Ideanomics, Inc. (IDEX) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Ideanomics, Inc. Our host for today's call is Alfred Poor, CEO of Ideanomics. [Operator Instructions] I will now turn the call over to your host, Mr. Poor, you may begin, sir.

Thank you very much. This meeting will now come to order. Good morning, ladies and gentlemen. Welcome to the 2020 Annual Meeting of Ideanomics, Inc. I'm Alfred Poor, Chief Executive Officer and Board member, and I'm pleased to preside over this year's annual meeting of stockholders. At this time, I call the meeting to order. Our Corporate Secretary, Tony Sklar, will act as secretary of the meeting. We are holding today's virtual meeting as a live audio webcast due to the public health concerns caused by the novel coronavirus pandemic. The virtual meeting will allow you to vote your shares online from now through the closing of the polls by clicking the shareholder ballot on your screen. You also have the opportunity to download an agenda and rules of conduct for today's meeting. To conduct an orderly meeting, we ask that you abide by the rules of conduct, including refraining from recording or taking screenshots of the meeting or any of the meeting materials. The materials for public distribution will be available on the -- our Ideanomics website later today. Before we proceed to the business portion of our meeting, let me first introduce the Ideanomics Board of Directors and members of the company's senior management team. Members of the Board of Directors, in addition to myself, in attendance today are Dr. Bruno Wu, Shane McMahon, Jim Cassano, Harry Edelson, Jerry Fan, Chao Yang and Mr. John Wallace who will be retiring his position as of today. It is also my pleasure to introduce you all to Mr. Conor McCarthy, the Chief Financial Officer of the company; and Mr. Keith Byers, our Senior Vice President of Operations. The biographies of all of our directors are contained in our proxy statement for the 2020 annual meeting. Also in attendance today is Eric Lien, representing our independent auditor, BF Borgers CPA, PC; and Tony Carideo, representing The Carideo Group, as our inspector of elections. Now I'd like to hand you over to our Chairman, Dr. Bruno Wu, who will provide the Chairman's opening remarks. Over to you, Bruno.

Thank you so much, Al. I would like to start off by saying thank you to all of our investors. Whether you have been with us for a few years or a few months or even a few days, I'm very pleased that you join us on this journey. This year produced many unexpected surprises, all on a global scale. The COVID-19 pandemic has profoundly changed the way we work and live. We made the decision before the pandemic to hold our AGM in New York this year. So it is a big disappointment to host this as a virtual event and lose out on an opportunity to meet many of you. Nonetheless, I'm very pleased to be able to share with you the current and future prospects of Ideanomics. Ideanomics reorganized the market opportunity before many others and have viewed, over the last 2 years, our foundation for its future growth. 2020, despite of its challenges, is an important inflection point for the company where we have begun demonstrating our ability to enable commercial EV and scale and to deliver our onus where others were just starting to plan their order book. Being first isn't easy in a developing market and a new business, but we're starting to see rewards of our endeavors. When we started our journey into EV in late 2018, I was confident it would be a matter of when and not if that the industry would begin to grow and mature into a global movement to replace fossil fuels for vehicles' energy needs. I am very pleased to say that this time has come and that we are prepared and perfectly positioned to participate in [ enduring ] global clean energy [ cloud, a trend ]. I would also like to thank you, my fellow Board members, who like you are participating today in the meeting remotely: Vice Chairman, Shane McMahon; Alf Poor, Ideanomics' CEO; and our independent directors, Jim Cassano; Jerry Fan; Harry Edelson; Chao Yang; and finally, John Wallace, who is a dear friend, who will be stepping down on his directorship role after this meeting. Again, I'd like to reiterate my promise when I first became a shareholder and investor [Technical Difficulty]. Regardless what hurdles we had to overcome, what turmoil we had to overcome, regardless of how much difficulties, I'd like for all of you, my shareholders, fellow shareholders, to know that we're working relentlessly, we continue to work relentlessly, to make sure that our dream comes true and our promise to you, my promise to you, will come through. You have to be patient and wait and see, and that day is going to come. I would also like to thank each one of them, my fellow Board members and members of management, for their dedicated service. Because of their counsel, support and leadership, Ideanomics is stronger and more resilient and is positioned to succeed today in the long term. We have big plans. We have made big moves to support them. And we have the pieces in place to have a strong end to the year and a tremendous 2021 going forward. Our focus is on unlocking shareholder value in key assets, including MEG, Medici Motor Works and Treeletrik, as well as welcoming Solectrac into our investment portfolio, into our family, which is a tractor and agritech market play. It is a very large market and one where we can work together and do great things in the months and years ahead. Many thanks to all of you. It is late in Beijing. We are busy working around the clock on behalf of the entire Ideanomics family to make sure that we get our financing and battery programs in place so we can finalize many of the big-ticket sales. We don't lack sales. We just need to bridge the market amongst demand, capacity of production and the need for market to have new energy cars. Unfortunately, I will be -- not be able to remain on the line for the Q&A session. But I will ask each one of you to pay attention to Alf's presentation, please, now and continue to support him and the management team as you have until now as we are about to enter into a phase of growth and value creation, and we see Ideanomics become one of the leading companies in the EV industry. Thank you so much again, and I hope to be speaking with you again soon. Back to you, Al.

