UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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CHINA AUTO LOGISTICS INC.
(Name of Registrant as Specified in its
Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11:
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing:
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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CHINA AUTO LOGISTICS INC.
Floor 1 FTZ International Auto Mall, 86
Tianbao Avenue, Free Trade Zone
Tianjin Province, The People’s Republic
of China 300461
October 6, 2017
To the Stockholders of China Auto Logistics
Inc.:
We are please to invite
you to attend our 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of China Auto Logistics Inc. (the “Company”
or “China Auto”) to be held on November 17, 2017 at 9:00 a.m., local time, at the offices of K&L Gates LLP, 599
Lexington Avenue, New York, New York 10022.
If you need directions to the Annual Meeting please contact the Company at (86) 22-2576-2771.
Details of the business
to be conducted at the Annual Meeting are provided in the enclosed Notice of Annual Meeting of Stockholders and the Proxy Statement
(also available at
www.proxyvote.com
), which you are urged to read carefully.
On behalf of the Board
of Directors, I cordially invite all stockholders to attend the Annual Meeting. It is important that your shares be voted on the
matters scheduled to come before the Annual Meeting. Whether or not you plan to attend the Annual Meeting, I urge you to vote your
shares. For your convenience, we are providing three ways in which you may vote your shares:
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(1)
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by Internet, at
www.proxyvote.com
and using the control number located on your proxy
card;
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(2)
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by touch-tone telephone, by dialing the toll-free telephone number located on your notice and following
the instructions; or
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(3)
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by mail, by returning your executed proxy in the enclosed postage paid envelope.
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If you attend the Annual Meeting, you may
revoke such proxy and vote in person if you wish. Even if you do not attend the Annual Meeting, you may revoke such proxy at any
time prior to the Annual Meeting by executing another proxy bearing a later date or providing written notice of such revocation
to the Chief Executive Officer of the Company.
Thank you for your
ongoing support of, and continued interest in the Company. We look forward to seeing you at our Annual Meeting.
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Sincerely,
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/s/ Tong Shiping
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Chief Executive Officer, President
and Chairman
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Important Notice
Regarding the Availability of Proxy Materials for the Annual Meeting of stockholders to be held on November 17, 2017:
In accordance
with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), we are now providing access
to our proxy materials, including the proxy statement, our Annual Report for the 2016 fiscal year and a form of proxy relating
to the Annual Meeting, over the Internet. All stockholders of record and beneficial owners will have the ability to access the
proxy materials at www.proxyvote.com. These proxy materials are available free of charge.
CHINA AUTO LOGISTICS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Time and Date
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9:00 a.m., local time, on Friday, November
17, 2017.
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Place
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Offices of K&L Gates, LLP, 599 Lexington
Avenue, New York, New York 10022.
If you need directions to the Annual Meeting please contact
the Company at (86) 22-2576-2771.
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Items of Business
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(1)
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To
elect a slate of nominees consisting of Tong Shiping, Cheng Weihong, Wang Xinwei, Howard S. Barth, Lv Fuqi, Yang Lili, and Bai
Shaohua (each a “Nominee” and collectively, the “Nominees”) to serve as directors of the Company until
the next annual meeting of stockholders, their resignation, or until their respective successors have been elected and qualified.
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(2)
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To
ratify the appointment of Marcum Bernstein & Pinchuk LLP (“Marcum BP”) as the Company’s independent register
public accountants for fiscal year 2017; and
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(3)
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To
consider such other business as may properly come before the meeting or any adjournment(s) thereof.
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Adjournments and Postponements
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Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
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Record Date
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You are entitled to vote only if you were a stockholder of the Company as of the close of business on September 22, 2017.
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Voting
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WHETHER OR NOT YOU EXPECT TO
BE PRESENT AT THE MEETING, PLEASE VOTE YOUR SHARES, SO THAT A QUORUM WILL BE PRESENT AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED.
IT IS IMPORTANT AND IN YOUR INTEREST FOR YOU TO VOTE YOUR SHARES. FOR YOUR CONVENIENCE, WE HAVE PROVIDED THREE EASY METHODS BY
WHICH YOU CAN VOTE YOUR SHARES:
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By Internet.
Visit www.proxyvote.com and enter the control number located on your notice.
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(2)
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By Touch-Tone Telephone.
Dial the toll-free number found on your notice and follow the simple instructions.
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(3)
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By Mail. Return
your executed proxy in the enclosed postage paid envelope.
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THE PROXY IS REVOCABLE AT ANY
TIME PRIOR TO ITS USE.
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By Order Of The Board Of Directors
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/s/ Peng Cheng
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Secretary
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October 6, 2017
CHINA AUTO LOGISTICS INC.
Floor 1 FTZ International Auto Mall, 86
Tianbao Avenue, Free Trade Zone
Tianjin Province, The People’s Republic
of China 300461
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement
and the accompanying proxy are being furnished with respect to the solicitation of proxies by the Board of Directors (the “Board”)
of China Auto Logistics Inc., a Nevada corporation (the “Company” or “China Auto”) for the 2017 Annual
Meeting of Stockholders to be held at 9:00 a.m., local time, on November 17, 2017 (the “Annual Meeting”) and at any
adjournment or adjournments thereof, at the offices of K&L Gates LLP, 599 Lexington Avenue, New York, New York 10022.
The approximate date
on which the Proxy Statement and form of proxy are intended to be sent or given to the stockholders is October 6, 2017. The proxy
materials are also available free of charge on the Internet at www.proxyvote.com. Stockholders are invited to attend the Annual
Meeting to vote on the proposals described in this proxy statement. However, stockholders do not need to attend the Annual Meeting
to vote. Instead, stockholders may simply complete, sign and return the proxy card, complete the proxy card online at www.proxyvote.com,
or vote by telephone by dialing the toll-free telephone number located on the proxy card.
We will bear the expense
of solicitation of proxies for the Annual Meeting, including the printing and mailing of this Proxy Statement. We may request persons,
and reimburse them for their expenses with respect thereto, who hold stock in their name or custody or in the names of nominees
for others to forward copies of such materials to those persons for whom they hold Common Stock (as defined below) and to request
authority for the execution of the proxies. In addition, some of our officers, directors and employees, without additional compensation,
may solicit proxies on behalf of the Board of Directors personally or by mail, telephone or facsimile.
