Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019 | |
Document And Entity Information | |
Entity Registrant Name | IDEANOMICS, INC. |
Entity Central Index Key | 0000837852 |
Entity Filer Category | Non-accelerated Filer |
Document Type | S-1/A |
Document Period End Date | Sep. 30, 2019 |
Amendment Flag | false |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Current assets: | |||||
Cash and cash equivalents | $ 1,686,596 | $ 3,106,244 | $ 7,208,037 | [1] | |
Restricted cash | [1] | 369,280 | |||
Accounts receivable, net | 2,941,245 | 19,370,665 | 26,962,085 | [1] | |
Licensed content, current | 0 | 16,958,149 | 16,958,149 | [1] | |
Inventory | [1] | 216,453 | |||
Prepayments | 1,013,384 | 2,042,041 | 2,202,728 | [1] | |
Other current assets | 2,371,913 | 3,594,942 | 2,276,096 | [1] | |
Total current assets | 8,013,138 | 45,072,041 | 56,192,828 | [1] | |
Property and Equipment, net | 14,504,993 | 15,029,427 | 127,275 | [1] | |
Intangible assets, net | 81,960,331 | 3,036,352 | 148,874 | [1] | |
Goodwill | 10,028,073 | 704,884 | 0 | [1] | |
Long-term investments | 42,159,313 | 26,408,609 | 6,975,511 | [1] | |
Operating lease right of use assets | 6,845,031 | 0 | |||
Other non-current assets | 1,252,797 | 3,983,799 | |||
Total assets | 164,763,676 | 94,235,112 | 63,444,488 | [1] | |
Current liabilities: (including amounts of the consolidated VIEs without recourse to Ideanomics, Inc. See Note 4) | |||||
Accounts payable | 1,543,291 | 19,265,094 | 26,829,593 | [1] | |
Deferred revenue | 458,894 | 405,929 | 222,350 | [1] | |
Accrued interest due to a related party | 140,055 | 20,055 | [1] | ||
Accrued salaries | 706,351 | 737,072 | [1] | ||
Amount due to related parties | 2,565,812 | 800,822 | 434,030 | [1] | |
Other current liabilities | 9,141,870 | 801,560 | [1] | ||
Current portion of operating lease liabilities | 912,271 | 0 | |||
Convertible promissory note due to related parties | 1,288,032 | 3,000,000 | [1] | ||
Total current liabilities | 15,910,170 | 29,933,597 | 32,044,660 | [1] | |
Deferred tax liabilities | 0 | 513,935 | |||
Asset retirement obligations | 6,392,500 | 8,000,000 | |||
Convertible promissory note due to related parties - long term | 3,000,000 | 0 | |||
Convertible note-long term | 12,627,531 | 11,313,770 | |||
Promissory note - long term | 3,000,000 | 0 | |||
Operating lease liability-long term | 6,329,533 | 0 | |||
Other non-current liabilities | [1] | 384,243 | |||
Total liabilities | 47,259,734 | 49,761,302 | 32,428,903 | [1] | |
Commitments and contingencies (Note 18) | [1] | ||||
Convertible redeemable preferred stock: | |||||
Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of September 30, 2019 and December 31, 2018 | 1,261,995 | 1,261,995 | 1,261,995 | [1] | |
Equity: | |||||
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 132,696,071 shares and 102,766,006 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 132,696 | 102,765 | 68,509 | [1] | |
Additional paid-in capital | 255,737,318 | 195,779,576 | 158,449,544 | [1] | |
Accumulated deficit | (138,468,441) | (149,975,302) | (126,693,022) | [1] | |
Accumulated other comprehensive loss | (1,557,346) | (1,664,598) | (782,074) | [1] | |
Total IDEX shareholder's equity | 115,844,227 | 44,242,441 | 31,042,957 | [1] | |
Non-controlling interest | 397,720 | (1,030,626) | (1,289,367) | [1] | |
Total equity | 116,241,947 | 43,211,815 | 29,753,590 | [1] | |
Total liabilities, convertible redeemable preferred stock and equity | $ 164,763,676 | $ 94,235,112 | $ 63,444,488 | [1] | |
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS (Unaudited) | |||
Convertible redeemable preferred stock, Series A shares issued | 7,000,000 | 7,000,000 | 7,000,000 |
Convertible redeemable preferred stock, Series A shares outstanding | 7,000,000 | 7,000,000 | 7,000,000 |
Convertible redeemable preferred stock, Series A liquidation and deemed liquidation preference | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 132,696,071 | 102,766,006 | 68,509,090 |
Common stock, shares outstanding | 132,696,071 | 102,766,006 | 68,509,090 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||
Revenue from third parties | $ 249,512 | $ 43,707,937 | $ 949,384 | $ 362,628,296 | $ 278,024,867 | $ 125,379,786 | [1] | ||
Revenue from related party | 2,854,178 | 0 | 43,554,178 | 0 | 99,718,005 | 18,973,054 | [1] | ||
Total revenue | 3,103,690 | 43,707,937 | 44,503,562 | 362,628,296 | 377,742,872 | 144,352,840 | [1] | ||
Cost of revenue from third parties | 243,360 | 42,844,876 | 750,290 | 115,729,433 | 130,464,906 | 137,188,393 | [1] | ||
Cost of revenue from related parties | 0 | 0 | 466,894 | 244,110,132 | 244,110,132 | ||||
Gross profit | 2,860,330 | 863,061 | 43,286,378 | 2,788,731 | 3,167,834 | 7,164,447 | [1] | ||
Operating expenses: | |||||||||
Selling, general and administrative expense | 7,769,503 | 4,333,259 | 18,442,280 | 16,861,425 | 22,471,976 | 13,129,313 | [1] | ||
Research and development expense | 0 | 667,416 | 0 | 1,393,025 | 1,654,491 | 406,845 | [1] | ||
Professional fees | 1,388,842 | 1,927,431 | 3,918,461 | 3,280,729 | 4,749,799 | 3,200,885 | [1] | ||
Depreciation and amortization | 806,481 | 291,512 | 1,420,480 | 314,737 | 352,332 | [1] | 308,102 | [1],[2] | |
Impairment of property and equipment | 2,298,887 | 0 | 2,298,887 | 0 | |||||
Impairment of other intangible assets | 134,290 | 216,468 | [1],[2] | ||||||
Total operating expense | 12,263,713 | 7,219,618 | 26,080,108 | 21,849,916 | 29,362,888 | 17,261,613 | [1] | ||
Income (Loss) from operations | (9,403,383) | (6,356,557) | 17,206,270 | (19,061,185) | (26,195,054) | (10,097,166) | [1] | ||
Interest and other income (expense): | |||||||||
Interest expense, net | (639,395) | (145,610) | (1,955,476) | (201,782) | (804,595) | (94,618) | [1] | ||
Change in fair value of warrant liabilities | [1],[2] | (112,642) | |||||||
Equity in loss of equity method investees | (40,369) | (13,882) | (606,390) | (44,316) | (180,625) | (129,193) | [1],[2] | ||
Gain on disposal of subsidiaries | 1,057,363 | 0 | 1,057,363 | 0 | (1,183,289) | ||||
Loss on remeasurement of DBOT investment | (3,178,702) | 0 | (3,178,702) | 0 | |||||
Other | (99,997) | (925,771) | (155,946) | (558,271) | (99,765) | (426,698) | [1] | ||
Income (Loss) before income taxes and non-controlling interest | (12,304,483) | (7,441,820) | 12,367,119 | (19,865,554) | (28,463,328) | (10,860,317) | [1] | ||
Income tax benefit | 0 | 0 | 513,935 | 0 | 40,244 | ||||
Net income (loss) | (12,304,483) | (7,441,820) | 12,881,054 | (19,865,554) | (28,423,084) | (10,860,317) | [1],[2] | ||
Net (income) loss attributable to non-controlling interest | (1,407,384) | 254,973 | (1,374,193) | 637,314 | 996,728 | 357,268 | [1] | ||
Net income (loss) attributable to IDEX common shareholders | $ (13,711,867) | $ (7,186,847) | $ 11,506,861 | $ (19,228,240) | $ (27,426,356) | $ (10,503,049) | [1] | ||
Earnings (loss) per share | |||||||||
Basic (in dollars per shares) | $ (0.11) | $ (0.10) | $ 0.10 | $ (0.27) | $ 0.35 | $ 0.17 | |||
Diluted (in dollars per shares) | $ (0.11) | $ (0.10) | $ 0.10 | $ (0.27) | 0.35 | 0.17 | |||
Basic and diluted loss per share (in dollars per share) | $ (0.35) | $ (0.17) | [1] | ||||||
Weighted average shares outstanding: | |||||||||
Basic (in shares) | 127,609,748 | 74,063,495 | 113,964,933 | 71,574,303 | 78,386,116 | 61,182,209 | |||
Diluted (in shares) | 127,609,748 | 74,063,495 | 118,319,893 | 71,574,303 | 78,386,116 | 61,182,209 | |||
Basic and diluted (in shares) | 78,386,116 | 61,182,209 | [1] | ||||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | ||||||||
[2] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | [1] | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) | |||||||
Net income (loss) | $ (12,304,483) | $ (7,441,820) | $ 12,881,054 | $ (19,865,554) | $ (28,423,084) | $ (10,860,317) | [2] |
Other comprehensive income (loss), net of nil tax | |||||||
Foreign currency translation adjustments | 23,502 | 708,140 | 102,481 | 565,315 | (882,516) | 766,070 | |
Comprehensive income (loss) | (12,280,981) | (6,733,680) | 12,983,535 | (19,300,239) | (29,305,600) | (10,094,247) | |
Comprehensive loss attributable to non-controlling interest | (1,470,410) | 243,078 | (1,419,916) | 614,298 | 978,282 | 401,359 | |
Comprehensive income (loss) attributable to IDEX common shareholders | $ (13,751,391) | $ (6,490,602) | $ 11,563,619 | $ (18,685,941) | $ (28,327,318) | $ (9,692,888) | |
[1] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | ||||||
[2] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) | Series E Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings / Accumulated Deficit | Accumulated Other Comprehensive Loss | Seven Stars Cloud Shareholders' Equity | Non - controlling Interest | Total | ||
Balance at Dec. 31, 2016 | [1] | $ 7,155 | $ 53,918 | $ 152,792,855 | $ (115,829,451) | $ (1,371,498) | $ 35,652,979 | $ (5,325,481) | $ 30,327,498 | |
Balance (in shares) at Dec. 31, 2016 | [1] | 7,154,997 | 53,918,523 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 1,305,829 | 1,305,829 | 1,305,829 | |||||||
Common stock issuance for RSU vested | $ 118 | (118) | ||||||||
Common stock issuance for RSU vested (in shares) | 117,715 | |||||||||
Common stock issuance for option exercised | $ 189 | 100,129 | 100,318 | 100,318 | ||||||
Common stock issuance for option exercised (in shares) | 188,687 | |||||||||
Common stock issued for warrant exercised | $ 907 | 1,724,819 | 1,725,726 | 1,725,726 | ||||||
Common stock issued for warrant exercised (in shares) | 907,390 | |||||||||
Common stock issuance | $ 6,222 | 11,969,368 | 11,975,590 | 11,975,590 | ||||||
Common stock issuance (in shares) | 6,221,778 | |||||||||
Common stock issued from conversion of series E preferred stock | $ (7,155) | $ 7,155 | ||||||||
Common stock issued from conversion of series E preferred stock (In shares) | (7,154,997) | 7,154,997 | ||||||||
Capital contribution from noncontrolling interest shareholder | 490,000 | 490,000 | ||||||||
Acquisition of Guang Ming | [1] | 444,060 | 444,060 | 444,060 | ||||||
Disposal of subsidiaries | (9,887,398) | (360,522) | (220,737) | (10,468,657) | 3,947,473 | (6,521,184) | ||||
Net income (loss) | (10,503,049) | (10,503,049) | (357,268) | (10,860,317) | [2],[3] | |||||
Foreign currency translation adjustments, net of nil tax | 810,161 | 810,161 | (44,091) | 766,070 | [2] | |||||
Balance at Dec. 31, 2017 | $ 68,509 | 158,449,544 | (126,693,022) | (782,074) | 31,042,957 | (1,289,367) | 29,753,590 | [4] | ||
Balance (in shares) at Dec. 31, 2017 | [1] | 68,509,090 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 121,190 | 121,190 | 121,190 | |||||||
Common stock issuance for RSU vested | $ 13 | (13) | ||||||||
Common stock issuance for RSU vested (in shares) | 13,464 | |||||||||
Common stock issuance for option exercised | $ 43 | 2,589 | 2,632 | 2,632 | ||||||
Common stock issuance for option exercised (in shares) | 42,501 | |||||||||
Common stock issued for warrant exercised | $ 300 | 524,700 | 525,000 | 525,000 | ||||||
Common stock issued for warrant exercised (in shares) | 300,000 | |||||||||
Net income (loss) | (3,721,369) | (3,721,369) | (91,444) | (3,812,813) | ||||||
Foreign currency translation adjustments, net of nil tax | (32,481) | (32,481) | (9,148) | (41,629) | ||||||
Balance at Mar. 31, 2018 | $ 68,865 | 159,098,010 | (130,414,391) | (814,555) | 27,937,929 | (1,389,959) | 26,547,970 | |||
Balance (in shares) at Mar. 31, 2018 | 68,865,055 | |||||||||
Balance at Dec. 31, 2017 | $ 68,509 | 158,449,544 | (126,693,022) | (782,074) | 31,042,957 | (1,289,367) | 29,753,590 | [4] | ||
Balance (in shares) at Dec. 31, 2017 | [1] | 68,509,090 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | (19,865,554) | |||||||||
Foreign currency translation adjustments, net of nil tax | 565,315 | |||||||||
Balance at Sep. 30, 2018 | $ 77,246 | 190,188,410 | (145,921,262) | (239,775) | 44,104,619 | (749,246) | 43,355,373 | |||
Balance (in shares) at Sep. 30, 2018 | 77,246,801 | |||||||||
Balance at Dec. 31, 2017 | $ 68,509 | 158,449,544 | (126,693,022) | (782,074) | 31,042,957 | (1,289,367) | 29,753,590 | [4] | ||
Balance (in shares) at Dec. 31, 2017 | [1] | 68,509,090 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 3,412,977 | 3,412,977 | 3,412,977 | |||||||
Common stock issuance (GTD) | $ 5,494 | 9,994,506 | 10,000,000 | 10,000,000 | ||||||
Common stock issuance for RSU vested | $ 1,241 | (1,241) | ||||||||
Common stock issuance for RSU vested (in shares) | 1,240,707 | |||||||||
Common stock issuance for option exercised | $ 82 | 27,960 | 28,042 | 28,042 | ||||||
Common stock issuance for option exercised (in shares) | 82,797 | |||||||||
Common stock issued for warrant exercised | $ 644 | 1,125,856 | 1,126,500 | 1,126,500 | ||||||
Common stock issued for warrant exercised (in shares) | 643,714 | |||||||||
Common stock issuance for acquisition of BDCG | $ 3,000 | 7,797,000 | 7,800,000 | 7,800,000 | ||||||
Common stock issuance for acquisition of BDCG (in shares) | 3,000,000 | |||||||||
Common Stock issuance for acquisition SolidOpinion (Note 5(a)) (in shares) | 2,267,869 | |||||||||
Common stock issuance for acquisition (DBOT) | $ 2,268 | 6,724,078 | 6,726,346 | 6,726,346 | ||||||
Common stock to be issued (SSSIG) | 1,177,585 | 1,177,585 | 1,177,585 | |||||||
Common stock issuance for Star Thrive Group Limited | $ 5,027 | 9,194,973 | 9,200,000 | 9,200,000 | ||||||
Common stock issuance for Star Thrive Group Limited | 5,027,324 | |||||||||
Beneficial conversion feature of convertible note-long term | 1,384,615 | 1,384,615 | 1,384,615 | |||||||
Earnout shares to SSSIG | $ 16,500 | (16,500) | ||||||||
Earnout shares to SSSIG (in shares) | 16,500,000 | |||||||||
Acquisition resulting in non-controlling interest (Grapevine) | 678,651 | 678,651 | ||||||||
Disposal of subsidiaries | (3,491,777) | 4,144,076 | 18,438 | 670,737 | 558,372 | 1,229,109 | ||||
Net income (loss) | (27,426,356) | (27,426,356) | (996,728) | (28,423,084) | ||||||
Foreign currency translation adjustments, net of nil tax | (900,962) | (900,962) | 18,446 | (882,516) | ||||||
Balance at Dec. 31, 2018 | $ 102,765 | 195,779,576 | (149,975,302) | (1,664,598) | 44,242,441 | (1,030,626) | 43,211,815 | |||
Balance (in shares) at Dec. 31, 2018 | 102,766,006 | |||||||||
Balance at Mar. 31, 2018 | $ 68,865 | 159,098,010 | (130,414,391) | (814,555) | 27,937,929 | (1,389,959) | 26,547,970 | |||
Balance (in shares) at Mar. 31, 2018 | 68,865,055 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 3,239,727 | 3,239,727 | 3,239,727 | |||||||
Investment from GTD and SSS | 5,900,000 | 5,900,000 | 5,900,000 | |||||||
Common stock issuance for RSU vested | $ 1,227 | (1,227) | ||||||||
Common stock issuance for RSU vested (in shares) | 1,227,244 | |||||||||
Common stock issuance for acquisition of BDCG | $ 3,000 | 7,797,000 | 7,800,000 | 7,800,000 | ||||||
Common stock issuance for acquisition of BDCG (in shares) | 3,000,000 | |||||||||
Net income (loss) | (8,320,024) | (8,320,024) | (290,897) | (8,610,921) | ||||||
Foreign currency translation adjustments, net of nil tax | (121,465) | (121,465) | 20,269 | (101,196) | ||||||
Balance at Jun. 30, 2018 | $ 73,092 | 176,033,510 | (138,734,415) | (936,020) | 36,436,167 | (1,660,587) | 34,775,580 | |||
Balance (in shares) at Jun. 30, 2018 | 73,092,299 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 11,530 | 11,530 | 11,530 | |||||||
Investment from GTD and SSS | 5,288,502 | 5,288,502 | 5,288,502 | |||||||
Common stock issuance for option exercised | $ 40 | (40) | ||||||||
Common stock issuance for option exercised (in shares) | 40,295 | |||||||||
Common stock issued for warrant exercised | $ 344 | 601,156 | 601,500 | 601,500 | ||||||
Common stock issued for warrant exercised (in shares) | 343,714 | |||||||||
Common stock issuance for Star Thrive Group Limited | $ 3,770 | 6,869,138 | 6,872,908 | 6,872,908 | ||||||
Common stock issuance for Star Thrive Group Limited (in shares) | 3,770,493 | |||||||||
Conversion feature of convertible note | 1,384,614 | 1,384,614 | 1,384,614 | |||||||
Acquisition Of Grapevine | 1,154,419 | 1,154,419 | ||||||||
Net income (loss) | (7,186,847) | (7,186,847) | (254,973) | (7,441,820) | ||||||
Foreign currency translation adjustments, net of nil tax | 696,245 | 696,245 | 11,895 | 708,140 | ||||||
Balance at Sep. 30, 2018 | $ 77,246 | 190,188,410 | (145,921,262) | (239,775) | 44,104,619 | (749,246) | 43,355,373 | |||
Balance (in shares) at Sep. 30, 2018 | 77,246,801 | |||||||||
Balance at Dec. 31, 2018 | $ 102,765 | 195,779,576 | (149,975,302) | (1,664,598) | 44,242,441 | (1,030,626) | 43,211,815 | |||
Balance (in shares) at Dec. 31, 2018 | 102,766,006 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 224,484 | 224,484 | 224,484 | |||||||
Common stock issuance for RSU vested | $ 130 | (130) | ||||||||
Common stock issuance for RSU vested (in shares) | 129,840 | |||||||||
Common stock issuance for acquisition (SolidOpinion, Inc) | $ 4,500 | 7,150,500 | 7,155,000 | 7,155,000 | ||||||
Common Stock issuance for acquisition SolidOpinion (Note 5(a)) (in shares) | 4,500,000 | |||||||||
Common stock issuance for convertible debt | $ 1,166 | 2,048,834 | 2,050,000 | 2,050,000 | ||||||
Common stock issuance for convertible debt (in shares) | 1,166,113 | |||||||||
Net income (loss) | 19,926,515 | 19,926,515 | (17,761) | 19,908,754 | ||||||
Foreign currency translation adjustments, net of nil tax | 172,133 | 172,133 | (25,295) | 146,838 | ||||||
Balance at Mar. 31, 2019 | $ 108,561 | 205,203,264 | (130,048,787) | (1,492,465) | 73,770,573 | (1,073,682) | 72,696,891 | |||
Balance (in shares) at Mar. 31, 2019 | 108,561,959 | |||||||||
Balance at Dec. 31, 2018 | $ 102,765 | 195,779,576 | (149,975,302) | (1,664,598) | 44,242,441 | (1,030,626) | 43,211,815 | |||
Balance (in shares) at Dec. 31, 2018 | 102,766,006 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | 12,881,054 | |||||||||
Foreign currency translation adjustments, net of nil tax | 102,481 | |||||||||
Balance at Sep. 30, 2019 | $ 132,696 | 255,737,318 | (138,468,441) | (1,557,346) | 115,844,227 | 397,720 | 116,241,947 | |||
Balance (in shares) at Sep. 30, 2019 | 132,696,071 | |||||||||
Balance at Mar. 31, 2019 | $ 108,561 | 205,203,264 | (130,048,787) | (1,492,465) | 73,770,573 | (1,073,682) | 72,696,891 | |||
Balance (in shares) at Mar. 31, 2019 | 108,561,959 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 3,702,636 | 3,702,636 | 3,702,636 | |||||||
Common stock issuance for asset acquisition-Fintalk (Note 5(b)) | $ 2,861 | 5,347,139 | 5,350,000 | 5,350,000 | ||||||
Common stock issuance for asset acquisition-Fintalk (Note 5(b)) (in shares) | 2,860,963 | |||||||||
Common stock issuance for acquisition of non-controlling interest Grapevine (Note 5(c)) | $ 591 | 491,027 | 491,618 | (491,618) | ||||||
Common stock issuance for acquisition of non-controlling interest Grapevine (Note 5(c)) (in shares) | 590,671 | |||||||||
Investment from SSSIG | [5] | $ 576 | (576) | |||||||
Investment (in shares) | [5] | 575,431 | ||||||||
Net income (loss) | 5,292,213 | 5,292,213 | (15,430) | 5,276,783 | ||||||
Foreign currency translation adjustments, net of nil tax | (75,851) | (75,851) | 7,992 | (67,859) | ||||||
Balance at Jun. 30, 2019 | $ 112,589 | 214,743,490 | (124,756,574) | (1,568,316) | 88,531,189 | (1,572,738) | 86,958,451 | |||
Balance (in shares) at Jun. 30, 2019 | 112,589,024 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 2,547,107 | 2,547,107 | 2,547,107 | |||||||
Common stock issuance for acquisition of BlackHorse Ventures | [6] | $ 815 | 1,499,475 | 1,500,290 | 1,500,290 | |||||
Common stock issuance for acquisition of BlackHorse Ventures (in shares) | [6] | 815,217 | ||||||||
Common stock issuance for acquisition of Glory Connection (Note 5(e)) | $ 12,190 | 24,367,810 | 24,380,000 | 24,380,000 | ||||||
Common stock issuance for acquisition of Glory Connection (Note 5(e)) (in shares) | 12,190,000 | |||||||||
Common stock issuance for acquisition (DBOT) | $ 5,852 | 9,708,186 | 9,714,038 | 104,648 | 9,818,686 | |||||
Common stock issuance for acquisition of DBOT (Note 5(f)) (in shares) | 5,851,830 | |||||||||
Common stock issuance for releasing Grapevine as collateral | $ 250 | 372,250 | 372,500 | 372,500 | ||||||
Common stock issuance for releasing Grapevine as collateral ( in shares) | 250,000 | |||||||||
Common stock issuance for convertible debt | $ 1,000 | 2,499,000 | 2,500,000 | 2,500,000 | ||||||
Common stock issuance for convertible debt (in shares) | 1,000,000 | |||||||||
Deconsolidation of Amer | 445,894 | 445,894 | ||||||||
Net income (loss) | (13,711,867) | (13,711,867) | 1,407,384 | (12,304,483) | ||||||
Foreign currency translation adjustments, net of nil tax | 10,970 | 10,970 | 12,532 | 23,502 | ||||||
Balance at Sep. 30, 2019 | $ 132,696 | $ 255,737,318 | $ (138,468,441) | $ (1,557,346) | $ 115,844,227 | $ 397,720 | $ 116,241,947 | |||
Balance (in shares) at Sep. 30, 2019 | 132,696,071 | |||||||||
[1] | The above consolidated statements of equity include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||
[2] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||
[3] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||
[4] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||
[5] | In 2018, the Company entered into a subscription agreement and amended agreements with SSSIG to purchase $1.1 million of Common Stock at the then market price. The Company has received $1.1 million in total in 2018 and issued 575,431 shares of common stock in June 2019. | |||||||||
[6] | On July 16, 2019, the Company entered into a share subscription agreement to subscribe 1,186 Pre-A preferred shares of BlackHorse Ventures, a Cayman Islands company, for a consideration of $1,500,290 paid in the form of common shares of the Company. The subscription shares represent 10% of the share capital of BlackHorse Ventures on a fully diluted basis. |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (Unaudited) (Parentheticals) - USD ($) | Jul. 16, 2019 | Jun. 30, 2019 | |
Common Stock | |||
Proceeds from issuance of common stock in SSSIG | $ 1,100,000 | ||
Investment (in shares) | [1] | 575,431 | |
Blackhorse Ventures [Member] | Series A preferred stock | |||
Investment (in shares) | 1,186 | ||
Blackhorse Ventures [Member] | Common Stock | |||
Proceeds from issuance of common stock in SSSIG | $ 1,500,290 | ||
[1] | In 2018, the Company entered into a subscription agreement and amended agreements with SSSIG to purchase $1.1 million of Common Stock at the then market price. The Company has received $1.1 million in total in 2018 and issued 575,431 shares of common stock in June 2019. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ 12,881,054 | $ (19,865,554) | $ (28,423,084) | $ (10,860,317) | [1],[2] | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||||||||
Share-based compensation expense | 6,474,227 | 3,372,447 | 3,412,977 | 1,305,829 | [1] | |||
Provision for doubtful accounts | [1] | 145,512 | ||||||
Depreciation and amortization | 1,420,480 | 314,737 | 352,332 | [2] | 308,102 | [1],[2] | ||
Non-cash interest expense | 2,265,921 | 0 | 698,385 | |||||
Equity in losses of equity method investees | 606,390 | 44,316 | 180,625 | 129,193 | [1],[2] | |||
Loss on disposal of assets | [1] | 688,098 | ||||||
Digital currency received as payment for services | (40,700,000) | 0 | ||||||
Gain on disposal of subsidiaries | (1,057,363) | 0 | 1,183,289 | |||||
Impairment of property and equipment | 2,298,887 | 0 | ||||||
Loss on remeasurement of DBOT investment | 3,178,702 | 0 | ||||||
Change in fair value of warrant liabilities | [1],[2] | 112,642 | ||||||
Impairment of other intangible assets | 134,290 | 216,468 | [1],[2] | |||||
Change in operating assets and liabilities, net of effects of businesses acquired: | ||||||||
Accounts receivable | (2,814,198) | (78,572,438) | 7,591,420 | (18,802,766) | [1] | |||
Licensed content | [1] | 759,698 | ||||||
Inventory | 216,453 | |||||||
Prepaid expenses and other assets | 2,446,822 | (3,332,696) | (1,296,872) | 4,130,372 | [1] | |||
Accounts payable | 1,024,370 | 6,560,434 | (7,564,499) | 13,493,865 | [1] | |||
Deferred revenue | 149,723 | 366,474 | 183,579 | (1,124,119) | [1] | |||
Amount due to related parties | (104,323) | 71,939,834 | 120,000 | |||||
Accrued expenses, salary and other current liabilities | 3,217,279 | 1,530,544 | 3,050,895 | (821,351) | [1] | |||
Net cash used in operating activities | (8,712,029) | (17,641,902) | (20,160,210) | (10,318,774) | [1] | |||
Cash flows from investing activities: | ||||||||
Acquisition of property and equipment | (1,809,092) | (167,891) | (6,762,248) | (63,877) | [1] | |||
Proceeds from disposal of property | [1] | 2,515,923 | ||||||
Proceeds from disposal of subsidiaries | 694,282 | 0 | (41,976) | (8,753) | [1] | |||
Acquisition of subsidiaries, net of cash acquired | 246,929 | (2,840,219) | (2,784,243) | (754,361) | [1] | |||
Investments in intangible assets | (301,495) | |||||||
Payments for long term investments | (870,000) | (2,035,190) | (5,266,880) | (2,250,000) | [1] | |||
Deposit for surety bond and other | (3,983,799) | |||||||
Net cash used in investing activities | (1,737,881) | (5,043,300) | (19,140,641) | (525,456) | [1] | |||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of convertible note | 4,802,300 | 12,000,000 | 13,000,000 | |||||
Proceeds from issuance of shares and warrant | 2,500,000 | 19,186,771 | 21,532,127 | 13,618,207 | [1] | |||
Borrowings from related parties | 1,764,992 | 0 | 366,792 | (293,977) | [1] | |||
Capital contribution from noncontrolling interest shareholder | [1] | 490,000 | ||||||
Exemption of amounts due to related parties | [1] | 444,060 | ||||||
Net cash provided by financing activities | 9,067,292 | 31,186,771 | 34,898,919 | 14,258,290 | [1] | |||
Effect of exchange rate changes on cash | (37,030) | (48,638) | (69,141) | 83,488 | [1] | |||
Net (decrease)/increase in cash and restricted cash | (1,419,648) | 8,452,931 | (4,471,073) | 3,497,548 | [1] | |||
Cash and cash equivalents at the beginning of the period | 3,106,244 | 7,577,317 | [1] | 7,577,317 | [1] | 4,079,769 | [1] | |
Cash and cash equivalents at the end of the period | 1,686,596 | 16,030,248 | 3,106,244 | 7,577,317 | [1] | |||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income tax | 0 | 0 | [1] | |||||
Cash paid for interest | [1] | 407,863 | ||||||
Disposal of assets in exchange of GTB | 20,218,920 | 0 | ||||||
Service Revenue received in GTB | 40,700,000 | 0 | ||||||
Exchange of Series E Preferred Stock for Common stock | [1] | $ 7,155 | ||||||
Issuance of shares for acquisition of intangible assets | $ 10,005,000 | $ 0 | 14,526,346 | |||||
Issuance of earn-out shares | 16,500 | |||||||
Asset retirement obligations acquired | $ 8,000,000 | |||||||
[1] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||
[2] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Nature of Operations and Summary of Significant Accounting Policies | Note 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Ideanomics, Inc. (Nasdaq: IDEX) is a Nevada corporation that primarily operates in the United States and Asia. The Company is comprised of two operating segments (i) our Legacy YOD business with primary operations in the PRC which has been winding down operations over the last 12 months and (ii) our Mobile Energy Group (MEG) (formally known as our Wecast Service) business, which is transitioning to focus on the commercial fleet market for electric vehicles in addition to the Company’s existing fintech advisory business. Our MEG business operates as an end-to-end solutions provider for the procurement, financing, charging and energy management needs for fleet operators of commercial Electronic Vehicles (EV). MEG operates through a series of joint ventures with the leading companies in the commercial EV space, principally in China, and earns fees for every transaction completed based on the spread for group buying of vehicles and fees derived from the arrangement of financing and energy management such as commercial purchasing of pre-paid electricity credits. MEG focuses on commercial EV rather than passenger EV, as commercial EV is on an accelerated adoption path when compared to consumer EV adoption – which is expected to take between ten to fifteen years. We focus on four distinct commercial vehicles types with supporting income streams: 1) Closed-area heavy commercial, in areas such as Mining, Airports, and Sea Ports; 2) Last-mile delivery light commercial; 3) Buses and Coaches; 4) Taxis. The purchase and financing of vehicles provides for one-time fees and the charging and energy management provides for recurring revenue streams. In July 2019 the company invested in Glory Connection Snd. Bhd, (Glory) a vehicle manufacturer based in Malaysia. Glory holds the only license granted so far for the manufacture of electric vehicles in Malaysia and is in the process of setting up its manufacturing and assembly capabilities. We continue to develop our FinTech services which principally consist of our ownership of the Delaware Board of Trade (DBOT) ATS, Intelligenta for marketing AI solutions to the Financial Services industry and FinTech Village, a 58 acre development site in West Hartford, Connecticut. The fintech business intends to offer customized services based on best-in-class blockchain, AI and other technologies to mature and emerging businesses across various industries. To do so, we are building a financial technology ecosystem through license agreements, joint ventures and strategic investments, which we refer to as our “Fintech Ecosystem”. Basis of Presentation In this Form 10‑Q, unless the context otherwise requires, the use of the terms "we," "us", "our" and the “Company” refers to Ideanomics, Inc, its consolidated subsidiaries and variable interest entities (“VIEs”). On April 24, 2018, the Company completed the acquisition of a 100% equity ownership in Shanghai Guang Ming Investment Management (“Guang Ming”), a PRC limited liability company. One of the two selling shareholders is a related party, an affiliate of Bruno Wu (“Dr. Wu”). Guang Ming holds a special fund management license. The acquisition will help the Company develop a fund management platform. Under Accounting Standard Codification (“ASC”) 805-50-05-5 and ASC 805-50-30-5, the transaction was accounted for as a reorganization of entities under common control, in a manner similar to a pooling of interest, using historical costs. As a result of the reorganization, the net assets of Guang Ming were transferred to the Company, and the accompanying consolidated financial statements as of and for the three and nine months ended September 30, 2018 have been prepared as if the current corporate structure had been in place at the beginning of the periods presented in which the common control existed. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessary be indicative of annual results. We use the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on April 1, 2019 (“2018 Annual Report”). Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the bad debt allowance, variable considerations, fair values of financial instruments, intangible assets (including digital currencies) and goodwill, useful lives of intangible assets and property and equipment, asset retirement obligations, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: · Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. · Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Our financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, other current liabilities and convertible notes. The fair values of these assets approximate carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Our financial assets that are measured at fair value on a nonrecurring basis include goodwill and other intangible assets, asset retirement obligations, and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. There were no material impairments and no material adjustments to equity securities using the measurement alternative for the three and nine months ended September 30, 2019 and 2018. Digital Currency Digital currency consists of GTDollar Coins (“GTB”). GTB is received in connection with the services agreement and assets purchase agreement with GT Dollar Pte. Ltd. (“GTD”), our minority shareholder at the time of the transaction (Note 3 and 14 (b)). As of September 30, 2019, GTD has disposed of its investment in the Company and is no longer a minority shareholder. GTB is a type of digital asset that is not a fiat currency and is not backed by hard assets or other financial instruments, and does not represent an investment in GTD or a right to access GTD’s platform. As a result, the value of GTB is determined by the value that various market participants place on GTB through their transactions. GTB holders make or lose money from buying and selling GTB. To date, the Asia EDX exchange has not permitted holders of GTB to convert into fiat. The company is unable to predict when our cryptocurrency holdings will be convertible into fiat and consequently does not consider them to be part of the company’s liquid resources. It is the Company’s understanding that in some locations in Asia, principally Singapore, holders of GTB can use the GT App to pay for small purchases at merchants who accept GTB, e.g. taxis and coffee shops. The Company is not aware of any other publicly available applications on the GTD blockchain. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies and other digital currencies under current GAAP, the Company has determined to account for these currencies as indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other until further guidance is issued by the FASB. Indefinite-lived intangible assets are recorded at cost and are not subject to amortization, but shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If, at the time of an impairment test, the carrying amount of an intangible asset exceeds its fair value, an impairment loss in an amount equal to the excess is recognized. The fair value of GTB currency was a Level 2 measurement (see Note 3) based upon the consideration agreed by GTD and the Company with a discount considering volatility, risk and limitations at contract inception. Assets and Liabilities Held for Sale The Company classifies assets and liabilities (disposal group) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal groups; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal group; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent losses as an adjustment to the carrying value of the disposal group. Reclassifications of a General Nature Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. Note 2 provides information about our adoption of new accounting standards for leases. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 2. New Accounting Pronouncements Recently Adopted Accounting Pronouncements We adopted Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016‑02, Leases (Topic 842), as of January 1, 2019, using a modified retrospective transition method and as a result, the consolidated balance sheet prior to January 1, 2019 was not restated, continues to be reported under ASC Topic 840, Leases, or ASC 840. For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The lease liability is based on the present value of the remaining minimum lease payments, determined under ASC 840, discounted using our incremental borrowing rate at the effective date of January 1, 2019, using the original lease term as the tenor. As permitted under the transition guidance, we elected several practical expedients that permit us to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability. Adoption of the new standard resulted in the recording of operating right of use assets and the related lease liabilities of approximately $3.6 million and $3.7 million, respectively, as of January 1, 2019. The difference between the additional lease assets and lease liabilities was immaterial. The standard did not materially impact our consolidated operating results and had no impact on cash flows. Please see Note 10. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. The ASU also clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers . The ASU requires a modified retrospective transition approach. We adopted ASU 2018‑07 as of January 1, 2019 and there is no impact to our consolidated financial statement because we did not have such payments in 2019. In July 2017, the FASB issued ASU No. 2017‑11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. For the Company, this ASU was effective January 1, 2019. Please see Note 12. Standards Issued and Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016‑13 (ASU 2016‑13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We will adopt ASU 2016‑13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016‑13 on our consolidated financial statements. The effect will largely depend on the composition and credit quality of our investment portfolio and the economic conditions at the time of adoption. |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Principal Activities | |
Organization and Principal Activities | IDEANOMICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization and Principal Activities Ideanomics, Inc. (Nasdaq: IDEX) (formerly known as Seven Stars Cloud Group, Inc. which changed its name effective as of October 17, 2018), is a Nevada corporation that primarily operates in Asia through its subsidiaries and variable interest entities (“VIEs”). Unless the context otherwise requires, the use of the terms "we," "us", "our" and the “Company” in these notes to consolidated financial statements refers to Ideanomics, Inc, its consolidated subsidiaries and VIEs. Our Company consists of two operating segments which our Chief Executive Officer (our chief operating decision maker) reviews separately to make decisions about resource allocation and to assess performance: Legacy YOD segment and Wecast Service segment. Legacy YOD segment provides premium content and integrated value-added service solutions for the delivery of video on demand (“VOD”) and paid video programming to digital cable providers, Internet Protocol Television (“IPTV”) providers, over-the-top (“OTT”) streaming providers, mobile manufacturers and operators, as well as direct customers. The Company historically has offered these products under the business name “YOU On Demand” and refers to these operations as the legacy YOD business. The revenues from Legacy YOD segment were from both minimum guarantee payments and revenue sharing arrangements with distribution partners as well as subscription or transactional fees from subscribers. Wecast Services is currently primarily engaged in the logistics management and financing business primarily operated in Singapore. Starting from early year 2017, the Company began transitioning our business model to become a next generation financial technology (“Fintech”) company through several acquisitions and the establishment of joint ventures, with the intention of offering financing solutions and logistics solutions, each based on the emergence of systems that utilize blockchain and artificial intelligence (“AI”) technologies. On the financing solutions side, the Company has been building capabilities both in providing business consulting services related to traditional financings, as well as in developing digital asset securitization services via AI and blockchain enabled platforms. On the logistics side, the Company has been building expertise in the traditional commodities trading business, with an initial focus on crude oil trading and consumer electronics trading, with the goal of leveraging such expertise to inform the development of an AI and blockchain enabled logistics platform. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements of Ideanomics, Inc., its subsidiaries and VIEs were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the subsidiaries over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation. (b) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the bad debt allowance, sales returns, fair values of financial instruments, intangible assets and goodwill, licensed content, useful lives of intangible assets and property and equipment, asset retirement obligations, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. (c) Cash and Cash Equivalents Cash consists of cash on hand and demand deposit with an original maturity of three months or less when purchased. Refer to Note 19 (d) and (e) for further information on our credit and foreign currency risks. (d) Accounts Receivable, net Accounts receivable are recognized at invoiced amounts and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews its allowance for doubtful accounts receivable on an ongoing basis. In establishing the required allowance, management considers any historical losses, the customer’s financial condition, the accounts receivable aging, and the customer’s payment patterns. After all attempts to collect a receivable have failed and the potential for recovery is remote, the receivable is written off against the allowance. (e) Licensed Content The Company obtains content through content license agreements with studios and distributors. We recognize licensed content when the license fee and the specified content titles are known or reasonably determinable. Prepaid license fees are classified as an asset (licensed content) and accrued license fees payable are classified as a liability on the consolidated balance sheets. We amortize licensed content in cost of revenues over the contents contractual availability based on the expected revenue derived from the licensed content, beginning with the month of first availability, such that our revenues bear a representative amount of the cost of the licensed content. We review factors that impact the amortization of licensed content at each reporting date, including factors that may bear direct impact on expected revenue from specific content titles. Changes in our expected revenue from licensed content could have a significant impact on our amortization pattern. Management evaluates the recoverability of the licensed content whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. No impairment loss were recorded for the years ended December 31, 2018 and 2017. The Company sold entire licensed content in March 2019. Please refer to Note 22 for additional information. (f) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and improvements, which extend the original estimated economic useful lives of applicable assets, are capitalized. Expenditures for normal repairs and maintenance are charged to expense as incurred. The costs and related accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss thereon is recognized in the consolidated statement of operations. Depreciation is provided for on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful life is 5 years for the furniture, 3 years for the electronic equipment, 5 to 10 years for the vehicles and lesser of lease terms or the estimated useful lives of the assets for the leasehold improvements. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. Construction in progress at December 31, 2018 represents Fintech Village under construction (See Note 8). Asset retirement obligations Asset retirement obligations generally apply to legal obligations associated with the retirement of a tangible long-lived asset that result from the acquisition, construction or development and the normal operation of a long-lived asset. If a reasonable estimate of fair value can be made, the fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred or a change in estimate occurs. Asset retirement costs associated with asset retirement obligations are capitalized with the carrying amount of the related long-lived assets and depreciated over the asset’s estimated life. The Company’s asset retirement obligations as of December 31, 2018 are mainly associated with the acquisition of Fintech Village that we are contractually obligated to remediate the existing environmental conditions. We included it in the construction in progress and asset retirement obligation (long term) in the consolidated balance sheets. We will start to amortize asset retirement costs upon completion of the assets and put into use. Please see Note 8 for more information. (g) Business Combinations We include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. (h) Intangible Assets and Goodwill Company accounts for intangible assets and goodwill, in accordance with ASC 350, Intangibles – Goodwill and Other. ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable. In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. On an annual basis, we review goodwill for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, goodwill is further tested for impairment by comparing the carrying value to the estimated fair value of its reporting units, determined using externally quoted prices (if available) or a discounted cash flow model and, when deemed necessary, a market approach. Application of goodwill impairment tests requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the reporting unit, composition, personnel or strategy changes affecting the reporting unit and recoverability of asset groups within a reporting unit. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each reporting unit. (i) Long-term investments We account for equity investments through which we exercise significant influence but do not have control over the investee under the equity method (“Equity Method Investments”). Under the equity method, the investment is initially recorded at cost and adjusted for the Company’s share of undistributed earnings or losses of the investee. The Company’s share of losses is not recognized when the investment is reduced to zero since the Company does not guarantee the investees’ obligations nor is the Company committed to providing additional funding. Beginning on January 1, 2018, our equity investment not result in consolidation and not accounted for under the equity method are either carried at fair value or under the measurement alternative upon the adoption of the FASB issued Accounting Standards Update (“ASU”) No. 2016‑01 (“Non-marketable Equity Investments”). We utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less impairment plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer. We classify our investments as non-current assets on the consolidated balance sheets as those investments do not have stated contractual maturity dates. Impairment of Investments We periodically review our equity investments for impairment. We consider impairment indicators such as negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. If indicators exist and the fair value of the security is below the carrying amount, we write down the security to fair value. (j) Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: · Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. · Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Our financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, accrued other expenses, other current liabilities and convertible notes. The fair values of these assets approximate carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Our financial assets that are measured at fair value on a nonrecurring basis include goodwill and other intangible assets asset retirement obligations, and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. There were no material impairments for 2018 and 2017 and no material adjustments to equity securities using the measurement alternative for 2018. (k) Foreign Currency Translation The Company uses the United States dollar (“$” or “USD”) as its reporting currency. The Company’s worldwide operations utilize the local currency or the U.S. dollar ("USD") as the functional currency, where applicable. For certain foreign subsidiaries, USD is used as the functional currency. This occurs when the subsidiary is considered an extension of the parent. The functional currency of certain subsidiaries and VIEs located in China (“PRC”) and Hong Kong is either the Renminbi (“RMB”) or Hong Kong dollars (“HKD”). In the consolidated financial statements, the financial information of the entities which use RMB and HKD as their functional currency has been translated into USD: assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at the historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component as a component of “Accumulated other comprehensive loss” in the equity section of the consolidated balance sheets. Transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated in the functional currency at the applicable rates of exchange in effect at the balance sheet date. The resulting exchange differences are recorded in the consolidated statements of operations. (l) Revenue Recognition Year 2018 We adopted ASU No. 2014‑09, Revenue from Contracts with Customers, and other related ASUs (collectively, ASC 606, Revenue from Contracts with Customers) on January 1, 2018 using the modified retrospective transition approach. The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Recently Adopted Accounting Pronouncements and Note 4 for further discussion on Revenues. Year 2017 In periods prior to the adoption of ASC 606, the Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and the collectability of the resulting receivable is reasonably assured. Legacy YOD The revenue is recognized as services are performed. For certain contracts that involve sub-licensing content within the specified license period, revenue is recognized in accordance with ASC Subtopic 926‑605, Entertainment-Films - Revenue Recognition, whereby revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and the Company has no substantive future obligations to provide future additional services. Payments received from customers for the performance of future services are recognized as deferred revenue, and subsequently recognized as revenue in the period that the service obligations are completed. In 2018, we do not have any revenue generated from Legacy YOD business. Wecast Services Wecast Services is mainly engaged in the sales of crude oil and consumer electronics. For both sales of crude oil and consumer electronics, sales orders are confirmed after negotiation on price between customers and the Company. The Company recognizes revenue on a gross basis based on the indicator points in ASC 605‑45‑45‑2 and ASC 606‑10‑55‑39. The Company enters into the contracts with the supplier and customer independently. Purchase orders are confirmed after careful selection of suppliers and negotiation on price. The Company purchases crude oil and consumer electronics from suppliers in accordance with sales orders from customers. The Company is responsible for fulfilling the promise to provide the specified good or service in the contract, including sourcing the right oil products desired by the customers, issuing the bill of lading to customers and nominating the vessels that comply with the applicable laws and standards; however customers may still submit claims against the Company in connection with the quality and quantity of any products delivered. Revenue recognition criteria are met when the products are delivered. For sale of crude oil, the Company considers delivery to have occurred once it is shipped; for sale of the consumer electronics, the Company considers delivery to have occurred once it arrives at the designated locations in Hong Kong. The crude oil and electronics sales arrangement do not include provisions for cancellation, variable consideration, returns, inventory swaps or refunds. In accordance with ASC 605‑45, Revenue Recognition – Principal Agent Consideration, the Company accounts for revenue from sales of goods on a gross basis. The Company is the primary obligor in the arrangements, as company has the ability to establish prices, and has discretion in selecting the independent suppliers and other third-party that will perform the delivery service, the company is responsible for the defective products and company bears credit risk with customer payments. Accordingly, all such revenue billed to customers is classified as revenue and all corresponding payments to suppliers are classified as cost of revenues. In accordance with ASC 606‑10‑55‑39, the Company accounts for revenue from sales of goods on a gross basis. The Company is primarily responsible for fulfilling the promise to provide the goods to the customer; bears certain inventory risk and also has the discretion in establishing prices. See Note 4 for further discussion on Revenues. (m) Research and Development Costs We expense research and development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented. Research and development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. All the software developed in 2018 and 2017 did not reach technological feasibility and therefore no costs capitalized. (n) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company also awards stocks and warrants for service to consultants for service and accounts for these awards under ASC 505‑50, Equity - Equity-Based Payments to Non-Employees . The fair value of the awards is assessed at measurement date and is recognized as cost or expenses when the services are provided. If the related services are completed upon issuance date, measurement date is determined to be the date the awards are issued. (o) Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. There were no such interest or penalty for the years ended December 31, 2018 and 2017. On December 22, 2017 the U.S. Tax Reform, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years. No tax was due under this provision. U.S. Tax reform also makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. (p) Net Loss Per Share Attributable to IDEX Shareholders Net loss per share attributable to our shareholders is computed in accordance with ASC 260, Earnings per Share. The two-class method is used for computing earnings per share. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because the holders are entitled to receive dividends or distributions on an as converted basis. For the years presented herein, the computation of basic loss per share using the two-class method is not applicable as the Company is in a net loss position and net loss is not allocated to other participating securities, since these securities are not obligated to share the losses in accordance with the contractual terms. Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and warrants are not considered outstanding in computation of basic earnings per share. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options and warrants to purchase ordinary shares, preferred shares and convertible promissory note, unless they were anti-dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. (q) Reclassifications of a General Nature Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. (r) Recent Accounting Pronouncements Standards Issued and Not Yet Implemented In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016‑02 (“ASC 842”) "Leases." ASC 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under ASC 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. We will adopt ASC 842 effective January 1, 2019 using a modified retrospective method and will not restate comparative periods. As permitted under the transition guidance, we will carry forward the assessment of whether our contracts contain or are leases, classification of our leases and remaining lease terms. Based on our portfolio of leases as of December 31, 2018, approximately $8.3 million of lease assets and liabilities will be recognized on our consolidated balance sheet upon adoption. We are substantially complete with our implementation efforts. In June 2016, the FASB issued Accounting Standards Update No. 2016‑13 (ASU 2016‑13) "Financial Instruments-Credit Losses” (“ASC 326”): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We will adopt ASU 2016‑13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016‑13 on our consolidated financial statements. The effect will largely depend on the composition and credit quality of our investment portfolio and the economic conditions at the time of adoption. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. The ASU also clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers . The ASU requires a modified retrospective transition approach. We will adopt ASU 2018‑07 effective as of January 1, 2019. The adoption will not have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Pronouncements In the first quarter of 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts/sales orders which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The effect from the adoption of ASC 606 was not material to our financial statements. (See Note 2 (m) above and Note 4 for more information.) The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In the first quarter of 2018, the Company adopted ASU 2016‑01, "Financial Instruments-Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities," which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. We use the prospective method for our non-marketable equity securities. We have elected to use the measurement alternative for our non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See Notes 10 for additional information. In the first quarter of 2018, the Company adopted ASU 2016‑18, "Statement of Cash Flows (Topic 230): Restricted Cash," which clarifies how entities should present restricted cash and restricted cash equivalents in the statements of cash flows, and as a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statements of cash flows. An entity with a material balance of restricted cash and restricted cash equivalents must disclose information about the nature of the restrictions. The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The new guidance changed the presentation of restricted cash in the consolidated statements of cash flows and was implemented on a retrospective basis. In the first quarter of 2018, the Company adopted ASU 2017‑01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied prospectively. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See Notes 6 for additional information. |
Revenue
Revenue | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue | ||
Revenue | Note 3. Revenue The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. All of the Company’s revenue is derived from Mobile Energy Group (formerly Wecast Services). The following table presents our revenues disaggregated by revenue source, geography (based on our business locations) and timing of revenue recognition. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Geographic Markets Singapore $ — $ — $ — $ 260,034,401 USA 249,512 200,660 41,649,384 200,660 Hong Kong/PRC 2,854,178 43,507,277 2,854,178 102,393,235 Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 Services Lines Mobile Energy Group (formerly Wecast Services) Crude oil $ — $ — $ — $ 260,034,401 Consumer electronics — 43,432,556 — 102,081,176 Digital asset management services — — 40,700,000 — Electric Vehicles (“EV”) 2,854,178 — 2,854,178 — Digital advertising services and other 249,512 275,381 949,384 512,719 Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 Timing of Revenue Recognition Products and services transferred at a point in time $ 3,103,690 $ 43,707,937 $ 3,803,562 $ 362,628,296 Services provided over time — — 40,700,000 — Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 Mobile Energy Group revenue (formerly Wecast Services) Mobile Energy Group is engaged in the sourcing, procurement, financing and management of commercial fleets of electronic vehicles. Historically, the Mobile Energy Group were mainly engaged in the logistics management, including sales of crude oil, consumer electronics, and digital consulting services such as assets management and marketing services. As of September 30, 2019, we no longer have control over Amer, the subsidiary that engaged in consumer electronics business, as disclosed in Note 5(h). Logistics management revenue: Revenue from the sales of crude oil and consumer electronics is recognized when the customer obtains control of the Company’s crude oil and consumer electronics, which occurs at a point in time, usually upon shipment or upon acceptance. The contracts are generally short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. The most significant judgment is determining whether we are the principal or agent for the sales of crude oil and consumer electronics. We report revenues from these transactions on a gross basis where we are the principal considering the following principal versus agent indicators: (a) We are primarily responsible for fulfilling the promise to provide the goods to the customer. The Company enters into contracts with customers with specific quality requirements and the suppliers separately. The Company is obliged to provide the goods if the supplier fails to transfer the goods to the customer and responsible for the acceptability of the goods. (b) The Company has certain inventory risk. Although the Company has the title to the goods only momentarily before passing title on to the customer, the Company is responsible to arrange and issue bill of lading to the customer so that the customer can have the right to obtain the required oil product. In addition, the customer can seek remedies and submit the claim against the Company regarding the quality or quantity of the products delivered. (c) The Company has discretion in establishing prices. Upon delivery of the crude oil and consumer electronics to the customer, the terms of the contract between the Company and the supplier require the Company to pay the supplier the agreed-upon price. The Company and the customer negotiate the selling price, and the Company invoices the customer for the agreed-upon selling price. The Company’s profit is based on the difference between the sales price negotiated with the customer and the price charged by the supplier. The sales price for crude oil is based on the daily benchmark price of spot product plus any premium determined by the Company. During the fourth quarter of 2018, we began experiencing market demand for non-logistics management revenue -generating opportunities and have begun focusing our efforts on these new market fintech services opportunities, while phasing out of the oil trading and electronics trading businesses. Digital asset management service with GTD: On March 14, 2019, the Company entered into a service agreement with GTD, one of our minority shareholders, to provide digital asset management services including consulting, advisory and management services which will be delivered in two phases. There are two performance obligations: (1) the development of a master plan for GTD’s assets for 7,083,333 GTB agreed by both parties; and (2) exclusive marketing and business development management services for a fee as percentage (0.25%) of the total market value of GTB; based on a 10‑day average of the 10 business days leading up to the end of a respective calendar month, and paid on the first day of each new calendar month. No marketing and business development management services were delivered by the Company during the current quarter and, furthermore, the company does not anticipate providing these services in the fourth quarter. The Company recognizes revenue for the master plan development services over the contract period based on the progress of the services provided towards completed satisfaction. Based on ASC 606-10-32, at contract inception, the Company considered the following factors to estimate the value of GTB (noncash consideration): a) it only trades in one exchange, which operations have been less than one year; b) its historical volatility is high; c) the Company’s intention to hold the majority of GTB, as part of our digital asset management services; and d) associated risks discussed in Note 19 (f). Therefore, the value of 7,083,333 GTB using Level 2 measurement was approximately $40.7 million with a 76% discount to the fixed contract price agreed upon by both parties when signing the contract. We considered similar assets exchanges in Singapore and considered the volatility of the quoted prices and determined a discount of 76%. The estimated value of GTB is calculated using the Black-Scholes valuation model using the following assumptions: expected terms 3.0 years; volatility 155%; dividend yield: zero and risk free interest rate 2.25%. The Company considers the payments for marketing and business development management services as performance based consideration, in accordance with ASC 606 on constraining estimates of variable consideration, including the following factors: The susceptibility of the consideration amount to factors outside the Company’s influence. The uncertainty associated with the consideration amount is not expected to be resolved for a long period of time. The Company’s experience with similar types of contracts. Whether the Company expects to offer price concessions or change the payment terms. The range of possible consideration amounts. As of September 30, 2019, all performance obligations associated with the development of the master plan for GTD’s assets have been satisfied. Accordingly, the Company recognized revenue of $0 and $40.7 million, for the three months and nine months ended September 30, 2019, respectively. No marketing and business development management services were delivered by the Company during the current quarter and, furthermore, the company does not anticipate providing these services in the fourth quarter. Taxis Commission Revenue: During Q2 2019, the Company signed an agreement with iUnicorn (also known as Shenma Zhuanche) to form a strategic joint venture (“JV”) that will focus on green finance and integrated marketing services for new energy taxi vehicles as part of Ideanomics’ Mobile Energy Group (“MEG”). The Company agreed to contribute advisory and sales resources which include arranging ABS-based auto financing with its bank partners, and will have 50.01% ownership interest in the JV and will have control of the board. iUnicorn, which will own 49.99% of the JV, agreed to contribute its vehicles sales orders in Sichuan province. The JV will generate revenues from commissions on vehicle sales order and ABS fees related to the financing, which will vary accordingly to manufacturer and vehicle model. During Q3 2019, the JV took over an order of 4,172 EV taxis from a third-party and helped facilitate the completion of the order in Q3 2019. As part of the transaction, Qianxi agreed to pay a commission of $2.9 million to the JV for facilitating the completion of this order. There is no other remaining performance obligation relating to this commission. In addition, the commission revenue is considered revenue from related party as the minority shareholder of the JV is an affiliate of our customer, Qianxi. Legacy YOD revenue Since 2017, we have run our legacy YOD segment with limited resources. No revenue was recognized for the nine months ended September 30, 2019 and 2018. As of September 30, 2019, we have ceased operations in the YOD segment. Arrangements with multiple performance obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the observable prices charged to customers or adjusted market assessment or using expected cost plus margin when one is available. Adjusted market assessment price is determined based on overall pricing objectives taking into consideration market conditions and entity specific factors. Variable consideration Certain customers may receive discounts, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. Our revenue reserves, consisting of various discounts and allowances, which are components of variable consideration as discussed above, are considered an area of significant judgment. Additionally, our digital asset management service revenue, as discussed above, is calculated as a percentage (0.25%) of the total market value of GTB. For these areas of significant judgment, actual amounts may ultimately differ from our estimates and are adjusted in the period in which they become known. Deferred revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. Our payment terms vary by the type and location of our customer and the products or services offered. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Practical expedients and exemptions We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. | Note 4. Revenue The majority of the Company’s revenue is derived from Wecast Service (100% in 2018 and 99.5% in 2017). The following table presents our revenues disaggregated by revenue source, geography (based on our business locations) and timing of revenue recognition. 2018 2017 Geographic Markets Singapore $ 260,034,401 $ 19,028,003 USA 638,412 7,037 Hong Kong 117,070,059 119,683,121 PRC — 5,634,679 $ 377,742,872 $ 144,352,840 Segments -Wecast Service Crude oil $ 260,034,401 $ 143,558,567 Consumer electronics 116,723,251 — Other 985,220 — 377,742,872 143,558,567 -Legacy YOD — 794,273 Total $ 377,742,872 $ 144,352,840 Wecast service revenue Wecast Services is mainly engaged in the sales of crude oil and consumer electronics. Revenue from the sales of crude oil and consumer electronics is recognized when the customer obtains control of the Company’s crude oil and consumer electronics, which occurs at a point in time, usually upon shipment or upon acceptance. The contracts are generally short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. The most significant judgment is determining whether we are the principal or agent for the sales of crude oil and consumer electronics. We report revenues from these transactions on a gross basis where we are the principal considering the following principal versus agent indicators: (a) We are primarily responsible for fulfilling the promise to provide the goods to the customer. The Company enters into contracts with customers with specific quality requirements and the suppliers separately. The Company is obliged to provide the goods if the supplier fails to transfer the goods to the customer and responsible for the acceptability of the goods. (b) The Company has certain inventory risk. Although the Company has the title to the good only momentarily before passing title on to the customer, the Company is responsible to arrange and issue bill of lading to the customer so that the customer can have the right to obtain the required oil product. In addition, the customer can seek remedies and submit the clam against the Company regarding the quality or quantity of the products delivered. (c) The Company has discretion in establishing prices. Upon delivery of the crude oil and consumer electronics to the customer, the terms of the contract between the Company and the supplier require the Company to pay the supplier the agreed-upon price. The Company and the customer negotiate the selling price, and the Company invoices the customer for the agreed-upon selling price. The Company’s profit is based on the difference between the sales price negotiated with the customer and the price charged by the supplier. The sales price for crude oil is based on the daily benchmark price of spot product plus any premium determined by the Company. Legacy YOD revenue In October 2016, the Company signed an agreement to form a partnership with Zhejiang Yanhua ("Yanhua Agreement"), where Yanhua acts as the exclusive distribution operator in PRC. According to the Yanhua Agreement, the existing legacy Hollywood studio paid contents as well as other IP contents specified in the agreement, along with the corresponding authorized rights letter that the Company is entitled to, will be turned over to Yanhua as a whole package, which was agreed to be priced at RMB13 million (approximately $2 million) as minimal guarantee fee. In addition to the minimal guarantee fee specified, there is a provision in the Yanhua Agreement which states that once the revenue recognized from the existing contents transferred from us to Yanhua reaches the amount of minimal guarantee fee, the revenue above minimal guarantee fee will be shared with us from the date when this revenue threshold is reached based on certain revenue-sharing mechanism stipulated in the Yanhua Agreement. The payment is agreed to be paid in two installments, the first half of RMB 6.5 million was received on December 30, 2016 and revenue was recognized in 2017 based on ASC 926‑605. The remaining RMB 6.5 million will be paid under the scenario that the license content fees due to Hollywood studios for the existing legacy Hollywood paid contents will be settled. We did not recognize revenue for the second installment (RMB 6.5 million) since the Company is not entitled to the second installment as of December 31, 2018. Arrangements with multiple performance obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on an observable prices charged to customers or adjusted market assessment or using expected cost plus margin when one is available. Adjusted market assessment price is determined based on overall pricing objectives taking into consideration market conditions and entity specific factors. Variable consideration Certain customers may receive discounts, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. Deferred revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The increase in the deferred revenue balance for the year ended December 31, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Practical expedients and exemptions We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
VIE Structure and Arrangements
VIE Structure and Arrangements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
VIE Structure and Arrangements | ||
VIE Structure and Arrangements | Note 4. VIE Structure and Arrangements We consolidate VIEs in which we hold a variable interest and are the primary beneficiary through contractual agreements. We are the primary beneficiary because we have the power to direct activities that most significantly affect their economic performance and have the obligation to absorb the majority of their losses or benefits. The results of operations and financial position of these VIEs are included in our consolidated financial statements. For these consolidated VIEs, their assets are not available to us and their creditors do not have recourse to us. As of September 30, 2019 and December 31, 2018, assets (mainly long-term investments) that can only be used to settle obligations of these VIEs were approximately $0.2 million and $3.5 million, respectively, and the Company is the major creditor for the VIEs. In order to operate our Legacy YOD business in PRC and to comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company entered into a series of contractual agreements with two VIEs: Beijing Sinotop Scope Technology Co., Ltd (“Sinotop Beijing”) and Tianjin Sevenstarflix Network Technology Limited (“SSF”). These contractual agreements will expire in March 2030 and April 2036, respectively and may not be terminated by the VIEs, except with the consent of the Company, or, in event of a material breach of the agreement by the Company . Currently, the Company is still evaluating the overall operating strategy for YOD legacy business and does not have plan to provide any funding to these two VIEs. Please refer to Note 19(a) for associated regulatory risks. Based on the contracts we entered with VIEs’ shareholders, we consider that there is no asset of the VIEs that can be used only to settle obligation of the Company, except for the registered capital of VIEs amounting to RMB 38.2 million (approximately $5.7 million). | Note 5. VIE Structure and Arrangements We consolidate VIEs in which we hold a variable interest and are the primary beneficiary through contractual agreements. We are the primary beneficiary because we have the power to direct activities that most significantly affect their economic performance and have the obligation to absorb the majority of their losses or benefits. The results of operations and financial position of these VIEs are included in our consolidated financial statements. For these consolidated VIEs, their assets are not available to us and their creditors do not have recourse to us. As of December 31, 2018 and 2017, assets (mainly long-term investments) that can only be used to settle obligations of these VIEs were approximately $3.5 million and $3.7 million, respectively, and the Company is the major creditor for the VIEs. In order to operate our Legacy YOD business in PRC and to comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company entered into a series of contractual agreements with two VIEs: Beijing Sinotop Scope Technology Co., Ltd (“Sinotop Beijing”) and Tianjin Sevenstarflix Network Technology Limited (“SSF”). These contractual agreements will be expired in March 2030 and April 2036, respectively and may not be terminated by the VIEs, except with the consent of, or a material breach by us. Currently, the Company is still evaluating the overall operating strategy for YOD legacy business and does not have plan to provide any funding to these two VIEs. Please refer to Note 19(a) for associated regulatory risks. The key terms of the VIE Agreements are summarized as follows: Equity Pledge Agreement The VIEs’ Shareholders pledged all of their equity interests in VIEs (the “Collateral”) to YOD On Demand (Beijing) Technology Co., Ltd (“YOD WFOE”), our wholly owned subsidiary in PRC, as security for the performance of the obligations to make all the required technical service fee payments pursuant to the Technical Services Agreement and for performance of the VIEs’ Shareholders’ obligation under the Call Option Agreement. The terms of the Equity Pledge Agreement expire upon satisfaction of all obligations under the Technical Services Agreement and Call Option Agreement. Call Option Agreement The VIEs’ Shareholders granted an exclusive option to YOD WFOE, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the VIEs’ Shareholders’ equity in VIEs. The exercise price of the option shall be determined by YOD WFOE at its sole discretion, subject to any restrictions imposed by PRC law. The term of the agreement is until all of the equity interest in VIEs held by the VIEs’ Shareholders are transferred to YOD WFOE, or its designee and may not be terminated by any part to the agreement without consent of the other parties. Power of Attorney The VIEs’ Shareholders granted YOD WFOE the irrevocable right, for the maximum period permitted by law, all of its voting rights as shareholders of VIEs. The VIEs’ Shareholders may not transfer any of its equity interest in VIEs to any party other than YOD WFOE. The Power of Attorney agreements may not be terminated except until all of the equity in VIEs has been transferred to YOD WFOE or its designee. Technical Service Agreement YOD WFOE has the exclusive right to provide technical service, marketing and management consulting service, financial support service and human resource support services to the VIEs, and the VIEs is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD WFOE. As compensation for providing the services, YOD WFOE is entitled to receive service fees from the VIEs equivalent to YOD WFOE’s cost plus 20‑30% of such costs as calculated on accounting policies generally accepted in the PRC. YOD WFOE and the VIEs agree to periodically review the service fee and make adjustments as deemed appropriate. The term of the Technical Services Agreement is perpetual, and may only be terminated upon written consent of both parties. Spousal Consent Pursuant to the Spousal Consent, undersigned by the respective spouse of the VIEs’ Shareholders, the spouses unconditionally and irrevocably agree to the execution of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The spouses agree to not make any assertions in connection with the equity interest of VIE and to waive consent on further amendment or termination of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The spouses further pledge to execute all necessary documents and take all necessary actions to ensure appropriate performance under these agreements upon YOD WFOE’s request. In the event the spouses obtain any equity interests of VIE which are held by the VIEs’ Shareholders, the spouses agreed to be bound by the VIE agreements, including the Technical Services Agreement, and comply with the obligations thereunder, including sign a series of written documents in substantially the same format and content as the VIE agreements. Letter of Indemnification Pursuant to the Letter of Indemnification among YOD WFOE and each nominee shareholder, YOD WFOE agrees to indemnify such nominee shareholder against any personal, tax or other liabilities incurred in connection with their role in equity transfer to the greatest extent permitted under PRC law. YOD WFOE further waives and releases the VIEs’ Shareholders from any claims arising from, or related to, their role as the legal shareholder of the VIE, provided that their actions as a nominee shareholder are taken in good faith and are not opposed to YOD WFOE’s best interests. The VIEs’ Shareholders will not be entitled to dividends or other benefits generated therefrom, or receive any compensation in connection with this arrangement. The Letter of Indemnification will remain valid until either the nominee shareholder or YOD WFOE terminates the agreement by giving the other party hereto sixty (60) days’ prior written notice. Management Services Agreement In addition to VIE agreements described above, our subsidiary and the parent company of YOD WFOE, YOU On Demand (Asia) Limited, a company incorporated under the laws of Hong Kong (“YOD Hong Kong”) has entered into a Management Services Agreement with each VIE. Pursuant to such Management Services Agreement, YOD Hong Kong has the exclusive right to provide to the VIE management, financial and other services related to the operation of the VIE’s business, and the VIE is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from the VIE, upon demand, equal to 100% of the annual net profits as calculated on accounting policies generally accepted in the PRC of the VIE during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against the VIE’s future payment obligations. In addition, at the sole discretion of YOD Hong Kong, the VIE is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of the VIE which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including: (a) business opportunities presented to, or available to the VIE may be pursued and contracted for in the name of YOD Hong Kong rather than the VIE, and at its discretion, YOD Hong Kong may employ the resources of the VIE to secure such opportunities; (b) any tangible or intangible property of the VIE, any contractual rights, any personnel, and any other items or things of value held by the VIE may be transferred to YOD Hong Kong at book value; (c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to the VIE on terms to be determined by agreement between YOD Hong Kong and the VIE; (d) contracts entered into in the name of the VIE may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and the VIE; and (e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; (f) provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of the VIE. Loan Agreement Pursuant to the Loan Agreement dated April 5, 2016, YOD WFOE agrees to lend RMB 19.8 million and RMB 0.2 million, respectively, to the VIEs’ Shareholders for the purpose of establishing SSF and for development of its business. As of December 31, 2018, RMB27.6 million ($4.2 million) have been lent to VIEs’ Shareholders which has contributed all of the RMB27.6 million ($4.2 million) in the form of capital contribution to SSF. The loan can only be repaid by a transfer by the VIEs’ Shareholders of their equity interests in SSF to YOD WOFE or YOD WOFE’s designated persons, through (i) YOD WOFE having the right, but not the obligation to at any time purchase, or authorize a designated person to purchase, all or part of the VIEs’ Shareholders’ equity interests in SSF at such price as YOD WOFE shall determine (the “Transfer Price”), (ii) all monies received by the VIEs’ Shareholders through the payment of the Transfer Price being used solely to repay YOD WOFE for the loans, and (iii) if the Transfer Price exceeds the principal amount of the loans, the amount in excess of the principal amount of the loans being deemed as interest payable on the loans, and to be payable to YOD WOFE in cash. Otherwise, the loans shall be deemed to be interest free. The term of the Loan Agreement is perpetual, and may only be terminated upon the VIEs’ Shareholders receiving repayment notice, or upon the occurrence of an event of default under the terms of the agreement. The loan extended to the Nominee Shareholders and the capital of SSF are fully eliminated in the consolidated financial statements. Therefore, we consider that there is no asset of the VIEs that can be used only to settle obligation of the Company, except for the registered capital of VIEs amounting to RMB38.2 million (approximately $5.8 million). |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Acquisitions and Divestitures | ||