Thank you very much, Dr. Wu. Always a pleasure to hear from you. I know it's very late over there in Beijing where you are at this time. But thank you for taking the time to join us, and thank you for those remarks. Now I would like to move on to the business portion of our meeting. Tony Sklar will establish that the meeting has been duly called and that a quorum is present for the meeting. Over to you, Tony.

Thank you, Mr. Poor, and thank you, Dr. Wu. The Board fixed September 10, 2020, as the record date for determining stockholders entitled to vote at this meeting. We have, at this time, this -- we have at this meeting a voting list of stockholders of record as of that date. The list has been available for inspection by any stockholder of the company during normal business hours at the Ideanomics offices. It is also available for inspection during this meeting via the meeting website by any attendee who has registered for the meeting. This list shows that as of the close of business on the record date, there was 237,303,159 shares of the company's common stock outstanding and 7 million shares of our preferred stock Series A. Copies of the certified listed stockholders, the affidavit, proxy statement and proxy card will be filed with the meeting of minutes. As stated in the original notice, the purposes of this meeting are as follows: first, to elect 7 directors for terms expiring at the company's 2021 annual meeting; second, ratify the appointment of BF Borgers CPA, PC as the independent registered accounting firm of the company for the fiscal year ending December 31, 2020; third, approval of the amendment and restatement of our 2010 equity incentive plan, a copy of such amended and restated plan is included in Appendix A of the proxy statement of the plan, to increase the number of shares authorized for the issuance under this plan to 56,800,000, and so that the term of the plan shall be August 31, 2030; and fourth, approve the issuance of shares of common stock to Yorkville Advisors pursuant to the terms of the standby equity distribution agreement included in Appendix B to this proxy statement in accordance with the stockholder approval requirements of NASDAQ listing rule 5635(d); finally, to transact any other business that may properly come before the meeting and any adjournment or postponement of this meeting. Tony Carideo of The Carideo Group has been appointed inspector of elections. Mr. Carideo has filed and signed the oath of office and submitted a report as follows. There were, on the record date, a total of 237,303,159 shares of the company's common stock outstanding and 7 million shares of the Series A preferred stock entitled to vote at this meeting. The holders of not less than 148,276,652 shares of common stock are present in person or by proxy at the meeting, which constitutes approximately 62.4% of the voting power of the outstanding shares of this company. Accordingly, Mr. Poor, a quorum is present. I now hand it back to you.

Since a quorum is present, this meeting is hereby convened. Now we will conduct the formal business portion of this meeting. If there are any stockholders or proxies for stockholders present who desire to vote during the virtual meeting, please cast your vote at this time. If you have already voted, it is unnecessary to vote during the virtual meeting unless you wish to change your vote. Attending this meeting does not revoke any prior votes unless you vote during the meeting. Voting at this meeting effectively revokes any prior proxy you may have submitted. We will now move to the business portion of this to be brought before the meeting. First, we will move to the election of directors. Mr. Secretary, would you present the nominations for directors, please? Their biographies are contained in the proxy statement for this meeting.

Mr. Chairman, Mr. Poor, as indicated in the company's proxy statement for this meeting, the Board of Directors has nominated the following persons for election as the company's directors to hold office for terms expiring at the company's 2021 Annual Meeting of Stockholders or until their successors have been duly elected and qualified: Bruno Wu, Alfred, Shane McMahon, James Cassano, Harry Edelson, Jerry Fan and Chao Yang. The number of votes cast for each director nominee must exceed the number of votes cast against that nominee. For -- only votes for or against will be counted as votes cast for purpose of the election of each director. Abstention and broker nonvotes will not be counted. Back to you, Mr. Poor.