VOTING SECURITIES, VOTING AND PROXIES
Record Date
Only stockholders
of record of our common stock, $0.001 par value (“Common Stock”), as of the close of business on September 22, 2017
(the “Record Date”) are entitled to notice and to vote at the Annual Meeting and any adjournment or adjournments thereof.
Voting Stock
As of the Record Date,
there were 4,034,394 shares of Common Stock outstanding. Each holder of Common Stock on the Record Date is entitled to one vote
for each share then held on the matter to be voted at the Annual Meeting. No other class of voting securities was then outstanding.
Quorum
The presence at the
Annual Meeting of a majority of the outstanding shares of Common Stock as of the Record Date, in person or by proxy, is required
for a quorum. Should you submit a proxy, even though you abstain as to the proposal, or you are present in person at the Annual
Meeting, your shares shall be counted for the purpose of determining if a quorum is present.
Broker “non-votes”
are included for the purposes of determining whether a quorum of shares is present at the Annual Meeting. A broker “non-vote”
occurs when a nominee holder, such as a brokerage firm, bank or trust company, holding shares of record for a beneficial owner,
does not vote on a particular proposal because the nominee holder does not have discretionary voting power with respect to that
item and has not received voting instructions from the beneficial owner.
Voting
The election of directors
requires the approval of a plurality of the votes cast at the Annual Meeting. For purposes of the proposal, abstentions and broker
“non-votes” will have no effect on the outcome.
If you are the beneficial
owner, but not the registered holder of shares of Common Stock, you cannot directly vote those shares at the Annual Meeting. You
must provide voting instructions to your nominee holder, such as your brokerage firm or bank.
If you wish to vote
in person at the Annual Meeting but you are not the record holder, you must obtain from your record holder a “legal proxy”
issued in your name and bring it to the Annual Meeting.
At the Annual Meeting,
ballots will be distributed with respect to the proposal to each stockholder (or the stockholder’s proxy if not the management
proxy holders) who is present and did not deliver a proxy to the management proxy holders or another person. The ballots shall
then be tallied, one vote for each share owned of record, the votes being in three categories: “FOR,” “AGAINST”
or “ABSTAIN.”
Proxies
The form of proxy solicited
by the Board of Directors affords you the ability to specify a choice among approval of, disapproval of, or abstention with respect
to, the matters to be acted upon at the Annual Meeting. Shares represented by the proxy will be voted and, where the solicited
stockholder indicates a choice with respect to the matter to be acted upon, the shares will be voted as specified. If no choice
is given, a properly executed proxy will be voted in favor of the proposal.
Revocability of Proxies
Even if you execute
a proxy, you retain the right to revoke it and change your vote by notifying us at any time before your proxy is voted. Such revocation
may be affected by execution of a later dated proxy, or by a written notice of revocation, sent to the attention of the Chief Executive
Officer at the address of our principal office set forth above in the Notice to this Proxy Statement, or your attendance and voting
at the Annual Meeting. Unless so revoked, the shares represented by the proxies, if received in time, will be voted in accordance
with the directions given therein.
You are requested,
regardless of the number of shares you own or your intention to attend the Annual Meeting, to sign the proxy and return it promptly
in the enclosed envelope.
Interest of Certain Persons in Matters To Be Acted Upon
None of the officers
or directors has any interest in the matters to be acted upon.
Dissenters’ Rights of Appraisal
Under the Nevada Revised
Statutes and the Company’s Articles of Incorporation, stockholders are not entitled to any appraisal or similar rights of
dissenters with respect to any of the proposals to be acted upon at the Annual Meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company’s
Board is currently comprised of seven members. Vacancies on the Board may be filled by (a) a vote of a majority of the remaining
directors, although less than a quorum is present, (b) the prior action of the directors, or (c) the affirmative vote of the holders
of a majority of the outstanding shares of capital stock of the Company entitled to vote generally in the election of directors.
A director elected by the Board to fill a vacancy shall serve for the remainder of the term of that director and until the director’s
successor is elected and qualified. This includes vacancies created by an increase in the number of directors.
The Board has recommended
for re-election Tong Shiping, Cheng Weihong, Wang Xinwei, Howard S. Barth, Yang Lili, Lv Fuqi and Bai Shaohua. If elected at the
Annual Meeting, these directors would serve until the end of their respective terms and until their successors are elected and
qualified, or until their earlier death, resignation or removal.
Directors are elected
by a plurality of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting. Shares represented
by executed proxies will be voted, if authority to do so is not withheld, for the election of Tong Shiping, Cheng Weihong, Wang
Xinwei, Howard S. Barth, Lv Fuqi, Yang Lili and Bai Shaohua. In the event that any nominee should be unavailable for election as
a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board may propose.
Each of Tong Shiping, Cheng Weihong, Wang Xinwei, Howard S. Barth, Lv Fuqi, Yang Lili and Bai Shaohua has agreed to serve if elected,
and we have no reason to believe that they will be unable to serve.
Our directors and nominees,
their ages, positions with China Auto Logistics Inc., the dates of their initial election or appointment as director are as follows:
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Name
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Position With the Company
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Age
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Director Since
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Tong Shiping
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Chief Executive Officer, President and Chairman of the Board
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57
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2008
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Cheng Weihong
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Senior Vice President (Head of Human Resources and General Administration) and Director
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55
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2008
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Wang Xinwei
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Chief Financial Officer and Director
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60
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2012
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Howard S. Barth (1)
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Director
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65
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2008
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Yang Lili (1)(2)(3)
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Director
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58
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2012
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Lv Fuqi (2)(3)
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Director
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59
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2016
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Bai Shaohua (1) (2)(3)
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Director
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58
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2016
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(1)
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Member of Audit Committee
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(2)
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Member of Compensation Committee
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(3)
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Member of Nominating and Corporate Governance Committee
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Tong Shiping, a member of the Board since 2008, has also
served as President and Chief Executive Officer of the Company since 1995, when the Company’s wholly owned operating subsidiary
Tianjin Seashore New District Shisheng Business Trading Group Co. Ltd. (formerly Tianjin Shisheng Investment Group Co. Ltd.) (“Shisheng”)
was founded. He earned his Bachelor degree in computer science from the China Air Force Engineering University. Mr. Tong is also
a director of the Tianjin Auto Logistics Association. The Board believes that Mr. Tong has the experience, qualifications, attributes
and skills necessary to serve on the Board because of his over 20 years of experience in the China auto industry, his having provided
leadership and strategic direction to the Company as its founder, and his unparalleled understanding of the Company’s operations
and products.
