Ideanomics: Digital Asset Enablement with AI and Blockchain

Ideanomics: Digital Asset Enablement with AI and Blockchain

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Federico Tovar, CFO, IdeanomicsFederico Tovar, CFO
Digital asset management has transitioned from being an exclusive marketing tool for large-scale enterprises to a crucial component of every organization’s marketing department. By leveraging modern asset management techniques that rely on artificial intelligence (AI), Blockchain, and other emerging technologies, organizations are maximizing the value of their existing digital assets. At the same time, storing, organizing, retrieving, and distributing these assets safely and cost-effectively is a top priority for businesses. New York-based Ideanomics comprehensively addresses these requirements using Blockchain and AI to not only help organizations enhance the impact of their digital content but also maintain proof of ownership and complete secure transactions. As a fintech advisory and platform as a service (PaaS) company, Ideanomics aspires to establish its prominence in the asset digitization economy by combining deal origination—the process of identifying investment opportunities in the market—with enablement. The company predominantly focuses on enabling organizations across insurance, financial services, capital markets, energy, media, consumer industries, and various other verticals that have the potential to benefit from Blockchain and AI.

“We are determined to become a global leader for fintech services in the asset digitization economy by establishing a global compliant network of financial technology, user community, and digital asset production,” states Federico Tovar, CFO at Ideanomics. The company delivers both traditional financing options as well as PaaS fintech solutions, in accordance with clients’ financial needs, regulatory compliance, regional jurisdictions, and more.

Ideanomics has developed a fintech infrastructure that provides AI-based asset rating and recommendation services, asset origination, and security token issuance along with facilitating the distribution and trading of assets. Partnering with providers of core digital asset creation, the company constantly strives to deliver a multi-layer, global infrastructure that manages risks with dynamic ontology—a specific form of AI—as well as issuance, trading, and settlement of digital asset transactions on the Blockchain. These partnerships help Ideanomics develop an ecosystem of financial institutions and technology service providers to digitize and tokenize existing digital financial securities along with creating new ones. The company also unlocks the liquidity of these digitized assets, which can be exemplified by its agreement with an electric bus operator as part of a multi-billion dollar deal. Ideanomics provides advisory services to the client, which includes collaborating with established financial services to assist them in underwriting, marketing, and sales processes. By further digitizing the client’s assets in compliance with regulations, the company is freeing up tremendous liquidity along with delivering the highest level of transparency for the underlying assets.

Ideanomics has acquired Grapevine, an influencer marketing organization, to create a Blockchain-based marketplace where influencers and advertising companies can exchange tokens and execute highly successful campaigns across an array of consumer goods. The prime objectives of these consumer digital assets include better cross-selling and improved customer retention as well as enhanced brand value via social media influencers, online gaming, reward points, and more. “Age-old advertising methods are predicted to be gradually replaced by influencer marketing, which, if integrated with Blockchain, has a strong and bright future,” remarks Tovar.

Dynamic ontology, coupled with Blockchain’s ability to reduce costs and enhance efficiency as well as authenticity, makes Ideanomics’ offering second to none. And now, as both Blockchain and AI converge with IoT, big data, cybersecurity, and other emerging technologies, the company is working on building its Fintech Village—a center for technology and innovation—in Connecticut. Along with capitalizing on the aforementioned convergence of technologies, the company is looking forward to establishing partnerships with Fortune 500 companies, research facilities, universities, and various other prominent organizations. “We are an enabler to the core, intending to evolve into an esteemed company of such magnitude that organizations across the globe resort to our services and reap the maximum benefits of Blockchain and AI, as well as other technologies,” concludes Tovar.

Ideanomics News

Building a FinTech Innovation Hub in the Heart of Connecticut

An entire campus dedicated to innovation and technology in FinTech is to be built in Connecticut by re-modeling the UConn campus.

FREMONT, CA: The story started when Dr Bruno Wu, CEO of Ideanomics, invited West Hartford to his home for a conference held by St. Joseph University. Within a year, circumstances fell into place, and the puzzle was complete. The AI and Blockchain-based Company, Ideanomics, is now equipped to transform the formerly known UConn campus, Connecticut into a Fintech Village, a headquarters for technology and innovation.
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Ideanomics Names Cybersecurity Expert Dr. Dan Lavi As Advisor

NEW YORK- Ideanomics (NASDAQ: IDEX) ("Ideanomics" or the "Company"), A Fintech and Greentech advisory services company, is pleased to announce it has added Dr. Dan Lavi as a strategic advisor.

