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
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
x Preliminary Proxy Statement
¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2))
¨ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Under §240.14a -12
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Under §240.14a -12 |
IDEANOMICS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
x | No fee required. |
¨ Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11. |
1) | Title of each class of securities to which transaction applies: | |
2) | Aggregate number of securities to which transaction applies: | |
3) | 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): | |
4) | Proposed maximum aggregate value of transaction: | |
5) | Total fee paid: |
¨ Fee paid previously with preliminary materials.
¨ | Fee paid previously with preliminary materials. |
¨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.
1) | Amount previously paid: | |
2) | Form, Schedule or Registration Statement No.: | |
3) | Filing Party: | |
4) | Date Filed: |
IDEANOMICS, INC.
September [___], 2020November 12, 2021
Dear Shareholder:
You are invited to attend Ideanomics, Inc.’s (the “Company”) Annual Meeting of Shareholders on [__________], 2020,December 22, 2021, at [10:10:00 AM],AM, local time (New York Time). In light of the COVID-19 pandemic, to support the health and well-being of our stockholders, employees and directors, and taking into account recent federal, state and local guidance, the Annual Meeting will be held in a virtual meeting format only, via live webcast on the Internet, with no physical in-person meeting. You will be able to attend and participate in the SpecialAnnual Meeting online by visiting [__________________],www.virtualshareholdermeeting.com/IDEX2021, where you will be able to listen to the meeting live, submit questions and vote. We encourage you to vote your shares prior to the Annual Meeting.
Details of the business to be conducted at the Annual Meeting are included in the attached Notice of Annual Meeting of Shareholders and Proxy Statement.
Whether or not you plan to attend the virtual Annual Meeting, your vote is important and you are encouraged to vote promptly. If you received a paper copy of the proxy card by mail, you may sign, date and return the proxy card in the enclosed envelope. If you attend the Annual Meeting, you may revoke your proxy and vote at the virtual Annual Meeting.
Very truly yours, | |
/s/ Alfred P. Poor | |
Alfred P. Poor | |
Chief Executive Officer |
IDEANOMICS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 2020DECEMBER 22, 2021
[___________}, 2020November 12, 2021
TO THE SHAREHOLDERS OF IDEANOMICS, INC.:
You are cordially invited to attend the Annual Meeting of Shareholders of Ideanomics, Inc., a Nevada corporation (the “Company”), to be held on [______________], 2020,December 22, 2021, at [10:10:00 AM],AM, local time (New York Time). In light of the COVID-19 pandemic, to support the health and well-being of our stockholders, employees and directors, and taking into account recent federal, state and local guidance, the Annual Meeting will be held in a virtual meeting format only, via live webcast on the Internet, with no physical in-person meeting. You will be able to attend and participate in the SpecialAnnual Meeting online by visiting [__________________],www.virtualshareholdermeeting.com/IDEX2021, where you will be able to listen to the meeting live, submit questions and vote. We encourage you to vote your shares prior to the Annual Meeting.
1. Elect the sevenfive directors named in the attached Proxy Statement to serve for a one-year term to expire at the 20202021 Annual Meeting of Shareholders or until their respective successors are duly elected and qualified, as follows: sevenfive directors, including Bruno Wu, Alfred P. Poor, Shane McMahon, James S. Cassano, Jerry Fan, Chao Yang, and Harry Edelson to be elected by the holders of the Company’s common stock and Series A preferred stock, voting together as a single class;
2. Ratify the appointment of BF Borgers CPA PCBDO USA, LLP as the independent registered accounting firm of the Company for the fiscal year ending December 31, 2020;2021;
3. Approval of the amendment and restatement of our 2010 Equity Incentive Plan, a copy of such amended and restated plan is included as Appendix A to this Information Statement (the “Plan”), to increase the number of shares authorized for issuance under the Plan to 56,800,000 and so that the term of the Plan shall be until August 31, 2030;
4. Approval of the issuance of shares of common stock to Yorkville Advisors pursuant to the terms of a standby equity distribution agreement in accordance with the stockholder approval requirements of NASDAQ listing rule 5635(d);
5.2. Transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
The Annual Meeting will be a completely virtual meeting of stockholders. To listen to the Annual Meeting or submit questions or vote during the Annual Meeting via live webcast, please visit [_______________].www.virtualshareholdermeeting.com/IDEX2021. You will not be able to attend the Annual Meeting in person.
This notice of meeting, Proxy Statement, proxy card and copy of the Annual Report to Shareholders for the year ended December 31, 20192020 are being distributed to shareholders on or about [_______________], 2020.November 12, 2021. The foregoing items of business are more fully described in the attached Proxy Statement. Shareholders of record at the close of business on [_________], 2020,November 4, 2021, the record date, are entitled to notice of and to vote at the annual meeting and any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS | |
/s/ Alfred P. Poor | |
Alfred P. Poor | |
Chief Executive Officer |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIAL
FOR THE ANNUAL MEETING TO BE HELD ON [______________], 2020DECEMBER 22, 2021
The Notice of Meeting, Proxy Statement, Proxy Card and Annual Report are available on the internet at:
www.proxyvote.com
IDEANOMICS, INC.
PROXY STATEMENT
20202021 ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors (the “Board”) of Ideanomics, Inc., a Nevada corporation (“we,” “us,” the “Company” or “Ideanomics”), for use at the Annual Meeting of Shareholders to be held on [___________], 2020,December 22, 2021, at 10:00, AM, local time (New York Time). In light of the COVID-19 pandemic, to support the health and well-being of our stockholders, employees and directors, and taking into account recent federal, state and local guidance, the Annual Meeting will be held in a virtual meeting format only, via live webcast on the Internet, with no physical in-person meeting. You will be able to attend and participate in the SpecialAnnual Meeting online by visiting [__________________],www.virtualshareholdermeeting.com/IDEX2021, where you will be able to listen to the meeting live, submit questions and vote. We encourage you to vote your shares prior to the Annual Meeting. Our telephone number at our principal executive offices is (212) 206-1216.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Share Ownership
Shareholders of record at the close of business on [_____________], 2020,November 4, 2021, which date is referred to herein as the record date, are entitled to notice of and to vote at the Annual Meeting. As of the record date: [_________]493,410,871 shares of our common stock, par value $0.001 per share (“Common Stock”) were issued and outstanding and held of record by approximately [___]387 shareholders of record, with each of those shares being entitled to one (1) vote; 7,000,000 shares of our Series A preferred stock, par value $0.001 per share (“Series A Preferred Stock”) were issued and outstanding and held of record by 1 shareholder of record, with the holders thereof being entitled to ten (10) votes for each share of Common Stock that is issuable upon conversion of a share of Series A Preferred Stock.
A list of these shareholders will be available for inspection during ordinary business hours at our offices located at 551441 Broadway, 19th Floor,Suite 5116, New York, NY 10006,10018, for at least ten (10) days prior to the Annual Meeting. The list will also be available for inspection during the Annual Meeting.
Voting, Solicitation and Revocability of Proxy
If you are a shareholder of record, you may vote online at the virtual Annual Meeting.
If you will not be attending the virtual Annual Meeting, you may vote by proxy. You may vote by proxy over the Internet, over the telephone or by mail. The procedures for voting by proxy are as follows:
· | To vote by proxy over the Internet go to the web address listed on the proxy card; or |
· | To vote by proxy over the telephone, dial the toll-free phone number listed on proxy card under the heading “Vote by Phone” and following the recorded instructions; or |
· | To vote by mail, mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
If your shares are held in the name of a bank, broker or other nominee, follow the voting instructions on the form you receive from your bank, broker or other nominee.
In order to ensure that your vote is counted, please submit your proxy card, properly signed, and the shares represented will be voted in accordance with your directions. You can specify your choices by marking the appropriate boxes on the proxy card. If your proxy card is submitted without specifying choices, the shares will be voted in line with the Board’s recommendationsrecommendation for Proposals 1,2, 3 &4.Proposal 1 and Proposal 2.
You may revoke your proxy at any time before it is voted at the Annual Meeting by executing a later-voted proxy by mail, by voting by ballot at the Annual Meeting, or by providing written notice of the revocation to our Secretary at our principal executive offices.
IMPORTANT: All shareholders are cordially invited to attend the virtual Annual Meeting. To assure your representation at the Annual Meeting, you are urged to vote your shares by proxy in accordance with the instructions included on the proxy card. Any shareholder attending the virtual Annual Meeting may vote even if he or she submitted a proxy. However, if a shareholder’s shares are held of record by a broker, bank or other nominee and the shareholder wishes to vote at the Annual Meeting, the shareholder must obtain from the record holder a proxy issued in his or her name.
Your vote is important. Accordingly, regardless of whether you plan to attend the Annual Meeting, you are urged to vote by proxy in accordance with the instructions included on the proxy card.
Attendance at the Annual Meeting is generally limited to our shareholders and their authorized representatives. Any stockholdershareholder may listen to the Annual Meeting via live webcast at [ ].www.virtualshareholdermeeting.com/IDEX2021. The webcast will begin on [ ], 2020December 22, 2021 10:00 AM, local time (New York Time). To enter the meeting, please have your 16-digit control number, which is available on your proxy card or voting instruction form. IIfIf you do not have your 16-digit control number please contact your bank, brokerage firm or follow the instructions on how to participate at [ ].www.virtualshareholdermeeting.com/IDEX2021. On the day of the Annual Meeting, if you encounter any difficulties accessing the live webcast of the Annual Meeting or during the Annual Meeting, please call the technical support number that will be posted on the log-in page for our virtual Annual Meeting for assistance.
If you do attend, you may vote by ballot at the Annual Meeting, thereby canceling any proxy previously given. However, attendance at the Annual Meeting will not revoke a proxy unless you actually vote at the virtual Annual Meeting.
In the event that any matter not described in this Proxy Statement properly comes before the Annual Meeting, the proxy holders named in the accompanying proxy will vote the shares represented by the proxy in their discretion. As of the date of this Proxy Statement, we are not aware of any other matter that might be presented at the Annual Meeting.
The presence at the virtual Annual Meeting or by proxy of the holders of thirty-three and one-third percent (33 1/3%) of the Common Stockshares issued and the Series A Preferred Stockoutstanding and entitled to cast a majority of all the votes entitled tovote shall be cast at the Annual Meeting is necessary and sufficient to constitute a quorum.quorum for the transaction of business except as otherwise provided by law, by the Articles of Incorporation or by these Bylaws. If, however, such quorum shall not be present or represented at any meeting of the Annual Meeting,stockholders, the shareholderschair of the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholderstockholder of record entitled to vote at the meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
Assuming a quorum is present, under Nevada law, and our Articles of Incorporation, as amended, and our Second Amended and Restated Bylaws, as amended (the “Bylaws”), with respect to Proposal 1, directors are to be elected by a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that for Proposal 1, the seven (7)five (5) candidates receiving the highest number of affirmative votes of the issued and outstanding Common Stock and Series A Preferred Stock, voting together as a single class on an as-converted basis at the Annual Meeting. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the shareholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a plurality. With respectTo approve Proposal 2, the number of votes cast in favor of Proposal 2 need to Proposals 2, 3 & 4,exceed the affirmative votenumber of the holders of at least a majority of the votes of the shares presentcast in person or represented by proxy at the Annual Meeting is requiredopposition to approve Proposals 2, 3 & 4.Proposal 2.
The inspector of election appointed for the Annual Meeting will determine the existence of a quorum and will tabulate the votes cast at the Annual Meeting. For purposes of determining the presence of a quorum, abstentions and broker “non-votes” (shares held by a bank, broker or other nominee that does not have the authority, either express or discretionary, to vote on a particular matter) will be counted by us as present at the Annual Meeting. Abstentions and broker non-votes, however, do not technically constitute a “vote cast” (affirmatively or negatively) on any matter and thus will be disregarded in the calculation of votes cast and whether shareholder approval of the matter has been obtained. Therefore, an abstention or broker non-vote will not have the effect of a vote for or against the proposal and will not be counted in determining the number of votes required for approval, though they will be counted as present at the Annual Meeting in determining the presence of a quorum.
Under the NASDAQcurrent NYSE rules regulating banks, brokers or other nominees and under applicable rules of the U.S. Securities and Exchange Commission, or the Commission, brokers, banks or other nominees that have not received voting instructions from a customer ten days prior to the meeting date may only vote the customer’s shares in discretion of the bank, broker or other nominee on proposals regarding “routine” matters, which in most cases includes the ratification of the appointment of the independent registered public accounting firm. However, without your specific instructions, your bank, broker, or other nominee may not vote your shares in the election of directors.
The entire cost of soliciting proxies on behalf of the Board, including the costs of preparing, assembling, printing and mailing this Proxy Statement, the proxy card and any additional soliciting materials furnished to stockholders by, or on behalf of, the Company, will be borne by us.the Company. The Company has agreed to pay Morrow Sodali a fee of $20,000 plus associated disbursements and other variable costs. The Company will reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain customary claims, liabilities, losses, damages and expenses. Copies of the Company’s solicitation material will be furnished to banks, brokerage houses, dealers, voting trustees, their respective nominees and other agents holding shares in their names, which are beneficially owned by others, so that they may forward such solicitation material, including our Annual Report on Form 10-K for the year ended December 31, 2020, to beneficial owners. In addition, toif asked, the solicitation of proxies by mail, we may utilize some of the officers and employees (who will receive no compensation in addition to their regular salaries), to solicit proxies personally and by telephone. Currently, we do not intend to retain a solicitation firm to assist in the solicitation of proxies. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies andCompany will reimburse suchthese persons for their reasonable expenses in so doing.forwarding these materials to the beneficial owners.
MATTERS TO BE CONSIDERED AT
THE ANNUAL MEETING
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
General
Our Board consists of one class of directors, which together currently include sevenfive (5) members: Bruno Wu, Alfred P. Poor, Shane McMahon, James S. Cassano, Jerry Fan, Chao Yang, and Harry Edelson. Effective upon the Annual Meeting, our board will consist of sevenfive (5) members. Each director serves from the date of his election until the end of his term and until his successor is elected and qualified.
Each of the directors listed above have been nominated as candidates for election as directors, as follows:
Proposal 1: Seven Five (5) directors, including Bruno Wu, Alfred P. Poor, Shane McMahon, James S. Cassano, Jerry Fan, Chao Yang,and Harry Edelson to be elected by the holders of the Company’s Common Stock and Series A Preferred Stock, voting together as a single class.
If elected, the directors will hold office until the next Annual Meeting and until their respective successor is elected and qualified. Unless authority is withheld, the proxies solicited by the board of directors will be voted “FOR” the election of the nominee. In case the nominee becomes unavailable for election to the board of directors, an event that is not anticipated, the persons named as proxies, or their substitutes, will have full discretion and authority to vote or refrain from voting for any other candidate in accordance with their judgment.
The following paragraphs set forth information regarding the current ages, positions, and business experience of the nominees.
Board Nominees
Bruno Wu
Director Since: January 2016 Age: 54
Dr. Wu has served as our Chairman since January 12, 2016. Dr. Wu is the founder, co-chairman and CEO of Sun Seven Stars Media Group Limited, a private media and investment company in China, since 2007. Its predecessor is Sun Media Group Holdings Limited, which was established by Dr. Wu and his spouse in 1999. Dr. Wu served as chairman of Sun Media Group from 1999 to 2007 and was former director of Shanda Group, a private investment group, from 2006 to 2009 and as former co-chairman of Sina Corporation (NASDAQ: SINA), a Chinese media and Internet services company, from 2001 to 2002. Additionally, Dr. Wu served as the chief operating officer for ATV, a free-to-air television broadcaster in Hong Kong, from 1998 to 1999. Dr. Wu served as a director of Seven Star Works Co Ltd (KOSDAQ:121800) between 2015 to 2017, and served as a director of Semir Garment Co. Ltd (SHE:00256) between 2008 and 2012. Dr. Wu received a Ph.D. from the School of International Relations and Public Affairs at Fudan University in 2001 and prior to that received an M.A. in International Relations from Washington University, a B.A. in Business Management from Culver-Stockton College of Missouri and a diploma in Superior Studies in French Literature from the School of French Language and Literature at the University of Savoie in Chambery, France.
