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Classified in: Science and technology, Business
Subjects: ERN, CCA

Ideanomics Reports Q3 2019 Financial Results


NEW YORK, Nov. 14, 2019 /PRNewswire/ -- 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).

Ideanomics (PRNewsfoto/Ideanomics)

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 earnings 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:

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)




(7,441,820)




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


 

SOURCE Ideanomics


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