Q2 2020 Ideanomics Inc Earnings Call NEW YORK Aug 11, 2020 (Thomson StreetEvents) — Edited Transcript of Ideanomics Inc earnings conference call or presentation Monday, August 10, 2020 at 8:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Alfred P. Poor Ideanomics, Inc. – CEO & Director * Conor John McCarthy Ideanomics, Inc. – CFO & Principal Accounting Officer * Tony Sklar Ideanomics, Inc. – VP of Communications ================================================================================ Conference Call Participants ================================================================================ * Peter Wright ================================================================================ Presentation ——————————————————————————– Operator  ——————————————————————————– Greetings, and welcome to the Ideanomics Q2 2020 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tony Sklar. Thank you. Mr. Sklar, you may begin. ——————————————————————————– Tony Sklar, Ideanomics, Inc. – VP of Communications  ——————————————————————————– Thank you, operator, and welcome, everybody, to the Ideanomics Q2 2020 Earnings Conference Call. Joining me today, I am pleased to have Mr. Alfred Poor, our Chief Executive Officer; and Mr. Conor McCarthy, our Principal Accounting and Chief Financial Officer. A webcast of today’s call will be archived and available in our Investor Presentation section of our corporate website for a minimum of 30 days. As a reminder, this conference call is being recorded. During the call, we will make forward-looking statements such as dialogue regarding our revenue expectations or forecasts for the quarters and full fiscal years 2020 and 2021 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, uncertainties and assumptions. Actual results may differ materially as a result of various risk factors that are being described in our periodic filings with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements as a result of new information or future events except as required by law. In addition, other risks and disclosures are more fully described in our Ideanomics public filings with the U.S. Securities and Exchange Commission, which can be viewed at www.sec.gov. Today, August 10, the company will file a 10-Q with the SEC, and afterwards, we have issued a press release that is out now announcing our financial results. So participants on this call who may not have already done so, may wish to look at those documents as we provide a summary of the results on this call. A format for today’s call will be as follows. Mr. Alfred Poor, our CEO, will speak to the company’s overview and business strategy as well as the activities and developments for the second quarter and the fiscal 2020. Mr. Conor McCarthy, our CFO, will speak to the company’s operating and financial results for the second quarter. And then I know it’s everybody’s favorite, the Q&A session. I will now hand the conversation over to Mr. Alfred Poor, Ideanomics’ CEO. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Thank you, Tony, and thank you to everyone joining our call today. I’d like to start the call with an update of the global electric vehicle industry. Based on Bloomberg’s NEF reports, which I consider as one of the leading information sources to the industry, due to the advancements taking place in battery tech, combined with policymakers pushing for lower emissions, the accelerating level of investments in the EV sector, we believe the outlook for EVs is very robust. To date, numerous countries have announced plans to phase out sales of gasoline and diesel powered vehicles. Beyond passenger cars, it is the municipal buses, mopeds, trucks and light commercial vehicles, which are forecasted to be leaders in their segments in terms of electrification. All of these of which, of course, target segments for Ideanomics. 2020 looks to be an important inflection point for the industry, evidenced by a very active IPO market for EV makers such as Nikola, Rivian, Fisker and Li Auto. Over the past 18 to 24 months, we have strategically built a comprehensive range of services to support EV enablement by commercial fleet operators. We believe our S2F2C, or Sales to Financing to Charging business model, positions us to serve this growing market. We are confident that our EV-related procurement and financing services will continue to attract commercial fleet operators and that we are confident in our ability to market our charging and energy services to those operators such that we generate the sustainable long-term revenues that will drive shareholder value. I’m going to take you through some of the highlights of the second quarter, starting with the MEG division, where the company booked several million dollars in revenue and validated our business model and investments in that segment. The company’s progress in the second quarter has meant that the third quarter is already off to a strong start. I’d like to say a big thank you to everyone in the Ideanomics family for the effort being made in 2020. We’re proud of our business and what we are achieving as a result of the collective efforts of everyone. I’d also like to