Greetings, and welcome to the Ideanomics Q4 2019 Conference Call. At this time, all participants are in listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Tony Sklar. Please go ahead, Tony.

Thank you, operator and welcome to the Ideanomics Q4 and 2019 earnings conference call. Joining me today, I'm pleased to have Mr. Alfred Poor, Chief Executive Officer and Mr. Conor McCarthy, Chief Financial Officer. A webcast and today's call will be archived available in events and presentation section of our corporate website for a minimum of 30 days. As a reminded, this is conference is being recorded. During the call, we will be making forward looking statements such as dialogue regarding our revenue expectations or forecasts for the quarters and fiscal year 2019 and 2020 related to our business. These statements are based on our current expectations and information available as of today, and are subject to a variety of risks and uncertainties and assumptions. Actual results may differ materially as a result of various risk factors that have been described in our periodic filings with the SEC. As a result, we caution you against facing undue reliance on these forward looking statements. We assume no obligation to update any forward looking statements and as a result of new information or future events except as required by law. In addition other risks and more fully described in Ideanomics public filings with the U.S. Securities and Exchange Commission, which can be viewed at www.sec.gov. Today, March 16, 2020, the company filed its 10-K with the SEC and after which issued a press release announcing the financial results. So if participants listening to this call who may not have already done so may wish to need those documents as we provide a summary of the results on the call. The format of today's call will be as follows. Mr. Al Poor, our CEO, will speak to the company's overview and business strategy and as well as the activities and developments for the fourth quarter and fiscal 2019, Mr. Conor McCarthy, our CFO will speak to the company's operating and financial results for the fourth quarter and the year end 2019 and then everybody's favorite, the Q&A session. I'll now hand the conversation over to Mr. Alfred Poor, Ideanomics CEO.

