Tony Sklar - VP of Communications Brett McGonegal - Co-CEO Federico Tovar - CFO Alf Poor - President and COO Bruno Wu - Special Advisor

Greetings, and welcome to Ideanomics Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Tony Sklar, Vice President of Communications for Ideanomics. Thank you. You may begin.

Thank you, operator, and welcome to the Ideanomics third quarter 2018 earnings conference call. Joining me today, I am pleased to have Dr. Bruno Wu, Special Advisor to Ideanomics; Mr. Brett McGonegal, our CEO; Mr. Federico Tovar, our Chief Financial Officer; and Mr. Alf Poor, President and Chief Operations Officer at Ideanomics and President of the Ideanomics FinTech Village in West Hartford, Connecticut. A webcast of today's call will be archived and available in the Events and Presentations section of our corporate website for a minimum of 30 days. As a reminder, this conference call is being recorded. I'd like to remind you that on this call management's prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements during the question-and-answer session. These forward-looking statements are subject to risk and uncertainties and actual results may differ materially. When used in this call words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, or similar expressions as they relate to Ideanomics, Inc. are as such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ from those anticipated by Ideanomics at this time. In addition, other risks are more fully described in Ideanomics public filings with the U.S. Securities and Exchange Commission and can be reviewed at www.sec.gov. Today November 14, 2018, the company will file its 10-Q with the SEC and has issued a press release announcing its financial results. The format for today's call will be as follows. Mr. Brett McGonegal, our CEO will speak to the company's overview and business strategy as well as the activities and developments for the third quarter 2018. Mr. Federico Tovar, our CFO will speak to the company's operating and financial results and metric strategy. Mr. Alf Poor, our President and Chief Operations Officer will be providing an update regarding our FinTech Village campus in West Hartford, Connecticut. And Dr. Bruno Wu, our Special Advisor to Ideanomics will be answering questions that have been sent in from our investment community. I'll now turn the call over to our Co-CEO, Mr. Brett McGonegal.

Good morning. My name is Brett McGonegal and I'm the Co-CEO of Ideanomics. Most recently, I was the Founding Member and CEO of Hong Kong Investment Bank, The Reorient Group which is listed on the Hong Kong Stock Exchange. At Reorient, I developed the group's investment banking business. Prior to Reorient, I was the Co-Head of Equity Sales and Trading at Cantor Fitzgerald in Hong Kong. I was also responsible for the development of the firm's Corporate Finance Investment Banking capabilities. Prior to Hong Kong, I was the Senior Managing Director at Charles Schwab Capital Markets and helped build the large-scale institutional sales and trading platform that was sold to UBS in 2003. I'm also a frequent guest on Bloomberg and CNBC TV. Business overview, Ideanomics has a tremendous opportunity ahead of itself that will be impactful in the coming quarters. We are determined to become a prominent global player in the FinTech service arena and the transforming digital economy through establishing a global compliant network of financial technology, user community and digital asset production. We intend to build the branded financial product group with access to leverage Blockchain. To achieve this, Ideanomics provides an end-to-end platform-as-a-service FinTech solution which supports diverse asset verticals. With the comprehensive ecosystem of digital products and services, we are deploying traditional assets and capital into a new world paradigm for the benefit of the investment community. Our strategy, Ideanomics has identified key industries which tend to benefit greatly from the development of the digital economy. To fully unlock the economic potential of various asset classes, we will create a FinTech infrastructure to deliver artificial intelligence grading services, asset origination, security token issuance support and distribution. Additionally, by supporting and fostering digital communities globally, we can utilize our AI technology to assist financing, investment services and help create asset securitization. As the transition takes shape from conventional platforms to the digital universe, the investment community will look for institutionally credible counter parties to assist, guide and navigate the ever-changing landscape. It is our goal to become one of the premier trusted counterparties ushering in this new era. Ideanomics will act as a bridge between the old and the new positioning itself to be a critical player in the institutional adoption of digital finance, while at the same time becoming a vital conduit for the next leg of digital adoption. Now moving onto some third quarter operational highlights, 2018 has proven to be a transitional year for Ideanomics, that has seen us migrate away from the legacy business operations and onto a focus of digital finance solutions enabled by Blockchain and AI. As with any transition we have experienced some volatility as it relates to top and bottom line. The rightsizing of staff levels as it relates to a legacy cable business. In addition to hiring a best-in-class executive team capable of positioning the business to be competitive and successful in 2019 has put a strain on the bottom-line performance and thus has resulted in us falling short of our previous forecast. We want to clearly articulate to the investment community and take responsibility for failing to meet EBITDA guidance. We are making an earnings warning at this time. Federico, the CFO will address in more detail later in the call. We have experienced a shortfall in product creation that has led us to delay two anticipated products to be released to the market this year. We have addressed these issues and believe we have positioned the products for a successful launch in early 2019. As part of our efforts to transform the business, we have been active in deal origination as well as targeting and acquisition of businesses which expand our strength and further increase our footprint in the industry. To highlight a couple from Q3, the acquisition of Grapevine, which is a proven influential market platform and brand has brought us a great opportunity in the digital space. Also, the investment into ownership of Asia Times and establishment of a financial JV company together will allow us to put new products into the market. These two deals highlight our focus and access to digital media and distribution and will be important parts of our media branded product creation and distribution. Both investments will yield margin opportunities in early 2019. While there are several other deals concluded in Q3. We have highlighted these deals I just covered as each of these represents a significant opportunity for Ideanomics that demonstrate to the market and our shareholders the applicability of our FinTech products and services to support large scale deal origination. Collectively, these deals have the potential to realize significant revenues, improve the viability of our business model. While we are encouraged by our ability to capture these deals in a relatively short time span and we continue to pursue other opportunities, our product teams are focused on execution. I'll now turn over to the moderator Tony. Thank you.