Alfred P. Poor
Director Since: December 2018 Age: 5152
Mr. Poor has served as our Chief Executive Officer since February 2019 and Presidenthas been responsible for overseeing the capitalization and development of the Connecticut Fintech Village since February 2019.business into two key divisions, Ideanomics Mobility and Ideanomics Capital, which position the company to scale for the growth anticipated in each division. Mr. Poor is a former Chief Operating Officer at Global Data Sentinel, a cybersecurity company that specializes in identity management, file access control, protected sharing, reporting and tracking, AI and thread response, and backup and recovery. He is the former President and Chief Operating Officer of Agendize Services Inc., a company with an integrated suite of applications that help businesses generate higher quality leads, improve business efficiency and customer engagement. Mr. Poor is a client-focused and profitability-driven management executive with a track record of success at both rapidly-growing technology companies and large, multi-national, organizations.
Shane McMahon*
Director Since: July 2010 Age: 4951
Mr. McMahon was appointed Viceas Executive Chairman as of July 23, 2021, and was previously our Vice Chairman from January 12, 2016 to July 23, 2021, and was previously our Chairman from July 2010 to January 2016. Prior to joining us, from 2000 to December 31, 2009, Mr. McMahon served in various executive level positions with World Wrestling Entertainment, Inc. (NYSE: WWE). Mr. McMahon also sits on the Boards of Directors of International Sports Management (USA) Inc., a Delaware corporation, and Global Power of Literacy, a New York not-for-profit corporation.
Mr. McMahon has significant marketing and promotion experience and has been instrumental in exploiting content programming on a global basis. In light of our business and structure, Mr. McMahon’s extensive executive and industry experience led us to the conclusion that he should serve as a director of our Company.
4
James S. Cassano*
Director Since: January 2008 Age: 7475
The Board appointed James S. Cassano as our Non-Executive Vice-Chairman as of July 23, 2021. Mr. Cassano was appointedhas served as directora board member of the Company effective as ofsince January 11, 2008. Since December 2010, Mr. Cassano is currentlyhas been a Partner & Chief Financial Officer of CoActive Health Solutions, LLC, a worldwide contract research organization, supporting the pharmaceutical and biotechnology industries. Mr. Cassano has served as executive vice president, chief financial officer, secretary and director of Jaguar Acquisition Corporation a Delaware corporation (OTCBB: JGAC), a blank check company, since its formation in June 2005. Mr. Cassano has served as a managing director of Katalyst LLC, a company which provides certain administrative services to Jaguar Acquisition Corporation, since January 2005. In June 1998, Mr. Cassano founded New Forum Publishers, an electronic publisher of educational material for secondary schools, and served as its chairman of the Board and chief executive officer until it was sold to Apex Learning, Inc., a company controlled by Warburg Pincus, in August 2003. He remained with Apex until November 2003 in transition as vice president business development and served as a consultant to the company through February 2004. In June 1995, Mr. Cassano co-founded Advantix, Inc., a high volume electronic ticketing software and transaction services company which handled event related client and customer payments, that was renamed Tickets.com and went public through an IPO in 1999. From March 1987 to June 1995, Mr. Cassano served as senior vice president and chief financial officer of the Hill Group, Inc., a privately-held engineering and consulting organization, and from February 1986 to March 1987, Mr. Cassano served as vice president of investments and acquisitions for Safeguard Scientifics, Inc., a public venture development company. From May 1973 to February 1986, Mr. Cassano served as partner and director of strategic management services (Europe) for the strategic management group of Hay Associates. Mr. Cassano received a B.S. in Aeronautics and Astronautics from Purdue University and an M.B.A. from Wharton Graduate School at the University of Pennsylvania.
Mr. Cassano has significant senior management experience, including service as chief executive officer, executive vice president, chief financial officer, secretary and director. In light of our business and structure, Mr. Cassano’s extensive executive experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Jerry Fan*
Director Since: January 2016 Age: 5355
Mr. Fan was appointed as director of the Company on January 12, 2016. Mr. Fan has served as Managing Director and Country Manageris Corporate Vice President for the Greater China regionAsia Pacific Region at Analog Devices, Inc. (NASDAQ: ADI), a global semiconductor company that he has joined since November 2012. Prior to ADI, Mr. Fan worked for Cisco Systems, Inc. (NASDAQ: CSCO) for 15 years between 1997 and 2012 in a number of senior management roles, including Sales Managing Director for Cisco China, Sales Director for Cisco Australia and Senior Manager for Operations and Strategy for the Cisco Service Provider business based in Hong Kong. Mr. Fan started his career in 19981988 working at Fudan University as a faculty member in both teaching and research roles. He graduated from Fudan University with a Computer Science bachelor's degree and an Executive MBA degree from CEIBS (China European International Business School) in 1999.
Mr. Fan has more than 2030 years of experience in top management positions in China and the Asia Pacific region, working for several multinational technology companies. He also has served in senior management positions of several U.S. public companies. In light of our business and structure, Mr. Fan’s extensive industry and business experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Harry Edelson*
Director Since: September 2019 Age: 8788
Mr. Edelson was appointed as director of the Company effective as of September 15, 2019, CFA, CCP, CDP, is the Founder of Edelson Technology Partners, and President since 1980 of Edelson Technology, Inc., a company involved in consulting, fundraising, M&A, and investments. From 1984 until 2005 Mr. Edelson was an advisor and consultant for 10 multinational corporations (AT&T, Viacom, 3M, Ford Motor, Cincinnati Bell, Colgate-Palmolive, Reed Elsevier, Imation, Asea Brown Boveri and UPS). During this time he managed four technology-oriented strategic venture capital funds for the aforementioned 10 companies using corporate rather than pension money. He has served on over 150 boards of directors, 12 as chairman. At some time in the past five years, Mr. Edelson served as a director of four private companies, Airwire, PogoTec, eChinaCash, Pathway Genomics, and one public company, China Gerui. Executive positions in industry include Senior Systems Computer Engineer for Unisys, Transmission Engineer for AT&T (1962-1967), CTO for Cities Service (1967-1970) and Director of Marketing for a terminal manufacturer serving the nascent internet industry (1971-1973). His experience in technology led him to a 12 year career as a securities analyst on Wall Street covering telecommunications, computers, and office equipment for three leading investment banking firms in the 1970s and 1980s. Mr. Edelson obtained a BS in Physics from Brooklyn College in 1962, MBA from New York University Graduate School of Business in 1965, and completed a Graduate Program in Telecommunications Engineering at the Cornell Graduate School of Electrical Engineering in 1966. In 2007, Mr. Edelson served as Chairman and Chief Executive Officer for China Opportunity Acquisition Corp., a SPAC that raised $40 million and merged with China Gerui in 2009. Mr. Edelson was a Council member of The Julliard School of Music Dance & Drama, and is the founder and still Chairman of the China Investment Group; and the founder and current member of the Chinese Cultural Foundation. Mr. Edelson’s qualifications to serve as a director include decades of experience on Wall Street and various venture capital ventures. He has SPAC experience, vast board experience, and participated in numerous M&A transactions.
Chao Yang*
Director Since: August 2018 Age: 68
Mr Yang was appointed as a director of the Company on August 7, 2018. Mr. Yang has been an Independent Non-Executive Director of Fosun International Limited since December 2014. Mr. Yang was the chairman of China Life Insurance Company Limited (listed on the Hong Kong Stock Exchange with stock code: 02628) from July 2005 to June 2011, the president and secretary of party committee of China Life Insurance (Group) Company from May 2005 to May 2011 and an independent non-executive director of SRE Group Limited (listed on the Hong Kong Stock Exchange with stock code: 01207) from November 2013 to December 2015. As at 31 December 2017, Mr. Yang has been a member of the 12th National Committee of the Chinese People’s Political Consultative Conference and its Social and Legislative Committee. Mr. Yang, a Senior Economist, has more than 40 years of experience in the insurance and banking industries, and was awarded special allowance by the State Council. Mr. Yang graduated from Shanghai International Studies University and Middlesex University in the United Kingdom, majoring in English and business administration respectively, and received a master’s degree in business administration.
Mr. Yang has significant senior management experience, including service as chairman, president and director. In light of our business and structure, Mr. Yang’s extensive executive experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Except as noted above, the above persons do not hold any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act.
Vote Required
The election of the nominees listed in Proposal 1 requires a plurality of the issued and outstanding Common Stock and Series A Preferred Stock, entitled to vote and voting together as a single class on an as-converted basis at the Annual Meeting vote “FOR”“FOR” the proposal.
Recommendation of Our Board
Our Board recommends that the Company’s shareholders vote FOR the election of the nominees listed in Proposal 1 (above)above.
CORPORATE GOVERNANCE
Director Independence
In considering and making decisions as to the independence of each of the directors of the Company, the Board considered transactions and relationships between the Company (and its subsidiaries) and each director (and each member of such director’s immediate family and any entity with which the director or family member has an affiliation such that the director or family member may have a material indirect interest in a transaction or relationship with such entity). The Board has determined that James S. Cassano, Jerry Fan, Chao Yang, Harry Edelson and[and Shane McMahon]McMahon are independent as defined in applicable SEC and NASDAQ rules and regulations, and that each constitutes an “Independent Director” as defined in NASDAQ Listing Rule 5605.
Board Leadership Structure and Corporate Governance
Our current corporate governance practices and policies are designed to promote shareholder value and we are committed to the highest standards of corporate ethics and diligent compliance with financial accounting and reporting rules. Our Board provides independent leadership in the exercise of its responsibilities. Our management oversees a system of internal controls and compliance with corporate policies and applicable laws and regulations, and our employees operate in a climate of responsibility, candor and integrity.
Corporate Governance Guidelines
We and our Board are committed to high standards of corporate governance as an important component in building and maintaining shareholder value. To this end, we regularly review our corporate governance policies and practices to ensure that they are consistent with the high standards of other companies. We also closely monitor guidance issued or proposed by the SEC and the provisions of the Sarbanes-Oxley Act, as well as the emerging best practices of other companies. The current corporate governance guidelines are available on the Company’s website http:https://corporate.ideanomics.com.investors.ideanomics.com/corporate-governance. Printed copies of our corporate governance guidelines may be obtained, without charge, by contacting our Corporate Secretary at IR@ideanomics.com.IR@ideanomics.com.
7
The Board and Committees of the Board
The Company is governed by the Board that currently consists of sevenfive (5) members: Bruno Wu, Alfred P. Poor, Shane McMahon, James S. Cassano, Jerry Fan, Chao Yang and Harry Edelson. Effective upon the Annual Meeting, our Board will consist of sevenfive (5) members: Bruno Wu, Alfred P. Poor, Shane McMahon, James S. Cassano, Jerry Fan, Chao Yang and Harry Edelson. The Board has established three (3) Committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Each of the Audit Committee, Compensation Committee and Nominating and Governance Committee are comprised entirely of independent directors. From time to time, the Board may establish other committees. The Board has adopted a written charter for each of the Committees which are available on the Company’s website https://www.ideanomics.com.investors.ideanomics.com/corporate-governance.
Governance Structure
Our Board of Directors is responsible for corporate governance in compliance with reporting laws and for representing the interests of our shareholders. The Board is currently composed of sevenfive members, fivefour of whom are considered independent, non-executive directors. Details on Board membership, oversight and activity are reported below.
We encourage our shareholders to learn more about our Company’s governance practices at our website https://www.ideanomics.com.www.ideanomics.com.
Audit Committee
Our Audit Committee currently consists of James S. Cassano, Harry Edelson, and Jerry Fan with Mr. Cassano acting as Chair. The Audit Committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. Mr. Cassano serves as our Audit Committee financial expert as that term is defined by the applicable SEC rules. The Audit Committee is responsible for, among other things:
· | selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors; |
· | reviewing with our independent auditors any audit problems or difficulties and management’s response; |
· | reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act of 1933, as amended; |
· | discussing the annual audited financial statements with management and our independent auditors; |
· | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of significant internal control deficiencies; |
· | annually reviewing and reassessing the adequacy of our Audit Committee charter; |
· | overseeing the work of our independent auditor, including resolution of disagreements between management and the independent auditor regarding financial reporting; |
· | reporting regularly to and reviewing with the full Board any issues that arise with respect to the quality or integrity of the Company’s financial statements, the performance and independence of the independent auditors and any other matters that the Audit Committee deems appropriate or is requested to review for the benefit of the Board. |
The Audit Committee may engage independent counsel and such other advisors it deems necessary to carry out its responsibilities and powers, and, if such counsel or other advisors are engaged, shall determine the compensation or fees payable to such counsel or other advisors. The Audit Committee may form and delegate authority to subcommittees consisting of one or more of its members as the Audit Committee deems appropriate to carry out its responsibilities and exercise its powers.
Compensation Committee
Our Compensation Committee currently consists of Harry Edelson, Jerry Fan and James S. Cassano with Mr. Cassano acting as Chair. Our Compensation Committee assists the Board in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers. The Compensation Committee is responsible for, among other things:
· | reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level of our chief executive officer based on this evaluation; |
· | reviewing and making recommendations to the Board with regard to the compensation of other executive officers; |
· | reviewing and making recommendations to the Board with respect to the compensation of our directors; and |
· | reviewing and making recommendations to the Board regarding all incentive-based compensation plans and equity-based plans, including the 2010 Equity Incentive Plan, as amended. |
The Compensation Committee has sole authority to retain and terminate any consulting firm or other outside advisor to assist the committee in the evaluation of director, chief executive officer or senior executive compensation and other compensation-related matters, including sole authority to approve the firms’ fees and other retention terms. The Compensation Committee may also form and delegate authority to subcommittees consisting of one or more members of the Compensation Committee.
Governance and Nominating Committee
Our Governance and Nominating Committee currently consists of James S. Cassano, Jerry Fan and Harry Edelson with Mr. Edelson acting as Chair. The Governance and Nominating Committee assists the Board of Directors in identifying individuals qualified to become our directors and in determining the composition of the Board and its committees. The Governance and Nominating Committee is responsible for, among other things:
· | identifying and recommending to the Board nominees for election or re-election to the Board, or for appointment to fill any vacancy; |
· | selecting directors for appointment to committees of the Board; and |
· | overseeing annual evaluation of the Board and its committees for the prior fiscal year. |
The Governance and Nominating Committee has sole authority to retain and terminate retain and terminate any search firm that is to be used by the Company to assist in identifying director candidates, including sole authority to approve the firms’ fees and other retention terms. The Governance and Nominating Committee may also form and delegate authority to subcommittees consisting of one or more members of the Governance and Nominating Committee.
Director Qualifications
Directors are responsible for overseeing the Company’s business consistent with their fiduciary duty to shareholders. This significant responsibility requires highly-skilled individuals with various qualities, attributes and professional experience. The Board believes that there are general requirements for service on the Company’s Board of Directors that are applicable to all directors and that there are other skills and experience that should be represented on the Board as a whole but not necessarily by each director. The Board and the Governance and Nominating Committee of the Board consider the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs.
