UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of |
(IRS Employer |
incorporation) | Identification No.) |
(Commission File Number)
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A (this “Amendment No. 1”) amends Ideanomics, Inc.’s (the “Company”) Current Report on Form 8-K (the “Original Filing”), which was originally filed on July 27, 2022 with the Securities and Exchange Commission (the “Commission”).
The purpose of this Amendment No. 1 is to revise the second and third paragraph under Item 4.01(a) of the Original Filing to reflect the Company’s receipt of a letter from BDO USA, LLP (“BDO”) on August 4, 2022 regarding the statements made by the Company under Item 4.01(a) and to file such letter as Exhibit 16.1 to this Amendment No. 1 to the Original Filing.
Item 4.01 is restated below in its entirety.
Item 4.01. Changes in Registrant’s Certifying Accountant.
BDO was previously the independent registered public accounting firm for the Company since September 24, 2021. On July 21, 2022, the Company dismissed BDO. The dismissal of BDO was approved by the Audit Committee of the board of directors of the Company (the “Audit Committee”). BDO did not issue an audit report on the Company’s financial statements for the fiscal year ended December 31, 2021. The Company’s new auditor Grassi & Co., CPAs, P.C. (“Grassi”) is currently conducting an audit of the financial statements and internal control over financial reporting as of and for the year ended December 31, 2021.
The Company was advised by BDO of certain events reportable in accordance with Item 304(a)(1)(v) of Regulation S-K in BDO’s letter dated August 4, 2022 (“BDO’s Letter”). A copy of BDO’s Letter is filed as Exhibit 16.1 hereto.
Numbered paragraph “1.” of BDO’s Letter states that at the time of its dismissal BDO had not yet finalized its assessment of the effectiveness of internal controls over financial reporting as of December 31, 2021. BDO’s Letter goes on to list certain material weaknesses that BDO had communicated to the Audit Committee prior to BDO’s dismissal. The Company is working diligently with Grassi to complete the Company’s Form 10-K for the fiscal year ended December 31, 2021, including completing Grassi’s assessment of the Company’s effectiveness of internal controls over financial reporting. Additionally, the Company has been and continues to devote resources to enhancing its internal controls over financial reporting. The Company does not believe that any of the items listed in BDO’s Letter will prevent Grassi, from completing the Company’s 2021 audit.
Numbered paragraph “2.” of BDO’s Letter also states that at the time of BDO’s dismissal it had not yet completed its evaluation of the materiality of certain audit adjustments pursuant to Staff Accounting Bulletin (“SAB”) No. 99 and that had a complete evaluation been performed, a conclusion may have been reached that previously filed financial statements may have contained a material error and could no longer be relied upon. The Company is working diligently with Grassi and is not aware of any material error related to previously filed financial statements or any reason that previously filed financial statements can no longer be relied upon.
Numbered paragraph “3.” of BDO’s Letter acknowledges that at the time of BDO’s dismissal, BDO had not yet finalized its procedures related to the Company’s investigation under Section 10A of the Securities Exchange Act relating to the Company’s China operations. Further, the same paragraph states that at the time of BDO’s termination, BDO had outstanding requests with the third-party law firm engaged by the Audit Committee to lead the investigation, had not completed its evaluation of the information that had been provided to BDO, and had not determined whether the investigation and the information provided therefrom was satisfactory to BDO. The Audit Committee engaged an Am Law 100 law firm and a nationally recognized forensics accounting firm to conduct a complete and thorough investigation and such investigation was completed by such parties to the Audit Committee’s satisfaction prior to the dismissal of BDO. The investigation concluded with no findings of improper or fraudulent actions or practices by the Company or any of its officers or employees with respect to any matters, including those raised by BDO.
The Company does not believe that any of the items listed in BDO’s Letter with respect to material weaknesses will prevent Grassi from completing the Company’s 2021. The Company currently anticipates filing its Form 10-K for the fiscal year ended December 31, 2021 and its Form 10-Q for each of the fiscal quarters ended March 31, 2022 and June 30, 2022 by September 12, 2022.
The Company provided BDO with a copy of the disclosures in the Original Filing. The Company requested that BDO furnish the Company with a letter addressed to the Commission stating whether or not BDO agrees with the Company’s statements included in this Item 4.01 as set forth in the Original Filing. The Company further requested that BDO furnish the Company with an updated letter addressed to the Commission stating whether or not BDO agrees with the Company’s statements included in this Item 4.01 as set forth in this Amendment No. 1.
