IDEANOMICS, INC. [IDEX] Filings

10-Q 1 idex-20220930.htm 10-Q idex-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ 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 jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1441 Broadway, Suite 5116

New York, NY 10018

(Address of principal executive offices)

212-206-1216

(Registrant’s telephone number, including area code)

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 Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “larger accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 563,602,888 shares as of November 7, 2022.

Table of Contents

QUARTERLY REPORT ON FORM 10-Q

OF IDEANOMICS, INC.

FOR THE PERIOD ENDED September 30, 2022

TABLE OF CONTENTS



PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		41

Table of Contents

Use of Terms

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company,” “the Company,” “IDEX,” or “Ideanomics,” are to the business of Ideanomics, Inc. (formerly known as “Seven Star Cloud Group, Inc.,” “SSC” and “Wecast Network, Inc.,”) a Nevada corporation, and its consolidated subsidiaries.

The following is a glossary of certain terms used in this report:


$			refers to the legal currency of the United States.



ASC			refers to Accounting Standards Codification.
ASC 205			refers to Accounting Standards Codification Topic 205, Presentation of Financial Statements.





ASC 718			refers to Accounting Standards Codification Topic 718, Stock Compensation.
ASC 810			refers to Accounting Standards Codification Topic 810, Consolidation.




ASEAN			refers to the Association of Southeast Asian Nations.
ASU 2016-13			refers to Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326).
ASU 2019-12			refers to Accounting Standards Update 2019-12, Income Taxes (Topic 740).
ASU 2020-06			refers to Accounting Standards Update 2020-06, Debt (Topic 470).
ASU 2021-04			refers to Accounting Standards Update 2021-04, Earning Per Share.



BEV			refers to battery electric vehicles.
Board			refers to the Company's Board of Directors.
CaaS			refers to Charging as a Service.


China			refers to the People’s Republic of China.
Chinese			refers to the People’s Republic of China.





DBOT			refers to the Delaware Board of Trade Holdings, Inc. which is holding company for the Company’s FINRA Registered Broker Dealer. The Company owns 99% of the share capital Delaware Board of Trade Holdings, Inc. On September 20, 2021 the name was changed to Justly Holdings Inc. (JUSTLY).


Dr. Wu.			refers to Dr. Bruno Wu., the former Chairman of the Company as of December 31, 2020.

Energica			refers to Energica Motor Company, S.P.A., manufacturer of high-performance electric motorcycles.


EV			refers to electric vehicles, particularly battery operated electric vehicles.
Exchange Act			refers to the Securities Exchange Act of 1934, as amended.
FASB			refers to the Financial Accounting Standards Board.
FCEV			refers to fuel cell electric vehicles.


FINRA			refers to the Financial Industry Regulatory Authority.
Fintech			refers to financial technology.
Fintech Village			refers to the Global Headquarters for Technology and Innovation in Connecticut.
FNL			refers to FNL Technologies, Inc., the owner and operator of the social media platform Hoo.be.



GAAP			refers to generally accepted accounting principles in the United States of America.

Glory			refers to Glory Connection Sdn. Bhd.
Grapevine			refers to Grapevine Logic, Inc. a previously wholly-owned subsidiary of Ideanomics focused on influencer marketing.




Ideanomics China			refers to Mobile Energy Global (MEG) the subsidiary that holds all of the Company’s EV.
Ideanomics			refers to Ideanomics Inc.



JUSTLY			refers to the company formerly known as DBOT - Delaware Board of Trade Holdings, Inc. which is holding company for the Company’s FINRA Registered Broker Dealer. The Company owns 99% of the share capital Delaware Board of Trade Holdings, Inc. On September 20, 2021 the name was changed to Justly Holdings Inc. (JUSTLY).


MDI Fund			refers to the Minority Depository Institution Keepers Fund.

Table of Contents


Medici			refers to Medici Motor Works.