Cheng Weihong, a member
of the Board since 2008, has served as Senior Vice President (Head of Human Resources and General Administration) of the Company
since 1995. She earned her Bachelor degree from Shijiazhuang Military Medical University. Ms. Cheng is also a co-founder of Shisheng
and has served as the Chairwoman of Shisheng since 1995. The Board believes that Ms. Cheng has the experience, qualifications,
attributes and skills necessary to serve on the Board because of her over 20 years of experience in the China auto industry as
Secretary and Senior VP of the Company.
Wang Xinwei, a member
of the Board since July of 2012, has served as the Chief Financial Officer, Treasurer and Vice President of the Company since 2001.
She earned her bachelors degree in industrial accounting from Tianjin Radio and Television University and is qualified as a Chinese
certified public account. The Board believes that Ms. Wang has the experience, qualifications, attributes and skills necessary
to serve on the Board because of her over 15 years of experience in the China auto industry as Chief Financial Officer, Treasurer
and Vice President of the Company.
Howard S. Barth, a
member of the Board since 2008, has operated his own public accounting firm in Toronto, Canada since 1985, and has over 30 years
of experience as a certified accountant. He is a former director and chairman of the audit committees of New Oriental Energy &
Chemical Corp. (formerly listed on NASDAQ), Orsus Xelent Technologies, Inc. (formerly an AMEX-listed company), Nuinsco Resources
Limited (a TSX listed exploration company), and Guanwei Recycling Corp. (formerly listed on NASDAQ). He is also a former director
of Yukon Gold Corporation, Inc. (dual listed on OTCBB and TSX) during the period from May 2005 through December 2014 and served
previously as chairman of its Audit Committee until May 2008 and was its chief executive officer and president in 2006. He also
formerly served as a director for Uranium Hunter Corporation (an OTC BB company). He is a member of the Chartered Professional
Accountants of Canada and the Chartered Professional Accountants of Ontario. He earned his B.A. and M.B.A. at York University.
The Board believes that Mr. Barth has the experience, qualifications, attributes and skills necessary to serve on the Board because
of his extensive experience and financial expertise in public companies.
Yang Lili, a member
of the Board since July of 2012, has served as the accounting director of Tianbao International Trade & Exhibition Ltd. since
2007, where she obtained years of experience in providing customers with commercial financing services. The Board believes that
Ms. Yang has the experience, qualifications, attributes and skills necessary to serve on the Board because of her extensive experience
in accounting.
Bai Shaohua, a member
of the Board since May 2016, earned a bachelor’s degree in economics from Tianjin University of Finance and Economics and
currently serves as the key account manager for a northern China online sales research group. Mr. Bai has accumulated approximately
ten years of experience consulting different companies on how to bolster their sales and approximately five years of experience
preparing financial statements. The Board believes that Mr. Bai has the experience, qualifications, attributes and skills necessary
to serve on the Board because of his extensive experience in customer management, marketing and financial services.
Lv Fuqi, a member
of the Board since May 2016, is currently employed as a professor of practice at Hebei Technology College where he teaches economic
law. Previously, Mr. Lv created a legal educational service company which helped him establish connections with local governmental
authorities, which will be very helpful in furthering the Company’s business development. The Board believes that Mr. Lv
has the experience, qualifications, attributes and skills necessary to serve on the Board because of his familiarity with Chinese
economy development and political affiliations.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE ELECTION OF EACH OF TONG SHIPING, CHENG WEIHONG, WANG XINWEI, HOWARD S. BARTH, LV FUQI, YANG LILI AND BAI SHAOHUA.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee
of the Board has appointed Marcum BP as the Company’s independent registered public accountants for the fiscal year ending
December 31, 2017.
We are asking our
stockholders to ratify the selection of Marcum BP as our independent registered public accountants. Although ratification is not
required by our Bylaws or otherwise, the Board is submitting the selection of Marcum BP to our stockholders for ratification as
a matter of good corporate practice.
The affirmative vote
of the holders of a majority of shares represented in person or by proxy and entitled to vote on this item will be required for
approval. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a negative vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE “FOR” THIS PROPOSAL TWO.
In the event stockholders
do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the Board. Even if the selection
is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during
the year if it determines that such a change would be in the best interests of the Company and our stockholders.
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Meetings and Certain Committees of the Board
The Board held one
meeting during the fiscal year ended December 31, 2016. An Audit Committee, a Compensation Committee and a Nominating and Corporate
Governance Committee were established in December of 2008. In fiscal year 2016, the Audit Committee held four meetings, the Compensation
Committee held one meeting, and the Nominating and Corporate Governance Committee held one meeting. Each Director attended, either
in person or telephonically, at least 75% of the aggregate Board of Directors meetings and meetings of committees on which he or
she served during his or her tenure as a director or committee member.
Audit Committee
The Audit Committee
is currently comprised of Howard S. Barth (Chair), Bai Shaohua and Yang Lili, each of whom is independent as “independence”
is currently defined in applicable SEC rules and an “independent director” as currently defined in applicable rules
of the Nasdaq Stock Market. The Board has determined that Howard S. Barth qualifies as an “Audit Committee financial expert,”
as defined in applicable SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002. The Board made a qualitative assessment
of Mr. Barth’s level of knowledge and experience based on a number of factors, including his formal education and experience.