Thank you, Tony. The second item of business today is the proposal to ratify the appointment of BF Borgers CPA, PC as the company's independent auditor for the current fiscal year ending December 31, 2020. The affirmative for vote of a majority of the votes cast by the shareholders present in person or represented by proxy at this annual meeting and entitled to vote thereon is required to approve this resolution. Since this is a routine proposal, brokers may vote in their discretion on behalf of clients who have furnished voting instructions. The third item of business today is the approval of the amendment and restatement of our 2010 equity incentive plan, a copy of such amended and restated plan is included as Appendix A to this proxy statement, to increase the number of shares authorized for issuance under the plan to 56,800,000 and so that the term of the plan shall be until August 31, 2030. This proposal is a nonbinding stockholder advisory vote. The affirmative for vote of a majority of the votes cast by the stockholders present in person or represented by proxy at this annual meeting and entitled to vote thereon is required to approve this resolution. Only votes for or against this proposal will be counted as votes cast. Abstentions and broker nonvotes will not be counted. The fourth item of business today is the approval of the issuance of shares of common stock to Yorkville Advisors pursuant to the terms of the standby equity distribution agreement included as Appendix B for this proxy statement in accordance with the stockholder approval requirements of NASDAQ listing rule 5635(d). The proposal is a nonbinding stockholder advisory vote. The affirmative for vote for a majority of the votes cast by the stockholders present in person or represented by proxy at this annual meeting and entitled to vote thereon is required to approve this resolution. Only votes for or against this proposal will be counted as votes cast. Abstentions and broker nonvotes will not be counted. The Board recommends that you vote for each of these nominees for directors and each of proposals 2, 3 and 4. The polls have been open for voting on the business indicated in the original Notice of the Meeting and proxy statement since the beginning of this meeting at 10:00 a.m. Eastern Time. While we allow time for shareholders who have not already done so to complete their voting, I would like to remind you that some of the statements made at this meeting may be considered forward-looking. The company cautions investors that results of future operations may differ from those anticipated. We urge you to review the cautionary statements and other information contained in the company's SEC filings, including our annual report for fiscal 2019, which identifies certain factors that could cause actual results to differ materially from those projected in any forward-looking statements made during this meeting. Copies of the annual report and other filings are available through the company or online. It is now 10:17 a.m., and the polls are closed. I will now present an update on our business, and then we will begin our Q&A session. Okay. Good morning, everyone. I hope you can see the presentation on your screens at this time. I assume you can. Okay, and welcome once again to the Annual General Meeting of Shareholders. Okay, I'd like to talk to you in very broad terms today and try and answer a lot of the questions that come in from our shareholders. Tony and the communications team field a lot of inquiries that come in through phone, through social media and through e-mail. So what the idea of this year's presentation is to try and give you guys a broad view of the business, where it is today, where it's going tomorrow and to answer as many of those questions as possible. Essentially, what we're doing in the EV industry at this time is we're trying to make sure, in terms of our vision, that we all have a cleaner and better planet to live in both today and tomorrow. For our children, our children's children and our children's children's children, obviously, we need to make sure that our planet is taking corrective action against the damage done by fossil fuels, okay? Underneath that vision, we have a very, very clear mission, okay? That's for us to deliver meaningful products and services so that commercial fleet operators can move over to clean energy vehicles, EV and hydrogen to fuel cell, okay? And we want to do that in a profitable way where we grow shareholder value. So that's our mission. We have no other mission than that: make sure that we deliver what our -- what the market needs so that we can grow profitably, return shareholder value. EV is a very interesting market right now, okay? It's a global challenge. Ideanomics is a global company, okay? We're a U.S. company, okay? We're headquartered in New York. We're listed on the U.S. NASDAQ Exchange, but we've got very much of a global footprint. Whether it's our teams here that does the U.S. operations and global headquarters in New York, our software services group in Ukraine that came in through an acquisition that we made, whether it's the China-based operations with Dr. Wu, Zhou Qiong, Avis Zhu and others who help lead those operations in Beijing, Qingdao and Guangzhou or it's the Treeletrik team in Malaysia, we have a footprint that is truly global. Now this is very important when you come to understanding EV because EV is about global supply chain, okay? No China, no automotive industry, okay? So there's several distinct advantages for being -- having operations on the ground in China. Not only does it keep us close to the manufacturers, the OEM suppliers, the entire supply chain, it also keeps us close to the technology as well. Outside of Tesla, the majority of the EV innovation that's happened in the last 10 years or so has come out of China. So it's a really strong proposition for us to be a global team. We take advantage of labor arbitrage where we can as we see with the software services group, as we see with our China operations. So we're very much an American company with a global footprint. We take you through 2020 at a glance in the next 2 slides. We've managed to progress the business despite this being a very strange year with COVID-19. There's been tremendously strong growth in the consumer sector for EV. The financial markets are bullish on EV overall, including the commercial sector where we operate. And the global support of government and regional government levels for EV continues with very favorable policies. I think the pandemic has shown us just what can happen in countries with pollution issues. And I think the countries that we're talking to are doubling down on their legislation to try and bring forward their 0 carbon emission plans. COVID-19 disrupted both our business and our personal lives, of course. Travel restrictions remain in place for many of us. It's getting tighter here in the U.S. at this time, particularly if you live in the New