Ideanomics, Inc. (NASDAQ:IDEX) Q4 2022 Earnings Conference Call March 30, 2023 8:30 AM ET Company Participants Tony Sklar - Senior Vice President, Investor Relations Alfred Poor - Chief Executive Officer Stephen Johnston - Chief Financial Officer Robin Mackie - Chief Operating Officer Conference Call Participants Andres Sheppard - Cantor Fitzgerald Dorien Nunez - OMNIResearch Operator Greetings. And welcome to the Ideanomics Fourth Quarter and Full Year 2022 Earnings Call. At this time, all participants are ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35561 IDEANOMICS, INC. (Exact name of registrant as specified in its charter) Nevada 20-1778374 (State or other juri ...

Ideanomics, Inc. (OTC:IDEX) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants Tony Sklar - Vice President, Investor Relations Alf Poor - Chief Executive Officer Stephen Johnston - Chief Financial Officer Robin Mackie - President, Ideanomics Mobility Conference Call Participants Andres Sheppard - Cantor Fitzgerald Operator Greetings, and welcome to the Ideanomics Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-an ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section details the company's unaudited condensed consolidated financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended September 30, 2022, show decreased cash and assets, an increased accumulated deficit, and a significant net loss, leading to a going concern warning [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2022, reflects a significant reduction in cash and total assets, alongside a widened accumulated deficit Condensed Consolidated Balance Sheet Highlights (USD in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$25,186** | **$269,863** | | Total current assets | $170,028 | $362,507 | | **Total assets** | **$370,319** | **$473,437** | | Total current liabilities | $61,959 | $91,117 | | **Total liabilities** | **$86,421** | **$106,807** | | **Accumulated deficit** | **($709,451)** | **($605,758)** | | Total equity | $282,636 | $365,368 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show a net loss of **$107.2 million** for the nine-month period ended September 30, 2022, a significant increase from the prior year Operating Results (USD in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $24,278 | $26,581 | $83,871 | $86,647 | | Gross Profit (Loss) | ($659) | $3,951 | $850 | $23,698 | | Loss from Operations | ($41,869) | ($51,912) | ($122,029) | ($74,941) | | **Net Loss** | **($38,853)** | **($51,998)** | **($107,217)** | **($65,445)** | | Net Loss Attributable to Ideanomics | ($37,414) | ($51,811) | ($103,692) | ($64,986) | | **EPS (Basic & Diluted)** | **($0.08)** | **($0.11)** | **($0.21)** | **($0.15)** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements for the nine months ended September 30, 2022, indicate a substantial increase in cash used in operations and a significant net decrease in overall cash Cash Flow Summary (Nine Months Ended Sep 30, USD in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($109,286) | ($42,601) | | Net cash used in investing activities | ($90,848) | ($191,787) | | Net cash (used in) provided by financing activities | ($42,788) | $325,291 | | **Net (decrease) increase in cash** | **($244,677)** | **$91,165** | [Notes to Financial Statements](index=13&type=section&id=Notes%20to%20Financial%20Statements) The notes detail the company's operations, accounting policies, and significant events, notably expressing substantial doubt about its ability to continue as a going concern - The company operates in one segment with two business units: Ideanomics Mobility (focused on EV adoption) and Ideanomics Capital (fintech)[33](index=33&type=chunk) - On September 12, 2022, the Board authorized a plan to restructure operations in China, which generated **$36.2 million** in revenue in the first nine months of 2022[36](index=36&type=chunk) - Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern for the next twelve months, as it does not have adequate cash to meet its short or long-term needs without additional financing[66](index=66&type=chunk)[67](index=67&type=chunk) - Subsequent to the quarter end, on October 25, 2022, the company entered into a Secured Debenture Purchase Agreement with YA II PN for **$6.5 million** in principal, receiving net proceeds of **$4.875 million**, which includes a commitment to spin out its ownership of Timios and Justly within twelve months[275](index=275&type=chunk)[277](index=277&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, noting a revenue decrease, a significant drop in gross profit, increased operating expenses, and reiterating going concern doubts Revenue by Product/Service (Nine Months Ended Sep 30, USD in thousands) | Product / Service | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Electric vehicles products | $52,913 | $17,041 | $35,872 | | Title and escrow services | $26,971 | $62,428 | ($35,457) | | Charging, batteries and powertrains products | $2,244 | $4,108 | ($1,864) | | **Total Revenue** | **$83,871** | **$86,647** | **($2,776)** | Gross Profit (Loss) by Product/Service (Nine Months Ended Sep 30, USD in thousands) | Product / Service | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Title and escrow services | $4,089 | $22,632 | ($18,543) | | Charging, batteries and powertrains | ($4,116) | $504 | ($4,620) | | Electric vehicles products | $308 | $200 | $108 | | **Total Gross Profit** | **$850** | **$23,698** | **($22,848)** | - Selling, general and administrative expenses increased by **$39.2 million** to **$113.6 million** for the nine months ended Sep 30, 2022, due to increased staff, a full year of costs from 2021 acquisitions, and higher professional fees related to regulatory filings and transactions[321](index=321&type=chunk) - The company's cash position is critical, with only **$25.2 million** as of September 30, 2022, of which **$16.2 million** is held outside the U.S (primarily PRC) and **$2.8 million** is restricted for regulatory purposes, severely limiting available liquidity[342](index=342&type=chunk)[343](index=343&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies interest rate, inflation, and foreign currency as primary market risks, with foreign currency fluctuations potentially impacting the income statement by **$7.4 million** - The company is exposed to foreign currency risk from its international operations, where a hypothetical 10% change in currency rates could result in an income statement adjustment of approximately **$7.4 million**[362](index=362&type=chunk) - Inflation is identified as a risk that may adversely affect business through increased material costs (e.g., semiconductor chips) and overhead[361](index=361&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of September 30, 2022, due to previously identified material weaknesses - The CEO and CFO concluded that as of September 30, 2022, the company's disclosure controls and procedures were not effective[364](index=364&type=chunk) - The ineffectiveness is due to previously identified material weaknesses, and remediation is not expected to be complete by the end of fiscal year 2022[368](index=368&type=chunk) [PART II - OTHER INFORMATION](index=75&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides details on legal proceedings, updated risk factors, equity sales, and other miscellaneous information and exhibits [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 of the financial statements for a detailed description of the company's legal proceedings, including an ongoing SEC investigation - For details on legal proceedings, the report refers to Note 19 in the financial statements[370](index=370&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) The company highlights new and updated risk factors, including the potential adverse effects of inflation and the restructuring of operations in China - A new risk factor is the potential adverse effect of inflation, stagflation, or economic recession on the company's liquidity, costs, and product demand[372](index=372&type=chunk) - The plan to restructure operations in China is identified as a risk that may negatively impact revenue, net loss, and the market price of the company's common stock[373](index=373&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period, except as previously disclosed - No unregistered sales of equity securities were made during the quarter, except as previously reported on Form 8-K[373](index=373&type=chunk) [Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period covered by this report - There were no defaults upon senior securities during the quarter[374](index=374&type=chunk) [Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[374](index=374&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company - Not applicable[374](index=374&type=chunk) [Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to agreements and various officer certifications - Lists exhibits filed with the report, including amendments to the VIA Motors merger agreement and financing agreements with YA II PN, LTD[376](index=376&type=chunk)[377](index=377&type=chunk)

