UNITED STATES

~~UNITED STATES~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: June 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-35850

~~MICT,~~TINGO GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		27-0016420
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

28 West Grand Avenue, Suite 3, Montvale, NJ		07645
(Address of principal executive offices)		(Zip Code)

	(201) 225-0190
	(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common ~~Stock,~~stock, par value $0.001 per share		TIO	~~MICT~~		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August ~~22, 2022,~~30, 2023, there were ~~129,566,207~~205,219,048 issued and outstanding shares of the registrant’s ~~Common Stock,~~common stock, $0.001 par value per ~~share.~~share (the “Common Stock”).

TABLE OF CONTENTS

	PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3829

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	5142

Item 4.	Controls and Procedures.	5142

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	43

Item 1A.	Risk Factors.	5243

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	43

Item 3.	Defaults Upon Senior Securities.	43

Item 4.	Mine Safety Disclosures.	43

Item 5.	Other Information.	43

Item 6.	Exhibits.	5344

SIGNATURES			45
~~SIGNATURES~~	54

EXHIBIT INDEX		53

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

~~MICT,~~TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(USD In Thousands, Except Share and Par Value Data)

	June 30, 2022		December 31, 2021		June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash	$	76,053	$	94,930
Cash and cash equivalents					$	53,195	$	500,316
Trade accounts receivable, net		12,025		17,879		366,022		11,541
Related parties		7,358		5,134
Inventories						142		-
Related party receivables						8,812		13,491
Other current assets		8,096		9,554		153,979		5,828
Total current assets		103,532		127,497		582,150		531,176

Property and equipment, net		666		677		591,282		855,125
Intangible assets, net		19,848		21,442		292,801		185,407
Goodwill		19,788		19,788		211,849		101,247
Right of use assets		1,583		1,921
Long-term deposit and prepaid expenses		618		824
Right of use assets under operating lease						1,400		2,260
Long-term deposit and other non-current assets						463		514
Deferred tax assets		2,531		1,764		3,549		3,661
Restricted cash escrow		2,299		2,417		1,379		2,233
Micronet Ltd. equity method investment		1,110		1,481		315		735
Total long-term assets		48,443		50,314		1,103,038		1,151,182

Total assets	$	151,975	$	177,811	$	1,685,188	$	1,682,358

~~MICT,~~TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(USD In Thousands, Except Share and Par Value Data)

June 30,
2022 December 31,
2021
LIABILITIES AND EQUITY

Short-term loan $ 922 $ 1,657
Trade accounts payable 8,328 14,416
Deposit held on behalf of clients 1,479 3,101
Related party 256 4
Lease liabilities – current portion 1,026 1,298
Other current liabilities 6,606 4,914
Total current liabilities 18,617 25,390

Lease liabilities 699 691
Deferred tax liabilities 3,544 3,952
Accrued severance pay 50 56
Total long-term liabilities 4,293 4,699
Total liabilities 22,910 30,089

Stockholders’ Equity:
Common stock; $0.001 par value, 250,000,000 shares authorized, 129,566,207 and 122,435,576 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively 129 122
Additional paid in capital 224,838 220,786
Accumulated other comprehensive income (loss) 124 (414 )
Accumulated deficit (99,417 ) (76,394 )
MICT, Inc. stockholders’ equity 125,674 144,100

Non-controlling interests 3,391 3,622

Total equity 129,065 147,722

Total liabilities and equity $ 151,975 $ 177,811

	June 30, 2023			December 31, 2022
LIABILITIES, TEMPORARY EQUITY AND EQUITY

Short-term loan	$	165		$	460
Trade accounts payable		149,483			11,092
Deposit held on behalf of clients		1,493			2,528
Related party payables		25,606			57,506
Current operating lease liability		834			1,215
Other current liabilities		112,865			192,594
Total current liabilities		290,446			265,395

Long-term loan		-			377
Long-term operating lease liability		507			905
Promissory note		207,912			-
Deferred tax liabilities		108,974			89,597
Other long-term liability		644			-
Accrued severance pay		47			50
Total long-term liabilities		318,084			90,929

Commitment and Contingencies (Note 11)		-			-

Temporary equity
Series B preferred stock subject to redemption: $0.001 par value, 33,687.21 shares authorized and 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.		553,035			553,035

Stockholders’ Equity:
Series A preferred stock: $0.001 par value, 2,604.28 shares authorized and 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		3			3
Common stock: $0.001 par value, 750,000,000 shares authorized, 164,968,599 and 157,599,882 shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively		165			158
Additional paid-in capital		893,471			889,579
Accumulated other comprehensive income (loss)		(520,627	)		4,367
Accumulated earnings (deficit)		149,785			(123,463	)
Tingo Group, Inc. stockholders’ equity		522,797			770,644

Non-controlling interest		826			2,355

Total stockholders’ equity		523,623			772,999

Total liabilities, temporary equity and stockholders’ equity	$	1,685,188		$	1,682,358

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(USD In Thousands, Except Share and Earnings Per Share Data)

	For the six months ended June 30,						For the three months ended June 30,
	2023			2022			2023			2022