Thank you, Brett so much. I am now going to turn the call over to our CFO, Mr. Federico Tovar.

Thank you, Tony and thank you to everyone joining our call. The third quarter was very much a transformational quarter marked by various investments across human capital and therefore infrastructure needed to build out our U.S. operations and the resources necessary to position Ideanomics towards unlocking FinTech related revenue. While we have already exceeded our top-line revenue guidance for the year, we did not generate a profit in the third quarter due to the transformation of the company is currently undergoing. Nonetheless, we've had significant achievements across the following areas. Number one, we've been focused on building out a world class management team with deep capital markets expertise as well as Blockchain, FinTech and regulatory compliance experience needed to succeed in our market. Number two, we've signed various deals that are helping to validate our new FinTech business model and position the company towards growth and profitability. Some of these include Grapevine and Asia Times with proven platforms, brands and underlying product. As such, we're completely focused and executing on our vision and building out our new digital products across these asset classes. As it relates to the third quarter financial performance, revenue for the third quarter ended in September 30, 2018 was $43.7 million as compared to $30.2 million for the same period in 2017, an increase of approximately $13.5 million or approximately 45%. This increase was primarily due to our expanding business with consumer electronics. Cost of revenue was $42.8 million for the quarter-ended September 30, 2018 as compared to $28.3 for the quarter-ended September 30, 2017. Our cost of revenues increased by $14.6 million, which is in line with our increasing revenue. Gross profit for the ended in September 30, 2018 was approximately $0.8 million or 2% as compared to the gross profit of $2 million or 6.5% during the same period in 2017. SG&A expense for the third quarter was $4.3 million as compared to $3.7 million for the same quarter in 2017, an increase of approximately $0.6 million or 18%. The majority of the increase was due to our efforts in building out our management team in the U.S. and investing our establishing our infrastructure as part of our transformation year. Professional fees for the three months ended September 30, 2018 were $1.9 million as compared to $0.8 million for the same period in 2017, an increase of approximately $1.1 million. This increase was related to public company reporting on governance expenses as well as legal fees related to our business transformation and expansion of ecosystem. Our loss per share for the three months ended in September 30, 2018 was $0.10 per share as compared to our loss per share for the same period in 2017 of $0.05 per share. As of September 30, 2018, the company had cash of $15.7 million, total assets of $167.7 million and total equity of $43.4 million. As mentioned earlier the stream in our bottom-line performance is primarily result of the investments needed to undergo such transformation as well as, a shortfall in product creation that has led us to delay two anticipated products to be released to the market this year, primarily due to the technical, legal and operational capabilities that are needed. We have addressed these issues however and believe that we have precision of products for a successful launch in early 2019. The company is committed to the successful product launches to be done in a regulatory compliant manner, while continuing to enhance our legal origination activities well in 2019. These deals have the potential to drive significant revenues for the business and prove the long-term liability of our Ideanomics business model. Over the past three quarters, Ideanomics has been able to continuous transformation from its legacy business to become a prominent player for FinTech services and asset digitization, through establishing a global compliant network of financial technology and digital asset production. Our team of seasoned executives, digital strategists and technology leaders is key to the success of Ideanomics' transformation to become further westernized and we believe that this will assist in further positioning the company towards unlocking FinTech related revenue in 2019. A - Tony Sklar: Thank you so much, Federico. This concludes management's prepared remarks. We will now turn the discussion to our question-and-answer session. We have had many questions regarding the update on our FinTech division Village West Hartford, Connecticut, So, I would like to turn this over to Mr. Al Poor, our Chief Operations Officer and President of Ideanomics and President of Ideanomics FinTech Village, our company's planned global headquarters for technology and innovation. And then over to Dr. Bruno Wu, who will be moderating the rest of our Q&A session.