Acquisitions and Divestitures | Note 5. Acquisitions and Divestitures Acquisitions (a) Assets Acquisition of SolidOpinion, Inc (“SolidOpinion”) On February 19, 2019, the Company completed the acquisition of certain assets from SolidOpinion in exchange for 4,500,000 shares of the Company’s common stock. The assets include cash ($2.5 million) and intellectual property (“IP”) which is complementary to the IP of Grapevine. The parties agreed that 450,000 of such shares of common stock (“Escrow Shares”) will be held in escrow until February 19, 2020 in connection with SolidOpinion’s indemnity obligations pursuant to the agreement. SolidOpinion have the rights to vote and receive the dividends paid with respect to the Escrow Shares. ( b) In September 2018, the Company entered into an agreement to purchase Fintalk Assets from Sun Seven Star International Limited, a Hong Kong company and an affiliate of Dr. Wu. FinTalk Assets include the rights, titles and interest in a secure mobile financial information, social, and messaging platform that has been designed for streamlining financial-based communication for professional and retail users. The purchase price for Fintalk Assets was $7.0 million payable with $1.0 million in cash and shares of the Company’s common stock with a fair market value of $6.0 million. The Company paid $1.0 million in October 2018 and recorded in prepaid expense as of December 31, 2018 because the transaction had not closed. In June 2019, the Company entered into an amendment to the agreement which amended the purchase price for Fintalk Assets to $6.35 million payable with $1.0 million in cash and shares of the Company’s common stock with a fair market value of $5.35 million. The Company issued 2,860,963 shares ($1.87 per share) in June 2019 and completed the transaction. In addition, upon completion of transaction the $1.0 million cash paid in 2018 was reclassified from prepaid expense to intangible assets. (c) In September 2018, the Company completed the acquisition of a 65.65% share of Grapevine for $2.4 million in cash. Fomalhaut Limited (“Fomalhaut”), a British Virgin Islands company and an affiliate of Dr. Wu, the Chairman of the Company, is the non-controlling equity holder of 34.35% in Grapevine (the “Fomalhaut Interest”). Fomalhaut entered into an option agreement, effective as of August 31, 2018 (the “Option Agreement”), with the Company pursuant to which the Company provided Fomalhaut with the option to sell the Fomalhaut Interest to the Company (the “Option”). The aggregate exercise price for the Option is the fair market value of the Fomalhaut Interest as of the close of business on the date preceding the date upon which the Option is exercised, and is payable in a combination of 1/3 in cash and 2/3 in the Company’s shares of common stock at the then market value on the exercise date. The Option Agreement will expire on August 31, 2021. In May 2019, the Company entered into two amendments to the Option Agreement, The aggregate exercise price for the Option is amended to the greater of (i) fair market value of the Fomalhaut Interest in Grapevine as of the close of business on the date preceding the date upon which the option is exercised; and (ii) $1.84 per share of the Company’s common stock. It was also agreed that the full amount of the exercise price shall be paid in the form of common stock of the Company. In June 2019, the Company issued 590,671 shares in exchange for a 34.35% ownership in Grapevine as a result of the exercise of the Option, at the completion of this transaction the Company owned 100% of Grapevine. At the completion date of the transaction, the carrying amount of the non-controlling interest in Grapevine was approximately $0.5 million. The difference between the value of the consideration exchanged of approximately $1.1 million and the carrying amount of the non-controlling interest in Grapevine is recorded as a debit to Additional Paid in Capital based on ASC 810-10-45-23. (d) Effective July 18, 2019, Ideanomics, Inc. (the “Company”) terminated its Acquisition Agreement with Tree Motion Sdn. Bhd., a Malaysian company (“Tree Motion”), pursuant to which the Company was to acquire 51% of Tree Motion in exchange for 25,500,000 shares of the Company’s common stock at $2.00 per share. Further, the Company terminated its Acquisition Agreement to acquire 11.22% of Tree Motion’s parent company, Tree Manufacturing Sdn. Bhd. (the “Parent Company”) for 12,190,000 shares of the Company’s common stock; provided, however, that the Company has acquired 250 acres in Malaysia-China Kuantan Industrial Park (MCKIP), the 1st Malaysia National Industrial Park joint developed by both Malaysia and China for $620,000. (e) On July 18, 2019, Ideanomics, Inc. (the “Company”) entered into an Acquisition Agreement (“Glory Agreement”) to purchase a 34% interest in Glory Connection Sdn. Bhd. a Malaysian Company, from its shareholder Beijing Financial Holding Limited, a Hong Kong registered company, for the consideration of 12,190,000 restricted common shares of Ideanomics (IDEX), representing $24.4 million at $2.00 per share. As part of this transaction, the Company was also granted an option to purchase a 40% interest in Bigfair Holdings Limited (“Bigfair”) from its shareholder Beijing Financial Holding Limited for an exercise price of $13.2 million in the form of common shares of Ideanomics. Bigfair currently holds a 51% ownership stake in Glory. The option is exercisable from July 18, 2020 to July 19, 2021. If the option was exercised, the Company would have 20.4% indirect ownership in Glory in addition to the 34% direct ownership it already has. As of September 30, 2019, the Company does not have control of Glory and has accounted for Glory as an equity method investment. The Company has performed a valuation analysis and allocated $23,000,000 and $1,380,000 of the consideration transferred to the equity method investment and the call option, respectively. The call option is accounted for as an equity security without readily determinable fair value. Pro forma results of operations for Glory have not been presented because they are not material to the consolidated results of operations. Glory is currently in the process of ramping up its operations. The following table summarizes the income statement information of Glory as of September 30, 2019: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Revenue $ 2,041 $ 3,936 Gross Profit 1,379 769 Net loss from operations 173,465 354,502 Net loss 171,719 352,606 Net loss attributable to Glory $ 95,477 $ 195,121 (f) In April 2019, the Company entered into a securities purchase agreement to acquire 6,918,547 shares in DBOT in exchange for 4,427,870 shares of the Company’s common stock at $2.11 per share. In July 2019, the Company entered into another securities purchase agreement to acquire an additional 2,224,937 shares in DBOT in exchange for 1,423,960 shares of the Company’s common stock at $2.11 per share. The two transactions, which increased the Company’s ownership in DBOT to 99.04%, were completed in July 2019. The securities purchase agreements required the Company to issue additional shares of the Company’s common stock (“True-Up Common Stock”) in the event the stock price of the common stock fall below $2.11 at the close of trading on the date immediately preceding the lock-up date, which is 9 months from the closing date. The Company accounted for the additional True-Up Common Stock consideration as a liability in accordance with ASC 480. We recorded this liability at fair value of $2,217,034 on the date of acquisition. As of September 30, 2019, we remeasured this liability to $2,327,919 and the remeasurement loss of $(110,885) was recorded in the other income/(expense) of the income statement. DBOT operates three companies: (i) DBOT ATS LLC, an SEC recognized Alternative Trading System; (ii) DBOT Issuer Services LLC, focused on setting and maintaining issuer standards, as well as the provision of issuer services to DBOT designated issuers; and (iii) DBOT Technology Services LLC, focused on the provision of market data and marketplace connectivity. The consolidated statements of operation for the three months ended September 30, 2019 include the results of DBOT. Supplemental information on an unaudited pro forma basis, as if the acquisition had been consummated as of January 1, 2018 is as follows: Three Months Nine Months Nine Months Ended Ended Ended September 30, September 30, September 30, 2018 2019 2018 Revenue $ 43,798,865 $ 44,612,471 $ 363,004,917 Net Income (loss) attributable to IDEX common shareholders $ (7,818,047) $ 10,582,474 $ (21,387,162) The unaudited pro forma results of operations do not purport to represent what the Company’s results of operations would actually have been had the acquisition occurred on January 1, 2018. Actual future results may vary considerably based on a variety of factors beyond the Company’s control. For all intangible assets acquired, continuing membership agreements have useful life of 20 years and the customer list has useful life of 3 years. The following table summarizes the acquisition-date fair value of assets acquired and liabilities assumed, as well as the fair value of the non-controlling interest in DBOT recognized: Cash $ 246,929 Other financial assets 1,686,464 Financial liabilities (4,411,140) Noncontrolling interest (104,649) Goodwill 9,323,189 Intangible asset – continuing membership agreement 8,255,440 Intangible asset – customer list 58,830 $ 15,055,063 Divestitures The Company may divest certain businesses from time to time based upon review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders. (g) In May 2019, the Company determined to sell the Red Rock business and entered into an agreement with Redrock Capital Group Limited, an affiliate of Dr. Wu, to sell its entire interest in Red Rock for a consideration of $700,000. The Company decided to sell Red Rock primarily because it has incurred operating losses and its business is no longer needed based on our strategic plan. The transaction was completed in July 2019 and the company recorded a disposal gain of $552,215. (h) On June 30, 2019, the Company entered into an agreement with BCC Technology Company Limited (“BCC”) and Tekang Holdings Technology Co., Ltd (“Tekang ”) pursuant to which Tekang will inject certain assets in the robotics and electronic internet industry and IOT business consisting of manufacturing data, supply chain management & financing, and lease financing of industrial robotics into Amer in exchange for 71.81% of ownership interest in Amer. The parties subsequently entered into several amendments including (1) changing the name of Amer to Logistorm Technology Limited, (2) issuing 39,500 new shares in Amer or 71.81% ownership interest to BCC instead of Tekang, (3) issuing 5,500 new shares in Amer or 10% ownership interest to Merry Heart Technology Limited (“MHT”) and (4) the Company is responsible for 20% of any potential tax obligation associated with Amer, if Amer fails to be publicly listed in 36 months from the closing date of this transaction. The Company concluded that it’s not probable that this contingent liability would be incurred. As a result of this transaction, the Company’s ownership interest in Amer was diluted from 55% to 10%. The transaction was completed on August 31, 2019. The Company recognized a disposal gain of $505,148 as a result of the deconsolidating Amer. $95,104 of the gain is attributable to the 10% ownership interest retained in Amer. In addition, on the date Amer was deconsolidated, the Company recorded a bad debt expense of $622,286 relating to a receivable due from Amer to a subsidiary of the Company. The following table summarizes the Consolidated Statement of Operations for the three months and nine months ended September 30, 2018, on an unaudited pro forma basis, as if the dilution of the Company’s interest in Amer had been consummated as of January 1, 2018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Revenue $ 275,380 $ 260,547,120 Net loss from operations (6,305,340) (18,548,258) Net loss (7,390,597) (19,351,526) Net loss attributable to IDEX common shareholders $ (7,158,674) $ (18,945,524) Pro forma results of operations for the period ended September 30, 2019 have not been presented because they are not material to the consolidated results of operations. Amer has no revenue and minimal operating expense in 2019. | Note 6. Acquisitions and Divestitures 2018 Acquisitions (a) Grapevine Logic, Inc. (“Grapevine”) On September 4, 2018, the Company completed the acquisition of 65.65% share of Grapevine for $2.4 million in cash. Grapevine fits within our overall core strategy to promote the use, development and advancement of technologies, by bringing technology leaders together with industry leaders and creating synergies in our Fintech Ecosystem and the businesses in our network of Industry Ventures. Grapevine is an end-to-end influencer marketing platform that facilitates collaboration between advertisers and brands with video based social influencers and content creators. We believe that Grapevine will help us develop strength in the consumer digital products industry vertical by providing the platform for connecting brands with content-producing influencers and their large-scale audience of consumer-driven followers to whom digital tokens, loyalty and discount cards, multi-purpose digital wallets, and other services may be marketed via Grapevine on behalf of the Company, brand advertisers and influencers, all according to a follower’s areas of interest. As a result of the acquisition, the Company can enhance our flexibility and adaptability in a rapidly evolving technological environment. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Grapevine. All of the goodwill was assigned to the Company’s Wecast Service segment. None of the goodwill recognized is expected to be deductible for income tax purposes. The transaction was accounted for as a business combination. The following table summarizes the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the non-controlling interest in Grapevine as of December 31, 2018. Cash $ 508,000 Other financial assets 388,000 Financial liabilities (747,000) Noncontrolling interest (679,000) Goodwill 705,000 Influencer network 1,980,000 Customer contract 500,000 Trade name 110,000 Technology platform 290,000 Deferred tax liabilities (570,000) $ 2,485,000 Pro forma results of operations for Grapevine have not been presented because it is not material to the consolidated results of operations. For all intangible assets acquired and purchased during the year ended December 31, 2018, the influencer network has a weighted-average useful life of 10 years, customer contracts have a weighted-average useful life of 3 years, the trade name has a weighted-average useful life of 15 years and technology platform has a weighted-average useful life of 7 years. Fomalhaut Limited (“Fomalhaut”), a British Virgin Islands company and an affiliate of Bruno Wu (“Dr. Wu”), the Chairman of the Company, is the non-controlling equity holder of 34.35% in Grapevine (the “Fomalhaut Interest”). Fomalhaut entered into an option agreement, effective as of August 31, 2018 (the “Option Agreement”), with the Company pursuant to which the Company provided Fomalhaut with the option to sell the Fomalhaut Interest to the Company. The aggregate sale price for the Fomalhaut Interest is the fair market value of the Fomalhaut Interest as of the close of business on the date preceding the date upon which the right to sell the Fomalhaut Interest to the Company is exercised by Fomalhaut. If the option is exercised, the sale price for the Fomalhaut Interest is payable in a combination of 1/3 in cash and 2/3 in the Company’s shares of common stock at the then market value on the exercise date. The Option Agreement will expire on August 31, 2021. (b) Shanghai Guang Ming Investment Management (“Guang Ming”) On April 24, 2018, the Company completed the acquisition of 100% equity ownership in Guang Ming, a PRC limited liability company, for a total purchase price of $0.36 million in cash. One of the two selling shareholders is a related party, an affiliate of Dr. Wu. Guang Ming holds a special fund management license. The acquisition will help the Company develop a fund management platform. Under Accounting Standard Codification (“ASC”) 805‑50‑05‑5 and ASC 805‑50‑30‑5, the transaction was accounted for as a reorganization of entities under common control, in a manner similar to a pooling of interest, using historical costs. As a result of the reorganization, the net assets of Guang Ming were transferred to the Company, and the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in place at the beginning of periods presented in which the common control existed. Pro forma results of operations for year 2017 acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in the aggregate. (c) Joint Venture with TPJ Ltd. On October 9 2018, the Company announced that it has entered into a joint venture agreement with TPJ Ltd (“TPJ”), to create Ideanomics Resources LTD, a company organized under the laws of England and Wales and based in London. The joint venture will initially focus its efforts in Africa and Middle East, where TPJ has significant long-term relationships and unlock value in the commodities and energy sectors by leveraging and utilizing the Ideanomics Platform-as-a-Service (“PaaS”) solutions. The Company owns 75% equity interest of Ideanomics Resources and has no obligation to fund the operations. Ideanomics Resources is still in development stage and no revenue generated in 2018. 2017 Acquisitions In January 2017, we completed two acquisitions, Sun Video Group Hong Kong Limited (“SVG”) and Wide Angle Group Limited (“Wide Angle”), for our Wecast business. As of the result of these acquisitions, the Company started to engage in consumer electronics e-commerce and smart supply chain management operations as part of our business strategy for our Wecast Service. The Company acquired 100% of ownership in SVG and 55% of ownership in Wide Angle from a related party, BT Capital Global Limited (“BT”) for $800,000 in cash and contingent consideration arrangement with a $50 million convertible Promissory Note (the “SVG Note”) and a certain percentage of profits. BT is 100% owned by Dr. Wu. The contingent consideration arrangements are as follows: 1. SVG Note- SVG Note with the principal and interest thereon can be convertible into the Company’s common stock at a conversion rate of $1.50 per share and will be automatically convert upon shareholders’ approval. BT has guaranteed that the business of SVG and its subsidiaries and Wide Angle (the “Sun Video Business”) shall achieve revenue of $250 million and $15 million of gross profit (collectively the “Performance Guarantees”) within 12 months of the closing (by January 2018). If the Sun Video Business fails to meet the Performance Guarantees, BT shall either forfeit back to the Company the Company’s common stock (“Earnout Shares”) or the SVG Note, on a pro rata basis based on the Performance Guarantee for which the Sun Video Business achieves the lowest percentage of the respective amount guaranteed. In 2018, the Company determined to issue 16.5 million Earnout Shares directly to BT. 2. Profit sharing payments- if the Sun Video Business achieves more than $50 million in cumulative net income within 3 years of closing, (the “Net Income Threshold”), the Company shall pay BT 50% of the amount of any cumulative net income above the Net Income Threshold. Profit sharing payments shall be made on an annual basis, in either cash or stock at the discretion of our Board of Directors. If the Board decides to make the payment in stock, the number of our shares of common stock to be awarded shall be determined on the basis of the closing market price of the Company’s common stock. As of December 31, 2018, the Company does not expect Sun Video Business will meet Net Income Threshold and therefore did not record contingent liability relating to profit sharing payments. Since the Company, SVG and Wide Angle had been under common controlled by Dr. Wu since November 10, 2016, this transaction was accounted for as a business combination between entities under common control. Therefore, in accordance with ASC Subtopic 805‑50, the consolidated financial statements of the Company include the acquired assets and liabilities of the SVG and Wide Angle at their historical carrying amounts starting from November 10, 2016. The consideration of $800,000 was paid in 2017 and 16.5 million Earnout Shares were issued in 2018 and the Company offset it against equity in accordance with ASC 805‑50‑25‑2.B. 2018 Divestitures The Company may divest certain businesses from time to time based upon review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders. In December 2018, we entered into an agreement with Hooxi, an entity listed on the TSX venture exchange in Canada, and completed the sale of our investment (55% interest) in Wide Angle and Shanghai Huicang Supplychain Management Ltd., whose operations mainly focus on magazines printing, for a nominal amount. This business was under the Wecast segment and had annual sales of approximately $347,000 and continued to incur losses with net assets is approximately $46,000. The transaction resulted in a loss of approximately $1.2 million. |
Accounts Receivable
Accounts Receivable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounts Receivable | ||
Accounts Receivable | Note 6. Accounts Receivable Accounts receivable is mainly from our Mobile Energy Group (formerly Wecast Services) business and consisted of the following: September 30, December 31, 2019 2018 Accounts receivable, gross $ 2,941,348 $ 19,370,665 Less: allowance for doubtful accounts (103) — Accounts receivable, net $ 2,941,245 $ 19,370,665 The following table outlines the aging of the accounts receivable: September 30, December 31, 2019 2018 Within 90 days $ 2,941,245 $ 1,219,526 91-180 days — 633 181-365 days — 12,385,193 More than 1 year — 5,765,313 Total $ 2,941,245 $ 19,370,665 The decrease in balance is mainly due to the deconsolidation of Amer as of September 30, 2019 as disclosed in Note 5(h). Our payment term is usually within 180 days upon the receipts of the goods. The Company has reviewed the outstanding balance by customers and concluded that the outstanding balances are collectible. | Note 7. Accounts Receivable Accounts receivable is mainly from our Wecast Service business and consisted of the following: December 31, December 31, 2018 2017 Accounts receivable, gross $ 19,370,665 $ 26,965,731 Less: allowance for doubtful accounts — (3,646) Accounts receivable, net $ 19,370,665 $ 26,962,085 The movement of the allowance for doubtful accounts is as follows: December 31, December 31, 2018 2017 Balance at the beginning of the year $ 3,646 $ 2,828,796 Additions charged to bad debt expense — 145,512 Write-off of bad debt allowance — (89,851) Disposal of Zhong Hai Shi Xun (3,646) (2,880,811) Balance at the end of the year $ — $ 3,646 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property and Equipment, net | ||
Property and Equipment, net | Note 7. Property and Equipment, net The following is a breakdown of property and equipment: September 30, December 31, 2019 2018 Furnitures and office equipment 602,548 357,064 Vehicle 60,951 63,135 Leasehold improvements 239,781 200,435 Total property and equipment 903,280 620,634 Less: accumulated depreciation (482,548) (186,514) Land 3,042,777 3,042,777 Building 1 308,779 2,607,666 Assets Retirement Obligations - Environmental Remediation 8,000,000 8,000,000 Capitalized direct development cost 2,732,705 944,864 Construction in progress (Fintech Village) 14,084,261 14,595,307 Property and Equipment, net $ 14,504,993 $ 15,029,427 Note 1 The $2.3 million decrease from the prior year represents the impairment charge recorded in connection with four of the five existing buildings on Fintech Village which are expected to be demolished. The Company recorded depreciation expense, which is included in its operating expense, of $65,862 and $14,820 for the three months ended September 30, 2019 and 2018 and $102,991 and $32,941 for the nine months ended September 30, 2019 and 2018, respectively. The Company recorded $8.0 million of Asset Retirement Obligations which are related to our legal contractual obligations in connection with the acquisition of Fintech Village. The Capitalized direct development costs mainly represent the architectural costs. | Note 8. Property and Equipment, net The following is a breakdown of property and equipment: December 31, December 31, 2018 2017 Furniture and office equipment $ 357,064 $ 308,383 Vehicle 63,135 147,922 Leasehold improvements 200,435 8,058 Total property and equipment 620,634 464,363 Less: accumulated depreciation (186,514) (337,088) Construction in progress (Fintech Village) 14,595,307 — Property and Equipment, net $ 15,029,427 $ 127,275 The Company recorded depreciation expense of approximately $139,903 and $221,006, which is included in its operating expense for the years ended December 31, 2018 and 2017, respectively. Global Headquarters for Technology and Innovation in Connecticut (“Fintech Village”) On October 10, 2018, the Company purchased a 58‑acre former University of Connecticut campus in West Hartford from the State of Connecticut for $5.2 million in cash and also assumed responsibility of the environmental remediation. The Company obtained a surety bond in favor of the University of Connecticut and the State of Connecticut (the “Seller”) in connection with the Company’s environmental remediation obligations. In order to obtain the surety bond, the Company was required to post $3.6 million in cash collateral with the bonding company and recorded in other non-current assets in the consolidated balance sheet. The Company recorded asset retirement obligations in the amount of $8.0 million as of December 31, 2018 which was the estimates performed by the Seller and at a discount to the purchase price, therefore, we considered it a reasonable estimate of fair value of our asset retirement obligation pursuant to ASC 410‑20‑25‑6. We will assess asset retirement obligations periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available. We plan to transform the property into a world-renowned technology campus named Fintech Village with a focus on being a leading technology and innovation facility for developing new and next-generation Fintech solutions utilizing artificial intelligence, deep learning and blockchain. The estimated cost to be incurred to complete construction of Fintech Village is approximately $283 million. In connection with the acquisition, the Company also entered into an Assistance Agreement by and between the State of Connecticut, acting by the Department of Economic and Community Development (the “Assistance Agreement"), pursuant to which the State of Connecticut may provide up to $10.0 million of financial assistance (the “Funding”) which in such case shall be evidenced by a promissory note, provided, however, that the aggregate principal of the funding shall not exceed 50% of the cost of the project. The Company will provide security for its obligation to repay the Funding to the State of Connecticut in the form of a first position mortgage. The Company agrees that in exchange for the Funding it will provide a minimum number of jobs at a minimum annual amount of compensation by December 31, 2021. Failure of the Company to do so will subject it to certain cash penalties for each employee below the minimum employment threshold. If the Company meets the employment obligations it is eligible for forgiveness of up to $10.0 million of the Funding. The Company will agree to certain covenants with respect to the Funding and such Funding may become immediately due and payable upon the occurrence of certain standard events of default. There were no borrowings from the Funding as of December 31, 2018. The Company capitalized direct costs and interest cost incurred on funds used to construct Fintech Village and the capitalized cost is recorded as part of construction in progress. Capitalized cost was approximately $945,000 in 2018 mainly related to the legal and architect costs. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets | ||
Goodwill and Intangible Assets | Note 8. Goodwill and Intangible Assets Goodwill Changes in the carrying value of goodwill consist of following: Nine months ended Year Ended September 30, 2019 December 31, 2018 At the beginning of the year 704,884 — Goodwill Acquired 1 9,323,189 704,884 At the end of the period 10,028,073 704,884 Note 1 The change in carrying amount of goodwill in the current year was the result of the acquisition of DBOT as disclosed in Note 5(f). Intangible Assets Information regarding amortizing and indefinite lived intangible assets consisted of the following: September 30, 2019 December 31, 2018 Weighted Gross Accumulated Gross Accumulated Average Remaining Carry Accumulated Impairment Net Carry Accumulated Impairment Net Useful Life Amount Amortization Loss Balance Amount Amortization Loss Balance Amortizing Intangible Assets Animation Copyright (Note 14 (b)) — $ — $ — $ — $ — $ 301,495 $ (64,606) $ — $ 236,889 Software and licenses — 97,308 (97,308) — — 97,308 (93,251) — 4,057 SolidOpinion IP (Note 5 (a)) 4.4 4,655,000 (543,084) — 4,111,916 — — — — Fintalk intangible assets (Note 5 (b)) 4.8 6,350,000 (317,500) — 6,032,500 — — — — Influencer network 8.9 1,980,000 (214,500) — 1,765,500 1,980,000 (66,000) — 1,914,000 Customer contract 1 2.0 558,830 (185,458) — 373,372 500,000 (55,556) — 444,444 Continuing Membership Agreement 1 19.8 8,255,440 (103,193) — 8,152,247 — — — — Trade name 13.9 110,000 (7,944) — 102,056 110,000 (2,444) — 107,556 Technology platform 5.9 290,000 (44,881) — 245,119 290,000 (13,808) — 276,192 Total amortizing intangible assets $ 22,296,578 $ (1,513,868) $ — $ 20,782,710 $ 3,278,803 $ (295,665) $ — $ 2,983,138 Indefinite lived intangible assets Website name 159,504 — (134,290) 25,214 159,504 — (134,290) 25,214 Patent 28,000 — — 28,000 28,000 — — 28,000 GTB (Note 14 (b)) 61,124,407 — — 61,124,407 — — — — Total intangible assets $ 83,608,489 $ (1,513,868) $ (134,290) $ 81,960,331 $ 3,466,307 $ (295,665) $ (134,290) $ 3,036,352 Note 1 During the third quarter of 2019, the Company completed the acquisition of additional shares in DBOT which increased its ownership in DBOT to 99.04%. $8,314,270 of intangible assets were recognized on the date of acquisition as disclosed in Note 5(f). Amortization expense relating to intangible assets was $764,010 and $276,692 for the three months ended September 30, 2019 and 2018 and $1,317,419 and $281,796 for the nine months ended September 30, 2019 and 2018, respectively. The following table outlines the expected amortization expense for the following years: Amortization to be Years ending December 31, recognized 2019 (excluding the nine months ended September 30, 2019) $ 761,702 2020 3,046,811 2021 2,991,255 2022 2,870,339 2023 2,860,534 2024 and thereafter 8,252,069 Total amortization to be recognized $ 20,782,710 | Note 9. Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: Wecast business Balance as of December 31, 2017 $ — Acquisitions 704,884 Foreign currency translation and other adjustments — Balance as of December 31, 2018 $ 704,884 Intangible Assets Information regarding amortizing and indefinite lived intangible assets consisted of the following: December 31, 2018 December 31, 2017 Weight Average Gross Gross Remaining Carry Accumulated Impairment Net Carry Accumulated Impairment Net Useful Life Amount Amortization Loss Balance Amount Amortization Loss Balance Amortizing Intangible Assets Animation Copyright 1.3 $ 301,495 $ (64,606) $ — $ 236,889 $ — $ — $ — $ — Software and licenses — 97,308 (93,251) — 4,057 214,210 (199,626) — 14,584 Patent and trademark (i) — — — — — 92,965 (39,943) (53,022) — Influencer network (ii) 9.7 1,980,000 (66,000) — 1,914,000 — — — — Customer contract (ii) 2.7 500,000 (55,556) — 444,444 — — — — Trade name (ii) 14.7 110,000 (2,444) — 107,556 — — — — Technology platform (ii) 6.7 290,000 (13,808) — 276,192 — — — — Total amortizing intangible assets $ 3,278,803 $ (295,665) $ — $ 2,983,138 $ 307,175 $ (239,569) $ (53,022) $ 14,584 Indefinite lived intangible assets Website name (iii) 159,504 — (134,290) 25,214 134,290 — — 134,290 Patent (i) 28,000 — — 28,000 10,599 — (10,599) — Total intangible assets $ 3,466,307 $ (295,665) $ (134,290) $ 3,036,352 $ 452,064 $ (239,569) $ (63,621) $ 148,874 (i) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents. (ii) During the third quarter of 2018, the Company completed the acquisition of 65.65% share of Grapevine. See Note 6. (iii) The Company wrote off the YOD website in the amount of approximately $134,000 in 2018 since we no longer used the website. Amortization expense relating to purchased intangible assets was $212,429 and $87,096 for the years ended December 31, 2018, and 2017, respectively. The following table outlines the expected amortization expense for the following years: Amortization to be Years ending December 31, recognized 2019 $ 546,882 2020 520,921 2021 357,873 2022 246,762 2023 and thereafter 1,310,700 Total amortization to be recognized $ 2,983,138 |
Long-term Investments
Long-term Investments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Long-term Investments. | ||
Long-term Investments | Note 9. Long-term Investments Long-term investments consisted of Non-marketable Equity Investment and Equity Method Investment as below: September 30, December 31, 2019 2018 Non-marketable Equity Investment $ 9,147,170 $ 9,452,103 Equity Method Investment 33,012,143 16,956,506 Total $ 42,159,313 $ 26,408,609 Non-marketable equity investment Our non-marketable equity investments are investments in privately held companies without readily determinable fair values. These investments are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, the Company considers the investee’s cash position, earnings and revenue outlook, liquidity and management ownership, among other factors, in its review. If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount. There is no impairment for the nine months ended September 30, 2019. Equity method investments The Company’s investment in companies accounted for using the equity method of accounting consist of the following: September 30, 2019 Foreign currency December 31, Loss on Reclassification translation September 30, 2018 Addition investment to subsidiaries adjustments 2019 Wecast Internet (i) $ 4,114 $ — $ (5) $ — $ 1,930 $ 6,039 Hua Cheng (ii) 308,666 — (32,890) — (37,210) 238,566 Shandong Media (iii) — — — — — — BDCG (iv) 9,800,000 — — — — 9,800,000 DBOT (v) 6,843,726 — (3,719,735) (3,123,991) — — Glory (vi) — 23,000,000 (32,462) — — 22,967,538 Total $ 16,956,506 $ 23,000,000 $ (3,785,092) $ (3,123,991) $ (35,280) $ 33,012,143 All the investments above are privately held companies; therefore, quoted market prices are not available. We have not received any dividends since initial investments. (i) Wecast Internet Starting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. (ii) Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”) The Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. (iii) Shandong Lushi Media Co., Ltd (“Shandong Media”) The Company held 30% equity ownership in Shandong Media, a print based media business, for Legacy YOD business. The accumulated operating loss of Shandong Media reduced the Company’s investment in Shandong Media to zero. The Company has no obligation to fund future operating losses. (iv) In 2018, we signed a joint venture agreement with two unrelated parties, to establish BDCG located in the United States for providing block chain services for financial or energy industries by utilizing AI and big data technology in the United States. The Company received 40% equity ownership in BDCG from the initial joint venture agreement. On April 24, 2018, the Company acquired 20% equity ownership in BDCG from one noncontrolling party for a total consideration of $9.8 million which consists of $2 million in cash and $7.8 million paid in the form of the Company’s common stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock), increasing the Company’s ownership to 60% in BDCG. The remaining 40% of BDCG are held by Seasail ventures limited (“Seasail”). The accounting treatment of the joint venture is based on the equity method due to variable substantive participating rights (in accordance with ASC 810‑10‑25‑11) granted to Seasail. The new entity is currently in the process of ramping up its operations. In April 2019, the company rebranded the name of the BDCG joint venture to Intelligenta. As part of the rebranding, Intelligenta’s strategy will now include credit services, corporation services, index services and products, and capital market services and products. (v) Refer to Note 5(f). (vi) Refer to Note 5(e). | Note 10. Long-term Investments Long-term investments consisted of Non-marketable Equity Investment (approximately $9.5 million and $6.6 million in 2018 and 2017, respectively) and Equity Method Investment (approximately $17.0 million and $0.4 million in 2018 and 2017, respectively) Non-marketable equity investment Our non-marketable equity investments are investments in privately held companies without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer and totaled approximately $9.5 million as of December 31, 2018. As of December 31, 2017, non-marketable equity securities accounted for under the cost method had a carrying value of approximately $6.6 million. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, the Company considers the investee’s cash position, earnings and revenue outlook, liquidity and management ownership, among other factors, in its review. If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount. There is no impairment in 2018 and 2017. Equity method investments The Company’s investment in companies accounted for using the equity method of accounting consist of the following: December 31, 2018 Loss on Impairment Foreign currency January 1, 2018 Addition investment loss translation adjustments December 31, 2018 Wecast Internet (i) $ 6,044 $ — $ (1,935) $ — $ 5 $ 4,114 Hua Cheng (ii) 353,498 — (46,070) — 1,238 308,666 BDCG (iv) — 9,800,000 — — — 9,800,000 DBOT (v) — 6,976,346 (132,620) — — 6,843,726 Total $ 359,542 $ 16,776,346 $ (180,625) $ — $ 1,243 $ 16,956,506 All the investments above are privately held companies; therefore, quoted market prices are not available. We have not received any dividends since initial investments. (i) Wecast Internet Starting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. (ii) Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”) As of December 31, 2018 and 2017, the Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. (iii) Shandong Lushi Media Co., Ltd (“Shandong Media”) As of December 31, 2018 and 2017, the Company held 30% equity ownership in Shandong Media, a print based media business, for Legacy YOD business. The accumulated operating loss of Shandong Media reduced the Company’s investment in Shandong Media to zero. The Company has no obligation to fund future operating losses. (iv) BBD Digital Capital Group Ltd. (“BDCG”) In 2018, we signed a joint venture agreement with two unrelated parties, to establish BDCG located in the United States for providing block chain services for financial or energy industries by utilizing AI and big data technology in the United States. On April 24, 2018, the Company acquired 20% equity ownership in BDCG from one noncontrolling party with cash consideration of a total consideration of $9.8 million which consists of $2 million in cash and $7.8 million paid in the form of the Company’s capital stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock), increasing the Company’s ownership to 60%. The remaining 40% of BDCG are held by Seasail ventures limited (“Seasail”). The accounting treatment of the joint venture is based on the equity method due to variable substantive participanting rights (in accordance with ASC 810‑10‑25‑11) granted to Seasail. The new entity is currently in the process of ramping up its operations. (v) Delaware Board of Trade Holdings, Inc. (“DBOT”) In August, 2017, the Company made a strategic investment of $250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT’s platform, trading system and technology. The Company accounts for this investment using the cost method in 2017, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. By October 2018, the Company issued 2,267,869 shares of the Company’s common stock to acquire additional shares in DBOT, thereby increasing its holdings to 36.92%. As a result, the Company changed its method of accounting for this investment to equity method. The effect of the change from cost method to equity method was immaterial. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | Note 10. Leases We lease certain office space and equipment from third parties. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, at the inception of a contract we assess whether the contract is, or contains, a lease. Our assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. At inception of a lease, we allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed. We account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the nonlease components (e.g.,common-area maintenance costs). Most leases include one or more options to renew, with renewal terms that can extend the lease term from one year or more. The exercise of lease renewal options is at our sole discretion. Our leases do not include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. All our leases are operating lease. We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases and initial direct costs on our right-of-use asset and lease liability was not material. As of September 30, 2019, our operating lease right of use assets and operating lease liability are approximately $6.8 million and $7.2 million, respectively. The weighted-average remaining lease term is 6.6 years and the weighted-average discount rate is 7.5%. For the three and nine months ended September 30, 2019, the components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Operating Lease Cost $ 390,577 $ 1,264,049 Short-Term Lease Cost 78,076 250,924 Sublease Income (10,605) (10,605) Total Lease Cost $ 458,048 $ 1,504,368 Supplemental information related to leases was as follows: Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 967,565 Right-of-use assets obtained in exchange for new operating lease liabilities $ 935,242 Maturity of operating lease liability is as follows: Maturity of Lease Liability Operating Lease 2019 (excluding the nine months ended September 30, 2019) $ 332,549 2020 1,307,783 2021 1,328,160 2022 1,422,965 2023 1,474,391 2024 and thereafter 3,377,653 Total lease payments 9,243,501 Less: Interest (2,001,696) Total $ 7,241,805 |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Supplemental Financial Statement Information | ||
Supplemental Financial Statement Information | Note 11. Supplemental Financial Statement Information Other Current Assets “Other current assets” were approximately $2.4 million and $3.6 million as of September 30, 2019 and December 31, 2018, respectively. Components of "Other current assets" that were more than 5 percent of total current assets: (1) other receivable due from third parties in our subsidiaries located in PRC and Hong Kong in the amount of $1.7 million and $3.3 million for the period ended September 30, 2019 and December 31, 2018 and (2) $0.6 million receivable due from ID Venturas 7 relating to the convertible debenture executed on September 27, 2019. As disclosed in Note 12(c), we have received the $0.6 million in October. Other Current Liabilities “Other current liabilities” were approximately $9.1 million and $5.3 million as of September 30, 2019 and December 31, 2018, respectively. Components of "Other current liabilities" that were more than 5 percent of total current liabilities: (1) $2.3 million liability relating to additional True-Up Common Stock consideration from the DBOT acquisition as disclosed in Note 5 (f) and (2) other payable due to third parties in the amount of $5.1 million and $4.6 million for the period ended September 30, 2019 and December 31, 2018, respectively. | Note 11. Supplementary Information Other Current Assets “Other current assets” were approximately $3.6 million and $2.3 million as of December 31, 2018 and 2017, respectively. Component of "Other current assets" as of December 31, 2018 and 2017 that was more than 5 percent of total current assets was other receivable in the amount of $3.3 million, including operations deposits receivable from a non-controlling shareholder (approximately $0.9 million) and $ 2.2 million due from third parties, respectively. Other Current Liabilities “Other current liabilities” were approximately $4.6 million and $0.8 million as of December 31, 2018 and 2017, respectively. Component of "Other current liabilities" that was more than 5 percent of total current liabilities was other payable to third parties in the amount of $4.6 million and $0.6 million respectively. |
Convertible Note
Convertible Note | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Convertible Note | ||