The Audit Committee
is responsible for overseeing the Company’s corporate accounting, financial reporting practices, audits of financial statements
and the quality and integrity of the Company’s financial statements and reports. In addition, the Audit Committee oversees
the qualifications, independence and performance of the Company’s independent auditors. In furtherance of these responsibilities,
the Audit Committee’s duties include the following: evaluating the performance of and assessing the qualifications of the
independent auditors; determining and approving the engagement of the independent auditors to perform audit, reviewing and attesting
to services and performing any proposed permissible non-audit services; evaluating employment by the Company of individuals formerly
employed by the independent auditors and engaged on the Company’s account and any conflicts or disagreements between the
independent auditors and management regarding financial reporting, accounting practices or policies; discussing with management
and the independent auditors the results of the annual audit; reviewing the financial statements proposed to be included in the
Company’s annual report on Form 10-K; discussing with management and the independent auditors the results of the auditors’
review of the Company’s quarterly financial statements; conferring with management and the independent auditors regarding
the scope, adequacy and effectiveness of internal auditing and financial reporting controls and procedures; and establishing procedures
for the receipt, retention and treatment of complaints regarding accounting, internal accounting control and auditing matters
and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
The Audit Committee operates under the written Audit Committee Charter adopted by the Board in December of 2008, a copy of which
may be obtained by writing the Secretary of the Company at Floor 1 FTZ International Auto Mall, 86 Tianbao Avenue, Free Trade
Zone, Tianjin Province, The People’s Republic of China 300461 and is available on the Company’s website at
http://www.chinaautologisticsinc.com
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Compensation Committee
The Compensation Committee is currently
comprised of the following Directors of the Company: Yang Lili (Chair), Lv Fuqi and Bai Shaohua, each of whom is independent as
“independence” is currently defined in applicable SEC rules and an “independent director” as currently
defined in applicable rules of the Nasdaq Stock Market. The Compensation Committee reviews and, as it deems appropriate, recommends
to the Board’s policies, practices and procedures relating to the compensation of the officers and other managerial employees
and the establishment and administration of employee benefit plans. The Compensation Committee advises and consults with the officers
of the Company as may be requested regarding managerial personnel policies and plays a crucial role in helping us to attract and
retain talented employees by advising career development and management succession. The Compensation Committee has the authority
to obtain advice and seek assistance from internal and external legal, accounting and other advisors, and has sole authority to
retain and terminate any compensation consultant to be used to evaluate director or officer compensation, including the authority
to approve the consulting firm’s fee and retention terms. The Compensation Committee also has such additional powers as may
be conferred upon it from time to time by the Board. The Compensation Committee operates under the written Compensation Committee
Charter adopted by the Board in December of 2008, a copy of which may be obtained by writing the Secretary of the Company at Floor
1 FTZ International Auto Mall, 86 Tianbao Avenue, Free Trade Zone, Tianjin Province, The People’s Republic of China 300461
and is available on the Company’s website at http://www.chinaautologisticsinc.com.
Nominating and Corporate Governance
Committee
The Nominating and
Corporate Governance Committee (the “Nominating Committee”) is currently comprised of Bai Shaohua (Chair), Yang Lili
and Lv Fuqi each of whom is independent as “independence” is currently defined in applicable SEC rules and an “independent
director” as currently defined in applicable rules of the Nasdaq Stock Market. The Nominating Committee is responsible for
preparing a list of candidates to fill the expiring terms of directors serving on our Board. The Nominating Committee submits the
list of candidates to the Board who determines which candidates will be nominated to serve on the Board. The names of nominees
are then submitted for election at our Annual Meeting of Stockholders. The Nominating Committee also submits to the entire Board
a list of nominees to fill any interim vacancies on the Board resulting from the departure of a member of the Board for any reason
prior to the expiration of his term. In recommending nominees to the Board, the Nominating Committee keeps in mind the functions
of this body. While there is no set of minimum requirements to be nominated as a director, the Nominating Committee considers various
criteria, including general business experience, general financial experience, knowledge of the Company’s industry (including
past industry experience), education, and demonstrated character and judgment. The Nominating Committee will consider director
nominees recommended by a stockholder if the stockholder mails timely notice to the Secretary of the Company at its principal offices,
which notice includes (i) the name, age and business address of such nominee, (ii) the principal occupation of such nominee, (iii)
a brief statement as to such nominee’s qualifications, (iv) a statement that such nominee consents to his or her nomination
and will serve as a director if elected, (v) whether such nominee meets the definition of an “independent” director
under the applicable SEC rules and (vi) the name, address, class and number of shares of capital stock of the Company held by the
nominating stockholder. Any person nominated by a stockholder for election to the Board will be evaluated based on the same criteria
as all other nominees. The Nominating Committee also oversees our adherence to our corporate governance standards. Although not
part of any formal policy, the goal of the Nominating Committee is a balanced and diverse Board, with members whose skills, viewpoint,
background and experience complement each other and, together, contribute to the Board’s effectiveness as a whole. The Nominating
Committee operates under the written Nominating Committee Charter adopted by the Board in December of 2008, a copy of which may
be obtained by writing the Secretary of the Company at Floor 1 FTZ International Auto Mall, 86 Tianbao Avenue, Free Trade Zone,
Tianjin Province, The People’s Republic of China 300461 and is available on the Company’s website at http://www.chinaautologisticsinc.com.
During the fiscal year
ended December 31, 2016, there were no changes to the procedures by which holders of our common stock may recommend nominees to
the Board.
Board Leadership Structure and Risk
Oversight
Our Chairman of the
Board is also our Chief Executive Officer and President. We believe that by having this combined position, our Chief Executive
Officer Chairman serves as a bridge between management and the Board, ensuring that both act with a common purpose. In addition,
we believe that the combined position facilitates our focus on both long- and short- term strategies. Further, we believe that
the advantages of having a Chief Executive Officer Chairman with extensive knowledge of our company, as opposed to a relatively
less informed independent Chairman, outweigh potential disadvantages. Additionally, of our seven current Board members, four have
been deemed to be independent by our Board. Accordingly, we believe that our majority of independent directors provides sufficient
independent oversight of our management. We do not have a lead independent director.