Thank you, Tony and thank you everyone joining our call. 2019 saw it complete the business transformation which began in 2018. We've taken important steps to focus our company on two transformative industries, which we are confident will provide us both near term and long term revenues and the subsequent increase in shareholder value, those two industries, our electric vehicles and financial services. At this point, I'd like to begin with a short review for 2019. We packed a tremendous amount of activities to 2019. And we are proud of what we have achieved as a result. We made a broad and concerted effort to ensure the foundation for growth was solid and scalable. There were significant challenges as any business in transformation faces. But ultimately, the company's positioned with a much stronger platform for growth as a result of our actual activities in 2019. Most significant developments in 2019 was the formation of our mobile energy global division. MEG serves as a catalyst for change in one of the world's most environmentally sensitive areas of industry, which is the vast fleets of commercial vehicles that keep our economies moving at all levels, locally, nationally and globally. Enabling commercial fleet operators to shift from gasoline and diesel based vehicles to clean energy, saving electric vehicles helps us to in two key areas. First, it helps preserve our natural environment by mitigating the pollutants leasing vehicles powered by fossil fuels. Second, it provides the fleet operators, the tremendous return on investment from the largest operating expense which is fuel costs. The cost of running an EV fleet is several times less when compared to running an equivalent fleet of trucks powered by gasoline or diesel. That's the benefit for the fleet operator and the environment of course, but I'd like to speak now about the benefits of this activity for MEG and Ideanomics. MEG's focus is in the acquiring of large scale commercial fleet operators through vehicle procurement and financing services that we offer, so that we can position the company to take advantage of the opportunity and the money to be made in the shift of energy consumption as it moves away from fossil fuels and into clean electricity. We decided to focus on commercial fleets as we provide this with a level of scale and profitability, which cannot be achieved in the consumer vehicle market at this time. The commercial fleet segments we focus on our heavy trucks, buses and coaches, logistical vans and small trucks and taxis. We believe these represent the major opportunities in commercial fleet transitioning to EV. In terms of customer acquisition, MEG attract fleet customers by providing services to help educate them on the benefits of EV and then support their transition to electric vehicles for discounted vehicle procurement based on group volume buying and financing services. Once a fleet operator becomes the MEG customer, we intend to market in prepaid electricity through a utility and energy partners to help reduce the running costs of their electric vehicle fleet. Our energy and utility partners also enabled MEG to participate in the sale of metered electricity via EV charging station networks. To help develop MEG for growth, we hired industry executives from the EV Automotive, Financial Services, EV Battery, and Electrical Energy Storage and Management industries to run our China operations. We announced the MEG sales hub in the coastal port of Qingdao, as well as partnerships with leading automotive and EV battery manufacturers, and of course energy partners including GCL, Three Gorges and PetroChina. We've also began building out the initial functionality of a proprietary management platform from MEG, which we will develop into a cloud based destination for commercial fleet operators, manufacturing, the financing partners and others. And this will serve as a strategic customer acquisition and retention tool. This platform is being spearheaded by Matt Fogel from a product perspective and Nick in our development team in the Ukraine from a technical perspective, which we’ve been very impressed with Nick and his team, since the CommentsRadar acquisition in February of 2019. They helped us with the website and systems implementation across the group, and we see them as a core part of the Ideanomics team going forward. Equally as significantly to make, we've sourced the lifeblood of EV enablement, which is access to capital. We partner with insurance companies and utility companies to form large scale these financing funds that will provide the liquidity needed to support the financing needs of commercial fleet operators. We also began ex-China's strategy with acquisition of a controlling stake in Malaysia, EV manufacturer and distributor Treeletrik, which will be our growth platform for the ex-China Asia region and focus we are planning an IPO in late 2020 assuming favorable market conditions. Finally, in terms of MEG to build a diverse pipeline of orders and opportunities covering each of the four commercial vehicle segments, leveraging our team's network, and the strategic partnerships and JVs we have established over the past 18 months. In addition to our direct sales, these partnerships help us source order flow directly from their fleet operator customers and have generated a consistent level of inbound inquiries. This acquisition of commercial EV fleet customers provides us with opportunities to earn upfront revenues from vehicle procurement buying, spreads and origination fees from financing services, and extends the customer lifecycle through long-term recurring revenues from the consumption or electrical energy. For those following with the – the slides online for your reference slides 5 and 6 provide more details on our deal announcements, and makes revenue model. I won't go over all the details of this now, but these are available for you to download. I'd like to speak now about the Ideanomics capital. Ideanomics is our division focused on the potential