Mr. Lavi is highly-skilled in several areas of progressive technology and innovation, having held senior positions in the fields of Physics, Cybersecurity, Greentech, Web and Mobile technologies. He holds several undergraduate degrees, two Masters' degrees, and a PhD in Physics. Leading expert, Mr. Lavi, is a former Physics professor, and lecturer on Cybersecurity and secure Android application development at various colleges and universities in Israel. Mr. Lavi will be based in Israel and New York, where he will oversee the various emerging technologies across the Ideanomics group, including the evaluation and implementation of Blockchain, Artificial Intelligence, Cybersecurity and green technologies.

"Dan brings a level of experience and vision that is unmatched," said Dr. Bruno Wu. "Dan is one of the leading cybersecurity experts in the world, and Ideanomics is pleased to welcome him to our team. Dan is joining us at a very important time for the company, as we strategically respond to the industry with leading technology infrastructure."

"It's an exciting time for Ideanomics. I look forward to working with the various teams throughout the organization, as we identify, develop, and implement market-leading technologies," said Dr. Lavi. "Dr. Wu's vision is powerful and motivating as he drives technology and innovation into business, and I am very excited to be a part of that."

Ideanomics Reports Q2 2019 Financial Results

NEW YORK: Ideanomics Inc. (Nasdaq: IDEX) has announced its 2019 Q2 operating results for the period ended June 30, 2019 (a full copy of the Company's quarterly report on Form 10-Q will be available.

Ideanomics Second Quarter 2019 Operating Results

Revenue for the second quarter ended June 30, 2019 was $14.5 million as compared to $133.0 million for the same period in 2018, a decrease of approximately $118.5 million, or approximately 89%. The decrease was mainly due to a change to our business focus from logistics management to digital business consulting services. 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. 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. In March 2019, the Company entered into an agreement with GT Dollar, one of our minority shareholders and strategic investors, whereby the Company agreed to provide digital asset management services. The Company recognized $26.6 million in the first quarter of 2019, and the remaining revenue of $14.1 million in the second quarter of 2019 as all performance obligations associated with the development of the master plan from the agreement have been satisfied.

Cost of revenues was $0.7 million for the quarter ended June 30, 2019, as compared to $131.4 million for the quarter ended June 30, 2018, a decrease of approximately $130.7 million, or 99%. From a comparability perspective, the cost of revenue during 2018 is not necessarily indicative of the new FinTech business 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 second quarter of 2019 is primarily associated with our digital asset management services as part of our new FinTech services business. Majority of the costs associated with the development of the master plan services have already been incurred in 2018. In 2018, due to the uncertainty associated with the future economic benefits when such costs were incurred, the Company expensed those costs during 2018.

Our gross profit for the quarter ended June 30, 2019 was approximately $13.7 million, as compared to $1.5 million during the same period in 2018, representing an increase of 796%. The gross profit ratio for the quarter ended June 30, 2019 was 95%, while it was 1% during the same period in 2018. The increase was mainly due to: 1) the Company recorded service revenue from digital asset management services in 2019 and 2) the low cost of revenue associated with our digital asset management services, which resulted in higher gross profit margin of second quarter in 2019 compared to the low gross profit margin from the logistics management business in 2018. The reasons for high gross margin in the digital asset management services provided to GT Dollar are as follows:

• we have invested in our technical development knowledge in digital asset management since early 2018;

• with our uncapitalized assets, such as know how and expertise in our management team to develop the appropriate strategy to provide the digital asset management service which has delivered a lot of values to our client, GT Dollar;

• there are no significant incremental costs, other than immaterial labor expenses associated with delivering on the master plan.

Selling, general and administrative expenses for the quarter ended June 30, 2019 was $6.5 million as compared to $8.8 million for the same period in 2018, a decrease of approximately $2.3 million or 26%. Majority of the decrease is due to a decrease in salary and employee benefits expenses, and lower sales and marketing expense for Wecast services.

Professional fees for the quarter ended June 30, 2019 was $1.2 million as compared to $0.6 million for the same period in 2018, an increase of approximately $0.6 million. The increase was related to an increase 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 earnings per share for the quarter ended June 30, 2019 was $0.05 per share, as compared to a loss per share for the same period in 2018 of $(0.12)per share. As of June 30, 2019, the company had cash of $1.1 million, total assets of $149.4 million, total liabilities of $61.2 million and total equity of $87.0 million.