Financial Data and Key Metrics Changes - Revenue for 2021 was $114.1 million, an increase of $87.3 million or more than 300% compared to 2020 [38] - Revenue for Q1 2022 was $25.4 million, a decrease of $4.5 million or 15.2% from Q1 2021 [39] - Revenue for Q2 2022 was $34.2 million, an increase of $4.1 million or 13.5% from Q2 2021 [39] - Gross profit for 2021 was $23.2 million, representing a gross margin of 20.4% [40] - Operating expenses for 2021 were $282.8 million, an increase of $185.1 million compared to 2020 [40] Business Line Data and Key Metrics Changes - EV-related revenue grew from just under $20 million in 2020 to $39.9 million in 2021, and surpassed $40 million in the first two quarters of 2022 [15] - Solectrac nearly doubled its full year 2021 revenue in Q1 and Q2 2022, with expectations for continued growth [16] - Energica's revenue nearly doubled in the first half of 2022 compared to the first half of 2021 [28] Market Data and Key Metrics Changes - Revenue from the U.S. increased from $1.6 million in 2020 to $84.3 million in 2021, but decreased in Q1 and Q2 2022 due to lower revenues from Timios [39] - U.S. Hybrid is gaining traction in the specialist vehicle market with increasing sales and interest from cargo handling markets [18] Company Strategy and Development Direction - The company is focused on completing the VIA Motors transaction to expand its capabilities and market reach [8] - Ideanomics is transitioning to a customer-centric business model, integrating vehicle, charging, and financing solutions [12] - The company is investing in production facilities and supply chain to support increased volume and predict future production levels [19] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of government support and subsidies for the transition to electric vehicles [45] - The company expects to see revenue growth from its as-a-Service models, which will provide predictable recurring revenues [20] - Management is optimistic about the future, citing strong demand for products and a growing order pipeline [10] Other Important Information - The company has engaged in rigorous cost control exercises to ensure effective use of capital [27] - Ideanomics is exploring divestment of non-core assets while focusing on its EV activities [63] Q&A Session Summary Question: Outlook for the second half of the year - Management indicated that businesses like WAVE and U.S. Hybrid are expected to unlock revenues in the second half of the year, with consistent revenue from Solectrac and Energica anticipated [52][53] Question: Update on capital needs - Management acknowledged the need for regular access to capital and indicated that they are in discussions with debt and equity partners [59][60] Question: Status of Ideanomics Capital - Management confirmed the commitment to divest non-core assets and migrate capital into financing for EV activities [62] Question: Update on VIA acquisition - Management stated that they are finalizing the S-4 submission for shareholder approval and expect to resubmit shortly [64][65]

Part I [Business](index=10&type=section&id=ITEM%201.%20BUSINESS) Ideanomics focuses on commercial EV adoption via its Mobility unit and fintech development through its Capital unit, significantly expanding in 2021 - Ideanomics operates through two business units: **Ideanomics Mobility**, focused on accelerating commercial EV adoption, and **Ideanomics Capital**, a fintech unit supporting the financial services industry[19](index=19&type=chunk) - In 2021, Ideanomics expanded its Mobility unit by acquiring several companies: **WAVE** (wireless charging), **Solectrac** (electric tractors), and **US Hybrid** (hydrogen fuel cells and power electronics)[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) - The company has a definitive agreement to acquire **VIA Motors**, a commercial electric vehicle company, for a total consideration of up to **$630 million**, with the deal anticipated to close in **Q4 2022**[37](index=37&type=chunk)[38](index=38&type=chunk) - The Ideanomics Capital unit includes **Timios**, a nationwide title and escrow services provider acquired in 2021, and **JUSTLY** (formerly DBOT), a FINRA-registered broker-dealer focused on ESG and thematic investments[43](index=43&type=chunk)[45](index=45&type=chunk)[48](index=48&type=chunk) - The company faces significant supply chain constraints and price increases for raw materials like aluminum, copper, and steel, which has limited its ability to manufacture and deliver products in 2021 and is expected to continue into 2022[57](index=57&type=chunk)[58](index=58&type=chunk) - As of December 31, 2021, the company had **559 employees**, with the majority (**476**) located in the United States[118](index=118&type=chunk) [Risk Factors](index=27&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant operational, financial, and regulatory risks, including going concern doubts, an SEC investigation, and