Qualifications for All Directors
In its assessment of each potential director candidate, including those recommended by shareholders, the Governance and Nominating Committee considers the nominee’s judgment, integrity, experience, independence, understanding of the Company’s business or other related industries and such other factors the Governance and Nominating Committee determines are pertinent in light of the current needs of the Board. The Governance and Nominating Committee also takes into account the ability of a director to devote the time and effort necessary to fulfill his or her responsibilities to the Company.
The Board and the Governance and Nominating Committee require that each director be a recognized person of high integrity with a proven record of success in his or her field. Each director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and to dealing responsibly with social issues. In addition to the qualifications required of all directors, the Board assesses intangible qualities including the individual’s ability to ask difficult questions and, simultaneously, to work collegially.
The Board does not have a specific diversity policy, but considers diversity of race, ethnicity, gender, age, cultural background and professional experiences in evaluating candidates for Board membership. Diversity is important because a variety of points of view contribute to a more effective decision-making process.
Qualifications, Attributes, Skills and Experience to be Represented on the Board as a Whole
The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole, in light of the Company’s current needs and business priorities. The Company’s services are performed in areas of future growth located outside of the United States. Accordingly, the Board believes that international experience or specific knowledge of key geographic growth areas and diversity of professional experiences should be represented on the Board. In addition, the Company’s business is multifaceted and involves complex financial transactions. Therefore, the Board believes that the Board should include some directors with a high level of financial literacy and some directors who possess relevant business experience as a Chief Executive Officer or President. Our business involves complex technologies in a highly specialized industry. Therefore, the Board believes that extensive knowledge of the Company’s business and industry should be represented on the Board.
Summary of Qualifications of Current Directors
For a summary of qualifications of current directors, please see the section above entitled “Proposal No. 1: Election of Directors — Board Nominees.”
10
Board’s Role in Risk Oversight
The Board oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls are maintained, and that the Company’s business is conducted wisely and in compliance with applicable laws and regulations and proper governance. Included in these responsibilities is the Board of Directors’ oversight of the various risks facing the Company. In this regard, the Board seeks to understand and oversee critical business risks. The Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of the Company’s business strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its objectives.
While the Board oversees risk management, Company management is charged with managing risk. The Company has robust internal processes and a strong internal control environment to identify and manage risks and to communicate with the Board. The Board and the Audit Committee monitor and evaluate the effectiveness of the internal controls and the risk management program at least annually. Management communicates routinely with the Board, Board committees and individual directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.
The Board implements its risk oversight function both as a whole and through Committees. Much of the work is delegated to various Committees, which meet regularly and report back to the full Board. All Committees play significant roles in carrying out the risk oversight function. In particular:
· | The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee members meet separately with representatives of the independent auditing firm. |
· | The Compensation Committee evaluates the risks and rewards associated with the Company’s compensation philosophy and programs. The Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the incentive nature of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation. |
· | The Governance & Nominating Committee oversees risks relating to corporate governance |
Committees and Meeting Attendance
Our Board held seven (7)18 meetings in connection with matters related to the fiscal year ended December 31, 2019.2020. Our Board has an Audit Committee, a Compensation Committee and a Governance and Nominating Committee. The Audit Committee held five (5)4 meetings in connection with matters related to the fiscal year ended December 31, 2019.2020. The Compensation Committee held two (2) meeting4 meetings and the Governance and Nominating Committee did not hold any meetings during the fiscal year ended December 31, 2019.2020.
During fiscal year 2019, except for Mr. Chao Yang,2020, each member of the Board attended or participated in 75%90% or more of the aggregate of (i) the total number of meetings of the Board (held during the period for which such person has been a director) and (ii) the total number of meetings held by all committees of the Board on which such person served (during the periods that such person served). Our Bylaws provide that the Executive Chairman (and in his absence, the Chairman) shall preside at all meetings of our shareholders and the Board. Each director is expected to make reasonable efforts to attend Board meetings, meetings of committees of which such director is a member and the Annual Meeting of Shareholders.
Code of Ethics
Our Board of Directors adopted a code of business conduct and ethics that applies to our directors, officers, employees and advisors, which became effective in January 2016. We have posted a copy of our code of business conduct and ethics on our website at corporate.sevenstarscloud.com.https://investors.ideanomics.com/corporate-governance.
Communications by Shareholders with Directors
The Chairman of our Board may receive and distribute to our Board, and arrange for responses to, communications from shareholders. Shareholders may communicate with any and all of our directors by transmitting correspondence by facsimile or email, addressed as follows:
c/o Corporate SecretaryFax Number: ___________________Secretary
EmailE-mail Address: ir@ideanomics.com
Our Corporate Secretary maintains a log of such communications and transmits as soon as practicable such communications to the Chairman and the identified director addressee(s), unless there are safety or security concerns that mitigate against further transmission of the communications, as determined by the Corporate Secretary. Our Board or individual directors so addressed are advised of any communication withheld for safety or security reasons as soon as practicable. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must clearly state whether the intended recipients are all members of the Board or just certain specified directors. The Corporate Secretary relays all communications to directors absent safety or security issues.
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
KPMG Huazhen LLPBF Borgers CPA PC (“KPMG”BFB”) was our independent registered public accounting firm for the year ended December 31, 2016.2020. On April 27, 2017,September 24, 2021, that firm was dismissed. The dismissal of KPMGBFB was approved by our Audit Committee. Grant ThorntonBDO USA, LLP (“BDO”) was appointed our independent registered public accounting firm on April 27, 2017. On February 16, 2018, Grant Thornton LLP was dismissed. The dismissal of Grant Thornton LLP was approved by our Audit Committee. Our Board then appointed BF Borgers CPA PC (“BF Borgers”) as our independent registered public accounting firm for the fiscal year ended December 31, 2018 and December 31, 2019 and which appointments were approved by our shareholders.September 24, 2021. Our Board has appointed BF BorgersBDO as our independent registered public accounting firm for the fiscal year ending December 31, 20202021 and recommends that shareholders vote for ratification of this appointment.
During the two fiscal years ended December 31, 2016,2020 and 2019, and in the subsequent interim period through April 27, 2017, September 24, 2021, there were no: no “disagreements” (as defined in Item 304(a)(1) disagreements(iv) of Regulation S-K and related instructions) with KPMGBFB on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures,procedure, which disagreements if not resolved to theirthe satisfaction of BFB would have caused themBFB to make reference thereto in connection with their opinion to the subject matter of the disagreement, or (2) reportable events, except that KPMG advised the Company of a material weakness in the Company’s internal control of financial reporting related to the design, documentation and implementation of effective internal controls over the review of the cash flow forecasts used in assessing the recoverability of licensed content.
The auditits reports of KPMG on the consolidated financial statements offor such years. During the Company and subsidiaries and variable interest entities as of and for thefiscal years ended December 31, 20162020 and 20152019 and through September 24, 2021, there have been no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K).
The reports by BFB on the Company’s consolidated financial statements for the fiscal years ended December 31, 2020 and 2019 did not contain an adverse opinion or a disclaimer of opinion, norand were theynot qualified or modified as to uncertainty, audit scope or accounting principles, except as follows:
KPMG’s report ofprinciples. For the consolidated financial statements as of and for the yearsyear ended December 31, 2016 and 2015, contained2019, BFB’s report included a separate paragraph stating “the Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 3. The consolidatedreport on the effectiveness of the Company’s internal control over financial statements do not include any adjustments that might result from the outcome of this uncertainty.” reporting.
On April 27, 2017,September 24, 2021, the Company appointed Grant Thornton, China member firm of Grant Thornton Internationalengaged BDO as itsthe Company’s new independent registered public accounting firm, effective immediately, to perform independent audit the Company’s financial statementsservices for the fiscal year ending December 31, 2017.2021. The decision to retain Grant Thorntonappoint BDO was approved by the Audit Committee. On February 16, 2018, Grant Thornton LLP was dismissed. The dismissal of Grant Thornton LLP was approved by our Audit Committee.
During the fiscal year ended December 31, 2017, and in the subsequent interim period through February 16, 2018, there were no: (1) disagreements with Grant Thornton on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events, except that Grant Thornton advised the Company of a material weakness in the Company’s internal control of financial reporting related to the design, documentation and implementation of effective internal controls over the review of the cash flow forecasts used in assessing the recoverability of licensed content.
On February 16, 2018, the Company appointed BF Borgers as its new independent registered public accounting firm to audit the Company’s financial statements for the year ending December 31, 2017. The decision to retain BF Borgers was approved by the Audit Committee.
During the Company's fiscal years ended December 31, 2020 and 2019 2018, 2017 and 2016,through September 24, 2021, neither the Company, nor anyone on its behalf, has consulted with BF BorgersBDO regarding either (i) the application of accounting principles to a specificspecified transaction, either completed or proposed, or (ii) the type of audit opinion that might be rendered onwith respect to the Company'sconsolidated financial statements of the Company, and neither ano written report noror oral advice was provided to the Company by BDO that BF Borgers concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issues,issue; or (iii)(ii) any matter that was the subject of a disagreement“disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions), or (iv) anya “reportable event” (as describedthat term is defined in Item 304(a)(1)(v) of Regulation S-K).
Shareholder ratification of the appointment of BF BorgersBDO as our independent registered public accounting firm for the fiscal year ending December 31, 20202021 is not required by our Bylaws or otherwise; however, our Board is submitting the appointment of BF BorgersBDO to our shareholders for ratification as a matter of good corporate practice. If our shareholders fail to ratify the appointment, our Audit Committee and our Board will reconsider whether or not to retain BF Borgers.BDO. Even if the appointment is ratified, our Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change would be in the best interests of us and our shareholders.
A representative of BF BorgersBDO is expected to attend the Annual Meeting with the opportunity to make a statement and/or respond to appropriate questions from shareholders present at the meeting.
Fees Paid to Our Independent Registered Public Accounting Firm
The following is a summary of the fees billed to the Company by its principal accountants BF Borgers CPABFB for professional services rendered for the years ended December 31, 2020 and 2019 and 2018:(in thousands):
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Audit Fees(1) | ||||||||
BF Borgers (BFB) | $ | 856,090 | $ | 500,000 | ||||
Tax Fees(2) | ||||||||
BF Borgers | ||||||||
All Other Fees(3) | - | |||||||
TOTAL | $ | 856,090 | $ | [500,000] |
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Audit Fees: | ||||||||
BF Borgers (BFB) | 850 | 856 | ||||||
TOTAL | $ | 850 | $ | 856 |
* “Audit Fees” consisted of the aggregate fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our Forms 10-Q and for any other services that were normally provided in connection with our statutory and regulatory filings or engagements.
Pre-Approval Policies and Procedures
Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our auditors must be approved in advance by our Board of Directors to assure that such services do not impair the auditors’ independence from us. In accordance with its policies and procedures, our Board of Directors pre-approved the audit service performed by BF BorgersBFB for our consolidated financial statements as of and for the year ended December 31, 2020 and 2019.
Vote Required
Approval of the ratification of BF BorgersBDO as our independent registered public accounting firm for the fiscal year ending December 31, 20202021 requires a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR”“FOR” the proposal.
Recommendation of Our Board
Our Board recommends that the shareholders vote FOR the ratification of the appointment of BF BorgersBDO as our independent registered public accounting firm for the fiscal year ending December 31, 2020.
PROPOSAL NO. 3:
To approve the amendment and restatement of our 2010 Equity Incentive Plan, a copy of such amended and restated plan is included as Appendix A to this Information Statement (the “Plan”), to increase the number of shares authorized for issuance under the Plan to 6,800,000]and so that the term of the Plan shall be until August 31, 2030.
Information Regarding the Plan
Reasons for the Adoption of the Plan
There are no shares currently available under the Plan and the board of directors believes that our ability to continue providing non-cash compensation and incentives in the form of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares is crucial to our ability to attract, retain and motivate talented employees, officers, consultants and non-employee directors and that the adoption of the Plan is advisable and in our best interests.
Approval of the Plan
On August 3, 2018, the Board approved and on August 28, 2018 the holders of 40,827,931 of the outstanding votes entitled to vote on the matter, representing 55.12% of the votes of our issued and outstanding voting shares, executed and delivered to the Company the written consents approving the Plan. Accordingly, in compliance with the laws of the State of Nevada and our bylaws a majority of the outstanding voting shares has approved the Plan, and no other vote or proxy is required of the shareholders.
Summary of the Material Terms of the Plan
The material terms of the Plan are outlined below. This summary is qualified in its entirety by reference to the complete text of the Plan. Stockholders are urged to read the actual text of the Plan in its entirety, which is set forth as Appendix A to this Information Statement.
Shares Available for Awards
The total number of shares of our common stock that may be subject to awards under the Plan is 56,800,000, which increases the number of shares authorized for issuance under the Plan by 25,300,000 shares. Under the Plan, the terms and number of options or other awards to be granted in the future are to be determined in the discretion of the plan administrator. No determination has been made regarding awards or grants under the Plan, or as to the benefits or amounts that will be received by or allocated to our non-employee directors, executive officers and other eligible employees under the Plan. We do not have any other equity incentive plans.
Eligibility
The persons eligible to receive awards under the Plan consist of our employees, directors and consultants.
Administration
The Plan shall be administered by the Board or a committee appointed by the Board, which committee shall be constituted to comply with applicable laws. If and so long as the common stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the administrator and the membership of any committee acting as administrator the requirements regarding (i) “nonemployee directors” within the meaning of Rule 16b-3 under the Exchange Act; (ii) “independent directors” as described in the listing requirements for any stock exchange on which Shares are listed; and (iii) Section 15(b)(i) of the Plan if the Company pays salaries for which it claims deductions that are subject to the Code section 162(m) limitation on its U.S. tax returns.
The plan administrator has the full authority to select those individuals eligible to receive awards and the amount and type of awards. Subject to the terms of the Plan, the plan administrator is authorized to select eligible persons to receive awards, determine the type and number of awards to be granted and the number of shares of our common stock to which awards will relate, specify times at which awards will be exercisable or may be settled (including performance conditions that may be required as a condition thereof), set other terms and conditions of awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the Plan, and make all other determinations that may be necessary or advisable for the administration of the Plan. The plan administrator may amend the terms of outstanding awards, in its discretion; provided that any amendment that adversely affects the rights of the award recipient must receive the approval of such recipient.
Type of Awards. The following types of awards are available for grant under the 2018 Plan: incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares.
Stock Options
Grant of Options. The Committee may award ISOs and NSOs (collectively referred to as “Options”) to grantees. The exercise price per share of an Option will be at least 100% of the fair market value per share of our stock underlying the award on the grant date. The Committee will determine the terms and conditions (including any performance requirements) under which an Option will become exercisable and will include such information in the award agreement.
Special Limitations on ISOs. In the case of a grant of an Option intended to qualify as an ISO to a grantee who owns more than ten percent of the total combined voting power of all classes of our outstanding stock (a “Ten Percent Stockholder”), the exercise price of the Option will not be less than 110% of the fair market value of a share of our stock on the grant date. Additionally, an Option will constitute an ISO only (i) if the grantee is an employee of the Company or a subsidiary of the Company, (ii) to the extent such Option is specifically designated as an ISO in the related award agreement, and (iii) to the extent that the aggregate fair market value (determined at the time the option is granted) of the shares of stock with respect to which all ISOs held by such grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the grantee’s employer and its affiliates) does not exceed $100,000.