NASDAQ			refers to the Nasdaq Stock Market.


New Energy			refers to Qingdao Medici New Energy Vehicle Co., Ltd. , formerly known as Qingdao Chengyang Mobo New Energy Vehicle Sales Service Company Limited.


OEM			refers to original equipment manufacturer.
OPEX			refers to the day-to-day operating expenses of a business.
Orangegrid			refers to Orangegrid LLC.
PEA			refers to Prettl Electronics Automotive.
Qianxi			refers to Guizhou Qianxi Green Environmentally Friendly Taxi Service Co.


PCAOB			refers to the Public Company Accounting Oversight Board.
PRC			refers to the People’s Republic of China.


RMB			refers to the legal currency of the PRC.



SAFE			refers to Simple Agreement for Future Equity.
Sarbanes-Oxley Act			refers to Section 404 of the Sarbanes-Oxley Act of 2002, as amended.


SEC			refers to the United States Securities and Exchange Commission.
SEDA			refers to standby equity distribution agreement.
SDPA			refers to secured debenture purchase agreement.
Securities Act			refers to the Securities Act of 1933, as amended.


Shenma			refers to Sichuan Shenma Zhixing Technology Co.
Silk			refers to Silk EV Cayman LP, is an Italian engineering and design services company.
Silk-FAW			refers to Silk, an Italian engineering and design services company that has recently partnered with FAW to form a new company (Silk-FAW) to produce fully electric, luxury vehicles for the Chinese and Global auto markets.
Silk EV Note			refers to the convertible promissory note Ideanomics entered into with Silk EV Cayman LP.


Solectrac			refers to Solectrac, Inc., which was acquired on June 11, 2021.
SSE			refers to Seven Stars Energy PTD LTD.

SSSIG			refers to Sun Seven Stars Investment Group Limited, a British Virgin Islands corporation, an affiliate of Dr. Wu, the former Chairman of the Company.

The 2010 Plan			refers to the 2010 Stock Incentive Plan.
The Company			refers to Ideanomics Inc.
Timios			refers to Timios Holdings Corp. and its affiliates which was acquired on January 8, 2021.
Timios New Shares			refers to the new common stock of Timios.
TM2			refers to Technology Metals Market Limited, a London based digital commodities issuance and trading platform for technology metals.
Tree Technologies			refers to Tree Technologies Sdn. Bhd., headquartered in Kuala Lumpur, Malaysia and through its Treeletrik brand sells EV bikes, scooters, and batteries throughout the ASEAN region.

U.S. dollars			refers to the legal currency of the United States.
U.S. GAAP			refers to accounting principles generally accepted in the United States of America.
US Hybrid			refers to US Hybrid Corporation, which was acquired on June 20, 2021.
USD			refers to the legal currency of the United States.
VaaS			refers to Vehicle as a Service.

VIA			refers to VIA Motors International, Inc. a business that produces commercial battery electric skateboard architecture.



WAVE			refers to Wireless Advanced Vehicle Electrification, Inc. which was acquired on January 15, 2021.
WAVE Agreement			refers to the agreement and plan of merger the Company entered into to acquire 100% of Wireless Advanced Vehicle Electrification, Inc.



YA II PN			refers to YA II PN, Ltd.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

IDEANOMICS, INC.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


			Page
Unaudited Condensed Consolidated Balance Sheets			6
Unaudited Condensed Consolidated Statements of Operations			7
Unaudited Condensed Consolidated Statements of Comprehensive Loss			8
Unaudited Condensed Consolidated Statements of Equity			9
Unaudited Condensed Consolidated Statements of Cash Flows			11
Notes to Unaudited Condensed Consolidated Financial Statements			13

Table of Contents

IDEANOMICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD in thousands)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	25,186	$	269,863
Accounts receivable, net	6,000		3,338
Contract assets	3,767		2,772
Amount due from related parties	534		266