disruption to financial markets by the types of technologies we invest in. We believe that these technologies have the potential to disrupt and improve financial services in areas, including trading systems, market performance indicators, portfolio management, and customer portfolio attrition, as well as the downstream regulatory and compliance services, which can be improved through greater transparency and controls, we have two primary assets in this division, Intelligenta and the Delaware Board of Trade or DBOT, as we call it, as well as some minority investments and partnership agreements with exciting companies such as Liquefy. We have begun to position Ideanomics capital in a similar manner to MEG by building out a platform for growth and scalability. The digitization of securities is still under review with regulatory bodies globally. And every player in this space is focused on the one thing, which can bring this industry to the mainstream, and that is the approval for secondary market trading digital securities. In the U.S., we call that Reg A+, until such approvals are available, we anticipate the digital securities market to remain low growth. We recently decided to reorganize the DBOT and get it out of the low margin over the counter equities trading market. On that note, I would like to mention that we did not acquire the DBOT ATS with the intention to remain in the OTC trading market. So this is not deviation from our clients, or other decision to take action perhaps sooner than previously discussed, as the market is quickly adapting away from the DBOT model for that line of business. The industry has been suffering from consolidation and fee compression for the last several years. And adding in the recent development of zero dollar trading OTC trading businesses growing untenable. We plan to expedite the repurposing of the ATS for other types of trading. And we'll be able to speak further tonight in the coming weeks or months as we gain the approvals required to do so. Prevention on our Q3 earnings call that we'll be looking to divest all non-core assets and the negotiations to conclude those deals will be worked on at this time. Lastly, I would like to speak about COVID-19 coronavirus, as we have active operations in several countries impacted by the outbreak. I'm going to speak briefly and concisely about the coronavirus and the impact on our business. Obviously, China has been impacted the most to-date and we've seen the U.S., we're starting to get an understanding of what that country endured in the past couple of months. Our staffs in China have been working remotely since just before the Chinese New Year break. And we are thankful that we did not have any staff infected at this point in time. At the time of the outbreak, our Chairman Dr. Bruno Wu and his family were in a part of Japan, which has not seen any coronavirus activity, and they have since traveled to the U.S. where they remained at this time. Our Treeletrik teams has remained largely operational throughout the relatively limited cases in Malaysia, which is held by totting EUV climate. Although the government there took some additional measures today, similar to what we're seeing here in the U.S., so a remote working plan was put in place for them today. Our teams in the U.S. have all been advised to work remotely since last week. And our offices in New York are temporary closed – temporarily closed, as there has been a positive case of COVID-19 in the building this past week. Our offices are being sanitized with Clorox 360 cleaning agents and will remain closed for at least the next two weeks. I want to reiterate the case in our building is not an Ideanomics employee. Similarly, our development team in the Ukraine has been asked to work remotely because there are a number of positive cases in their city. In each case, we are fortunate to be a young company with modern infrastructure. I mean our networks, our VPN, email systems, and critical software services required to run the business are all in the cloud and accessible to our staff so long as they have an internet connection. In terms of our first quarter, the coronavirus has impeded ordered deliveries in China due to strict quarantine conditions that were in place in most major cities over the last two months. We do expect some level of revenues in Q1 which are being worked on at this time and we further anticipate things beginning to return to something closer to normal in Q2, as the warmer weather begins to slow down the impact of the virus. That said, we would like to expect set expectations that China has only returned to work in the past week or so and that there still remains a lot of travel restrictions in China. Despite this, our team in China and our partners have been resolute and determined to conduct business as best they can and we have to say a special thank you to our staff, partners, and customers for all applying the focus to get some level of business done, in what's been extremely demanding circumstances. But it's been tough to witness; our shareholders should be encouraged by the fact that staff and partners have been attending numerous meetings and conference calls in China, wearing face masks and protective clothing, trying to ensure we limit the impact of the outbreak on our business. Likewise, the SEC provided additional flexibility in terms of reporting to the company -- to those companies impacted by coronavirus. And while we have certainly been impacted as much as most, our finance teams in New York and Beijing and our auditors have gone over and above to ensure we met our original filing date today. In determination put in to do so, will be lost on a lot of people listening to the call today, but I believe it warrants a level of acknowledgment in line with the professionalism and dedication as shown. So, big thank you on behalf of the entire Ideanomics family, to Conor McCarthy and his finance team, as well as to our auditors and accounting partners. Tony back over to you.