On October 10, 2018, we officially closed on the purchase of the University of Connecticut's former West Hartford campus. We intend to convert the Former U-Conn Campus into FinTech Village, the company's global headquarters for technology and innovation. And we are thankful for the ongoing support of our state and local partners in Connecticut who are involved in this project. Our multimillion-dollar investment will focus on being an ultrahigh speed computing facility and laboratory for developing new and leading edge FinTech solutions, utilizing artificial intelligence, deep learning, IOT and Blockchain. FinTech Village will foster the highest levels of innovation and bolster the finest and urban design, sustainable green technologies and community connectivity factors. FinTech Village, will help stimulate the local economy in Connecticut and we've committed to 330 high paid job in addition to the many local service providers and others who will benefit from our presence in the area, generating significant tax revenues for the town of West Hartford, Connecticut in general. The company previously announced to hire Newman Architects to plan and design FinTech Village. Newman, our award-winning Connecticut based architecture firm, with extensive experience in the greater Hartford area, including new construction and renovation projects to local stadiums and educational facilities. We are currently underway with a remediation plan and final planning adjustments and look forward to updating our stakeholders in the near future. Thank you very much. I'm now going to turn it over to Bruno Wu.

Our next question is, what is the status of some of our top deals. For example, the National Transportation Capacity Company Limited, NTS. First Auto Loan, China's leading auto financing company and APMEN which a joint venture which means that APEC reported. The Board of Directors is very pleased with all of our future revenue related deals, signed doing the third quarter of 2018. Including a three-year $224 billion deal with National Transportation Capacity Company Limited to support the large scale upgrading our electric buses will in China, which was announced August 20 of 2018. Number two is the First Auto Loan, China's leading auto financing company and now September 11, 2018. And number 3 is a joint venture was APMEN Trade Company Limited, which is the Asia Pacific model electronic port network. APEC online port clearing system which was announced September 2018. These are all examples of highly transformative areas of global business developments where Ideanomics is able to supply vastly scalable digital solutions. Each of these projects are currently in their go to market strategy with those the NTS deal which is National Transportation Capacity and the First Auto Loans, the first asset packages that we could digitize and issued via a hybrid of both digital methods and the traditional methods are all being designed and in the preparatory stage to be launched. So, the Phase 1 is of course to architect in design the product to efficiently employ our platform as a service that includes artificial intelligence and Blockchain solutions. Some of these deals were include traditional type of financing which is speaks to us 2 stage process. Now our STO 2 stage process as to meaning security token offering, as part of the Ideanomics 2 stage of STO market growth, Ideanomics aims to bring Blockchain AI based information for STO market expansion. And it will continue to cooperate with traditional brokerage sales channels, regulatory approved in compliant asset managers, plus major security companies. So far, our technology is leading worldwide in terms of us being able to provide an end-to-end ecosystem for STO. We believe this infrastructure and ecosystem were developing were enable us to assist our customers and derived revenues from fee and connection, in prices of creating marketing and selling these digital securitized assets. Number 3 is we have a few questions for update on DeBug. We're very pleased to talk about investment DeBug which is the short name for the Delaware border trade. Our SEC and FINRA approved alternative trading system, which currently supports over the counter trading activities. A few highlights, Ideanomics is now the largest shareholder in DeBug at 28%. DeBug has their CMA approved by FINRA. We believe that they're strategically positioned to provide regulatory compliance support for the digital economy and working - we're working with the team and DeBug to position them for the required approvals with FINRA and the SEC. A little bit of background, Delaware bought at a trade, DeBug ATS meets the need of the established capital markets. DeBug is a FINRA member firm and a member of the security investment, sorry Securities Investor's Protection Corporation, SIPC. That operates a fully automated auto-execution Alternative Trading System, ATS. DeBug's ecosystem is bringing together funding, tradeable securities, key