Restructuring

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

On September 12, 2022, the Board authorized management to pursue a plan to restructure the current EV resale activities in China. While the current operational activities will decline in scale during 2023, the company will continue to source materials from Chinese suppliers through its procurement team in China and evaluate opportunities for the sale of current Ideanomics' subsidiaries technologies in China. We believe that this change in the scope of activities in China will result in a significant reduction in the number of operating entities, a simplification of the legal entity structure and a pivot to margin expansion opportunities.

As of September 30, 2023 and December 31, 2022, the Company recorded charges of $0.9 million and $1.2 million in connection with its China restructuring actions on the consolidated balance sheet. The restructuring charges consist of employee termination costs of $0.9 million and $1.1 million, respectively. Employee termination benefits were recorded based on statutory requirements, completed negotiations and Company policy.

In the second quarter of 2023, the Company decided to wind down Tree Technology business, Accordingly the Company recorded employee termination cost of $0.4 million related to Tree Technology wind-down as of September 30, 2023.

The following table summarizes the charges in connection with its employee termination cost (in thousands):

	Nine Months Ended
	September 30, 2023		September 30, 2022
Balance at the beginning of the period	$	1,056	$	—
Increase/(decrease)	608		—
Payment	$	(349)	$	—
Balance at the end of the period	$	1,314	$	—

As of September 30, 2023 China and Tree Technology had completed all expected run-off activities and consequently was classified as a discontinued operation. For further details, please refer to Note 1 in the unaudited condensed consolidated financial statements.