Benzinga | Jun 2, 2021 04:36PM EDT

Future Fintech Group Entered Into A Termination Agreement With Sichuan Longma Electronic And Sichuan Ticode Supply

Future FinTech Group Inc. (the "Company") and Future Supply Chain Co., Ltd., a wholly owned subsidiary of the Company and a company incorporated under the laws of China ("Buyer") entered into a Termination Agreement (the "Termination Agreement") with Sichuan Longma Electronic Technology Co. Ltd., a company incorporated under the laws of China ("Seller") and Sichuan Ticode Supply Chain Management Co., Ltd., a company incorporated under the laws of China (the "Ticode").

Pursuant to the Termination Agreement, the parties agreed to terminate the Share Exchange Agreement, which was originally entered into by and among the Company, Buyer, Seller and Ticode on February 26, 2021. The Company originally entered into the Share Exchange Agreement to acquire 60% of the equity interest of Ticode ("Ticode Shares") from the Seller in exchange for 7,789,882 shares of common stock of the Company (the "Company Shares"), as disclosed in the Form 8-K filed by the Company on March 1, 2021. The transaction was closed on April 16, 2021. After the closing of the transaction, certain shareholders and executive officers of the Seller, some of which are also the executive officers of Ticode, have been subject to an investigation by local government authorities in connection with matters concerning their other business ventures that are unrelated to Ticode or the Company's acquisition of Ticode. In light of the investigation of these shareholders and officers of the Seller, their inability to manage Ticode's business, and the likelihood that Seller will not be able to fulfil its obligation to transfer additional shares of Ticode to the Buyer as stipulated in the Share Exchange Agreement in the circumstance that Ticode fails to achieve certain Earnings Before Interest and Taxes goals, the Company requested to terminate the Share Exchange Agreement and the parties have agreed to enter the Termination Agreement, effective on May 31, 2021 (the "Effective Date").

Pursuant to the Termination Agreement, the Seller agreed to return the Company Shares back to the Company for cancellation or as the Company's treasury shares within 5 days of the Effective Date and the Buyer agreed to transfer the Ticode Shares back to the Seller within 30 days of the Effective Date.

The foregoing description of the Termination Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.