Over the past year Ideanomics has been able to transform its legacy business, to be a prominent player for fintech services and asset digitization through establishing a global compliant network of financial technology, user community, and digital asset production. Our team of seasoned digital strategists and technology leaders have positioned the Company towards a path of unlocking FinTech services related revenue during 2019. We have several signed customer revenue deals in our pipeline, and our product and tech teams are diligently building out these new digital products to continue to unlock this revenue and position the company towards a strong 2019.

Ideanomics Names Conor McCarthy New York-based Chief Financial Officer

NEW YORK: Ideanomics, Inc. (NASDAQ: IDEX) ("IDEX" or the "Company"), announced the appointment of Mr. Conor McCarthy as Chief Financial Officer ("CFO"), effective immediately. As CFO, Mr. McCarthy will oversee Ideanomics global financial operations, including financial management, treasury, tax, budgeting, financial planning, reporting, and compliance.

"We are delighted to have Conor join Ideanomics as our new CFO," said Alf Poor, CEO of Ideanomics. "At such an important phase for the company, we were looking for a CFO with experience in the FinTech industry, as well as someone who had the ideal background which is a mix of public company and high-growth start-up experience. Conor brings a blend of operational and strategic experience to our finance operations, and his extensive experience with financial services firms will prove invaluable to our planning and execution. We are extremely pleased to have Conor join us during an exciting growth phase for the company".

Mr. McCarthy brings over 30 years of experience to the CFO role in areas such as corporate strategy and corporate finance including capital raising and M&A. Having started his career as an auditor with KPMG in Ireland, Mr. McCarthy moved into financial services, working as CFO, Treasurer, and other executive finance roles, with trading and brokerage firms, as well as high growth FinTech partners supporting the financial services industry. Most recently, Mr. McCarthy was CFO for OS33 a private equity backed FinTech SaaS platform for compliance and productivity enablement for the wealth management industry with 200 employees. Previous positions include CFO roles with Intent, Convergex Group, and 9 years as CFO of the Americas for GFI Group, Inc. a NYSE-listed FinTech wholesale money broker with revenues of almost $1Billion (now part of BGC Partners).

"I am excited to join this dynamic team at Ideanomics," said Coner McCarthy. "Ideanomics combines the best of technology with top global talent, growth potential, and top collaborative working relationships to offer the next generation of FinTech services."

Ideanomics' Agreement with Dasheng Licheng Financial Leasing for Innovative EV Financing

NEW YORK: Ideanomics (NASDAQ: IDEX) ("Ideanomics" or the "Company"), has announced an agreement with Dasheng Licheng (Beijing) Financial Leasing Co., Ltd. to provide an innovative lease financing program for AAA+-rated state-owned entities (SOE's) and other enterprise fleet operators.

The Electric Vehicle (EV) commercial sector differs from traditional vehicle lease financing, which has been built on 100-plus years of residual values of combustion engine vehicles. The battery and battery storage in electric vehicles comprise a much higher percentage of the vehicle's overall value, both new and used, requiring a new structure of financing to avoid imposing increased upfront deposits on fleet operators. The agreement has been designed with a consortium of insurance companies as investing partners in order to make financing programs flexible enough to meet the needs of the burgeoning EV market.

"This is a very important agreement for our MEG division, and potentially a barrier to entry in the market for the lease financing of large-scale commercial EV fleets," said Alf Poor, CEO of Ideanomics. "By effectively plugging the gap between traditional lease financing and the financing solutions required by the EV industry, through the support of a consortium of China-based insurance companies as investors; we have engineered an innovative solution to meet market demand at scale. We anticipate coming to market in Q1, for those SOE's and enterprise customers rated as AAA or better, with the benefits seen from Q2 of 2020 forward. We're excited to be working with Dasheng Licheng's team on rolling this program out for the benefit of our commercial EV fleet customers and will be exploring ways to bring this type of solution to our other markets outside of China."

The insurance company partners include China Life, China Property Insurance, Pacific Insurance, Taiping Insurance, Ping An Insurance, and Urtrust Insurance. These partners have committed up to 100 Billion RMB for the Inner Mongolia heavy duty trucks replacement project.

Ideanomics' MEG division operates in 4 key segments of commercial EV, which are Heavy Duty commercial, for closed area environments, such as Mining, Steel Mills, Airports, and Seaports, Light commercial last-mile logistics vehicles, Buses and Coaches, and Taxis.