ITEM
1. BUSINESS
In
this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,” “us,”
“our” and refer to FutureTech II Acquisition Corp.
Overview
We
are a blank check company incorporated in Delaware on August 19, 2021. The Company was formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated
with emerging growth companies.
Our
efforts to identify a prospective target business will not be limited to a particular industry or geographic location, although we currently
intend to focus on opportunities to acquire U.S. companies in the disruptive technology sector, for example, artificial intelligence,
or AI, robotic process automation, or Robotics, and any other related technology innovations market. We shall not undertake our initial
business combination with any entity with its principal business operations in China (including Hong Kong and Macau). While we may pursue
an acquisition opportunity in any business industry or sector, we intend to capitalize on our management team’s differentiated
ability to source, acquire and manage a business in the technology industry.
Our
management team is led by Yuquan Wang, our Chief Executive Officer and Chairman of the Board. Yuquan Wang is a New York based investor
in hardware-based technologies. Mr. Wang is the Founding Partner of Haiyin Capital, a venture capital fund formed in 2008 that focuses
on investing in new technologies around the world. To date, Haiyin Capital has invested in hardware-based technology companies around
the world, with AI and Robotics as key fields of investment. Haiyin Capital’s portfolio companies include Hanson Robotics, an AI
and Robotics company dedicated to creating socially intelligent, human-like machines that enrich the quality of human lives; Soft Robotics,
a company that designs and builds automated hand-like devices using proprietary soft robotic grippers and AI to solve problems related
to grasping items in industries such as food processing, consumer goods production, and logistics. Prior to being an investor, Mr. Wang
had 20 years of experience in the field of consulting and was the founder, first Chairman and Chief Advisor of Frost & Sullivan (China
branch). Additionally, Mr. Wang is a frequent speaker on topics such as trends in technology and is featured on the Dedao Platform (a
provider of online education courses in China) and Toutiao (among the leading news apps in China over the past several years). Mr. Wang
has published articles on global technology trends and since 2017 has branded an annual 4-hour technology review show “Mapping
Global Innovation”; annually, the review show has attracted on-site attendees and a large online following. Mr. Wang has written
four books on global innovation: Modularized Innovation, The Invisible Trends, Industry Insights Handbook and The
Indispensable China, which was Mr. Wang’s latest book (the titles of these works are approximate translations). Mr. Wang believes
cross-border cooperation is crucial for the future global innovation, and therefore founded Innovation Map in 2016, a company that facilitates
cross-boundary business and cultural communication especially between United States and China. Mr. Wang currently serves as an advisor
to the George H.W. Bush Foundation for U.S.-China Relations. Mr. Wang earned his bachelor’s degree in Biology from Beijing Normal
University.
The
Company’s sponsor is FutureTech Partners II LLC, a Delaware limited liability company (the “Sponsor”). The registration
statement for the Company’s Initial Public Offering was declared effective on February 14, 2022. On February 18, 2022, the Company
consummated its Initial Public Offering of 10,000,000 units (the “Units” and, with respect to the Class A common stock included
in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $100,000,000 (the “Initial Public Offering”). The Company granted the underwriter a 45-day option to purchase up to an additional 1,500,000
Units at the Initial Public Offering price to cover over-allotments, if any.
Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 467,575 units
(the “Placement Units”) to the Sponsor at a price of $10.00 per Placement Unit, generating total gross proceeds of $4,675,750(the
“Private Placement”).
Subsequently,
on February 18, 2022, the underwriters exercised the over-allotment option in full, and the closing of the issuance and sale of the additional
Units occurred (the “Over-allotment Option Units”). The total aggregate issuance by the Company of 1,500,000 units at a price
of $10.00 per unit resulted in total gross proceeds of $1,500,000. On February 18, 2022, simultaneously with the sale of the Over-allotment
Option Units, the Company consummated the private sale of an additional 52,500 Placement Units, generating gross proceeds of $525,000.
The Placement Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transactions did not involve
a public offering.
A
total of $117,300,000, comprised of the proceeds from the Offering and the proceeds of private placements that closed on February 18,
2022, net of the underwriting commissions, discounts, and offering expenses, was deposited in a trust account established for the benefit
of the Company’s public stockholders.
