to the
same position at that time. Mr. Hongke Xue resigned as CEO effective January 31, 2018, and Mr. Yongke Xue was appointed as
CEO effective at the same time.
|
|
|
(2)
|
Mr.
Hanjun Zheng was appointed by the Board as Interim Chief Financial Officer on November 27, 2015.
|
Outstanding
Equity Awards at December 31, 2017
The
following table presents certain information concerning outstanding equity awards held by each of our named executive officers
at December 31, 2017.
|
|
|
Option
Awards
|
|
Name
|
|
|
Number
of
securities
underlying
unexercised
options
(#)
exercisable
|
|
|
|
Number
of
securities
underlying
unexercised
options
(#)
unexercisable
|
|
|
|
Equity
incentive
plan awards:
number of
securities
underlying
unexercised
unearned
options
(#)
|
|
|
|
Option
exercise
price
($)
|
|
|
|
Option
expiration
date
|
|
Yongke Xue
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Hongke Xue
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Hanjun Zheng
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Compensation
of Directors
We
(i) pay each of our nonemployee directors residing outside the United States an annual fee of $8,850, (ii) reimburse
our directors for actual, reasonable and customary expenses incurred in connection with the performance of their duties as board
members and (iii) pay the chairman of our audit committee a fee of $25,000 for his or her service as chairman.
There
was no change to the compensation to our directors in 2017. The following table sets forth information concerning cash and non-cash
compensation paid by us to our directors during 2017.
Name
|
|
Fees
Paid in
Cash
($)
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Yongke Xue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Hongke Xue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Guolin Wang (1)
|
|
$
|
8,850
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
8,850
|
|
Fuyou Li (2)
|
|
$
|
8,850
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
8,850
|
|
Johnson Lau (3)
|
|
$
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
25,000
|
|
(1)
|
On
April 7, 2008, the Company’s Board of Directors appointed Mr. Guolin Wang as a member of the Board of Directors and
a member of both the audit committee and compensation committee. Mr. Wang is entitled to US$8,850 per annum as
compensation for his services as a director of Future FinTech as of December 31, 2017. Mr. Wang resigned as a director of
the Company on April 25, 2018. On May 6, 2018, the Board appointed Mr. Yiliang Li as a new director to the Board to fill the
vacancy created by the resignation of Mr. Guolin Wang.
|
|
|
(2)
|
On
May 8, 2015, the Company’s Board of Directors appointed Mr. Fuyou Li as a member of the Board of Directors and a member
of both the audit committee and compensation committee. Mr. Li is entitled for US$8,850 per annum as compensation for his
service as director of Future FinTech.
|
|
|
(3)
|
On
December 23, 2014, the Board appointed Johnson Lau as a member of the Board of Directors of the Company and also the Chairman
of audit and compensation committees of the Board. Mr. Lau is entitled for US$25,000 per annum as compensation for his services
as the Chairman of the audit committee of Future FinTech.
|
REQUIREMENTS,
INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
To
be considered for inclusion in our proxy solicitation materials for the 2019 Annual Meeting of Shareholders, a shareholder proposal
must be received by our Corporate Secretary at our principal executive offices no later than June 28, 2019, which is 120 calendar
days before the one-year anniversary of the date on which the Company first mailed this Proxy Statement.
The
independent directors will consider candidates for election as a director recommended by any shareholder of the Company who has
held the Company’s Common Stock for at least one year and who holds a minimum of 1% of the Company’s outstanding shares.
The recommending shareholder must submit the following:
|
●
|
a
detailed resume of the recommended candidate;
|
|
●
|
an
explanation of the reasons why the shareholder believes the recommended candidate is qualified for service on the Company’s
Board;
|
|
●
|
such
other information that would be required by the rules of the SEC to be included in a proxy statement;
|
|
●
|
the
written consent of the recommended candidate;
|
|
●
|
a
description of any arrangements or undertakings between the shareholder and the recommended candidate regarding the nomination;
and
|
|
●
|
proof
of the recommending shareholder’s stock holdings in the Company.
|
Recommendations
from shareholders which are received after the deadline set forth in the Company’s most recent proxy statement, for a shareholder
proposal to be considered for inclusion in the Company’s proxy statement for the next Annual Meeting, likely will not be
considered timely for consideration by the Board for the following year’s Annual Meeting.