Exercise of Options. An Option may be exercised by the delivery to us of written notice of exercise and payment in full of the exercise price (plus the amount of any taxes which we may be required to withhold). If not exercised, Options will expire at such time as the Committee determines. However, no Option may be exercised more than ten years from the date of grant, or in the case of an ISO held by a Ten Percent Stockholder, not more than five years from the date of grant.
Restricted Stock and Restricted Stock Units. The Committee may award to a participant shares of Common Stock subject to specified restrictions (“restricted stock”). The Committee also may award to a participant-restricted stock units representing the right to receive shares of Common Stock in the future. Shares of restricted stock and restricted stock units are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified period and/or the attainment of specified performance targets over such period. The Committee will determine the terms and conditions (including any performance requirements) for each award of restricted stock or restricted stock units and will include such information in the award agreement.
Effect of Certain Transactions. In the event of a change in control of the Company, outstanding awards under the Plan may be subject to accelerated vesting or settlement as provided in the individual award agreements. Upon the occurrence of certain corporate transactions, which may include a change in control, outstanding awards generally will be subject to the terms of the agreement entered into in connection with the transaction, which may provide for the assumption or substitution of awards by the surviving corporation or its parent or subsidiary, for accelerated vesting and accelerated expiration, or for settlement in cash or cash equivalents.
Nontransferability of Awards. Generally, during the lifetime of a grantee, only the grantee may exercise rights under the Plan and no award will be assignable or transferable other than by will or laws of descent and distribution. If authorized in the award agreement, a grantee may transfer, not for value, all or part of an NSO to certain family members (including trusts and foundations for their benefit). Neither restricted stock nor restricted stock units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee.
Amendment and Termination. Subject to applicable laws and stock exchange listing standards requiring shareholder approval under certain circumstances, our Board of Directors may, at any time, amend or terminate the Plan, provided that no such action may be taken that adversely affects any rights or obligations with respect to any awards previously made under the Plan without the consent of the applicable participants.
Plan Benefits. All grants of awards under the Plan will be discretionary and, therefore, the benefits and amounts that will be received under the Plan are not determinable.
Federal Income Tax Consequences. The following is a summary of the general federal income tax consequences to the Company and to U.S. taxpayers of awards to be granted under the Plan. Tax consequences for any particular individual or under state or non-U.S. tax laws may be different.
NSOs. No taxable income is reportable when a NSO is granted. Upon exercise, generally, the recipient will have ordinary income equal to the fair market value of the underlying shares of stock on the exercise date minus the exercise price. Any gain or loss upon the disposition of the stock received upon exercise will be capital gain or loss to the recipient if the appropriate holding period under federal tax law is met for such treatment.
ISOs. No taxable income is reportable when an ISO is granted or exercised (except for grantees who are subject to the alternative minimum tax, who may be required to recognize income in the year in which the ISO is exercised). If the recipient exercises the ISO and then sells the underlying shares of stock more than two years after the grant date and more than one year after the exercise date, the excess of the sale price over the exercise price will be taxed as long-term capital gain or loss. If the recipient exercises the ISO and sells the shares before the end of the two- or one-year holding periods, he or she generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the ISO.
Restricted Stock and Restricted Stock Units. A recipient of restricted stock or restricted stock units will not have taxable income upon the grant unless, in the case of restricted stock, he or she elects to be taxed at that time. Instead, he or she will have ordinary income at the time of vesting equal to the fair market value on the vesting date of the shares (or cash) received minus any amount paid for the shares.
Performance Awards. Typically, a recipient will not have taxable income upon the grant of a performance awards. Subsequently, when the conditions and requirements for the grants have been satisfied and the payment determined, any cash received and the fair market value of any common stock received will constitute ordinary income to the recipient.
Tax Effect for the Company. We generally will receive a tax deduction for any ordinary income recognized by a grantee in respect of an award under the Plan (for example, upon the exercise of a NSO). In the case of ISOs that meet the holding period requirements described above, the grantee will not recognize ordinary income; therefore, we will not receive a deduction.
No Appraisal Rights
Our shareholders do not have any “appraisal” or “dissenters” rights in connection with the approval or implementation of the Plan.
Vote Required
Approval of the amendment and restatement of our 2010 Equity Incentive Plan requires a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR” the proposal.
Recommendation of Our Board
Our Board recommends that the shareholders vote FOR the approval of the amendment and restatement of our 2010 Equity Incentive Plan.
PROPOSAL No. 4
—to approve the issuance of shares of Common Stock to Yorkville Advisors pursuant to the terms of a standby equity distribution agreement in accordance with the stockholder approval requirements of Nasdaq Listing Rule 5635(d).
At our annual meeting, holders of our Common Stock will be asked to approve, for purposes of compliance with Nasdaq Listing Rule 5635(d), the issuance of up to $150,000,000 of our Common Stock to YA II PN Ltd., or an affiliate of YA II PN Ltd. (“Yorkville Advisors”), in connection with and pursuant to a Standby Equity Distribution Agreement, dated September 4, 2020, by and between the Company and Yorkville Advisors (the “SEDA”), pursuant to which Yorkville Advisors is committed, subject to the conditions and limitations set forth in the SEDA, to purchase up to an aggregate of $[150,000,000] of our shares of Common Stock over the 36-term of the SEDA.
Background
On April 3, 2020, the Company entered into a Standby Equity Distribution Agreement (the “Prior SEDA”) with Yorkville Advisors, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Yorkville was committed to purchase up to an aggregate of $50,000,000 worth of shares of our Common Stock from Company over the 36-month term of the Prior SEDA. The Prior SEDA was terminated on September 4, 2020. Over the course of the Prior SEDA’s term, Yorkville Advisors purchased an aggregate of 30,083,891 shares of our common stock under the SEDA at an aggregate purchase price of $30,500,000
Following the termination of the Prior SEDA, On September 4, 2020, the Company entered into the SEDA with Yorkville Advisors, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Yorkville Advisors is committed, subject to the conditions and limitations set forth in the SEDA, to purchase up to an aggregate of $150000,000 shares of Common Stock over the 36-term of the SEDA (the “SEDA Shares”). The terms of the SEDA are materially the same as the terms of the Prior SEDA.
Under the terms of the SEDA, the Company will be able to sell the SEDA Shares at our request any time during the 36 months following the date of the SEDA’s entrance into force. The SEDA Shares would be purchased at 90% of the market price, which is defined as the lowest daily volume weighted average price of the Company’s common stock during the 5 consecutive trading days commencing on the trading day immediately following our delivery of an advance notice to Yorkville Advisors, and would be subject to certain limitations, including that Yorkville Advisors could not purchase any shares that would result in it owning more than 4.99% of our common stock.
Pursuant to the SEDA, we are required to register all SEDA Shares which Yorkville Advisors may acquire. We shall file with the Securities and Exchange Commission a prospectus supplement to the Company's prospectus, dated July 17, 2020, filed as part of the Company’s effective shelf registration statement on Form S-3/A, File No. 333-239371, registering all of the SEDA Shares be offered and sold to Yorkville Advisors pursuant to the SEDA. Additionally, pursuant to the SEDA, we shall use the net proceeds from any sale of the Seda Shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We did not pay any additional amounts to reimburse or otherwise compensate Yorkville Advisors in connection with the transaction.
Yorkville Advisors has agreed that neither it nor any of its affiliates shall engage in any short-selling or hedging of our common stock during any time prior to the public disclosure of the SEDA.
Stockholder Approval Requirement
As noted above, the issuance of the SEDA Shares to Yorkville Advisors is subject to approval by the Company's stockholders in compliance with the applicable Listing Rules of the Nasdaq Stock Market. The Common Stock is listed on the Nasdaq Capital Market and, as such, the Company is subject to the Nasdaq Listing Rules.
Pursuant to Nasdaq Listing Rule 5635(d), stockholder approval is required prior to a 20% Issuance at a price that is less than the Minimum Price. For purposes of Nasdaq Listing Rule 5635(d), (A) "20% Issuance" means a transaction, other than a public offering, involving: (i) the sale, issuance or potential issuance by us of Common Stock (or securities convertible into or exercisable for Common Stock), which alone or together with sales by our officers, directors or substantial stockholders equals 20% or more of Common Stock (which for purposes of this calculation, includes issued and outstanding shares of our voting Common Stock and non-voting common stock) or 20% or more of the voting power outstanding before the issuance and (B) "Minimum Price" means a price that is the lower of: (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average closing price of Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. In determining whether multiple issuances should be aggregated for purposes of Nasdaq Listing Rule 5635(d), Nasdaq will consider several factors, including the timing of the issuances. Stockholder approval of this proposal will constitute stockholder approval for purposes of Nasdaq Listing Rule 5635(d).
While the issuance of the SEDA Shares would not in itself constitute a “20% issuance” pursuant to NASDAQ Listing Rule 5635(d), the issuance of the SEDA Shares when aggregated with the shares of Common Stock issued to Yorkville Advisors under the Prior SEDA could constitute a “20% issuance” pursuant to NASDAQ Listing Rule 5635(d). As a result, the Company’s issuance of the SEDA Shares under the SEDA may be subject to stockholder approval under Nasdaq Listing Rule 5635(d) (including rules related to the aggregation of offerings thereunder).
Reasons for Transaction and Effect on Current Stockholders
Our Board of Directors has determined that the SEDA is in the best interests of us and our stockholders because the right to sell the SEDA Shares to Yorkville Advisors provides us with a reliable source of capital for working capital and general corporate purposes.
Vote Required
The vote required to approve Proposal No. 4 is the affirmative vote of the holders of a majority of the votes cast, affirmatively or negatively in person or by proxy at the Annual Meeting and entitled to vote, provided a quorum is present. As a result, abstentions will be considered in determining whether a quorum is present but will have no effect on the vote for Proposal No. 4.
The board of directors unanimously recommends that the stockholders vote "FOR" Proposal No. No. 4 to approve the issuance of shares of Common Stock to Yorkville Advisors pursuant to the terms of a standby equity distribution agreement in accordance with the stockholder approval requirements of Nasdaq Listing Rule 5635(d).2021.
19
MANAGEMENT
Directors and Executive Officers
The following sets forth the name and position of each of our current executive officers and directors as of March 29, 2019.November 12, 2021.
NAME | AGE | POSITION | ||
Shane McMahon | ||||
Chief Executive Officer, Director | ||||
Conor McCarthy | Chief Financial Officer | |||
James S. Cassano | Director | |||
Jerry Fan | Director | |||
Harry Edelson | ||||
Director |
Bruno Wu. Dr. Wu has served as our Chairman since January 12, 2016. Dr. Wu is the founder, co-chairman and CEO of Sun Seven Stars Media Group Limited, a private media and investment company in China, since 2007. Its predecessor is Sun Media Group Holdings Limited, which was established by Dr. Wu and his spouse in 1999. Dr. Wu served as chairman of Sun Media Group from 1999 to 2007 and was former director of Shanda Group, a private investment group, from 2006 to 2009 and as former co-chairman of Sina Corporation (NASDAQ: SINA), a Chinese media and Internet services company, from 2001 to 2002. Additionally, Dr. Wu served as the chief operating officer for ATV, a free-to-air television broadcaster in Hong Kong, from 1998 to 1999. Dr. Wu served as a director of Seven Star Works Co Ltd (KOSDAQ:121800) between 2015 to 2017, and served as a director of Semir Garment Co. Ltd (SHE:00256) between 2008 and 2012. Dr. Wu received a Ph.D. from the School of International Relations and Public Affairs at Fudan University in 2001 and prior to that received an M.A. in International Relations from Washington University, a B.A. in Business Management from Culver-Stockton College of Missouri and a diploma in Superior Studies in French Literature from the School of French Language and Literature at the University of Savoie in Chambery, France.
Shane McMahon. Mr. McMahon was appointed Viceas Executive Chairman as of July 23, 2021, and was previously our Vice Chairman from January 12, 2016 to July 23, 2021, and was previously our Chairman from July 2010 to January 2016. Prior to joining us, from 2000 to December 31, 2009, Mr. McMahon served in various executive level positions with World Wrestling Entertainment, Inc. (NYSE: WWE). Mr. McMahon also sits on the Boards of Directors of International Sports Management (USA) Inc., a Delaware corporation, and Global Power of Literacy, a New York not-for-profit corporation.
Mr. Alf Poor. Our Mr. Poor has served as our Chief Executive Officer since February 2019 and has been responsible for overseeing the capitalization and development of the business into two key divisions, Ideanomics Mobility and Ideanomics Capital, which position the company to scale for the growth anticipated in each division. Mr. Poor is a former Chief Operating Officer at Global Data Sentinel, a cybersecurity company that specializes in identity management, file access control, protected sharing, reporting and tracking, AI and thread response, and backup and recovery. He is the former President and Chief Operating Officer of Agendize Services Inc., a company with an integrated suite of applications that help businesses generate higher quality leads, improve business efficiency and customer engagement. Mr. Poor is a client-focused and profitability-driven management executive with a track record of success at both rapidly-growing technology companies and large, multi-national, organizations.
Mr. Conor McCarthy.McCarthy. Mr. McCarthy was appointed as our Chief Financial Officer and Chief Accounting Officer on September 9, 2019. Mr. McCarthy has over 30 years of experience as a Chief Financial Officer in areas such as corporate strategy and corporate finance including capital raising and M&A. Mr. McCarthy most recently served as the Chief Financial Officer of OS33, a private equity backed FinTech SaaS platform for compliance and productivity enablement for the wealth management industry with 200 employees from July 2018 to May 2019. Prior to that, Mr. McCarthy served as the (i) Chief Financial Officer of Intent from May 2016 to July 2018; (ii) the Chief Financial Officer of Convergex Group from June 2014 to July 2015 and (iii) the Chief Financial Officer and Finance Director of the Americas for GFI Group, Inc., a NYSE-listed fintech wholesale money broker with revenues of almost $1Billion (now part of BGC Partners, Nasdaq: BGCP), from March 2005 to June 2014. Mr.McCarthy,Mr. McCarthy, holds a CA from the Institute of Chartered Accountants in Ireland. Mr. McCarthy started his career as an auditor with KPMG in Ireland. Mr. McCarthy then transitioned into financial services, working as CFO, Treasurer, and in other executive finance roles, with trading and brokerage firms, as well as high growth fintech partners supporting the financial services industry.
James S. Cassano. The Board appointed James S. Cassano as our Non-Executive Vice-Chairman as of July 23, 2021. Mr. Cassano was appointedhas served as directora board member of the Company effective as ofsince January 11, 2008. Since December 2010, Mr. Cassano is currentlyhas been a Partner & Chief Financial Officer of CoActive Health Solutions, LLC, a worldwide contract research organization, supporting the pharmaceutical and biotechnology industries. Mr. Cassano has served as executive vice president, chief financial officer, secretary and director of Jaguar Acquisition Corporation a Delaware corporation (OTCBB: JGAC), a blank check company, since its formation in June 2005. Mr. Cassano has served as a managing director of Katalyst LLC, a company which provides certain administrative services to Jaguar Acquisition Corporation, since January 2005. In June 1998, Mr. Cassano founded New Forum Publishers, an electronic publisher of educational material for secondary schools, and served as its chairman of the Board and chief executive officer until it was sold to Apex Learning, Inc., a company controlled by Warburg Pincus, in August 2003. He remained with Apex until November 2003 in transition as vice president business development and served as a consultant to the company through February 2004. In June 1995, Mr. Cassano co-founded Advantix, Inc., a high volume electronic ticketing software and transaction services company which handled event related client and customer payments, that was renamed Tickets.com and went public through an IPO in 1999. From March 1987 to June 1995, Mr. Cassano served as senior vice president and chief financial officer of the Hill Group, Inc., a privately-held engineering and consulting organization, and from February 1986 to March 1987, Mr. Cassano served as vice president of investments and acquisitions for Safeguard Scientifics, Inc., a public venture development company. From May 1973 to February 1986, Mr. Cassano served as partner and director of strategic management services (Europe) for the strategic management group of Hay Associates. Mr. Cassano received a B.S. in Aeronautics and Astronautics from Purdue University and an M.B.A. from Wharton Graduate School at the University of Pennsylvania.