stakeholders, issuing capabilities and think tank technologies allowing for growth, liquidity and security, transparency. DeBug serves issuers whether the company is getting ready to go public, transferring or entering the U.S. markets as international company. Delaware Border Trade has the resources in support to create greater visibility and liquidity in investment community. Investors Delaware Border Trade promotes captive growth, liquidity, security and transparency to the OTC market. Investors can effectively analyze and trade in a more efficient financial market. Market makers and brokers, DeBug ATS provides an electronic platform for trading over the counter. Equity securities, DeBug ATS delivers products and services that reduce complexity and provide market making opportunities for the OTC dealers community. The next question is, could you please provide an update on Grapevine Logic? We are very excited to speak about Grapevine Logic, the world's leading end-to-end influential marketing platform with now reaching 3.3 billion followers and our shareholders the tremendous that our team has done in continuing to build out their platforms with real and growing business opportunities. Highlight for Q3 for Grapevine, Grapevine recently renewed a campaign for a premier U.S. meal delivery service. Their quarter-over-quarter increase has driven by leveraging micro instances, or YouTube and Instagram where they have been able to acquire leads at cost per acquisition, which is ideal for scaling up their efforts with influential marketing - launched their programmatic capabilities combining their authenticated audience data with proven data service to deliver unmatched targeted audience extension and placement buying across YouTube Facebook, Instagram and Twitter guaranteed brand save. And Grapevine launched their influencer marketing academy. On Product Hunt and was placed the first page as a result of the overwhelming interest and signup. Consumer digital assets serve as a new medium for engaging merchants and service providers through digital membership cards, digital wallets and digital loyalty programs that offer cash for rewards and other token-based reward to enhance communities. These assets can be used the media copyright and licensing and digital collectable, gaming, celebrity fan fair, social media influential marketing activities, loyalty management and consumer facing web and mobile application users. Ideanomics went well transformed the value and relationships using AI technology and Block Chain to enhance consumer marketing and digital asset sales. Through Ideanomics acquisition of Grapevine, we have created an ecosystem that provides broad strategic marketing reach, Grapevine will play a pivotal role in Ideanomics consumer asset digitization strategy. I would like to say in the closing that Ideanomics has accomplished a tremendous amount in a very short period of time. The past 12 months has been a transformational mine a time. From building an experienced management team to support a success, an ecosystem of FinTech solutions with Blockchain and AI-backed tools and technologies and then adding the right type of assets-based deal flow to provide the best margins of value for stakeholders in the months to. Q3 has been the quarter of investment for the long-term strategy of the company, where at the end of a completing the greatest transformation for the company. Our balance sheet and cash flow allow us to continue to execute our strategies as we strive to deliver lasting value for stockholders. Thank you very much. Back to you, Tony.

Dr. Bruno Lu, it's an honor and pleasure to have your experience and vision helping guide our growing company into a successful FinTech service provider. We encourage our community to continue reach to us and we can answer any questions that you may have individually, you can send your questions to us at ir@ideanomics.com. We remind listeners about our opening bell ring ceremony at the NASDAQ November 23, 2018. We'd like to thanks all of our listeners, shareholders and analysts and other who have taken the time to listen to this earnings call, and we urge all of you to refer to our latest SEC filings for any additional information that you may need. This concludes our Q&A portion of the iDeck 2018 third quarter investor earnings call, to be alerted to news and events in a timely manner the company recommends following us on Twitter, with our handle @ideanomicshq, signing up for the SEC alert at secfillings.com and exploring our website at www.ideanomic.com. This call will be available on our website www.ideanomics.com, please click on the investor section and you will find the link there, please don't forget to subscribe to our newsletter and this way you won't miss on any of our updates. Thank you to all of those who participate today on and listening on today's call.

Thank you. This concludes today's teleconference. Thank you for your participation. You may now disconnect your lines.