York area. We're starting to get travel warnings between New York State, New Jersey, et cetera. But in terms of impact, we've been able to conduct our business other than the early Q1 and Q2 deliveries in China when China was shut down, to -- with not a tremendous impact. The one business unit that has probably been affected the most is our Treeletrik team in Malaysia. Malaysia has again put in force a fairly restrictive movement order recently, which does prevent the borders being open and many other things. But otherwise, in general [Audio Gap] digest this slide very well, okay? Deliveries mean revenue, okay? As you can see, we started our deliveries in the business in Q1, China was closed, couldn't get a lot done. But what you're seeing here is a business that is growing, and it's growing quickly. Fourth quarter is not an accurate number there. But we just want to show you that already, there's a strong feeling that the fourth quarter is going to be significantly larger than Q3, which was significantly larger than Q2 before it and Q1 before that. We are delivering on orders. Many people are gathering orders in the EV industry at this time. Ideanomics is delivering vehicles. I'll talk a little bit about what goes on behind the scenes other than the kind of money shot, which is the deliveries, to drive our revenues. We've invested in talent. So we've grown our sales teams in China and Malaysia in anticipation of this growth. We've also invested in our operations, our cross-border operations as well as in-country operations. In terms of sales operations, as you start to ramp up your deliveries and your revenues, okay, you start to build out a scalable infrastructure to support those. We've built a sales analytics group. We've got cross-border reporting automation in place now; a global pipeline reporting and tracking, so we can know exactly how many units are being delivered day-to-day, week-to-week, month-to-month, quarter-to-quarter basis. And we've also put in place our import infrastructure to bring in vehicles into the U.S. In terms of the -- on the marketing and tech side, Chinese MEG -- Chinese-language MEG website will be launching in Q4. The MEG sales hub has launched. For those of you who don't know what that is, I've mentioned it on a few interviews in previous earnings calls, we've been building a series of internal tools. Again, this is a new industry with a different kind of business, so we couldn't find off-the-shelf products to support what we needed. So everything from inbound inquiry, information gathering through to sales order contract automation is being facilitated through a homegrown platform that we're calling the MEG sales hub. It's available now in Chinese and English. We're putting Malay into it now so that the Treeletrik team can utilize it, and Medici Motor Works will also utilize this. This will be one global tool that will allow us to have a single vision into all of our sales operations globally. In terms of what else we've been doing, we reduced our corporate debt by around 50% this year. We've off-loaded some redundant assets in the U.S. Those are saving us approximately $5 million per year. Treeletrik's land acquisition actually closed. We got the sales tax invoice for that at the end of January with a 30-day pay on it. And 2 weeks later, the entire government in Malaysia shut down until mid-June. So we were not able to pay the stamp duty and subsequently get the title until we paid the stamp duty in June. And many of you know from purchasing real estate for your homes or otherwise, it takes a while for the title to come through. That's finally come through, so now we can actually start to plan confidently for use of that land. And as we previously mentioned, we're disposing of the Fintech Village asset. We do have offers on the table for that at this time, so we're considering those. And we did obviously make the right of first refusal to the town of West Hartford on that. So the discussions for that are ongoing. I'll talk you through a little bit about the market dynamics. Market dynamics are really important because this is what's happening that's affecting our decision-making and the way that we're building our business through the final quarter of 2020 into 2021 and beyond. There is a strong interest at the consumer level, and that is fueling the fleet operator interest. Fleet operators are now starting to understand, people they know, members of their family, who are starting to buy EVs, starting to drive them, that's what's peaking the interest, okay? The battery is the keystone in this entire EV movement, okay? The battery is big, okay? It covers everything from the ability to finance the vehicle through to the range it can drive, okay? And the Battery as a Service is emerging in China and South Asia as a key sales driver. The OEMs are evolving to service the full ecosystem. To bring EV fully online, obviously, you need a full supply chain not just for the vehicles you sell today but for the aftermarket spare parts and service requirements that go with it. And China, as well, it's critical. This is why I mentioned earlier why we have such a presence in China in terms of our global footprint. No China to manufacture and provide supply chain, no automotive industry, let alone EV, okay? The supply chain for EV is now mature in China, and you're starting to see that because you're starting to see offerings coming to market from some of the big auto and others. Hydrogen fuel cell technology is garnering interest. Battery EV cannot make long haul. Batteries can only contain so much power. So we're looking at hydrogen to do instant chemical electricity generation to make sure that vehicles can drive that 500, 600, 1,000 miles they need to, to go coast-to-coast or drive fruit and vegetables up from Florida to New York. These are challenges that the EV alone cannot solve, okay? If you do that in a truck, you can fast charge a passenger car very quickly, you cannot charge a huge truck because it takes hours to charge, okay? Charging networks are expanding. Just as interestingly, Level 2 home charging is growing really fast, okay? People are not relying on the charging networks out in the field for their short haul. They're installing Level 2 fast charges in their garages or close to -- somewhere close to their home so that they can charge their vehicle efficiently overnight. For those of you that drive EVs who do it for average commuting distances, you all know that you do not need to charge your EV more than once a week. You stick it on for 3 to 5 hours overnight, okay, you wake up the next morning, you never need to go to a gas station again. That convenience is playing out extremely well in the short-haul delivery and the consumer EV space. The cost of the tech is coming down. And as a result, something really important is going to be happening in 2021. Traditional big auto offerings are coming in, okay? This is really important for the industry because this will