thank our growing shareholder base for their support. The MEG center in Qingdao established operations in the second quarter and contributed to the second quarter revenues, along with MEG’s executive team based in Hangzhou, our Chairman, Dr. Bruno Wu is on the ground in Qingdao at this time, supporting the local team and working with local officials to help close out sales to local municipal customers. Our order book continues to grow, and we are in an ongoing hiring phase in China to support the execution and delivery of our order pipeline. This month sees positive momentum within our heavy truck division. One particular order we are fulfilling at this time with our battery technology partner CATL is for a mining operations customer in Inner Mongolia. We announced in Q2, this division was named as Medici Motor Works. The rebranding of the heavy truck division is to support expansion efforts outside of China and into North America, where interest in the truck segment is progressing faster than we originally anticipated. To participate in this interest, with the help of OEM partners in China and South Korea, we anticipate having cost-efficient versions of both battery EV and hydrogen to fuel cell heavy trucks to market relatively quickly. The process for doing so requires regulatory approvals for all vehicle types, for the various road, weather and safety conditions in North America, and we will keep you updated on the progress of that accordingly. With the reopening of government offices in Malaysia in June, the Treeletrik business was able to secure title to the approximately 250 acres of land within in the process of acquiring. And as a result, we are now in discussions with assembly and OEM partners regarding development of that land to further support the growth of the business. Similarly, the Treeletrik team is in discussions with financing partners around collateralization of the land for development. To support the anticipated growth in the ASEAN region, we are recruiting a CFO for Treeletrik, and we’re in discussions with candidates who have automotive experience. And we have expanded the number of board seats to Treeletrik to include CEO, (inaudible); and a senior government adviser in Malaysia. During the second quarter, we raised money to beef up the cash on our balance sheet and we will use the money raised to accelerate operational objectives as well as for supporting our efforts in evaluating opportunities to accelerate our business strategically, such as accretive acquisitions. We see several opportunities in the market in the fall out of COVID-19, and where such opportunities can complement our organic growth or provide strategic advantage, we will move to capture the value for Ideanomics. For your reference, including in our presentation is a slide detailing our revenue model. I won’t go over these details now we’ve covered in several previous calls, but the presentation is available on our website after the call. I will now hand the call over to Conor McCarthy, CFO of Ideanomics, for a review of the financials. ——————————————————————————– Conor John McCarthy, Ideanomics, Inc. – CFO & Principal Accounting Officer  ——————————————————————————– Good afternoon. Thank you, Alf. Ideanomics produced one of its strongest financial performances in the second quarter. The highlights for this quarter are our Mobile Energy Global subsidiary, which we refer to as MEG, reported its best-ever revenues. We finished the quarter with $36 million of cash in our balance sheet; we reduced convertible debt by almost $12 million, which is about 40%; the going concern qualification is removed from our financial statements, given the strong cash position we now have; and we continue to reduce our operating cost base through rationalization of the company’s office leases, and we continue to look for other savings that — in our cost base. I would now like to discuss the financial performance in greater detail. Revenue for the second quarter was $4.7 million, almost all of which was generated by MEG, the company’s EV business. The second quarter revenues are the largest revenues from MEG since the company commenced its sale of EVs, and I believe, demonstrate the underlying strength of MEG’s business, particularly as these revenues were earned during a period when Chinese economy is still returning to normal after the COVID-19 lockdown. Revenues for the second quarter of 2019 were $14.4 million. However, nearly all of the second quarter revenues were earned from the digital asset management services contract that produced no revenues in the first half of 2020. Consequently, comparison with the prior period is not meaningful. Gross profit for the second quarter was $255,000, which represented a gross margin of 4.9%. Second quarter (inaudible). The increase was due principally to a onetime noncash impairment charge of $6.2 million, of which almost all related to the decision to terminate our office lease at 55 Broadway. Excluding the impairment charge, operating expense for the second quarter was $10.3 million versus $8 million in the prior year. The increase was driven by higher professional fees and