Revenues	$	1,828,414		$	21,521		$	977,169		$	11,958
Cost of revenues		1,095,544			18,183			631,153			9,885
Gross profit		732,870			3,338			346,016			2,073

Operating expenses:
Research and development		696			941			333			346
Selling and marketing		174,207			3,552			89,139			1,035
General and administrative		53,043			20,991			23,416			13,665
Amortization of intangible assets		23,763			1,594			12,644			797
Loss from deconsolidation of subsidiaries		3,333			-			3,333			-
Impairment of long-term assets and goodwill		35,438			-			35,438			-
Total operating expenses		290,480			27,078			164,303			15,843

Profit (loss) from operations		442,390			(23,740	)		181,713			(13,770	)
Other income (loss), net		(363	)		838			(788	)		683
Financial income (expenses), net		(21,377	)		(1,089	)		(22,821	)		(1,167	)
Profit (loss) before provision for income taxes		420,650			(23,991	)		158,104			(14,254	)
Income tax expenses (benefit)		147,695			(1,081	)		61,781			(5	)

Net profit (loss) after provision for income taxes		272,955			(22,910	)		96,323			(14,249	)
Loss from equity investment		(420	)		(371	)		(212	)		(187	)
Net profit (loss)		272,535			(23,281	)		96,111			(14,436	)
Net loss attributable to non-controlling interests		(713	)		(258	)		(397	)		(99	)

Net profit (loss) attributable to Tingo Group, Inc.	$	273,248		$	(23,023	)	$	96,508		$	(14,337	)

Profit (loss) per share attributable to Tingo Group, Inc.:
Basic profit (loss) per share	$	1.68		$	(0.18	)	$	0.59		$	(0.11	)
Diluted profit (loss) per share	$	0.52		$	(0.18	)	$	0.18		$	(0.11	)

Weighted average common shares outstanding:
Basic		162,764,178			124,455,921			164,199,357			126,431,864
Diluted		525,786,518			124,455,921			527,222,097			126,431,864

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(USD In Thousands)

	For the six months ended June 30,						For the three months ended June 30,
	2023			2022			2023			2022

Net profit (loss)	$	272,535		$	(23,281	)	$	96,111		$	(14,436	)
Other comprehensive income (loss), net of tax:
Currency translation adjustment		(525,139	)		565			(489,183	)		648
Total comprehensive loss		(252,604	)		(22,716	)		(393,072	)		(13,788	)
Comprehensive loss attributable to non-controlling stockholders		(858	)		(231	)		(385	)		(18	)
Comprehensive loss attributable to Tingo Group, Inc.	$	(251,746	)	$	(22,485	)	$	(392,687	)	$	(13,770	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

(USD In Thousands, Except Numbers of Shares)

	Series B preferred stock subject to redemption				Series A preferred stock				Common Stock				Additional Paid-in			Accumulated Earnings			Accumulated Other Comprehensive			Non- controlling			Total Stockholders’
	Amount		Shares		Amount		Shares		Amount		Shares		Capital			(Deficit)			Income (Loss)			Interest			Equity
Balance, December 31, 2022	$	553,035		33,687	$	3		2,604	$	158		157,599,882	$	889,579		$	(123,463	)	$	4,367		$	2,355		$	772,999
Shares issued to service providers and employees		-		-		-		-		6		6,437,500		7,687			-			-			-			7,693
Stock based compensation		-		-		-		-		-		-		54			-			-			-			54
Net profit (loss)		-		-		-		-		-		-		-			273,248			-			(713	)		272,535
Repurchase of warrants		-		-		-		-		-		-		(6,548	)		-			-			-			(6,548	)
Exercising of warrants		-		-		-		-		1		931,217		2,699			-			-			-			2,700
Deconsolidation of subsidiaries		-		-		-		-		-		-		-			-			-			(671	)		(671	)
Other comprehensive income (loss)		-		-		-		-		-		-		-			-			(524,994	)		(145	)		(525,139	)
Balance, June 30, 2023	$	553,035		33,687	$	3		2,604	$	165		164,968,599	$	893,471		$	149,785		$	(520,627	)	$	826		$	523,623

	Series B preferred stock subject to redemption				Series A preferred stock				Common Stock				Additional Paid-in			Accumulated Earnings			Accumulated Other Comprehensive			Non- controlling			Total Stockholders’
	Amount		Shares		Amount		Shares		Amount		Shares		Capital			(Deficit)			Income (Loss)			Interest			Equity
Balance, March 31, 2023	$	553,035		33,687	$	3		2,604	$	164		163,727,382	$	896,398		$	53,277		$	(31,432	)	$	1,882		$	920,292
Shares issued to service providers and employees		-		-		-		-		-		310,000		898			-			-			-			898
Stock based compensation		-		-		-		-		-		-		24			-			-			-			24
Net profit (loss)		-		-		-		-		-		-		-			96,508			-			(397	)		96,111
Warrants repurchase agreements		-		-		-		-		-		-		(6,548	)		-			-			-			(6,548	)
Exercising of warrants		-		-		-		-		1		931,217		2,699			-			-			-			2,700
Deconsolidation of subsidiaries		-		-		-		-		-		-		-			-			-			(671	)		(671	)
Other comprehensive income (loss)		-		-		-		-		-		-		-			-			(489,195	)		12			(489,183	)
Balance, June 30, 2023	$	553,035		33,687	$	3		2,604	$	165		164,968,599	$	893,471		$	149,785		$	(520,627	)	$	826		$	523,623