prove out the tipping point for the mainstream adoption at both consumer and commercial levels. Ford are coming out with an SUV version of the Mustang. That's a really bold move taking their most iconic brand. I love things like that from big auto. Hummer are coming out with their first vehicle in many years that's going to be fully EV, over 1,000 horsepower. Typical buyers of pickups and SUVs who buy for power for dragging boats, caravans, working -- using them as working vehicles are going to be pleasantly surprised at the torque that the electric vehicle can deliver instantly. When they see the power that's available in these vehicles for their short-haul needs, the transition over from things that currently, at this point, have anything between 5- and 7.5-liter engine is quickly going to disappear and they're going to move over to EV, at least in my opinion. On the policy side of things, we do see rebates reducing globally as the market matures, but the demand is strong in the mid-market. EV is here to stay. And one of the other pleasing things in terms of policies is, as I mentioned earlier, globally, the governments are setting more aggressive time lines to retire fossil fuels. So this isn't any longer an idealistic movement, this is a change in automotive that's happening. Just a short overview of our business segments. As we've spoken about many times, we do have some legacy assets from the media business. But in terms of our EV subsidiaries, we have MEG, which is a services company. And on the product side, we have Medici Motor Works, which is our new truck and heavy vehicle, specialty vehicle, division. We have Treeletrik, Malaysian-based, which primarily does mopeds and motorbikes and some smaller electric vehicles. And of course, we have our investment in Solectrac, which was announced this morning. In terms of our fintech subsidiaries, we have the Delaware Board of Trade. We have a JV with a large AI company called BBD that we brand as Intelligenta. And we have some more recent investments in Liquefy, which is a real estate tokenization platform; and TM2, which is a London and Reykjavík-based commodities trading platform. On the media side, we do have Grapevine. It is still with us. We're still in the closing of that divestment. And we still hold a long-term investment in a media company, which is a B2B version, I guess, of Hulu. It's a delivery platform for cable companies and online content aggregators. That's called Frequency Networks based out of Los Angeles. Okay, I'm going to speak a little bit more about the difference between products and services. I'd like our investors to pay attention to this because we get a lot of questions in asking what's MEG versus Medici, how do they fit in, okay? It's really very simple for you to understand. If you look in the top right of here, okay, Mobile Energy Global, MEG, that is a services company, okay? That exists to provide our S2F2C model that allows us to acquire large-scale commercial fleet customers. I've said this many times, the sales and the financing, okay, they're like the hook and the bait in the fishing analogy so that we catch the fish of the charging. The energy sales are ultimately where the recurring revenues come from. The revenues derived from the sale of vehicles and the financing of vehicles are onetime spreads and commissions. When you move over into the energy sales and the charging side of things, those are the recurring revenue streams that we're after in the services business. Then we move over into the product side of the business, Medici, okay? So Medici is going to be manufacturing through our OEM partners, okay, our own hydrogen to fuel cell technology trucks. They will also be producing Medici-branded battery electric vehicle trucks as well as hydrogen. Okay, in Treeletrik, our Malaysia-based investment, they're primarily in the 2-wheel market. That is the primary motor transportation in the ASEAN region. The ASEAN region is the area where Malaysia is. That contains Thailand, Singapore, Indonesia, the Philippines, Vietnam, several other countries. It's a high-population, high-growth area, and 2-wheelers are very important there. So they are in the business of manufacturing with OEM partners 2-wheelers and some small 4-wheelers. Now we move on to our latest one, which isn't owned by us in the way that Medici and Treeletrik is. We have a minority investment that we've just closed in the last few days with Solectrac. That is a California-based, okay, maker of EV tractors. And the reason that they're very interested in us and we were very interested in them is because they wanted a strategic partner who could help them with things such as supply chain and credit lines in China, okay? And we were looking for a company that has product, has patent, has sales, has an order book. Solectrac have all of these. I'd like you all just to digest that for a moment, okay? They have patents, they have product, they have sales and they have an order book. Most of the other people in the specialty vehicle space, in EVs, only have an order book, okay? So it's a very important distinction to know. And any companies that we will be looking to make an investment in or acquire in the future will have to have those 4 things: product, patent, revenues from sales and an ongoing order book. They will be the only types of customers that we'll be -- or companies that we will be interested in acquiring. So moving on. As well as investing in companies in the product and service side, we're investing in people, okay? So far in 2020, as I mentioned, we've augmented the sales teams in Asia Pacific, in Malaysia and China. We've expanded the staff in our global operations. We've hired recently a number of people. We have only PR-ed one of them, but we've hired a number of people that bring hydrogen technology expertise to us. Why have we hired these people, you ask yourselves. Well, I answer you. We've hired them because hydrogen is a very, very significant differentiator for the long-haul part of the clean energy vehicles industry, okay? Battery EV at this point in time is not going to get you through the long haul, okay? So hydrogen is a clean, 0 carbon emission technology that is quickly maturing. We see Medici Motor Works' ability to compete being -- based on being cost efficient. By hiring the people that know the tech, we can build our own hydrogen tech. That is going to be the most expensive part of producing a hydrogen to fuel cell truck, is licensing or buying that tech. So we have acqui-hired the people that have got long-term experience in the industry and patents and inventions in their name so that we can capture that hydrogen tech ourselves so we can reduce our costs. So we don't need to buy it. We don't need to license it. That will allow us to bring a cost-efficient vehicle to the market. That is why we've made that move. We've also hired a CFO for Treeletrik. The person signed with us earlier this month. It is not like America