We administer our risk
oversight function through our Audit Committee as well as through our Board of Directors as a whole. Our Audit Committee is empowered
to appoint and oversee our independent registered public accounting firm, monitor the integrity of our financial reporting processes
and systems of internal controls and provide an avenue of communication among our independent auditors, management, our internal
auditing department and our Board of Directors.
Director Nominations
The nomination process
involves a careful examination of the performance and qualifications of each incumbent director and potential nominees before deciding
whether such person should be nominated. The Board believes that the business experience of its directors has been, and continues
to be, critical to the Company’s success. While there are no minimum requirements to be nominated, directors should possess
integrity, independence, energy, forthrightness, analytical skills and commitment to devote the necessary time and attention to
the Company’s affairs. Directors must possess a willingness to challenge and stimulate management and the ability to work
as part of a team in an environment of trust.
The Board will generally
consider all relevant factors, including, among others, each nominee’s applicable expertise and demonstrated excellence in
his or her field, the usefulness of such expertise to the Company, the availability of the nominee to devote sufficient time and
attention to the affairs of the Company, the nominee’s reputation for personal integrity and ethics, and the nominee’s
ability to exercise sound business judgment. Other relevant factors, including age and diversity of skills, will also be considered.
Director nominees are reviewed in the context of the existing membership of the Board (including the qualities and skills of the
existing directors), the operating requirements of the Company and the long-term interests of its stockholders. Although not part
of any formal policy, the goal is a balanced and diverse Board, with members whose skills, viewpoint, background and experience
complement each other and, together, contribute to the Board’s effectiveness as a whole. The Board uses its network of contacts
when compiling a list of potential director candidates and may also engage outside consultants (such as professional search firms).
Director Independence
NASDAQ requires that
a majority of the Company’s Board be independent as defined under the NASDAQ rules. The NASDAQ rules provide that no director
can qualify as independent unless the Board affirmatively determines that the director has no relationship that would interfere
with exercising independent judgment in carrying out a director’s responsibilities. The Board utilizes the following standards
in determining whether or not a director has a material relationship with the Company:
|
|
·
|
The director is, or was at any time during the past three years, employed by the company. Serving
as an interim executive officer does not affect the determination of independence as long as service was for less than one year.
|
|
|
·
|
A family member of the director is or was during the past three years an executive officer of the
company. NASDAQ defines “family member” to include spouses, parents, children, siblings, whether by blood, marriage
or adoption, and anyone else sharing the director's home.
|
|
|
·
|
The director or a family member of the director received more than $120,000 in compensation from
the company in any 12-month period in the past three years. Compensation does not include the following: (i) director and committee
fees, (ii) payments under a tax qualified retirement plan or other non-discretionary compensation or (iii) compensation of a family
member of the director who is an employee but not an executive officer of the company.
|
|
|
·
|
The director or a family member of the director is, or was during the past three years, a controlling
stockholder, partner or executive officer of another entity that makes payments to or receives payments from the listed company,
and the amount of these payments made in the current fiscal year or any one of the past three fiscal years exceeds the greater
of $200,000 or 5% of that other entity's consolidated gross revenues. If the director or family member is an executive officer
of a charitable organization, the director may not be considered independent if the company contributes more than $200,000 or 5%
of the charity's revenues.
|
|
|
·
|
The director or a family member of the director is an executive officer of another company where
any of the listed company's executive officers are or were during the past three years members of the compensation committee of
that other company.
|
|
|
·
|
The director has one of the following relationships with the company's auditors: (i) the director
or a family member of the director is a current partner of the auditors; or (ii) the director was, or a family member of the director
was, within the past three years, a partner or employee of the auditors and worked on the company's audit.
|
Based on these independence
standards and all of the relevant facts and circumstances, the Board determined that the following directors are independent: Howard
S. Barth, Yang Lili, Lv Fuqi and Bai Shaohua.
Stockholder Communications
The Board welcomes communications
from our stockholders, and maintains a process for stockholders to communicate with the Board. Stockholders who wish to communicate
with the Board may send a letter to Peng Cheng, Secretary, at Floor 1 FTZ International Auto Mall, 86 Tianbao Avenue, Free Trade
Zone, Tianjin Province, The People’s Republic of China 300461. The mailing envelope must contain a clear notation indicating
that the enclosed letter is a “Stockholder-Board Communication.” All such letters should identify the author as a security
holder. All such letters will be reviewed by the Secretary and submitted to the entire Board no later than the next regularly scheduled
Board meeting.
Annual Meetings
We have no policy with
respect to director attendance at annual meetings. Last year one director attended the Annual Meeting.
Compensation of Directors
Directors do not receive
any compensation for their service as a director and are not compensated for serving on committees or attending meetings, except
Mr. Howard Barth. Mr. Howard Barth is awarded $24,000 per year for his professional contribution as a director and chairman of
the audit committee. However, the Company may establish other certain compensation plans (e.g. options, cash for attending meetings,
etc.) with respect to directors in the future. As of October 1
st
, 2017, the Company has not made any awards under the
China Auto Logistics Inc. 2010 Omnibus Long-Term Incentive Plan, including to any directors of the Company.
Third-Party Payments Made to Directors
None of the directors
and any person or entity other than the Company have entered into an agreement relating to compensation or other payment in connection
with that person’s candidacy or service as a director.
Summary Compensation
Table For Directors
|
Name and Principal Position
|
|
Fees earned or paid in cash
$
|
|
|
Bonus
$
|
|
|
Stock awards
$
|
|
|
Option awards
$
|
|
|
Non-equity Incentive plan compensation
$
|
|
|
Nonqualified Deferred compensation
Earnings $
|
|
|
All other compensation
$
|
|
|
Total
$
|
|
|
Haward S. Barth
|
|
|
24,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
24,000
|
|
|
Yang Lili
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Lv Fuqi
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Bai Shaohua
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Wang Wei
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Zou Baoying
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Retirement, Post-Termination and Change
in Control
We have no retirement,
pension, or profit-sharing programs for the benefit of directors, officers or other employees, nor do we have post-termination
or change in control arrangements with directors, officers or other employees, but our Board may recommend adoption of one or more
such programs in the future.