PROPOSAL
2 – RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On
December 31, 2014, the Company engaged Armanino LLP (“Armanino”) to serve as its independent registered public accounting
firm with immediate effect, and Armanino performed and rendered the audit of the Company’s financial statements for the
fiscal year ended December 31, 2014. Armanino’s reports on the Company’s financial statements for the year ended December
31, 2014 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit
scope or accounting principles. The decision to engage Armanino as the Company’s independent registered public accounting
firm was recommended by the Audit Committee and approved by the Board on December 30, 2014.
On
April 12, 2016, the Audit Committee of the Board of Directors of the Company dismissed Armanino as the Company’s independent
registered public accounting firm for the fiscal year ended December 31, 2015, effectively immediately. During the Company’s
fiscal years ended December 31, 2014 and the subsequent periods through the effective date of the dismissal of Armanino, there
were no disagreements on any matter of accounting principles or practices, financial statement disclosure or auditing scope of
procedure, which disagreement, if not resolved to the satisfaction of Armanino, would have caused Armanino to make reference thereto
in its reports on the Company’s consolidated financial statements for such periods. There have been no reportable events
as provided in Item 304(a)(1)(v) of Regulation S-K during the Company’s fiscal year ended December 31, 2014 and any subsequent
interim period, including the interim period up to and including the effective date of the dismissal of Armanino.
On
April 12, 2016, the Audit Committee approved the engagement of Wei, Wei & Co., LLP (“Wei & Wei”) as the
Company’s independent registered public accounting firm, effective immediately. The Audit Committee also approved Wei &
Wei to act as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2015 and
December 31, 2016.
On
September 19, 2016, the Company received a letter from Wei & Wei stating that it would cease its services as the independent
registered public accounting firm of the Company, effective from September 19, 2016. During the period of Wei & Wei’s
engagement, there were no disagreements between the Company and Wei & Wei on matters of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to satisfaction of Wei &
Wei, would have caused Wei & Wei to make reference thereto in its reports on the Company’s consolidated financial statements
for such periods. There were no reportable events as provided in Item 304(a)(1)(v) of Regulation S-K during the term of the engagement.
On
September 22, 2016, the Audit Committee of Board of Directors of the Company approved the engagement of Wang Certified Public
Accountant, P.C. (previously known as Jia Roger Qian Wang, CPA) (“Wang CPA”) as the Company’s independent registered
public accounting firm, effectively immediately. The Audit Committee, in accordance with its charter and authority delegated to
it by the Board, has appointed Wang CPA to serve as our independent registered public accounting firm for the fiscal year ending
December 31, 2018. The Audit Committee considers Wang CPA to be well qualified. We are asking the shareholders to ratify the selection
of Wang CPA as our independent registered accounting firm. If the shareholders do not ratify the appointment of Wang CPA, the
Audit committee will reconsider the appointment. Even if the selection is ratified, the Audit Committee, in its discretion, may
select a different independent registered public accounting firm at any time during the year if it determines that such a change
would be in the best interests of the Company and its shareholders. At the time of mailing this Proxy Statement, the Company does
not anticipate that any representatives of Wang CPA will be present, by phone or in person, at the 2018 Annual Meeting, and accordingly,
will not be available to respond to questions at the meeting. Should a representative of Wang CPA be available and desire to make
a statement either in person or by telephone at our 2018 Annual Meeting, they will have the opportunity to do so.
The
affirmative vote of the holders of a majority of the Company’s common stock present in person or represented by proxy at
the Annual Meeting is necessary for ratification of the selection of Wang CPA as our independent registered public accounting
firm.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF
WANG CERTIFIED PUBLIC
ACCOUNTANT, P.C.,
AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FEES
The
following table shows the fees that we paid or accrued for audit and other services for fiscal years 2017 and 2016. All of the
services described in the following fee table were approved in conformity with the audit committee’s pre-approval process.
|
|
2017
|
|
|
2016
|
|
Audit Fees
|
|
$
|
200,000
|
|
|
$
|
205,000
|
|
Tax Fees
|
|
|
6,000
|
|
|
|
6,000
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
206,000
|
|
|
$
|
211,000
|
|
Audit
Fees
The
amounts set forth opposite “Audit Fees” above reflect the aggregate fees billed or billable by Wang Certified Public
Accountant, P.C.
Wang
Certified Public Accountant, P.C. succeeded to the registration status of predecessor firm named as Jia Roger Qian Wang, CPA in
PCAOB in March, 2017. Wang CPA has provided professional services for the audit of our fiscal 2017 and 2016 annual financial statements,
respectively.