where you give 2 weeks' notice. Other parts of the world, you need to give a longer notice period. The gentleman had to give 2 months' worth of notice to his current employer, which is a big auto. It's an international brand. He was the head of the ASEAN operations there in terms of the finance function. He is joining us to help us with the growth that's anticipated in the Treeletrik team. In terms of what we're going to be doing in Q4, additional salespeople are coming in. We're looking to bring people on who are experienced in the EV industry and the automotive industry to help us service our order book. We're recruiting people in global supply chain and partnerships. Again, as I mentioned, you can't just stand up Medici and sell a few trucks. You need an aftermarket servicing, distribution and other things like that. So we're bringing in the right people to be able to help us stand that business up. Global corporate development. We are, as I said, a global company. We have a cross-border footprint. We need corporate development people to help us work in multiple jurisdictions. And global marketing as well. Until now, our marketing efforts have been very much condensed into single countries where we operate, such as the U.S. We're now bringing on a marketing team that will help us with our cross-border marketing as well. In terms of 2021, we're going to be expanding our sales teams. We have a large order book. We continue to receive inquiries and orders in on a day-to-day basis. We need the sales teams to help us further develop the business and service those orders. Why can we be confident about the industry? These 4 charts are made up of data that comes from the Bloomberg New Energy Forum. For those of you that subscribe to a Bloomberg terminal, this is an amazing source of information, probably the best in the EV industry today. What you can see here is wherever you see light blue versus gray, that is the growth of EV versus traditional combustion engine vehicles. If you look out to the upper right-hand quadrant, you will see that there is less aggressive assumptions in terms of EV capturing the truck market. That is because of what I've just mentioned in the last few minutes. Long-haul trucks typically will not be using battery EV. Short hauls, such as mining, construction, those types of heavy trucks, they fit perfectly with battery EV, but long haul does not because of battery charging times on huge batteries, okay? So that's why they've been less aggressive, okay? Factor in hydrogen as a differentiator here, and I believe you'll see much more aggressive numbers in that particular sector. But every other sector you see, including in the bottom right, the global electricity charging demand, you see that we're in a high-growth industry. And we believe, per Dr. Wu's comments, that we're perfectly positioned to take advantage of that. I'm going to talk to you a little bit about our pipeline. We get a lot of questions in about our pipeline. I want to give you guys a good view here. Okay, typically, when you're looking at the sales funnel, those of you who work in sales organizations, who have managed sales teams, you would know that typically, the first column would be where you would expect to see the majority of the activity. And it's called a sales funnel because it works like that. The leads come in very broadly, and then they get honed down into the sales that come through the thinner end of the pipe. Okay, I want to show you this because this is very important. You will see that we have a large number of leads and early discussions taking place, as you would expect to see, at the top of the sales funnel. Then you see the order specification, proposal, negotiations and delivery are in low single digits, okay? We are very efficient at closing orders, okay, where we can get the financing in place. But you will see in our pipeline, we have the majority of our pipeline in the financing and contracts stage, but it's primarily the financing. That is the vast majority of what's in there. Financing for EV big ticket is difficult, as Dr. Wu mentioned. I'm going to take you through some innovations that we're doing to help release that bottleneck in there. What I can tell you is those orders are secure. So if you've seen something from us that's been PR-ed in the past that's got a large order number on it, there would be a counter PR if that deal is dissolved and disappeared. So the order book is intact. It's the financing that's been the bottleneck on getting some of the orders through. Here's what we're doing. And we debated showing you this particular slide because it's complicated. But this will also help you understand why when you're on social media or you're in your Discord and your telegram account, everything is immediate, "I need an immediate answer. I need an immediate answer," and everybody feeds off each other's immediacy. You can't put Battery as a Service program in place in anything that will quench the thirst of social media users, okay? We show you this because we show you there's complexity, and there's other partners involved. And quite simply put, if you look at the gray boxes, okay, that is the customer order flow coming into the company on the left, okay? The customer delivery is on the right. And everything in the middle is what has to happen for Battery as a Service to be provisioned for commercial EV fleet operators. You've all seen recently that NEO, who is in talks with a number of partners and launched a Battery as a Service product on the consumer side, we were in those talks. We did not participate because it needed a large cash investment, and it was a consumer play. But what we have done is we've gone and worked with the same battery partners. And our funding partners in our lease financing pools have said to them, "They want to rejig the way that we're doing things," okay? The major fleet operators are coming to us, and they're saying, "We have a conundrum," okay, "We have the government regulations that say we need to change our fleet. However, we have battery technology that's getting cheaper and more powerful by the year, so why do I want to finance a finished product today where the battery may have much less value and much less capability than it will be tomorrow?" So that's what you see when we say that we see Battery as a Service coming as a trend, okay? If the battery is part of the service leasing program and it's not actually owned by the fleet operator, the fleet operator can make a much more confident decision because instead of financing a finished product that he may finance for 4, 5, 6, 7 years, okay, he can finance just the shell of the vehicle for that term and he can lease the battery for a 2- or 3-year period. Then he doesn't lock himself into the technological progress and cost efficiency that's taken place in the market over the last few years and is anticipated to continue going forward. So I won't take you through all of this, but what we're