	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Income (Loss)			Interest			Equity
Balance, December 31, 2021	$	122		122,435,576	$	220,786	$	(76,394	)	$	(414	)	$	3,622		$	147,722
Shares issued to service providers and employees		7		7,130,631		3,817		-			-			-			3,824
Stock based compensation		-		-		235		-			-			-			235
Net loss		-		-		-		(23,023	)		-			(258	)		(23,281	)
Other comprehensive income (loss)		-		-		-		-			538			27			565
Balance, June 30, 2022	$	129		129,566,207	$	224,838	$	(99,417	)	$	124		$	3,391		$	129,065

	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Income (Loss)			Interest			Equity
Balance, March 31, 2022	$	122		122,435,576	$	220,911	$	(85,080	)	$	(443	)	$	3,409		$	138,919
Shares issued to service providers and employees		7		7,130,631		3,817		-			-			-			3,824
Stock based compensation		-		-		110		-			-			-			110
Net loss		-		-		-		(14,337	)		-			(99	)		(14,436	)
Other comprehensive income (loss)		-		-		-		-			567			81			648
Balance, June 30, 2022	$	129		129,566,207	$	224,838	$	(99,417	)	$	124		$	3,391		$	129,065

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

~~MICT, INC. AND SUBSIDIARIES~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(USD In Thousands, Except Share and Earnings Per Share Data)~~

Six months ended
June 30, Three months ended
June 30,
2022 2021 2022 2021

Revenues $ 21,521 $ 21,276 $ 11,958 $ 12,341
Cost of revenues 18,183 18,667 9,885 11,675
Gross profit 3,338 2,609 2,073 666

Operating expenses:
Research and development 941 619 346 388
Selling and marketing 3,552 2,352 1,035 1,351
General and administrative 20,991 19,421 13,665 14,853
Amortization of intangible assets 1,594 1,569 797 643
Total operating expenses 27,078 23,961 15,843 17,235

Loss from operations (23,740 ) (21,352 ) (13,770 ) (16,569 )
Loss from equity investment (371 ) (163 ) (187 ) (163 )
Other income (loss), net 838 83 683 (4 )
Financial income (expenses), net (1,089 ) (275 ) (1,167 ) 291
Loss from loss of control in Micronet Ltd - (1,934 ) - (1,934 )
Loss before provision for income taxes (24,362 ) (23,641 ) (14,441 ) (18,379 )
Taxes on income (tax benefit) (1,081 ) (339 ) (5 ) 17

Net loss (23,281 ) (23,302 ) (14,436 ) (18,396 )
Net loss attributable to non-controlling interests (258 ) (445 ) (99 ) -

Net loss attributable to MICT, Inc. $ (23,023 ) $ (22,857 ) $ (14,337 ) $ (18,396 )

Loss per share attributable to MICT, Inc.
Basic and diluted loss per share $ (0.18 ) $ (0.22 ) $ (0.11 ) $ (0.16 )

Weighted average common shares outstanding:
Basic and diluted 124,455,921 102,992,830 126,431,864 117,634,776

~~The accompanying notes are an integral part of the unaudited condensed consolidated financial statements~~

~~MICT, INC. AND SUBSIDIARIES~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS~~

~~(USD In Thousands)~~

Six months ended
June 30, Three months ended
June 30,
2022 2021 2022 2021

Net loss $ (23,281 ) $ (23,302 ) $ (14,436 ) $ (18,396 )
Other comprehensive income (loss), net of tax:
Currency translation adjustment 538 285 567 (321 )
Total comprehensive loss (22,743 ) (23,017 ) (13,869 ) (18,717 )
Comprehensive loss attributable to non-controlling stockholders (231 ) (642 ) (18 ) (3 )
Comprehensive loss attributable to MICT, Inc. $ (22,512 ) $ (22,375 ) $ (13,851 ) $ (18,714 )

~~The accompanying notes are an integral part of the unaudited condensed consolidated financial statements~~

~~MICT,~~TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF ~~CHANGES IN EQUITY~~CASH FLOWS

(USD In ~~Thousands, Except Numbers of Shares)~~Thousands)

Common Stock
(A)
Additional
Paid-in
Accumulated Accumulated
Other
Comprehensive Capital
reserve
related to
transaction
with the
minority Non-
controlling Total
Stockholders’
Amount Shares Capital Deficit Income (Loss) stockholders Interest Equity
Balance, December 31, 2020 68 68,757,450 102,333 (39,966 ) (196 ) (174 ) 3,631 65,696
Shares issued to service providers and employees 6 6,100,000 8,369 - - - - 8,375
Stock based compensation - - 458 - - - - 458
Exercising options for employees and consultants 20,000 28 - - - - 28
Net loss - - - (22,857 ) - - (445 ) (23,302 )
Other Comprehensive loss - - - - 285 174 (197 ) 262
Loss of control of subsidiary - - - - - - (2,989 ) (2,989 )
Issuance of shares upon November 2020 Securities Purchase Agreement 3 2,400,000 2,673 - - - - 2,676
Issuance of shares upon February 2021 Purchase Agreement 23 22,471,904 53,977 - - - - 54,000
Issuance of shares upon March 2021 Securities Purchase Agreement 19 19,285,715 48,671 - - - - 48,690
Exercising warrants 2 1,665,926 1,864 - - - - 1,866
Balance, June 30, 2021 121 120,700,995 218,373 (62,823 ) 89 - - 155,760