Notes receivable from third parties	83,863		54,907
Notes receivable from related party	400		697
Inventory	29,530		6,159
Prepaid expenses	15,075		20,015
Other current assets	5,673		4,490
Total current assets	170,028		362,507
Property and equipment, net	10,170		2,905
Intangible assets, net	78,645		42,546
Goodwill	68,711		16,161
Operating lease right of use assets	16,835		12,827
Financing lease right of use assets	1,376		—
Long-term investments	23,319		35,588
Other non-current assets	1,235		903
Total assets	$	370,319	$	473,437

LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY
Current liabilities
Accounts payable	$	22,782	$	6,674
Deferred revenue (including customer deposits of $2,681 and $3,163 as of September 30, 2022 and December 31, 2021, respectively)	3,540		5,392
Accrued salaries	7,916		8,957
Amount due to related parties	2,223		1,102
Other current liabilities	8,831		7,137
Current portion of operating lease liabilities	3,878		3,086
Current portion of financing lease liabilities	348		—
Current contingent consideration	767		648
Promissory note-short term	2,424		312
Convertible promissory note due to third-parties-short term	9,250		57,809


Total current liabilities	61,959		91,117
Promissory note-long term	1,559		—
Operating lease liability-long term	12,808		9,647
Financing lease liability-long term	1,253		—
Non-current contingent consideration	100		350
Deferred tax liabilities	7,972		5,073
Other long-term liabilities	770		620

Total liabilities	86,421		106,807
Commitments and contingencies (Note 19)
Convertible redeemable preferred stock and Redeemable non-controlling interest:
Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of September 30, 2022 and December 31, 2021	1,262		1,262

Equity:
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 517,134,223 shares issued and outstanding as of September 30, 2022 and 497,272,525 and 344,861,295 shares issued and outstanding as of December 31, 2021,	517		497
Treasury Stock	4,639		—
Additional paid-in capital	980,232		968,066
Accumulated deficit	(709,451)		(605,758)
Accumulated other comprehensive income	(13,162)		222
Total Ideanomics, Inc. shareholders' equity	262,775		363,027
Non-controlling interest	19,861		2,341
Total equity	282,636		365,368
Total liabilities, convertible redeemable preferred stock, redeemable non-controlling interest and equity	$	370,319	$	473,437

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

IDEANOMICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD in thousands)


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Revenue from sales of products (including from a related party of $10, $0 and $10, $1, for the three and nine months ended September 30, 2022 and 2021, respectively)	$	15,746	$	9,676	$	55,157	$	21,149
Revenue from sales of services	8,412		16,336		28,461		64,339
Other revenue	120		$	569	253		$	1,159
Total revenue	24,278		26,581		83,871		86,647
Cost of revenue from sales of products (including from a related party of $0, $4 and $0, $8 for the three and nine months ended September 30, 2022 and 2021, respectively)	18,198		9,934		58,963		20,445
Cost of revenue from sales of services	6,691		12,165		23,879		41,441
Cost of other revenue	48		531		179		1,063
Total cost of revenue	24,937		22,630		83,021		62,949
Gross profit	(659)		3,951		850		23,698

Operating expenses:
Selling, general and administrative expenses	37,710		37,750		113,555		74,419
Research and development expense	849		184		2,543		429

Asset impairment	378		15,183		1,030		15,183
Goodwill impairment	—		5,850		—		5,850
Change in fair value of contingent consideration, net	—		(5,099)		(131)		(7,006)
Litigation settlement	2		216		44		5,216
Depreciation and amortization	2,271		1,779		5,838		4,548
Total operating expenses	41,210		55,863		122,879		98,639

Loss from operations	(41,869)		(51,912)		(122,029)		(74,941)

Interest and other income (expense):
Interest income	957		417		2,560		812
Interest expense	(456)		(308)		(1,523)		(1,683)