(b) Newly Engaged Independent Registered Public Accounting Firm
On July 27, 2022, the Company engaged Grassi as the Company’s new independent registered public accounting firm, effective immediately, to perform independent audit services for the fiscal year ended December 31, 2021. The decision to appoint Grassi was approved by the Audit Committee. During the fiscal years ended December 31, 2021 and 2020 and through July 27, 2022, neither the Company, nor anyone on its behalf, consulted Grassi regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written report or oral advice was provided to the Company by Grassi that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
Description | |
16.1 | Letter of BDO, dated August 4, 2022. | |
104 | Cover page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Ideanomics, Inc. | ||
Date: August 8, 2022 | By: | /s/ Alfred P. Poor |
Alfred P. Poor | ||
Chief Executive Officer |
Exhibit 16.1
![]() | Tel: 212-371-4446 Fax: 212-371-9374 www.bdo.com | 622 Third Ave, Suite 3100 New York, NY 10017 |
August 4, 2022
Securities and Exchange Commission
101 F. Street, N.E.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read Item 4.01(a) of Ideanomics, Inc.’s Form 8-K dated July 21, 2022 filed on July 27, 2022, and have the following comments:
In regards to the,
- | First paragraph, we agree with the statement in the first sentence. We have no basis to agree or disagree with the statements in the second or third sentence. We agree with the statement in the fourth sentence. | |
- | Second paragraph, we agree with the statement in the first sentence. We disagree with the statement in the second sentence as we have identified the following reportable events as described in Regulation S-K Item 304 paragraph (a)(1)(v), specifically: |
1. | In response to Item 304 (a)(1)(v)(A), at the time of our dismissal, Ideanomics, Inc. (“the Company”), and therefore BDO, had not yet finalized its assessment of the effectiveness of internal controls over financial reporting as of December 31, 2021. On February 18, 2022, we communicated to the Audit Committee of the Board of Directors our belief that the Company had the following material weaknesses that were incremental to those reported in Part I, Item 4 of Form 10-Q for the quarterly period ended September 30, 2021: |
● | There is a lack of controls designed to address risk of material misstatement for various financial statement areas and related assertions. |
● | There is a lack of validation of completeness and accuracy of key reports generated from systems utilized in the operation of controls. |
● | There is lack of evidence to support the review in the operations of controls. |
● | There is a lack of Entity Level Controls, particularly over the review of subsidiary information. |
● | The Company’s controls are not designed with a sufficient level of precision to detect a material misstatement. |
● | There is a lack of review over Service Organization reports. |
● | There is a lack of segregation of duties that exists in the information technology environments and payroll cycles at the Company. |
● | There is a lack of documented compliance related controls to evaluate potential risk of dealing with inappropriate vendors and/or customers. |
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
Securities and Exchange Commission
August 4, 2022
Page 2 of 3
Subsequent to our February 18, 2022 communication, we communicated to the Audit Committee of the Board of Directors our belief that the Company also had the following material weaknesses: | ||
● | There is ineffective oversight from the Company’s Audit Committee. |
● | There is a lack of documented compliance-related controls to evaluate transactions in accordance with the Foreign Corrupt Practices Act (‘FCPA’). |
The material weaknesses, as disclosed in the Company’s Form 10-Q for the quarterly period ended September 30, 2021, included:
● | The design and implementation of internal controls over the review of management’s inputs into valuation models and associated valuation outputs from third party valuation specialists. |
● | The design and implementation of internal controls over the revenue recognition process, specifically the failure to properly evaluate whether the Company was to be considered the principal or the agent in contracts with customers. |
● | There is a lack of sufficient personnel in accounting and financial reporting functions with sufficient experience and expertise with respect to the application of U.S. GAAP and SEC disclosure requirements. |
● | Operating effectiveness of internal controls to identify and evaluate the accounting implications of non-routine transactions. |
2. | In response to Item 304 (a)(1)(v)(C), we identified errors related to certain financial statement accounts that were being evaluated at the time of our dismissal that may be material to previously reported periods in 2021 and prior. At the time of our dismissal, the Company’s evaluation of these adjustments pursuant to Staff Accounting Bulletin (“SAB”) No. 99: Materiality, was incomplete. Additionally, there were certain accounting evaluations, analyses and schedules not yet complete or provided to us by the Company at the time of our dismissal. The finalization of these matters may have resulted in additional adjustments, which may have further impact to one or more prior periods. Had a complete evaluation been performed, a conclusion may have been reached by the Company that previously filed financial statements may have contained a material error(s) and could no longer be relied upon. The nature of these errors and open accounting evaluations include the accounting for revenue, leases, business combinations (including the classification of contingent consideration), inventory, goodwill impairment, equity method and other investments, valuation of accounts receivable and the related income tax effects, where applicable. |
Securities and Exchange Commission
August 4, 2022
Page 3 of 3
3. | In response to Item 304 (a)(1)(v)(C), at the time of our dismissal, BDO had not yet finalized its procedures related to the Company’s investigation under Section 10A of the Securities Exchange Act, which relates to the Company’s China operations. At the time of the termination, BDO had outstanding requests with the third-party firm engaged by the Audit Committee to lead the investigation (inclusive of obtaining and reviewing certain redacted information). BDO had also not completed its evaluation of the information that had been provided from results of the investigation and had not determined whether the investigation and the information provided therefrom was satisfactory. |
- | Third paragraph, we agree with the statement. |
We have no basis to agree or disagree with the statements made in Item 4.01(b).