~~(A)~~

~~Upon the conversion of Series A and B convertible preferred stock, all preferred stock and common stock additional paid-in capital was combined into one account.~~

	For the six months ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit (loss)	$	272,535		$	(23,281	)

Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities:
Impairment of long-term assets		15,650			-
Impairment of goodwill		19,788			-
Loss from deconsolidation of subsidiaries		3,333			-
Loss from equity investment		420			371
Depreciation and amortization		213,257			1,709
Provision for doubtful accounts		84			80
Issuance of shares for service providers and employees		7,693			3,824
Stock-based compensation		54			235
Changes in assets and liabilities:
Deferred taxes, net		(9,688	)		(1,174	)
Long-term deposit and other non-current assets		48			369
Right of use assets		859			338
Lease liabilities		(780	)		(264	)
Due to related party		(683	)		494
Promissory note		3,912			-
Trade accounts receivable, net		(163,694	)		5,774
Inventories		(142	)		-
Other current assets		(146,630	)		1,048
Trade accounts payable		(55,518	)		(6,137	)
Deposit held on behalf of client		(1,035	)		(1,622	)
Other current liabilities		(90,569	)		1,692
Net cash provided by (used in) operating activities		68,894			(16,544	)

Common Stock
(B)
Additional
Paid-in
Accumulated Accumulated
Other
Comprehensive Capital
reserve
related to
transaction
with the
minority Non-
controlling Total
Stockholders’
Amount Shares Capital Deficit Income stockholders Interest Equity
Balance, March 31, 2021 114 114,177,951 208,566 (44,427 ) 410 (174 ) 2,992 167,481
Shares issued to service providers and employees 6 6,030,894 8,669 - - - - 8,675
Stock based compensation - - 458 - - - - 458
Net loss - - - (18,396 ) - - - (18,396 )
Other Comprehensive loss - - - - (321 ) 174 (3 ) (150 )
Loss of control of subsidiary - - - - - - (2,989 ) (2,989 )
Exercising warrants 1 492,150 680 - - - - 681
Balance, June 30, 2021 121 120,700,995 218,373 (62,823 ) 89 - - 155,760

~~(B)~~

~~Upon the conversion of Series A and B convertible preferred stock, all preferred stock and common stock additional paid-in capital was combined into one account.~~

Common Stock Additional
Paid-in Accumulated Accumulated
Other
Comprehensive Non-
controlling Total
Stockholders’
Amount Shares Capital Deficit Income (Loss) Interest Equity
Balance, December 31, 2021 122 122,435,576 220,786 (76,394 ) (414 ) 3,622 147,722
Shares issued to service providers and employees 7 7,130,631 3,817 - - - 3,824
Stock based compensation - 235 - - - 235
Net loss - - - (23,023 ) - (258 ) (23,281 )
Other Comprehensive loss - - - - 538 27 565
Balance, June 30, 2022 129 129,566,207 224,838 (99,417 ) 124 3,391 129,065

Common Stock Additional
Paid-in Accumulated Accumulated
Other
Comprehensive Non-
controlling Total
Stockholders’
Amount Shares Capital Deficit Income (Loss) Interest Equity
Balance, March 31, 2022 122 122,435,576 220,911 (85,080 ) (443 ) 3,409 138,919
Shares issued to service providers and employees 7 7,130,631 3,817 - - - 3,824
Stock based compensation - 110 - - - 110
Net loss - - - (14,337 ) - (99 ) (14,436 )
Other Comprehensive loss - - - - 567 81 648
Balance, June 30, 2022 129 129,566,207 224,838 (99,417 ) 124 3,391 129,065

~~The accompanying notes are an integral part of the unaudited condensed consolidated financial statements~~

~~MICT,~~TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD In Thousands)

	For the six months ended June 30,
	2023			2022
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances and purchases of property and equipment		(434,365	)		(104	)
Acquisition of Tingo Foods (Appendix A)		56,849			-
Receipt of loan from related party (Micronet)		-			534
Loan to Tingo pursuant to the merger agreement		-			(3,000	)
Net cash used in investing activities		(377,516	)		(2,570	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term loan		(154	)		(736	)
Repayment of loan from related party		(9,831	)		-
Repurchase of warrants		(6,548	)		-
Proceeds from Common shares issued for warrant exercises		2,700			-
Net cash used in financing activities		(13,833	)		(736	)

TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(125,520	)		445

NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(447,975	)		(19,405	)

Cash and cash equivalents and restricted cash at beginning of the period		502,549			99,036

Cash and cash equivalents and restricted cash at end of the period	$	54,574		$	79,631

Supplemental disclosure of cash flow information:
Amount paid during the period for:

Interest	$	19		$	5
Taxes	$	174,152		$	254

Six months ended
June 30,
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (23,281 ) $ (23,302 )

Adjustments to reconcile net loss to net cash used in operating activities:
Loss from loss of control in Micronet Ltd. - 1,934
Loss from equity investment 371 163
Depreciation and amortization 1,709 1,648
Provision for doubtful accounts 80 -
Issuance of shares for employees and consultants 3,824 8,375
Stock-based compensation for employees and consultants 235 458
Changes in assets and liabilities:
Change in deferred taxes, net (1,174 ) (545 )
Change in long-term deposit and prepaid expenses 369 240
Change in right of use assets 338 (2,464 )
Change in lease liabilities (264 ) 2,402
Due to related party 494 167
Decrease (increase) in trade accounts receivable, net 5,774 (15,447 )
Decrease (increase) in other current assets 1,458 (892 )
(Decrease) increase in trade accounts payable (6,137 ) 11,881
Decrease in deposit held on behalf of client (1,622 ) -
Increase (decrease)in other current liabilities 1,692 (692 )
Net cash used in operating activities (16,134 ) (16,074 )

~~MICT, INC. AND SUBSIDIARIES~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(USD In Thousands)~~

Six months ended
June 30,
2022 2021
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (104 ) (294 )
Cash acquired through business combination - Magpie (Appendix B) - 1,834
Payment on business acquired - Beijing Fucheng (Appendix A) - (4,891 )
Loan to related party - (500 )
Net cash acquired on an variable interest entity acquired - Guangxi Zhongtong - 460
Receipt of loan from related party (Micronet) 534 -
Loan to Tingo pursuant to the merger agreement (3,000 ) -
Deconsolidation of Micronet Ltd. (Appendix C) - (2,466 )
Net cash used in investing activities (2,570 ) (5,857 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of bank loans - (195 )
Repayment of short-term loan (736 ) -
Proceeds from issuance of shares and warrants 105,366
Proceeds from exercise of warrants - 1,894
Net cash (used in) provided by financing activities (736 ) 107,065

TRANSLATION ADJUSTMENT ON CASH AND RESTRICTED CASH 445 -

NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH (18,995 ) 85,134

Cash and restricted cash at beginning of the period 97,347 29,526

Cash and restricted cash at end of the period $ 78,352 $ 114,660

Supplemental disclosure of cash flow information:
Amount paid during the period for:

Interest $ 5 $ 27
Taxes $ 254 $ 63

The following table provides a reconciliation of cash and cash equivalent and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

Cash at end of the period $ 76,053 $ 114,183
Restricted cash at end of the period 2,299 477
Cash and restricted cash at end of the period $ 78,352 $ 114,660

Cash and cash equivalents at end of the period	$	53,195	$	77,332
Restricted cash at end of the period		1,379		2,299
Cash and cash equivalents and restricted cash at end of the period	$	54,574	$	79,631

Supplemental non-cash investing and financing activities

~~Appendix A: Beijing Fucheng~~

February 10,
2021
Net working capital $ 106
Property and equipment 26
Current liabilities (55 )
Intangible assets 4,814
Cash $ 4,891

Appendix A: Acquisition of Tingo Foods

~~Appendix B: Magpie Securities Limited~~

	February 9, 2023
Net working capital	$	14,772
Property and equipment		(12,235	)
Intangible assets		(147,774	)
Goodwill		(46,246	)
Deferred tax liabilities		44,332
Promissory note		204,000
Net cash provided by acquisition	$	56,849

February 26,
2021
Net working capital $ 206
Investment and loan to Magpie (2,947 )
Property and equipment 24
Current liabilities (19 )
Intangible assets 902
Cash $ (1,834 )

~~Appendix C: Deconsolidation of Micronet Ltd.~~

May 9,
2021
Working capital other than cash $ (3,849 )
Finance lease 33
Accrued severance pay, net 96
Translation reserve 134
Micronet Ltd.investment in fair value 1,128
Non-controlling interests 2,990
Net loss from loss of control 1,934
Cash $ 2,466

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

NOTE 1 — DESCRIPTION OF BUSINESS

Overview

~~MICT,~~Tingo Group, Inc. (“~~MICT”~~Tingo Group”, the “Company”, ~~“We”~~“we”, “us”, “our”) was formed as a Delaware corporation on January 31, ~~2002.~~2002 under the name Lapis Technologies, Inc. On March 14, 2013, we changed our corporate name ~~from Lapis Technologies, Inc.~~ to Micronet Enertec Technologies, Inc. On July 13, 2018, following the sale of our former subsidiary, Enertec Systems Ltd., we changed our name ~~from Micronet Enertec Technologies,~~to MICT, Inc. On February 27, 2023, following the merger transaction with Tingo Mobile Limited (“Tingo Mobile”), we changed our name to ~~MICT.~~Tingo Group, Inc. Our shares have been listed for trading on The Nasdaq Capital Market (“Nasdaq”) since April 29, 2013 and trade under the symbol ~~“MICT” since April 29, 2013.~~“TIO”.

MICT Telematics Ltd (“MICT Telematics”) is a wholly-owned holding company, established in Israel on December 31, 1991. On October 22, 1993, MICT Telematics established a wholly-owned holding company headquartered in Israel, MICT Management Ltd.

