Item 1.01 Entry into a Material Definitive Agreement.
Convertible Debenture Financing
On October 25, 2021 (the "Effective Date"), Ideanomics, Inc. (the "Company")
entered into a convertible debenture (the "Note"), dated October 25, 2021 with
the YA II PN, Ltd. (the "Investor") with a principal amount of $75,000,000 (the
"Principal"). The Note has a fixed conversion price of $1.88 (the "Conversion
Price"). The Conversion Price is not subject to adjustment except for
subdivisions or combinations of common stock. The Principal and the interest
payable under the Note will mature on October 24, 2022 (the "Maturity Date"),
unless earlier converted or redeemed by the Company. Interest shall accrue on
the outstanding Principal at an annual rate equal to 4%; provided that such
interest rate shall be increased to 18% upon an Event of Default (as defined in
the Note). At any time before the Maturity Date, the Investor may convert the
Note at its option into up to 39,893,617 shares (excluding additional shares
issuable upon accrued interest) of the Company's common stock at a fixed
conversion price of $1.88. The Investor shall not have the right to convert any
portion of the Note to the extent that after giving effect to such conversion,
the Investor, would beneficially own in excess of 4.99% of the number of shares
of common stock outstanding immediately after giving effect to such conversion.
Since the Investor will not be obligated to report to the Company the number of
shares of common stock it may hold at the time of conversion, unless the
conversion at issue would result in the issuance of shares of common stock in
excess of 4.99% of the then outstanding shares of common stock without regard to
any other shares which may be beneficially owned by the Investor, the Investor
shall have the authority, responsibility and obligation to determine whether the
beneficial ownership restriction contained in the Note will limit any particular
conversion thereunder and to the extent that the Investor determines that the
beneficial ownership limitation contained in the Note applies, the determination
of which portion of the Principal amount of the Note is convertible shall be the
responsibility and obligation of the Investor. The Company shall redeem in cash
(a "Mandatory Redemption") $8,333,333.33 in Principal, plus accrued and unpaid
Interest on the outstanding Principal (the "Mandatory Redemption Amount") each
month during the term of the Note beginning on February 1, 2022 and continuing
on each successive calendar month (each, a "Redemption Date"). The amounts of
any conversions made by the Investor or any Optional Redemption (as defined
below) made by the Company contemporaneous with or prior to any Redemption Date
shall have the effect of reducing the Mandatory Redemption Amount of payments
coming due (in chronological order beginning with the nearest Redemption Date).
The Company has the right, but not the obligation, to redeem ("Optional
Redemption") a portion or all amounts outstanding under this Note prior to the
Maturity Date at a cash redemption price equal to the Principal to be redeemed,
plus accrued and unpaid interest, if any; provided that the Company provides
Investor with at least 15 business days' prior written notice of its desire to
exercise an Optional Redemption and the volume weighted average price of the
Company's common stock over the 10 business days' immediately prior to such
redemption notice is less than the Conversion Price. The Investor may convert
all or any part of the Note after receiving a redemption notice, in which case
the redemption amount shall be reduced by the amount so converted. No public
market currently exists for the Note, and the Company does not intend to apply
to list the Note on any securities exchange or for quotation on any inter-dealer
quotation system. The Note contains customary events of default, indemnification
obligations of the Company, and other obligations and rights of the parties.
The Note was offered pursuant to the Company's effective registration statement
on Form S-3ASR (Registration Statement No. 333-252230) previously filed with the
SEC and a prospectus supplement thereunder (the "Registration Statement"). A
prospectus supplement relating to the offering of the securities has been filed
with the SEC and is available on the SEC's website at http://www.sec.gov. The
prospectus supplement also covers the resale of shares issuable to the Investor
upon the conversion of the Note. Prior to the Effective Date, the Investor did
not own any shares of the Company's common stock. After the Effective Date, and
assuming the Investor converts the Note, the Investor will own up to 39,893,617
shares (excluding additional shares issuable upon accrued interest) of the
Company's common stock, or 7.63 % of the Company's common stock outstanding,
subject to the beneficial ownership limitation described above. Immediately
after the consummation of the secondary offering by the Investor, the Investor
will own zero shares of the Company's common stock. The Investor is a fund
managed by Yorkville Advisors Global, LP ("Yorkville LP"). Yorkville Advisors
Global II, LLC ("Yorkville LLC") is the General Partner of Yorkville LP. All
investment decisions for the Investor are made by Yorkville LLC's President and
Managing Member, Mr. Mark Angelo. The Investor's business address is 1012
Springfield Avenue, Mountainside, NJ 07092.
The foregoing description of the Note is qualified in its entirety by reference
to the full text of the Note, a copy of which is filed herewith as Exhibit 10.1
to this Current Report on Form 8-K (this "8-K") and is incorporated by reference
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information pertaining to the Note discussed in Item 1.01 of this 8-K is
incorporated herein by reference in its entirety.
Item 8.01 Other Events.
The information set forth in the second paragraph of Item 1.01 of this 8-K is
incorporated herein by reference in its entirety.
Item 9.01 Financial Statements and Exhibits.
10.1 Convertible Debenture between the Company and YA II PN, Ltd, dated
October 25, 2021 in the principal amount of $75,000,000.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
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