EXECUTIVE OFFICERS
General
Certain information
concerning our executive officers as of the date of this proxy statement is set forth below. Officers are elected annually by the
Board and serve at the discretion of the Board.
|
Name
|
|
Position With Our Company
|
|
Age
|
|
Officer Since
|
|
Tong Shiping
|
|
Chief Executive Officer, President and Chairman of the Board
|
|
57
|
|
1995
|
|
Jin Yan
|
|
Chief Operating Officer
|
|
51
|
|
2012
|
|
Wang Xinwei
|
|
Chief Financial Officer, Treasurer, Vice President and Director
|
|
60
|
|
2001
|
|
Cheng Weihong
|
|
Senior Vice President (Head of Human Resources and General Administration) and Director
|
|
55
|
|
1995
|
Jin Yan has served
as Chief Operating Officer of the Company since July of 2012. From 2007 to 2010, he served as Managing Director of Madeleine Gourmet
Restaurant which operated a series of chain restaurants. Prior to his appointment as COO, he served as General Manager of Sales
for the Company since 2011. He also earned an MBA from Tianjin Nankai University. The Board believes that Mr. Jin has the experience,
qualifications, attributes and skills necessary to serve the Company because of his extensive leadership and management experience.
Certain Relationships and Related Transactions
The Company’s
Code of Business Conduct and Ethics, adopted December 12, 2008, contains a policy for the review of transactions in which the Company
conducts business with a relative or significant other of a director, officer, or employee of the Company (a “Related Party
Transaction”). A Related Party Transaction must be disclosed to the Company’s Chief Financial Officer to determine
whether or not it is material to the Company. In the event that a Related Party Transaction is determined to be material, it must
be reviewed and approved in writing by the Audit Committee in advance of the consummation of such Related Party Transaction. Significant
Related Party Transactions, including those involving the Company’s directors or executive officers, must be reviewed and
approved in writing in advance by the Company’s Board of Directors.
Ms. Cheng Weihong (the
Senior Vice President and Chairwoman of Shisheng and wife of the Company’s President and Chief Executive Officer, Mr. Tong
Shiping) made non-interest bearing loans to the Company from time to time to meet working capital needs of the Company. For the
years ended December 31, 2016 and 2015, the Company made aggregate borrowings from Ms. Cheng Weihong of $686,185 and $599,120,
respectively, and made repayments of $0 and $454,280 to Ms. Cheng Weihong. As of December 31, 2016 and 2015, the outstanding balances
due to Ms. Cheng Weihong were $1,550,745 and $722,028, respectively.
The Company’s
former shareholder, Sino Peace Limited, paid certain accrued expenses in the previous years on behalf of the Company. The amounts
of $1,956,625 and $2,093,182 were outstanding as payable related to prior years’ professional fees on the consolidated balance
sheets as of December 31, 2016 and 2015, respectively. In January 2015, December 2016, and February 2017, the Company received
notification from an individual who claimed to be the owner of St. George International Limited ("St. George") and made
a claim that the debt owed to Sino Peace by the Company had been transferred to St. George. However, the Company neither received
any evidence to support such assignment nor any notification from the owner of Sino Peace that Sino Peace was transferring its
legal right of collecting the receivable from the Company to St. George. The Company has been unable to locate the owner of Sino
Peace to confirm such transfer and therefore considers such claim by St. George legally unbinding at this time.
The balances as discussed
above as of December 31, 2016 and 2015 are interest-free, unsecured and have no fixed term of repayment. During the years ended
December 31, 2016 and 2015, there was no imputed interest charged in relation to these balances.
Mr. Tong Shiping and
Ms. Cheng Weihong personally guarantee borrowings on various lines of credit related to our financing services and short-term borrowings.
Security Ownership
of Certain Beneficial Owners and Management
The following tables
set forth, as of September 22, 2017, information known to us relating to the beneficial ownership of shares of common stock by
each person who is the beneficial owner of more than 5 percent of the outstanding shares of common stock, each director, each executive
officer, and all executive officers and directors as a group.
Name and Address of
Beneficial Owner*
|
|
Number of Shares Beneficially Owned
|
|
|
Percentage of Shares Beneficially Owned
|
|
|
Position
|
|
Tong Shiping**
|
|
|
0
|
|
|
|
0
|
%
|
|
President, Chief Executive Officer and Chairman of the Board
|
|
Wang Xinwei
|
|
|
0
|
|
|
|
0
|
%
|
|
Chief Financial Officer, Treasurer and Vice President and Director
|
|
Cheng Weihong**
|
|
|
0
|
|
|
|
0
|
%
|
|
Senior Vice President (Head of Human Resources and General Administration) and Director
|
|
Jin Yan
|
|
|
0
|
|
|
|
0
|
%
|
|
Chief Operating Officer
|
|
Howard S. Barth
|
|
|
0
|
|
|
|
0
|
%
|
|
Director
|
|
Yang Lili
|
|
|
0
|
|
|
|
0
|
%
|
|
Director
|
|
Lv Fuqi
|
|
|
0
|
|
|
|
0
|
%
|
|
Director
|
|
Bai Shaohua
|
|
|
0
|
|
|
|
0
|
%
|
|
Director
|
All Directors and Officers
as a Group (8 persons)
|
|
|
0
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bright Praise Enterprises Limited**
|
|
|
1,648,140
|
|
|
|
40.85
|
%
|
|
Stockholder
|
|
Choi Chun Leung Robert**
|
|
|
1,648,140
|
|
|
|
40.85
|
%
|
|
Stockholder
|
|
*
|
Except where otherwise indicated, the address of the beneficial owner is deemed to be the same address of the Company.
|
|
**
|
Choi Chun Leung Robert is the beneficial owner of 1,648,140 shares of our common stock through his 100% ownership of Bright Praise Enterprises Limited as trustee for the benefit of Tong Shiping and Cheng Weihong.
|
Compensation of Officers
The following table
provides certain summary information concerning compensation awarded to, earned by, or paid to our Chief Executive Officer and
the two highest paid executive officers for fiscal years 2016, 2015 and 2014. The Company did not have other individuals whose
total annual salary and bonus exceeded $100,000 for fiscal years 2016, 2015 and 2014. Except as listed below, there were no bonuses,
other annual compensation, restricted stock awards or stock options/SARs or any other compensation paid to the named executive
officers.