Convertible Note | Note 12 . Convertible Note The following is the summary of outstanding convertible notes as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 Convertible Note-Mr. McMahon(Note 14 (a)) $ 3,229,808 $ 3,140,055 Convertible Note-SSSIG (Note 14 (a)) 1,288,032 1,000,000 Convertible Note-Advantech 12,382,806 11,313,770 $2.05 million Senior Secured Convertible Note - ID Venturas 7 626,387 — $2.5 million Senior Secured Convertible Note - ID Venturas 7 14,917 — Total $ 17,541,950 $ 15,453,825 Short-term Note 1,914,419 4,140,055 Long-term Note 15,627,531 11,313,770 (a) $12 million Convertible Note – Advantech On June 28, 2018, the Company entered into a convertible note purchase agreement with Advantech Capital Investment II Limited (“Advantech”) in the aggregate principal amount of $12,000,000 (the Notes). The Notes bear interest at a rate of 8%, mature on June 28, 2021, and are convertible into approximately 6,593,406 shares of the Company’s common stock at a conversion price of $ 1.82 per share. The difference between the conversion price and the fair market value of the common stock on the commitment date (transaction date) resulted in a beneficial conversion feature recorded of approximately $1.4 million. For the three months ended September 30, 2019 and 2018, total interest expense recognized relating to the beneficial conversion feature was $117,000 and $112,000, respectively. For the nine months ended September 30, 2019 and 2018, total interest expense recognized relating to the beneficial conversion feature was $347,000 and $112,000, respectively. The agreement also requires the Company to comply with certain covenants, including restrictions on the use of the proceeds and other convertible note offering. As of September 30, 2019, the Company was in compliance with all ratios and covenants. (b) $2.05 million Senior Secured Convertible Debenture due in August 2020 - ID Ventura 7 On February 22, 2019, the Company executed a security purchase agreement with ID Venturas 7, LLC (“IDV”), whereby the Company issued $2,050,000 of senior secured convertible note. The note bears interest at a rate of 10% per year payable either in cash or in kind at the option of the Company on a quarterly basis and matures on August 22, 2020. In addition, IDV is entitled to the following: (i) the convertible note is senior secured; (ii) convertible at $1.84 per share of Company common stock at the option of IDV (approximately 1,114,130 shares), subject to adjustments if subsequent equity shares have a lower conversion price, (ii) 1,166,113 shares of common stock of the Company and (iii) a warrant exercisable for 150% of the number of shares of common stock which the note is convertible into (approximately 1,671,196 shares) at an exercise price of $1.84 per share and will expire 5 years after issuance. On October 29, 2019 the Company entered into a letter agreement (the “Agreement”) with ID Venturas pursuant to which the Company agreed to reduce the conversion price of the Debentures and the exercise price of the Warrants to $1.00, The Company received aggregate gross proceeds of $2 million, net of $50,000 for the issuance expenses paid by IDV. Total funds received were allocated to convertible note, common stocks and warrants based on their relative fair values in accordance with ASC 470‑20‑30. The value of the convertible note and common stocks was based on the closing price on February 22, 2019. The fair value of the warrants was determined using the Black-Scholes option-pricing model, with the following assumptions: expected life of 5 years, expected dividend rate of 0%, volatility of 111.83% and an interest rate of 2.48%. The relative fair value of the warrants was recorded as additional paid-in capital and reduced the carrying amount of the convertible note. The Company recognized a beneficial conversion feature discount on convertible note at its intrinsic value, which was the fair value of the common stock at the commitment date for convertible note, less the effective conversion price. The Company recognized approximately $600,000 of beneficial conversion feature as an increase in additional paid in capital and reduced (discount on) the carrying amount of the convertible note in the accompanying consolidated balance sheet. The discounts on the convertible note for the warrants and beneficial conversion feature are being amortized to interest expense, using the effective interest method over the term of the convertible note. As of September 30, 2019, the unamortized discount on the convertible note is approximately $1,424,000. Total interest expense recognized relating to the discount was approximately $175,000 and $626,000 for the three and nine months ended September 30, 2019, respectively. Interest on the convertible note is payable quarterly starting from April 1, 2019. The convertible note is redeemable at the option of the Company in whole at an initial redemption price of the principal amount of the convertible note plus additional warrants and accrued and unpaid interest to the date of redemption. The security purchase agreement contains customary representations, warranties and covenants. The convertible note is collateralized by the Company’s equity interest in Grapevine, which had a carrying amount of $2.4 million as of September 30, 2019. The Company has the right to request for the removal of the guarantee and collateral by issuance of additional 250,000 shares of common stock . On September 27, 2019, the Company issued 250,000 shares of common stock to IDV in exchange for the release of Grapevine as collateral. IDV has registration rights that require the Company to file and register the common stock issued or issuable upon conversion of the convertible note or the exercise of the warrants, within 180 days following the closing of the transaction. The Company is also subject to penalty fee at 8% per annum for late payments of interests and compensation for the loss of IDV on failure to timely deliver conversion shares upon conversion. (c) On September 27, 2019, the Company executed a security purchase agreement with ID Venturas 7, LLC (“IDV”), whereby the Company issued $2,500,000 of senior secured convertible note. The note bears interest at a rate of 10% per year payable either in cash or in kind at the option of the Company on a quarterly basis and matures on March 27, 2021. In addition, IDV is entitled to the following: (i) the convertible note is senior secured; (ii) convertible at $1.84 per share of Company common stock at the option of IDV (approximately 1,358,696 shares), subject to adjustments if subsequent equity shares have a lower conversion price, (ii) 1,000,000 shares of common stock of the Company and (iii) a warrant exercisable for 150% of the number of shares of common stock which the note is convertible into (approximately 2,038,043 shares) at an exercise price of $1.84 per share and will expire 5 years after issuance. On October 29, 2019 the Company entered into a letter agreement (the "Agreement") with ID Venturas pursuant to which the Company agreed to reduce the conversion price of the Debentures and the exercise price of the Warrants to $1.00, The Company will receive aggregate gross proceeds of $2.5 million, net of $66,195 for the issuance expenses paid by IDV. The Company received $1.8 million proceed in September and the remaining $633,805 was received in October. Total gross proceeds were allocated to convertible note, common stocks and warrants based on their relative fair values in accordance with ASC 470-20-30. The value of the convertible note and common stocks was based on the closing price on September 27, 2019. The fair value of the warrants was determined using the Black-Scholes option-pricing model, with the following assumptions: expected life of 5 years, expected dividend rate of 0%, volatility of 110.36% and an interest rate of 1.55%. The relative fair value of the warrants was recorded as additional paid-in capital and reduced the carrying amount of the convertible note. The Company recognized a beneficial conversion feature discount on convertible note at its intrinsic value, which was the fair value of the common stock at the commitment date for convertible note, less the effective conversion price. The Company recognized approximately $989,000 of beneficial conversion feature as an increase in additional paid in capital and reduced (discount on) the carrying amount of the convertible note in the accompanying consolidated balance sheet. The discounts on the convertible note for the warrants and beneficial conversion feature are being amortized to interest expense, using the effective interest method over the term of the convertible note. As of September 30, 2019, the unamortized discount on the convertible note is approximately $2,488,000. Total interest expense recognized relating to the discount was approximately $12,000 and $12,000 for the three and nine months ended September 30, 2019, respectively. Interest on the convertible note is payable quarterly starting from October 1, 2019. The convertible note is redeemable at the option of the Company in whole at an initial redemption price of the principal amount of the convertible note plus additional warrants and accrued and unpaid interest to the date of redemption. The security purchase agreement contains customary representations, warranties and covenants. The convertible note is collateralized by the Company’s equity interest in DBOT, which had a carrying amount of $14.3 million as of September 30, 2019. IDV has registration rights that require the Company to file and register the common stock issued or issuable upon conversion of the convertible note or the exercise of the warrants, within 120 days following the closing of the transaction. The Company is also subject to penalty fee at 8% per annum for late payments of interests and compensation for the loss of IDV on failure to timely deliver conversion shares upon conversion. | Note 12. Convertible Note-Long Term On June 28, 2018, the Company entered into a convertible note purchase agreement with Advantech Capital Investment II Limited (“Advantech”) in the aggregate principal amount of $12,000,000 (the Notes). The Notes bear interest at a rate of 8%, mature on June 28, 2021, and are convertible into approximately 6,593,406 shares of the Company’s common stock at a conversion price of $ 1.82 per share. The difference between the conversion price and the fair market value of the common stock on the commitment date (transaction date) resulted in a beneficial conversion feature recorded of approximately $1.4 million. Total interest expense recognized relating to the beneficial conversion feature was $698,000 during the year ended December 31, 2018. The agreements also require the Company to comply with certain covenants, including restrictions on the use of the proceeds and other convertible note offering. As of December 31, 2018, the Company was in compliance with all ratios and covenants. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Stockholders' Equity | ||
Stockholders' Equity | Note 13. Stockholders’ Equity Convertible Preferred Stock Our board of directors has authorized 50 million shares of convertible preferred stock, $0.001 par value, issuable in series. As of September 30, 2019 and December 31, 2018, 7,000,000 shares of Series A preferred stock were issued and outstanding and is convertible, at any time at the option of the holder, into 933,333 shares of common stock (subject to customary adjustments). The Series A preferred stock shall be entitled to ten vote per common stock on an as-converted basis and only entitled to receive dividends when and if declared by the board. On liquidation, both series of preferred stock are entitled to a liquidation preference of $0.50 per share. The shares are not redeemable except on liquidation or if there is a change in control of the Company or a sale of all or substantially all of the assets of the Company. The conversion price of the Series A may only be adjusted for standard anti-dilution, such as stock splits and similar events. The Series A preferred stocks are considered to be equity instruments and therefore the embedded conversion options have not been separated. Because the preferred stocks have conditions for their redemption that may be outside the control of the Company, they have been classified outside of Shareholders’ Equity, in the mezzanine section of our balance sheet. Common Stock Our board of directors has authorized 1,500 million shares of common stock, $0.001 par value. | Note 13. Stockholders’ Equity Convertible Preferred Stock Our board of directors has authorized 50 million shares of convertible preferred stock, $0.001 par value, issuable in series. As of December 31, 2018 and 2017, 7 million shares of Series A preferred stock were issued and outstanding. The Series A preferred stock shall be entitled to one vote per common stock on an as-converted basis and only entitled to receive dividends when and if declared by the board. Common Stock Our board of directors has authorized 1,500 million shares of common stock, $0.001 par value. Year 2018 Equity Transactions In March and June 2018, the Company entered into a subscription agreement with GT Dollar Ptd. Ltd. (“GTD”) for a private placement and was subsequently amended to reduce the amount of the investment to from $40.0 million to $10.0 million. In October 2018, the Company received $10.0 million and issued an aggregate of 5,494,505 shares of the common stock of the Company, for $1.82 per share, to GTD. In June and December 2018, the Company entered into a subscription agreement and amended agreements with Sun Seven Stars Investment Group Limited, a British Virgin Islands corporation (“SSSIG”), an affiliate of Dr. Wu, to purchase $1.1 million of Common Stock at the then market price. The Company has received $1.1 million in total as of December 31, 2018. The Company expects to issue 572,917 shares of common stock in 2019. In July and December, 2018, the Company entered into a share purchase and option agreement and amended agreement with Star Thrive Group Limited (“Star”), a British Virgin Islands corporation, pursuant to which Star purchased 5,027,324 shares of the Company’s common stock, for $9.2 million (the “Investment”). The Company also granted to Star a share purchase option (the “Call Option”) pursuant to which the Star may, within 24 months after July 24, 2018, purchase from the Company such number of shares of common stock that would bring Star’s total ownership of the Company’s issued and outstanding shares up to 19.5% on a fully diluted basis, at a price equal to 95% of the weighted average trading price of the common stock within 3 months prior to the exercise date of the Call Option. As of December 31, 2018, the Company has received $9.2 million and 5,027,324 shares have been issued. The fair value of the call option is $8.0 million using the Black-Sholes valuation model using the following assumptions: expected terms 1.81 years; volatility 132.55%; dividend yield: zero and risk free interest rate 2.81%. The management determined that the call options is classified within shareholders’ equity as “Additional paid-in capital” upon the issuance in accordance with ASC 815‑40 and the proceeds from the investment are allocated to common stock and call options based on the relative fair value of the securities in accordance with ASC 470‑20‑30. Year 2017 Equity Transactions In May 2017, the Company entered into a subscription agreement with certain investors, including officers, directors and other affiliates of the Company, pursuant to which the Company issued and sold to such investors, in a private placement, an aggregate of 727,273 shares of the common stock of the Company, for $2.75 per share, or a total purchase price of $2.0 million. Investors in the private placement included Lan Yang, the wife of the Company’s Chairman Dr. Wu, and China Telenet Ventures Limited, an entity owned and controlled by Sean Wang, a member of the Company’s Board of Directors. As of July 18, 2017, all subscription amounts have been received by the Company. In October 2017, the Company entered into a Securities Purchase Agreement with Hong Kong Guo Yuan Group Capital Holdings Limited. Pursuant to the terms of the agreement, the Company sold and issued 5,494,505 shares of the Company’s common stock for $1.82 per share, or a total purchase price of $10.0 million. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Related Party Transactions | ||
Related Party Transactions | Note 14. Related Party Transactions (a) Convertible Notes $3.0 Million Convertible Note with Mr. Shane McMahon (“Mr. McMahon”) On May 10, 2012, Mr. McMahon, our Vice Chairman, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”) at a 4% interest rate computed on the basis of a 365‑day year. We entered several amendments with respect to the effective conversion price (changed from $1.75 to $1.5), convertible stocks (changed from of Series E Preferred Stock to Common Stock) and extension of the maturity date to December 31, 2020. For the three and nine months ended September 30, 2019, the Company recorded interest expense of approximately $30,000 and $90,000,respectively, related to the Note. For the three and nine months ended September 30, 2018, the Company also recorded interest expense of approximately $30,000 and $90,000, respectively, related to the Note. Interest payable was $229,808 and $140,055 as of September 30, 2019 and December 31, 2018, respectively. $2.5 Million Convertible Promissory Note with SSSIG On February 8, 2019, the Company entered into a convertible promissory note agreement with SSSIG, an affiliate of Dr. Wu, in the aggregate principal amount of $2,500,000. The convertible promissory note bears interest at a rate of 4%, matures on February 8, 2020, and is convertible into the shares of the Company’s common stock at a conversion price of $1.83 per share anytime at the option of SSSIG. As of September 30, 2019, the Company received $1.3 million from SSSIG. The Company has not received the remaining $1.2 million as of the date of this report. For the three and nine months ended September 30, 2019, the Company recorded interest expense of approximately $13,000 and $36,000, respectively,related to the Note. (b) Transactions with GTD Disposal of Assets in exchange of GTB In March 2019, the Company completed the sale of the following assets (with total carrying amount of approximately $20.4 million) to GTD, a minority shareholder based in Singapore, in exchange for 1,250,000 GTB. The Company considers the arrangement as a nonmonetary transaction and the fair values of GTB are not reasonably determinable due to the reasons described in Note 3. Therefore, GTB received are recorded at the carrying amount of the assets exchanged and the Company did not recognize any gain or loss based on ASC 845‑10‑30. · License content (net carrying amount approximately $17.0 million) · Approximately 13% ownership interest in Nanjing Shengyi Network Technology Co., Ltd (“Topsgame”) (carrying amount approximately $3.2 million which was included in long-term investment-Non-marketable Equity Investment) · Animation copy right (net carrying amount approximately $0.2 million which was included in intangible asset.) Digital asset management services Please refer to Note 3. (c) Crude Oil Trading For the nine months ended September 30, 2018, we purchased crude oil in the amount of approximately $244.1 million from three suppliers that a minority shareholder of the Company has significant influence upon because this minority shareholder has significant influence on both our Singapore joint venture and these three suppliers. The Company has recorded the purchase on a separate line item referenced as “Cost of revenue from related parties” in its financial statements. There is no outstanding balance due (in Accounts Payable) as of September 30, 2019. No such related party transactions occurred for the same period in 2019. (d) Severance payments On February 20, 2019, the Company accepted the resignation of former Chief Executive Officer, former Chief Investment Officer and former Chief Strategy Officer and agreed to pay approximately $837,000 in total for salary, severance and expenses. The Company paid $637,000 in the first quarter of year 2019 and recorded $200,000 in other current liabilities on our consolidated balance sheet as of September 30, 2019. The $837,000 severance expenses were recorded in the Selling, general and administrative expenses of the income statement. (e) During the third quarter of 2019, the Company’s net borrowings from Dr. Wu and his affiliates increased by $1.0 million. We recorded these borrowings in amount due to related parties on our consolidated balance sheet as of September 30, 2019. These borrowings bear no interest. (f) Please refer to Note 5(b). (g) Please refer to Note 5(g). (h) Please refer to Note 5(c). (i) Please refer to Note 5(h). (j) Please refer to Note 3. | Note 14. Related Party Transactions (a) Convertible Note $3.0 Million Convertible Note with Mr. Shane McMahon (“Mr. McMahon”) On May 10, 2012, Mr. McMahon, our Vice Chairman, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”) at a 4% interest rate computed on the basis of a 365‑day year. We entered several amendments with respect to the effective conversion price (changed from $1.75 to $1.5), convertible stocks (changed from of Series E Preferred Stock to Common Stock) and extension of the maturity date to December 31, 2019. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes (“Note”) issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In 2018 and 2017, the Company paid such interest in the amount of $0.0 and $407,863 to Mr. McMahon, and the accumulated interest payable as of December 31, 2018 and 2017 was $140,055 and $20,055. For the years ended December 31, 2018 and 2017, the Company recorded interest expense of $120,000 and $120,000 related to the Note. $2.5 Million Convertible Promissory Note with SSSIG On February 8, 2019, the Company entered into a convertible promissory note agreement with SSSIG, an affiliate of Dr. Wu, in the aggregate principal amount of $2,500,000. The convertible promissory note bear interest at a rate of 4%, matures on February 8, 2020, and are convertible into the shares of the Company’s common stock at a conversion price of $ 1.83 per share anytime at the option of SSSIG. As of December 31, 2018, SSSIG advanced $1.0 million to the Company. We have not received the remaining $1.5 million. (b) Assets Disposal to BT On November 28, 2017, for strategic reasons, the Company and BT agreed to amend the BT share purchase agreement, in which the Company will neither sell the equity of Nanjing Tops Game Co., Ltd, and the equity of the Pantaflix joint venture to BT nor receive the previously agreed upon consideration for such sales. Instead the Company sold to BT 80% of the outstanding capital stock of Zhong Hai Shi Xun Media (Legacy YOD business) to streamline the operations of the Company and to eliminate the Company’s exposure to any liabilities and obligations of Zhong Hai Shi Xun Media. (c) Please refer to Note 6 (b). (d) Please refer to Note 6 (a) Fomalhaut Interest. (e) In September 2018, we announced the proposed joint venture with Asia Times, a Hong Kong company which owns the Asia Times newspaper, to be named Asia Times Financial Limited (“ATF”). Effective February 20, 2019, and in connection with the resignation of three former executives (see Note 22), the Company and Asia Times agreed to terminate their subscription agreement so that the Company retains approximately 3.16% interest in Asia Times for $1.2 million in cash, and not be obligated to make any further investment into Asia Times. In addition, the parties have agreed to terminate the shareholder’s agreement for the joint venture, ATF. The Company paid $1.2 million in 2018 and recorded in long term investment (non-marketable equity investment). (f) For developing our Wecast business, on September 7, 2018, the Company entered into an agreement to purchase FinTalk Assets with Sun Seven Star International Limited, a Hong Kong company and an affiliate of Dr. Wu. FinTalk Assets are the rights, titles and interest in a secure mobile financial information, social, and messaging platform that has been designed for streamlining financial-based communication for professional and retail users. The purchase price for Fintalk Assets is $7.0 million payable with $1.0 million in cash and shares of the Company’s common stock with a fair market value of $6.0 million. The Company paid $1.0 million in October 2018 and recorded in prepaid expense. The transaction is expected to be completed by the second quarter of 2019. (g) Equity Investment In September 2018, the Company entered a share purchase agreements with SSSIG and other persons for whom SSSIG acted as seller-representative (the “Seller”) to purchase common stock of Hooxi, an entity listed on the TSX venture exchange in Canada. The share purchase consisted of the following: · an aggregate of 8,583,034 shares of common stock of Hooxi at fair market value in consideration for the Company’s common stock of equivalent value; and · an aggregate of 3,240,433 additional shares of Hooxi, subject to the Sellers receiving those shares from Hooxi as award of performance shares (“Hooxi performance shares”), if and when certain performance and vesting conditions set out in an agreement among the Sellers and Hooxi are achieved, in consideration for Company common stock of equivalent value. These Hooxi performance shares represent 50% of performance based Hooxi shares to which the Sellers are entitled. In the event the performance criteria are not met, the Hooxi performance shares will not be issued to the Sellers and thus the purchase of these performance shares by the Company will not close. As of the date of this report, the shares related to the above transaction have not been issued by either the Company or SSSIG. In addition, the Company signed a subscription agreement with Hooxi to purchase 1,173,333 common shares of Hooxi for $2.0 million in cash. The Company paid $2.0 million of the purchase price in 2018. The Company recorded this in long-term investments (non-marketable equity investment) (Note 10) in consolidated balance sheets. Sales of Wide Angle and its subsidiary Please see Note 6 - 2018 Divestitures. (h) Crude Oil Trading For the years ended December 31, 2018, we purchased crude oil in the amount of approximately $244 million from three suppliers that a minority shareholder of the Company has significant influence upon because this minority shareholder has significant influence on both our Singapore joint venture and these three suppliers. The Company has recorded the purchase on a separate line item referenced as “Cost of revenue from related parties” in its financial statements. There is no outstanding balances due (in Accounts Payable) as of December 31, 2018. No such related party transactions occurred in 2017. For the years ended December 31, 2018 and 2017, we sold crude oil in the amount of approximately $0 million and $19 million to one customer that is partially owned by the same individual who is also a minority shareholder of Seven Stars Energy Pte. Ltd. (“SSE”). The Company has recorded this sale on a separate line item referenced as “Revenue from Related Party” in its financial statements. (i) Consumer Electronics Trading For the years ended December 31, 2018, we sold consumer electronics in the amount of approximately $99.7 million to one customer that a director of minority shareholder of our subsidiary has significant influence upon. There is no outstanding balances due (in Accounts Receivable) as of December 31, 2018. No such related party transactions occurred in 2017. The Company has recorded this sale on a separate line item referenced as “Revenue from Related Party” in its financial statements. |
Share-Based Payments
Share-Based Payments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-Based Payments | ||
Share-Based Payments | Note 15. Share-Based Payments As of September 30, 2019, the Company had 14,971,431 options, 55,586 restricted shares and 3,709,240 warrants outstanding. The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation . The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period. Effective as of December 3, 2010 and amended on August 3, 2018, our Board of Directors approved the 2010 Stock Incentive Plan (“the 2010 Plan”) pursuant to which options or other similar securities may be granted. As of September 30, 2019, the maximum aggregate number of shares of our common stock that may be issued under the 2010 Plan is 31,500,000 shares. As of September 30, 2019, options and restricted shares available for issuance are 14,160,326 shares. The company recorded share-based payments expense of $2,547,107 and $11,530 for the three months ended September 30, 2019 and 2018 and $6,474,227 and $3,372,447 for the nine months ended September 30, 2019 and 2018, respectively. (a) Stock option activity for the nine months ended September 30, 2019 is summarized as follows: Weighted Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at January 1, 2019 1,706,431 $ 3.28 4.08 $ — Granted 14,325,000 1.98 8.75 — Exercised — — — — Expired (83,333) 1.98 — — Forfeited (976,667) 1.98 — — Outstanding at September 30, 2019 14,971,431 $ 2.13 8.72 $ — Vested and expected to be vested as of September 30, 2019 14,971,431 $ 2.13 8.72 $ — Options exercisable at September 30, 2019 (vested) 5,529,977 $ 2.38 7.55 $ — As of September 30, 2019, approximately $14,255,266 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.4 years. The total fair value of shares vested for the nine months ended September 30, 2019 and 2018 was $6,010,085 and $319,001, respectively. Cash received from options exercised during the nine months ended September 30, 2019 and 2018 was approximately $0 and $2,632, respectively. (b) In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to service providers to purchase common stock of the Company. The warrants issued to Warner Brother were expired without exercise on January 31, 2019. The Company issued warrants to IDV in connection with senior secured convertible notes (See Note 12) and the weighted average exercise price was $1.84 and the weighted average remaining life was approximately 4.73 years. September 30, 2019 December 31, 2018 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2014 Broker Warrants (Series E Financing) — 60,000 $ 1.75 1/31/19 $2.05 million IDV Senior Secured Convertible Debenture 1,671,196 — $ 1.84 2/22/2024 $2.5 million IDV Senior Secured Convertible Debenture 2,038,044 — 1.84 9/27/2024 3,709,240 60,000 On September 24, 2018, the Company entered into employment agreements with three executives. As part of their employment agreements, they are entitled to warrants for an aggregate of 8,000,000 shares at an exercise price of $5.375 per share (the “Exercise Price”), which is a 25% premium to the $4.30 per share closing market price of the Company’s common stock on September 7, 2018, the date upon which the terms of the employment agreements were mutually agreed. In February 2019, the rights to receive warrants were terminated due to the resignation of three executives. (c) In January 2019, the Company granted 129,840 restricted shares to the two independent directors under the “2010 Plan” which was approved as part of the 2018 independent board compensation plan by the Board of Directors. The restricted shares were all vested immediately since commencement date. The aggregated grant date fair value of all those restricted shares was $161,001. A summary of the unvested restricted shares is as follows: Weighted-average Shares fair value Non-vested restricted shares outstanding at January 1, 2019 87,586 $ 2.46 Granted 129,840 $ 1.24 Forfeited (3,000) $ 2.60 Vested (158,840) $ 1.49 Non-vested restricted shares outstanding at September 30, 2019 55,586 $ 2.37 As of September 30, 2019, there was $33,800 of unrecognized compensation cost related to unvested restricted shares. This amount is expected to be recognized over a weighted-average period of 0.51 years. | Note 15. Share-Based Payments As of December 31, 2018, the Company had 1,706,431 options, 87,586 restricted shares and 60,000 warrants outstanding. The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation . The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period. Effective as of December 3, 2010 and amended on August 3, 2018, our Board of Directors approved the 2010 Stock Incentive Plan (“the 2010 Plan”) pursuant to which options or other similar securities may be granted. As of December 31, 2018, the maximum aggregate number of shares of our common stock that may be issued under the 2010 Plan increased from 4,000,000 shares to 31,500,000 shares. As of December 31, 2018, options available for issuance are 27,635,499 shares. For the years ended December 31, 2018 and 2017, total share-based payments expense was approximately $3.4 million and $1.3 million, respectively. (a) Stock Options Stock option activity for the year ended December 31, 2018 is summarized as follows: Weighted Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at January 1, 2018 1,853,391 $ 3.2 2.99 $ 0.02 Granted — — Exercised (136,961) 2.34 Expired (9,999) 1.58 Forfeited — — Outstanding at December 31, 2018 1,706,431 $ 3.28 4.08 $ — Vested and expected to be vested as of December 31, 2018 1,706,431 $ 3.28 4.08 $ — Options exercisable at December 31, 2018 (vested) 1,653,097 $ 3.33 3.94 $ — As of December 31, 2018, approximately $64,960 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.43 years. The total fair value of shares vested for the years ended December 31, 2018 and 2017 was $364,001 and $974,237 respectively. Cash received from options exercised during 2018 and 2017 was approximately $28,000 and $100,000. The following table summarizes the assumptions used to estimate the fair values of the share options granted for the year ended 2017 presented. There were no options granted in 2018. December 31, 2017 Expected term 5.4 ~5.9 years Expected volatility 55% ~ 85 % Expected dividend yield — % Risk free interest rate 2.04% ~2.29 % (b) Warrants In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to service providers to purchase common stock of the Company. The warrants issued to Warner Brother has been expired without exercise on January 31, 2019. The warrants that were issued to Beijing Sun Seven Stars Culture Development Limited (“SSS”) has been expired without exercise on March 28, 2018. Cash received from warrants exercised during 2018 and 2017 was approximately $1,126,000 and $1,725,000. As of December 31, 2018, the weighted average exercise price was $1.75 and the weighted average remaining life was 0.08 years. The following table outlines the warrants outstanding and exercisable as of December 31, 2018 and December 31, 2017: 2018 2017 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2014 Broker Warrants (Series E Financing) 60,000 703,714 $ 1.75 01/31/19 2016 Warrants to SSS — 1,818,182 $ 2.75 03/28/18 60,000 2,521,896 On September 24, 2018, the Company entered into an employment agreements with three executives and subsequently resigned in February 2019 (see Note 22). As part of their employment agreements, they were entitled to warrants for an aggregate of 8,000,000 shares at an exercise price of $5.375 per share, which is a 25% premium to the $4.30 per share closing market price of the Company’s common stock on September 7, 2018. As a result of the resignation, all the warrants were forfeited. (c) Restricted Shares In January, 2017, the Company granted 35,000 restricted shares to one employee under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $43,750. As this employee left the Company in February 2017, no expense was recorded. In March and April, 2017, the Company granted 365,000 restricted shares to certain employees under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $778,200. In November, 2017, the Board of Directors approved 2017 independent board compensation plan, which approved to grant 4,488 restricted shares to each of four then independent directors under the “2010 Plan”. The restricted shares were all vested immediately since commencement date. The aggregated grant date fair value of all those restricted shares was $100,000. In April and June, 2018, the Company granted 1,342,743 restricted shares to certain employees under the “2010 Plan”. 1,239,743 of the restricted shares were all vested immediately at commencement date. Rest of the shares have a vesting period of two years with the first half vesting on the first anniversary from grant date and the other half vesting on the second anniversary. The grant date fair value of the restricted shares was $3,469,532. A summary of the unvested restricted shares is as follows: Weighted-average Shares fair value Non-vested restricted shares outstanding at January 1, 2018 109,586 $ 1.92 Granted 1,342,743 2.58 Forfeited (100,000) 2.27 Vested (1,264,743) 2.56 Non-vested restricted shares outstanding at December 31, 2018 87,586 $ 2.46 As of December 31, 2018, there was $131,950 of unrecognized compensation cost related to unvested restricted shares. This amount is expected to be recognized over a weighted-average period of 1.26 years. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Earnings (Loss) Per Common Share | ||
Earnings (Loss) Per Common Share | Note 16. Earnings (Loss) Per Common Share Basic earnings (loss) per common share attributable to our shareholders is calculated by dividing the net earnings (loss) attributable to our shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share is calculated by taking net earnings (loss), divided by the diluted weighted average common shares outstanding. The calculations of basic and diluted earnings (loss) per share for the three months and nine months ended, 2019 and 2018 are as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Net earnings (loss) attributable to common stockholders $ (13,711,867) $ (7,186,847) $ 11,506,861 $ (19,228,240) Interest expense attributable to convertible promissory note — — 125,485 — Net earnings (loss) assuming dilution (13,711,867) (7,186,847) 11,632,346 (19,228,240) Basic Basic weighted average common shares outstanding 127,609,748 74,063,495 113,964,933 71,574,303 Effect of dilutive securities — — — — Convertible preferred shares- Series A — — 933,333 — Conversion of restricted shares and employee stock options — — 22,823 — Convertible promissory notes — — 2,777,687 — Contingently issuable shares — — 621,117 — Diluted potential common shares 127,609,748 74,063,495 118,319,893 71,574,303 Net earnings (loss) per share: Basic $ (0.11) $ (0.10) $ 0.10 $ (0.27) Diluted $ (0.11) $ (0.10) $ 0.10 $ (0.27) In 2018, diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares was anti-dilutive. The following table includes the number of shares that may be dilutive potential common shares in the future. The holders of these shares do not have a contractual obligation to share in our earnings (losses) and thus these shares were not included in the computation of diluted earnings (loss) per share because the effect was antidilutive. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Warrants 3,709,240 60,000 3,709,240 60,000 Options 14,971,431 1,797,017 14,965,598 1,797,017 Series A Preferred Stock 933,333 933,333 — 933,333 Convertible promissory note and interest 12,417,909 10,227,507 9,324,911 10,227,507 Contingently issuable shares — — Total 34,354,721 13,017,857 30,322,557 13,017,857 | Note 16. Loss Per Common Share 2018 2017 Net loss attributable to common stockholders $ (27,426,356) $ (10,503,049) Basic Basic weighted average common shares outstanding 78,386,116 61,182,209 Diluted Diluted weighted average common shares outstanding 78,386,116 61,182,209 Net loss per share: Basic $ (0.35) $ (0.17) Diluted $ (0.35) $ (0.17) Basic loss per common share attributable to our shareholders is calculated by dividing the net loss attributable to our shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive. The following table includes the number of shares that may be dilutive potential common shares in the future. The holders of these shares do not have a contractual obligation to share in our losses and thus these shares were not included in the computation of diluted loss per share because the effect was either antidilutive. December 31, December 31, 2018 2017 Warrants 60,000 2,521,896 Options 1,706,431 2,162,977 Series A Preferred Stock 933,333 933,333 Convertible promissory note and interest 10,407,233 35,346,703 Total 13,106,997 40,964,909 |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Income Taxes | Note 17. Income Taxes During the nine months ended September 30, 2019, the Company recorded an income tax benefit of $513,935, $152,876 resulting from losses of Grapevine Logic, Inc. offsetting deferred tax liabilities that were recognized on the acquisition of Grapevine Logic, Inc. and a $361,059 reduction of the valuation allowance on Ideanomics, Inc. deferred tax assets in excess of those reversed to offset Ideanomics, Inc.'s income. The reduction in valuation allowance resulted from Ideanomics, Inc.'s acquisition of additional ownership interests in Grapevine Logic, Inc. which caused Grapevine Logic, Inc. to be included in a consolidated tax return with Ideanomics, Inc. beginning June 30, 2019. This meant that $361,059 of Ideanomics, Inc.'s deferred tax assets could be utilized to offset Grapevine Logic Inc.'s remaining deferred tax liabilities. This resulted in an effective tax rate of (4.43%). The effective tax rate for the nine months ended September 30, 2019 differs from the U.S. statutory tax rate primarily due to the effect of taxes on foreign earnings, non-deductible expenses and the reduction in the beginning of the year deferred tax valuation allowance. As of September 30, 2019, the Company had approximately $9.9 million of the U.S domestic cumulative tax loss carryforwards and approximately $30.9 million of the foreign cumulative tax loss carryforwards which may be available to reduce future income tax liabilities in certain jurisdictions. The remaining 2018 U.S. tax loss is not subject to expiration under the new Tax Law. The foreign tax loss carryforwards will expire beginning year 2019 through 2023. There was no identified unrecognized tax benefit as of September 30, 2019. We are not aware of any unrecorded tax liabilities which would impact our financial position or our results of operations. | Note 17. Income Taxes (a) Corporate Income Tax (“CIT”) Ideanomics, Inc., M.Y. Products LLC and Grapevine Logic, Inc., are subject to U.S. federal and state income tax. CB Cayman was incorporated in Cayman Islands as an exempted company and is not subject to income tax under the current laws of Cayman Islands. Most of the Company’s income is generated in Hong Kong in 2018. The statutory income tax rate in HK is 16.5%. Seven Stars Energy is incorporated in Singapore in late 2017 which is conducting crude oil trading business. The statutory income tax rate in Singapore is 17%. YOD WFOE, Sinotop Beijing, and Sevenstarflix are PRC entities. The income tax provision of these entities is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in the PRC. In accordance with the Corporate Income Tax Law of the PRC (“CIT Law”), effective beginning on January 1, 2008, enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC territory are considered PRC resident enterprises and subject to the PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, and among other items, overall management and control over the production and business, personnel, accounting, and properties of an enterprise. If the Company’s non-PRC incorporated entities are deemed PRC tax residents, such entities would be subject to PRC tax under the CIT Law. Since our non-PRC entities have accumulated loss, the application of this tax rule will not result in any PRC tax liability, if our non-PRC incorporated entities are deemed PRC tax residents. The CIT Law imposes a 10% withholding income tax, subject to reduction based on tax treaty where applicable, for dividends distributed by a foreign invested enterprise to its immediate holding company outside China. Under the PRC-HK tax treaty, the withholding tax on dividends is 5% provided that a HK holding company qualifies as a HK tax resident as defined in the tax treaty. No provision was made for the withholding income tax liability as the Company’s foreign subsidiaries were in accumulated loss. Loss before tax and the provision for income tax benefit consists of the following components: 2018 2017 Loss before tax United States $ (13,139,622) $ (841,323) PRC/Hong Kong/Singapore (15,323,706) (10,018,994) $ (28,463,328) $ (10,860,317) Deferred tax benefit of net operating loss United States $ — $ — PRC/Hong Kong/Singapore — — $ — $ — Deferred tax benefit other than benefit of net operating loss United States $ 40,244 $ — PRC/Hong Kong — — Total income tax benefit $ 40,244 $ — A reconciliation of the expected income tax derived by the application of the U.S. corporate income tax rate to the Company’s loss before income tax benefit is as follows: 2018 2017 U. S. statutory income tax rate 21 % 34 % Non-deductible expenses: Non-deductible stock awards (1.2) % — % Waiver of intercompany loan related to ZHV disposal — % 14.7 % Others (0.9) % (2.9) % Non-deductible interest expenses (0.6) % (0.4) % Non-taxable change in fair value warrant liabilities — % (0.4) % Increase in valuation allowance (18.4) % (21.6) % Tax rate differential 0.1 % (23.4) % Effective income tax rate — % — % Deferred income taxes are recognized for future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows: 2018 2017 U.S. NOL $ 7,977,213 $ 6,152,242 Foreign NOL 6,406,052 5,365,437 Accrued payroll and expense 131,867 132,812 Nonqualified options 780,800 760,213 Others 171,819 30,040 Total deferred tax assets $ 15,467,751 $ 12,440,744 Less: valuation allowance $ (15,467,751) $ (12,440,744) As of December 31, 2018, the Company had approximately $38.9 million U.S domestic cumulative tax loss carryforwards and approximately $28.3 million foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. $26.8 million of the U.S. carryforwards expire in the years 2027 through 2037. The remaining U.S. tax loss is not subject to expiration under the new Tax Law. These PRC tax loss carryforwards will expire beginning year 2019 to year 2023. The Company also has a U.S. capital loss carryover, available to offset future capital gains, of $0.4 million which expires in 2024. Utilization of net operating losses may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state and foreign provisions. This annual limitation may result in the expiration of net operating losses before utilization. Realization of the Company’s net deferred tax assets is dependent upon the Company’s ability to generate future taxable income in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards The valuation allowance increased by approximately $3.0 million during 2018, which consists of $2.3 million resulting from operations and $0.7 million resulting from deferred tax liabilities acquired in the Grapevine acquisition. (b) Uncertain Tax Positions Accounting guidance for recognizing and measuring uncertain tax positions prescribes a threshold condition that a tax position must meet for any of the benefit of uncertain tax position to be recognized in the financial statements. There was no identified unrecognized tax benefit as of December 31, 2018 and 2017. As of December 31, 2018 and 2017, the Company did not accrue any material interest and penalties. The Company’s United States income tax returns are subject to examination by the Internal Revenue Service for at least 2010 and later years. Due to the uncertainty regarding the filing of tax returns for years before 2007, it is possible that the Company is subject to examination by the IRS for earlier years. All of the PRC tax returns for the PRC operating companies are subject to examination by the PRC tax authorities for all periods from the companies’ inceptions in 2007 through 2017 as applicable. (c) U.S. Tax Reform On December 22, 2017 the U.S. enacted the “Tax Cuts and Jobs Act” (“U.S. Tax Reform”) which made significant changes to corporate income tax law. One significant change was to decrease the general corporate income tax rate from 34% to 21%. This change in the rate reduced the Company’s deferred tax assets at December 31, 2017 by approximately $4.4 million. This reduction had no effect on the Company’s income tax expense as the reduction in deferred tax assets was offset by an equivalent reduction in the valuation allowance. Another significant change resulting from U.S. Tax Reform is that any future remittances to the parent company from business income earned by its subsidiaries outside of the U.S. will no longer to taxable to the Company under U.S. tax law. The Company would be liable for payment of income tax, or reduction of the net operating loss carryover, at a reduced rate for any accumulated earnings and profits of its non-U.S. subsidiaries at December 31, 2017. Any such tax would be payable over eight years. The Company’s provisional estimate is that there are no such accumulated earnings and profits at December 31, 2017 and consequently no tax would be payable. The Company continues to gather information relating to this estimate and expects to confirm this estimate during 2018. U.S. Tax Reform includes provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. There are substantial uncertainties in the interpretation of BEAT and GILTI and while certain formal guidance was issued by the U.S. tax authority, there are still aspects of the Tax Act that remain unclear and additional guidance is expected in 2019. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of U.S. Tax Reform, possibly materially. Consistent with accounting guidance, we treat BEAT as a period tax charge in the period the tax is incurred and have made an accounting policy election to treat GILTI taxes in a similar manner. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Contingencies and Commitments | ||