essentially trying to show you here is there's a number of parties involved. Bruno is in China right now, our Chairman, Dr. Wu, okay, talking to CATL, talking to the funding consortium that we put together for the lease financing pools to tweak things so that we can offer battery as a service as well as the financing of the vehicle without the battery. Once we have that in place -- and there's a lot of talks taking place, CATL and ourselves, to produce an extensive feasibility study to show to the funding partners, the LPs and the funds, which has been signed off, and we're in the latter stages of closing those out now. Once they come to market, you will see the big-ticket orders that we have get fulfilled very quickly. Okay, in terms of pipeline status, we get asked a lot where are the trucks, where are the buses. Some of it, as you see, is dependent on the battery of the service, funds being finalized. Secondly, I want to talk to you just about a few of the key deals that we have in place, okay? As I mentioned, our key deals are in place, whether it's the seaport for heavy trucks, for moving around in a closed circuit, containers, taking them off ships, putting them on container stacks, moving them onto trucks for distribution and vice versa. And we have orders in place with Qingdao Port and other ports. Those are secure. Those are pending the Battery as a Service offering coming online. Same with mining, we have orders in Inner Mongolia and in Yunnan provinces to provide heavy trucks and logistical vehicles for mining-related uses. Again, those are in our Battery as a Service offering, and we expect to fulfill those as soon as that comes online. And the same with the large-scale orders we have at the city bus and toll bus level as well. These are why you haven't seen these big-ticket items delivered today. It's because the fleet operators don't want to invest long term in a battery that may not have a value tomorrow, okay, a very fundamental part of the business. And what you're seeing Ideanomics do right now, these fundamentals are going to play out in the European market, in the North American market, the South Asia market, in the other markets as well. So what we're going to do when we bring Medici over is we've already started discussions with the financing companies, preliminary discussions in North America, to talk to them about the challenges so that we can have the financing programs in place for Medici and other vehicles that we need to sell in the future. Okay, I thought it was very important to take you through MEG. I'm not going to walk you all through this, but this presentation is going to be available on our website. I hope this answers a lot of the questions that investors are asking, okay? As I said earlier, MEG is a service offering business, okay? It has an S2F2C model to acquire large-scale customers, okay? As I mentioned a few moments ago, sales and financing onetime revenues, the holy grail we're chasing here is the energy-based revenues from charging and wholesale prepaid electricity for people who will have charging apparatus at a depot or on site. I'll give you a quick update on our MEG Center. We've got a lot of interest there. Renovations at the MEG Center in Qingdao are progressing. Next phase comes online in Q4. Some aspects of those will be online as early as mid-November, and partners will be joining us on-site in showrooms in 2021. Currently, MEG's B2B sales and finance personnel are active at the site in addition to the existing retail car business. This is a big deal for us, this MEG Center, okay? So we want to make sure that we get it done, right? We've been slowed down with a lot of noise in the summer this year. People don't understand when you get that kind of negative attention, the reparation that you have to do isn't simply one phone call. Citi investment fund and others called our team, including Dr. Wu, into many, many meetings to discuss the negative attention we received. But this is a flagship, a part of our crown jewels, I think you would call it for our EV operations, and we do plan more regional centers like this in the future. I'll talk to you a little bit about Medici Motor Works. Now we've covered MEG. Medici Motor Works is our truck and bus division, and we will be bringing that as a brand to North America. We decided to give it a brand because I think selling trucks under the MEG name, it probably wasn't appropriate. It needed something that was stronger in terms of brand appeal. Okay, Medici, we are developing hydrogen fuel cells for heavy trucks and buses, okay? We are in manufacturing at this time. We do hope to have our first vehicle in terms of being ready as a POC in December. We're going to talk a little bit more about the process to bring it to the U.S. in a moment. But we are -- we have paid industrial designers to come up with these designs. And we are working with manufacturers now to get our vehicle built using hydrogen technology that is coming from those guys that we've recently hired so that we own that tech, as I've said earlier. Our competitive advantage will be price. Having proprietary hydrogen tech, as I mentioned earlier, that I don't need to license, I don't need to purchase, allows me to control my market pricing. It is our belief that we will be able to market our trucks and buses at 15% to 20% less of the purchase price as well as the lifetime cost of ownership reduction compared to our competition. Here's North American market time line. We are bringing vehicles in at this time for marketing purposes, okay? You bring them in for marketing and testing and POC. That requires, even though they're EV, to get a submission of EPA waiver, EPA being Environmental Protection Agency, and some specifications that we need to do in terms of getting them certified for being on the roads in the U.S. and Canada, okay? We hope to have the POC vehicle manufacturing complete. We will showcase that to the market. You know us, when we have something to holler, we will holler. In terms of Q1, we will be getting the U.S.A. certification done. There may be some reengineering that needs to be done, okay, brake systems, other things. There's different compliance standards from Europe, to the U.S., to Asia, okay, so the vehicle being manufactured by OEM partners in China and South Korea. Once we bring it over, we'll get it tested to U.S. certification, of course. The vehicles will come in shipping-wise into Port Newark in the New York Port Authority area. And the U.S. homologation, which is a word that's difficult to say, that basically means you're getting it up to standard for use in North America and certified for road use, will take place. And then we expect to be able to get the first units ready for resale into -- once the reengineering has taken place into the second half of next year. I'll talk to you a little bit about Treeletrik. Tree is an interesting company, as I mentioned earlier. It's been probably the business unit that's