Wang
CPA provided professional services for the audit of our fiscal year 2017 financial statements and $140,000 was billed for the
audit of consolidated financial statements for fiscal 2017, the quarterly review fees $60,000 was billed for 2017 quarterly financial
reports.
Wang
CPA provided professional services for the audit of our fiscal year 2016 financial statements and $160,000 was billed for the
audit of consolidated financial statements for fiscal 2016, the quarterly review fees $45,000 was billed for 2016 quarterly financial
reports.
Tax
Fees
The
amounts set forth opposite “Tax Fees” above reflect the aggregate fees billed for fiscal 2017 and 2016 for professional
services rendered for tax compliance and return preparation. The compliance and return preparation services consisted of the preparation
of original and amended tax returns and support during the income tax audit or inquiries.
The
Board audit committee’s policy is to pre-approve all audit services and all non-audit services that our independent accountants
are permitted to perform for us under applicable federal securities regulations. The audit committee’s policy utilizes an
annual review and general pre-approval of certain categories of specified services that may be provided by the independent accountant,
up to pre-determined fee levels. Any proposed services not qualifying as a pre-approved specified service, and pre-approved services
exceeding the pre-determined fee levels, require further specific pre-approval by the audit committee. The audit committee has
delegated to the Chairman of the audit committee the authority to pre-approve audit and non-audit services proposed to be performed
by the independent accountants. Our audit committee was established in April 2008. Therefore, all the services provided by our
auditors in fiscal years 2017 and 2016 were pre-approved by the audit committee.
PROPOSAL
3 – ADVISORY VOTE ON EXECUTIVE COMPENSATION
We
are asking shareholders to approve, on a non-binding, advisory basis, a resolution approving our executive compensation as reported
in this Proxy Statement.
We
urge shareholders to read the “Compensation” section of this Proxy Statement, which describes how our executive compensation
program is designed and operates, as well as the Summary Compensation table and other related compensation tables, which provide
additional information on the compensation of our named executive officers. The Board and the Compensation Committee believe that
our executive compensation program has supported and contributed to our recent and long-term success and the creation of long-term
shareholder value; and that these programs are effective in helping us attract and retain the high caliber of executive talent
necessary to drive our business forward and build sustainable value for our shareholders.
In
accordance with regulations issued under Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), we are asking shareholders to approve the following non-binding, advisory resolution at the Annual Meeting:
FURTHER
RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in the Compensation section,
compensation tables and narrative discussion of the Proxy Statement for the 2018 Annual Meeting of Shareholders, be
approved.
While
this advisory resolution, commonly referred to as a “say on pay” resolution, is non-binding, the Compensation Committee
will carefully review and consider the voting results when making future decisions regarding our executive compensation program.
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RESOLUTION
APPROVING
FUTURE FINTECH’S NAMED EXECUTIVE OFFICERS COMPENSATION.
ADDITIONAL
MEETING INFORMATION
Proxy
Solicitation
The
cost of soliciting proxies for the Annual Meeting will be borne by the Company. In addition, the Company will reimburse brokerage
firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Directors, officers and regular employees of the Company may, for no additional compensation, also solicit
proxies personally or by telephone, electronic transmission, telegram or special letter.
Annual
Report
The
Company’s Annual Report for fiscal year 2017 is being mailed with this Proxy Statement to shareholders entitled to notice
of the Annual Meeting. The Annual Report includes the consolidated financial statements, unaudited selected consolidated financial
data and management’s discussion and analysis of financial condition and results of operations.
Upon
the written request of any shareholder, the Company will provide, without charge, a copy of the Company’s Annual Report
on Form 10-K filed with the Commission for the fiscal year ended December 31, 2017. This request should be directed to the Corporate
Secretary, 23F, China Development Bank Tower, No. 2, Gaoxin 1st RD, Xi’an, Shaanxi, China, 710075.
OTHER
MATTERS
The
shareholders and any other persons who would like to communicate with the Board can access the Company’s website, www.ftft.top,
and fill in the contact form for any enquiries or information. The form will be sent directly to the Secretary and the communications
for specified individual directors of the Board will be given to them personally by the Secretary. In addition, the contact number
is listed on the website and messages will be passed to the Board accordingly.
At
this time, the Board knows of no other business that will come before the Annual Meeting. However, if any other matters properly
come before the Annual Meeting, the persons named as proxies will vote on them in accordance with their best judgment.
|
By
Order of the Board of Directors
|
|
|
|
/s/
Yongke Xue
|
|
Yongke
Xue
|
|
Chief
Executive Officer
|
|
October
15, 2018
|
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