Jerry Fan. Mr. Fan was appointed as director of the Company on January 12, 2016. Mr. Fan has served as Managing Director and Country Manageris Corporate Vice President for the Greater China regionAsia Pacific Region at Analog Devices, Inc. (NASDAQ: ADI), a global semiconductor company that he has joined since November 2012. Prior to ADI, Mr. Fan worked for Cisco Systems, Inc. (NASDAQ: CSCO) for 15 years between 1997 and 2012 in a number of senior management roles, including Sales Managing Director for Cisco China, SaleSales Director for Cisco Australia and Senior Manager for Operations and Strategy for the Cisco Service Provider business based in Hong Kong. Mr. Fan started his career in 19981988 working at Fudan University as a faculty member in both teaching and research roles. He graduated from Fudan University with a Computer Science Bachelorbachelor's degree and an Executive MBA degree from CEIBS (China European International Business School) in 1999.
Mr. Fan has more than 30 years of experience in top management positions in China and the Asia Pacific region, working for several multinational technology companies. He also has served in senior management positions of several U.S. public companies. In light of our business and structure, Mr. Fan’s extensive industry and business experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Harry Edelson.Edelson. Mr. Edelson was appointed as director of the Company effective as of September 15, 2019, CFA, CCP, CDP, is the Founder of Edelson Technology Partners, and President since 1980 of Edelson Technology, Inc., a company involved in consulting, fundraising, M&A, and investments. From 1984 until 2005 Mr. Edelson was an advisor and consultant for 10 multinational corporations (AT&T, Viacom, 3M, Ford Motor, Cincinnati Bell, Colgate-Palmolive, Reed Elsevier, Imation, Asea Brown Boveri and UPS). During this time he managed four technology-oriented strategic venture capital funds for the aforementioned 10 companies using corporate rather than pension money. He has served on over 150 boards of directors, 12 as chairman. At some time in the past five years, Mr. Edelson served as a director of four private companies, Airwire, PogoTec, eChinaCash, Pathway Genomics, and one public company, China Gerui. Executive positions in industry include Senior Systems Computer Engineer for Unisys, Transmission Engineer for AT&T (1962-1967), CTO for Cities Service (1967-1970) and Director of Marketing for a terminal manufacturer serving the nascent internet industry (1971-1973). His experience in technology led him to a 12 year career as a securities analyst on Wall Street covering telecommunications, computers, and office equipment for three leading investment banking firms in the 1970s and 1980s. Mr. Edelson obtained a BS in Physics from Brooklyn College in 1962, MBA from New York University Graduate School of Business in 1965, and completed a Graduate Program in Telecommunications Engineering at the Cornell Graduate School of Electrical Engineering in 1966. In 2007, Mr. Edelsonserved as Chairman and Chief Executive Officer for China Opportunity Acquisition Corp., a SPAC that raised $40 million and merged with China Gerui in 2009. Mr. Edelson was a Council member of The Julliard School of Music Dance & Drama, and is the founder and still Chairman of the China Investment Group; and the founder and current member of the Chinese Cultural Foundation. Mr. Edelson’s qualifications to serve as a director include decades of experience on Wall Street and various venture capital ventures. He has SPAC experience, vast board experience, and participated in numerous M&A transactions.
21
Chao Yang. Mr. Yang was appointed as a director of the Company on August 7, 2018. Mr. Yang has been an Independent Non-Executive Director of Fosun International Limited since December 2014. Mr. Yang was the chairman of China Life Insurance Company Limited (listed on the Hong Kong Stock Exchange with stock code: 02628) from July 2005 to June 2011, the president and secretary of party committee of China Life Insurance (Group) Company from May 2005 to May 2011 and an independent non-executive director of SRE Group Limited (listed on the Hong Kong Stock Exchange with stock code: 01207) from November 2013 to December 2015. As at 31 December 2017, Mr. Yang has been a member of the 12th National Committee of the Chinese People’s Political Consultative Conference and its Social and Legislative Committee. Mr. Yang, a Senior Economist, has more than 40 years of experience in the insurance and banking industries, and was awarded special allowance by the State Council. Mr. Yang graduated from Shanghai International Studies University and Middlesex University in the United Kingdom, majoring in English and business administration respectively, and received a master’s degree in business administration.
Mr. Yang has significant senior management experience, including service as chairman, president and director. In light of our business and structure, Mr. Yang’s extensive executive experience and his educational background led us to the conclusion that he should serve as a director of our Company.
There are no agreements or understandings between any of our executive officers or directors and any other persons to resign at the request of another such other person and to act on behalf of or at the direction of any such other person.
Directors are elected for one-year term and until their successors are duly elected and qualified.
Family Relationships
There are no family relationships among our directors or officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
· | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
· | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
· | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
· | been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
· | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
· | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
EXECUTIVE COMPENSATION
Summary Compensation Table (2019(2020 and 2018)2019)
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons (our “named executive officers”) for services rendered in all capacities during the noted periods.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock awards (3) ($) | Option awards (#) | Nonequity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | Year | Salary ($) | Bonus ($) | Stock awards (3) ($) | Option awards (#) | Nonequity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruno Wu (Former Chief Executive Officer)(1) | 2018 | 312,500 | 125,000 | 415,332 | - | - | - | - | 852,832 | 2019 | 250,000 | - | - | 2,500,000 | - | - | - | 250,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 250,000 | 0 | 2,500,000 | - | - | - | 250,000 | 2020 | 250,000 | - | - | - | - | - | - | 250,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alf Poor (Chief Executive Officer ) | 2018 | 133,333 | - | - | - | - | - | - | 133,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alfred P. Poor (Chief Executive Officer) | 2019 | 300,000 | 50,000 | - | 2,000,000 | - | - | - | 350,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 300,000 | 50,000 | - | 2,000,000 | - | - | - | 350,000 | 2020 | 383,333 | 500,000 | - | 1,000,000 | - | - | - | 883,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conor McCarthy (Chief Financial Officer)(2) | 2018 | - | - | - | - | - | - | - | - | 2019 | 116,667 | 50,000 | - | 1,500,000 | - | - | - | 166,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 116,667 | 50,000 | 1,500,000 | - | - | - | 166,667 | 2020 | 289,900 | 350,000 | - | - | - | - | - | 639,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carla Oiong Zhou (Chief Revenue Officer) | 2018 | 250,000 | - | - | - | - | - | 250,000 | 2019 | 250,000 | - | - | 1,000,000 | - | - | - | 250,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 250,000 | - | - | 1,000,000 | - | - | - | 250,000 | 2020 | 250,000 | - | - | - | - | - | - | 250,000 |
(1) | On November 12, 2018 , Bruno Wu resigned from his position as a Chief Executive Officer of the Company. On February 22, 2019 Bruno Wu rejoined the Company as Executive |
(2) | Mr.McCarthy joined The Company on September 9, 2019, the salary represents a prorated amount for the year. |
(3) | Reflects the aggregate grant date fair value of option or restricted stock units determined in accordance with FASB ASC Topic 718. |
23
Employment Agreements
Alfred P. Poor
Employment Agreement
Effective August 5,on July 31, 2020, the Company and Mr. Alfred Poor amended hiswe entered into employment agreement which provideswith Mr. Poor for (i) a term of 2 years; (ii) ayears pursuant to which Mr. Poor will receive an annual base salary of $500,000; (iii)$500,000, a 2020 cash bonus of $300,000 earned on July 21, 2020, the date the employment contract became effective, and will be entitled to participate in recognitionall employment benefit plan and policies of the Company generally available. Mr. Poor’s performance during the first 6 monthsPoor will be entitled to stock options of 2020; (iv) an option grant ofup to 2,000,000 shares in 2021.
Effective July 23, 2021, which shall vest monthly over 2 years; (v) future cash bonuses based on performance objectiveswe agreed to be mutually agreed byincrease the board of directors or an appropriate committee; (vi) in the eventannual base salary for Mr. Poor is terminated without cause or for “good reason” as defined in theto $850,000. The employment agreement severance payments equal to the base salary through the remainder of the term of the employment agreement plus the prior year’s performance bonuses divided by 12 and multiplied by the months remainingfor Mr. Poor otherwise remains in the term and the estimated cost of health insurance pursuant to COBRA for 12 months following termination and (vii) eligibility for employee benefits provided to the Company’s senior executives.its current form.
Conor McCarthy
Employment Agreement
Effective August 5,on July 31, 2020, the Company and Mr. Conor McCarthy amended hiswe entered into an employment agreement which provideswith Mr. McCarthy for (i) a term of 2 years; (ii) a baseyears pursuant to which Mr. McCarthy will receive an annual salary of $350,000; (iii) an option grant$350,000 and will be entitled to participate in all employment benefit plan and policies of the Company. Mr. McCarthy will be entitled to stock options of up to 750,000 shares in 2021.
Effective July 23, 2021, which shall vest monthly over 2 years; (iv) future cash bonuses based on performance objectiveswe agreed to be mutually agreed byincrease the board of directors or an appropriate committee; (v) in the eventannual base salary for Mr. McCarthy is terminated without cause or for “good reason” as defined in theto $525,000. The employment agreement severance payments equal to the base salary through the remainder of the term of the employment agreement plus the prior year’s performance bonuses divided by 12 and multiplied by the months remainingfor Mr. McCarthy otherwise remains in the term and the estimated cost of health insurance pursuant to COBRA for 12 months following termination and (vi) eligibility for employee benefits provided to the Company’s senior executives.its current form.
We have not provided retirement benefits (other than a state pension scheme in which all of our employees in China participate) or change of control benefits to our named executive officers.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the equity awards of our named executive officers outstanding at December 31, 2019.2020.
Option awards | ||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | |||||||||||||||||||
Bruno Wu | 1,041,666 | 1,458,334 | - | 1.98 | February 20, 2029 | 1,041,666 | $ | 895,833 | ||||||||||||||||||
Alf Poor | 833,333 | 1,166,667 | - | 1.98 | February 20, 2029 | 833,333 | 716,666 | |||||||||||||||||||
Conor McCarthy (1) | 1,500,000 | - | 0.53 | September 20, 2029 | 1,500,000 | 1,290,000 | ||||||||||||||||||||
Carla Qiong Zhou | 416,666 | 583,334 | - | 1.98 | February 20, 2029 | 416,666 | 358,333 |
Option awards | ||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||
incentive | ||||||||||||||||||||||||||
plan awards: Number | ||||||||||||||||||||||||||
of | Number of | |||||||||||||||||||||||||
Number of | Number of | securities | shares or | Market value | ||||||||||||||||||||||
securities | securities | underlying | units of | of shares of | ||||||||||||||||||||||
underlying | underlying | unexercised | Option | stock that | units of stock | |||||||||||||||||||||
unexercised | unexercised | unearned | exercise | Option | have not | that have not | ||||||||||||||||||||
options | options | options | price | expiration | vested | vested | ||||||||||||||||||||
Name | (#) exercisable | (#) unexercisable | (#) | ($) | date | (#) | ($) | |||||||||||||||||||
Bruno Wu | 1,041,666 | 1,458,334 | — | 1.98 | February 20, 2029 | 1,458,334 | $ | 2,902,084 | ||||||||||||||||||
Alfred P. Poor | 833,333 | 1,166,667 | — | 1.98 | February 20, 2029 | 1,166,667 | 2,321,667 | |||||||||||||||||||
125,000 | (1) | 499,998 | 0.53 | December 7, 2030 | 499,998 | 994,996 | ||||||||||||||||||||
Conor McCarthy | 937,500 | 562,500 | — | 0.53 | September 20, 2029 | 562,500 | 1,119,375 |
(1) Excludes 125,000 shares underlying options exercised by Mr. Poor as of November 7, 2020.
Compensation of Directors
The following table sets forth certain information concerning the compensation paid to our directors for services rendered to us during the fiscal year ended December 31, 2019.2020.
Name | Fees earned or paid in cash ($) | Stock awards(1) ($) | Option awards(2) (#) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | |||||||||||||||||||||
Bruno Wu | 250,000 | - | 2,500,000 | - | - | - | 250,000 | |||||||||||||||||||||
Shane McMahon | 36,000 | - | - | - | - | - | 36,000 | |||||||||||||||||||||
Alf Poor | 300,000 | - | 2,000,000 | - | - | 50,000 | 350,000 | |||||||||||||||||||||
James Cassano | 81,504 | 80,501 | - | - | - | 50,000 | 212,005 | |||||||||||||||||||||
Jerry Fan | 36,000 | - | - | - | - | - | 36,000 | |||||||||||||||||||||
John Wallace | - | - | 250,000 | - | - | - | - | |||||||||||||||||||||
Steven Fadem | 19,894 | - | 500,000 | - | - | - | 19,894 | |||||||||||||||||||||
Harry Edelson | 13,473 | - | 250,000 | - | - | - | 13,473 | |||||||||||||||||||||
Jin Shi | 49,500 | 80,501 | - | - | - | - | 130,001 | |||||||||||||||||||||
Kang Zhao | - | - | - | - | - | - | - | |||||||||||||||||||||
Chao Yang | - | - | - | - | - | - | - | |||||||||||||||||||||
Richard Frankel (3) | 18,000 | - | - | - | - | - | 18,000 | |||||||||||||||||||||
Brett McGonegal (4) | - | - | - | - | - | - | - |
Fees | Nonqualified | |||||||||||||||||||||||||||
earned or | Non-equity | deferred | ||||||||||||||||||||||||||
paid in | Stock | Option | incentive plan | compensation | All other | |||||||||||||||||||||||
cash | awards(1) | awards(2) | compensation | earnings | compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) | (#) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Bruno Wu(3) | 250,000 | — | — | — | — | — | 250,000 | |||||||||||||||||||||
Shane McMahon | 36,000 | — | — | — | — | — | 36,000 | |||||||||||||||||||||
Alfred P. Poor(4) | 383,333 | — | 1,000,000 | — | — | — | 383,333 | |||||||||||||||||||||
James S. Cassano | 156,000 | — | 263,333 | — | — | — | 156,000 | |||||||||||||||||||||
Jerry Fan | 36,000 | — | 250,000 | — | — | — | 36,000 | |||||||||||||||||||||
John Wallace | — | — | — | — | — | — | — | |||||||||||||||||||||
Steven Fadem | 50,000 | — | 500,000 | — | — | — | 50,000 | |||||||||||||||||||||
Harry Edelson | 50,000 | — | 500,000 | — | — | — | 50,000 |
(1) Reflects the aggregate grant date fair value of restricted stock determined in accordance with FASB ASC Topic 718.
(2) Reflects the number of stock options granted in 2020.
(3) Mr. Wu received this compensation solely in his capacity as our then Executive Chairman.
(4) Mr. Poor received this compensation solely in his capacity as our Chief Executive Officer.
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the year ended December 31, 2019.2020. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent that the Company specifically incorporates such information by reference in such filing.
The Audit Committee consists of three members: James S. Cassano, Harry Edelson and Jerry Fan with Mr. Cassano acting as Chair. All of the members are independent directors under the NASDAQ and SEC audit committee structure and membership requirements. The Audit Committee has certain duties and powers as described in its written charter adopted by the Board.