Our
Business Strategy
We
believe that the Artificial Intelligence (“AI”) and Robotics sectors are evolving quickly and will experience substantial
growth in the coming years. AI and Robotics have the potential to improve social productivity, bring disruptive changes to human life,
safer work, more affordable products and services, smarter and more human-friendly infrastructures, new markets and more emerging employment
opportunities. AI and Robotics are becoming fully commercialized and bring profound changes to all industries. The opportunity for technology
companies serving these needs has never been greater, and we believe this trend will continue to generate significant value on a global
scale.
Artificial
Intelligence
We
believe that we are living in a digital era where AI is poised to reshape our lives. The continuous research and innovation directed
by the tech giants are driving the adoption of advanced AI technologies in industry verticals, such as automotive, healthcare, retail,
finance, and manufacturing.
The
global artificial intelligence (AI) software market is forecast to grow rapidly in the coming years and reach approximately $126 billion
by 2025. We believe the development of AI will facilitate growth in a variety of industries such as auto driving, smart city, the Internet
of things (“IoT”) and Robotics. The investment in AI is also growing rapidly. According to IDC, global investment in AI is
projected to grow from approximately $50.1 billion in 2020 to over approximately $110.0 billion in 2024.
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The
global AI market reached a value of approximately $40.21 billion in 2020. |
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The
AI market is projected to experience strong growth during the next five years, growing by approximately $76.44 billion, representing
a CAGR of approximately 21% during the forecast period of 2021 – 2025. |
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North
America is expected to represent approximately 56% of the worldwide market’s overall growth. |
Robotics
The
global market for robots is expected to grow at a compound annual growth rate (CAGR) of approximately 26 percent to reach just under
$210 billion by 2025. Robotics investments boomed during the COVID-19 pandemic. From March 2020 to March 2021, venture firms invested
approximately $6.3 billion into Robotics companies, an increase of nearly 50% from the $4.3 billion that such firms invested during the
prior 12-month period, according to an analysis by venture-capital database PitchBook for Forbes.
Industrial
Robotics firms, which serve factories and warehouses, accounted for approximately $1.9 billion of such funding, a 90% increase from the
approximately $1.0 billion raised for the prior year, according to PitchBook for Forbes which represents nearly one-third of total
venture investment in that period, demonstrating the increased interest from venture investors in industrial innovation. The commercial
Robotics market was valued at $10.91 billion in 2020, and it is expected to reach a value of $58.56 billion by 2026, at a CAGR of 33.21%,
during the forecast period (2021 - 2026).
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According
to Mordor Intelligence, commercial robots are widely used in the field, as autonomous guided, drones, and in medical applications
due to robots’ exceptional service as compared to traditional methods. |
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Moreover,
Mordor Intelligence notes that the medical Robotics sector has developed at a rapid rate, as the healthcare industry strongly generally
favors innovation and the IoT industry and investments in Robotics have been the major contributors to the growth of this market. |
Our
Acquisition Criteria
The
focus of our management team to create stockholder value by leveraging its experience to improve the efficiency of the business, while
implementing strategies to grow revenue and profits organically and/or through acquisitions. Consistent with our strategy, we have identified
the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. While we intend
to use these criteria and guidelines in evaluating prospective businesses, we may decide to enter into our initial business combination
with a target business that does not meet these criteria and guidelines. We intend to seek to acquire one or more companies that we believe
have:
We
will focus on hardware technology companies that have large market potentials, mainly in areas of AI and Robotics.
Based
on the factors discussed elsewhere in this prospectus, robots are becoming the underlying operating system of our society. Integrated
with AI, robots can perform complex tasks that require rich human experience. Various types of robots have been introduced into the market,
such as cleaning robots, hotel service robots, logistics robots, cruising robots, cooking robots and human-like social robots. These
robots are gradually being integrated into our daily lives and we believe that they will likely be significantly further popularized
in the future.
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Opportunity
for operational improvements |
We
will seek to identify businesses that we believe are stable but at an inflection point and would benefit from our ability to drive improvements
in the target’s processes, go-to market strategy, product or service offering, sales and marketing efforts, geographical presence
and/or leadership team.
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Leading
industry position and competitive market advantage |
We
will seek to acquire a business whose products utilize a proprietary or patented technology, have a significant market position in a
specific geographic or technological niche, or have a significant market position in a specific geographic or technological niche, or
have some other form of distinct competitive advantage. The factors we intend to consider include management’s credentials, growth
prospects, competitive dynamics, level of industry consolidation, need for capital investment, intellectual property, barriers to entry,
and merger terms. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business
combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that
our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that
does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder
communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation
materials or tender offer documents that we would file with the SEC.