Contingencies and Commitments | Note 18. Contingencies and Commitments Lawsuits and Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Shareholder Class Action On July 19, 2019, a purported class action, captioned Jose Pinto Claro Da Fonseca Miranda v. Ideanomics, Inc., was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers. While the Company believes that the Class Action is without merit and plans to vigorously defend itself against these claims, there can be no assurance that the Company will prevail in the lawsuits. The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with these litigations. | Note 18. Contingencies and Commitments (a) Operating Lease Commitment The Company is committed to paying leased property costs related to our offices as follows: Leased Property Years ending December 31 Costs $ 1,728,670 1,341,024 1,202,496 1,294,781 1,343,668 Thereafter 2,587,280 Total $ 9,497,919 (b) Lawsuits and Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of December 31, 2018, there are no such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. |
Concentration, Credit and Other
Concentration, Credit and Other Risks | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Concentration, Credit and Other Risks | ||
Concentration, Credit and Other Risks | Note 19. Concentration, Credit and Other Risks (a) The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts legacy YOD business in China through a series of contractual arrangements (See Note 4). The Company believes that these contractual arrangements are in compliance with PRC law and are legally enforceable. If Sinotop Beijing, SSF or their respective legal shareholders fail to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, we can enforce its rights under the VIE contracts through PRC law and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If we had direct ownership of Sinotop Beijing and SSF, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Sinotop Beijing or SSF, which in turn could affect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing, SSF and their respective legal shareholders to perform their contractual obligations to exercise effective control. The Company also gives no assurance that PRC government authorities will not take a view in the future that is contrary to the opinion of the Company. If the current ownership structure of the Company and its contractual arrangements with the VIEs and their equity holders were found to be in violation of any existing or future PRC laws or regulations, the Company’s ability to conduct its business could be affected and the Company may be required to restructure its ownership structure and operations in the PRC to comply with the changes in the PRC laws which may result in deconsolidation of the VIEs. From time to time the PRC government imposes regulations that limit the amount and timing of foreign payments from companies operating in the PRC. Our ability to repatriate cash held in the PRC, or obtain funding from sources in the PRC, may be restricted by such regulations. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WFOE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. For example, there is substantial uncertainty regarding the Draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption and effective date of the final form of the law. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. While such uncertainty exists, the Company cannot assure that the new laws, when it is adopted and becomes effective, and potential related administrative proceedings will not have a material and adverse effect on the Company’s ability to control the affiliated entities through the contractual arrangements. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC. (b) For the nine months ended September 30, 2018, one customer individually accounted for more than 10% of the Company’s revenue from third parties. One customer individually accounted for more than 10% of the Company’s net accounts receivables as of September 30, 2018, respectively. For the nine months ended September 30, 2019, one customer individually accounted for more than 10% of the Company’s revenue. One customer individually accounted for more than 10% of the Company’s net accounts receivables as of September 30, 2019, respectively. (c) For the nine months ended September 30, 2018, two suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for more than 10% of the Company’s accounts payable and amount due to related parties as of September 30, 2018. For the nine months ended September 30, 2019, one supplier individually accounted for more than 10% of the Company’s accounts payable as of September 30, 2019. (d) Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and accounts receivable. As of September 30, 2019 and December 31, 2018, the Company’s cash was held by financial institutions (located in the PRC, Hong Kong, the United States and Singapore) that management believes have acceptable credit. Accounts receivable are typically unsecured and are mainly derived from revenues from Mobile Energy Group (formerly Wecast Services). The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. (e) We have certain operating transactions that are denominated in RMB and a portion of the Company’s assets and liabilities that is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance. Cash consist of cash on hand and demand deposits at banks, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. Cash and time deposits maintained at banks consist of the following: September 30, December 31, 2019 2018 RMB denominated bank deposits with financial institutions in the PRC $ 110,005 $ 1,523,622 US dollar denominated bank deposits with financial institutions in the PRC $ 30,666 $ 133,053 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 17,985 $ 13,133 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 13,708 $ 44,182 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 569,707 $ 697,099 SGD denominated bank deposits with financial institutions in Singapore $ 70,432 — US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 874,093 $ 695,155 Total $ 1,686,596 $ 3,106,244 As of September 30, 2019 and December 31, 2018, deposits of $855,915 and $0 were insured. To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, USA, Singapore and Cayman with acceptable credit rating. (f) As of September 30, 2019, the Company holds 8,333,333 GTB · Digital currency is highly volatile due to the limited trading history, and singular currency exchange platform; · Under the circumstances where governments prohibit or effectively prohibit the trading of digital currency, this will significantly impact the financial statements of the Company since the digital currency market is currently largely unregulated; and · To date the company has not been able to convert any of its crypto currency holdings to fiat. The Asia EDX exchange has indicated that it continues work towards providing exchangeability for coins held on the exchange into fiat. Management is unable to give any assurance as to when, if ever, the Asia EDX exchange will permit conversion of the company’s crypto currency holdings into fiat. | Note 19. Concentration, Credit and Other Risks (a) PRC Regulations The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts legacy YOD business in China through a series of contractual arrangements (See Note 5). The Company believes that these contractual arrangements are in compliance with PRC law and are legally enforceable. If Sinotop Beijing, SSF or their respective legal shareholders fail to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, We can enforce its rights under the VIE contracts through PRC law and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If we had direct ownership of Sinotop Beijing and SSF, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of Sinotop Beijing or SSF, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing, SSF and their respective legal shareholders to perform their contractual obligations to exercise effective control. The Company also gives no assurance that PRC government authorities will not take a view in the future that is contrary to the opinion of the Company. If the current ownership structure of the Company and its contractual arrangements with the VIEs and their equity holders were found to be in violation of any existing or future PRC laws or regulations, the Company’s ability to conduct its business could be affected and the Company may be required to restructure its ownership structure and operations in the PRC to comply with the changes in the PRC laws which may result in deconsolidation of the VIEs. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WFOE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. For example, there is substantial uncertainty regarding the Draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption and effective date of the final form of the law. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. While such uncertainty exists, the Company cannot assure that the new laws, when it is adopted and becomes effective, and potential related administrative proceedings will not have a material and adverse effect on the Company’s ability to control the affiliated entities through the contractual arrangements. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC. (b) Major Customers Legacy YOD business The Company has agreements with distribution partners, including digital cable operators, IPTV operators, OTT streaming operators and mobile smartphone manufacturers and operator. A distribution partner that individually generates more than 10% of the Company’s revenue is considered a major customer in 2017. No revenue from Legacy YOD business in 2018. Wecast Services Wecast Services is currently primarily engaged with consumer electronics e-commerce and smart supply chain management operations. The Company’s ending customers are located across the world. For the year ended December 31, 2017, two customers individually accounted for more than 10% of the Company’s third parties revenue. Three customers individually accounted for more than 10% of the Company’s net accounts receivables as of December 31, 2017, respectively. For the year ended December 31, 2018, two customers individually accounted for more than 10% of the Company’s revenue. Two customers individually accounted for more than 10% of the Company’s net accounts receivables as of December 31, 2018, respectively. (c) Major Suppliers Legacy YOD business The Company relies on agreements with studio content partners to acquire video contents. A content partner that accounts for more than 10% of the Company’s cost of revenues is considered a major supplier. Since January 1, 2017, only the content that was acquired from SSS in the amount of $17.7 million were still recorded as licensed content assets and amortized into cost of sales based on revenue and gross profit margin estimates. For the year ended December 31, 2017, $0.8 million was recorded in cost of sales and $0.8 million was recorded as revenue. No further revenue nor cost of sales was recorded since March 31, 2017. Wecast Services The Company relies on agreements with consumer electronics manufactures. For the year ended December 31, 2017, five suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2017. For the year ended December 31, 2018, three suppliers (two of three suppliers are related parties) individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2018. (d) Concentration of Credit Risks Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and accounts receivable. As of December 31, 2018 and 2017, the Company’s cash was held by financial institutions (located in the PRC, Hong Kong, the United States and Singapore) that management believes have acceptable credit. Accounts receivable are typically unsecured and are mainly derived from revenues from Wecast Services. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. (e) Foreign Currency Risks A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance. Cash consist of cash on hand and demand deposits at banks, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. Cash and time deposits maintained at banks consist of the following: December 31, 2018 2017 RMB denominated bank deposits with financial institutions in the PRC $ 1,523,622 $ 693,584 US dollar denominated bank deposits with financial institutions in the PRC $ 133,053 $ 628,481 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 13,133 $ 17,508 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 44,182 $ 1,505,271 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 697,099 $ 1,033,769 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 695,155 $ 3,698,704 Total $ 3,106,244 $ 7,577,317 As of December 31, 2018 and December 31, 2017 deposits of $0 and $369,280 were insured, respectively. To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, USA, Singapore and Cayman with acceptable credit rating. |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Defined Contribution Plan | ||
Defined Contribution Plan | Note 20. Defined Contribution Plan For our U.S. employees, during 2019, the Company introduced a new 401(k) defined contribution plan which provides 100% employer matching up to 4% of each employee’s pay. Employee is eligible to participate after six months of employment. Company 401(k) matching contributions were approximately $8,700 and $487 for the three months ended September 30, 2019 and 2018 and $8,700 and $3,242 for the nine months ended September 30, 2019 and 2018, respectively. Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to make contributions based on certain percentages of the employees’ basic salaries. Other than such contributions, there is no further obligation under these plans. The total contribution for such PRC employee benefits was $113,654 and $235,811 for the three months ended September 30, 2019 and 2018 and $267,868 and $607,872 for the nine months ended September 30, 2019 and 2018, respectively. | Note 20. Defined Contribution Plan For our U.S. employees, during 2011, the Company began sponsoring a 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee’s pay. Employees become fully vested in employer matching contributions after six months of employment. Company 401(k) matching contributions were approximately $3,242 and $13,173 for the years ended December 31, 2018 and 2017, respectively. Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to make contributions based on certain percentages of the employees’ basic salaries. Other than such contributions, there is no further obligation under these plans. The total contribution for such PRC employee benefits was $456,268 and $439,227 for the years ended December 31, 2018 and 2017, respectively. |
Segments and Geographic Areas
Segments and Geographic Areas | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segments and Geographic Areas | ||
Segments and Geographic Areas | Note 21. Segments and Geographic Areas The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. We operate our business in two operating segments: Legacy YOD and Mobile Energy Group (formerly Wecast Services). Segment disclosures are on a performance basis consistent with internal management reporting. The Company does not allocate expenses below segment gross profit since these segments share the same executive team, office space, occupancy expenses, information technology infrastructures, human resources and finance department. Information about segments during the periods presented were as follows: Nine Months Ended September 30, 2019 September 30, 2018 Revenue -Legacy YOD $ — $ — - Mobile Energy Group (formerly Wecast Services) 44,503,562 362,628,296 Total revenue 44,503,562 362,628,296 Cost of revenue -Legacy YOD — — - Mobile Energy Group (formerly Wecast Services) 1,217,184 359,839,565 Gross profit $ 43,286,378 $ 2,788,731 September 30, 2019 December 31, 2018 TOTAL ASSETS -Legacy YOD $ 635,128 $ 26,442,810 -Mobile Energy Group (formerly Wecast Services) 164,128,548 51,592,929 -Unallocated assets — 16,199,373 Total $ 164,763,676 $ 94,235,112 | Note 21. Segments and Geographic Areas The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. We operate our business in two operating segments: Legacy YOD and Wecast Service. Segment disclosures are on a performance basis consistent with internal management reporting. The Company does not allocate expenses below segment gross profit since these segments share the same executive team, office space, occupancy expenses, information technology infrastructures, human resources and finance department. Information about segments during the periods presented were as follows: 2018 2017 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ — $ 794,273 -Wecast Service 377,742,872 143,558,567 Net sales 377,742,872 144,352,840 GROSS PROFIT -Legacy YOD — 31,659 -Wecast Service 3,167,834 7,132,788 Gross profit $ 3,167,834 $ 7,164,447 December 31, December 31, 2018 2017 TOTAL ASSETS -Legacy YOD $ 26,442,810 $ 27,141,163 -Wecast Service 51,592,929 30,084,607 -Unallocated assets 16,199,373 11,270,378 -Intersegment elimination — (5,051,660) Total $ 94,235,112 $ 63,444,488 |
Going Concern and Management's
Going Concern and Management's Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Going Concern and Management's Plans | ||
Going Concern and Management's Plans | Note 22. Going Concern and Management’s Plans As of September 30, 2019, the Company had cash and cash equivalents of approximately $1.7 million and the Company has incurred losses since its inception and must continue to rely on proceeds from debt and equity issuances to pay for ongoing operating expenses in order to execute its business plan. Management has taken several actions below to ensure that the Company will continue as a going concern through November 30, 2020, including the cessation of YOD legacy segment related expenses and discretionary expenditures. · As discussed in Note 12, the Company executed a security purchase agreement with ID Venturas 7, LLC ("IDV"), whereby the Company issued $2,500,000 of senior secured convertible note during the third quarter. · As discussed in Note 5, the Company has received $0.7 million proceeds from the sale of Redrock. The Company’s operating businesses are in the development and ramp up phase and are not yet cash generative as they generate minimal revenues and require investment to support their business plans. The Company intends to raise both debt and equity capital to cover its short and medium term capital needs. Although the Company may attempt to raise funds by issuing debt or equity instruments, future financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or to discontinue certain operations, scale back or discontinue the development of new business lines, reduce headcount, sell assets, file for bankruptcy, reorganize, merge with another entity, or cease operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. If the Company is in fact unable to continue as a going concern, the shareholders may lose their entire investment in the Company. | Note 3. Going Concern and Management’s Plans As of December 31, 2018, the Company had cash and cash equivalents of approximately $3.1 million and an accumulated deficit of approximately $150.0 million. Additionally, the Company has incurred losses since its inception and must continue to rely on proceeds from debt and equity issuances to pay for ongoing operating expenses in order to execute its business plan. Management has taken several actions below to ensure that the Company will continue as a going concern through March 31, 2020, including reductions in YOD legacy segment related expenses and discretionary expenditures. · As discussed in Note 14, the Company has entered into a convertible note agreement with Sun Seven Stars Investment Group Limited (“SSSIG”) in which it will receive approximately $1.5 million in additional cash during 2019. · Through the recent asset purchase of the SolidOpinion (defined in Note 22), we acquired $2.5 million in cash; and · The Company recently closed on a financing of $2.05 million with ID Venturas 7, LLC. Please refer to Note 22 for additional information. As part of the Company’s strategy, management raised these recent capital to cover short and medium term cash needs, while it plans to unlock revenue from its new fintech advisory services business in 2019. Therefore, the Company does not plan to take additional outside investments in the near term, unless there is a delay product expectations and sales. Although the Company may attempt to raise funds by issuing debt or equity instruments, in the future additional financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or to discontinue certain operations, scale back or discontinue the development of new business lines, reduce headcount, sell assets, file for bankruptcy, reorganize, merge with another entity, or cease operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. If the Company is in fact unable to continue as a going concern, the shareholders may lose their entire investment in the Company. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | Note 23. Fair Value Measurements The following table presents information about our financial instruments measured at fair value on a recurring basis, grouped into level 1 to 3 based on the degree to which the fair value is observable: September 30, 2019 Level I Level II Level III Total Contingent Consideration Liability 1 — — 2,327,919 2,327,919 Note 1 This represents the liability incurred in connection with the acquisition of DBOT shares during Q3 2019 as disclosed in Note 5(f). The fair value of the contingent consideration liability at September 30, 2019 was valued using the Black-Scholes Merton method. The following table presents the significant inputs and assumptions used in the model: September 30, 2019 Risk-free interest rate 1.8 % Expected volatility 30 % Expected term 0.5 year Expected dividend yield 0 % The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration liability includes the risk-free interest rate, expected volatility, expected term and expected dividend yield. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement. Reconciliation of level 3 fair value measurements: Contingent Consideration Liability January 1, 2019 $ — Addition (2,217,034) Remeasurement (loss)/gain recognized in the income statement (110,885) September 30, 2019 $ (2,327,919) |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Subsequent Events | ||
Subsequent Events | Note 24. Subsequent Events Senior Secured Convertible Debentures - ID Ventura 7 On October 29, 2019, the Company entered into an Additional Issuance Agreement (the “Purchase Agreement”), with ID Venturas 7, LLC. (“ID Venturas”) an exempted company incorporated and existing under the laws of the Delaware, pursuant to which ID Venturas invested $400,000 of the up to $2,500,000 of additional investment rights granted to ID Venturas in the September SPA (as defined below) and received (i) a promissory note (the “Convertible Note”) which is senior secured and convertible at $1.00 per share of Company common stock, subject to anti-dilution adjustments and (ii) a warrant (the “Warrant”) exercisable for 150% of the number of shares of common stock which the Note is convertible into. The Convertible Note is convertible into common stock, par value $0.001 per share (the “Common Stock”), at a conversion price of $1.00, subject to anti-dilution adjustments. The Convertible Note matures on March 27, 2021, and accrues at a 10% interest rate. In connection with the above transaction, the Company also entered into a registration rights agreement with ID Venturas (the “ Registration Rights Agreement ”) which grants ID Venturas demand registration rights. As disclosed in Note 12, the Company entered into Securities Purchase Agreements, dated February 22, 2019 (“The Purchase Agreement”) and dated September 27, 2019 (“Convertible Note Agreement”) with ID Venturas pursuant to which ID Venturas purchased 10% Senior Secured Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) and were granted additional investments rights to purchase up to an additional $2,500,000 of Debentures and Warrants (“Additional Investment Rights”). On October 29, 2019 Ideanomics, Inc. (the “Company”) entered into a letter agreement (the “Agreement”) with ID Venturas pursuant to which the Company agreed to reduce the conversion price of the Debentures and the exercise price of the Warrants to $1.00, subject to adjustment thereunder. The Agreement also reduced the conversion price of Debentures and the exercise price of the Warrants issuable pursuant to the Additional Investment Rights. GTB Impairment review On October 29, 2019, our digital currency, GTB tokens (see Note 1), had a one-time unexpected significant decline in quoted price from $17 to $1.84. The Company’s management is currently evaluating the risks and potential impacts of this incident and plans to perform its annual impairment test as of December 31, 2019. The Company is not able to make a meaningful estimate of the amount or range of potential impairment resulting from the subsequent decline in quoted price. | Note 22. Subsequent Event Acquisition of Assets On February 19, 2019, the Company entered into an agreement with SolidOpinion, Inc (“SolidOpinion”) to purchase the assets of SolidOpinion in exchange for 4.5 million shares of the Company’s common stock. The assets include cash ($2.5 million) and certain intellectual property (“IP”) which is complementary to the IP of Grapevine. The parties agreed that 450,000 of such shares of common stock (“Escrow Shares”) will be held in escrow until February 19, 2020 in connection with SolidOpinion’s indemnity obligations pursuant to the agreement. SolidOpinion have the rights to vote and receive the dividends paid with respect to the Escrow Shares. Severance Payments to Three Former Executives On February 20, 2019, the Company accepted the resignation of former Chief Executive Officer, former Chief Investment Officer and former Chief Strategy Officer and agreed to pay approximately $423,000, $296,000 and $118,000, respectively for salary, severance and expenses. Issuance of Senior Secured Convertible Debenture On February 22, 2019, the Company executed an agreement with ID Venturas 7, LLC, whereby the Company issued $2,050,000 in convertible secured note. The note bears interest at a rate of 10% per year and matures on August 22, 2020. The holder is entitled to the following: (i) the convertible note is senior secured and convertible at $1.84 per share of Company common stock at the option of holder, subject to anti-dilution adjustments, (ii) 1,166,113 shares of common stock of the Company and (iii) a warrant exercisable for 150% of the number of shares of common stock which the Note is convertible into. Acquisition of Tree Motion Sdn. Bhd. (“Tree Motion”) On March 5, 2019, the Company entered into the following acquisition agreements: · Acquire 51% of Tree Motion, a Malaysian company, for 25,500,000 shares of the Company’s common stock at $2.00 per share · Acquire 11.22% of Three Motion’s parent company, Tree Manufacturing Sdn. Bhd., for 12,190,000 shares of the Company’s common stock and $620,000 in cash or/and loan. The transactions are conditioned upon the Company’s completion of its due diligence and customary closing conditions. Disposal of Assets in exchange of GTDollar coins In March 2019, the Company entered into the agreement and completed the sale of the following assets (with total carrying amount of approximately $20.4 million) to GTD, a minority shareholder based in Singapore, in exchange for 1,250,000 GTDollar coins (with fair value of approximately $30.0 million). · License content (carrying amount approximately $17.0 million as of December 31, 2018) · Approximately 13% ownership interest in Nanjing Shengyi Network Technology Co., Ltd (“Topsgame”) (carrying amount approximately $3.2 million as of December 31, 2018 which is included in long-term investment-Non-marketable Equity Investment) · Animation copy right (net carrying amount approximately $0.2 million as of December 31, 2018 included in intangible asset.) |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Nature of Operations and Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of Presentation In this Form 10‑Q, unless the context otherwise requires, the use of the terms "we," "us", "our" and the “Company” refers to Ideanomics, Inc, its consolidated subsidiaries and variable interest entities (“VIEs”). On April 24, 2018, the Company completed the acquisition of a 100% equity ownership in Shanghai Guang Ming Investment Management (“Guang Ming”), a PRC limited liability company. One of the two selling shareholders is a related party, an affiliate of Bruno Wu (“Dr. Wu”). Guang Ming holds a special fund management license. The acquisition will help the Company develop a fund management platform. Under Accounting Standard Codification (“ASC”) 805-50-05-5 and ASC 805-50-30-5, the transaction was accounted for as a reorganization of entities under common control, in a manner similar to a pooling of interest, using historical costs. As a result of the reorganization, the net assets of Guang Ming were transferred to the Company, and the accompanying consolidated financial statements as of and for the three and nine months ended September 30, 2018 have been prepared as if the current corporate structure had been in place at the beginning of the periods presented in which the common control existed. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessary be indicative of annual results. We use the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on April 1, 2019 (“2018 Annual Report”). | (a) Basis of Presentation The consolidated financial statements of Ideanomics, Inc., its subsidiaries and VIEs were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the subsidiaries over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the bad debt allowance, variable considerations, fair values of financial instruments, intangible assets (including digital currencies) and goodwill, useful lives of intangible assets and property and equipment, asset retirement obligations, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | (b) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the bad debt allowance, sales returns, fair values of financial instruments, intangible assets and goodwill, licensed content, useful lives of intangible assets and property and equipment, asset retirement obligations, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents Cash consists of cash on hand and demand deposit with an original maturity of three months or less when purchased. Refer to Note 19 (d) and (e) for further information on our credit and foreign currency risks. | |
Accounts Receivable, net | (d) Accounts Receivable, net Accounts receivable are recognized at invoiced amounts and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews its allowance for doubtful accounts receivable on an ongoing basis. In establishing the required allowance, management considers any historical losses, the customer’s financial condition, the accounts receivable aging, and the customer’s payment patterns. After all attempts to collect a receivable have failed and the potential for recovery is remote, the receivable is written off against the allowance. | |
Licensed Content | (e) Licensed Content The Company obtains content through content license agreements with studios and distributors. We recognize licensed content when the license fee and the specified content titles are known or reasonably determinable. Prepaid license fees are classified as an asset (licensed content) and accrued license fees payable are classified as a liability on the consolidated balance sheets. We amortize licensed content in cost of revenues over the contents contractual availability based on the expected revenue derived from the licensed content, beginning with the month of first availability, such that our revenues bear a representative amount of the cost of the licensed content. We review factors that impact the amortization of licensed content at each reporting date, including factors that may bear direct impact on expected revenue from specific content titles. Changes in our expected revenue from licensed content could have a significant impact on our amortization pattern. Management evaluates the recoverability of the licensed content whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. No impairment loss were recorded for the years ended December 31, 2018 and 2017. The Company sold entire licensed content in March 2019. Please refer to Note 22 for additional information. | |
Property and Equipment, net | (f) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and improvements, which extend the original estimated economic useful lives of applicable assets, are capitalized. Expenditures for normal repairs and maintenance are charged to expense as incurred. The costs and related accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss thereon is recognized in the consolidated statement of operations. Depreciation is provided for on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful life is 5 years for the furniture, 3 years for the electronic equipment, 5 to 10 years for the vehicles and lesser of lease terms or the estimated useful lives of the assets for the leasehold improvements. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. Construction in progress at December 31, 2018 represents Fintech Village under construction (See Note 8). Asset retirement obligations Asset retirement obligations generally apply to legal obligations associated with the retirement of a tangible long-lived asset that result from the acquisition, construction or development and the normal operation of a long-lived asset. If a reasonable estimate of fair value can be made, the fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred or a change in estimate occurs. Asset retirement costs associated with asset retirement obligations are capitalized with the carrying amount of the related long-lived assets and depreciated over the asset’s estimated life. The Company’s asset retirement obligations as of December 31, 2018 are mainly associated with the acquisition of Fintech Village that we are contractually obligated to remediate the existing environmental conditions. We included it in the construction in progress and asset retirement obligation (long term) in the consolidated balance sheets. We will start to amortize asset retirement costs upon completion of the assets and put into use. Please see Note 8 for more information. | |
Business Combinations | (g) Business Combinations We include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. | |
Intangible Assets and Goodwill | (h) Intangible Assets and Goodwill Company accounts for intangible assets and goodwill, in accordance with ASC 350, Intangibles – Goodwill and Other. ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable. In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. On an annual basis, we review goodwill for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, goodwill is further tested for impairment by comparing the carrying value to the estimated fair value of its reporting units, determined using externally quoted prices (if available) or a discounted cash flow model and, when deemed necessary, a market approach. Application of goodwill impairment tests requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the reporting unit, composition, personnel or strategy changes affecting the reporting unit and recoverability of asset groups within a reporting unit. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each reporting unit. | |
Long-term investments | (i) Long-term investments We account for equity investments through which we exercise significant influence but do not have control over the investee under the equity method (“Equity Method Investments”). Under the equity method, the investment is initially recorded at cost and adjusted for the Company’s share of undistributed earnings or losses of the investee. The Company’s share of losses is not recognized when the investment is reduced to zero since the Company does not guarantee the investees’ obligations nor is the Company committed to providing additional funding. Beginning on January 1, 2018, our equity investment not result in consolidation and not accounted for under the equity method are either carried at fair value or under the measurement alternative upon the adoption of the FASB issued Accounting Standards Update (“ASU”) No. 2016‑01 (“Non-marketable Equity Investments”). We utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less impairment plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer. We classify our investments as non-current assets on the consolidated balance sheets as those investments do not have stated contractual maturity dates. Impairment of Investments We periodically review our equity investments for impairment. We consider impairment indicators such as negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. If indicators exist and the fair value of the security is below the carrying amount, we write down the security to fair value. | |
Fair Value Measurements | Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: · Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. · Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Our financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, other current liabilities and convertible notes. The fair values of these assets approximate carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Our financial assets that are measured at fair value on a nonrecurring basis include goodwill and other intangible assets, asset retirement obligations, and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. There were no material impairments and no material adjustments to equity securities using the measurement alternative for the three and nine months ended September 30, 2019 and 2018. | (j) Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: · Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. · Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Our financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, accrued other expenses, other current liabilities and convertible notes. The fair values of these assets approximate carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Our financial assets that are measured at fair value on a nonrecurring basis include goodwill and other intangible assets asset retirement obligations, and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. There were no material impairments for 2018 and 2017 and no material adjustments to equity securities using the measurement alternative for 2018. |
Digital Currency | Digital Currency Digital currency consists of GTDollar Coins (“GTB”). GTB is received in connection with the services agreement and assets purchase agreement with GT Dollar Pte. Ltd. (“GTD”), our minority shareholder at the time of the transaction (Note 3 and 14 (b)). As of September 30, 2019, GTD has disposed of its investment in the Company and is no longer a minority shareholder. GTB is a type of digital asset that is not a fiat currency and is not backed by hard assets or other financial instruments, and does not represent an investment in GTD or a right to access GTD’s platform. As a result, the value of GTB is determined by the value that various market participants place on GTB through their transactions. GTB holders make or lose money from buying and selling GTB. To date, the Asia EDX exchange has not permitted holders of GTB to convert into fiat. The company is unable to predict when our cryptocurrency holdings will be convertible into fiat and consequently does not consider them to be part of the company’s liquid resources. It is the Company’s understanding that in some locations in Asia, principally Singapore, holders of GTB can use the GT App to pay for small purchases at merchants who accept GTB, e.g. taxis and coffee shops. The Company is not aware of any other publicly available applications on the GTD blockchain. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies and other digital currencies under current GAAP, the Company has determined to account for these currencies as indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other until further guidance is issued by the FASB. Indefinite-lived intangible assets are recorded at cost and are not subject to amortization, but shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If, at the time of an impairment test, the carrying amount of an intangible asset exceeds its fair value, an impairment loss in an amount equal to the excess is recognized. The fair value of GTB currency was a Level 2 measurement (see Note 3) based upon the consideration agreed by GTD and the Company with a discount considering volatility, risk and limitations at contract inception. | |