Thank you so much Alf and Conor. Absolutely, it is my pleasure to introduce and turn the conversation over to our CFO, Conor. Please it is your show now.

Thank you, Tony and welcome to everybody on the call and thank you Alf for the kind words. As Alf discussed earlier, 2019 saw complete the business transformation, which began in 2018. We've taken important steps to focus our company on two transformative industries, which we are confident, will provide us with both near and long-term revenues and the subsequent increase in shareholder value. These two industries are electric vehicles and financial services. Financial statements for the year ended December 31, 2019 include a significant number of one-time non-operating non-cash items incurred as part of the management's work to transition the business. I will discuss these further in my remarks. Revenues. For the full year 2019, the company generated revenues of $44.6 million as compared to $378 million in 2018. The revenues for 2019 and 2018 are not readily comparable as they come from very different industries with very different profit margins. The 2019 revenues were generated from digital asset management services and the first revenues from our new electronic vehicles business. The 2018 revenues were generated from oil and electronic components trading, both high volume low margin industries that we exited in 2018. The digital asset management services revenue were earned in first and second quarter of 2019. There were no revenues from this contract in the third and fourth quarters and we do not anticipate any revenues from this activity in 2020. Our gross profit for the year ended December 31st was $43.1 million versus $3.1 million in 2018, an increase of almost $14 million. The gross margin for 2019 was 97% as compared to 1% in 2018, echoing my earlier comments that we have transitioned out of a low margin business in 2018 into a higher margin businesses in 2019 and going forward. Total operating expenses for 2019 were $111.7 million versus $29.4 million in the prior year, an increase of $82.3 million, which was largely driven by one-time non-operating non-cash charges as we transition the business. We performed a review of our holding of GTB cryptocurrency and concluded that a combination of a very large decline in the cost price of GTB versus the U.S. dollar and the inability to convert GTB into fees despite huge efforts to find a mechanism for converting, then managements conclude that we should impair holdings of GTB at a cost of $61 million. There were smaller impairment costs arising from the demolition of buildings at Fintech village and the write-down of assets that are no longer core to the direction in which the business is moving. The loss from operations for the year ended December 31st, 2019 was $68.6 million, which includes the asset impairment charge of almost $74 million and earn out expenses related to our acquisition of the Delaware Board of Trade of $5.1 million. Without these one-time charges, the company would have recorded an operating profit of $10.2 million, equal to a pro forma operating margin of 23%. Finally, I would like to briefly discuss the interest expense number. Interest expense for the year ended 31st of December 2019 was $5.6 million versus $800,000 in the prior year. The large increase in interest expenses due to the U.S. GAAP accounting treatment for the convertible note funding we engaged in during 2019. Interest paid in cash was $73,000. So, the bulk of these 5.6 billion is a non-cash U.S. GAAP accounting charge, which is reported as interest. To conclude, the financial results for the year ended December 31 include a large number of one-time non-cash non-operating charges which reflect the work that management has done to position the business for very significant opportunities in the electric vehicle market in China and the Asian countries. Back to you, Tony.

Thank you so much, Conor. This concludes management's prepared remarks and I'm very excited to get everybody ready for our investor and analysts question-and-answer period. Kevin, who -- operator, could you please gives the instructions to the audience?

Absolutely. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Derrick Hodgkin, a private investor. Your line is now live.

Hi. Just looking at your balance sheet here, just wondering, it shows $22.6 million in long term investments. I was wondering if you could give some color on that.

Conor, would you like to take that?

Sorry, I was on mute. I didn't hear that question.

I was just wondering about the 22.6 million in long term investments and what's that made of?

Sure. And -- just trying to find my work paper on that. So if you give me one moment, I'll come back to that question.

No problem.

Okay. We'll look at the next one in line. Kevin?

Sure. Next question is coming from Alan Stone from Wall Street Research. Your line is now live.

Yes. Thank you, Tony, Alf and Conor. So it seems that most of the loss for last year was from one-time charges or write downs or non-cash charges. Is it fair to say that, as we're now in 2020, that the company is having positive cash flow?

Thank you, Alan. Thanks for the question. Yes, Conor, do you want to speak on it. Sure.

I think, the reality is, we are still very much in an investment mode. We have high hopes that our electronic vehicle business in China will become cash generative in sometime this year. But our operations in the U.S. are still going to require funding, because as we build out our DBOT business and also this is the corporate head office, which is responsible for most of the public filings.

Okay. And also, could you address the intangible assets on the balance sheet. I know that is to – and the goodwill, I know that you used to include some of the cryptocurrency assets or the -- is that still carried under that segment or?

No, we wrote off our cryptocurrency entirely in -- at the end of this year and that was the largest single impairment charge we took of $61 million. And the other Goodwill relates to our investment in Malaysia and our investments in DBOT, principally.

Okay. And the intangibles?

The intangibles related also to DBOT, where we have some long term contracts, trade names, and things like that.

Okay. Thank you.

Thank you. Our next question is coming from David Joseph [ph], a private investor. Your line is now live.

Moving very quickly with lot of sales…

Mr. Joseph, would you mind repeating your question, I do apologies go ahead.

I'm wondering are there any other competitors in the electric vehicle financings sector in China? I've noticed that there's been a lot of news coming through and excellent work, gentlemen. But are there any other competitors in that space?