In
addition to any potential business candidates we may identify on our own, we anticipate that other target business candidates will be
brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large
business enterprises
Our
Acquisition Process
In
evaluating a potential target business, we expect to conduct a comprehensive due diligence review to seek to determine a company’s
quality and its intrinsic value. That due diligence review may include, among other things, financial statement analysis, detailed document
reviews, technology diligence, multiple meetings with management, consultations with relevant industry and academic experts, competitors,
customers and suppliers, as well as a review of additional information that we will seek to obtain as part of our analysis of a target
company.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors.
In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors,
we, or a committee of independent directors, will obtain an opinion from either an independent investment banking firm that is a member
of the Financial Industry Regulatory Authority (“FINRA”) or an independent accounting firm that our initial business combination
is fair to our company from a financial point of view. Furthermore, in the event that we seek such a business combination, we expect
that the independent members of our board of directors would be involved in the process for considering and approving the transaction.
Members
of our management team, including our officers and directors, will directly or indirectly own our securities following this offering
and, accordingly, may have a conflict of interest in determining whether a particular target company is an appropriate business with
which to effectuate our initial business combination. Each of our officers and directors, as well as our management team, may have a
conflict of interest with respect to evaluating a particular business combination, including if the retention or resignation of any such
officers, directors, and management team members was included by a target business as a condition to any agreement with respect to such
business combination.
We
have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions,
directly or indirectly, with any business combination target.
Each
of our directors, director nominees and officers presently have and any of them in the future may have additional, fiduciary or contractual
obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity.
Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity
to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations
to present such opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers
or directors will materially affect our ability to identify and pursue business combination opportunities or complete our initial business
combination.
Our
amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any
director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer
of our company, and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal
obligation.
Our
founder, sponsor, officers, and directors may sponsor, form or participate in other blank check companies similar to ours during the
period in which we are seeking an initial business combination and their respective participation in any such companies may present additional
conflicts of interest in respect of determining to which such company a particular business combination opportunity should be presented,
particularly in the event there is overlap among the investment mandates of such companies. Additionally, one of our directors, Mr. Stein,
has invested in other blank check companies. We do not believe Mr. Stein’s investments would affect our ability to identify and
pursue business opportunities or complete our initial business combination.
Moreover,
because our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously
and we are not limited by industry or geography in terms of the acquisition opportunities we can pursue, except with respect to our prohibition
from seeking target acquisitions in China and Hong Kong. In addition, our founder, sponsor, officers, and directors are not required
to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Initial
Business Combination
Nasdaq
rules require that we complete one or more initial business combinations having an aggregate fair market value of at least 80% of the
value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on interest earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of
directors will make the determination as to the fair market value of our initial business combination.
If
our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect
to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent
determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced
with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets
or prospects.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares
will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial
business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target
business for the post-acquisition company to meet certain objectives of the target management team or stockholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires an interest in the target or assets sufficient for it not to be required to register as
an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act of 1940, as amended.
Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial
business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the
target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number
of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest
in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our
initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets
test. If the initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate
value of all of the target businesses and we will treat the target businesses together as the initial business combination for the purposes
of a tender offer or for seeking stockholder approval, as applicable.
The
net proceeds of this offering and the sale of the placement units released to us from the trust account upon the closing of our initial
business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business
combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the
trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of
our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to
be used following the closing for general corporate purposes as described above.
There
is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances
or other indebtedness in connection with our initial business combination. Subject to compliance with applicable securities laws, we
would only complete such financing simultaneously with the completion of our initial business combination. At this time, we are not a
party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities
or otherwise. None of our sponsors, officers, directors or stockholders is required to provide any financing to us in connection with
or after our initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund
our working capital needs and transaction costs in connection with our search for and completion of our initial business combination.
Our
amended and restated certificate of incorporation will provide that, following this offering and prior to the consummation of our initial
business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive
funds from the trust account; or (ii) vote as a class with our public shares: (a) on any initial business combination, or (b) to approve
an amendment to our amended and restated certificate of incorporation to: (x) extend the time we have to consummate a business combination
from the closing of this offering, or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended
and restated certificate of incorporation) we offer our public stockholders the opportunity to redeem their public shares
Corporate
Information
Our
executive offices are located at 128 Gail Drive New Rochelle, NY 10805, and our telephone number is (914) 316-4805.