Assets and Liabilities Held for Sale | Assets and Liabilities Held for Sale The Company classifies assets and liabilities (disposal group) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal groups; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal group; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent losses as an adjustment to the carrying value of the disposal group. | |
Foreign Currency Translation | (k) Foreign Currency Translation The Company uses the United States dollar (“$” or “USD”) as its reporting currency. The Company’s worldwide operations utilize the local currency or the U.S. dollar ("USD") as the functional currency, where applicable. For certain foreign subsidiaries, USD is used as the functional currency. This occurs when the subsidiary is considered an extension of the parent. The functional currency of certain subsidiaries and VIEs located in China (“PRC”) and Hong Kong is either the Renminbi (“RMB”) or Hong Kong dollars (“HKD”). In the consolidated financial statements, the financial information of the entities which use RMB and HKD as their functional currency has been translated into USD: assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at the historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component as a component of “Accumulated other comprehensive loss” in the equity section of the consolidated balance sheets. Transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated in the functional currency at the applicable rates of exchange in effect at the balance sheet date. The resulting exchange differences are recorded in the consolidated statements of operations. | |
Revenue Recognition | (l) Revenue Recognition Year 2018 We adopted ASU No. 2014‑09, Revenue from Contracts with Customers, and other related ASUs (collectively, ASC 606, Revenue from Contracts with Customers) on January 1, 2018 using the modified retrospective transition approach. The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Recently Adopted Accounting Pronouncements and Note 4 for further discussion on Revenues. Year 2017 In periods prior to the adoption of ASC 606, the Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and the collectability of the resulting receivable is reasonably assured. Legacy YOD The revenue is recognized as services are performed. For certain contracts that involve sub-licensing content within the specified license period, revenue is recognized in accordance with ASC Subtopic 926‑605, Entertainment-Films - Revenue Recognition, whereby revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and the Company has no substantive future obligations to provide future additional services. Payments received from customers for the performance of future services are recognized as deferred revenue, and subsequently recognized as revenue in the period that the service obligations are completed. In 2018, we do not have any revenue generated from Legacy YOD business. Wecast Services Wecast Services is mainly engaged in the sales of crude oil and consumer electronics. For both sales of crude oil and consumer electronics, sales orders are confirmed after negotiation on price between customers and the Company. The Company recognizes revenue on a gross basis based on the indicator points in ASC 605‑45‑45‑2 and ASC 606‑10‑55‑39. The Company enters into the contracts with the supplier and customer independently. Purchase orders are confirmed after careful selection of suppliers and negotiation on price. The Company purchases crude oil and consumer electronics from suppliers in accordance with sales orders from customers. The Company is responsible for fulfilling the promise to provide the specified good or service in the contract, including sourcing the right oil products desired by the customers, issuing the bill of lading to customers and nominating the vessels that comply with the applicable laws and standards; however customers may still submit claims against the Company in connection with the quality and quantity of any products delivered. Revenue recognition criteria are met when the products are delivered. For sale of crude oil, the Company considers delivery to have occurred once it is shipped; for sale of the consumer electronics, the Company considers delivery to have occurred once it arrives at the designated locations in Hong Kong. The crude oil and electronics sales arrangement do not include provisions for cancellation, variable consideration, returns, inventory swaps or refunds. In accordance with ASC 605‑45, Revenue Recognition – Principal Agent Consideration, the Company accounts for revenue from sales of goods on a gross basis. The Company is the primary obligor in the arrangements, as company has the ability to establish prices, and has discretion in selecting the independent suppliers and other third-party that will perform the delivery service, the company is responsible for the defective products and company bears credit risk with customer payments. Accordingly, all such revenue billed to customers is classified as revenue and all corresponding payments to suppliers are classified as cost of revenues. In accordance with ASC 606‑10‑55‑39, the Company accounts for revenue from sales of goods on a gross basis. The Company is primarily responsible for fulfilling the promise to provide the goods to the customer; bears certain inventory risk and also has the discretion in establishing prices. See Note 4 for further discussion on Revenues. | |
Research and Development Costs | (m) Research and Development Costs We expense research and development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented. Research and development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. All the software developed in 2018 and 2017 did not reach technological feasibility and therefore no costs capitalized. | |
Share-Based Compensation | (n) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company also awards stocks and warrants for service to consultants for service and accounts for these awards under ASC 505‑50, Equity - Equity-Based Payments to Non-Employees . The fair value of the awards is assessed at measurement date and is recognized as cost or expenses when the services are provided. If the related services are completed upon issuance date, measurement date is determined to be the date the awards are issued. | |
Income Taxes | (o) Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. There were no such interest or penalty for the years ended December 31, 2018 and 2017. On December 22, 2017 the U.S. Tax Reform, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years. No tax was due under this provision. U.S. Tax reform also makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. | |
Net Loss Per Share Attributable to IDEX Shareholders | (p) Net Loss Per Share Attributable to IDEX Shareholders Net loss per share attributable to our shareholders is computed in accordance with ASC 260, Earnings per Share. The two-class method is used for computing earnings per share. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because the holders are entitled to receive dividends or distributions on an as converted basis. For the years presented herein, the computation of basic loss per share using the two-class method is not applicable as the Company is in a net loss position and net loss is not allocated to other participating securities, since these securities are not obligated to share the losses in accordance with the contractual terms. Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and warrants are not considered outstanding in computation of basic earnings per share. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options and warrants to purchase ordinary shares, preferred shares and convertible promissory note, unless they were anti-dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. | |
Reclassifications of a General Nature | Reclassifications of a General Nature Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. Note 2 provides information about our adoption of new accounting standards for leases. | (q) Reclassifications of a General Nature Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements We adopted Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016‑02, Leases (Topic 842), as of January 1, 2019, using a modified retrospective transition method and as a result, the consolidated balance sheet prior to January 1, 2019 was not restated, continues to be reported under ASC Topic 840, Leases, or ASC 840. For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The lease liability is based on the present value of the remaining minimum lease payments, determined under ASC 840, discounted using our incremental borrowing rate at the effective date of January 1, 2019, using the original lease term as the tenor. As permitted under the transition guidance, we elected several practical expedients that permit us to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability. Adoption of the new standard resulted in the recording of operating right of use assets and the related lease liabilities of approximately $3.6 million and $3.7 million, respectively, as of January 1, 2019. The difference between the additional lease assets and lease liabilities was immaterial. The standard did not materially impact our consolidated operating results and had no impact on cash flows. Please see Note 10. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. The ASU also clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers . The ASU requires a modified retrospective transition approach. We adopted ASU 2018‑07 as of January 1, 2019 and there is no impact to our consolidated financial statement because we did not have such payments in 2019. In July 2017, the FASB issued ASU No. 2017‑11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. For the Company, this ASU was effective January 1, 2019. Please see Note 12. | (r) Recent Accounting Pronouncements Standards Issued and Not Yet Implemented In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016‑02 (“ASC 842”) "Leases." ASC 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under ASC 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. We will adopt ASC 842 effective January 1, 2019 using a modified retrospective method and will not restate comparative periods. As permitted under the transition guidance, we will carry forward the assessment of whether our contracts contain or are leases, classification of our leases and remaining lease terms. Based on our portfolio of leases as of December 31, 2018, approximately $8.3 million of lease assets and liabilities will be recognized on our consolidated balance sheet upon adoption. We are substantially complete with our implementation efforts. In June 2016, the FASB issued Accounting Standards Update No. 2016‑13 (ASU 2016‑13) "Financial Instruments-Credit Losses” (“ASC 326”): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We will adopt ASU 2016‑13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016‑13 on our consolidated financial statements. The effect will largely depend on the composition and credit quality of our investment portfolio and the economic conditions at the time of adoption. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. The ASU also clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers . The ASU requires a modified retrospective transition approach. We will adopt ASU 2018‑07 effective as of January 1, 2019. The adoption will not have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Pronouncements In the first quarter of 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts/sales orders which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The effect from the adoption of ASC 606 was not material to our financial statements. (See Note 2 (m) above and Note 4 for more information.) The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In the first quarter of 2018, the Company adopted ASU 2016‑01, "Financial Instruments-Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities," which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. We use the prospective method for our non-marketable equity securities. We have elected to use the measurement alternative for our non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See Notes 10 for additional information. In the first quarter of 2018, the Company adopted ASU 2016‑18, "Statement of Cash Flows (Topic 230): Restricted Cash," which clarifies how entities should present restricted cash and restricted cash equivalents in the statements of cash flows, and as a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statements of cash flows. An entity with a material balance of restricted cash and restricted cash equivalents must disclose information about the nature of the restrictions. The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The new guidance changed the presentation of restricted cash in the consolidated statements of cash flows and was implemented on a retrospective basis. In the first quarter of 2018, the Company adopted ASU 2017‑01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied prospectively. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See Notes 6 for additional information. |
Standards Issued and Not Yet Adopted | Standards Issued and Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016‑13 (ASU 2016‑13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We will adopt ASU 2016‑13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016‑13 on our consolidated financial statements. The effect will largely depend on the composition and credit quality of our investment portfolio and the economic conditions at the time of adoption. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue | ||
Schedule of revenues disaggregated by revenue source, geography and timing of revenue recognition | The following table presents our revenues disaggregated by revenue source, geography (based on our business locations) and timing of revenue recognition. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Geographic Markets Singapore $ — $ — $ — $ 260,034,401 USA 249,512 200,660 41,649,384 200,660 Hong Kong/PRC 2,854,178 43,507,277 2,854,178 102,393,235 Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 Services Lines Mobile Energy Group (formerly Wecast Services) Crude oil $ — $ — $ — $ 260,034,401 Consumer electronics — 43,432,556 — 102,081,176 Digital asset management services — — 40,700,000 — Electric Vehicles (“EV”) 2,854,178 — 2,854,178 — Digital advertising services and other 249,512 275,381 949,384 512,719 Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 Timing of Revenue Recognition Products and services transferred at a point in time $ 3,103,690 $ 43,707,937 $ 3,803,562 $ 362,628,296 Services provided over time — — 40,700,000 — Total $ 3,103,690 $ 43,707,937 $ 44,503,562 $ 362,628,296 | 2018 2017 Geographic Markets Singapore $ 260,034,401 $ 19,028,003 USA 638,412 7,037 Hong Kong 117,070,059 119,683,121 PRC — 5,634,679 $ 377,742,872 $ 144,352,840 Segments -Wecast Service Crude oil $ 260,034,401 $ 143,558,567 Consumer electronics 116,723,251 — Other 985,220 — 377,742,872 143,558,567 -Legacy YOD — 794,273 Total $ 377,742,872 $ 144,352,840 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Schedule of assets acquired and liabilities assumed | For all intangible assets acquired, continuing membership agreements have useful life of 20 years and the customer list has useful life of 3 years. The following table summarizes the acquisition-date fair value of assets acquired and liabilities assumed, as well as the fair value of the non-controlling interest in DBOT recognized: Cash $ 246,929 Other financial assets 1,686,464 Financial liabilities (4,411,140) Noncontrolling interest (104,649) Goodwill 9,323,189 Intangible asset – continuing membership agreement 8,255,440 Intangible asset – customer list 58,830 $ 15,055,063 | Cash $ 508,000 Other financial assets 388,000 Financial liabilities (747,000) Noncontrolling interest (679,000) Goodwill 705,000 Influencer network 1,980,000 Customer contract 500,000 Trade name 110,000 Technology platform 290,000 Deferred tax liabilities (570,000) $ 2,485,000 |
Schedule Of Consolidated Statement Of Operations On Proforma Basis | The following table summarizes the Consolidated Statement of Operations for the three months and nine months ended September 30, 2018, on an unaudited pro forma basis, as if the dilution of the Company’s interest in Amer had been consummated as of January 1, 2018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Revenue $ 275,380 $ 260,547,120 Net loss from operations (6,305,340) (18,548,258) Net loss (7,390,597) (19,351,526) Net loss attributable to IDEX common shareholders $ (7,158,674) $ (18,945,524) | |
Glory | ||
Business Acquisition [Line Items] | ||
Schedule Of Income Statement Information | The following table summarizes the income statement information of Glory as of September 30, 2019: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Revenue $ 2,041 $ 3,936 Gross Profit 1,379 769 Net loss from operations 173,465 354,502 Net loss 171,719 352,606 Net loss attributable to Glory $ 95,477 $ 195,121 | |
DBOT [Member] | ||
Business Acquisition [Line Items] | ||
Schedule Of Income Statement Information | The consolidated statements of operation for the three months ended September 30, 2019 include the results of DBOT. Supplemental information on an unaudited pro forma basis, as if the acquisition had been consummated as of January 1, 2018 is as follows: Three Months Nine Months Nine Months Ended Ended Ended September 30, September 30, September 30, 2018 2019 2018 Revenue $ 43,798,865 $ 44,612,471 $ 363,004,917 Net Income (loss) attributable to IDEX common shareholders $ (7,818,047) $ 10,582,474 $ (21,387,162) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounts Receivable | ||
Schedule of Mobile Energy Group (formerly Wecast Services) business accounts receivable | September 30, December 31, 2019 2018 Accounts receivable, gross $ 2,941,348 $ 19,370,665 Less: allowance for doubtful accounts (103) — Accounts receivable, net $ 2,941,245 $ 19,370,665 | December 31, December 31, 2018 2017 Accounts receivable, gross $ 19,370,665 $ 26,965,731 Less: allowance for doubtful accounts — (3,646) Accounts receivable, net $ 19,370,665 $ 26,962,085 |
Schedule of aging of accounts receivable | September 30, December 31, 2019 2018 Within 90 days $ 2,941,245 $ 1,219,526 91-180 days — 633 181-365 days — 12,385,193 More than 1 year — 5,765,313 Total $ 2,941,245 $ 19,370,665 | December 31, December 31, 2018 2017 Balance at the beginning of the year $ 3,646 $ 2,828,796 Additions charged to bad debt expense — 145,512 Write-off of bad debt allowance — (89,851) Disposal of Zhong Hai Shi Xun (3,646) (2,880,811) Balance at the end of the year $ — $ 3,646 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property and Equipment, net | ||
Schedule of property and equipment | September 30, December 31, 2019 2018 Furnitures and office equipment 602,548 357,064 Vehicle 60,951 63,135 Leasehold improvements 239,781 200,435 Total property and equipment 903,280 620,634 Less: accumulated depreciation (482,548) (186,514) Land 3,042,777 3,042,777 Building 1 308,779 2,607,666 Assets Retirement Obligations - Environmental Remediation 8,000,000 8,000,000 Capitalized direct development cost 2,732,705 944,864 Construction in progress (Fintech Village) 14,084,261 14,595,307 Property and Equipment, net $ 14,504,993 $ 15,029,427 Note 1 The $2.3 million decrease from the prior year represents the impairment charge recorded in connection with four of the five existing buildings on Fintech Village which are expected to be demolished. | December 31, December 31, 2018 2017 Furniture and office equipment $ 357,064 $ 308,383 Vehicle 63,135 147,922 Leasehold improvements 200,435 8,058 Total property and equipment 620,634 464,363 Less: accumulated depreciation (186,514) (337,088) Construction in progress (Fintech Village) 14,595,307 — Property and Equipment, net $ 15,029,427 $ 127,275 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets | ||
Schedule of changes in carrying amount of goodwill | Nine months ended Year Ended September 30, 2019 December 31, 2018 At the beginning of the year 704,884 — Goodwill Acquired 1 9,323,189 704,884 At the end of the period 10,028,073 704,884 Note 1 The change in carrying amount of goodwill in the current year was the result of the acquisition of DBOT as disclosed in Note 5(f). | Wecast business Balance as of December 31, 2017 $ — Acquisitions 704,884 Foreign currency translation and other adjustments — Balance as of December 31, 2018 $ 704,884 |
Schedule of amortizing and indefinite lived intangible assets | September 30, 2019 December 31, 2018 Weighted Gross Accumulated Gross Accumulated Average Remaining Carry Accumulated Impairment Net Carry Accumulated Impairment Net Useful Life Amount Amortization Loss Balance Amount Amortization Loss Balance Amortizing Intangible Assets Animation Copyright (Note 14 (b)) — $ — $ — $ — $ — $ 301,495 $ (64,606) $ — $ 236,889 Software and licenses — 97,308 (97,308) — — 97,308 (93,251) — 4,057 SolidOpinion IP (Note 5 (a)) 4.4 4,655,000 (543,084) — 4,111,916 — — — — Fintalk intangible assets (Note 5 (b)) 4.8 6,350,000 (317,500) — 6,032,500 — — — — Influencer network 8.9 1,980,000 (214,500) — 1,765,500 1,980,000 (66,000) — 1,914,000 Customer contract 1 2.0 558,830 (185,458) — 373,372 500,000 (55,556) — 444,444 Continuing Membership Agreement 1 19.8 8,255,440 (103,193) — 8,152,247 — — — — Trade name 13.9 110,000 (7,944) — 102,056 110,000 (2,444) — 107,556 Technology platform 5.9 290,000 (44,881) — 245,119 290,000 (13,808) — 276,192 Total amortizing intangible assets $ 22,296,578 $ (1,513,868) $ — $ 20,782,710 $ 3,278,803 $ (295,665) $ — $ 2,983,138 Indefinite lived intangible assets Website name 159,504 — (134,290) 25,214 159,504 — (134,290) 25,214 Patent 28,000 — — 28,000 28,000 — — 28,000 GTB (Note 14 (b)) 61,124,407 — — 61,124,407 — — — — Total intangible assets $ 83,608,489 $ (1,513,868) $ (134,290) $ 81,960,331 $ 3,466,307 $ (295,665) $ (134,290) $ 3,036,352 Note 1 During the third quarter of 2019, the Company completed the acquisition of additional shares in DBOT which increased its ownership in DBOT to 99.04%. $8,314,270 of intangible assets were recognized on the date of acquisition as disclosed in Note 5(f). | December 31, 2018 December 31, 2017 Weight Average Gross Gross Remaining Carry Accumulated Impairment Net Carry Accumulated Impairment Net Useful Life Amount Amortization Loss Balance Amount Amortization Loss Balance Amortizing Intangible Assets Animation Copyright 1.3 $ 301,495 $ (64,606) $ — $ 236,889 $ — $ — $ — $ — Software and licenses — 97,308 (93,251) — 4,057 214,210 (199,626) — 14,584 Patent and trademark (i) — — — — — 92,965 (39,943) (53,022) — Influencer network (ii) 9.7 1,980,000 (66,000) — 1,914,000 — — — — Customer contract (ii) 2.7 500,000 (55,556) — 444,444 — — — — Trade name (ii) 14.7 110,000 (2,444) — 107,556 — — — — Technology platform (ii) 6.7 290,000 (13,808) — 276,192 — — — — Total amortizing intangible assets $ 3,278,803 $ (295,665) $ — $ 2,983,138 $ 307,175 $ (239,569) $ (53,022) $ 14,584 Indefinite lived intangible assets Website name (iii) 159,504 — (134,290) 25,214 134,290 — — 134,290 Patent (i) 28,000 — — 28,000 10,599 — (10,599) — Total intangible assets $ 3,466,307 $ (295,665) $ (134,290) $ 3,036,352 $ 452,064 $ (239,569) $ (63,621) $ 148,874 (i) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents. (ii) During the third quarter of 2018, the Company completed the acquisition of 65.65% share of Grapevine. See Note 6. (iii) The Company wrote off the YOD website in the amount of approximately $134,000 in 2018 since we no longer used the website. |
Schedule of amortization expense | Amortization to be Years ending December 31, recognized 2019 (excluding the nine months ended September 30, 2019) $ 761,702 2020 3,046,811 2021 2,991,255 2022 2,870,339 2023 2,860,534 2024 and thereafter 8,252,069 Total amortization to be recognized $ 20,782,710 | Amortization to be Years ending December 31, recognized 2019 $ 546,882 2020 520,921 2021 357,873 2022 246,762 2023 and thereafter 1,310,700 Total amortization to be recognized $ 2,983,138 |
Long-term Investments (Tables)
Long-term Investments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Long-term Investments. | ||
Schedule of long-term investments | September 30, December 31, 2019 2018 Non-marketable Equity Investment $ 9,147,170 $ 9,452,103 Equity Method Investment 33,012,143 16,956,506 Total $ 42,159,313 $ 26,408,609 | |
Schedule of long term investment under equity method | September 30, 2019 Foreign currency December 31, Loss on Reclassification translation September 30, 2018 Addition investment to subsidiaries adjustments 2019 Wecast Internet (i) $ 4,114 $ — $ (5) $ — $ 1,930 $ 6,039 Hua Cheng (ii) 308,666 — (32,890) — (37,210) 238,566 Shandong Media (iii) — — — — — — BDCG (iv) 9,800,000 — — — — 9,800,000 DBOT (v) 6,843,726 — (3,719,735) (3,123,991) — — Glory (vi) — 23,000,000 (32,462) — — 22,967,538 Total $ 16,956,506 $ 23,000,000 $ (3,785,092) $ (3,123,991) $ (35,280) $ 33,012,143 All the investments above are privately held companies; therefore, quoted market prices are not available. We have not received any dividends since initial investments. (i) Wecast Internet Starting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. (ii) Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”) The Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. (iii) Shandong Lushi Media Co., Ltd (“Shandong Media”) The Company held 30% equity ownership in Shandong Media, a print based media business, for Legacy YOD business. The accumulated operating loss of Shandong Media reduced the Company’s investment in Shandong Media to zero. The Company has no obligation to fund future operating losses. (iv) In 2018, we signed a joint venture agreement with two unrelated parties, to establish BDCG located in the United States for providing block chain services for financial or energy industries by utilizing AI and big data technology in the United States. The Company received 40% equity ownership in BDCG from the initial joint venture agreement. On April 24, 2018, the Company acquired 20% equity ownership in BDCG from one noncontrolling party for a total consideration of $9.8 million which consists of $2 million in cash and $7.8 million paid in the form of the Company’s common stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock), increasing the Company’s ownership to 60% in BDCG. The remaining 40% of BDCG are held by Seasail ventures limited (“Seasail”). The accounting treatment of the joint venture is based on the equity method due to variable substantive participating rights (in accordance with ASC 810‑10‑25‑11) granted to Seasail. The new entity is currently in the process of ramping up its operations. In April 2019, the company rebranded the name of the BDCG joint venture to Intelligenta. As part of the rebranding, Intelligenta’s strategy will now include credit services, corporation services, index services and products, and capital market services and products. (v) Refer to Note 5(f). (vi) Refer to Note 5(e). | December 31, 2018 Loss on Impairment Foreign currency January 1, 2018 Addition investment loss translation adjustments December 31, 2018 Wecast Internet (i) $ 6,044 $ — $ (1,935) $ — $ 5 $ 4,114 Hua Cheng (ii) 353,498 — (46,070) — 1,238 308,666 BDCG (iv) — 9,800,000 — — — 9,800,000 DBOT (v) — 6,976,346 (132,620) — — 6,843,726 Total $ 359,542 $ 16,776,346 $ (180,625) $ — $ 1,243 $ 16,956,506 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of Lease Expense Components, Supplemental Cash Flow Information and Other Information | For the three and nine months ended September 30, 2019, the components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Operating Lease Cost $ 390,577 $ 1,264,049 Short-Term Lease Cost 78,076 250,924 Sublease Income (10,605) (10,605) Total Lease Cost $ 458,048 $ 1,504,368 Supplemental information related to leases was as follows: Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 967,565 Right-of-use assets obtained in exchange for new operating lease liabilities $ 935,242 |
Schedule of maturity of operating lease liability | Maturity of Lease Liability Operating Lease 2019 (excluding the nine months ended September 30, 2019) $ 332,549 2020 1,307,783 2021 1,328,160 2022 1,422,965 2023 1,474,391 2024 and thereafter 3,377,653 Total lease payments 9,243,501 Less: Interest (2,001,696) Total $ 7,241,805 |
Convertible Note (Tables)
Convertible Note (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Note | |
Schedule of of outstanding convertible notes | September 30, December 31, 2019 2018 Convertible Note-Mr. McMahon(Note 14 (a)) $ 3,229,808 $ 3,140,055 Convertible Note-SSSIG (Note 14 (a)) 1,288,032 1,000,000 Convertible Note-Advantech 12,382,806 11,313,770 $2.05 million Senior Secured Convertible Note - ID Venturas 7 626,387 — $2.5 million Senior Secured Convertible Note - ID Venturas 7 14,917 — Total $ 17,541,950 $ 15,453,825 Short-term Note 1,914,419 4,140,055 Long-term Note 15,627,531 11,313,770 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-Based Payments | ||
Schedule of stock option activity | Weighted Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at January 1, 2019 1,706,431 $ 3.28 4.08 $ — Granted 14,325,000 1.98 8.75 — Exercised — — — — Expired (83,333) 1.98 — — Forfeited (976,667) 1.98 — — Outstanding at September 30, 2019 14,971,431 $ 2.13 8.72 $ — Vested and expected to be vested as of September 30, 2019 14,971,431 $ 2.13 8.72 $ — Options exercisable at September 30, 2019 (vested) 5,529,977 $ 2.38 7.55 $ — | Weighted Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at January 1, 2018 1,853,391 $ 3.2 2.99 $ 0.02 Granted — — Exercised (136,961) 2.34 Expired (9,999) 1.58 Forfeited — — Outstanding at December 31, 2018 1,706,431 $ 3.28 4.08 $ — Vested and expected to be vested as of December 31, 2018 1,706,431 $ 3.28 4.08 $ — Options exercisable at December 31, 2018 (vested) 1,653,097 $ 3.33 3.94 $ — |
Schedule of assumptions used to estimate the fair values of the share options | December 31, 2017 Expected term 5.4 ~5.9 years Expected volatility 55% ~ 85 % Expected dividend yield — % Risk free interest rate 2.04% ~2.29 % | |
Schedule of warrants outstanding and exercisable | September 30, 2019 December 31, 2018 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2014 Broker Warrants (Series E Financing) — 60,000 $ 1.75 1/31/19 $2.05 million IDV Senior Secured Convertible Debenture 1,671,196 — $ 1.84 2/22/2024 $2.5 million IDV Senior Secured Convertible Debenture 2,038,044 — 1.84 9/27/2024 3,709,240 60,000 | 2018 2017 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2014 Broker Warrants (Series E Financing) 60,000 703,714 $ 1.75 01/31/19 2016 Warrants to SSS — 1,818,182 $ 2.75 03/28/18 60,000 2,521,896 |
Schedule of summary of restricted shares | Weighted-average Shares fair value Non-vested restricted shares outstanding at January 1, 2019 87,586 $ 2.46 Granted 129,840 $ 1.24 Forfeited (3,000) $ 2.60 Vested (158,840) $ 1.49 Non-vested restricted shares outstanding at September 30, 2019 55,586 $ 2.37 | Weighted-average Shares fair value Non-vested restricted shares outstanding at January 1, 2018 109,586 $ 1.92 Granted 1,342,743 2.58 Forfeited (100,000) 2.27 Vested (1,264,743) 2.56 Non-vested restricted shares outstanding at December 31, 2018 87,586 $ 2.46 |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Earnings (Loss) Per Common Share | ||
Schedule of basic and diluted earnings (loss) per common share | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Net earnings (loss) attributable to common stockholders $ (13,711,867) $ (7,186,847) $ 11,506,861 $ (19,228,240) Interest expense attributable to convertible promissory note — — 125,485 — Net earnings (loss) assuming dilution (13,711,867) (7,186,847) 11,632,346 (19,228,240) Basic Basic weighted average common shares outstanding 127,609,748 74,063,495 113,964,933 71,574,303 Effect of dilutive securities — — — — Convertible preferred shares- Series A — — 933,333 — Conversion of restricted shares and employee stock options — — 22,823 — Convertible promissory notes — — 2,777,687 — Contingently issuable shares — — 621,117 — Diluted potential common shares 127,609,748 74,063,495 118,319,893 71,574,303 Net earnings (loss) per share: Basic $ (0.11) $ (0.10) $ 0.10 $ (0.27) Diluted $ (0.11) $ (0.10) $ 0.10 $ (0.27) | 2018 2017 Net loss attributable to common stockholders $ (27,426,356) $ (10,503,049) Basic Basic weighted average common shares outstanding 78,386,116 61,182,209 Diluted Diluted weighted average common shares outstanding 78,386,116 61,182,209 Net loss per share: Basic $ (0.35) $ (0.17) Diluted $ (0.35) $ (0.17) |
Schedule of number of securities convertible into common shares | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018 Warrants 3,709,240 60,000 3,709,240 60,000 Options 14,971,431 1,797,017 14,965,598 1,797,017 Series A Preferred Stock 933,333 933,333 — 933,333 Convertible promissory note and interest 12,417,909 10,227,507 9,324,911 10,227,507 Contingently issuable shares — — Total 34,354,721 13,017,857 30,322,557 13,017,857 | December 31, December 31, 2018 2017 Warrants 60,000 2,521,896 Options 1,706,431 2,162,977 Series A Preferred Stock 933,333 933,333 Convertible promissory note and interest 10,407,233 35,346,703 Total 13,106,997 40,964,909 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of components of loss before tax and provision for income tax benefit | 2018 2017 Loss before tax United States $ (13,139,622) $ (841,323) PRC/Hong Kong/Singapore (15,323,706) (10,018,994) $ (28,463,328) $ (10,860,317) Deferred tax benefit of net operating loss United States $ — $ — PRC/Hong Kong/Singapore — — $ — $ — Deferred tax benefit other than benefit of net operating loss United States $ 40,244 $ — PRC/Hong Kong — — Total income tax benefit $ 40,244 $ — |
Schedule of reconciliation of expected income tax | 2018 2017 U. S. statutory income tax rate 21 % 34 % Non-deductible expenses: Non-deductible stock awards (1.2) % — % Waiver of intercompany loan related to ZHV disposal — % 14.7 % Others (0.9) % (2.9) % Non-deductible interest expenses (0.6) % (0.4) % Non-taxable change in fair value warrant liabilities — % (0.4) % Increase in valuation allowance (18.4) % (21.6) % Tax rate differential 0.1 % (23.4) % Effective income tax rate — % — % |
Schedule of components of deferred tax assets and liabilities | 2018 2017 U.S. NOL $ 7,977,213 $ 6,152,242 Foreign NOL 6,406,052 5,365,437 Accrued payroll and expense 131,867 132,812 Nonqualified options 780,800 760,213 Others 171,819 30,040 Total deferred tax assets $ 15,467,751 $ 12,440,744 Less: valuation allowance $ (15,467,751) $ (12,440,744) |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contingencies and Commitments | |
Schedule of operating lease commitment | Leased Property Years ending December 31 Costs $ 1,728,670 1,341,024 1,202,496 1,294,781 1,343,668 Thereafter 2,587,280 Total $ 9,497,919 |
Concentration, Credit and Oth_2
Concentration, Credit and Other Risks (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Concentration, Credit and Other Risks | ||
Schedule of cash and time deposits | September 30, December 31, 2019 2018 RMB denominated bank deposits with financial institutions in the PRC $ 110,005 $ 1,523,622 US dollar denominated bank deposits with financial institutions in the PRC $ 30,666 $ 133,053 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 17,985 $ 13,133 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 13,708 $ 44,182 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 569,707 $ 697,099 SGD denominated bank deposits with financial institutions in Singapore $ 70,432 — US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 874,093 $ 695,155 Total $ 1,686,596 $ 3,106,244 | December 31, 2018 2017 RMB denominated bank deposits with financial institutions in the PRC $ 1,523,622 $ 693,584 US dollar denominated bank deposits with financial institutions in the PRC $ 133,053 $ 628,481 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 13,133 $ 17,508 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 44,182 $ 1,505,271 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 697,099 $ 1,033,769 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 695,155 $ 3,698,704 Total $ 3,106,244 $ 7,577,317 |
Segments and Geographic Areas (
Segments and Geographic Areas (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segments and Geographic Areas | ||
Schedule of Company's revenue and cost generated from different revenue streams | 2018 2017 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ — $ 794,273 -Wecast Service 377,742,872 143,558,567 Net sales 377,742,872 144,352,840 GROSS PROFIT -Legacy YOD — 31,659 -Wecast Service 3,167,834 7,132,788 Gross profit $ 3,167,834 $ 7,164,447 December 31, December 31, 2018 2017 TOTAL ASSETS -Legacy YOD $ 26,442,810 $ 27,141,163 -Wecast Service 51,592,929 30,084,607 -Unallocated assets 16,199,373 11,270,378 -Intersegment elimination — (5,051,660) Total $ 94,235,112 $ 63,444,488 | |
Schedule of Revenue, Cost of revenue and Gross Profit by segment | Nine Months Ended September 30, 2019 September 30, 2018 Revenue -Legacy YOD $ — $ — - Mobile Energy Group (formerly Wecast Services) 44,503,562 362,628,296 Total revenue 44,503,562 362,628,296 Cost of revenue -Legacy YOD — — - Mobile Energy Group (formerly Wecast Services) 1,217,184 359,839,565 Gross profit $ 43,286,378 $ 2,788,731 | |
Schedule of assets by segment | September 30, 2019 December 31, 2018 TOTAL ASSETS -Legacy YOD $ 635,128 $ 26,442,810 -Mobile Energy Group (formerly Wecast Services) 164,128,548 51,592,929 -Unallocated assets — 16,199,373 Total $ 164,763,676 $ 94,235,112 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Schedule of financial instruments measured at fair value on a recurring basis | September 30, 2019 Level I Level II Level III Total Contingent Consideration Liability 1 — — 2,327,919 2,327,919 Note 1 This represents the liability incurred in connection with the acquisition of DBOT shares during Q3 2019 as disclosed in Note 5(f). |
Summary of significant inputs and assumptions used | The following table presents the significant inputs and assumptions used in the model: September 30, 2019 Risk-free interest rate 1.8 % Expected volatility 30 % Expected term 0.5 year Expected dividend yield 0 % |
Summary of reconciliation of level 3 fair value measurements | Reconciliation of level 3 fair value measurements: Contingent Consideration Liability January 1, 2019 $ — Addition (2,217,034) Remeasurement (loss)/gain recognized in the income statement (110,885) September 30, 2019 $ (2,327,919) |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019asegment | Dec. 31, 2018segment | Apr. 24, 2018 | |
Business Acquisition [Line Items] | |||
Number of Operating Segments | segment | 2 | 2 | |
Mobile Energy Group, Formerly We Cast Services [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Commercial Electronic Vehicles, Economic Useful Life | 10 years | ||
Mobile Energy Group, Formerly We Cast Services [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Commercial Electronic Vehicles, Economic Useful Life | 15 years | ||
Shanghai Guang Ming Investment Management ("Guang Ming") | |||
Business Acquisition [Line Items] | |||
Percentage of equity ownership | 100.00% | ||
DBOT [Member] | |||
Business Acquisition [Line Items] | |||
Area of Land | a | 58 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating right of use assets | $ 6,845,031 | $ 0 |
Operating lease liability | $ 7,241,805 | |
Accounting Standards Update 840 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating right of use assets | 3,600,000 | |
Operating lease liability | $ 3,700,000 |
Organization and Principal Ac_2
Organization and Principal Activities (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization and Principal Activities | ||
Number of operating segments | 2 | 2 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Impairment loss recognized from intangible assets | $ 0 | |
U. S. statutory income tax rate | 21.00% | 34.00% |
Portfolio leases of lease assets and liabilities recognized | $ 8,300,000 | |
Furniture | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment estimated useful life | P5Y | |
Electronic equipment | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment estimated useful life | P3Y | |
Vehicle | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment estimated useful life | P5Y | |
Vehicle | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment estimated useful life | P10Y |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Disaggregation of Revenue [Line Items] | |||||||
Total | $ 3,103,690 | $ 43,707,937 | $ 44,503,562 | $ 362,628,296 | $ 377,742,872 | $ 144,352,840 | [1] |
Singapore | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 260,034,401 | 19,028,003 | |||||
USA | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 638,412 | 7,037 | |||||
Hong Kong | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 117,070,059 | 119,683,121 | |||||
PRC | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 0 | 5,634,679 | |||||
Geographic Markets [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 3,103,690 | 43,707,937 | 44,503,562 | 362,628,296 | 377,742,872 | 144,352,840 | |
Geographic Markets [Member] | Singapore | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 0 | 0 | 0 | 260,034,401 | |||
Geographic Markets [Member] | USA | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 249,512 | 200,660 | 41,649,384 | 200,660 | |||
Geographic Markets [Member] | Hong Kong | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 2,854,178 | 43,507,277 | 2,854,178 | 102,393,235 | |||
Wecast Services | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 377,742,872 | 143,558,567 | |||||
Wecast Services | Crude oil [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 260,034,401 | 143,558,567 | |||||
Wecast Services | Consumer electronics [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 116,723,251 | 0 | |||||
Wecast Services | Other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | $ 985,220 | $ 0 | |||||
Mobile Energy Group, Formerly We Cast Services [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 3,103,690 | 43,707,937 | 44,503,562 | 362,628,296 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Crude oil [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 0 | 0 | 0 | 260,034,401 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Consumer electronics [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 0 | 43,432,556 | 0 | 102,081,176 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Digital asset management services | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 0 | 0 | 40,700,000 | 0 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Electric Vehicles [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 2,854,178 | 0 | 2,854,178 | 0 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Digital advertising services and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 249,512 | 275,381 | 949,384 | 512,719 | |||
Timing of Revenue Recognition [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 3,103,690 | 43,707,937 | 44,503,562 | 362,628,296 | |||
Timing of Revenue Recognition [Member] | Products transferred at a point in time | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | 3,103,690 | 43,707,937 | 3,803,562 | 362,628,296 | |||
Timing of Revenue Recognition [Member] | Services provided over time | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total | $ 0 | $ 0 | $ 40,700,000 | $ 0 | |||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Revenue - Additional Informatio