This is Alfred. Thank you for the question, David. The EV financing space has been very interesting one. Last year we were confronted with the fact that partners that we previously secured in the latter half of 2018 were unable to fund the -- in a similar manner to what they had been funding internal combustion engine vehicles. Primarily because the battery and the battery pack within the vehicle is such a large part of the cost of the vehicle in Tesla, it's around 35%, in bus or large truck, it could be 55%. So the fleet operators are typically not used to having to pay the deposits that the financing industry was looking for. I can tell you that at this point, we're not aware of any direct competitors, because we've set up these large liquidity pools to do the least financing. But the capital markets are very efficient. So I'm sure where there's money to be made, there will be competitors in the future, but we continue to receive inbound inquiries for people that are unable to place financing for the EV commercial vehicles at this time.

So you would then -- we could say that you're first to market with regards to this business plan or structure?

I think it's fair to say that we couldn't find any partners to work with us in China. So we effectively went out to consortium of utilities and insurance companies, people with cash on their balance sheet would typically buy corporate debt. And we ask them to help us fill the space in the marketplace. So while we're not aware of any of this point, we feel we do have a first mover advantage. Like I said, the capital markets are pretty efficient when people start to see us making money. I'm sure they'll -- I'm sure competition will come and is welcoming.

Absolutely. And then, I read in the news release back in 2018, I believe was in September, that you -- the company was coordinating or organizing a electrification fund and it was in the $6 billion mark. I trust and I saw that also in your announcements -- previous announcements, this fund is still being put together as it close to being completed and I gathered this is the fund that's going to be doing the leasing, et cetera?

Yes. This is one of the funds that will be doing the leasing. At the movement, we've set up two liquidity pools of about RMB 100 billion each. These are not our funds, obviously, these are the funds that belong to what -- for one of a better term LVs who are supplying the funds that are lease financing. As part of that, we're going to be providing 6 billion of that to First Auto Loan, which was one of our partners, who previously has a good sized market share in China for traditional lease financing. We thought they were a great qualified partner for us. And then we hit this kind of roadblock, which is every lease financing company was requiring a much larger deposit for EV than it was typically for combustion engine vehicles. And the fleet operators didn't have that extra business model just was built around the status quo. So bringing these liquidity pools together gives us not only the ability to bridge that gap in financing, but also to do 100% financing where it's appropriate.

Very good. And core strengths. What do you think is -- what is the core strength of Ideanomics at this present time? Obviously, those are building and now you're focused on two sectors. What would you say is the core strength of the company?

Right now, I would say, that without wanting to get this kind of feedback as such, I don't believe there's another company out there with the IP capability of us of what it takes to enable EV, EV on mass for the commercial markets. Because we're involved right from the supply chain side through to the financing side and ABS refinancing. And without manufacturer, battery partners, everything, rebate partners or covenant level were involved in every aspect of it. So I think we have as a bit of a brain trust right now, a really good understanding of how to do EV enablement at scale. And I think it'll take some time for others to catch up with us.

I hear you. So for example, if I'm mister fleet operator in China and I have 100 vehicles and I need to convert them into -- I need to electrify them all, I would come to your to your hub and you guys will take care of everything for me, is that's the way it works with break from financing…?

Yeah. Absolutely. I mean, the -- we were aware that the number of cities were looking to establish themselves as an EV hub. So we spoke to many of them. We partnered with the city of Qingdao because it's a port city. It's across the water from Japan and Korea. So it attracts a lot of business from those countries in their auto manufacturers. So that seemed to be a very strategic hub for us. But the hub will showcase the best of obviously, our financial services to help people get the vehicles purchased, but also from all of our manufacturing and battery partners. But over and above that, we'll have insurance services on site and we'll also have a vehicle registration services on site. So the equivalent of the local DMV will be on site in Qingdao, so we can take care of every aspect of whatever the commercial vehicle partners needs are. And we're developing that hub into something for next time. So if you are a fleet operator, you can come to Qingdao, you can see the very best of what's available to the market and kind of do a one stop shop and be catered to whatever your needs are.

Thank you. Our next question is coming from David Lula [ph], a Private Investor. Your line is now live.

Well, I was just wondering, but MEGs revenues will eventually start to come in and perhaps have an exponential effect, when do you see their revenues is really starting to come in greatly a second or third quarter or fourth quarter?

