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

 

Date of Report (Date of earliest event reported): November 14, 2019

 

IDEANOMICS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 20-1778374
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)

 

001-35561

(Commission File Number)

 

55 Broadway, 19th Floor, New York, NY 10006

(Address of principal executive offices) (Zip Code)

 

212-206-1216

(Registrant’s telephone number, including area code)

 

(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 (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))

 

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.   ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading symbol(s) Name of each exchange on which registered
Common stock, $0.001 par value per share IDEX The Nasdaq Stock Market

 

 

 

 

 

  Item 2.02. Results of Operations and Financial Condition.

 

On November 14, 2019, Ideanomics, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2019. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any other filings under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

  Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits

 

Exhibit No. Description
   
99.1 Press Release dated November 14, 2019.

  

 

 

 

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: November 18, 2019 By:   /s/ Alfred Poor  
    Alfred Poor  
    Chief Executive Officer  

 

 

 

 

Exhibit 99.1

 

Ideanomics Reports Q3 2019 Financial Results

 

- Revenue for the quarter ended September 30, 2019 was $3.1 million
- MEG commercial EV segment delivered 4127 taxis, as part of larger order, paving the way for continuing growth and profitability for the commercial EV operations
- Taxis are one of four commercial EV market segments, which includes big ticket areas of heavy duty/off the road trucks, last mile logistic vehicles, and buses and coaches. Introduction of umbrella financing deals in Q4 for Q1 2020 rollout is part of plan to prepare for anticipated revenue growth from Q2 2020 onwards
- Q3 2019 EPS: $(0.11) loss - due to extraordinary non-cash items such as stock options costs and demolition and remediation costs of Fintech Village. These one-off adjustments are not related to ongoing operations
- The company will start to sell non-core assets and past investments to realize value from non-core assets and enable focus on MEG and Financial Services business units

 

New York, NY, Thursday, November 14, 2019 – Ideanomics, Inc. (Nasdaq: IDEX) has today announced its 2019 Q3 operating results for the period ended September 30, 2019 (a full copy of the Company's quarterly report on Form 10-Q will be available at www.sec.gov).

 

Conference Call: Ideanomics’ management, including Alf Poor (Chief Executive Officer), Conor McCarthy (Chief Financial Officer) and Tony Sklar (VP of Communications and Head of Investor Relations), will host live the earnings release conference call at 8:30 am ET, Thursday, November 14, 2019 (9:30pm Thursday November 14, 2019 Singapore).

 

To join the webcast, please visit the 'Events & Presentations' section of the Ideanomics corporate website (http://www.ideanomics.com/), or Dial-in Number: (Toll-Free US & Canada): 877-407-3107 or 201-493-6796; for China: +86-400-120-2840. Time permitting, Ideanomics management will answer questions during the live Q&A session.

 

A replay of the earning call will be available soon after the conclusion of the event.

 

Ideanomics Third Quarter 2019 Operating Results

 

Revenue for the three months ended September 30, 2019 was $3.1 million as compared to $43.7 million for the same period in 2018, a decrease of approximately $40.6 million, or 93%. The decrease was mainly due to a change to our business focus from logistics management to Electric Vehicles and Fintech businesses.  Our business strategy and the primary goal for entering the crude oil and electronic trading businesses was to learn about the needs of buyers and sellers in these industries that rely heavily on the shipment of goods. Our activities in the crude oil trading and electronic trading business have been successful in various aspects in 2018, and for strategic reasons we have now phased out of our crude oil trading business and electronics trading business so that we can work towards enabling the application of our Fintech Ecosystem for other useful cases that we have identified.

 

 

 

 

Cost of revenues was approximately $0.2 million for the three months ended September 30, 2019, as compared to $42.8 million for the three months ended September 30, 2019, a decrease of approximately $42.6 million, or 99%. From a comparability perspective, the cost of revenue during 2018 is not necessarily indicative of the Electric Vehicles and Fintech businesses in 2019. The cost of revenue during 2018 was primarily associated with the logistics management business (oil trading and electronics trading), which traditionally has a very high cost of revenue and low gross margin, while the cost of revenue during the third quarter of 2019 is primarily associated with subsidiaries including Grapevine and DBOT. 