On February 1, 2019, BI Intermediate (Hong Kong) Limited (“BI Intermediate”) was incorporated in Hong Kong as a wholly-owned holding company of GFH Intermediate Holdings Ltd. (“GFHI” or “Intermediate”).

On December 11, 2019, Bokefa Petroleum and Gas Co., Ltd (“Bokefa Petroleum” ) was incorporated in Hong Kong as a holding company, and is the wholly-owned subsidiary of BI Intermediate. On October 22, 2020 and March 8, 2021, Bokefa Petroleum established two additional holding companies, Shanghai Zheng Zhong Energy Technologies Co., Ltd (“Shanghai Zheng Zhong”) and Tianjin Bokefa Technology Co., Ltd. (“Bokefa”).

On June 10, 2020, MICT Telematics purchased 5,999,996 ordinary shares of Micronet Ltd. (“Micronet”) for aggregate proceeds of New Israeli Shekel (“NIS”) 1,800 (or $515) through tender offer issued by MICT Telematics. As a result, increased our ownership interest in Micronet to 45.53% of Micronet’s issued and outstanding ordinary shares.

Subsequently, on June 23, 2020 we purchased, through a public offering consummated by Micronet on the Tel Aviv Stock Exchange (the “TASE”), 10,334,000 of Micronet’s ordinary shares for total consideration of NIS 3,100 (or $887). As a result, we increased our ownership interest in Micronet to 53.39% of Micronet’s outstanding ordinary shares. MICT applied purchase accounting and began to consolidate Micronet’s operating results into our financial statements once the offering was consummated. MICT recognized a $665 gain on previously held equity in Micronet.

On October 11, 2020, Micronet consummated a public equity offering on the TASE, in which the Company purchased 520,600 of Micronet’s ordinary shares and 416,480 of Micronet’s stock options convertible into 416,480 Micronet ordinary shares (at a conversion price of NIS 3.5 per share), for total consideration of NIS 4,961 (or $1,417). Following Micronet’s offering, including the purchase of Micronet shares, the exercise of our stock options and the additional purchase of 115,851 Micronet shares from an individual seller, our ownership interest in Micronet was diluted from 53.39% to 50.31% of Micronet’s outstanding share capital. On May 9, 2021, following the exercise of options by minority stockholders, the Company’s ownership interest was further diluted to 49.88% and, as a result we no longer consolidate Micronet’s operating results in our financial statements. As of May 9, 2021, the Company accounted for the investment in Micronet using the equity method of accounting.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

Prior to July 1, 2020, MICT operated primarily through its Israel-based majority-owned subsidiary, Micronet. Since July 1, 2020, after MICT completed its acquisition of GFHI pursuant to that certain agreement and plan of merger entered into on November 7, 2019 by and between MICT, GFHI, Global Fintech Holding Ltd. (“GFH”), a British Virgin Islands company and the sole shareholder of GFHI, and MICT Merger Subsidiary Inc., a British Virgin Islands company and a wholly owned subsidiary of MICT, as amended and restated on April 15, 2020 (the “Restated Merger Agreement” or “Merger”). MICTThe Company is a holding company conducting financial technology business, agri-fintech and food business through its subsidiaries and entities, both wholly-owned and controlled through various variable interest entity (“VIE entities”, together with the Company, the “Group”) arrangements (“VIE”), which are located mainly in Africa, Southeast Asia and the Middle East. The Group’s business has changed materially since December 1, 2022, following the completion of two material acquisitions of Tingo Mobile and Tingo Foods PLC (“Tingo Foods”), the details of which are described below under “Acquisition of Tingo Mobile” and “Acquisition of Tingo Foods”, respectively.

As of June 30, 2023, we operate in five segments and following the recent launch of TingoPay we will be operating in six segments (i) verticals and technology, comprised of our operations in China where we operate our insurance brokerage business (“Verticals and Technology”); (ii) online stock trading, primarily comprised of the operation of Magpie Securities Limited (“Magpie”) through which we operate the online stock trading business, primarily out of Hong Kong and Singapore (“Online Stock Trading”); (iii) comprehensive platform service, which includes the operations of Tingo Mobile described below (“Comprehensive Platform Service”); (iv) food processing, where crops and raw foods are purchased by Tingo Foods, before being processed into finished food products, through arrangements with third party rice mills, cashew processing plants, and other food processing companies, and sold to large food distributor and wholesaler companies (Tingo Foods was purchased by the Company in February 2023) (“Food Processing”); (v) export and commodity trading, where both agricultural commodities and processed foods are exported and traded on a global basis through Tingo DMCC, which operates from the Dubai Multi Commodity Centre (the “DMCC”) (“Export and Commodity Trading”); and (vi) Consumer Super App, digital payment services and merchant services, which in partnership with Visa operates the TingoPay Super App (currently in a beta version) offering retail customers a range of services, including but not limited to online payments in their domestic or foreign currencies, as well as the ability to manage their Visa cards, pay bills, arrange insurance, arrange loans and purchase mobile telephone top-ups. TingoPay also offers businesses a range of Visa powered merchant services.