material internal control weaknesses - The company's auditor's report for the year ended December 31, 2021, includes an explanatory paragraph expressing **substantial doubt** about the company's ability to continue as a **going concern** due to significant recurring losses and limited working capital[173](index=173&type=chunk) - The company has identified multiple **material weaknesses** in its internal control over financial reporting and concluded its disclosure controls were **not effective** as of December 31, 2021[132](index=132&type=chunk)[195](index=195&type=chunk) - The company is subject to an **ongoing investigation by the SEC** and has responded to various information requests and subpoenas[167](index=167&type=chunk)[169](index=169&type=chunk) - The company's Timios business previously experienced a **cybersecurity incident** that resulted in a **material reduction** in orders and revenue, and the company remains subject to risks from malicious cyber-attacks[46](index=46&type=chunk)[187](index=187&type=chunk) - Due to untimely filings, the company has **lost its eligibility to use the Form S-3 registration statement**, which may make it more difficult and costly to raise capital until eligibility is regained, not expected before **August 2023**[202](index=202&type=chunk) - The company faces significant risks related to its operations in the **People's Republic of China (PRC)**, including potential government intervention, regulatory uncertainties, restrictions on currency exchange, and the inability of the PCAOB to inspect auditors, which could lead to **delisting under the Holding Foreign Companies Accountable Act (HFCA Act)**[217](index=217&type=chunk)[228](index=228&type=chunk)[246](index=246&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports that it has no unresolved comments from the SEC staff - The Company has no unresolved Staff Comments[258](index=258&type=chunk) [Properties](index=55&type=section&id=ITEM%202.%20PROPERTIES) The company leases office and showroom facilities in Beijing, New York, New Jersey, and Malaysia, which management considers sufficient - The Company leases office space in Beijing, a limited amount of space in New York, and a showroom facility in New Jersey[259](index=259&type=chunk) - The Tree Technologies subsidiary has office space in Kuala Lumpur and a long-term lease on 250 acres of industrial land in Kuantan, Malaysia[259](index=259&type=chunk) [Legal Proceedings](index=55&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is involved in various legal matters, including shareholder class actions, derivative suits, an ongoing SEC investigation, and a $16.4 million judgment against Silk EV - The company is subject to an **ongoing investigation by the SEC's Division of Enforcement** regarding transactions and disclosures dating back to 2017[821](index=821&type=chunk) - The Rudani v. Ideanomics shareholder class action lawsuit was settled for **$5.0 million**, with the court granting final approval in **January 2022**[817](index=817&type=chunk) - The company obtained a judgment of **$16.4 million** against Silk EV Cayman LP for non-payment of a convertible promissory note, which has not yet been paid[823](index=823&type=chunk)[824](index=824&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[261](index=261&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=56&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20SHAREHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq, with no cash dividends paid or anticipated, and no share repurchases in 2021 Common Stock Price Range ($) | Quarter (2021) | High ($) | Low ($) | | :--- | :--- | :--- | | 1st Quarter | 5.43 | 2.06 | | 2nd Quarter | 3.38 | 2.35 | | 3rd Quarter | 2.78 | 1.91 | | 4th Quarter | 2.11 | 1.16 | - The company has **never declared or paid a cash dividend** and does not intend to pay any in the foreseeable future[267](index=267&type=chunk) - **No repurchases** of the Company's common stock were made in the year ended December 31, 2021[270](index=270&type=chunk) [Reserved]](index=58&type=section&id=ITEM%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=59&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In 2021, revenue grew to $114.1 million from acquisitions, but net loss widened to $256.7 million due to impairments, raising substantial doubt about the company's going concern ability Consolidated Results of Operations (in millions) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Revenue** | $114.1M | $26.8M | | **Gross Profit** | $23.2M | $2.1M | | **Loss from Operations** | ($259.6M) | ($95.6M) | | **Net Loss** | ($256.7M) | ($111.6M) | | **Net Loss per Share** | ($0.57) | ($0.47) | - The