Yours Truly,
BDO USA, LLP
Cover |
Jul. 21, 2022 |
---|---|
Cover [Abstract] | |
Document Type | 8-K/A |
Amendment Flag | false |
Document Period End Date | Jul. 21, 2022 |
Entity File Number | 001-35561 |
Entity Registrant Name | IDEANOMICS, INC. |
Entity Central Index Key | 0000837852 |
Entity Tax Identification Number | 20-1778374 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 1441 Broadway |
Entity Address, Address Line Two | Suite 5116 |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10018 |
City Area Code | 212 |
Local Phone Number | 206-1216 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, $0.001 par value per share |
Trading Symbol | IDEX |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
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end
F(+I1_-4:Q27(6C
MC&6YV=1VO#Q>_Y3%SP67CV?NUY@9B"PO: R3ZUY3H_3I?"/SK)W?=MY<;//^M(L@0_/%20G"@EC *=Z"Y
M2NRE7B/X'Q@CR9]2DO ).72>G7[+3%Z>]$Y/+TX(;O2I;:R
M]^AF;I #Y-)(%O!U9Y0Y;.90.>E4GHR7^=33%P*!7T'
M\$>CZA +MJ)(K*.*NQ&C=XA$2&9(R:3D 0(;>ER1M)"2I9IJ"21G\..8V
M,])%:O^JT^IWK_NB4EZ:2*5,GMLSJE6#[ N'FB,ZGB-?^9F(J?$$5>5TJM;O
MV-;!\69?'%@O2!5PK.USL./KAK&Q,$F5-)+J\.NIN'1&=CI!W\:B_ZW#QFSE#;?\P.W$D
M!A:M;XCNSBVNO.F):)]MMC>;6[OMYO;V]HZ7+7OBGT>LZ)1?3U>TM[6[_YW82K,5Z
MP)YY>:^O@GL@(!A ^G:0BY!S\EV]_:\G\K)_]-!/<*[0HT-NC7?(5V KLEHN
MY2AF7OE:*L9Z_;<^S-WKGLK*1,P/P /*3W0"E25V+$@
MG@:N&)ND?GA!RI52$3HN,;OSN&7Z1_331/\I@5V\TT2)C$")VH[%N[#P=O\$
M[#(89RM=@SJ-S8/25ZMYXM$759%9?)[4C^2/A;5E,A,(A)YJCJH850K>:$Q;
M$B?GD:Y42T7=\Q]U^:]3ES '=R886F\L]54U,NB?B-->;UZ@=,_<[W?E2G/_
M9.-%U68^7B^E/C!CH1N;
@-U5_*L8(?^"\.DR!3H&APH+ /A)4-@IR;_IT/T '8MY4C^KP:J?%>O%
M;"9IJ'7?&5N-F1WM*L!RX1[C=]6"1[0&G$PE"JTRUET*-*F8FQ .K-\]$TAF
MV%\S2\%4ZX*#0DEZE OO2O7>UF$(Y5@IA:G3 IUQ-H,R"BSM@J&D8$35NR=D
MP'%UP@@/48N%B:]RU:Z9LK^54A6VU15C=>5^5;_.HN];NAZV#2XB# /0D
[@&N_[EEKM
M:.-JU_8C;PB#Q>WM(,RF&C\ZT?,84J@%V8S+A+JH8^95-]1=E=884M05$%6E
M+ (K,5@ ,N:!ZWTNU;.* *"N4'4R2"=VD GA"(4ED&6!)MI@,1T(I01,"-.!
MFIC$=QU[4:L6>I+*H=/*1D=4,.VOC:=GAAF4*P#\G9"#/M]<>AQ]GP8X(977
MO# CNN"(SJ7N[Z:040A3"35RCA,%Q-C.")C:?XY&YA]W#4#1R"(Y
M] 6>O.O]2F()U,2.+6B:@'/JI;$<7S<9L ),C>^ILS9$1^"1B02QC)*<*AM7
M@*F\,;'H2 ?*S.[3_ORP%?T;1LT@ H\Q*A\Q/V$,LYE9:\CMZ)L&)J9*69OH
M.%"[.GFEU"%
GOTU%6V^_J04$4T7Q)3_*8AYF8*8-S:TBQE5-=0$_U,'%SLZ?L'O
M^