As further discussed in Note 5 the Company decided to exit its operations of one of its VIEs ~~arrangements~~(as explained below). The Company is reconsidering its focus areas. As part of the reconsideration the Company considering the exit of other operations in China and subsequent to the balance sheet date decided on the cessation and abandonment of the operations of Magpie.

Since July 1, 2020, as a result of the Company’s acquisition of GFH Intermediate Holdings Ltd (“GFHI ”) (the “GFHI Acquisition”) the Group has been operating in the financial technology sector. GFHI is a financial technology company with a marketplace in China, as well as the wider southeast Asia area and other ~~areas~~parts of the world and is currently in the process of building various platforms for business opportunities in different ~~insurance platform segments (formerly:~~ verticals and technology ~~segments) in order~~segments to capitalize on such technology and ~~business. GFHI~~business, including the Company’s recent acquisitions of Tingo Mobile and Tingo Foods. The Company plans to increase its capabilities and its technological platforms through acquisition and licensing technologies to support its growth efforts, particularly in the ~~different market segments. After the merger, MICT includes the business of Intermediate, its wholly-owned subsidiary, operating through its operating subsidiaries, as described herein.~~

On October 2, 2020, BI Intermediate entered into a strategic agreement (the “Strategic Agreement”) to acquire the entire share capital of Magpie Securities Limited (“Magpie”), a Hong Kong based securitiesagri-fintech, payment services, digital marketplace and investments firm for a total purchase price of approximately $3,000 (the “Purchase Price”). Magpie is licensed to trade securities on leading exchanges in Hong Kong, the U.S. and China, including China A-Shares, all of which are the primary target markets for Company’s global fintech business. The Strategic Agreement provided that the acquisition would be consummated in two phases, an initial purchase whereby 9% of the share capital of Magpie was acquired and thereafter, the remaining 91% of Magpie would be purchased by BI Intermediate upon, and subject to, the approval of the Hong Kong Securities and Futures Commission (the “SFC”), the principal regulator of Hong Kong’s securities and futures markets. On November 11, 2020, BI Intermediate closed on its acquisition of the first 9% and paid 9% of the Purchase Price. Additionally, pursuant to the Strategic Agreement upon the initial closing, BI Intermediate loaned Magpie an amount equivalent to the remaining 91% of the Purchase Price. Upon closing on the remaining 91%, which remained subject to SFC approval, the loan will be cancelled, and BI Intermediate will acquire the remaining 91% of Magpie. The loan was secured against the pledge of 91% of the share capital of Magpie purchased at such time by BI Intermediate. The obligations of Magpie have been guaranteed by its majority shareholder. On February 26, 2021 we finalized the acquisition of Magpie. The acquisition was consummated following the receipt of approval from the SFC effecting the change in the majority shareholder of Magpie. In consideration for the entire share capital of Magpie, we paid a total Purchase Price of $2,947 (reflecting the net asset value of Magpie estimated at $2,034 recorded as a working capital, and a premium $902 that was recorded as a license in the intangible assets). The Company, through and together with the Company’s wholly owned subsidiaries, Beijing Magpie Securities Consulting Services Co., Ltd (“Beijing Magpie”) and Shenzhen Magpie Information Consulting Technology Co., Ltd (“Shenzhen Magpie”), are in the process of integrating its mobile app platform with Magpie’s licensed trading assets.

Upon completion of the acquisition of 100% of the equity interest in Magpie, we were able to obtain the licenses and permits needed for operating our online platform. After we complete the appropriate system testing to ensure scale and reliability, we will be in a position to notify the Hong Kong regulator of our intended launch date. Our initial plan is to launch the online stock trading platform in Hong Kong.

On January 1, 2021, we entered into a transaction through our wholly-owned subsidiary, Bokefa, with the shareholders of Guangxi Zhongtong Insurance Agency Co., Ltd (“Guangxi Zhongtong”), a local Chinese entity with business and operations in the insurance brokerage business. Pursuant to the transaction, we loaned the Guangxi Zhongtong shareholders through a frame work loan (the “GZ Frame Work Loan”) the amount of up to RMB 40,000 (approximately $6,125) (“GZ Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for Guangxi Zhongtong. As of June 30, 2022, only RMB 8,010 (approximately $1,243) was drawn down from the GZ Frame Work Loan for working capital and approximately $919 was drawn down for loans to shareholders of Guangxi Zhongtong (as stipulated in the agreement). In consideration for the GZ Frame Work Loan, the parties entered into various additional agreements which