Revenue - Additional Information (Details) ¥ in Millions | Mar. 14, 2019USD ($)item | Oct. 08, 2016CNY (¥)installment | Oct. 08, 2016USD ($)installment | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2019 | Mar. 31, 2019USD ($)item | |
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue from related party | $ 2,854,178 | $ 0 | $ 43,554,178 | $ 0 | $ 99,718,005 | $ 18,973,054 | [1] | |||||
Revenue | 3,103,690 | 43,707,937 | $ 44,503,562 | 362,628,296 | $ 377,742,872 | $ 144,352,840 | [1] | |||||
Majority of revenue percentage | 100.00% | 99.50% | ||||||||||
Qianxi [Member] | Joint Venture [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue from related party | $ 2,900,000 | |||||||||||
IUnicorn, Also Known as Shenma Zhuanche [Member] | Joint Venture [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50.01% | |||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.99% | |||||||||||
Number of Orders | item | 4,172 | |||||||||||
GTBs | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Percentage of marketing and business development management services | 0.25% | |||||||||||
GTD | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Number of GTB received for services provided to GTD | item | 1,250,000 | |||||||||||
Assets sold under agreements carrying amount | $ 20,400,000 | |||||||||||
GTD | Digital asset management services | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Number of GTB received for services provided to GTD | item | 7,083,333 | |||||||||||
Percentage of marketing and business development management services | 0.25% | |||||||||||
Percentage of discount to fixed contract price | 76.00% | |||||||||||
GTD | Digital asset management services | Expected life | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Expecting holding period | 3 years | |||||||||||
GTD | Digital asset management services | Expected volatility [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Digital asset (liability) net, measurement input | 155 | 155 | ||||||||||
GTD | Digital asset management services | Expected dividend rate | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Digital asset (liability) net, measurement input | 0 | 0 | ||||||||||
GTD | Digital asset management services | Interest rate | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Digital asset (liability) net, measurement input | 2.25 | 2.25 | ||||||||||
GTD | Digital asset management services | Level II | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Number of GTB received for services provided to GTD | item | 7,083,333 | |||||||||||
Assets sold under agreements fair value | $ 40,700,000 | |||||||||||
Percentage of discount to fixed contract price | 76.00% | |||||||||||
Mobile Energy Group, Formerly We Cast Services [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue | $ 3,103,690 | 43,707,937 | $ 44,503,562 | 362,628,296 | ||||||||
Mobile Energy Group, Formerly We Cast Services [Member] | Digital asset management services | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue | 0 | 0 | 40,700,000 | 0 | ||||||||
Mobile Energy Group, Formerly We Cast Services [Member] | Electric Vehicles [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue | $ 2,854,178 | $ 0 | 2,854,178 | 0 | ||||||||
Legacy YOD | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenue | $ 0 | $ 0 | ||||||||||
Legacy YOD | Major Customers | Yanhua Agreement | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Minimal guarantee fee | ¥ 13 | $ 2,000,000 | ||||||||||
Number of installments | installment | 2 | 2 | ||||||||||
Amount recognized as revenue of the first installment | ¥ | ¥ 6.5 | |||||||||||
Second installments of agreement to be paid in three months from the date when the first installment | ¥ | ¥ 6.5 | |||||||||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
VIE Structure and Arrangements
VIE Structure and Arrangements (Details) ¥ in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019CNY (¥)entity | Dec. 31, 2018CNY (¥)entity | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 05, 2016CNY (¥) | |
VIE Structure and Arrangements | ||||||
Number of variable interest entity | entity | 2 | 2 | ||||
Contractual Agreements | SSF | Subsidiaries [Member] | ||||||
VIE Structure and Arrangements | ||||||
Registered capital | ¥ 27.6 | $ 4.2 | ||||
Loan Agreement | Subsidiaries [Member] | ||||||
VIE Structure and Arrangements | ||||||
Loan payable | ¥ 19.8 | |||||
Loan Agreement | Nominee Shareholders | ||||||
VIE Structure and Arrangements | ||||||
Loan payable | ¥ 0.2 | |||||
VIE | ||||||
VIE Structure and Arrangements | ||||||
Assets that settle obligations of VIEs | $ | $ 0.2 | 3.5 | $ 3.7 | |||
VIE | PRC | Subsidiaries [Member] | Minimum [Member] | ||||||
VIE Structure and Arrangements | ||||||
Percentages of service fees | 20.00% | |||||
VIE | PRC | Subsidiaries [Member] | Maximum [Member] | ||||||
VIE Structure and Arrangements | ||||||
Percentages of service fees | 30.00% | |||||
VIE | Contractual Agreements | YOD Hong Kong | ||||||
VIE Structure and Arrangements | ||||||
Registered capital | ¥ 38.2 | ¥ 38.2 | $ 5.7 | $ 5.8 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Assets Acquisition of Fintalk Assets (Details) - USD ($) | 1 Months Ended | |||||
Jun. 30, 2019 | Oct. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisitions and Divestitures | ||||||
Intangible assets | $ 20,782,710 | $ 2,983,138 | $ 14,584 | |||
Fintalk | ||||||
Acquisitions and Divestitures | ||||||
Total purchase price paid | $ 6,350,000 | $ 7,000,000 | ||||
Cash paid to acquire entity | 1,000,000 | $ 1,000,000 | ||||
Value of capital stock issued | $ 5,350,000 | $ 6,000,000 | ||||
Number of common stock issued | 2,860,963 | |||||
Shares Issued, Price Per Share | $ 1.87 | |||||
Intangible assets | $ 1,000,000 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Acquisition of Grapevine Logic, Inc (Details) $ / shares in Units, $ in Millions | Sep. 04, 2018USD ($) | Jun. 30, 2019USD ($)shares | May 31, 2019item$ / shares | Sep. 30, 2018USD ($) |
Security purchase agreement with Grapevine | ||||
Acquisitions and Divestitures | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |||
Security purchase agreement with Grapevine | ||||
Acquisitions and Divestitures | ||||
Percentage of ownership interest acquired | 65.65% | 34.35% | 65.65% | |
Cash paid to acquire entity | $ 2.4 | $ 2.4 | ||
Business Acquisition Ratio Of Consideration Payable In Cash | 0.333 | |||
Business Acquisition Ratio Of Consideration Payable In Common Stock | 0.667 | |||
Number Of Amendments | item | 2 | |||
Shares Issued, Price Per Share | $ / shares | $ 1.84 | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 590,671 | |||
Non Controlling Interest Carrying Amount | $ 0.5 | |||
Change In Additional Paid In Capital | $ 1.1 | |||
Security purchase agreement with Grapevine | Fomalhaut Limited [Member] | ||||
Acquisitions and Divestitures | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 34.35% |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Acquisition of Solid Opinion and Termination of Agreement wth Tree Motion (Details) | Jul. 18, 2019USD ($)a$ / sharesshares | Feb. 19, 2019USD ($)shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Acquisitions and Divestitures | ||||
Amount received on share issued | $ | $ 7,800,000 | $ 7,800,000 | ||
cash consideration for land | $ | $ 10,000,000 | |||
Tree Motion Sdn. Bhd. ("Tree Motion") | ||||
Acquisitions and Divestitures | ||||
Acquisition percentage | 51.00% | |||
Number of shares issued | shares | 25,500,000 | |||
Number Of Acres Acquired | a | 250 | |||
Shares issued, price per share (in dollars per share) | $ / shares | $ 2 | |||
SolidOpinion, Inc ("SolidOpinion") | ||||
Acquisitions and Divestitures | ||||
Number of common stock ("Escrow Shares") held in escrow (in shares) | shares | 450,000 | |||
Amount received on share issued | $ | $ 2,500,000 | |||
Number of shares exchange | shares | 4,500,000 | |||
Tree Manufacturing Sdn. Bhd | Tree Motion Sdn. Bhd. ("Tree Motion") | ||||
Acquisitions and Divestitures | ||||
Acquisition percentage | 11.22% | |||
Number of shares issued | shares | 12,190,000 | |||
cash consideration for land | $ | $ 620,000 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Acquisition of Glory Connection Sdn. Bhd (Details) - USD ($) | Jul. 18, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | [1] |
Income Statement Information [Abstract] | ||||||||||||
Revenue | $ 3,103,690 | $ 43,707,937 | $ 44,503,562 | $ 362,628,296 | $ 377,742,872 | $ 144,352,840 | ||||||
Gross profit | 2,860,330 | 863,061 | 43,286,378 | 2,788,731 | 3,167,834 | 7,164,447 | ||||||
Net loss from operations | (9,403,383) | (6,356,557) | 17,206,270 | (19,061,185) | (26,195,054) | (10,097,166) | ||||||
Net loss | (12,304,483) | $ 5,276,783 | $ 19,908,754 | (7,441,820) | $ (8,610,921) | $ (3,812,813) | 12,881,054 | (19,865,554) | (28,423,084) | (10,860,317) | [2] | |
Net loss attributable to Glory | (13,711,867) | $ (7,186,847) | 11,506,861 | $ (19,228,240) | $ (27,426,356) | $ (10,503,049) | ||||||
Glory | ||||||||||||
Acquisitions and Divestitures | ||||||||||||
Percentage of voting equity interests acquired | 34.00% | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 12,190,000 | |||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 24,400,000 | |||||||||||
Shares Issued, Price Per Share | $ 2 | |||||||||||
Allocation Of Consideration To Equity Method Investment | 23,000,000 | |||||||||||
Allocation Of Consideration To Call Option | 1,380,000 | |||||||||||
Glory | Call option | ||||||||||||
Acquisitions and Divestitures | ||||||||||||
Percentage of voting equity interests acquired | 20.40% | |||||||||||
Glory | ||||||||||||
Income Statement Information [Abstract] | ||||||||||||
Revenue | 2,041 | 3,936 | ||||||||||
Gross profit | 1,379 | 769 | ||||||||||
Net loss from operations | 173,465 | 354,502 | ||||||||||
Net loss | 171,719 | 352,606 | ||||||||||
Net loss attributable to Glory | $ 95,477 | $ 195,121 | ||||||||||
Bigfair Holdings Limited [Member] | Call option | ||||||||||||
Acquisitions and Divestitures | ||||||||||||
Percentage of voting equity interests acquired | 40.00% | |||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 13,200,000 | |||||||||||
Bigfair Holdings Limited [Member] | Glory | ||||||||||||
Acquisitions and Divestitures | ||||||||||||
Percentage of voting equity interests acquired | 51.00% | |||||||||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||||
[2] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Acquisitions and Divestitures_5
Acquisitions and Divestitures - Acquisition of Delaware Board of Trade Holdings, Inc (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2019USD ($)$ / sharesshares | Apr. 30, 2019$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)company | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | [1] | Sep. 04, 2018USD ($) | |
Supplemental information on an unaudited pro forma basis | ||||||||||
Revenue | $ 3,103,690 | $ 43,707,937 | $ 44,503,562 | $ 362,628,296 | $ 377,742,872 | $ 144,352,840 | ||||
Net income (loss) attributable to IDEX common stockholders | (13,711,867) | (7,186,847) | 11,506,861 | (19,228,240) | $ (27,426,356) | $ (10,503,049) | ||||
Acquisition-date fair value of assets acquired and liabilities assumed | ||||||||||
Cash | $ 508,000 | |||||||||
Other financial assets | 388,000 | |||||||||
Financial liabilities | (747,000) | |||||||||
Noncontrolling interest | 679,000 | |||||||||
Goodwill | 705,000 | |||||||||
Net assets assumed | $ 2,485,000 | |||||||||
DBOT [Member] | ||||||||||
Acquisitions and Divestitures | ||||||||||
Shares in DBOT | shares | 2,224,937 | 6,918,547 | ||||||||
Number of common stock issued | shares | 1,423,960 | 4,427,870 | ||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 2.11 | $ 2.11 | ||||||||
Percentage of voting equity interests acquired | 99.04% | |||||||||
Maximum Stock Price Consideration For Additional Shares | $ / shares | $ 2.11 | |||||||||
Liability at Fair value | $ 2,217,034 | |||||||||
Liability Remeasured | 2,327,919 | 2,327,919 | ||||||||
Loss on Remeasurement | $ (110,885) | |||||||||
Number Of Companies Operated By DBOT | company | 3 | |||||||||
Supplemental information on an unaudited pro forma basis | ||||||||||
Revenue | 43,798,865 | $ 44,612,471 | 363,004,917 | |||||||
Net income (loss) attributable to IDEX common stockholders | $ (7,818,047) | 10,582,474 | $ (21,387,162) | |||||||
Acquisition-date fair value of assets acquired and liabilities assumed | ||||||||||
Cash | 246,929 | 246,929 | ||||||||
Other financial assets | 1,686,464 | 1,686,464 | ||||||||
Financial liabilities | (4,411,140) | (4,411,140) | ||||||||
Noncontrolling interest | (104,649) | (104,649) | ||||||||
Goodwill | 9,323,189 | 9,323,189 | ||||||||
Net assets assumed | 15,055,063 | 15,055,063 | ||||||||
DBOT [Member] | Continuing Membership Agreements [Member] | ||||||||||
Acquisitions and Divestitures | ||||||||||
Useful Life | 20 years | |||||||||
Acquisition-date fair value of assets acquired and liabilities assumed | ||||||||||
Intangible asset | 8,255,440 | 8,255,440 | ||||||||
DBOT [Member] | Customer List [Member] | ||||||||||
Acquisitions and Divestitures | ||||||||||
Useful Life | 3 years | |||||||||
Acquisition-date fair value of assets acquired and liabilities assumed | ||||||||||
Intangible asset | $ 58,830 | $ 58,830 | ||||||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Acquisitions and Divestitures_6
Acquisitions and Divestitures - Divestures (Details) - USD ($) | Aug. 31, 2019 | Aug. 30, 2019 | Jun. 30, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | May 31, 2019 |
Acquisitions and Divestitures | |||||||||
Disposal Gain | $ (1,183,289) | ||||||||
Red Rock Global Capital LTD [Member] | |||||||||
Acquisitions and Divestitures | |||||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 700,000 | ||||||||
Disposal Gain | $ 552,215 | ||||||||
Amer Global Technology Limited [Member] | |||||||||
Acquisitions and Divestitures | |||||||||
Percentage of potential tax obligation | 20.00% | ||||||||
Period for Publicly Listing | 36 months | ||||||||
Diluted Ownership Interest In Disposal Group | 10.00% | 55.00% | |||||||
Disposal Gain | $ 505,148 | ||||||||
Bad debt expense relating to receivable due to subsidiary | 622,286 | ||||||||
Gain On Disposal Attributable To Ownership Interest Retained | $ 95,104 | ||||||||
Disposal Group Not Discontinued Operation Proforma Income Statement Disclosures [Abstract] | |||||||||
Revenue | $ 275,380 | $ 260,547,120 | |||||||
Net loss from operations | (6,305,340) | (18,548,258) | |||||||
Net Loss | (7,390,597) | (19,351,526) | |||||||
Net loss attributable to IDEX common shareholders | $ (7,158,674) | $ (18,945,524) | |||||||
BCC Technology Company Limited [Member] | Amer Global Technology Limited [Member] | |||||||||
Acquisitions and Divestitures | |||||||||
Exchange Of Ownership Interest Due To Disposal | 71.81% | ||||||||
Number of shares issued | 39,500 | ||||||||
Merry Heart Technology Limited [Member] | Amer Global Technology Limited [Member] | |||||||||
Acquisitions and Divestitures | |||||||||
Exchange Of Ownership Interest Due To Disposal | 10.00% | ||||||||
Number of shares issued | 5,500 |
Acquisitions and Divestitures_7
Acquisitions and Divestitures (Details) | Sep. 04, 2018USD ($) |
Acquisitions and Divestitures | |
Cash | $ 508,000 |
Other financial assets | 388,000 |
Financial liabilities | (747,000) |
Noncontrolling interest | (679,000) |
Goodwill | 705,000 |
Influencer network | 1,980,000 |
Customer contract | 500,000 |
Trade name | 110,000 |
Technology platform | 290,000 |
Deferred tax liabilities | (570,000) |
Net assets assumed | $ 2,485,000 |
Acquisitions and Divestitures_8
Acquisitions and Divestitures (Detail Textuals) - USD ($) | Sep. 04, 2018 | Jun. 30, 2019 | Sep. 30, 2018 | Apr. 24, 2018 | Dec. 31, 2018 | Oct. 09, 2018 |
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 110,000 | |||||
Net assets assumed | $ 2,485,000 | |||||
Security purchase agreement with Grapevine | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of ownership interest acquired | 65.65% | 34.35% | 65.65% | |||
Cash paid to acquire entity | $ 2,400,000 | $ 2,400,000 | ||||
Number of common stock issued | 590,671 | |||||
Security purchase agreement with Grapevine | Bruno Wu ("Mr.Wu") | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of non voting stock by equity holder | 34.35% | |||||
Security purchase agreement with Grapevine | Influence network | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 10 years | |||||
Security purchase agreement with Grapevine | Customer contracts | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 3 years | |||||
Security purchase agreement with Grapevine | Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 15 years | |||||
Security purchase agreement with Grapevine | Technology platform | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 7 years | |||||
Shanghai Guang Ming Investment Management ("Guang Ming") | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of ownership interest acquired | 100.00% | |||||
Total purchase price paid | $ 360,000 | |||||
TPJ Ltd | Joint venture agreement | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of ownership interest acquired | 75.00% |
Acquisitions and Divestitures_9
Acquisitions and Divestitures (Detail Textuals 1) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||||
Convertible Promissory Note | $ 15,453,825 | $ 17,541,950 | ||
Sun Video Group HK Limited | BT Capital Global Limited | ||||
Business Acquisition [Line Items] | ||||
Principal amount of Promissory Note (SVG Note) | $ 800,000 | |||
Conversion price of note convertible | $ 1.50 | |||
Expected revenue to generate | $ 250,000,000 | |||
Percentage of equity ownership | 100.00% | |||
Expected profit performance guarantee | $ 15,000,000 | |||
Cumulative threshold limit of net income achieve within 3 years | $ 50,000,000 | |||
Percentage of cumulative net income payment | 50.00% | |||
Convertible Promissory Note | $ 50,000,000 | |||
Number of earn out shares | 16.5 | |||
Wide Angle Group Limited | ||||
Business Acquisition [Line Items] | ||||
Cash consideration for exchange | $ 800,000 | |||
Percentage of equity ownership | 55.00% | 55.00% |
Acquisitions and Divestiture_10
Acquisitions and Divestitures (Detail textuals 2) - Wide Angle Group Limited - USD ($) | 1 Months Ended | |
Dec. 31, 2018 | Jan. 30, 2017 | |
Business Acquisition [Line Items] | ||
Percentage of equity ownership | 55.00% | 55.00% |
Consideration to be received | $ 347,000 | |
Net assets after divestitures | 46,000 | |
Transaction loss on divestitures | $ 1,200,000 |
Accounts Receivable - Mobile En
Accounts Receivable - Mobile Energy Group (formerly Wecast Services) business (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable | ||||
Accounts receivable, gross | $ 2,941,348 | $ 19,370,665 | $ 26,965,731 | |
Less: allowance for doubtful accounts | (103) | 0 | (3,646) | |
Accounts receivable, net | $ 2,941,245 | $ 19,370,665 | $ 26,962,085 | [1] |
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Accounts Receivable - Aging of
Accounts Receivable - Aging of the accounts receivable (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||
Balance at the beginning of the year | $ (3,646) | $ (2,828,796) | ||||
Additions charged to bad debt expense | 0 | 145,512 | ||||
Write-off of bad debt allowance | 0 | (89,851) | ||||
Disposal of Zhong Hai Shi Xun | (3,646) | (2,880,811) | ||||
Allowance for Doubtful Accounts Receivable | $ 3,646 | $ 2,828,796 | $ 0 | $ 3,646 | ||
Accounts Receivable, Net, Current | $ 2,941,245 | 19,370,665 | $ 26,962,085 | [1] | ||
Within 90 days | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||
Accounts Receivable, Net, Current | 2,941,245 | 1,219,526 | ||||
91-180 days | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||
Accounts Receivable, Net, Current | 0 | 633 | ||||
181-365 days | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||
Accounts Receivable, Net, Current | 0 | 12,385,193 | ||||
More than 1 year | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||
Accounts Receivable, Net, Current | $ 0 | $ 5,765,313 | ||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Property and Equipment net | ||||
Total property and equipment | $ 903,280 | $ 620,634 | $ 464,363 | |
Less: accumulated depreciation | (482,548) | (186,514) | (337,088) | |
Property and Equipment, net | 14,504,993 | 15,029,427 | 127,275 | [1] |
Furniture | ||||
Property and Equipment net | ||||
Total property and equipment | 602,548 | 357,064 | 308,383 | |
Vehicle | ||||
Property and Equipment net | ||||
Total property and equipment | 60,951 | 63,135 | 147,922 | |
Leasehold improvements | ||||
Property and Equipment net | ||||
Total property and equipment | 239,781 | 200,435 | 8,058 | |
Land | ||||
Property and Equipment net | ||||
Property and Equipment, net | 3,042,777 | 3,042,777 | ||
Building | ||||
Property and Equipment net | ||||
Property and Equipment, net | 308,779 | 2,607,666 | ||
Decrease in Impairment Charges, Property and Equipment | 2,300,000 | |||
Assets Retirement Obligations - Environmental Remediation | ||||
Property and Equipment net | ||||
Property and Equipment, net | 8,000,000 | 8,000,000 | ||
Capitalized direct development cost | ||||
Property and Equipment net | ||||
Property and Equipment, net | 2,732,705 | 944,864 | ||
Construction in progress (Fintech Village) | ||||
Property and Equipment net | ||||
Property and Equipment, net | $ 14,084,261 | $ 14,595,307 | $ 0 | |
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Property and Equipment net - Ad
Property and Equipment net - Additional Information (Details) - USD ($) | Oct. 10, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | |||||||
Asset Retirement Obligations | $ 6,392,500 | $ 6,392,500 | $ 8,000,000 | ||||
Assistance Agreement | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total purchase price in asset acquisition | $ 10,000,000 | ||||||
Maximum percentage of project cost as aggregate principal of funding | 50.00% | ||||||
Forgiveness of promissory note after meet conditions | $ 10,000,000 | ||||||
University of Connecticut | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Purchase price | 5,200,000 | ||||||
Cash collateral expense | 3,600,000 | ||||||
Investments | $ 283,000,000 | ||||||
Operating expense | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Depreciation expense | $ 65,862 | $ 14,820 | $ 102,991 | $ 32,941 | $ 139,903 | $ 221,006 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | ||
Goodwill [Roll Forward] | |||
Balance | $ 704,884 | $ 0 | [1] |
Goodwill Acquired | 9,323,189 | 704,884 | |
Foreign currency translation and other adjustments | 0 | ||
Balance | $ 10,028,073 | $ 704,884 | |
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Amortizing and Indefinite lived intangible assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Amortizing Intangible Assets | ||||||
Gross Carry Amount | $ 3,278,803 | $ 307,175 | ||||
Accumulated Amortization | (295,665) | (239,569) | ||||
Impairment Loss | 0 | (53,022) | ||||
Total amortization to be recognized | $ 20,782,710 | 2,983,138 | 14,584 | |||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | 22,296,578 | 3,278,803 | ||||
Accumulated Amortization | (1,513,868) | (295,665) | ||||
Impairment Loss | 0 | 0 | ||||
Net Balance | 20,782,710 | 2,983,138 | ||||
Total intangible assets | ||||||
Gross Carry Amount | 83,608,489 | 3,466,307 | 452,064 | |||
Accumulated Amortization | (1,513,868) | (295,665) | (239,569) | |||
Impairment Loss | (134,290) | (134,290) | (63,621) | |||
Net Balance | $ 81,960,331 | $ 3,036,352 | 148,874 | [1] | ||
Animation Copyright | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 0 years | 1 year 3 months 18 days | ||||
Gross Carry Amount | $ 0 | $ 301,495 | 0 | |||
Accumulated Amortization | 0 | (64,606) | 0 | |||
Impairment Loss | 0 | 0 | 0 | |||
Total amortization to be recognized | $ 0 | 236,889 | 0 | |||
Software and licenses | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 0 years | |||||
Gross Carry Amount | $ 97,308 | 97,308 | 214,210 | |||
Accumulated Amortization | (97,308) | (93,251) | (199,626) | |||
Impairment Loss | 0 | 0 | 0 | |||
Total amortization to be recognized | $ 0 | 4,057 | 14,584 | |||
SolidOpinion Intellectual property (Note 5 (a)) | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 4 years 4 months 24 days | |||||
Gross Carry Amount | $ 4,655,000 | 0 | ||||
Accumulated Amortization | (543,084) | 0 | ||||
Impairment Loss | 0 | 0 | ||||
Total amortization to be recognized | $ 4,111,916 | 0 | ||||
Fintalk Intangible Assets [Member] | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 4 years 9 months 18 days | |||||
Gross Carry Amount | $ 6,350,000 | 0 | ||||
Accumulated Amortization | (317,500) | 0 | ||||
Impairment Loss | 0 | 0 | ||||
Total amortization to be recognized | $ 6,032,500 | $ 0 | ||||
Influencer network | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 8 years 10 months 24 days | 9 years 8 months 12 days | ||||
Gross Carry Amount | $ 1,980,000 | $ 1,980,000 | 0 | |||
Accumulated Amortization | (214,500) | (66,000) | 0 | |||
Impairment Loss | 0 | 0 | 0 | |||
Total amortization to be recognized | $ 1,765,500 | $ 1,914,000 | 0 | |||
Customer contract | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 2 years | 2 years 8 months 12 days | [2] | |||
Gross Carry Amount | $ 558,830 | $ 500,000 | [2] | 0 | [2] | |
Accumulated Amortization | (185,458) | (55,556) | [2] | 0 | [2] | |
Impairment Loss | 0 | 0 | [2] | 0 | [2] | |
Total amortization to be recognized | $ 373,372 | 444,444 | [2] | 0 | [2] | |
Continuing Membership Agreements [Member] | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 19 years 9 months 18 days | |||||
Gross Carry Amount | $ 8,255,440 | 0 | ||||
Accumulated Amortization | (103,193) | 0 | ||||
Impairment Loss | 0 | 0 | ||||
Total amortization to be recognized | $ 8,152,247 | $ 0 | ||||
Trade name | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 13 years 10 months 24 days | 14 years 8 months 12 days | [2] | |||
Gross Carry Amount | $ 110,000 | $ 110,000 | [2] | 0 | [2] | |
Accumulated Amortization | (7,944) | (2,444) | [2] | 0 | [2] | |
Impairment Loss | 0 | 0 | [2] | 0 | [2] | |
Total amortization to be recognized | $ 102,056 | $ 107,556 | [2] | 0 | [2] | |
Technology platform | ||||||
Amortizing Intangible Assets | ||||||
Weighted Average Remaining Useful Life (in years) | 5 years 10 months 24 days | 6 years 8 months 12 days | [2] | |||
Gross Carry Amount | $ 290,000 | $ 290,000 | [2] | 0 | [2] | |
Accumulated Amortization | (44,881) | (13,808) | [2] | 0 | [2] | |
Impairment Loss | 0 | 0 | [2] | 0 | [2] | |
Total amortization to be recognized | 245,119 | 276,192 | [2] | 0 | [2] | |
Website and mobile app development | ||||||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | 159,504 | 159,504 | ||||
Accumulated Amortization | 0 | 0 | ||||
Impairment Loss | (134,290) | (134,290) | ||||
Net Balance | 25,214 | 25,214 | ||||
Patent and trademark | ||||||
Amortizing Intangible Assets | ||||||
Gross Carry Amount | [3] | 0 | 92,965 | |||
Accumulated Amortization | [3] | 0 | (39,943) | |||
Impairment Loss | [3] | 0 | (53,022) | |||
Total amortization to be recognized | [3] | 0 | 0 | |||
Website name | ||||||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | [4] | 159,504 | 134,290 | |||
Accumulated Amortization | [4] | 0 | 0 | |||
Impairment Loss | [4] | (134,290) | 0 | |||
Net Balance | [4] | 25,214 | 134,290 | |||
Patent | ||||||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | [3] | 28,000 | 10,599 | |||
Accumulated Amortization | [3] | 0 | 0 | |||
Impairment Loss | [3] | 0 | (10,599) | |||
Net Balance | [3] | 28,000 | $ 0 | |||
Patent | Patent and trademark | ||||||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | 28,000 | 28,000 | ||||
Accumulated Amortization | 0 | 0 | ||||
Impairment Loss | 0 | 0 | ||||
Net Balance | 28,000 | 28,000 | ||||
GTB Tokens (Note 13 (b)) | GTB Tokens (Note 13 (b)) | ||||||
Indefinite lived intangible assets | ||||||
Gross Carry Amount | 61,124,407 | 0 | ||||
Accumulated Amortization | 0 | 0 | ||||
Impairment Loss | 0 | 0 | ||||
Net Balance | $ 61,124,407 | $ 0 | ||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||
[2] | During the third quarter of 2018, the Company completed the acquisition of 65.65% share of Grapevine. See Note 6 | |||||
[3] | During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents | |||||
[4] | The Company wrote off the YOD website in the amount of approximately $134,000 in 2018 since we no longer used the website. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Expected amortization expenses (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets | |||
2019 (excluding the three months ended March 31, 2019) | $ 761,702 | ||
2020 | 3,046,811 | $ 520,921 | |
2021 | 2,991,255 | 357,873 | |
2022 | 2,870,339 | 246,762 | |
2023 | 2,860,534 | 546,882 | |
2024 and thereafter | 8,252,069 | 1,310,700 | |
Total amortization to be recognized | $ 20,782,710 | $ 2,983,138 | $ 14,584 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||||||
Amortization expense relating to intangible assets | $ 764,010 | $ 276,692 | $ 1,317,419 | $ 281,796 | ||
Amortization expense relating to purchased intangible assets | $ 212,429 | $ 87,096 | ||||
DBOT [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived Intangible Assets Acquired | $ 8,314,270 |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2017 | |
Non-marketable Equity Investment | $ 9,147,170 | $ 9,452,103 | $ 6,600,000 | ||
Equity Method Investment | 33,012,143 | 16,956,506 | |||
Total | $ 42,159,313 | $ 26,408,609 | $ 6,975,511 | [1] | |
Delaware Board of Trade Holdings, Inc. ("DBOT") | |||||
Total | $ 250,000 | ||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Long-term Investments - Additio
Long-term Investments - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Oct. 31, 2018shares | Apr. 24, 2018USD ($)$ / sharesshares | Aug. 31, 2017shares | Oct. 31, 2016CNY (¥) | Oct. 31, 2016USD ($) | Mar. 31, 2019shares | Sep. 30, 2019USD ($)item | Dec. 31, 2018USD ($)itemshares | Dec. 31, 2017USD ($) | Oct. 29, 2019$ / shares | Oct. 28, 2019$ / shares | ||||
Long-term Investments | ||||||||||||||
Equity method investment | $ 17,000,000 | $ 400,000 | ||||||||||||
Initial investment balance | $ 23,000,000 | $ 35,612 | [1] | |||||||||||
Subsequent Event | ||||||||||||||
Long-term Investments | ||||||||||||||
GTB quoted price | $ / shares | $ 1.84 | $ 17 | ||||||||||||
Common Stock | ||||||||||||||
Long-term Investments | ||||||||||||||
Purchase of shares | shares | 5,494,505 | |||||||||||||
Common Stock issuance for acquisition SolidOpinion (Note 5(a)) (in shares) | shares | 4,500,000 | 2,267,869 | ||||||||||||
Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||||||||||
Long-term Investments | ||||||||||||||
Purchase of shares | shares | 187,970 | |||||||||||||
Common Stock issuance for acquisition SolidOpinion (Note 5(a)) (in shares) | shares | 2,267,869 | |||||||||||||
Delaware Board of Trade Holdings, Inc. ("DBOT") | Maximum [Member] | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 4.00% | |||||||||||||
Shandong Lushi Media Co Ltd [Member] | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 30.00% | 30.00% | ||||||||||||
Seasail Ventures Limited [Member] | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 40.00% | |||||||||||||
BDCG | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 20.00% | 60.00% | 40.00% | |||||||||||
Number of unrelated party | item | 2 | 2 | ||||||||||||
Total cash consideration paid | $ 9,800,000 | |||||||||||||
Cash paid to acquire entity | 2,000,000 | |||||||||||||
Value of capital stock issued | $ 7,800,000 | |||||||||||||
Number of common stock issued | shares | 3,000,000 | |||||||||||||
Share price of capital stock issued | $ / shares | $ 2.60 | |||||||||||||
Wecast Internet Limited ("Wecast Internet") | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 50.00% | 50.00% | ||||||||||||
Initial investment balance | ¥ 1,000,000 | $ 149,750 | $ 0 | [2] | $ 0 | [3] | ||||||||
Hua Cheng | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 39.00% | 39.00% | 39.00% | |||||||||||
Initial investment balance | $ 0 | [4] | $ 0 | [5] | ||||||||||
Shandong Media | ||||||||||||||
Long-term Investments | ||||||||||||||
Percentage of equity ownership | 30.00% | |||||||||||||
Initial investment balance | $ 0 | $ 16,776,346 | ||||||||||||
[1] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | |||||||||||||
[2] | Wecast InternetStarting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. | |||||||||||||
[3] | Wecast InternetStarting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. | |||||||||||||
[4] | Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”)The Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. | |||||||||||||
[5] | Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”)As of December 31, 2018 and 2017, the Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. |
Long-term Investments - Equity
Long-term Investments - Equity method investments (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2016CNY (¥) | Oct. 31, 2016USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | $ 16,956,506 | ||||||||
Capital increase | 23,000,000 | $ 35,612 | [1] | ||||||
Loss on investment | (3,785,092) | ||||||||
Impairment loss | $ 0 | 0 | |||||||
Reclassification to subsidiaries | (3,123,991) | ||||||||
Foreign currency translation adjustments | (35,280) | ||||||||
Ending balance | 33,012,143 | 16,956,506 | |||||||
Wecast Internet Limited ("Wecast Internet") | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | 4,114 | [2] | 6,044 | [3] | |||||
Capital increase | ¥ 1,000,000 | $ 149,750 | 0 | [2] | 0 | [3] | |||
Loss on investment | (5) | [2] | (1,935) | [3] | |||||
Impairment loss | [3] | 0 | |||||||
Reclassification to subsidiaries | [2] | 0 | |||||||
Foreign currency translation adjustments | 1,930 | [2] | 5 | [3] | |||||
Ending balance | 6,039 | [2] | 4,114 | [2] | 6,044 | [3] | |||
Hua Cheng | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | [4] | 308,666 | [5] | 353,498 | |||||
Capital increase | 0 | [5] | 0 | [4] | |||||
Loss on investment | (32,890) | [5] | (46,070) | [4] | |||||
Impairment loss | [4] | 0 | |||||||
Reclassification to subsidiaries | [5] | 0 | |||||||
Foreign currency translation adjustments | (37,210) | [5] | 1,238 | [4] | |||||
Ending balance | 238,566 | [5] | 308,666 | [4],[5] | 353,498 | [4] | |||
Shandong Media | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | 16,956,506 | 359,542 | |||||||
Capital increase | 0 | 16,776,346 | |||||||
Loss on investment | 0 | (180,625) | |||||||
Impairment loss | 0 | ||||||||
Reclassification to subsidiaries | 0 | ||||||||
Foreign currency translation adjustments | 0 | 1,243 | |||||||
Ending balance | 0 | 16,956,506 | 359,542 | ||||||
BDCG | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | [6] | 9,800,000 | [7] | 0 | |||||
Capital increase | 0 | [7] | 9,800,000 | [6] | |||||
Loss on investment | 0 | [7] | 0 | [6] | |||||
Impairment loss | [6] | 0 | |||||||
Reclassification to subsidiaries | [7] | 0 | |||||||
Foreign currency translation adjustments | 0 | [7] | 0 | [6] | |||||
Ending balance | 9,800,000 | [7] | 9,800,000 | [6],[7] | 0 | [6] | |||
Delaware Board of Trade Holdings, Inc. ("DBOT") | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Beginning balance | [8] | 6,843,726 | 0 | ||||||
Capital increase | 0 | 6,976,346 | [8] | ||||||
Loss on investment | (3,719,735) | (132,620) | [8] | ||||||
Impairment loss | [8] | 0 | |||||||
Reclassification to subsidiaries | (3,123,991) | ||||||||
Foreign currency translation adjustments | 0 | 0 | [8] | ||||||
Ending balance | 0 | $ 6,843,726 | [8] | $ 0 | [8] | ||||
Glory | |||||||||
Schedule Of Equity Method Investment [Roll Forward] | |||||||||
Capital increase | 23,000,000 | ||||||||
Loss on investment | (32,462) | ||||||||
Reclassification to subsidiaries | 0 | ||||||||
Foreign currency translation adjustments | 0 | ||||||||
Ending balance | $ 22,967,538 | ||||||||
[1] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | ||||||||
[2] | Wecast InternetStarting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. | ||||||||
[3] | Wecast InternetStarting from October 2016, we have 50% interest in Wecast Internet Limited (“Wecast Internet”) and initial investment was invested RMB 1,000,000 (approximately $149,750). Wecast Internet is in the process of liquidation and the remaining carrying value is immaterial. | ||||||||
[4] | Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”)As of December 31, 2018 and 2017, the Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. | ||||||||
[5] | Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd.(“Hua Cheng”)The Company held 39% equity ownership in Hua Cheng, a company established to provide integrated value-added service solutions for the delivery of VOD and enhanced content for cable providers. | ||||||||
[6] | BBD Digital Capital Group Ltd. (“BDCG”)In 2018, we signed a joint venture agreement with two unrelated parties, to establish BDCG located in the United States for providing block chain services for financial or energy industries by utilizing AI and big data technology in the United States. On April 24, 2018, the Company acquired 20% equity ownership in BDCG from one noncontrolling party with cash consideration of a total consideration of $9.8 million which consists of $2 million in cash and $7.8 million paid in the form of the Company’s capital stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock), increasing the Company’s ownership to 60%. The remaining 40% of BDCG are held by Seasail ventures limited (“Seasail”). The accounting treatment of the joint venture is based on the equity method due to variable substantive participanting rights (in accordance with ASC 810102511) granted to Seasail. The new entity is currently in the process of ramping up its operations. | ||||||||
[7] | BBD Digital Capital Group Ltd. (“BDCG”)In 2018, we signed a joint venture agreement with two unrelated parties, to establish BDCG located in the United States for providing block chain services for financial or energy industries by utilizing AI and big data technology in the United States. The Company received 40% equity ownership in BDCG from the initial joint venture agreement. On April 24, 2018, the Company acquired 20% equity ownership in BDCG from one noncontrolling party for a total consideration of $9.8 million which consists of $2 million in cash and $7.8 million paid in the form of the Company’s common stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock), increasing the Company’s ownership to 60% in BDCG. The remaining 40% of BDCG are held by Seasail ventures limited (“Seasail”). The accounting treatment of the joint venture is based on the equity method due to variable substantive participating rights (in accordance with ASC 810102511) granted to Seasail. The new entity is currently in the process of ramping up its operations. In April 2019, the company rebranded the name of the BDCG joint venture to Intelligenta. As part of the rebranding, Intelligenta’s strategy will now include credit services, corporation services, index services and products, and capital market services and products. | ||||||||
[8] | Delaware Board of Trade Holdings, Inc. (“DBOT”)In August, 2017, the Company made a strategic investment of $250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT’s platform, trading system and technology. The Company accounts for this investment using the cost method in 2017, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT.By October 2018, the Company issued 2,267,869 shares of the Company’s common stock to acquire additional shares in DBOT, thereby increasing its holdings to 36.92%. As a result, the Company changed its method of accounting for this investment to equity method. The effect of the change from cost method to equity method was immaterial. |
Leases (Details)
Leases (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lease, Cost [Abstract] | ||
Operating Lease Cost | $ 390,577 | $ 1,264,049 |
Short-Term Lease Cost | 78,076 | 250,924 |
Sublease Income | (10,605) | (10,605) |
Total Lease Cost | 458,048 | 1,504,368 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 967,565 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | 935,242 | |
2019 (excluding the nine months ended September 30, 2019) | 332,549 | 332,549 |
2020 | 1,307,783 | 1,307,783 |
2021 | 1,328,160 | 1,328,160 |
2022 | 1,422,965 | 1,422,965 |
2023 | 1,474,391 | 1,474,391 |
2024 and thereafter | 3,377,653 | 3,377,653 |
Total lease payments | 9,243,501 | 9,243,501 |
Less: Interest | (2,001,696) | (2,001,696) |
Total | $ 7,241,805 | $ 7,241,805 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Leases | ||
Leases initial term | 12 months | |
Operating right of use assets | $ 6,845,031 | $ 0 |
Operating lease liability | $ 7,241,805 | |
Weighted-average remaining lease term | 6 years 7 months 6 days | |
Average discount rate | 7.50% |
Supplementary Financial Stateme
Supplementary Financial Statement Information (Details) - USD ($) | Sep. 27, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Financial Statement Information | |||||||
Other Assets, Current | $ 2,371,913 | $ 2,371,913 | $ 3,594,942 | $ 2,276,096 | [1] | ||
Other Liabilities, Current | 9,141,870 | $ 9,141,870 | 801,560 | [1] | |||
Description of other current liabilities component | more than 5 percent | more than 5 percent | |||||
Other payable to third party | 5,100,000 | $ 5,100,000 | $ 4,600,000 | 600,000 | |||
$2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||
Supplemental Financial Statement Information | |||||||
Proceeds from convertible debt | $ 2,500,000 | $ 633,805 | 1,800,000 | ||||
ID Ventura 7 [Member] | |||||||
Supplemental Financial Statement Information | |||||||
Other receivable from third party | $ 600,000 | ||||||
PRC | |||||||
Supplemental Financial Statement Information | |||||||
Description of other current assets component | more than 5 percent | more than 5 percent | |||||
Operations deposits receivable from non controlling shareholder | $ 900,000 | ||||||
Other receivable from third party | $ 1,700,000 | $ 1,700,000 | $ 3,300,000 | $ 2,200,000 | |||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Convertible Note (Details)
Convertible Note (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Convertible note | $ 17,541,950 | $ 15,453,825 |
Short-term Note | 1,914,419 | 4,140,055 |
Long-term Note | 15,627,531 | 11,313,770 |
Convertible Note | SSSIG | ||
Short-term Debt [Line Items] | ||
Convertible note | 1,288,032 | 1,000,000 |
Convertible Note | Advantech Capital Investment II Limited | ||
Short-term Debt [Line Items] | ||
Convertible note | 12,382,806 | 11,313,770 |
Convertible Note | Mr.McMahon | ||
Short-term Debt [Line Items] | ||
Convertible note | 3,229,808 | 3,140,055 |
$2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note | 626,387 | 0 |
$2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note | $ 14,917 | $ 0 |
Convertible Note - Additional I
Convertible Note - Additional Information (Details) - USD ($) | Sep. 27, 2019 | Feb. 22, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Jun. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Oct. 29, 2019 | Sep. 24, 2018 | Apr. 24, 2018 |
Debt Instrument [Line Items] | |||||||||||||
Common stock issuance (GTD) | $ 10,000,000 | ||||||||||||
Exercise price of warrants | $ 1.84 | $ 1.84 | $ 1.84 | $ 1.75 | $ 5.375 | $ 5.375 | |||||||
$2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 10.00% | 8.00% | 8.00% | 8.00% | |||||||||
Common stock issued from conversion of convertible note | 1,114,130 | ||||||||||||
Conversion price | $ 1.84 | ||||||||||||
Amount of beneficial conversion feature | $ 600,000 | ||||||||||||
Maturity date of the note | Aug. 22, 2020 | ||||||||||||
Senior secured convertible note | $ 2,050,000 | ||||||||||||
Number of shares issued | 1,166,113 | ||||||||||||
Exercise price of warrants | $ 1.84 | $ 1 | |||||||||||
Number of common stock convertible | 1,671,196 | ||||||||||||
Warrant expiry period | 5 years | ||||||||||||
Percentage of warrant exercisable | 150.00% | ||||||||||||
Proceeds from convertible debt | $ 2,000,000 | ||||||||||||
Convertible note issuance expenses | $ 50,000 | ||||||||||||