The Audit Committee is responsible primarily for assisting the Board in fulfilling its oversight responsibility of reviewing the financial information that will be provided to shareholders and others, appointing the independent registered public accounting firm, reviewing the services performed by the Company’s independent registered public accounting firm and internal audit department, evaluating the Company’s accounting policies and the Company’s system of internal controls that management and the Board have established, and reviewing significant financial transactions. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements.
In fulfilling its oversight responsibility of appointing and reviewing the services performed by the Company’s independent registered public accounting firm, the Audit Committee carefully reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit related services.
The Company maintains an auditor independence policy that bans its auditors from performing non-financial consulting services, such as information technology consulting and internal audit services. This policy mandates that the Audit Committee approve the audit and non-audit services and related budget in advance, and that the Audit Committee be provided with quarterly reporting on actual spending. This policy also mandates that the Company may not enter into auditor engagements for non-audit services without the express approval of the Audit Committee.
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 20192020 with the Company’s management and BF Borgers CPA PC, the Company’s 20192020 independent registered public accounting firm (“BF Borgers”). The Audit Committee has also discussed with BF Borgers the matters required to be discussed by Auditing Standards No. 16, Communication with Audit Committees, issued by the Public Company Accounting Oversight Board (United States).
The Audit Committee also has received and reviewed the written disclosures and the letter from BF Borgers required by applicable requirements of the Public Company Accounting Oversight Board regarding BF Borgers’ communications with the Audit Committee concerning independence, and has discussed with BF Borgers its independence from the Company.
Submitted by the Audit Committee of the Board of Directors | |
James S. Cassano (Chair) | |
Harry Edelson | |
Jerry Fan |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review and Approval of Related Party Transactions
We have adopted a written policy with respect to the review, approval and ratification of related person transactions. The Audit Committee has primary responsibility for reviewing all related party transactions involving the Company’s directors, officers and directors’ and officers’ immediate family members. The Board may determine to permit or prohibit the Related Party Transaction. For any ongoing relationships, the Board shall annually review and assess the relationships with the Related Party and whether the Related Party Transaction should continue.
Under the policy, a “related party transaction” means any transaction directly or indirectly involving any Related Party that would need to be disclosed under Item 404 of Regulation S-K. Under Item 404, the Company is required to disclose any transaction occurring since the beginning of the Company’s last fiscal year, or any currently proposed transaction, in which the Company was or is a participant and the amount involved exceeds $120,000, and in which any related party had or will have a direct or indirect material interest. “Related Party Transaction” also includes any material amendment or modification to an existing Related Party Transaction. For the purposes of this policy, a “Related Party” means (A) a director, including any director nominee, (B) an executive officer; (C) a person known by the Company to be the beneficial owner of more than 5% of the Company’s common stock; or (D) a person known by the Company to be an immediate family member of any of the foregoing. “Immediate family member” means a child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such director, executive officer, nominee for director, or beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee for director, or beneficial owner.
The following is a summary of transactions since the beginning of the 20192018 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under Item 11—“Executive Compensation”). We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.
Related Party Transactions with Bruno Wu, former Executive Chairman
On November 25, 2019, the Company entered into a convertible promissory note agreement with SSSIG, an affiliate of Dr. Wu, in the aggregate principal amount of $2.5$1.0 million. The convertible promissory note bearsbore interest at a rate of 4.0%, matureswas initially scheduled to mature on November 25, 2021, and iswas convertible into the shares of the Company’s common stock at a conversion price of $1.25 per share anytime at the option of SSSIG. As of December 31, 2019, the Company received $0.25 million from SSSIG. The Company did not receive the remaining $0.975 million due under this note. On June 5, 2020, the Audit Committee and the Board of Directors approved the reduction of conversion price to $0.59, contingent upon the immediate conversion of the convertible promissory note. On June 5, 2020, the convertible promissory note, including accumulated interest, was converted into 0.4 million shares of common stock.
On February 8, 2019, the Company entered into a convertible promissory note agreement with SSSIG, an affiliate of Dr. Wu, in the aggregate principal amount of $2.5 million. The convertible promissory note bearsbore interest at a rate of 4.0%, was scheduled to mature on February 8, 2020, and iswas convertible into shares of the Company’s common stock at a conversion price of $1.83 per share anytime at the option of SSSIG. The Company is in the process of negotiating an extended due date, and believes it has the ability to do so. As of December 31, 2019, the Company received $1.3 million from SSSIG. The Company hasdid not receivedreceive the remaining $1.2 million asdue under this note. On June 5, 2020, the Audit Committee and the Board of Directors approved the reduction of the dateconversion price to $0.59, contingent upon the immediate conversion of this report. For the year ended December 31, 2019,convertible promissory note. On June 5, 2020, the Company recordedconvertible promissory note including accumulated interest expensewas converted into 2.2 million shares of $48,357 related to the Note. The Company has not paid the interest yet.common stock.
In connection with our acquisition with Grapevine on September 4, 2018, Fomalhaut Limited (“Fomalhaut”), a British Virgin Islands company and an affiliate of Bruno Wu (“Dr. Wu”), the Chairman of the Company, is the non-controlling equity holder of 34.35% in Grapevine (the “Fomalhaut Interest”Interest.”). Fomalhaut entered into an option agreement, effective as of August 31, 2018 (the “Option Agreement”), with the Company pursuant to which the Company provided Fomalhaut with the option to sell the Fomalhaut Interest to the Company. In May 2019, the Company entered into two amendments to the Option Agreement. The aggregate exercise price for the Option was amended to the greater of: (1) fair market value of the Fomalhaut Interest in Grapevine as of the close of business on the date preceding the date upon which the option is exercised; and (2) $1.84 per share of the Company’s common stock. It was also agreed that the full amount of the exercise price shall be paid in the form of common stock of the Company. In June 2019, the Company issued 0.6 million shares in exchange for a 34.3% ownership in Grapevine as a result of the exercise of the Option.
On September 7, 2018, the Company entered into an agreement to purchase FinTalk Assets with Sun Seven Star International Limited, a Hong Kong company and an affiliate of Dr. Wu. FinTalk Assets are the rights, titles and interest in a secure mobile financial information, social, and messaging platform that has been designed for streamlining financial-based communication for professional and retail users. The purchase price for Fintalk Assets is $7.0 million payable with $1.0 million in cash and shares of the Company’s common stock with a fair market value of $6.0 million. The Company paid $1.0 million in October 2018 and recorded in prepaid expense because the transaction had not closed. The purchase price was later amended to $6.4 million, payable with $1.0 million in cash and shares of the Company’s common stock with a value of $5.4 million. The Company issued 2.9 million common shares in June 2019 and completed the transaction.
In May 2019, the Company determined to sell the Red Rock business and entered into an agreement with Redrock Capital Group Limited, an affiliate of Dr. Wu, to sell its entire interest in Red Rock for consideration of $0.7 million. The Company decided to sell Red Rock primarily because it has incurred operating losses and its business is no longer needed based on the Company’s business plan. The transaction was completed in July 2019 and the Company recorded a disposal gain of $0.6 million recorded in “Loss“Gain (loss) on disposal of subsidiaries, net” in the consolidated statements of operations.
In June 2020, the Audit Committee and the Board of Directors approved the conversion of some borrowings from Dr. Wu at a conversion price of $0.59 per common share, contingent upon the immediate conversion of these amounts. On June 5, 2020, the borrowings of $1.5 million, including the $0.4 million transferred from Beijing Financial Holding Limited, were converted into 2.6 million shares of common stock.
In June 2020, the Company entered a service agreement with SSSIG for the period from July 1, 2020 through June 30, 2021 for $1.4 million in exchange for consulting services from SSSIG, the services include but are not limited to human resources, finance and legal advice. The Company recorded the service charges of $0.7 million in “professional fess” for the year ended December 31 2020, and $0.2 million in “Amount due to related parties” as of December 31 2020. The Company is currently in process of negotiating the agreement with SSSIG.
Other Related Party Transactions
On May 10, 2012, at the Company’s request,Mr. McMahon, our then Chairman and Chief Executive Officer and current Vice Chairman, Shane McMahon, made a loan to the Company in the amount of $3,000,000.$3.0 million. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000$3.0 million (the “Note”) at an annuala 4.0% interest rate computed on the basis of 4% (the “McMahon Note”). Effective on January 31, 2014, thea 365-day year. The Company and Mr. McMahon entered into an amendmentseveral amendments with respect to the McMahon Note pursuanteffective conversion price (changed from $1.75 to which the McMahon Note will be, at Mr. McMahon’s option, payable on demand or$1.50), convertible on demand into sharesstocks (changed from of Series E Preferred Stock at a conversion price of $1.75, until December 31, 2015. On December 30, 2014, the Company and Mr. McMahon entered into an amendment extending the maturity date of the McMahon Note to December 31, 2016. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the McMahon Note will be, at Mr. McMahon’s option, payable on demand or convertible on demand into shares of the Company’s Series E Preferred Stock, provided that the McMahon Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media Limited into the Company’s Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. C Media Limited converted all Series E Preferred Stock owned by it to Common Stock on March 8, 2017,Stock) and as a result, the McMahon Note is currently convertible solely into the Company’s Common Stock. the Company and Mr. McMahon entered into an amendment extending the maturity dateextension of the McMahon Note to December 31, 2019 On November 9, 2017, then further extending the maturity date to December 31, 2020. On June 5, 2020, on May 7, 2019.the Audit Committee and the Board of Directors approved the reduction of conversion price to $0.59, contingent upon the immediate conversion of the Note. On June 5, 2020, the Note was converted into 5.1 million shares of common stock. The Company paid the accumulated interest $0.3 million in cash prior to the conversion.
Except as set forth in our discussion above, none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Promoters and Certain Control Persons
We did not have any promoters at any time during the past five fiscal years.
29
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding beneficial ownership of our common stock as of August 31, 2020September 30, 2021 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our executive officers and directors as a group; and (iii) by all of our executive officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of Ideanomics, Inc., at 551441 Broadway, 19th Floor,Suite 5116, New York, NY 10006.10018. Information in this table with respect to our directors, named executive officers and all directors and executive officers as group is based upon information supplied by these individuals.
Name and Address of | Common Stock(2) | Series A Preferred Stock (3) | Combined Common Stock and Series A(4) | |||||||||||||||||||||||
Beneficial Owner | Office, If Any | Shares | % of Class | Shares | % of Class | Votes | Percentage | |||||||||||||||||||
Directors and Officers | ||||||||||||||||||||||||||
Bruno Wu | Chairman | 34,949,141 | 14.7 | % | 7,000,000 | 41,949,141 | 17.5 | % | ||||||||||||||||||
Shane McMahon | Vice Chairman | 8,321,019 | (6) | 3.5 | % | 0 | * | 8,321,019 | 3.5 | % | ||||||||||||||||
James Cassano | Director | 296,990 | (7) | * | 0 | * | 296,990 | * | % | |||||||||||||||||
John Wallace | Director | 768,557 | (14) | * | 768,557 | |||||||||||||||||||||
Jerry Fan | Director | 255,013 | (9) | * | 0 | * | 255,013 | * | ||||||||||||||||||
Kang Zhao | Director (Former) | 86,923 | (11) | * | 0 | * | 86,923 | * | ||||||||||||||||||
Chao Yang | Director | 26,923 | (12) | * | 0 | * | 26,923 | * | ||||||||||||||||||
Federico Tovar | CFO (Former) | 60,000 | (10) | * | 0 | * | 60,000 | * | ||||||||||||||||||
All officers and directors as a group (8 persons named above) | 44,764,566 | 18.9 | % | 51,764,566 | 25.4 | % | ||||||||||||||||||||
5% Securities Holders |
Name and | Combined Common Stock and | |||||||||||||||||||||||||||
Address of | Common Stock (2) | Series A Preferred Stock (3) | Series A (4) | |||||||||||||||||||||||||
Beneficial | Office, If | % of | % of | |||||||||||||||||||||||||
Owner | Any | Shares | Class | Shares | Class | Votes | Percentage | |||||||||||||||||||||
Directors and Officers | ||||||||||||||||||||||||||||
Shane McMahon | Executive Chairman | 6,494,990 | (5) | 1.4 | % | 0 | * | 6,494,990 | 1.4 | % | ||||||||||||||||||
Alfred P. Poor | CEO, Director | 4,475,215 | (6) | * | % | 0 | * | 4,475,215 | * | % | ||||||||||||||||||
James S. Cassano | Director | 1,350,193 | (7) | * | 0 | * | 1,350,193 | * | % | |||||||||||||||||||
Harry Edelson | Director | 600,000 | (8) | * | 0 | * | 600,000 | * | % | |||||||||||||||||||
Jerry Fan | Director | 775,800 | (9) | * | 0 | * | 775,800 | * | % | |||||||||||||||||||
Conor McCarthy | CFO | 1,915,062 | (10) | * | 0 | * | 1,915,062 | * | % | |||||||||||||||||||
All officers and directors as a group (6 persons named above) | 15,611,260 | 3.3 | % | 15,611,260 | 3.3 | % | ||||||||||||||||||||||
5% Securities Holders | ||||||||||||||||||||||||||||
Sun Seven Stars Investment Group Limited (11) | 36,071,565 | (12) | 7.5 | % | 7,000,000 | 100 | % | 44,471,562 | 9.2 | % | ||||||||||||||||||
*Less than 1%. | ||||||||||||||||||||||||||||
(1) | Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to our securities. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator. |
(2) | Applicable percentage ownership is based on 484,821,523 shares of |
(3) | Based on 7,000,000 shares of Series A Preferred Stock issued and outstanding as of |
(4) | Represents total voting power with respect to all shares of our Common Stock and Series A Preferred Stock. |
(5) | Includes (i) |
(6) | Includes (i) 250,000 shares of Common Stock, |
(7) | Includes (i) 225,808 shares of Common Stock, (ii) 6,111 shares underlying options exercisable within 60 days at $1.84 per share, (iii) 8,974 shares underlying options exercisable within 60 days at $2.91 per share, (iv)75,800 shares underlying options exercisable within 60 days at $5.57, (v) 500,000 shares underlying options exercisable within 60 days at $1.98 per shares, (vi) 250,000 shares underlying options exercisable with 60 days at $0.53 per share; and |
(8) | Includes (i) |
(9) | Includes (i) 100,000 shares of Common Stock, (ii) 250,000 shares underlying options exercisable within 60 days at $1.98; (iii) 75,800 shares underlying options exercisable within 60 days at |
(10) | Includes (i) |
(11) | Sun Seven Stars Investment Group Limited (“SSSIG”), a British Virgin Islands corporation, is an affiliate of Bruno Wu, the former Executive Chairman of the Company. SSSIG is a wholly-owned entity of Lan Yang, the spouse of Bruno Wu. |
(12) | Includes (i) |
Changes in Control
There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.