Gain on extinguishment of debt	—		300		—		300
Loss on disposal of subsidiaries, net	(30)		—		(218)		(1,264)
Gain on remeasurement of investment	—		—		10,965		2,915
Other income, net	2,574		8		4,460		507
Loss before income taxes and non-controlling interest	(38,824)		(51,495)		(105,785)		(73,354)

Income tax benefit	400		944		925		9,971
Impairment of and equity in gain (loss) of equity method investees	(429)		(1,447)		(2,357)		(2,062)

Net loss	(38,853)		(51,998)		(107,217)		(65,445)



Net loss attributable to common shareholders	(38,853)		(51,998)		(107,217)		(65,445)

Net loss attributable to non-controlling interest	1,439		187		3,525		459

Net loss attributable to Ideanomics, Inc. common shareholders	$	(37,414)	$	(51,811)	$	(103,692)	$	(64,986)

Earnings (loss) per share
Basic	$	(0.08)	$	(0.11)	$	(0.21)	$	(0.15)
Diluted	$	(0.08)	$	(0.11)	$	(0.21)	$	(0.15)

Weighted average shares outstanding:
Basic	494,061,205		473,829,962		496,392,410		432,989,602
Diluted	494,061,205		473,829,962		496,392,410		432,989,602

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

IDEANOMICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (USD in thousands)


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net loss	$	(38,853)	$	(51,998)	$	(107,217)	$	(65,445)
Other comprehensive income (loss), net of nil tax:
Changes in fair value of available-for-sale securities	—		4		—		(16)
Foreign currency translation adjustments	(8,127)		(951)		(15,930)		(1,683)
Comprehensive loss	(46,980)		(52,945)		(123,147)		(67,144)

Comprehensive loss (gain) attributable to non-controlling interest	3,075		273		6,756		864
Comprehensive loss attributable to Ideanomics, Inc. common shareholders	$	(43,905)	$	(52,672)	$	(116,391)	$	(66,280)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

IDEANOMICS, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) (USD in thousands)


	Nine Months Ended September 30, 2021
	Common Stock	Par Value		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Ideanomics Shareholders’ equity		Non- controlling Interest*		Total Equity
Balance, January 1, 2021	344,861,295	$	345	$	531,866	$	(349,747)	$	1,231	$	183,695	$	3,739	$	187,434
Share-based compensation	—	—		2,040		—		—		2,040		—		2,040
Contingent shares	—	—		7,658		—		—		7,658		—		7,658
Common stock issuance for acquisition	10,181,299	10		32,367		—		—		32,377		—		32,377
Common stock issuance for professional fee	440,909	—		1,162		—		—		1,162		—		1,162
Common stock issued under employee stock incentive plan	475,000	—		251		—		—		251		—		251
Common stock issuance	17,615,534	18		53,389		—		—		53,407		—		53,407
Common stock issuance for convertible note	45,895,763	46		140,080		—		—		140,126		—		140,126
Net income (loss)	—	—		—		(6,483)		—		(6,483)		(236)		(6,719)
Foreign currency translation adjustments, net of nil tax	—	—		—		—		(380)		(380)		(313)		(693)
Balance, March 31, 2021	419,469,800	$	419	$	768,813	$	(356,230)	$	851	$	413,853	$	3,190	$	417,043
Share-based compensation	—	—		2,007		—		—		2,007		—		2,007
Common stock issuance for at the market offering	25,301,190	25		74,322		—		—		74,347		—		74,347
Common stock issued under employee Stock Incentive Plan	4,590,000	5		7,735		—		—		7,740		—		7,740
Common stock issuance for acquisition	6,733,497	7		21,120		—		—		21,127		—		21,127
Common stock issued pertain to SEDA	10,000,000	10		27,290		—		—		27,300		—		27,300
Common stock issuance for professional fee	260,000	—		656		—		—		656		—		656
Changes in available-for-sale securities fair value	—	—		—		—		(20)		(20)		—		(20)
Net income (loss)*	—	—		—		(6,695)		—		(6,695)		(267)		(6,962)
Foreign currency translation adjustments, net of nil tax	—	—		—		—		(33)		(33)		(7)		(40)
Balance, June 30, 2021	466,354,487	$	466	$	901,943	$	(362,925)	$	798	$	540,282	$	2,916	$	543,198
Share-based compensation	—	—		15,187		—		—		15,187		—		15,187
Contingent Shares	—	—		(6,138)		—		—		(6,138)		—		(6,138)
Common stock issuance for at the market offering	7,495,997	7		17,737		—		—		17,744		—		17,744
Common stock issued under employee Stock Incentive Plan	4,051,021	6		293		—		—		299		—		299
Common stock issuance for Controlled Equity Offering Sales	1,988,401	2		4,201		—		—		4,203		—		4,203
Changes in available-for-sale securities fair value	—	—		—		—		4		4		—		4
The effects of changes in exchange rate of RNCI	—	—		(9)		—		—		(9)		—		(9)
Common stock issuance for acquisition	2,011,617	2		6,302		—		—		6,304		—		6,304
Net income (loss)	—	—		—		(51,811)		—		(51,811)		(303)		(52,114)
Foreign currency translation adjustments, net of nil tax	—	—		—		—		(866)		(866)		(85)		(951)
Balance, September 30, 2021	481,901,523	$	483	$	939,516	$	(414,736)	$	(64)	$	525,199	$	2,528	$	527,727