been impacted the most from the shutdown of the COVID. That country has been very quick to close its borders and even put in place regional restrictions of movement to control the virus. The reason they do that is they are an equatorial country, which means they have a high level of heat and humidity year round. They do not have seasons. They just have rain or sun. So they are typically pretty well insulated from the heat and humidity from outbreaks of coronavirus and flu-based illnesses. But obviously, COVID-19 has proven to be a bit trickier. So when you do have viruses such as that spread in warm humid climates, it can be difficult to eradicate. That's why they've had to be a lot stronger in the way that they've dealt with this. The good news for them is they have large-scale orders in hand, okay? And we've recently been able to get trucks into Indonesia and Thailand to start fulfilling those orders, okay? They largely have the vehicle certification done at Malaysia level for all of ASEAN, but there is some localized final certifications that need to happen. Those are taking place at this time. And they are working with Conor and the finance team to line up the first large-scale batches of orders to start fulfilling those sales in those 2 countries. The predominant vehicles that we're going to sell under the Treeletrik brand are the mopeds. Although we will bring -- they do sell small trucks and a small EV passenger car at this time, and we will be getting more vehicles brought into them. But the mainstay of transport in that part of the world is the motorbike or the moped. We are bringing, as part of our Medici sales effort, Treeletrik-branded bikes that we will be selling under Medici into the U.S. Those can be brought through relatively faster than the trucks can because, obviously, the truck tech is new so that's going to be subject to more scrutiny. These are already certified to EU standards, which Malaysia adopts. So the tweaks needed to get the homologation done for the U.S. should be a lot quicker. So expect to see those on our shores and available faster than the trucks. Last piece I want to take you through in terms of our product, a brand-new investment we made. We're really excited about this investment. We love Steve Heckeroth and the team there. Steve has been in the solar and EV space for close to 50 years. He's worked for some very interesting companies, and he's got some interesting patents and produced what we believe is an outstanding product for the agricultural market. We're going to be helping these guys, as I said. One of his needs was for a strategic investor. And not just for an investor. He needs help with supply chain efficiencies, credit line, those types of things for EV battery makers and EV motors, all of which -- the majority of which, as you know, are produced out of China. So we were a perfect fit for him. He was a perfect fit for us. We see the tractor and agritech sector being one of the largest sectors for the specialty vehicle segment. And we're very pleased to have him as part of the family, and we have big plans for Solectrac going forward. Finally, just want to talk about our M&A strategy. I touched on this earlier, our priorities in terms of EV, enhance tech, strengthen our supply chains and distribution channels, having the charging and energy management solutions in place and accelerating EV adoption into new geographic areas. Okay, in terms of our fintech priorities, there is a big convergence between fintech and EV, as we've told you. The financing is the most challenging part of EV adoption by commercial fleet operators, okay? We still continue to have conversations with fintech companies that are of interest to us. We're looking for people who are in mature industries that are looking at disruption. Again, the name Ideanomics was brought about so that we could be a catalyst for change, but we're always looking at companies that do things differently. Loyalties, payments, big data, all very interesting to us because of the overlap with what we can do with the EV ecosystem. And as I mentioned earlier, we've bought some interesting companies in the past, but most of them have been future potential. That is no longer our strategy, okay? Our characteristics for M&A targets continue to be aligned with our strategic priorities. They have to be synergistic. They have to bring us their main expertise, okay? I want to see patents and products. As I said, it's 2 really important things coming. If you come to us with a story, we will not write you a check, okay? Stable cash flow positive businesses. People have got to have sales and order books. We're not buying anybody that's got a high burn rate that's going to chew through our cash on hand. So we're looking to bring companies in that add accretively to our earnings and our balance sheet, okay, and anyone that's got a significant growth potential and where we can be a force multiplier as we are with Solectrac. Solectrac needs to get assistance with its China-based relationships for supply chain and credit lines. That is absolutely 100% a bull's eye for a company like Ideanomics, as you know. Okay. That completes the update there. I hope I've answered a lot of the investor questions that are out there. We've tried to cover as many things as we can. This will be filed publicly. This will be available on our website, this presentation. But I'd like to say thank you to everybody for sitting through that. I know it's audio only. So what I would like to do now I hand you back to Tony Sklar.

Thank you very much, Al. That is fantastic. We can now open up the meeting for questions and comments from stockholders or stockholders' representatives regarding the matters presented at this meeting. Again, we will continue to observe the rules of conduct that have been made available on the virtual meeting website. All questions should be directed to me. And in responding, I may call upon some of the members of the management team who are present. If you have not yet submitted a question and wish to do so, please make sure to identify yourself in your submission by giving your name and affiliation, if any, and identifying yourself as a stockholder or proxy. I now will pause to allow some questions to be answered in the text box on the virtual shareholder meeting website.

Okay. We have quite some questions that have come in previous to the presentation, and I believe that most of those have been answered. However, just to reiterate some of the questions that are being answered -- or asked, sorry, are in conjunction with the marketing efforts of the homologation. And among the questions is why are we not bringing in, in parallel for marketing purposes and road purposes for compliance? And maybe you can expand on that a bit, Alf.

Absolutely. Keith, I know you're with us, I don't know if you want to field this particular question given that you're heading up our homologation effort, so it's okay if you want to deal with it.