Future FinTech Group Inc. 10-Q

Item 1. Legal Proceedings Legal case with FT Global Capital, Inc. In January 2021, FT Global Capital, Inc., a former placement agent of the Company, filed a lawsuit against the Company in the Superior Court of Fulton County, Georgia, and served the complaint that same month. The Company has previously reported developments related to this matter in its filings with the SEC, including without limitation, its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Form 10-K for the fiscal year ended December 31, 2022, Form 10-K for the fiscal year ended December 31, 2023, Form 10-K for the fiscal year ended December 31, 2024, Quarterly Report on Form 10-Q for the fiscal quarter ended on March 31, 2025. On June 17, 2025, the Company entered into a Settlement and Forbearance Agreement with FT Global to resolve four federal court judgments entered against the Company. Pursuant to the Agreement, the company was required to pay an aggregate settlement amount of $4.0 million and issue a total of 106,250 shares (as adjusted for the reverse stock splits) of common stock, among which, (i) $0.5 million was paid no later than June 20, 2025, (ii) $1.0 million, $1.3 million and $1.2 million shall be paid within six months, twelve months and eighteen months after signing of the Agreement, respectively, (iii) 3,750 shares and 21,250 shares of common stock were issued on June 30, 2025 and July 2, 2025, respectively, and (iv) 40,625 shares and 40,625 shares of common stock shall be issued no earlier than six months and twelve months following the agreement’s effective date, respectively. As of June 30, 2026, a total of 107,368 shares of common stock had been issued and an aggregate amount of $2.98 million had been repaid to the Creditor. The Company’s obligations include instalment payments over 18 months and the issuance of shares pursuant to a court order under Section 3(a)(10) of the Securities Act. The agreement also includes mutual releases and requires the Company to remain current in its SEC filings and maintain its listing on a national securities exchange. Additional details are included in the Company’s Current Report on Form 8-K filed on June 20, 2025. As of the date of this report, the Settlement and Forbearance Agreement remains in effect and the parties are in compliance with the terms. Shareholders Lawsuit (LaBelle and Janzen) The LaBelle case is a putative securities class action filed in January 2024 and is pending in the District of New Jersey. Denise LaBelle (“Plaintiff”) alleges that the Company and certain of its officers violated Sections 10(b) and 20(a) of the Securities Exchange Act by making materially false or misleading statements in the company’s public filings and disclosures relating to the former Chief Executive Officer of the Company, Mr. Shanchun Huang and charges filed by the SEC against Mr. Shanchun Huang with manipulative trading in the stock of the Company using an offshore account shortly before he became the Company’s CEO in 2020 and failing to disclose his beneficial ownership. Mr. Huang has denied the allegations of trading before he became CEO. Plaintiff claims that these alleged misstatements caused the Company’s stock to trade at artificially inflated prices, harming investors when the truth was revealed. The lead plaintiff and lead counsel were appointed in September 2024. The Company was served in September 2024. On July 28, 2025, the Plaintiff filed an amended complaint. Defendants (Future FinTech, Huang, and individual officers) filed a Rule 12(b)(6) motion to dismiss the amended complaint, later submitting an errata/amended version of the motion. Mr. Huang asserts in his Motion to Dismiss that service of process was defective because Plaintiff failed to comply with the Hague Convention despite knowing Huang’s foreign residence, thus depriving the Court of personal jurisdiction under Rule 12(b)(5). Among other arguments, all Defendants assert in their Motions to Dismiss that the Amended Complaint fails to meet the heightened pleading standards of the PSLRA and Rules 9(b) and 12(b)(6) because it merely repackages unproven SEC allegations and does not plausibly allege that Mr. Huang executed or knew of any trades, engaged in manipulative conduct, or acted with scienter. The Janzen action is a consolidated shareholder derivative case filed by Jeff Janzen on May 31, 2024, also pending in the District of New Jersey, brought nominally on behalf of Future FinTech. Plaintiff alleges that certain current and former officers and directors breached fiduciary duties by allowing or failing to prevent the same alleged misconduct at issue in LaBelle, including mismanagement and misleading public disclosures. On January 20, 2026, the Company and certain of its current and former officers and directors filed a motion to dismiss the derivative complaint pursuant to Rules 12(b)(5) and 12(b)(6) of the Federal Rules of Civil Procedure in the United States District Court for the District of New Jersey. The derivative case has been stayed by stipulation, pending resolution of the anticipated motion to dismiss in LaBelle, but plaintiff has reserved the right to participate in mediation and settlement discussions relating to the class action. 45 Item 1A. R isk Factors Not applicable.