__________________________

* Excludes accretion of dividend for redeemable non-controlling interest.

Table of Contents

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

IDEANOMICS, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) (USD in thousands) Continued


	Nine months ended September 30, 2022
	Common Stock	Par Value	Additional Paid-in Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Ideanomics Shareholders’ equity		Non- controlling Interest*		Total Equity
Balance, January 1, 2022	497,272,525	497	$	968,066	$	—	$	(605,758)	$	222	$	363,027	$	2,341	$	365,368
Share-based compensation	—	—	2,355		—		—		—		2,355		—		2,355

Common stock issuance for professional fee	350,000	1	434		—		—		—		435		—		435
Common stock issued under employee stock incentive plan	125,000	—	66		—		—		—		66		—		66


Tax withholding paid for net share settlement of equity awards	—	—	(83)		—		—		—		(83)		—		(83)
Deconsolidation of subsidiary	—	—	—		—		—		—		—		(236)		(236)
Acquisition of Energica	—	—	—		—		—

IDEANOMICS, INC. [IDEX] Filings
10-Q	[2022-11-09]
S-1	[2022-09-22]
10-Q	[2022-09-09]
10-Q	[2022-09-09]
10-K	[2022-09-02]
10-Q	[2021-11-23]
10-Q	[2021-08-16]
10-Q	[2021-05-17]
10-K	[2021-03-31]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-11]
10-K	[2020-03-16]
10-Q	[2019-11-14]
10-Q	[2019-08-14]
10-Q	[2019-05-02]
10-K	[2019-04-01]
10-Q	[2018-11-14]
10-Q	[2018-08-13]
10-Q	[2018-05-15]
S-1	[2018-04-20]
10-K	[2018-03-30]
10-Q	[2017-11-13]
10-Q	[2017-08-14]
10-Q	[2017-05-15]
10-K	[2017-03-31]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
10-Q	[2016-05-16]
10-K	[2016-03-30]
10-Q	[2015-11-16]
10-Q	[2015-08-13]
10-Q	[2015-05-14]
10-K	[2015-03-30]
10-Q	[2014-11-13]
10-Q	[2014-08-14]
10-Q	[2014-05-15]
10-K	[2014-03-31]
10-Q	[2013-11-14]
10-Q	[2013-08-14]
10-Q	[2013-05-15]
10-K	[2013-04-08]
10-Q	[2012-11-14]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-30]