We don't know what the full impact of coronavirus will be. It looks like it's tapering off very quickly, because of the measures taken within China. We're starting to see similar measures here if you follow the news in the last 24 to 72 hours. We've managed to get some revenues. We haven't finished the quarter yet, so we can't speak to that entirely. But there are revenues in Q1, we'll see it list in Q2, to what extent will be dependent on the full listing of the interstate transportation. That's the moment to move from province-to-province, which is like moving from state-to-state in the US, there's still a lot of restrictions and we can't get deliveries done while those restrictions are in place, so the faster those restrictions lift, the better. But we are anticipating that’s likely to return to normal in China for Q2 to record revenues as well.

All right. And how about Fintech village, any update on that or what's the future for that?

Fintech village, we're taking a long hard look at that. It's been a much longer slower grind through the approvals process with everyone from the Department of Environment and the Environmental Protection Agency, because of the contamination of the buildings through the weapons, commission's and others because it's got particularly VAT on some of the property. So we're looking at the moment to bring some partners into to help reinvigorate some life in there, while we put more of our time and attention to make at this point.

Thank you. Our next question is coming from Tim Moynihan from Janney. Your line is now live.

Hey, guys how are you? And can you hear me?

It’s good to hear your voice.

Okay. Can you just give us an update on the probably not saying the right, the MEG mall and is it -- I’m kind of confused, is it you're purchasing an old mall and revamping it, or it's a brand new structure, what's the status with that?

Okay. So this has been provided by the City of Qingdao is an existing facility. Several of us were out there, it was already being refurbished to be an EV hub, and they were looking to try and attract partners into it. MEG was the one that went in there. The building is mostly finished. It's obviously been slowed down because of the coronavirus. But the idea of it is, it's about a million square feet of space. The idea there will be there will be vehicles on site similar to what you would see in a very high-end showroom. There'll be multiple manufacturers from across the industry; it will be a friendly, competitive environment. They'll also be the administrative offices for MEG centrally, for all of its processing, for everything from invoicing through the rebates and accounting systems, things like that. It will be the base there for MEG. It is rent free. So the City of Qingdao has made that rent free to us. They've also made an investment into us, as you probably aware from the press releases. But it's a very exciting project for us. For us, it doesn't matter if the building is new or old. It's been completely refurbished. So the insides of it are going to be as new it's all going to be glass fronted and shown in kind of style in terms of the vehicle display. So for us, it's an incredible opportunity. We've synced up really well with what the City of Qingdao and the province is looking to achieve. And they've been prepared to put their money where their mouth is with investments as well. So now we're still in negotiations for other lines of investment with them as well as part of that -- part of expanding that relationship.

So you said rent free and no expense to get in as well?

Absolutely rent free, no expense to get in. The rent free is for initial period of 10 years. They won't allow us -- somebody had asked this recently with inquiry to Investor Relations, they won't allow us to charge rent to the partners, because obviously they don't want to provide a building rent free to us and as sublease it out of profit, so all participating partners subleasing from us will be rent free as well. There's some tax breaks that go along with that. They're also folding in the existing activity at the site. At the moment, the site is used for a number of purposes, but a large portion of it currently already is a vehicle sales site. So they're going to be folding that in and contributing that part of the business to the subsidiary of MEG that they invested into.

Thank you. We've reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.

Just on behalf of Tony, Conor, and the rest of Ideanomics…

Al, sorry about that. I was -- sorry. I was on mute. Yes, thank you very much. And thank you, Kevin, very much operator. I appreciate that. This is all the time that we have for today. And this concludes the Ideanomics first Quarter 2018 investor's conference call. We encourage our community to continue to reach out to us, as well as any questions that we didn't end up getting answered for you, please do not hesitate to send them into ir@ideanomics.com. We'd like to thank our listeners, shareholders, analysts and others who have taken the time to listen to this earnings call. We urge you to refer to our latest SEC filings for any information that you need. This call will be available on our website in the Investor Relations section and you could find the link there. To be alerted with our news, events and other information in a timely manner, we recommend you following us on all the social channels, sign up for our newsletter and explore our website at www.ideanomics.com. Thank you everyone for participating and listening on this call today.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.