Securities Authorized for Issuance under Equity Compensation Plans
The following table includes the information as of December 31, 20192020 for each category of our equity compensation plan:
Number of securities remaining | Number of securities remaining | |||||||||||||||||||||||
Number of securities to | Weighted-average | available for future issuance | Number of securities to | Weighted-average | available for future issuance | |||||||||||||||||||
be issued upon exercise | exercise price of | under equity compensation | be issued upon exercise | exercise price of | under equity compensation | |||||||||||||||||||
of outstanding options | outstanding options | plans (excluding securities | of outstanding options | outstanding options | plans (excluding securities | |||||||||||||||||||
Plan category | and rights (a) | and rights (b) | reflected in column (a)) (c) | and rights (a) | and rights (b) | reflected in column (a)) (c) | ||||||||||||||||||
Equity compensation plans approved by security holders (1) | 1,706,431 | $ | 3.28 | 27,635,499 | 25,172,209 | $ | 1.29 | 24,721,195 | ||||||||||||||||
Equity compensation plans not approved by security holders | - | - | - | — | — | — | ||||||||||||||||||
Total | 1,706,431 | $ | 3.28 | 27,635,499 | 25,172,209 | $ | 1.29 | 24,721,195 |
(1) On August 3, 2018, our Board of Directors approved and on August 28, 2018 our shareholders approved the Ideanomics Amended and Restated 2010 Equity Incentive Plan (the “Plan”) to increase the number of shares authorized for issuance under the Plan to 31,500,000 pursuant to which incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares may be granted to employees, directors and consultants of the Company and its subsidiaries. On October 22, 2020 our shareholders at our Annual General Meeting approved an increase of 25,300,000 in the number of shares authorized for issuance under the Plan to 56,800,000.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 20202022
Shareholder proposals that are intended to be presented by such shareholders at our 20212022 Annual Meeting of Shareholders must be received by our Corporate Secretary at our principal executive offices no later than 120 calendar days in advance of the one year anniversary of the date our proxy statement was released to shareholders in order to be considered for inclusion in the proxy statement and form of proxy/voting instruction card relating to that meeting pursuant to Rule 14a-8 under the Exchange Act. Under the rules of the SEC, shareholders who wish to submit proposals for inclusion in the Proxy Statement for the 20212022 Annual Meeting of Shareholders must submit such proposals to Ideanomics by [September ___], 2021.July 15, 2022.
OTHER MATTERS
Our Board knows of no other matters to be submitted to the Annual Meeting. If any other matters properly come before the Annual Meeting, then the persons named in the enclosed form of proxy will vote the shares they represent in their discretion.
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers, banks and nominees) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies and intermediaries.
This year, a number of brokers, banks and nominees with account holders who are our shareholders may be householding our proxy materials. In such circumstances, a single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received by the broker, bank or nominee from one or more of the affected shareholders. We have not initiated householding with respect to the small number of our record holders, because such householding would increase our costs. If, at any time, you would like to receive a separate copy of our proxy statement and annual report, we will promptly send you an additional copy upon written or oral request directed to our Secretary. If you are a beneficial owner, you can request additional copies of the proxy statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2020. If your shares are held in “street name”, you can request a change in your householding status by notifying your broker, bank or nominee.
To the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, the section of this Proxy Statement entitled “Audit Committee Report” (to the extent permitted by the rules of the SEC) will not be deemed incorporated unless specifically provided otherwise in such filing.
The final results of the balloting at the Annual Meeting will appear in our Current Report on Form 8-K within four business days of the Annual Meeting.
APPENDIX A
SEVEN STARS CLOUD GROUP, INC.
AMENDED AND RESTATED 2010 EQUITY INCENTIVE PLAN
“Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4.
“Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
“Award” means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.
“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company.
“Change in Control” means the occurrence of any of the following events:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities; provided however, that for purposes of this subsection (i) any acquisition of securities directly from the Company shall not constitute a Change in Control; or
(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets;
(iii) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or
(iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
For avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is the change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
“Code” means the Internal Revenue Code of 1986, as amended. Any reference in the Plan to a section of the Code will be a reference to any successor or amended section of the Code.
“Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.
“Common Stock” means the common stock of the Company.
“Company” means YOU on Demand Holdings, Inc., a Nevada corporation, or any successor thereto.
“Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
“Director” means a member of the Board.
“Disability” means total and permanent disability as determined by the Administrator in its discretion in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
“Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director's fee by the Company will be sufficient to constitute "employment" by the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have lower exercise prices and different terms), Awards of a different type and/or cash, and/or (ii) the exercise price of an outstanding Award is reduced.
“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation any division or subdivision of the Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, including without limitation quotation through the over the counter bulletin board (“OTCBB”) quotation service administered by the Financial Industry Regulatory Authority (“FINRA”) , the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator, and to the extent Section 15 applies (a) with respect to ISOs, the Fair Market Value shall be determined in a manner consistent with Code section 422 or (b) with respect to NSOs or SARs, the Fair Market Value shall be determined in a manner consistent with Code section 409A.
“Fiscal Year” means the fiscal year of the Company.
“Grant Date” means, for all purposes, the date on which the Administrator determines to grant an Award, or such other later date as is determined by the Administrator, provided that the Administrator cannot grant an Award prior to the date the material terms of the Award are established. Notice of the Administrator’s determination to grant an Award will be provided to each Participant within a reasonable time after the Grant Date.
“Incentive Stock Option” or “ISO” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
“Nonstatutory Stock Option” or “NSO” means an Option that by its terms does not qualify or is not intended to qualify as an ISO.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
“Option” means a stock option granted pursuant to the Plan.
“Optioned Shares” means the Common Stock subject to an Option.
“Optionee” means the holder of an outstanding Option.
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
“Participant” means the holder of an outstanding Award.
“Performance Share” means an Award denominated in Shares which may vest in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10.
“Performance Unit” means an Award which may vest in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.
“Period of Restriction” means the period during which Shares of Restricted Stock are subject to forfeiture or restrictions on transfer pursuant to Section 7.
“Plan” means this 2010 Equity Incentive Plan.
“Restricted Stock” means Shares awarded to a Participant which are subject to forfeiture and restrictions on transferability in accordance with Section 7.
“Restricted Stock Unit” means the right to receive one Share at the end of a specified period of time, which right is subject to forfeiture in accordance with Section 8 of the Plan.
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3.
“Section” means a paragraph or section of this Plan.
“Section 16(b)” means Section 16(b) of the Exchange Act.
“Service Provider” means an Employee, Director or Consultant.
“Share” means a share of the Common Stock, as adjusted in accordance with Section 13.
“Stock Appreciation Right” or “SAR” means the right to receive payment from the Company in an amount no greater than the excess of the Fair Market Value of a Share at the date the SAR is exercised over a specified price fixed by the Administrator in the Award Agreement, which shall not be less than the Fair Market Value of a Share on the Grant Date. In the case of a SAR which is granted in connection with an Option, the specified price shall be the Option exercise price.
“Subsidiary” means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of the Code.
“Ten Percent Owner” means any Service Provider who is, on the grant date of an ISO, the owner of Shares (determined with application of ownership attribution rules of Code Section 424(d)) possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries.
(1) cash;
(2) check;
(3) to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a promissory note;
(4) other Shares, provided Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised;
(5) to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, in accordance with any broker-assisted cashless exercise procedures approved by the Company and as in effect from time to time;
(6) by asking the Company to withhold Shares from the total Shares to be delivered upon exercise equal to the number of Shares having a value equal to the aggregate Exercise Price of the Shares being acquired;
(7) any combination of the foregoing methods of payment; or
(8) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
In the event that the successor corporation does not assume or substitute for the Award, unless the Administrator provides otherwise, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and SARs, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or SAR is not assumed or substituted in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or SAR will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or SAR will terminate upon the expiration of such period.
For the purposes of this Section 13(c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a SAR upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or SAR or upon the payout of a Restricted Stock Unit, Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Restricted Stock Units and Performance Units, the number of implied shares determined by dividing the value of the Restricted Stock Units and Performance Units, as applicable, by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant's consent; provided, however, a modification to such performance goals only to reflect the successor corporation's post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
(1) The Administrator shall designate Options granted as ISOs in the Award Agreement. Notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which ISOs are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), Options will not qualify as an ISO. For purposes of this section, ISOs will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.
(2) The Award Agreement shall specify the term of the ISO. The term shall not exceed ten (10) years from the Grant Date or five (5) years from the Grant Date for Ten Percent Owners.
(3) The Award Agreement shall specify an exercise price of not less than the Fair Market Value per Share on the Grant Date or one hundred ten percent (110%) of the Fair Market Value per Share on the Grant Date for Ten Percent Owners.
(4) �� The Award Agreement shall specify that an ISO is not transferable except by will, beneficiary designation or the laws of descent and distribution.
(1) Subject to the provisions of Section 13, the maximum number of Shares that can be awarded to any individual Participant in the aggregate in any one fiscal year of the Company is one hundred million (100,000,000) Shares;
(2) For Awards denominated in Shares and satisfied in cash, the maximum Award to any individual Participant in the aggregate in any one fiscal year of the Company is the Fair Market Value of fifty million (50,000,000) Shares on the Grant Date; and
(3) The maximum amount payable pursuant to any cash Awards to any individual Participant in the aggregate in any one fiscal year of the Company is the Fair Market Value of fifty million (50,000,000) Shares on the Grant Date.
(1) Increased revenue;
(2) Net income measures (including but not limited to income after capital costs and income before or after taxes);
(3) Stock price measures (including but not limited to growth measures and total stockholder return);
(4) Market share;
(5) Earnings per Share (actual or targeted growth);
(6) Earnings before interest, taxes, depreciation, and amortization (“EBITDA”);
(7) Cash flow measures (including but not limited to net cash flow and net cash flow before financing activities);
(8) Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity);
(9) Operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency);
(10) Expense measures (including but not limited to overhead cost and general and administrative expense);
(11) Margins;
(12) Stockholder value;
(13) Total stockholder return;
(14) Proceeds from dispositions;
(15) Production volumes;
(16) Total market value; and
(17) Corporate values measures (including but not limited to ethics compliance, environmental, and safety).
STANDBY EQUITY DISTRIBUTION AGREEMENT
THIS STANDBY EQUITY DISTRIBUTION AGREEMENT dated as of September 4, 2020 (this “Agreement”) is made by and between YA II PN, LTD., a Cayman Islands exempt limited partnership (the “Investor”), and IDEANOMICS, INC., a Nevada (the “Company”).
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to $150,000,000 of the Company’s Common Stock, par value $0.001 per share (the “Common Shares”); and
WHEREAS, the Common Shares are listed for trading on the Nasdaq Capital Market under the symbol “IDEX;” and
WHEREAS, the offer and sale of the Common Shares issuable hereunder shall be registered on the Company’s registration statement on Form S-3 (File No. 333-239371) under Section 5 of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”).
NOW, THEREFORE, the parties hereto agree as follows:
Article I. Certain Definitions
Section 1.01 “Additional Amount” shall have the meaning set forth in Section 2.01(d)(ii).
Section 1.02 “Adjusted Advance Amount” shall have the meaning set forth in Section 2.01(d)(i).
Section 1.03 “Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.
Section 1.04 “Advance Date” shall mean the 1st Trading Day after expiration of the applicable Pricing Period for each Advance.
Section 1.05 “Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor.
Section 1.06 “Advance Notice Date” shall mean each date the Company delivers (in accordance with Section 2.01(b) of this Agreement) to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.
Section 1.07 “Affiliate” shall have the meaning set forth in Section 3.07.
Section 1.08 “Applicable Laws” shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.
Section 1.09 “Base Prospectus” shall mean the Company’s prospectus accompanying the Registration Statement.
Section 1.10 “Commitment Amount” shall mean the aggregate amount of up to $150,000,000.
Section 1.11 “Commitment Period” shall mean the period commencing on the date hereof and expiring upon the date of termination of this Agreement in accordance with Section 11.02.
Section 1.12 “Common Shares” shall have meaning set forth in the Recitals.
Section 1.13 “Company Indemnitees” shall have the meaning set forth in Section 5.02.
Section 1.14 “Condition Satisfaction Date” shall have the meaning set forth in Section 7.01.
Section 1.15 “Consolidation Event” shall have the meaning set forth in Section 6.08.
Section 1.16 “Environmental Laws” shall have the meaning set forth in Section 4.08.
Section 1.17 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Section 1.18 “Excluded Day” shall have the meaning set forth in Section 2.01(d)(i).
Section 1.19 “Indemnified Liabilities” shall have the meaning set forth in Section 5.01.
Section 1.20 “Initial Registration Statement” shall have the meaning set forth in 6.01.
Section 1.21 “Investor Indemnitees” shall have the meaning set forth in Section 5.01.
Section 1.22 “Market Price” shall mean the lowest daily VWAP of the Common Shares during the relevant Pricing Period, other than the daily VWAP on any Excluded Days.
Section 1.23 “Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or would reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement.
Section 1.24 “Maximum Advance Amount” in respect of each Advance Notice means $[5],000,000, or such other amount as may be agreed by the parties.
Section 1.25 “Minimum Acceptable Price” or “MAP” shall mean the minimum price notified by the Company to the Investor in each Advance Notice, if applicable, or if none is specified than the MAP shall be deemed to be 80% of VWAP on the Trading Day immediately preceding the Advance Notice Date.
- 2 -
Section 1.26 “OFAC” shall mean the U.S. Department of Treasury’s Office of Office of Foreign Asset Control.
Section 1.27 “Ownership Limitation” shall have the meaning set forth in Section 2.01(c)(i).
Section 1.28 “Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
Section 1.29 “Plan of Distribution” shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.
Section 1.30 “Pricing Period” shall mean the 5 consecutive Trading Days commencing on the Trading Day immediately following the Advance Notice Date.
Section 1.31 “Principal Market” shall mean the Nasdaq Capital Market.
Section 1.32 “Prospectus” shall mean the Base Prospectus, as supplemented by any Prospectus Supplement.
Section 1.33 “Prospectus Supplement” shall mean any prospectus supplement to the Base Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, including, without limitation, the Prospectus Supplement to be filed in accordance with Section 6.01 hereof.
Section 1.34 “Purchase Price” shall mean the price per share obtained by multiplying the Market Price by 90%.
Section 1.35 “Registration Limitation” shall have the meaning set forth in Section 2.01(c).
Section 1.36 “Registration Period” shall mean the Initial Registration Statement or another registration statement on a form promulgated by the SEC for which the Company then qualifies for the registration of the offer and sale of the Shares to be offered and sold by the Company to the Investor and the resale of such Shares by the Investor, as the same may be amended and supplemented from time to time and including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act and any successor registration statement filed by the Company with the SEC under the Securities Act on a form promulgated by the SEC for which the Company then qualifies and which form shall be available for the registration of the transactions contemplated hereunder.
Section 1.37 “Regulation D” shall mean Regulation D promulgated under the Securities Act.
Section 1.38 “Sanctions” means any sanctions administered or enforced by OFAC, the U.S. State Department, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.
Section 1.39 “Sanctions Programs” means any OFAC economic sanction program (including, without limitation, programs related to Crimea, Cuba, Iran, North Korea, Sudan and Syria).
- 3 -
Section 1.40 “SEC” shall mean the U.S. Securities and Exchange Commission.
Section 1.41 “SEC Documents” shall have the meaning set forth in Section 4.04.
Section 1.42 “Securities Act” shall have the meaning set forth in the recitals of this Agreement.
Section 1.43 “Settlement Document” shall have the meaning set forth in Section 2.02(a).
Section 1.44 “Shares” shall mean the Common Shares to be issued from time to time hereunder pursuant to Advances.
Section 1.45 “Trading Day” shall mean any day during which the Principal Market shall be open for business.
Section 1.46 “VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Shares for such date on the Principal Market as reported by Bloomberg L.P. during regular trading hours.
Article II. Advances
Section 2.01 Advances; Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, Common Shares on the following terms:
- 4 -
- 5 -
Section 2.02 Closings. Each Closing shall take place as soon as practicable after each Advance Date in accordance with the procedures set forth below. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:
- 6 -
Section 2.03 Hardship. In the event the Investor sells Common Shares after receipt of an Advance Notice and the Company fails to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.
