Attached files
| file | filename |
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| EX-10.3 - IDEANOMICS, INC. | v176915_ex10-3.htm |
| EX-10.2 - IDEANOMICS, INC. | v176915_ex10-2.htm |
| EX-10.1 - IDEANOMICS, INC. | v176915_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported): March 10, 2010
(March 9, 2010)
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CHINA
BROADBAND, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
(State
or other jurisdiction of
incorporation)
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000-19644
(Commission
File Number)
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20-1778374
(IRS
Employer Identification No.)
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1900
Ninth Street, 3rd Floor Boulder, Colorado 80302
Telephone
No.: (303) 449-7733
(Address
and telephone number of Registrant's principal
executive
offices and principal place of business)
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(Former
name or address, if changed since last
report.)
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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 (see General Instruction A.2. below):
¨ 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))
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March
9, 2010, a wholly owned subsidiary of China Broadband Inc. (“China Broadband”),
China Broadband, Ltd., a Cayman Islands corporation (“CB Cayman”), entered into
a note purchase agreement (the “Note Purchase Agreement”) and a non-binding
Letter of Intent (the “LOI”) with Sinotop Group Ltd., a Hong Kong corporation
(“Sinotop Hong Kong”). Through a series of contractual arrangements
(“VIE Contracts”) Sinotop Hong Kong controls Beijing Sino Top Scope Technology
Co., Ltd. (“Sinotop Beijing”), a corporation established in the People’s
Republic of China (“PRC”). Sinotop Beijing, in turn, is
a party to a joint venture with two other PRC companies to provide
integrated value-added service (“VAS”) solutions for the delivery of
pay-per-view (“PPV”), video-on-demand (“VOD”), and enhanced premium content for
cable providers.
The LOI
summarizes the proposed terms of the acquisition by CB Cayman of 100% of the
outstanding capital stock of Sinotop Hong Kong from its sole stockholder in
consideration for a percentage of China Broadband to be determined in the
definitive agreement. Among other customary closing conditions, the
acquisition is contingent upon the (1) the drafting and negotiation of
definitive agreements that cover the matters discussed in the LOI, (2) the
funding of the Note (as defined below), which has already occurred, (3) the
contribution by CB Cayman of at least US$5,000,000 to the capital of Sinotop
Hong Kong (or the purchase by CB Cayman of newly issued shares of Sinotop Hong
Kong in consideration for the same amount), and (4) the absence of any debts,
obligations or encumbrances on the equity or assets of Sinotop Hong Kong and the
WFOE other than the Note and the VIE Contracts. The LOI contains a
binding exclusivity provision that prohibits Sinotop Hong Kong and Sinotop Hong
Kong’s sole stockholder from soliciting, initiating, entertaining, participating
in any discussions or negotiations concerning, or making or accepting any offer
or proposed transaction with any third party with regard to, any of the
transactions contemplated by the LOI or any similar
transaction. The parties anticipate that the transactions
contemplated by the LOI will close on March 15, 2010.
Pursuant
to the Note Purchase Agreement, on March 9, 2010, CB Cayman acquired a
Convertible Promissory Note (the “Note”) from Sinotop Hong Kong in consideration
of CB Cayman’s loan to Sinotop Hong Kong under the Note in the amount of
US$580,000 as contemplated by the LOI.
The Note
accrues interest at a simple annual rate of 5% and is due on the date (the
“Maturity Date”) that is the earlier of the fifth anniversary of the date of
issuance of the Note or the day following a change of control (as described in
the Note). The outstanding principal amount of the Note along with
all accrued interest is convertible into common shares of Sinotop Hong Kong upon
the occurrence of (1) Sinotop Hong Kong consummating a financing transaction (a
“Financing”) resulting in aggregate gross proceeds of at least $1 million, in
which case the Note would automatically be converted into ordinary shares of
Sinotop Hong Kong at a price equal to 70% of the price per share paid by
investors in such Financing, or (2) a change of control of Sinotop Hong Kong (as
described in the Note), in which case the Note would automatically be converted
into ordinary shares that represent 50% of the issued and outstanding capital
stock of Sinotop Hong Kong. The outstanding principal amount of the
Note and all accrued interest thereon may also be converted at the option of CB
Cayman at any time after the Maturity Date or an event of default into ordinary
shares of Sinotop Hong Kong representing 50% of the issued and outstanding
voting capital stock of Sinotop Hong Kong. The Note may not be
prepaid prior to the Maturity Date without the consent of the holder of the
Note. The Note contains customary events of default.
