FTFT Future FinTech Group Inc

Item 1.01 Entry into a Material Definitive Agreement

On December 19, 2019, Future FinTech Group, Inc., a Florida corporation (the “Company”), entered into a Note Purchase Agreement (the “Purchase Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Secured Promissory Note (the “Note”) in the principal amount of $1,060,000. The Purchaser purchased the Note with an original issue discount of $50,000, and the Company agreed to pay to the Purchaser $10,000 for fees and costs incurred by Purchaser in connection with the consummation of the Purchase Agreement. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The purchase price for the Note will be paid by the Purchaser through an initial cash payment of $500,000 and the issuance of an investor note by the Purchaser to the Company with a one-year term and an interest rate of 8% (the “Investor Note”). The Purchaser may, with Company’s consent, pay, without penalty, all or any portion of the outstanding balance along with any accrued but unpaid interest on the Investor Note at any time prior to the maturity date of the Investor Note.

The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable twelve (12) months after the purchase price of the Note is delivered by Purchaser to the Company (the “Purchase Price Date”). The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 25% premium on any amounts outstanding under the Note. During the term of the Note, the Company shall not, without the prior written consent of the Purchaser, enter into or effect certain fundamental business transactions. The Purchaser has the right to redeem the Note at any time after the six month anniversary of the Purchase Price Date. The Company’s obligations under the Note are secured by a pledge of 2,500,000 shares of the Company’s common stock by Mengyao Chen, an unrelated third party, in favor of the Purchaser.

The representations, warranties and covenants contained in the Purchase Agreement, Investor Note and Note were made solely for the benefit of the parties to the Purchase Agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the Purchase Agreement, Investor Note and Note and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by shareholders of, or other investors in, the Company. Accordingly, the Purchase Agreement, Investor Note and Note are filed with this report only to provide investors with information regarding the terms of transactions, and not to provide investors with any other factual information regarding the Company. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, Investor Note and Note, which subsequent information may or may not be fully reflected in public disclosures.

The Purchase Agreement, form of Investor Note and Note are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of the Purchaser Agreement, Investor Note and Note are subject to, and qualified in their entirety by, the Purchase Agreement, Investor Note and Note, which are incorporated herein by reference.