 

Our gross profit for the three months ended September 30, 2019 was approximately $2.9 million, as compared to $0.9 million during the same period in 2018, representing an increase of 231%. The gross profit ratio for the three months ended September 30, 2019 was 92%, as compared to 2% during the same period in 2018.

 

Selling, general and administrative expenses for the three months ended September 30, 2019 was $7.8 million as compared to $4.3 million for the same period in 2018, an increase of approximately $3.5 million or 79%. Majority of the increase was due to:

 

- an increase of $2.6 million in share-based compensation expense primarily related to the stock options granted to employees and directors during Q1 2019;
- an increase of $0.3 million in office related expenses; and
- an increase of $0.3 million in insurance expenses

 

Professional fees are generally related to public company reporting and governance expenses as well as legal fees related to business transition and expansion. Our professional fees for the three months ended September 30, 2019 was $1.4 million as compared to $1.9 million for the same period in 2018, a decrease of approximately $0.5 million. The decrease was related to a decrease in legal, valuation, audit and tax as well as fees associated with continuing to build out our technology ecosystem and establishing strategic partnerships and M&A activity as part of this technology ecosystem.

 

Net loss per share for the quarter ended September 30, 2019 was $(0.11) per share, as compared to a loss per share for the same period in 2018 of $(0.10) per share. As of September 30, 2019, the company had cash of $1.7 million, total assets of $164.8 million, total liabilities of $47.3 million and total equity of $116.2 million.

 

 

 

 

About Ideanomics

Ideanomics is a global Financial Technology (Fintech) company for transformative industries. Ideanomics combines deal origination and enablement with the application of technologies such as artificial intelligence, blockchain, and others as part of the next- generation of smart financial services. Our projects in New Energy Vehicle markets, Fintech, and advisory services provide our customers and partners better efficiencies, technologies, and access to global markets.

 

Ideanomics, through its investments, along with its partners curate innovation around the globe through hubs and centers that foster a pipeline of technological excellence in cleantech, fintech, tradetech, agritech, regtech, insuretech, playtech, healthtech, cyber security, and more.

 

The company is headquartered in New York, NY, and has offices in Beijing, China. It also has a planned global center for Technology and Innovation in West Hartford, CT, named Fintech Village.

 

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements". All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties, and include statements regarding our intention to transition our business model to become a next-generation financial technology company, our business strategy and planned product offerings, our intention to phase out our oil trading and consumer electronics businesses, and potential future financial results. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and uncertainties, such as risks related to: our ability to continue as a going concern; our ability to raise additional financing to meet our business requirements; the transformation of our business model; fluctuations in our operating results; strain to our personnel management, financial systems and other resources as we grow our business; our ability to attract and retain key employees and senior management; competitive pressure; our international operations; and other risks and uncertainties disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, and similar disclosures in subsequent reports filed with the SEC, which are available on the SEC website at www.sec.gov.. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

 

Investor Relations and Media Contact

Tony Sklar, VP of Communications

55 Broadway, 19th Floor New York, New York 10006

Email: ir@ideanomics.com

www.ideanomics.com

Tel: +1.212.206.1216

 

 

 

  

IDEANOMICS, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

    September 30, 2019     December 31, 2018  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 1,686,596     $ 3,106,244  
Accounts receivable, net     2,941,245       19,370,665  
Licensed content, current     -       16,958,149  
Prepayments     1,013,384       2,042,041  
Other current assets     2,371,913       3,594,942  
Total current assets     8,013,138       45,072,041  
Property and equipment, net     14,504,993       15,029,427  
Intangible assets, net     81,960,331       3,036,352  
Goodwill     10,028,073       704,884  
Long-term investments     42,159,313       26,408,609  
Operating lease right of use assets     6,845,031       -  
Other non-current assets     1,252,797       3,983,799  
Total assets   $ 164,763,676     $ 94,235,112  
                 