Unamortized discount convertible note | $ 1,424,000 | $ 1,424,000 | $ 1,424,000 | ||||||||||
Interest expense relating to discount | 175,000 | 626,000 | |||||||||||
$2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 10.00% | ||||||||||||
Common stock issued from conversion of convertible note | 1,358,696 | ||||||||||||
Conversion price | $ 1.84 | ||||||||||||
Amount of beneficial conversion feature | $ 989,000 | ||||||||||||
Senior secured convertible note | $ 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |||||||||
Number of shares issued | 1,000,000 | ||||||||||||
Exercise price of warrants | $ 1.84 | $ 1 | |||||||||||
Number of common stock convertible | 2,038,043 | ||||||||||||
Warrant expiry period | 5 years | ||||||||||||
Percentage of warrant exercisable | 150.00% | ||||||||||||
Proceeds from convertible debt | $ 2,500,000 | $ 633,805 | 1,800,000 | ||||||||||
Convertible note issuance expenses | $ 66,195 | ||||||||||||
Unamortized discount convertible note | 2,488,000 | 2,488,000 | 2,488,000 | ||||||||||
Interest expense relating to discount | 12,000 | 12,000 | |||||||||||
Security purchase agreement with Grapevine | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Carrying amount of convertible note | 2,400,000 | 2,400,000 | $ 2,400,000 | ||||||||||
Number of additional shares issued | 250,000 | ||||||||||||
Delaware Board of Trade Holdings, Inc. ("DBOT") | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Carrying amount of convertible note | $ 14,300,000 | $ 14,300,000 | $ 14,300,000 | ||||||||||
ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Penalty fee for late payments of interests and compensation | 8.00% | ||||||||||||
Expected life | $2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrant, Term | 5 years | ||||||||||||
Expected life | $2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrant, Term | 5 years | ||||||||||||
Expected dividend rate | $2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 0 | ||||||||||||
Expected dividend rate | $2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 0 | ||||||||||||
Expected volatility [Member] | $2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 111.83 | ||||||||||||
Expected volatility [Member] | $2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 110.36 | ||||||||||||
Interest rate | $2.05 million Senior Secured Convertible Debenture due in August 2020, ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 2.48 | ||||||||||||
Interest rate | $2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants and rights outstanding, Measurement Input | 1.55 | ||||||||||||
Advantech Capital Investment II Limited | Private placement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Common stock issuance (GTD) | $ 12,000,000 | ||||||||||||
Interest rate | 8.00% | ||||||||||||
Common stock issued from conversion of convertible note | 6,593,406 | ||||||||||||
Conversion price | $ 1.82 | ||||||||||||
Amount of beneficial conversion feature | $ 1,400,000 | ||||||||||||
Maturity date of the note | Jun. 28, 2021 | ||||||||||||
Interest expense recognized to beneficial conversion feature | $ 698,000 | $ 117,000 | $ 112,000 | $ 347,000 | $ 112,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 4 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2018 | Jul. 24, 2018 | Oct. 31, 2017 | May 31, 2017 | Jun. 30, 2018 | Jul. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stockholders Equity [Line Items] | |||||||||
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Amount of shares issued | $ 10,000,000 | ||||||||
Private placement | Investors, officers & directors and affiliates | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of shares issued | 727,273 | ||||||||
Shares Issued, Price Per Share | $ 2.75 | ||||||||
Amount of shares issued | $ 2,000,000 | ||||||||
Guo Yuan | Private placement | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of shares issued | 5,494,505 | ||||||||
Shares Issued, Price Per Share | $ 1.82 | ||||||||
Amount of shares issued | $ 10,000,000 | ||||||||
Subscription Agreement [Member] | GTD | Private placement | |||||||||
Stockholders Equity [Line Items] | |||||||||
Proceeds from Issuance of Common Stock | $ 10,000,000 | ||||||||
Total amount of investment | $ 10,000,000 | $ 40,000,000 | |||||||
Number of shares issued | 5,494,505 | ||||||||
Shares Issued, Price Per Share | $ 1.82 | ||||||||
Subscription Agreement [Member] | SSSIG | |||||||||
Stockholders Equity [Line Items] | |||||||||
Proceeds from Issuance of Common Stock | $ 1,100,000 | ||||||||
Total amount of investment | $ 1,100,000 | ||||||||
Number of shares expected to issued in 2019 | 572,917 | ||||||||
Share Purchase & Option Agreement [Member] | Star Thrive Group Limited [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of shares issued | 5,027,324 | 5,027,324 | |||||||
Amount of shares issued | $ 9,200,000 | ||||||||
Call option description | the Star may, within 24 months after July 24, 2018, purchase from the Company such number of shares of common stock that would bring Star's total ownership of the Company's issued and outstanding shares up to 19.5% on a fully diluted basis, at a price equal to 95% of the weighted average trading price of the common stock within 3 months prior to the exercise date of the Call Option. | the Star may, within 24 months after July 24, 2018, purchase from the Company such number of shares of common stock that would bring Star's total ownership of the Company's issued and outstanding shares up to 19.5% on a fully diluted basis, at a price equal to 95% of the weighted average trading price of the common stock within 3 months prior to the exercise date of the Call Option. | |||||||
Fair value of call option | $ 8,000,000 | ||||||||
Expected term | 1 year 9 months 22 days | ||||||||
Volatility rate | 132.55% | ||||||||
Risk-free interest rate | 2.81% | ||||||||
Dividend yield | 0.00% | ||||||||
Convertible preferred shares- Series A | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Series A preferred stock | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares issued | 7,000,000 | 7,000,000 | 7,000,000 | ||||||
Preferred stock, shares outstanding | 7,000,000 | 7,000,000 | |||||||
Number of common stock issued for conversion | 933,333 | ||||||||
Preferred stock, voting rights | ten vote | one vote | |||||||
Liquidation preference value, per share | $ 0.50 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Feb. 08, 2019 | Nov. 09, 2017 | May 10, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Related Party Transaction [Line Items] | |||||||||||||
Amount due to related parties | $ 800,822 | $ 434,030 | [1] | $ 2,565,812 | $ 2,565,812 | $ 800,822 | $ 434,030 | [1] | |||||
Interest expenses related to note | 120,000 | 120,000 | |||||||||||
Interest payable | $ 140,055 | 20,055 | $ 140,055 | $ 20,055 | |||||||||
Asia Times | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest rate of convertible note | 3.16% | 3.16% | |||||||||||
$2.5 Million Convertible Promissory Note | SSSIG | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Principal amount of convertible note | $ 2,500,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.83 | ||||||||||||
Advance received without any interest | $ 1,000,000 | $ 1,000,000 | |||||||||||
Maturity date of the note | Feb. 8, 2020 | ||||||||||||
Interest expenses related to note | 13,000 | 36,000 | |||||||||||
Principal amount of convertible note received | 1,300,000 | 1,300,000 | |||||||||||
Convertible promissory note amount not received | 1,500,000 | 1,200,000 | 1,200,000 | 1,500,000 | |||||||||
Mr. Shane McMahon | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest expenses related to note | 0 | $ 407,863 | |||||||||||
Mr. Shane McMahon | Convertible Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Amount due to related parties | $ 3,000,000 | ||||||||||||
Principal amount of convertible note | $ 3,000,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.5 | $ 1.75 | |||||||||||
Conversion price of convertible note after amendment | $ 1.5 | ||||||||||||
Maturity date of the note | Dec. 31, 2019 | Dec. 31, 2020 | |||||||||||
Interest expenses related to note | 30,000 | $ 30,000 | 90,000 | $ 90,000 | |||||||||
Interest payable | $ 140,055 | $ 229,808 | $ 229,808 | $ 140,055 | |||||||||
Bruno Wu ("Mr.Wu") | $2.5 Million Convertible Promissory Note | SSSIG | Subsequent Event | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Principal amount of convertible note | $ 2,500,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.83 | ||||||||||||
Maturity date of the note | Feb. 8, 2020 | ||||||||||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Related party Transactions - Ad
Related party Transactions - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Feb. 20, 2019USD ($) | Mar. 31, 2019USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 14, 2019item | Dec. 31, 2017USD ($) | [1] | |
Related Party Transaction [Line Items] | ||||||||
Purchase of crude oil, commitment amount | $ 244,100,000 | $ 244,000,000 | ||||||
Intangible assets, net | $ 81,960,331 | 3,036,352 | $ 148,874 | |||||
Licensed content, current | 0 | 16,958,149 | 16,958,149 | |||||
Long term investment | 42,159,313 | 26,408,609 | $ 6,975,511 | |||||
Salary, severance and expenses | $ 837,000 | $ 637,000 | ||||||
Due to other related parties | 200,000 | |||||||
Short-term Debt | 1,914,419 | $ 4,140,055 | ||||||
Selling, general and administrative expense | ||||||||
Related Party Transaction [Line Items] | ||||||||
Salary, severance and expenses | 837,000 | |||||||
Borrowing from Dr. Wu. and his affiliates | ||||||||
Related Party Transaction [Line Items] | ||||||||
Short-term Debt | $ 1,000,000 | |||||||
GTD | ||||||||
Related Party Transaction [Line Items] | ||||||||
Assets sold under agreements carrying amount | $ 20,400,000 | |||||||
Number of GTB received for services provided to GTD | item | 1,250,000 | |||||||
GTD | Digital asset management services | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of GTB received for services provided to GTD | item | 7,083,333 | |||||||
GTD | Animation copy right | ||||||||
Related Party Transaction [Line Items] | ||||||||
Intangible assets, net | $ 200,000 | |||||||
GTD | License content | ||||||||
Related Party Transaction [Line Items] | ||||||||
Licensed content, current | 17,000,000 | |||||||
GTD | Nanjing Shengyi Network Technology Co., Ltd | ||||||||
Related Party Transaction [Line Items] | ||||||||
Long term investment | $ 3,200,000 | |||||||
GTD | Nanjing Shengyi Network Technology Co., Ltd | Ideanomics, Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of ownership interest | 13.00% | |||||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Related Party Transactions (D_2
Related Party Transactions (Details) - USD ($) | Feb. 08, 2019 | Nov. 09, 2017 | May 10, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Related Party Transaction [Line Items] | |||||||||||||
Amount due to related parties | $ 800,822 | $ 434,030 | [1] | $ 2,565,812 | $ 2,565,812 | $ 800,822 | $ 434,030 | [1] | |||||
Interest expenses related to note | 120,000 | 120,000 | |||||||||||
Interest payable | $ 140,055 | 20,055 | $ 140,055 | $ 20,055 | |||||||||
Asia Times | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest rate of convertible note | 3.16% | 3.16% | |||||||||||
$2.5 Million Convertible Promissory Note | SSSIG | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Principal amount of convertible note | $ 2,500,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.83 | ||||||||||||
Advance received without any interest | $ 1,000,000 | $ 1,000,000 | |||||||||||
Maturity date of the note | Feb. 8, 2020 | ||||||||||||
Interest expenses related to note | 13,000 | 36,000 | |||||||||||
Principal amount of convertible note received | 1,300,000 | 1,300,000 | |||||||||||
Convertible promissory note amount not received | 1,500,000 | 1,200,000 | 1,200,000 | 1,500,000 | |||||||||
Mr. Shane McMahon | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest expenses related to note | 0 | $ 407,863 | |||||||||||
Mr. Shane McMahon | Convertible Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Amount due to related parties | $ 3,000,000 | ||||||||||||
Principal amount of convertible note | $ 3,000,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.5 | $ 1.75 | |||||||||||
Conversion price of convertible note after amendment | $ 1.5 | ||||||||||||
Maturity date of the note | Dec. 31, 2019 | Dec. 31, 2020 | |||||||||||
Interest expenses related to note | 30,000 | $ 30,000 | 90,000 | $ 90,000 | |||||||||
Interest payable | $ 140,055 | $ 229,808 | $ 229,808 | $ 140,055 | |||||||||
Bruno Wu ("Mr.Wu") | $2.5 Million Convertible Promissory Note | SSSIG | Subsequent Event | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Principal amount of convertible note | $ 2,500,000 | ||||||||||||
Interest rate of convertible note | 4.00% | ||||||||||||
Conversion price of note convertible | $ 1.83 | ||||||||||||
Maturity date of the note | Feb. 8, 2020 | ||||||||||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Related Party Transactions (D_3
Related Party Transactions (Detail Textuals 1) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2017 | [1] | Nov. 28, 2017 | |
Related Party Transaction [Line Items] | |||||
Long-term investments | $ 26,408,609 | $ 42,159,313 | $ 6,975,511 | ||
Asia Times | |||||
Related Party Transaction [Line Items] | |||||
Advance payment made | $ 1,200,000 | ||||
Interest rate of convertible note | 3.16% | ||||
Zhong Hai Shi Xun Media [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of equity ownership | 80.00% | ||||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Related Party Transactions (D_4
Related Party Transactions (Detail Textuals 2) - USD ($) | Sep. 07, 2018 | Sep. 28, 2018 | Sep. 17, 2018 | Jun. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | Oct. 31, 2018 | Sep. 07, 2017 |
Related Party Transaction [Line Items] | |||||||||
Convertible note-long term | $ 11,313,770 | $ 12,627,531 | |||||||
Stock Issued During Period, Value, Acquisitions | $ 7,800,000 | $ 7,800,000 | |||||||
Subscription Agreement [Member] | SSSIG | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total amount of investment | $ 1,100,000 | ||||||||
Subscription Agreement [Member] | Hooxi | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of common shares to be purchased pursuant to agreement | 1,173,333 | ||||||||
Stock Issued During Period, Value, Acquisitions | $ 2,000,000 | ||||||||
Payments to acquire common shares | $ 2,000,000 | ||||||||
Share Purchase Agreements With Sssig [Member] | Hooxi | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of common shares received at fair market value in consideration for the company's common stock of equivalent value | 8,583,034 | ||||||||
Number of additional common shares received as award of performance shares | 3,240,433 | ||||||||
Bruno Wu ("Mr.Wu") | Share Purchase & Option Agreement [Member] | Hooxi | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership interest acquired | 50.00% | ||||||||
Fintalk | Purchase and Assumption Agreement (the "SSIL Agreement") | SSSIG | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible note-long term | $ 1,000,000 | ||||||||
Common stock fair market value | $ 6,000,000 | ||||||||
Purchase price | $ 7,000,000 | ||||||||
Prepaid Expense | $ 1,000,000 |
Related Party Transactions (D_5
Related Party Transactions (Detail Textuals 3) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | [1] | |
Related Party Transactions | |||||||
Purchase of crude oil, commitment amount | $ 244,100,000 | $ 244,000,000 | |||||
Amount of sold crude oil | $ 2,854,178 | $ 0 | $ 43,554,178 | $ 0 | 99,718,005 | $ 18,973,054 | |
Consumer electronics sold to director of minority shareholder | $ 99,700,000 | ||||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Share-Based Payments (Details)
Share-Based Payments (Details) - Stock Options - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options Outstanding | |||
Outstanding at January 1, 2019 | 1,706,431 | 1,853,391 | |
Granted | 14,325,000 | 0 | |
Exercised | 0 | (136,961) | |
Expired | (83,333) | (9,999) | |
Forfeited | (976,667) | 0 | |
Outstanding at September 30, 2019 | 14,971,431 | 1,706,431 | 1,853,391 |
Vested and expected to be vested as of September 30, 2019 | 14,971,431 | 1,706,431 | |
Options exercisable at September 30, 2019 (vested) | 5,529,977 | 1,653,097 | |
Weighted Average Exercise Price | |||
Outstanding at January 1, 2019 | $ 3.28 | $ 3.2 | |
Granted | 1.98 | 0 | |
Exercised | 0 | 2.34 | |
Expired | 1.98 | 1.58 | |
Forfeited | 1.98 | 0 | |
Outstanding at September 30, 2019 | 2.13 | 3.28 | $ 3.2 |
Vested and expected to be vested as of September 30, 2019 | 2.13 | 3.28 | |
Options exercisable at September 30, 2019 (vested) | $ 2.38 | $ 3.33 | |
Weighted Average Remaining Contractual Life (Years) | |||
Outstanding at January 1,, 2019 | 8 years 8 months 19 days | 4 years 29 days | 2 years 11 months 27 days |
Granted | 8 years 9 months | ||
Outstanding at September 30,2019 | 8 years 8 months 19 days | 4 years 29 days | 2 years 11 months 27 days |
Vested and expected to be vested as of September 30, 2019 | 8 years 8 months 19 days | 4 years 29 days | |
Options exercisable at September 30, 2019 (vested) | 7 years 6 months 18 days | 3 years 11 months 9 days | |
Aggregated Intrinsic Value | |||
Outstanding at January 1, 2019 | $ 0 | $ 0 | $ 0.02 |
Vested and expected to be vested as of September 30, 2019 | 0 | 0 | |
Options exercisable at September 30, 2019 (vested) | $ 0 | $ 0 |
Share-Based Payments - Warrants
Share-Based Payments - Warrants (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 24, 2018 | Apr. 24, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right [Line Items] | |||||
Number of Warrants Outstanding and Exercisable | 3,709,240 | 60,000 | 8,000,000 | 8,000,000 | 2,521,896 |
Exercise price of warrants | $ 1.84 | $ 1.75 | $ 5.375 | $ 5.375 | |
2014 Broker Warrants (Series E Financing) | |||||
Class of Warrant or Right [Line Items] | |||||
Number of Warrants Outstanding and Exercisable | 0 | 60,000 | 703,714 | ||
Exercise price of warrants | $ 1.75 | $ 1.75 | |||
Expiration Date | Jan. 31, 2019 | Jan. 31, 2019 | |||
Two Thousand Sixteen Warrants To Sss Member | |||||
Class of Warrant or Right [Line Items] | |||||
Number of Warrants Outstanding and Exercisable | 0 | 1,818,182 | |||
Exercise price of warrants | $ 2.75 | ||||
Expiration Date | Mar. 28, 2018 | ||||
$2.05 million IDV Senior Secured Convertible Debenture | |||||
Class of Warrant or Right [Line Items] | |||||
Number of Warrants Outstanding and Exercisable | 1,671,196 | 0 | |||
Exercise price of warrants | $ 1.84 | $ 1.84 | |||
Expiration Date | Feb. 22, 2024 | Feb. 22, 2024 | |||
$2.5 million IDV Senior Secured Convertible Debenture | |||||
Class of Warrant or Right [Line Items] | |||||
Number of Warrants Outstanding and Exercisable | 2,038,044 | 0 | |||
Exercise price of warrants | $ 1.84 | $ 1.84 | |||
Expiration Date | Sep. 27, 2024 | Sep. 27, 2024 |
Share-Based Payments - Summary
Share-Based Payments - Summary of unvested shares (Details) - Restricted Stock - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Shares | ||
Non-vested restricted shares outstanding at January 1, 2019 | 87,586 | 109,586 |
Granted | 129,840 | 1,342,743 |
Forfeited | (3,000) | (100,000) |
Vested | (158,840) | (1,264,743) |
Non-vested restricted shares outstanding at September 30, 2019 | 55,586 | 87,586 |
Weighted-average fair value | ||
Non-vested restricted shares outstanding at January 1, 2019 | $ 2.46 | $ 1.92 |
Granted | 1.24 | 2.58 |
Forfeited | 2.60 | 2.27 |
Vested | 1.49 | 2.56 |
Non-vested restricted shares outstanding at September 30, 2019 | $ 2.37 | $ 2.46 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Details) | Sep. 24, 2018$ / sharesshares | Jan. 31, 2019USD ($)directorshares | Jun. 30, 2018USD ($)shares | Apr. 30, 2018USD ($)shares | Apr. 24, 2018$ / sharesshares | Oct. 31, 2017USD ($)directorshares | Apr. 30, 2017USD ($)shares | Mar. 31, 2017USD ($)shares | Jan. 31, 2017USD ($)employeeshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Aug. 03, 2018shares | Dec. 03, 2010shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Warrants outstanding to purchase shares of common stock | 8,000,000 | 8,000,000 | 3,709,240 | 3,709,240 | 60,000 | 2,521,896 | |||||||||||
Share-based payments expense | $ | $ 2,547,107 | $ 11,530 | $ 6,474,227 | $ 3,372,447 | $ 3,400,000 | $ 1,300,000 | |||||||||||
Unrecognized compensation expense related to non-vested share options | $ | $ 14,255,266 | 14,255,266 | 64,960 | ||||||||||||||
Total fair value of vested shares | $ | $ 6,010,085 | 319,001 | $ 364,001 | 974,237 | |||||||||||||
Weighted average exercise price of warrants | $ / shares | $ 5.375 | $ 5.375 | $ 1.84 | $ 1.84 | $ 1.75 | ||||||||||||
Weighted average remaining life of warrants | 4 years 8 months 23 days | 29 days | |||||||||||||||
Cash received from options exercised | $ | $ 0 | $ 2,632 | $ 28,000 | 100,000 | |||||||||||||
Cash received from warrants exercised | $ | $ 1,126,000 | $ 1,725,000 | |||||||||||||||
Percentage of premium on exercise price | 25.00% | 25.00% | |||||||||||||||
Closing market price | $ / shares | $ 4.30 | $ 4.30 | |||||||||||||||
Weighted average period for recognition related to non-vested stock options | 1 year 4 months 24 days | 1 year 5 months 5 days | |||||||||||||||
2010 Stock Incentive Plan ("the Plan") | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Number of shares authorized for issuance | 31,500,000 | 31,500,000 | 31,500,000 | 4,000,000 | |||||||||||||
Number of options available for issuance | 14,160,326 | 14,160,326 | 27,635,499 | ||||||||||||||
Employee [Member] | 2010 Stock Incentive Plan ("the Plan") | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Restricted shares granted | 1,342,743 | 1,342,743 | |||||||||||||||
Restricted shares, vesting period | 2 years | 2 years | |||||||||||||||
Amount of grant date fair value of the restricted shares | $ | $ 3,469,532 | $ 3,469,532 | |||||||||||||||
Restricted shares vested | 1,239,743 | 1,239,743 | |||||||||||||||
Board of Directors | 2010 Stock Incentive Plan ("the Plan") | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Restricted shares granted | 129,840 | 4,488 | |||||||||||||||
Amount of grant date fair value of the restricted shares | $ | $ 161,001 | $ 100,000 | |||||||||||||||
Number of directors | director | 2 | 4 | |||||||||||||||
Restricted Stock | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Options outstanding to purchase shares of common stock | 87,586 | ||||||||||||||||
Number of non-vested restricted shares | 55,586 | 55,586 | 87,586 | 109,586 | |||||||||||||
Restricted shares granted | 129,840 | 1,342,743 | |||||||||||||||
Restricted shares vested | 158,840 | 1,264,743 | |||||||||||||||
Unrecognized compensation cost related to unvested restricted shares | $ | $ 33,800 | $ 33,800 | $ 131,950 | ||||||||||||||
Weighted average period for recognition related to non-vested stock options | 6 months 4 days | 1 year 3 months 4 days | |||||||||||||||
Restricted Stock | 2010 Stock Incentive Plan ("the Plan") | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Restricted shares granted | 365,000 | 365,000 | 35,000 | ||||||||||||||
Number of employees | employee | 1 | ||||||||||||||||
Restricted shares, vesting period | 4 years | 4 years | 4 years | ||||||||||||||
Amount of grant date fair value of the restricted shares | $ | $ 778,200 | $ 778,200 | $ 43,750 | ||||||||||||||
Stock Options | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Options outstanding to purchase shares of common stock | 14,971,431 | 14,971,431 | 1,706,431 | 1,853,391 | |||||||||||||
Stock options issued to employees | 14,325,000 | 0 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Expected term | 5 years 4 months 24 days |
Expected volatility | 55.00% |
Risk-free interest rate | 2.04% |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Expected term | 5 years 10 months 24 days |
Expected volatility | 85.00% |
Risk-free interest rate | 2.29% |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings (Loss) Per Common Share | ||||||
Net earnings (loss) attributable to common stockholders | $ (13,711,867) | $ (7,186,847) | $ 11,506,861 | $ (19,228,240) | ||
Interest expense attributable to convertible promissory note | 0 | 0 | 125,485 | 0 | ||
Net earnings (loss) assuming dilution | $ (13,711,867) | $ (7,186,847) | $ 11,632,346 | $ (19,228,240) | ||
Basic weighted average common shares outstanding | 127,609,748 | 74,063,495 | 113,964,933 | 71,574,303 | 78,386,116 | 61,182,209 |
Effect of dilutive securities | ||||||
Convertible preferred shares- Series A | 933,333 | |||||
Conversion of restricted shares and employee stock options | 22,823 | |||||
Convertible promissory notes | 2,777,687 | |||||
Contingently issuable shares | 621,117 | 0 | ||||
Diluted potential common shares | 127,609,748 | 74,063,495 | 118,319,893 | 71,574,303 | 78,386,116 | 61,182,209 |
Net earnings (loss) per share: | ||||||
Basic | $ (0.11) | $ (0.10) | $ 0.10 | $ (0.27) | $ 0.35 | $ 0.17 |
Diluted | $ (0.11) | $ (0.10) | $ 0.10 | $ (0.27) | $ 0.35 | $ 0.17 |
Earnings (Loss) Per Common Sh_4
Earnings (Loss) Per Common Share - Computation of diluted earnings (loss) per share (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 34,354,721 | 13,017,857 | 30,322,557 | 13,017,857 | 13,106,997 | 40,964,909 |
Exercise of stock warrants | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 3,709,240 | 60,000 | 3,709,240 | 60,000 | 60,000 | 2,521,896 |
Stock Options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 14,971,431 | 1,797,017 | 14,965,598 | 1,797,017 | 1,706,431 | 2,162,977 |
Series A preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 933,333 | 933,333 | 0 | 933,333 | 933,333 | 933,333 |
Convertible promissory note and interest | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 12,417,909 | 10,227,507 | 9,324,911 | 10,227,507 | 10,407,233 | 35,346,703 |
Contingently issuable shares | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 2,322,808 | 2,322,808 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Operating Loss Carryforwards [Line Items] | |||||||
Loss before tax | $ (12,304,483) | $ (7,441,820) | $ 12,367,119 | $ (19,865,554) | $ (28,463,328) | $ (10,860,317) | [1] |
Deferred tax benefit of net operating loss | 0 | 0 | |||||
Total income tax benefit | $ 0 | $ 0 | $ 513,935 | $ 0 | 40,244 | ||
United States | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Loss before tax | (13,139,622) | (841,323) | |||||
Deferred tax benefit of net operating loss | 0 | 0 | |||||
Deferred tax benefit other than benefit of net operating loss | 40,244 | 0 | |||||
PRC/Hong Kong | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Loss before tax | (15,323,706) | (10,018,994) | |||||
Deferred tax benefit of net operating loss | 0 | 0 | |||||
Deferred tax benefit other than benefit of net operating loss | $ 0 | $ 0 | |||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||||||
Income tax benefit | $ 0 | $ 0 | $ (513,935) | $ 0 | $ (40,244) | |
Effective income tax rate | 4.43% | 0.00% | 0.00% | |||
Valuation allowance | 361,059 | $ 361,059 | $ 15,467,751 | $ 12,440,744 | ||
U.S domestic cumulative tax loss carryforwards | 9,900,000 | 9,900,000 | 7,977,213 | 6,152,242 | ||
Foreign cumulative tax loss carryforwards | $ 30,900,000 | 30,900,000 | $ 6,406,052 | $ 5,365,437 | ||
Security purchase agreement with Grapevine | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Benefit from reduction in deferred tax valuation allowance | $ 152,876 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
U. S. statutory income tax rate | 21.00% | 34.00% | |
Non-deductible expenses: | |||
Non-deductible stock awards | (1.20%) | 0.00% | |
Waiver of intercompany loan related to ZHV disposal | 0.00% | 14.70% | |
Others | (0.90%) | (2.90%) | |
Non-deductible interest expenses | (0.60%) | (0.40%) | |
Non-taxable change in fair value warrant liabilities | 0.00% | (0.40%) | |
Increase in valuation allowance | (18.40%) | (21.60%) | |
Tax rate differential | 0.10% | (23.40%) | |
Effective income tax rate | 4.43% | 0.00% | 0.00% |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes | |||
U.S. NOL | $ 9,900,000 | $ 7,977,213 | $ 6,152,242 |
Foreign NOL | 30,900,000 | 6,406,052 | 5,365,437 |
Accrued payroll and expense | 131,867 | 132,812 | |
Nonqualified options | 780,800 | 760,213 | |
Others | 171,819 | 30,040 | |
Total deferred tax assets | 15,467,751 | 12,440,744 | |
Less: valuation allowance | $ (361,059) | $ (15,467,751) | $ (12,440,744) |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
PRC income tax rate | 25.00% | ||
Withholding income tax rate | 10.00% | ||
Withholding tax on dividends rate | 5.00% | ||
Reduction in deferred tax assets due to change in tax rate | $ 4.4 | ||
Cumulative tax loss carryforwards | $ 26.8 | ||
Valuation allowance increased (decreased) | 3 | ||
Results of operations, revenue, other | 2.3 | ||
Deferred Tax Liabilities | $ 0.7 | ||
Capital loss carryover available To offset future capital gains expires in 2024 | 0.4 | ||
United States | |||
Operating Loss Carryforwards [Line Items] | |||
Cumulative tax loss carryforwards | 38.9 | ||
PRC/Hong Kong | |||
Operating Loss Carryforwards [Line Items] | |||
Cumulative tax loss carryforwards | $ 28.3 |
Contingencies and Commitments_2
Contingencies and Commitments (Details) | Dec. 31, 2018USD ($) |
Years ending December 31, | |
2019 | $ 1,728,670 |
2020 | 1,341,024 |
2021 | 1,202,496 |
2022 | 1,294,781 |
2023 | 1,343,668 |
Thereafter | 2,587,280 |
Total | $ 9,497,919 |
Concentration, Credit and Oth_3
Concentration, Credit and Other Risks (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Bank Deposits [Line Items] | |||
Total | $ 1,686,596 | $ 3,106,244 | $ 7,577,317 |
PRC | PRC | |||
Bank Deposits [Line Items] | |||
Total | 110,005 | 1,523,622 | 693,584 |
U.S dollar denominated bank deposits | PRC | |||
Bank Deposits [Line Items] | |||
Total | 30,666 | 133,053 | 628,481 |
U.S dollar denominated bank deposits | Hong Kong | |||
Bank Deposits [Line Items] | |||
Total | 13,708 | 44,182 | 1,505,271 |
U.S dollar denominated bank deposits | Singapore | |||
Bank Deposits [Line Items] | |||
Total | 569,707 | 697,099 | 1,033,769 |
U.S dollar denominated bank deposits | USA | |||
Bank Deposits [Line Items] | |||
Total | 874,093 | 695,155 | 3,698,704 |
HKD denominated bank deposits | Hong Kong | |||
Bank Deposits [Line Items] | |||
Total | 17,985 | 13,133 | $ 17,508 |
SGD denominated bank deposits | Singapore | |||
Bank Deposits [Line Items] | |||
Total | $ 70,432 | $ 0 |
Concentration, Credit and Oth_4
Concentration, Credit and Other Risks - Major Customers (Details) - Major Customers - customer | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Wecast Services | Revenue | ||||
Revenue, Major Customer [Line Items] | ||||
Description of percentage of revenue for major customer | more than 10 | more than 10 | ||
Number of customers | 2 | 2 | ||
Wecast Services | Accounts receivables | ||||
Revenue, Major Customer [Line Items] | ||||
Description of percentage of revenue for major customer | more than 10 | more than 10 | ||
Number of customers | 2 | 2 | ||
Legacy YOD | Revenue | ||||
Revenue, Major Customer [Line Items] | ||||
Description of percentage of revenue for major customer | more than 10 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Revenue | ||||
Revenue, Major Customer [Line Items] | ||||
Description of percentage of revenue for major customer | more than 10 | more than 10 | ||
Number of customers | 1 | 1 | ||
Mobile Energy Group, Formerly We Cast Services [Member] | Accounts receivables | ||||
Revenue, Major Customer [Line Items] | ||||
Description of percentage of revenue for major customer | more than 10 | more than 10 | ||
Number of customers | 1 | 1 |
Concentration, Credit and Oth_5
Concentration, Credit and Other Risks - Major Suppliers (Details) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($)item | Sep. 30, 2018item | Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($) | |
Digital currency [line items] | ||||||
Insured deposit | $ 855,915 | $ 0 | $ 369,280 | |||
Major Suppliers | Cost of revenues | ||||||
Digital currency [line items] | ||||||
Description of percentage of revenue for major supplier | more than 10 | |||||
Number of suppliers | item | 2 | |||||
Major Suppliers | Accounts payable | ||||||
Digital currency [line items] | ||||||
Description of percentage of revenue for major supplier | more than 10 | more than 10 | ||||
Number of suppliers | item | 1 | 2 | ||||
Legacy YOD | Licensed Content Commitment | ||||||
Digital currency [line items] | ||||||
Cost of revenue | $ 17,700,000 | |||||
Legacy YOD | Major Suppliers | Cost of revenues | ||||||
Digital currency [line items] | ||||||
Cost of revenue | $ 800,000 | |||||
Legacy YOD | Major Suppliers | Cost of revenues | Content partner | ||||||
Digital currency [line items] | ||||||
Description of percentage of revenue for major supplier | more than 10 | |||||
Legacy YOD | Major Suppliers | Revenue | ||||||
Digital currency [line items] | ||||||
Revenue | $ 800,000 | |||||
Wecast Services | Major Suppliers | Cost of revenues | ||||||
Digital currency [line items] | ||||||
Description of percentage of revenue for major supplier | more than 10 | more than 10 | ||||
Number of suppliers | customer | 3 | 5 | ||||
Wecast Services | Major Suppliers | Accounts payable | ||||||
Digital currency [line items] | ||||||
Description of percentage of revenue for major supplier | more than | more than | ||||
Number of suppliers | customer | 2 | 2 | ||||
GTBs | ||||||
Digital currency [line items] | ||||||
Number of GTB tokens held | item | 8,333,333 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan | ||||||
Employer matching contribution, percent | 100.00% | 100.00% | ||||
Employer matching contribution, description | 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee's pay. Employees become fully vested in employer matching contributions after six months of employment. | |||||
Employer matching contribution, amount | $ 8,700 | $ 487 | $ 8,700 | $ 3,242 | $ 3,242 | $ 13,173 |
Maximum [Member] | ||||||
Defined Contribution Plan | ||||||
Employer matching contribution pay, percent | 4.00% | |||||
PRC | ||||||
Defined Contribution Plan | ||||||
Employer matching contribution, amount | $ 113,654 | $ 235,811 | $ 267,868 | $ 607,872 | $ 456,268 | $ 439,227 |
Segments and Geographic Areas_2
Segments and Geographic Areas (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | $ 3,103,690 | $ 43,707,937 | $ 44,503,562 | $ 362,628,296 | $ 377,742,872 | $ 144,352,840 | [1] |
Cost of Sales | |||||||
Cost of Sales | 243,360 | 42,844,876 | 750,290 | 115,729,433 | 130,464,906 | 137,188,393 | [1] |
GROSS PROFIT | |||||||
Gross profit | 2,860,330 | 863,061 | 43,286,378 | 2,788,731 | 3,167,834 | 7,164,447 | [1] |
TOTAL ASSETS | |||||||
Assets | 164,763,676 | 164,763,676 | 94,235,112 | 63,444,488 | [2] | ||
Operating Segments | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 44,503,562 | 362,628,296 | 377,742,872 | 144,352,840 | |||
GROSS PROFIT | |||||||
Gross profit | 43,286,378 | 2,788,731 | 3,167,834 | 7,164,447 | |||
TOTAL ASSETS | |||||||
Assets | 164,763,676 | 164,763,676 | 94,235,112 | ||||
Legacy YOD | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 0 | 0 | |||||
Legacy YOD | Operating Segments | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 0 | 0 | 0 | 794,273 | |||
Cost of Sales | |||||||
Cost of Sales | 0 | 0 | |||||
GROSS PROFIT | |||||||
Gross profit | 0 | 31,659 | |||||
TOTAL ASSETS | |||||||
Assets | 635,128 | 635,128 | 26,442,810 | 27,141,163 | |||
Wecast Services | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 377,742,872 | 143,558,567 | |||||
Wecast Services | Operating Segments | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 377,742,872 | 143,558,567 | |||||
GROSS PROFIT | |||||||
Gross profit | 3,167,834 | 7,132,788 | |||||
TOTAL ASSETS | |||||||
Assets | 51,592,929 | $ 30,084,607 | |||||
Mobile Energy Group, Formerly We Cast Services [Member] | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 3,103,690 | $ 43,707,937 | 44,503,562 | 362,628,296 | |||
Mobile Energy Group, Formerly We Cast Services [Member] | Operating Segments | |||||||
NET SALES TO EXTERNAL CUSTOMERS | |||||||
Net sales | 44,503,562 | 362,628,296 | |||||
Cost of Sales | |||||||
Cost of Sales | 1,217,184 | $ 359,839,565 | |||||
TOTAL ASSETS | |||||||
Assets | 164,128,548 | 164,128,548 | 51,592,929 | ||||
Unallocated | Operating Segments | |||||||
TOTAL ASSETS | |||||||
Assets | $ 0 | $ 0 | $ 16,199,373 | ||||
[1] | The above consolidated statements of operations include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) | ||||||
[2] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Segments and Geographic Areas -
Segments and Geographic Areas - Additional Information (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segments and Geographic Areas | ||
Number of operating segments | 2 | 2 |
Segments and Geographic Areas_3
Segments and Geographic Areas (Details 1) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets [Abstract] | ||||
Total | $ 164,763,676 | $ 94,235,112 | $ 63,444,488 | [1] |
Operating Segments | ||||
Assets [Abstract] | ||||
Total | 164,763,676 | 94,235,112 | ||
Unallocated assets | ||||
Assets [Abstract] | ||||
Total | 16,199,373 | 11,270,378 | ||
Intersegment Eliminations [Member] | ||||
Assets [Abstract] | ||||
Total | 0 | (5,051,660) | ||
Legacy YOD | Operating Segments | ||||
Assets [Abstract] | ||||
Total | $ 635,128 | 26,442,810 | 27,141,163 | |
Wecast Services | Operating Segments | ||||
Assets [Abstract] | ||||
Total | $ 51,592,929 | $ 30,084,607 | ||
[1] | The above consolidated balance sheets include Shanghai Guang Ming Investment Management Limited (“Guang Ming”). The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Going Concern and Management'_2
Going Concern and Management's Plans (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 27, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | |
Going Concern and Management's Plans | ||||||||
Cash and cash equivalents | $ 1,686,596 | $ 3,106,244 | $ 16,030,248 | $ 7,577,317 | $ 4,079,769 | |||
Red Rock Group Limited | ||||||||
Going Concern and Management's Plans | ||||||||
Consideration to be received | 700,000 | |||||||
$2.5 million Senior Secured Convertible Debenture due in March 2021 - ID Ventura 7 [Member] | ||||||||
Going Concern and Management's Plans | ||||||||
Senior secured convertible note | $ 2,500,000 | $ 2,500,000 | ||||||
Convertible Note | SSSIG | ||||||||
Going Concern and Management's Plans | ||||||||
Additional cash received | $ 1,500,000 | |||||||
[1] | The above consolidated statements of cash flows include Guang Ming. The acquisition of Guang Ming was completed on April 4, 2018 and accounted for as a reorganization of entities under common control and as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 80550 (See Note 6 “Acquisition”) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Sep. 30, 2019USD ($) | [1] |
Fair Value Measurements | ||
Contingent Consideration Liability | $ 2,327,919 | |
Level I | ||
Fair Value Measurements | ||
Contingent Consideration Liability | 0 | |
Level II | ||
Fair Value Measurements | ||
Contingent Consideration Liability | 0 | |
Level III | ||
Fair Value Measurements | ||
Contingent Consideration Liability | $ 2,327,919 | |
[1] | This represents the liability incurred in connection with the acquisition of DBOT shares during Q3 2019 as disclosed in Note 5(f) |
Fair Value Measurements - Signi
Fair Value Measurements - Significant inputs and assumptions (Details) | Sep. 30, 2019 |
Interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 1.8 |
Expected volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 30 |
Expected life | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 0.5 |
Expected dividend rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 fair value measurements (Details) - Contingent consideration liability [Member] | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning | $ 0 |
Addition | (2,217,034) |
Remeasurement (loss)/gain recognized in the income statement | (110,885) |
Balance at the end | $ (2,327,919) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 29, 2019 | Oct. 28, 2019 | Sep. 30, 2019 | Sep. 27, 2019 | Dec. 31, 2018 | Sep. 24, 2018 | Apr. 24, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Exercise price of warrants | $ 1.84 | $ 1.75 | $ 5.375 | $ 5.375 | ||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
GTB quoted price | $ 1.84 | $ 17 | ||||||
Additional Issuance Agreement with ID Venturas 7, LLC [Member] | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Amount invested | $ 400,000 | |||||||
Additional investment rights granted | $ 2,500,000 | |||||||
Conversion price | $ 1 | |||||||
Percentage Of Warrant Exercisable | 150.00% | |||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Interest rate | 10.00% | |||||||
Security purchase agreement with ID Venturas 7, LLC [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate | 10.00% | |||||||
Letter agreement [Member] | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Exercise price of warrants | $ 1 |
Subsequent Event (Detail Textua
Subsequent Event (Detail Textuals) - USD ($) | Jul. 18, 2019 | Mar. 05, 2019 | Feb. 19, 2019 | Feb. 22, 2019 | Feb. 20, 2019 | Feb. 19, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Mar. 14, 2019 | Sep. 24, 2018 | Apr. 24, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||||||||||
Exercise price of warrants | $ 1.75 | $ 1.84 | $ 5.375 | $ 5.375 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Stock Issued During Period, Value, New Issues | $ 10,000,000 | |||||||||||
Former Chief Executive Officer | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Salary, severance and expenses | $ 423,000 | |||||||||||
Former Chief Investment Officer | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Salary, severance and expenses | 296,000 | |||||||||||
Former Chief Strategy Officer | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Salary, severance and expenses | $ 118,000 | |||||||||||
Solid Opinion | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 4,500,000 | |||||||||||
Escrow Shares | 450,000 | |||||||||||
Cash Included In Acquisition Of Assets | $ 2,500,000 | |||||||||||
ID Venturas 7, LLC | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 1,166,113 | |||||||||||
Debt Instrument, Face Amount | $ 2,050,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||
Debt Instrument, Maturity Date | Aug. 22, 2020 | |||||||||||
Common Stock, Par or Stated Value Per Share | $ 1.84 | |||||||||||
Percentage of warrant exercisable | 150.00% | |||||||||||
Gt Dollar Ptd. Ltd [Member] | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Assets Sold Under Agreements Carrying Amount | $ 20,400,000 | |||||||||||
Assets Sold Under Agreements Carrying Amount Share | 1,250,000 | |||||||||||
Assets Sold Under Agreements Fair Value | $ 30,000,000 | |||||||||||
Gt Dollar Ptd. Ltd [Member] | Animation copy right | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Assets Sold Under Agreements Carrying Amount | 200,000 | |||||||||||
Gt Dollar Ptd. Ltd [Member] | License content | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Assets Sold Under Agreements Carrying Amount | 3,200,000 | |||||||||||
Gt Dollar Ptd. Ltd [Member] | Nanjing Shengyi Network Technology Co., Ltd | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Assets Sold Under Agreements Carrying Amount | $ 17,000,000 | |||||||||||
Tree Motion Sdn. Bhd. ("Tree Motion") | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 25,500,000 | |||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 51.00% | |||||||||||
Shares Issued, Price Per Share | $ 2 | |||||||||||
Tree Motion Sdn. Bhd. ("Tree Motion") | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 12,190,000 | |||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 11.22% | |||||||||||
Stock Issued During Period, Value, New Issues | $ 620,000 | |||||||||||
Tree Motion Sdn. Bhd. ("Tree Motion") | MALAYSIA | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 25,500,000 | |||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 51.00% | |||||||||||
Shares Issued, Price Per Share | $ 2 |