significant increase in 2021 revenue was mainly due to the acquisition of Timios, which generated **$72.7 million** in title and escrow services revenue[320](index=320&type=chunk) - The company recorded asset and goodwill impairment charges of **$71.1 million** and **$101.5 million**, respectively, in 2021, primarily related to its recent acquisitions (Timios, WAVE, US Hybrid, Solectrac)[314](index=314&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) - Management has concluded that there is **substantial doubt** about the Company's ability to continue as a **going concern** due to recurring losses, an accumulated deficit, and insufficient cash to fund operations and planned acquisitions[280](index=280&type=chunk)[287](index=287&type=chunk)[495](index=495&type=chunk) - As of December 31, 2021, the Company had cash and cash equivalents of **$269.9 million**; net cash used in operating activities was **$75.5 million**, while net cash used in investing activities was **$220.1 million**, primarily for acquisitions; net cash provided by financing activities was **$399.3 million**[370](index=370&type=chunk)[375](index=375&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces limited interest rate risk from fixed-rate convertible debt, but is exposed to market risk from equity investments and foreign currency risk from RMB operations - Interest rate risk is limited as the company's **$57.8 million** of convertible debt outstanding as of December 31, 2021, has a fixed **4.0%** interest rate[422](index=422&type=chunk) - The company has market risk exposure through its investments in equity securities, which had a carrying amount of **$35.6 million** as of December 31, 2021, including publicly traded shares of Energica[423](index=423&type=chunk) - Foreign currency risk is primarily from operations denominated in RMB, but the company does not consider this risk to be material to its results of operations currently[426](index=426&type=chunk) [Financial Statements and Supplementary Data](index=94&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents consolidated financial statements and auditor reports, including a going concern doubt and adverse opinion on internal controls for 2021, with detailed notes Consolidated Balance Sheet Data (in thousands) | (In thousands) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $473,437 | $233,869 | | **Total Liabilities** | $106,807 | $37,688 | | **Total Equity** | $365,368 | $187,434 | | **Cash and cash equivalents** | $269,863 | $165,764 | - The auditor's report for 2021 expresses **substantial doubt** about the Company's ability to continue as a **going concern** due to recurring losses and insufficient cash[433](index=433&type=chunk) - The auditor issued an **adverse opinion** on the effectiveness of the Company's internal control over financial reporting as of December 31, 2021, due to the existence of multiple **material weaknesses**[432](index=432&type=chunk)[448](index=448&type=chunk) - In 2021, the company acquired Timios, WAVE, US Hybrid, and Solectrac; the total purchase consideration for these acquisitions was approximately **$181.6 million**, leading to the recognition of **$117.4 million** in goodwill before impairments[606](index=606&type=chunk)[630](index=630&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=181&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The information required for this item was previously reported by the company - The information required by this item was previously reported[858](index=858&type=chunk) [Controls and Procedures](index=181&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of December 31, 2021, due to multiple material weaknesses in internal control over financial reporting, with a remediation plan underway - Management concluded that the company's disclosure controls and procedures were **not effective** as of December 31, 2021[859](index=859&type=chunk) - **Multiple material weaknesses** were identified in internal control over financial reporting, including a lack of sufficient experienced accounting personnel, inadequate controls over non-routine transactions, and lack of controls designed to address the risk of material misstatement[865](index=865&type=chunk)[866](index=866&type=chunk) - Additional **material weaknesses** noted include a lack of segregation of duties, ineffective IT general controls, and ineffective oversight from the Company's Audit Committee[867](index=867&type=chunk)[868](index=868&type=chunk) - Management's assessment of internal controls excluded the 2021 acquisitions of Timios, WAVE, Solectrac, and US Hybrid, as permitted by SEC guidance[863](index=863&type=chunk) [Other