Item 5.02, Departure of Directors or Principal Officers;
Election of Directors; Appointment of Principal Officers
On March 5, 2019, the Board of Directors (the “Board”)
of Ideanomics, Inc. (Nasdaq: IDEX) (“Ideanomics” or the “Company”) appointed Bruno Wu to the Board as Executive
Chairman. Mr. Wu had resigned from his role as Co-Chief Executive Officer (“CEO”) and Chairman of the Board on November
12, 2019. Dr. Bruno Wu resigned from his role as Co-CEO and Chairman of the Board in order to lead the National Committee for China-U.S.
Relations (the “Committee”), which was a new committee developed to improve relations between China and the U.S. Mr.
Wu’s service on the Committee has ended and he can now rejoin the Company’s Board.
Dr. Bruno Wu
is
an experienced investor, technology and media entrepreneur, and philanthropist. Dr. Wu has been actively involved with blockchain
enabled and big data technologies since October 2011. After four years of investment and research, in 2015, Dr. Wu and Beijing
Sun Seven Stars Culture Development Limited (“SSS”), an affiliate of Dr. Wu and a significant shareholder in our Company,
proceeded to execute the strategy of becoming a leader in fintech and asset digitization services by aggregating AI, blockchain
and other big data and cloud-based technologies, carefully sourced and selected on a global basis through joint ventures and partnerships.
These partnerships focus on customizing and enabling actual business use case applications. Dr. Wu actively participated in the
build out of a leading big data hub in Guiyang, China, particularly by endorsing the integration of AI and blockchain. Dr. Wu has
committed to transforming our Company into a fintech and asset digitization services flagship, with multiple use case technology
engines to be rolled out.
There is no arrangement between Mr. Wu and any person pursuant
to which Mr. Wu was selected as a director. Mr. Wu has been involved previously in related party transactions since January 2018
with the Company during his prior service as Chief Executive Officer and Chairman and such transactions have been previously disclosed
as follows publicly in footnote 12 of the Company’s Form 10-Q filed on November 14, 2018:
(i) On September 4, 2018, the Company have completed the acquisition
of 65.65% share of Grapevine Logic, Inc., a Delaware corporation (“GLI”). Fomalhaut Limited, a British Virgin Islands
company and an affiliate of Bruno Wu, the Chairman and Co-CEO of the Company (“Fomalhaut”), was an equity holder of
34.35% in GLI (the “Fomalhaut Interest”) prior to the merger and remains so following the merger. Fomalhaut will not
receive any part of the Purchase Price. Fomalhaut entered into a Stock 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. The aggregate sale price for the Fomalhaut Interest is the fair market value of the Fomalhaut Interest as of the
close of business on the date preceding the date upon which the right to sell the Fomalhaut Interest to the Company is exercised
by Fomalhaut. If the option is exercised, the sale price for the Fomalhaut Interest is payable in a combination of 1/3 cash and
2/3 Company shares of common stock at the then market value. The exercise period for the Option Agreement terminates on August
31, 2021.
(ii) On June 21, 2018, the Company entered
into a Subscription Agreement (the “Subscription Agreement”) with Sun Seven Stars Investment Group Limited, a British
Virgin Islands corporation (“SSSIG”), an affiliate of Bruno Wu, the Company’s Chairman and Chief Executive Officer,
pursuant to which SSSIG purchased $3 million of Common Stock at the then market price.
(iii) On September 7, 2018, the Company
entered into an Intellectual Property and Purchase and Assumption Agreement (the “SSIL Agreement”) with Sun Seven Star
International Limited, a Hong Kong company (“SSIL”) and an affiliate of Mr. Bruno Wu, the Company’s Chairman
and Co- CEO, pursuant to which SSIL sold the assets of FinTalk to the Company in exchange for $1.0 million promissory note (the
“Note”) and shares of the Company’s common stock with a fair market value of $6.0 million. The Company paid the
$1.0 million promissory note in October 2018.
(iv) On September 7, 2018, the Company
entered into a Share Purchase Agreement with SSSIG, an affiliate of Bruno Wu, the then Chairman and Co-CEO of the Company, pursuant
to which the Company agreed to purchase from Sun and other persons for whom Sun acted as seller-representative:
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an aggregate of 8,583,034 shares of common stock of Liberty Biopharma, an entity listed on the TSX venture exchange (“Liberty”), at fair market value, in consideration for Company common stock of equivalent value; and
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an aggregate of 3,240,433 additional shares of Liberty, subject to the sellers receiving those shares from Liberty as award of performance shares if and when certain performance and vesting conditions set out in an agreement among Sun, Liberty and the sellers are achieved, in consideration for Company common stock of equivalent value. These Liberty shares represent 50% of performance based Liberty shares to which the sellers are entitled. In the event the performance criteria are not met, the Liberty performance shares will not be issued to the sellers and thus the purchase of these performance shares by the Company will not close.
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The Company shares to be issued to the
sellers in consideration for the Liberty shares are valued at fair market value on the date of each closing. As of today the Company
has not received any shares from Liberty, nor has the Company issued any shares to the sellers.
In addition, on September 28, 2018, the
Company signed a Subscription Agreement with Liberty to purchase 1,173,333 common shares for $2.0 million, which was completed
in 2018.
(v) In 2018, the Company entered into a
subscription agreement and amended agreements with SSSIG to purchase $1.1 million of Common Stock at the then market price. The
Company has received $1.1 million in total as of December 31, 2018. The Company expects to issue 572,917 shares of common stock
in 2019.
(vi) The Company entered into a convertible
note agreement with SSSIG for an amount of up to $2,500,000. The convertible note bears interest at 4%, matures on February 8,
2020, and is convertible into the shares of the Company’s common stock at a conversion price of $1.83 per share anytime at
the option of SSSIG. In December 2018, SSSIG had advanced approximately $1,000,000 towards the convertible note, and the remaining
amount is expected to be received in 2019.