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY                
Current liabilities: (including amounts of the consolidated VIEs without recourse to Ideanomics, Inc. See Note 4)                
Accounts payable   $ 1,543,291     $ 19,265,094  
Deferred revenue     458,894       405,929  
Amount due to related parties     2,565,812       800,822  
Other current liabilities     9,141,870       5,321,697  
Current portion of operating lease liabilities     912,271       -  
Convertible promissory note due to related parties     1,288,032       4,140,055  
Total current liabilities     15,910,170       29,933,597  
Deferred tax liabilities     -       513,935  
Asset retirement obligations     6,392,500       8,000,000  
Convertible promissory note due to related parties – long term     3,000,000       -  
Convertible note - long term     12,627,531       11,313,770  
Promissory note - long term     3,000,000       -  
Operating lease liability-long term     6,329,533       -  
Total liabilities     47,259,734       49,761,302  
Commitments and contingencies (Note 18)                
Convertible redeemable preferred stock:                
Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of September 30, 2019 and December 31, 2018     1,261,995       1,261,995  
Equity:                
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 132,696,071 shares and 102,766,006 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively     132,696       102,765  
Additional paid-in capital     255,737,318       195,779,576  
Accumulated deficit     (138,468,441 )     (149,975,302 )
Accumulated other comprehensive loss     (1,557,346 )     (1,664,598 )
Total IDEX shareholder’s equity     115,844,227       44,242,441  
Non-controlling interest     397,720       (1,030,626 )
Total equity     116,241,947       43,211,815  
Total liabilities, convertible redeemable preferred stock and equity   $ 164,763,676     $ 94,235,112  

 

 

 

  

IDEANOMICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,     September 30,     September 30,  
    2019     2018     2019     2018  
Revenue from third parties   $ 249,512     $ 43,707,937     $ 949,384     $ 362,628,296  
Revenue from related party     2,854,178       -       43,554,178       -  
Total revenue     3,103,690       43,707,937       44,503,562       362,628,296  
Cost of revenue from third parties     243,360       42,844,876       750,290       115,729,433  
Cost of revenue from related parties     -       -       466,894       244,110,132  
Gross profit     2,860,330       863,061       43,286,378       2,788,731  
                                 
Operating expenses:                                
Selling, general and administrative expense     7,769,503       4,333,259       18,442,280       16,861,425  
Research and development expense     -       667,416       -       1,393,025  
Professional fees     1,388,842       1,927,431       3,918,461       3,280,729  
Impairment of property and equipment     2,298,887       -       2,298,887       -  
Depreciation and amortization     806,481       291,512       1,420,480       314,737  
Total operating expense     12,263,713       7,219,618       26,080,108       21,849,916  
                                 
Income (loss) from operations     (9,403,383 )     (6,356,557 )     17,206,270       (19,061,185 )
                                 
Interest and other income (expense)                                
Interest expense, net     (639,395 )     (145,610 )     (1,955,476 )     (201,782 )
Equity in loss of equity method investees     (40,369 )     (13,882 )     (606,390 )     (44,316 )
Gain on disposal of subsidiaries     1,057,363       -       1,057,363       -  
Loss on remeasurement of DBOT investment     (3,178,702 )     -       (3,178,702 )     -  
Other     (99,997 )     (925,771 )     (155,946 )     (558,271 )
Income (loss) before income taxes and non-controlling interest     (12,304,483 )     (7,441,820 )     12,367,119       (19,865,554 )
                                 
Income tax benefit     -       -       513,935       -  
                                 
Net income (loss)     (12,304,483 )     (7,441 z,820)     12,881,054       (19,865,554 )
                                 
Net (income) loss attributable to non-controlling interest     (1,407,384 )     254,973       (1,374,193 )     637,314  
                                 
Net income (loss) attributable to IDEX common shareholders   $ (13,711,867 )   $ (7,186,847 )   $ 11,506,861     $ (19,228,240 )
                                 
Earnings (loss) per share                                
Basic   $ (0.11 )   $ (0.10 )   $ 0.10     $ (0.27 )
Diluted   $ (0.11 )   $ (0.10 )   $ 0.10     $ (0.27 )
                                 
Weighted average shares outstanding:                                
Basic     127,609,748       74,063,495       113,964,933       71,574,303  
Diluted     127,609,748       74,063,495       118,319,893       71,574,303