Future Fintech Announces Closing of Nice Talent Asset Management Acquisition and Pending Acquisitions Update

Future FinTech Group Inc. (FTFT), a leading blockchain-based e-commerce business and a fintech service provider, announced that on August 6, 2021, the Company closed its acquisition of 90% of the issued and outstanding shares of Nice Talent Asset Management Limited (“NTAM”), a Hong Kong-based asset management company, from Joy Rich Enterprises Limited (“Joy Rich“).

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As previously announced in the Company’s press releases on July 16, 2020 and April 12, 2021, the Company entered into a Share Exchange Agreement (the “Agreement”), amended on April 9, 2021 (the “Amendment”), with Joy Rich to acquire 90% of the issued and outstanding shares of NTAM.

NTAM is licensed under the Securities and Futures Commission of Hong Kong (“SFC”) to carry out regulated activities in ‘Type 4: Advising on Securities and ‘Type 9: Asset Management’. The Company has received approval from the SFC to become a substantial shareholder of NTAM. NTAM’s current business partners include major international banks and its clients are high net worth customers. Hong Kong is widely recognized as a leading asset management center in Asia with a large concentration of international fund managers.

Based upon a valuation report prepared for the Company by Greater China Appraisal Limited, a 100% equity interest of NTAM was valued at HK$189,338,353 in February 2021. Pursuant to the terms of the amended Agreement, the total purchase price for a 90% equity interest in NTAM (the “Purchase Price”) is HK$144,000,000 (approximately US$18,701,299), of which 60% of the Purchase Price, or HK$86,400,000 (approximately US$11,220,779) shall be paid in shares of common stock of the Company based on 95% of the closing price of the shares of Company’s common stock on the Nasdaq Stock Market prior to the date of the Amendment which is calculated to be $5.00 per share (the “FTFT Share Price”). The remaining 40% of the Purchase Price shall be paid in FTFT common stock (the “Earn-Out Shares”)

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according to the achievement of EBIT goals by NTAM for 2021 and 2022, as follows:

i. If NTAM achieves EBIT of HK$14,000,000 in 2021, the Company shall pay 20% of the Purchase Price, which is HK$28,800,000, in shares of common stock of the Company based on the FTFT Share Price;

ii. If NTAM achieves an EBIT of HK$20,000,000 in 2022, the Company shall pay the final 20% of the Purchase Price, which is HK$28,800,000, in shares of common stock of the Company based on the FTFT Share Price; and,

iii. If NTAM does not achieve its EBIT goals for a given year, a fee equal to ten times the EBIT shortfall amount shall be paid by Joy Rich to the Company before the Earn-Out Shares for that year are issued from the Company to Joy Rich.

Mr. Shanchun Huang, Chief Executive Officer of Future FinTech, stated, “We are pleased to acquire 90% of Nice Talent Asset Management as it represents a major step forward in our ongoing expansion into the global financial services sector. We believe that there is a substantial opportunity to integrate fintech with boutique financial services and develop an innovative business model that meets that needs of the investment community for capital growth and total return as fintech further evolves the financial services sector in the years ahead. The Company plans upon creating synergies with our current capabilities to offer best-in-class asset management and investment consulting services for both corporate customers and high net-worth professional investors in Hong Kong.”

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Mr. Chan Siu Kei, Chief Executive Officer and Director of NTAM stated, “The management team of NTAM includes former senior executives of HSBC and Hong Kong certified public accountants with deep experience in asset management and investment advisory services who also have extensive contacts in the industry in Hong Kong. We are excited to move forward with this highly strategic partnership with Future FinTech and their leading-edge approach in the financial services sector. Our business focus is to work alongside our clients to help them grow their wealth and achieve their investment goals. In every market environment, we specialize in uncovering potential sector winners and opportunities that align with clients’ interests while offering tailored and flexible investment strategies. We will leverage the additional resources, technology and platform provided by FTFT to further develop our business in Hong Kong and globally.”

In addition, due to a new and more strict regulatory policy recently announced by the Chinese government and China’s central bank regarding to the cryptocurrency sector, the Company has determined to terminate discussions related to its cryptocurrency and mining related potential acquisitions in China that it previously announced earlier this year. This pertains to the potential acquisition of a 51% equity interest in Mingtang Network Technology Co., Ltd., the potential acquisition of Nanjing Ribensi Electronic Technology Co., Ltd., and the potential acquisition of 20,000 Antminer bitcoin mining machines from Nanjing Shunru Electronic Technology Co., Ltd.

The Company also has terminated discussions related to the potential acquisition of 60% of the shares of Guang Dong Hi-Card Business Service Co., Ltd. as a result of the findings of its due diligence.

Despite the changes in circumstance of these potential acquisitions, the Company remains committed to its strategy of pursuing acquisitions for value creation and growth. We will be assessing new potential crypto mining farm and partnering opportunities in North America and the United Arab Emirates. We remain optimistic about our future opportunities to create a comprehensive financial services platform and fintech enterprise, and look forward to developing a strong competitive position in these sectors in the years ahead.

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