Information](index=185&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) There is no information reported under this item - None[874](index=874&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=185&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable - Not applicable[874](index=874&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=186&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) This section provides biographical information for directors and executive officers, detailing the Board's composition, committees, and risk oversight role - The company's key executive officers include **Shane McMahon** (Executive Chairman), **Alfred P. Poor** (CEO), and **Conor McCarthy** (CFO)[876](index=876&type=chunk)[877](index=877&type=chunk)[878](index=878&type=chunk) - The Board of Directors has **five members**, with James S. Cassano, Jerry Fan, and Harry Edelson serving as independent directors alongside Shane McMahon[887](index=887&type=chunk)[893](index=893&type=chunk) - The Board has established **Audit**, **Compensation**, and **Nominating and Governance** committees, all composed entirely of independent directors[887](index=887&type=chunk) [Executive Compensation](index=192&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) This section details 2021 and 2020 compensation for named executive officers, including CEO Alfred P. Poor's $6.7 million and CFO Conor McCarthy's $2.3 million total compensation Summary Compensation Table (in thousands) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards () | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Alfred P. Poor** (CEO) | 2021 | 645,833 | 500,000 | 5,535,000 | 2,000,000 | 6,680,833 | | | 2020 | 291,666 | 350,000 | 0 | 1,500,000 | 641,666 | | **Conor McCarthy** (CFO) | 2021 | 422,915 | 350,000 | 1,537,500 | 750,000 | 2,310,415 | | | 2020 | 364,755 | 350,000 | 3,075,000 | 500,000 | 3,789,755 | - Effective July 23, 2021, CEO Alfred P. Poor's annual base salary was increased to **$800,000**, and CFO Conor McCarthy's was increased to **$525,000**[917](index=917&type=chunk)[918](index=918&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=194&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details beneficial ownership of common stock, including Bruno Wu's 6.1% combined voting power and the 3.4% held by all executive officers and directors - As of August 29, 2022, all executive officers and directors as a group beneficially owned **16,814,925 shares**, representing **3.4%** of the common stock[927](index=927&type=chunk) - Bruno Wu is listed as a greater than 5% beneficial owner, holding **20,999,416 shares** of common stock (**4.3%**) and **7,000,000 shares** of Series A Preferred Stock (**100%**), for a combined voting power of **6.1%**[928](index=928&type=chunk) - As of December 31, 2021, there were **17,350,746 securities** remaining available for future issuance under the company's equity compensation plans[934](index=934&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=196&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) The company's Audit Committee reviews related party transactions, including a $1.4 million service agreement with SSSIG, an affiliate of the former Executive Chairman - The **Audit Committee** is responsible for reviewing and approving all related party transactions involving directors, officers, and their immediate family members[936](index=936&type=chunk) - A service agreement was entered into with SSSIG, an affiliate of former Chairman Dr. Wu, in June 2020 for consulting services valued at **$1.4 million**[939](index=939&type=chunk) [Principal Accountant Fees and Services](index=197&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section details principal accountant fees, with total audit fees increasing to $2.8 million in 2021 from $0.85 million in 2020, all pre-approved Audit Fees (in thousands) | Fees (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Audit Fees (BF Borgers)** | $1,365 | $850 | | **Audit Fees (Grassi)** | $1,439 | $0 | | **Total Audit Fees** | $2,804 | $850 | Part IV [Exhibits, Financial Statement Schedules](index=197&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists financial statements from Item 8 and provides an index of all exhibits filed with the Form 10-K, including merger agreements and corporate governance documents - This section contains the index of exhibits filed with the Form 10-K, including merger agreements for WAVE, US Hybrid, Solectrac, and VIA Motors[945](index=945&type=chunk)[946](index=946&type=chunk) [Form 10-K Summary](index=197&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This item is not applicable and contains no information - None[945](index=945&type=chunk)