remeasurement of acquisition earn-out expense. Drivers of the increase in professional fees included expenses related to the continued development of the company’s Investor Relations program, legal fees associated with the equity and debt transactions in the second quarters, and other regulatory matters. The loss from operations was $16.3 million. However, excluding the onetime impairment charge, the loss would have been $10.1 million as compared to a profit of $5.7 million in the prior period. The increased operating loss is almost entirely due to the lower gross profit in the current period as the very high margins achieved from the digital asset management service contract were not repeated in the current quarter. And going forward, we do not expect to earn revenue in the foreseeable future from digital asset management services. As I stated earlier, management continues to look for ways to reduce costs and allocate spending to projects with the highest rate of return. I’d like to comment briefly on the interest and other income section of our income statement. Interest expense for the period was $8.9 million, which was almost all noncash and represents the expense when U.S. GAAP accounting guidance is applied to the ratchet provisions in the company’s convertible debt. The conversion expense of $2.2 million is also noncash, and results from the adjustment of the conversion price on for vertical notes held by Dr. Bruno Wu and Mr. Shane McMahon. As previously reported, on June 5, Dr. Wu and Mr. McMahon converted their notes to common stock in Ideanomics at a 30% premium to the 5-day volume average weighted price at the date of conversion. The company considered this conversion to be very beneficial, as it indicated Dr. Wu and Mr. McMahon’s strong belief in the future prospects of the company and reduced the amount of debt outstanding. We recorded a gain of $1 million in other income related to the successful negotiations to terminate an operating lease held by one of the company’s U.S. subsidiary. That was a real estate lease that we (technical difficulty) My final comment on the income statement is to highlight that the expenses for the second quarter include almost $17.4 million of noncash expenses related to the conversion of convertible debt and the asset impairment charge for our office at 55 Broadway. Turning to the balance sheet. We greatly strengthened our balance sheet in the second quarter. We ended the quarter with $36.4 million of cash, which based on current projections, is sufficient to fund the company at planned level activity for more than the next 12 months, which in turn means that the company believes that it has the ability to operate as a going concern. Holders of Ideanomics convertible debt converted almost $12 million to common stock, which will represent almost 45% of the total principal outstanding before the conversion. We are in negotiations with Advantech Capital Investment, holders of the $12 million note that comes due in June 2021, to restructure the terms of the note. Based on discussions to date, management is confident that these negotiations will be successful. In conclusion, the second quarter was one of milestones achieved. To recap the highest revenues from MEG since the business commenced operations; strong liquidity with $36 million in cash on the balance sheet, providing a strong platform for future investment; significantly reduced levels of debt; and an effective S3 statement, which gives us the ability to raise capital to take advantage of strategic acquisitions in this virus market. And I’m now going to hand it back to Tony. Thank you. ——————————————————————————– Tony Sklar, Ideanomics, Inc. – VP of Communications  ——————————————————————————– Thank you so much, Conor. This concludes management’s prepared remarks. I am now very, very excited for us to answer a few of our investor and analyst questions. So I’m just going to toss it back to Victor (inaudible) for a second so that he can explain how to raise your hand, if you so speak. ================================================================================ Questions and Answers ——————————————————————————– Operator  ——————————————————————————– (Operator Instructions) I’m sorry, gentlemen, I’m having some technical difficulty here (technical difficulty) My apologies, Mr. Sklar, if you could take over, sir. It seems that my computer has frozen here. ——————————————————————————– Tony Sklar, Ideanomics, Inc. – VP of Communications  ——————————————————————————– All right. You bet you. Absolutely. Okay. Then at that note, we’ll just give it a couple more seconds here for people to get their messages in the queue. And our first person up here is Ray from Alliance Capital. ——————————————————————————– Unidentified Analyst,  ——————————————————————————– (technical difficulty) Capital. Congratulations on a great quarter. $4.7 million in revenue. Going to dial it back a little bit and go in a time machine. The Hindenburg and J Cap research pieces that came out seemed to be timed very well coming out together. Any feeling of that was maybe a coordinated attack? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Yes. Obviously, we feel that it was the hit piece, as they call it in the industry. We hired a global law firm, DLA Piper, to look into the (inaudible). They concluded their work at this time, and they come back to us with a few recommendations of some improvements to some processes to make sure that we make ourselves a little more bulletproof against those types of attacks in the future. ——————————————————————————– Unidentified Analyst,  ——————————————————————————– Okay. Great to hear. Now just a quick question around the revenue for the quarter. How successful was the MEG in delivering on the order book? And were any orders pulled forward? Or did you hit the numbers as expected? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Nothing was pulled forward. A lot of activity towards the end of the month, some of it did rollover into July, gave us a particularly strong start. I think this was a good quarter in terms of proving out our business model. I think you’ll see Q3 significant ramp-up in activities. ——————————————————————————– Operator  ——————————————————————————– Our next question comes from Susan Monroe, a private investor. ——————————————————————————– Unidentified Participant,  ——————————————————————————– My question is, you’ve said in the past that financing is the key to getting the fleet customer orders. And I think you’ve previously stated that there would be hundreds of billions in local currency available for companies to place orders. Can you provide some detail on the financing pools that are now live? What value is in place? What are they utilized for? And are there any restrictions on use? And also how much has been deployed currently? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Susan, thank you. That’s a very good question. The reason we put those pools together was primarily to drive the big-ticket items (inaudible) the trucks. It’s a slightly complex system that I won’t bore you all with, which is you have to be a AAA-rated. We’re part of the consortia, so we help bring the money in from utilities and insurance companies and others. So you have to have a AAA-rated entity with which to hold the assets that have been lease financed out. So a little bit of complexity in there. We haven’t used any of it for the sales that we did in Q2, but there are a number of sales completing in Q3 that we’ll be leaning into those financing pools. Those financing pools are quite large. Some of them are hundreds of billions of renminbi. That is with a B, so hundreds of billions, and you need that when the cost of some of the vehicles can be $250,000, $300,000, and then there’s multiple hundreds of units in some of the orders. So Q3, we’ll see the activity of those. Nothing was completed in Q2. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Okay. Can I follow-up with one more question, Al? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Sure thing. ——————————————————————————– Unidentified Participant,  ——————————————————————————– On your interview yesterday with Cleantechnica that was released, you talked a little bit about working with BeiBen. And I imagine those trucks each cost quite a bit of money. Is there a chance that these funds could run out? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Certainly, the funds will need to be replenished, Susan. It’s a very good question. So there’s 2 elements for this. The first one is, the capital that’s put up by the consortium partners to begin with. But then once we get close to tapping out that, so to speak, we’ll then take it out to the market, we’ll ABS refinance it to replenish the pool. And we continue to talk to the consortium partners who are getting government incentives and other things in order to make sure that there’s plenty of capital available. But yes, I mean, with those types of sizes of items, yes, it will take multiple funds and then the refinancing of multiple funds once we collateralize those assets to keep the pool topped up the size of conversion that needs to take place in China to meet the regulatory deadlines. We’re in Phase 1 of the financing. There’ll be 2 or 3 phases. It will be a much bigger, broader market. We do anticipate that other players will come into the market, and they’ll see what we’re doing, how we’re making money because although you can’t get capital out of China right now, there’s a lot of capital in China. And we frankly welcome competition because it’s always good. So I suspect that the short term, we’ll capture a lot of order flow because we have these. But in the long term, I expect it to be part of the common state of the market. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Got you. How much is the order book worth right now? Do you — can you — do you have figures on that? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– I don’t have the figures at hand. It changes every day with the new orders coming in. We’re moving towards — which we hope to have set up for September. We’re working on the template now. We’re moving towards giving an update every month of both the orders and the deliveries. so you can understand what’s coming down in the pipeline and you can also understand what we’ve done in a given month. And when we put that September number out, we’ll put out the July and August numbers together. ——————————————————————————– Operator  ——————————————————————————– (Operator Instructions) Our next question comes from Peter Wright with Intro-act. ——————————————————————————– Peter Wright,  ——————————————————————————– Great, and congratulations on a great quarter on MEG. And also, I guess I’ll start on 3Q guidance, nothing provided quantitatively, and it does look like you’re going to start providing an order book and delivery numbers on a monthly basis, which is great, better than peer transparency. How would you characterize for us how customers are scaling into their fleet upgrades? And if you kind of put in term maybe what is — with the press releases, we got some good ideas of kind of what the transactions look like in 2Q. How do you see this evolving from kind of the size of vehicle base is through the back half of the year? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Yes. I think, obviously, we’re not going to give guidance at this point because one of the questions that was at the beginning of the segment around the short selling activities, I don’t think it’s a smart move for us. So what we are going to do is give those very factual reports every month starting from September for the July and August numbers. I think those will show you. But suffice to say, Peter, we’re moving into bigger ticket size of stuff. I’d referenced one particular deal we’re working on for a mining operations customer. That is about 100 heavy trucks and 200 batteries. They’re buying 2 CATL batteries for every truck. So those are the types of order flow that you’re going to start seeing coming through much bigger ticket, much bigger driver of revenues. ——————————————————————————– Peter Wright,  ——————————————————————————– Great. And 2 little questions as a follow-up. Can you comment on any thoughts on the $12.5 million associated with the Fintech Village on the balance sheet? Is there any thoughts you can share with us on how to monetize this? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Well, at the moment, we’re looking at an offer that’s still in due diligence progress from the town. There’s some other interest from some private developers as well. The properties — the MEG segment is growing so fast. And the fintech segment, particularly some of the blockchain and other investments we did in 2017, 2018, they’re not ready for prime time because there are no regulatory approvals to do what we want to do with them at this time, but not just for us, but the (inaudible) and everybody else out there. They’re all waiting for (inaudible) their approval. So given where it is with MEG, we want to move our work towards that. The landscape’s changed a little bit. So we’re looking to realize the value back out of it and try and find somebody who can take the vision on for what we wanted to do. Because I think it’s a great location. I think there’s a fiber backbone between Boston and New York that services Connecticut very well. I think this will make a great campus for somebody. But at this point in time, it’s been a heavy lift. It’s been a drain on my resources, one of the 2 members of the team, constantly meeting to have (inaudible) [Wetlands Commission] to the Department of Environment to the EPA. It’s just taken a lot of time at the business. MEG is really starting to grow quickly, so that’s where we want to put our works. ——————————————————————————– Peter Wright,  ——————————————————————————– Wonderful. And very last question is, if you look at the MEG revenue breakdown in 2Q, is it pretty much for procurement spread is what is in the revenue in 2Q? Or is there any financing spread, including these numbers? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– There’s no financing spread. As I mentioned to Susan, the previous question, Peter, we didn’t make use of the funds in Q2, so we did all these placements without financing companies and banks in China. ——————————————————————————– Peter Wright,  ——————————————————————————– Congrats on the great quarter, guys. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Thank you. ——————————————————————————– Operator  ——————————————————————————– Our next question comes from Patrick St. Fort, a private investor. Our next question comes from Chris Zarney, a private investor. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Looking at the EV revenues in the 10-Q, it looks like there was $55,000 in Q1 and $695,000 in Q2. Now that the MEG platform is operational, will you be sharing how the platform looks? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Potentially, yes, we would. Can you help me understand what you mean by how the platform looks? Do you mean in terms of the S2F2C model? ——————————————————————————– Unidentified Participant,  ——————————————————————————– Yes. So if you’re interacting on the platform, I think investors would be interested to know how that kind of looks if you’re a fleet operator or some other user. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Okay. Do you mean the internally developed platform that we’ve built for the MEG team to take the orders into contract, automation, things like that? I mean at the moment, that’s designed to be a B2B tool that we have. We haven’t decided to show that to anyone because it’s being used internally, and it’s got a lot of what we developed is what we consider proprietary information in it. But it’s very much in beta with the MEG team and the customers that are making use of it. So I’m not sure we’ll be planning to do that anytime soon. But I think as it becomes the (inaudible) order with the manufacturers and others, then I think we’ll be in a position to show it. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Great. And also one follow-up. Can you provide any updates on business development efforts in the United States for MEG? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Yes. Thank you. That’s a really good question, Chris. As you saw, we’ve decided to accept. We weren’t planning to do any business development for MEG in 2020. In fact, not until the second half of 2021. But given the way that the industry is moving right now and the fact that we’re starting to get some inbound inquiries, we have inbound inquiries for everything from garbage trucks, the city buses to school buses coming from the U.S. and Canada. So we obviously negatively responsive to those inquiries. So we’re setting up a Medici Motor Works as quickly as we can to help service that. We thought it was important to have a brand in the U.S. given the strength of the brands that are already in the space. And this is our move into that space. It will be slightly different from the way we work in China. In China, there’s over 100 EV manufacturers. So we don’t want to be competing with them, making vehicles, but these are going to be Medici Motor Works branded vehicles that we sell in North America, whether it’s a bus, garbage truck, fire truck or heavy truck for the short haul or long haul, it will be in Medici. We’re working with OEM partners out of China and South Korea as well to make sure we can bring cost-efficient vehicles, because I think some of the other players in the market right now have pretty hefty price tags, but I’m not sure all the small independent owner-operators and others are going to want to pay for a truck when they’re used to driving a Peterbilt or something that’s pretty much bulletproof for 15, 20 years. So we see that as an area that we can really break into, and Medici Motor Works is our vehicle to do it. ——————————————————————————– Operator  ——————————————————————————– Our next question comes from David Joseph, another private investor. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Mr. Poor, congratulations on the earnings for the second quarter. The EV industry is really booming with other companies like Tesla leading the way, there’s Nikola, Nio and so forth. And Ideanomics is obviously right in there with the rest of them. You’re not a manufacturer, but you’re a facilitator with the MEG center, and the MEG center is basically end-to-end services. What do you see for the future for the industry at large? And as well as how does Ideanomics fit in and how will you grow along with the rest of those other companies that are doing very well in the EV sector? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Yes. I mean, as you mentioned, 2 of the — and thanks very much for your question, David. 2 of the companies that are making the significant traction right now would be Tesla and Nio. That’s primarily driven by passenger car. We’ve obviously (inaudible) used some Tesla vehicles to fulfill some orders in the taxi space. But — so we’re kind of an order partner for them. They are downstream manufacturer, they will supply vehicle to our customers. It’s a commercial space where the take off is only really just starting. The passenger space, I think, has been maturing over the last few years — passenger cars space. So it’s a commercial area where you’re going to see — and that’s no coincidence that you see Nikola, (inaudible) Tesla or others all starting to make noises on the commercial side. With the regulatory-driven framework in China, it’s been a little slow to get off the ground, but now it’s happening because people are running out of that time window that they need to fulfill. So — whereas another manufacturing in China, as I mentioned to previous caller, because of the fact that there’s over 100 manufacturers to compete with, we are a manufacturer out of Malaysia. We’ve got a 3 electric brand. And we will be bringing vehicles that have assembled here in branded as Medici Motor Works for the North American and European markets as well. ——————————————————————————– Unidentified Participant,  ——————————————————————————– I see. With Medici Motor Works, you are going to be bringing them through electric and Medici motors into the North American market. How do you see that working out in the coming years? I understand California has passed some legislation where all trucks have to be electric. Am I correct with that statement? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Yes. So California, as everybody knows, is a more progressive state with the environmental policies than most others in the states. Canada as well is — can be viewed more in the same spectrum as California is. They’re mandating to get moved over to electric — hydrogen to electric fuel cell trucks in the relatively what it looks like, long-term compared to some of the legislation in China and other Asian countries. But it’s very, very important because the U.S. market, North American market, Canada as well, is absolutely fast. We ship 70% of our goods by road. Most other countries don’t do that. So this is a big and very important commercial vehicle sector. And obviously, we’ve seen, in the recent COVID, just how Amazon and Walmart and others with local delivery vans as well have been able to substantially increase their business. So I don’t expect that to go away. So it’s going to be a really important market for us. In terms of tree, it will probably only be the bikes that we market, the Treeletrik in North America. Everything else will be marketed under Medici Motor Works. ——————————————————————————– Unidentified Participant,  ——————————————————————————– I understand. Very good. And going forward into Q3 and Q4, I gather we can expect the same type of revenues that are coming out of the company. I mean, you did a good quarter this year already. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– That was the beginning. We expect to ramp up significantly in Q3, significantly more after that in Q4. A lot of the big-ticket items is going to start to move in late this quarter, middle of this quarter, late this quarter, Q4 for certain. So you’re probably going to see a little in the revenue numbers. But it really depends whether we act as principal or agent. There’s a little bit of gap in U.S. GAAP accounting rules, which Conor is a bit more an expert on than I am. But depending on how the deal is done, and depending whether or not we purchase the vehicles first and sell them as opposed to just having it in pass through, it depends whether we book the gross or the net revenues in that regard. But regardless, I think you’ll see the number of units and the net revenues jump significantly from here forward. ——————————————————————————– Unidentified Participant,  ——————————————————————————– Sure. And if — I hate to take the stage, your last — the charging stations. I recall reading a news release regarding a charging station that you guys had initiated a few months back. What’s the status of that? ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– So we — with PetroChina, we have an ongoing project. The project we deliberately, along with PetroChina and CATL, we held it back a bit because the pace of technological advancement in battery storage and batteries and battery charging has been moving so quick. If we’d have done it as quickly as we signed up the relationship with PetroChina, we’d have put old charging stations in — at a point when you could do a lot better. So we held back a bit in starting that program. But significantly as well, we’ve secured an order for our first, what we call charging poles. So we’re putting out more than 100 charging stations out into the field for a customer within Q3. So that’s going to be the start of not only the charging revenues from the energy segment of the business, but also the ability to sell the wholesale with more and more (inaudible) that commercial fleets come online. ——————————————————————————– Unidentified Participant,  ——————————————————————————– I’m long Ideanomics, and very good quarter. Keep up the good work, gentlemen. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Thank you. Thank you so much. ——————————————————————————– Operator  ——————————————————————————– There are no further questions at this time. I’d like to turn the floor back over to Mr. Sklar for any final comments. ——————————————————————————– Tony Sklar, Ideanomics, Inc. – VP of Communications  ——————————————————————————– Thank you so much, operator. And that is all the time we have for today, and this concludes the Ideanomics Q2 2020 Investor Earnings Call. We encourage our community to continue to reach out to us, and we can answer your questions on an individual basis. You can send those questions to email@example.com. We’d like to (inaudible) of our listeners, shareholders, analysts and others who’ve taken the time to listen to our earnings call and we urge you all to refer to our latest SEC filings for any information that you may need. This call will be available on our website in the Investors section, and you will find the link there. To be alerted to our news, events and other information in a timely manner, we recommend you follow us on our social media 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. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Okay. Thank you, everyone. Are we clear? ——————————————————————————– Operator  ——————————————————————————– Yes, sir, we are. ——————————————————————————– Alfred P. Poor, Ideanomics, Inc. – CEO & Director  ——————————————————————————– Thank you very much. I’ll drop off. Thank you so much, everybody. And thank you again for hosting us. Thank you.