Summary Compensation Table
|
Name and Principal Position
|
|
Year Ended
December 31,
|
|
Salary
$
|
|
|
Bonus
$
|
|
|
Stock awards
$
|
|
|
Option awards
$
|
|
|
Non-equity Incentive plan compensation
$
|
|
|
Nonqualified Deferred compensation Earnings
$
|
|
|
All other compensation
$
|
|
|
Total
$
|
|
|
Tong Shiping,
|
|
2016
|
|
$
|
54,192
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
54,192
|
|
|
CEO and President (1)
|
|
2015
|
|
|
57,901
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
57,901
|
|
|
Wang Xinwei,
|
|
2016
|
|
$
|
36,128
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
36,128
|
|
|
CFO, Treasurer and VP (2)
|
|
2015
|
|
|
38,601
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
38,601
|
|
|
Cheng Weihong,
|
|
2016
|
|
$
|
36,128
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
36,128
|
|
|
Senior VP (Head of HR and Admin) (3)
|
|
2015
|
|
|
38,601
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
38,601
|
|
|
(1)
|
Mr. Tong Shiping’s total compensation for the fiscal years ended December 31, 2016 and December 31, 2015 was $54,192 and $57,901 respectively (RMB360,000). The U.S. dollar amounts provided in this summary compensation table are based on the weighted average rate of RMB to U.S. dollars during the years 2016 and 2015.
|
|
(2)
|
Ms. Wang Xinwei’s total compensation for the fiscal years ended December 31, 2016 and December 31, 2015 was $36,128 and $38,601 respectively (RMB240,000). The U.S. dollar amounts provided in this summary compensation table are based on the weighted average rate of RMB to U.S. dollars during the years 2016 and 2015.
|
|
(3)
|
Ms. Cheng Weihong’s total compensation for the fiscal years ended December 31, 2016 and December 31, 2015 was $36,128 and $38,601 respectively
(
RMB240,000). The U.S. dollar amounts provided in this summary compensation table are based on the weighted average rate of RMB to U.S. dollars during the years 2016 and 2015.
|
Compensation Discussion and Analysis
The Company’s
compensation program is designed to provide our executive officers with competitive remuneration and to reward their efforts and
contributions to the Company. Elements of compensation for our executive officers include base salary and cash bonuses.
Before we set the
base salary for our executive officers each year, we research the market compensation in Tianjin for executives in similar positions
with similar qualifications and relevant experience, and add a 10%-15% premium as an incentive to attract and retain high-level
employees. The Company has not utilized any compensation consultants in determining its compensation recommendations. Company performance
does not play a significant role in the determination of base salary.
The Compensation Committee
will also take into consideration the results of the Company’s stockholders vote on the compensation of the Company’s
named executive officers if the Company’s stockholders did not approve the proposed named executive compensation at the prior
annual meeting.
Cash bonuses may also
be awarded to our executives on a discretionary basis at any time. Cash bonuses are also awarded to executive officers upon the
achievement of specified performance targets, including annual revenue targets for the Company.
The Company is able
to attract and retain high-level employees by providing premium salaries and incentives such employees through the use of a cash
bonus system.
Compensation Committee Report
The Compensation Committee
has reviewed the Compensation Discussion and Analysis and discussed that analysis with management. Based on its review and discussions
with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included
in the Company’s 2017 Proxy Statement.
|
|
Compensation Committee
|
|
|
Yang Lili
|
|
|
Lv Fuqi
|
|
|
Bai Shaohua
|
Compensation Committee Interlocks and
Insider Participation in Compensation Decisions
During the last fiscal
year, none of the Company’s executive officers served on the Board of Directors or compensation committee of any other entity
whose executive officers served either the Company’s Board or Compensation Committee.
Employment Agreements
Each of the executive
officers of the Company has entered into standard employment contracts with Shisheng. The contracts have one-year terms and are
otherwise consistent with the standard form prescribed by the Tianjin Labor and Social Security Administration. None of the employment
contracts provide for annual total compensation payments in excess of $100,000. The amounts listed in the table above were paid
by Shisheng. As of October 1
st
, 2017, the Company has not made any awards under the China Auto Logistics Inc. 2010 Omnibus
Long-Term Incentive Plan, including to any officers of the Company.
Outstanding Equity Awards at Fiscal
Year-End
None.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the
Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers and persons who own more
than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of the Company. Directors, officers and greater than
10% stockholders are required to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s
knowledge, based solely on a review of the copies of such reports furnished to the Company, with respect to the fiscal year ended
December 31, 2016, the officers, directors and beneficial owners of more than 10% of our common stock have filed their initial
statements of ownership on Form 3 on a timely basis, and the officers, directors and beneficial owners of more than 10% of our
common stock have also filed the required Forms 4 or 5 on a timely basis.
Arrangements or Understandings
There was no arrangement
or understanding between any of our directors and any other person pursuant to which any director was to be selected as a director.
Involvement in Certain Legal Proceedings
During the past ten
(10) years, none of the directors or executive officers has been involved in any legal proceedings that are material to the evaluation
of their ability or integrity.
Family Relationships
Ms. Cheng Weihong, our
Senior Vice President (Head of Human Resources and General Administration) and a director nominee, is the wife of Mr. Tong Shiping,
our President and Chief Executive Officer and a director nominee.
Frequency of Stockholder Advisory Votes
on Executive Compensation
At the Company’s
2013 annual meeting the Company’s stockholders approved a three year frequency for stockholder advisory votes on the compensation
of the Company’s named executive officers. Accordingly, the Company’s stockholders cast an advisory (non-binding) vote
on the Company’s named executive officers compensation at the 2016 annual meeting.
The Company’s
stockholders will be entitled to vote at the Company’s 2019 annual meeting to determine the frequency of non-binding advisory
votes on the Company’s named executive officers compensation.