- 7 -
Section 2.04 In the event the Investor fails to perform its obligations as mandated in Section 2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.
Article III. Representations and Warranties of Investor
Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance Date:
Section 3.01 Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions contemplated hereby. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
Section 3.02 Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.
Section 3.03 No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives or agents for legal, tax, investment or other advice with respect to the Investor’s acquisition of Common Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction and that the Investor may lose all or a part of its investment.
- 8 -
Section 3.04 Investment Purpose. The Common Shares purchased by the Investor hereunder are being or will be purchased for its own account, for investment purposes, and without any view or intention to distribute such shares in violation of the Securities Act or any other applicable securities laws. The Investor agrees not to assign or in any way transfer the Investor’s rights to the securities or any interest therein or its obligations under this Agreement and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal and state securities laws. No other Person has or will have a direct or indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise transfer the Investor’s Common Shares unless such shares are registered under Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available.
Section 3.05 Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D.
Section 3.06 Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and has received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to the transactions contemplated hereby.
Section 3.07 Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any “affiliate” of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).
Section 3.08 Trading Activities. The Investor’s trading activities with respect to the Common Shares shall be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market. Neither the Investor nor its affiliates has any open short position in the Common Shares, nor has the Investor entered into any hedging transaction that establishes a net short position with respect to the Common Shares, and the Investor agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales or hedging transactions with respect to the Common Shares; provided that the Company acknowledges and agrees that upon receipt of an Advance Notice the Investor has the right to sell (a) the Shares to be issued to the Investor pursuant to the Advance Notice prior to receiving such shares, or (b) other Common Shares of the Company that it holds as a long position.
Section 3.09 General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Common Shares offered hereby.
- 9 -
Article IV. Representations and Warranties of the Company
Except as set forth in the SEC Documents, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules or in another Section of the Disclosure Schedules, to the extent that it is reasonably apparent on the face of such disclosure that such disclosure is applicable to such Section, the Company represents and warrants to the Investor that, as of the date hereof and as of each Advance Date (other than representations and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date), that:
Section 4.01 Organization and Qualification. Each of the Company and its Subsidiary (as defined below) is an entity duly organized and validly existing under the laws of its state of organization or incorporation, and has the requisite power and authority to own its properties and to carry on its business as now being conducted. Each of the Company and its Subsidiary is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. “Subsidiaries” means any Person (as defined below) in which the Company, directly or indirectly, (x) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (y) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”
Section 4.02 Authorization, Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares) have been or (with respect to consummation) will be duly authorized by the Company’s board of directors or other governing body and no further consent or authorization will be required by the Company, its board of directors or its shareholders. This Agreement and the other Transaction Documents to which it is a party have been (or, when executed and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
- 10 -
Section 4.03 No Conflict. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares) will not (i) result in a violation of the articles of association or other organizational documents of the Company or its Subsidiary (with respect to consummation, as the same may be amended prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiary is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiary or by which any property or asset of the Company or its Subsidiary is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect.
Section 4.04 SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to Section 15(d) of the Exchange Act for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (all of the foregoing filed within two years preceding the date hereof or amended after the date hereof, or filed after the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and all registration statements filed by the Company under the Securities Act, being hereinafter referred to as the “SEC Documents”). The Company has made available to the Investor through the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the respective dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
Section 4.05 Equity Capitalization. As of the date hereof, the authorized capital of the Company consists of 1,500,000,000 shares of Common Stock and 50,000,000 shares of Preferred Stock with [____________] shares of Common Stock and 7,000,000 shares of Series A Preferred Stock issued and outstanding.
- 11 -
Section 4.06 Intellectual Property Rights. The Company and its Subsidiary own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted, except as would not cause a Material Adverse Effect. The Company and its Subsidiary do not have any knowledge of any infringement by the Company or its Subsidiary of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse Effect. To the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against the Company or its Subsidiary regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and, except as would not cause a Material Adverse Effect, the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.
Section 4.07 Employee Relations. Neither the Company nor any of its Subsidiary is involved in any labor dispute nor, to the knowledge of the Company or any of its Subsidiary, is any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.
Section 4.08 Environmental Laws. The Company and its Subsidiary (i) are in compliance in all material respects with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all applicable federal, state and local laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
Section 4.09 Title. Except as set forth in the SEC Documents or except as would not cause a Material Adverse Effect, the Company has good and marketable title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries.
Section 4.10 Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
- 12 -
Section 4.11 Regulatory Permits. Except as would not cause a Material Adverse Effect, the Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.
Section 4.12 Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
Section 4.13 Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Shares or any of the Company’s Subsidiary, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.
Section 4.14 Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, association or other business entity.
Section 4.15 Tax Status. Each of the Company and its Subsidiary (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim.
Section 4.16 Certain Transactions. Except as set forth in the SEC Documents (or as not required to be disclosed pursuant to applicable law) none of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner.
- 13 -
Section 4.17 Fees and Rights of First Refusal. The Company is not obligated to offer the Common Shares offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.
Section 4.18 Dilution. The Company is aware and acknowledges that issuance of Common Shares hereunder could cause dilution to existing shareholders and could significantly increase the outstanding number of Common Shares.
Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Shares hereunder. The Company is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Common Shares pursuant to any Advances would violate any rules of the Principal Market. The Company further acknowledges and agrees that it is not a client or customer of the Fund or any of its affiliates and none of the Fund or its affiliates has provided, or will provide, any services to the Issuer or any of its affiliates. The Fund’s relationship to the Issuer is solely as investor.
Section 4.19
Section 4.20 Neither the Company, nor any Subsidiary of the Company, nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary of the Company, is a Person that is, or is owned or controlled by a Person that is:
- 14 -
Article V. Indemnification
The Investor and the Company represent to the other the following with respect to itself:
Section 5.01 Indemnification by the Company. In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; (c) any material breach of any material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (d) any cause of action, suit or claim brought or made against such Investor Indemnitee not arising out of any action or inaction of an Investor Indemnitee, and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.
Section 5.02 Indemnification by the Investor. In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the Investor; (c) any breach of any covenant, agreement or obligation of the Investor(s) contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor; or (d) any cause of action, suit or claim brought or made against such Company Indemnitee not arising out of any action or inaction of a Company Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.
- 15 -
Section 5.03 Notice of Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this Article V, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability under this Article V except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain its own counsel with the reasonable fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor is due.
- 16 -
Section 5.04 Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedies which may otherwise be available to any indemnified person at law or in equity. The obligations of the parties to indemnify or make contribution under this Article V shall survive expiration or termination of this Agreement.
Article VI. Covenants of the Company
Section 6.01 Registration Statement.
- 17 -
- 18 -
Section 6.02 Listing of Common Shares. The Company shall use its commercially reasonable efforts to maintain the authorization for quotation of the Common Shares on the Principal Market and shall notify the Investor promptly if the Common Shares shall cease to be authorized for quotation on the Principal Market.
Section 6.03 Opinion of Counsel. Prior to the date of the first Advance Notice, the Investor shall have received an opinion letter from counsel to the Company in form and substance reasonably satisfactory to the Investor.
Section 6.04 Exchange Act Registration. The Company will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.
Section 6.05 Transfer Agent Instructions. For any time while there is a Registration Statement in effect for this transaction, the Company shall (if required by the transfer agent for the Common Shares) cause legal counsel for the Company to deliver to the transfer agent for the Common Shares (with a copy to the Investor) instructions to issue Common Shares to the Investor free of restrictive legends upon each Advance.
- 19 -
Section 6.06 Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company during the Commitment Period.
Section 6.07 Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related prospectus relating to an offering of Common Shares: (i) receipt of any request for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Common Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus of any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or of the necessity to amend the Registration Statement or supplement a related prospectus to comply with the Securities Act or any other law; and (v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; and the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to the Investor any Advance Notice, and the Investor shall not sell any Shares pursuant to a Registration Statement, during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i) through (v), inclusive, a “Material Outside Event”).
Section 6.08 Consolidation. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation (a “Consolidation Event”) of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Advance Notice has been closed in accordance with Section 2.02 hereof, and all Shares in connection with such Advance have been received by the Investor. The Company shall not give an Advance Notice if a shareholder meeting, or the record date for any shareholder meeting or any corporate action, would fall during the period beginning on the Advance Notice Date and ending 10 Trading Days following the closing of such Advance.
Section 6.09 Market Activities. The Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company under Regulation M of the Exchange Act.
- 20 -
Section 6.10 Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement, (iii) all fees and disbursements of the Company’s counsel, accountants and other advisors, (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.
Section 6.11 Current Report. The Company shall not, and the Company shall cause each its Subsidiary and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld in the Investor’s sole discretion), and Investor shall not be subject to any expectation or duty of confidentiality for any information given to it by the Company (regardless of form, including, without limitation, telephone calls or emails, even if such communication purports to be confidential) without such prior written agreement. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly agrees that it shall publicly disclose, no later than four (4) Business Days following the date hereof, any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions contemplated herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding the Company or its Subsidiary.
Section 6.12 No Expectation of Confidentiality/Black-out Periods. Notwithstanding any other provision of this Agreement, the Company shall not deliver an Advance Notice during any Company black-out periods or during any other period in which the Company is, or could be deemed to be, in possession of material non-public information. Moreover, the Company shall acknowledge and agree at the time of delivery each Advance that it is not in possession of material, non-public information. Notwithstanding anything to the contrary set forth herein or elsewhere, the Investor shall have no expectation or duty of confidentiality with respect to any information given by the Company or any of its Subsidiaries to the Investor (absent a separate written agreement signed by the Investor acknowledging the receipt of such information and its agreement to keep it confidential). The Company shall not deliver an Advance Notice if a shareholder meeting or corporate action date, or the record date for any shareholder meeting or any corporate action, would fall during the period beginning five Trading Days prior to the date of delivery of such Advance Notice and ending 10 Trading Days following the Closing of such Advance Notice.
Section 6.13 Use of Proceeds. The Company will use the proceeds from the sale of the Common Shares hereunder for working capital and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration Statement. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions or Sanctions Programs, or (ii) in any other manner that will result in a violation of Sanctions.
- 21 -
Section 6.14 Compliance with Laws. The Company shall comply with all Applicable Laws and will not take any action which will cause the Investor to be in violation of any such Applicable Laws.
Article VII. Conditions for Advance and Conditions to Closing
Section 7.01 Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance is subject to the satisfaction by the Company, on each Advance Notice Date (a “Condition Satisfaction Date”), of each of the following conditions:
- 22 -
Article VIII. Non-Disclosure of Non-Public Information
The Company covenants and agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations of the SEC) to the Investor without also disseminating such information to the public, unless prior to disclosure of such information the Company identifies such information as being material non-public information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information for review. Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentially, or be deemed to have agreed to maintain information in confidence, with respect to (i) any information disclosed in violation of this provision or (ii) the delivery of any Advance Notices.
Article IX. Non Exclusive Agreement
Notwithstanding anything contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and, subject to the provisions in Section 6.13, the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced by Common Shares or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future share capital.
- 23 -
Article X. Choice of Law/Jurisdiction
This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this paragraph.
Article XI. Assignment; Termination
Section 11.01 Assignment. Neither this Agreement nor any rights of the parties hereto may be assigned to any other Person.
Section 11.02 Termination.
- 24 -
Article XII. Notices
Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day, provided a copy is mailed by U.S. certified mail, return receipt requested or overnight carrier; (iii) 7 days after being sent by U.S. or Israeli certified mail, return receipt requested, or (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications (except for Advance Notices which shall be delivered in accordance with Exhibit A hereof) shall be:
| |
| |
|
|
| |
| |
|
|
Either may change its information contained in this Article XII by delivering notice to the other party as set forth herein.
Article XIII. Miscellaneous
Section 13.01 Counterparts. This Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures, including by e-mail attachment, shall be deemed originals for all purposes of this Agreement.
- 25 -
Section 13.02 Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.
Section 13.03 Reporting Entity for the Common Shares. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.
Section 13.04 Each Party Responsible for Own Professional Fees. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby.
Section 13.05 Brokerage. Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder’s fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 26 -
IN WITNESS WHEREOF, the parties hereto have caused this Standby Equity Distribution Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.
- 27 -
EXHIBIT AADVANCE NOTICE
IDEANOMICS, INC.
Dated: ______________ Advance Notice Number: ____
The undersigned, _______________________ hereby certifies, with respect to the sale of Common Shares of IDEANOMICS, INC. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant to that certain Standby Equity Distribution Agreement, dated as of _______, 2020 (the “Agreement”), as follows:
1. The undersigned is the duly elected ______________ of the Company.
2. There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement.
3. The Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in all material respects with all obligations and conditions contained in this Agreement on or prior to the Advance Notice Date, and shall continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof. The Company is not subject to black-out periods and the Company is not, and cannot be deemed to be, in possession of material non-public information. The Company acknowledges and agrees that any information given by the Company to the Investor is non-material or has been disclosed publicly. Notwithstanding the foregoing, any information given by the Company to the Investor is not subject to an expectation or duty of confidentiality (it being understood that the Company would not be submitting any Advance Notice to the Investor if this paragraph were inaccurate in any respect).
4. The Advance requested is _____________________.
5. The Minimum Acceptable Price with respect to this Advance Notice is _________ (if left blank then no Minimum Acceptable Price will be applicable to this Advance).
6. The number of Common Shares of the Company outstanding as of the date hereof is ___________.
The undersigned has executed this Advance Notice as of the date first set forth above.
Please deliver this Advance Notice by email with a follow up phone call to:
Email: Trading@yorkvilleadvisors.com
Attention: Trading Department and Compliance OfficerConfirmation Telephone Number: (201) 985-8300.
EXHIBIT B
FORM OF SETTLEMENT DOCUMENT
VIA EMAIL
IDEANOMICS, INC.
Attn:
Email:
Please issue the number of Shares due to the Investor to the account of the Investor as follows:
Investor’s DTC participant #:
ACCOUNT NAME:
ACCOUNT NUMBER:
ADDRESS:
CITY:
COUNTRY:
Contact person:
Number and/or email:
C/O TRANSFER ONLINE, INC. 512 SE SALMON STREET PORTLAND, OR 97214 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 12/21/2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 12/21/2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 2 Ratification of appointment of BDO USA, LLP as independent registered public accounting firm. NOTE: THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ALL PROPOSALS. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
0000522873_2 R1.0.0.177 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Form 10-K is available at www.proxyvote.com IDEANOMICS, INC. Proxy Card PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 22, 2021. The shareholder(s) whose signature(s) appear(s) on the reverse side of this proxy form hereby appoint(s) Tony Sklar and Alfred P. Poor or either of them as proxies, with full power of substitution, and hereby authorize(s) them to represent and vote all shares of common stock and Series A preferred stock of Ideanomics, Inc. which the shareholder(s) would be entitled to vote on all matters which may come before the Annual Meeting of Shareholders to be held virtually on December 22, 2021, or at any adjournment thereof. The proxies shall vote subject to the directions indicated on the reverse side of this card and the proxies are authorized to vote in their discretion upon such other business as may properly come before the meeting at the virtual Annual Meeting of Shareholders of the Ideanomics, Inc. to be held on December 22, 2021 at 10:00 a.m. local time or any adjournments or postponements thereof. The proxies will vote as the Board of Directors recommends where a choice is not specified. Shareholders of record at the close of business on November 4, 2021, the record date, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. Please complete, sign, date and mail this proxy form in the accompanying envelope as soon as possible even if you intend to be present at the meeting. You may also grant your Proxy via the Internet by following the instructions on below on this Proxy Card. Continued and to be signed on reverse side |