The
foregoing description of the Note Purchase Agreement, the Note, and the LOI does
not purport to be complete and is qualified in its entirety by reference to such
documents. A copy of the Note Purchase Agreement, the Note and the LOI are
attached hereto as Exhibit 10.1, 10.2 and 10.3, respectively, and is
incorporated herein by reference.
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
A
significant beneficial owner of the Company’s securities advanced the funds
necessary for CB Cayman to make the loan to Sinotop described in Item 1.01
above. The terms of the advance have not yet been
documented. The Company will file an amendment to this Form 8-K to
disclose the terms of the advance promptly after it is documented.
ITEM
2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
China
Broadband has materially reduced the staff employed for its indirect
wholly-owned subsidiary PRC subsidiary, Wanshi Wangjing Media Technologies
(Beijing) Co., Ltd., a/k/a Adnet Media Technologies (Beijing) Co., Ltd.
(“AdNet”) and, began implementing other cost savings measures with respect to
AdNet.
AdNet,
which was acquired during the first half of 2009, holds an Internet Content
Provider (“ICP”) license with rights to provide delivery of multimedia
advertising content to 2000+ internet cafés in the PRC. AdNet
operates and is licensed to operate in 28 provinces in the PRC with servers in
five data centers including Wuhan, Wenzhou, Yantai, Yunan and with a master
distribution server in Tongshan.
As
management has seen limited revenue growth relating to AdNet’s business, AdNet’s
full and part time staff, all of which were based in the PRC, were reduced from
20 persons to 2 full time employees. Nonetheless, China Broadband is
maintaining AdNet’s ICP and other licenses, servers and infrastructure, as well
as all of its intellectual property, all of which China Broadband intends on
using both for AdNet and, in connection with other businesses that China
Broadband is contemplating acquiring or entering into, which would require
similar technology and infrastructure. China Broadband does not
anticipate terminating additional employees at this time.
China
Broadband estimates its costs in taking the above cost cutting measures at
approximately $50,000, stemming from one time termination and severance benefits
and does not anticipate additional related expenditures at this
time.
China
Broadband’s management has not made a good faith estimate yet as to the
impairment charge, if any, that will be incurred as reflected in China
Broadband’s financial statements, as a result of the reduction of AdNet’s
internet café advertising business operations. China Broadband will
file an amended Current Report on Form 8-K within four business days after
making a determination of such an estimate or range of estimates.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits
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Exhibits
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Description
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10.1
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Note
Purchase Agreement, dated March 9, 2010, among CB Cayman and Sinotop Hong
Kong.
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10.2
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Convertible
Promissory Note, dated March 9, 2010, by Sinotop Hong Kong in favor of CB
Cayman.
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10.3
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Non-Binding
Letter of Intent among CB Cayman and Weicheng
Liu
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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.
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CHINA
BROADBAND, INC.
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Date: March
10, 2010
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By:
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/s/Marc
Urbach
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President
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INDEX
TO EXHIBITS
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Exhibits
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Description
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10.1
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Note
Purchase Agreement, dated March 9, 2010, among China Broadband, CB Cayman,
and Sinotop Hong Kong.
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10.2
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Convertible
Promissory Note, dated March 9, 2010, by Sinotop Hong Kong in favor of CB
Cayman.
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10.3
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Non-Binding
Letter of Intent among CB Cayman and Weicheng
Liu
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