AUDIT-RELATED MATTERS – AUDITOR
FEES AND SERVICES
The Company’s
independent registered public accounting firm for the prior year, Marcum LLP, entered into a joint venture transaction (“Joint
Venture”) with Bernstein & Pinchuk LLP to form Marcum BP. Marcum LLP informed the Company that, as a result of the Joint
Venture, (i) Marcum effectively resigned as the Company’s independent registered public accounting firm as of February 9,
2017; and (ii) Marcum BP, as a successor to Marcum’s China-based business, was willing to serve as the Company’s independent
registered public accounting firm. Marcum BP has been selected as the Company’s independent registered public account for
the current year.
Representatives of
the principal accountants for the current year and for the most recently completed fiscal year:
|
|
(i)
|
are not expected to be present at the Annual Meeting;
|
|
|
(ii)
|
will have the opportunity to make a statement if they
desire to do so; and
|
|
|
(iii)
|
are not expected to be available to respond to appropriate
questions.
|
Audit Fees
During the fiscal years
ended December 31, 2016 and 2015, the audit fees for the for Marcum LLP were $289,722 and $293,161, respectively for the audit
of the annual financial statements, review of quarterly statements, and other services normally provided by an accountant for statutory
and regulatory filings.
During the fiscal years
ended December 31, 2016 and December 31, 2015, there were no fees billed by Marcum LLP. The fees expected to be billed by and paid
to Marcum BP related to the audit for the year ended December 31, 2016 are approximately $145,000.
Audit-Related Fees
During the fiscal years
ended December 31, 2016 and December 31, 2015, our principal accountants did not render assurance and related services reasonably
related to the performance of the audit or review of financial statements.
Tax Fees
During the fiscal year
ended December 31, 2016 and December 31, 2015, our principal accountants did not render services to us for tax compliance, tax
advice and tax planning.
All Other Fees
During the fiscal years
ended December 31, 2016 and December 31, 2015, there were no fees billed for products and services provided by the principal accountants
other than those set forth above.
The Audit Committee
has reviewed the above fees for non-audit services and believes such fees are compatible with the independent registered public
accountants’ independence.
Policy on Audit Committee Pre-Approval
of Audit and Non-Audit Services of Independent Accountant
The policy of the
Audit Committee is to pre-approve all audit and non-audit services provided by the independent accountants. These services may
include audit services, audit-related services, tax fees, and other services. Pre-approval is generally provided for up to one
year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget.
The Audit Committee has delegated pre-approval authority to certain committee members when expedition of services is necessary.
The independent accountants and management are required to periodically report to the full Audit Committee regarding the extent
of services provided by the independent accountants in accordance with this pre-approval delegation, and the fees for the services
performed to date. None of the fees paid to the independent accountants during fiscal years ended December 31, 2016 and 2015, under
the categories Audit-Related and All Other fees described above were approved by the Audit Committee after services were rendered
pursuant to the de minimis exception established by the SEC.
Audit Committee Report
The Audit Committee
has reviewed and discussed the audited financial statements with our management. The Audit Committee has discussed with our independent
auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing
Standards, AU Section 380). The Audit Committee has received the written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1, and has discussed with the independent auditors the independent auditors’
independence. Additionally, the Audit Committee has reviewed fees charged by the independent auditors and has monitored whether
the non-audit services provided by its independent auditors are compatible with maintaining the independence of such auditors.
Based upon its reviews and discussions, the Audit Committee recommended to our Board that the audited financial statements be included
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for filing with the SEC and the Board approved that
recommendation.
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Audit Committee:
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Howard S. Barth
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Bai Shaohua
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Yang Lili
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OTHER INFORMATION
Delivery of Documents to Stockholders Sharing an Address
Only one Proxy Statement
is being delivered to two or more security holders who share an address, unless the Company has received contrary instruction from
one or more of the security holders. The Company will promptly deliver, upon written or oral request, a separate copy of the Proxy
Statement to a security holder at a shared address to which a single copy of the document was delivered. If you would like to request
additional copies of the Proxy Statement, or if in the future you would like to receive multiple copies of information or proxy
statements, or annual reports, or, if you are currently receiving multiple copies of these documents and would, in the future,
like to receive only a single copy, please so instruct the Company, by writing to us at Floor 1 FTZ International Auto Mall, 86
Tianbao Avenue, Free Trade Zone, Tianjin Province, The People’s Republic of China 300461 or calling (86-22) 2576-2771.
Submission of Stockholder Proposals
If you wish to have
a proposal included in our proxy statement and form of proxy for next year’s annual meeting in accordance with Rule 14a-8
under the Exchange Act, your proposal must be received by us at our principal executive offices on or before June 8, 2018 (120
days before the anniversary of this year’s mailing date). A proposal which is received after that date or which otherwise
fails to meet the requirements for stockholder proposals established by the SEC will not be included. The submission of a stockholder
proposal does not guarantee that it will be included in the proxy statement.
Other Matters
As of the date of
this Proxy Statement, the Board has no knowledge of any business which will be presented for consideration at the Annual Meeting
other than proposals one through four described in this Proxy Statement. Should any other matter be properly presented, it is intended
that the enclosed proxy will be voted in accordance with the best judgment of the persons voting the proxies.
We file annual, quarterly
and special reports, proxy statements and other information with the SEC. The public may read and copy any materials that we have
filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet
site that contains the reports, proxy and information statements and other information regarding the Company that we have filed
electronically with the SEC. The address of the SEC’s Internet site is http://www.sec.gov.
Annual Report
A copy of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016, which has been filed with the SEC pursuant to the Securities Exchange
Act of 1934, is being mailed to you along with this Proxy Statement. Additional copies of this Proxy Statement and/or the Annual
Report, as well as copies of any Quarterly Report may be obtained without charge upon written request to China Auto Logistics Inc.,
at Floor 1 FTZ International Auto Mall, 86 Tianbao Avenue, Free Trade Zone, Tianjin Province, The People’s Republic of China
300461, or on the SEC’s Internet website at http://www.sec.gov.
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BY ORDER OF THE BOARD OF DIRECTORS
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/s/ Tong Shiping
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Chief Executive Officer, President and Chairman
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October 6, 2017
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