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

was structured pursuant to a Variable Interest Entity (“VIE”) Structure (in which we do not hold the shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with Guangxi Zhongtong, we are regarded as Guangxi Zhongtong’s controlling entity and primary beneficiary of Guangxi Zhongtong business. We have, therefore, consolidated the financial position and operating results of Guangxi Zhongtong into our consolidated financial statements, using the fair value of the assets and liabilities of Guangxi Zhongtong in accordance with U.S. GAAP. Beijing Fucheng Lianbao Technology Co., Ltd (“Beijing Fucheng”) is an entity incorporated on December 29, 2020, in which Bokefa owns 24% equity interest with the remaining 76% controlled by Bokefa through VIE agreements. On February 10, 2021, Beijing Fucheng acquired all of the shares of Beijing Yibao Technology Co., Ltd., (“Beijing Yibao”) which holds 100% of the equity interest in Beijing Fucheng Insurance Brokerage Co., Ltd. (“Fucheng Insurance”). Fucheng Insurance is a Chinese insurance brokerage agency and a nation-wide licensed entity which offers insurance brokerage services for a broad range of insurance products. Fucheng Insurance, through their nationwide license, will give us the flexibility to offer and create tailor-made insurance products, leverage customers directly or through distribution partners and procure better deals with both our existing and new insurance company partners. Fucheng Insurance further enables us to accelerate the onboarding of new agents onto our platforms all throughout China. It also creates the opportunity to promote our business through some of China’s biggest online portals, which will provide business-to-business-to-consumer (B2B2C) as well as business-to-consumer (B2C) channels. When Fucheng Insurance initiates its nationwide rollout of its mobile application, it will facilitate access to those portals’ large customer bases which will also offer MICT’S full suite of insurance products. Beijing Fucheng shares were acquired for approximately $5,700, and funded through MICT. For further information please refer to Note 7.

On June 16, 2021, Micronet announced that it completed a public equity offering on the TASE. Pursuant to the offering, Micronet sold an aggregate of 18,400 securities units (the “Units”) at a price of NIS 14.6 per Unit with each Unit consisting of 100 ordinary shares, 25 series A options and 75 series B options, resulting in the issuance of 1,840,000 ordinary shares, 460,000 series A options and 1,380,000 series B options. Micronet raised total gross proceeds of NIS 26,864 (approximately $8,290) in the offering. The Company did not participate in the offering, and, as a result, the Company owned 31.47% of the outstanding ordinary shares of Micronet and 26.83% on a fully diluted basis as of June 30, 2022.

On July 1, 2021, Bokefa entered into a transaction with the shareholders of All Weather Insurance Agency Co., Ltd (“All Weather”), a local Chinese entity with business and operations in the field of broker insurance (the “Transaction”). Pursuant to the Transaction, Bokefa agreed to provide the All Weather shareholders with a frame work loan (the “AW Frame Work Loan”) for a total amount of up to RMB 30,000 (approximately $4,700) (the “AW Frame Work Loan Amount”) which, if utilized, will be used for working capital purposes of All Weather. In consideration for the AW Frame Work Loan, the parties entered into various additional agreements which was structured as a VIE structure (pursuant to which we do not technically hold the shares) and as a result of our direct ownership in Bokefa and its contractual arrangements with All Weather, we are regarded as All Weather’s controlling entity and the primary beneficiary of All Weather’s business. On October 27, 2021, the entire AW Frame Work Loan Amount was utilized by the All Weather shareholders and the AW Frame Work Loan Amount was transferred to All Weather for purposes of working capital. In addition, as of June 30, 2022, the Company granted All Weather shareholders an additional loan in the sum of approximately $776 to be provided in advance to a transaction between the parties pursuant to which the VIE structure described above shall be replaced by an equity structure for purchase by MICT of such equity interests in All Weather on such commercial and other terms to be agreed by the parties.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

All Weather Appraisal Co., Ltd. (All Weather Appraisal) is a subsidiary of All Weather Insurance Agency Co., Ltd, which holds 99.6% equity in All Weather Appraisal. All Weather Appraisal is a nationwide company and is approved by the China Banking and Insurance Regulatory Commission, specializing in the appraisal, evaluation, inspection and damage assessment of subjects of Insurance.

On August 23, 2021, Beijing Yibao Technology Co., Ltd, Guangxi Zhongtong Insurance Agency Co., Ltd, and two shareholders of Guangxi Zhongtong entered into a capital increase agreement pursuant to which Beijing Yibao will invest approximately RMB30,000 ($4,700) into Guangxi Zhongtong. On October 21, 2021, Beijing Yibao transferred the funds separately and the transaction closed. As a result of the transaction, Beijing Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the closing, the previous agreements consummated on January 1, 2021 per the GZ Frame Work Loan became null and void, and the loan should be repaid by the shareholders before December 31, 2022.

From January through September 2021, Shenzhen Bokefa Technology Co., Ltd (“Shenzhen Bokefa”) and Tianjin Dibao Technology Co., Ltd (“Tianjin Dibao”) were established under BI Intermediate as holding companies to further develop the Company’s insurance business in China. As of June 30, 2022, no substantial operations conducted in those two entities.

Our current business, following the completion of the acquisition of GFHI, is primarily comprised and focused on the growth and development of the GFHI financial technology offerings and the marketplace in China. We are in the process of building various platforms for business opportunities in different insurance platform segments (formerly: verticals and technology segments) in order to capitalize on such technology and business.

As a result of our acquisition of GFHI and the subsequent work we have undertaken with the management of GFHI, we are positioned to establish ourselves, through our operating subsidiaries and VIEs, to serve the markets as a financial technology company with a significant Chinese marketplace. We plan to expand on a global level as we continue to scale our business. GFHI has built various platforms to capitalize on business opportunities in a range of insurance platform segments (formerly: verticals and technology segments), which currently include stock trading and wealth management, commodities in segments of oil and gas trading and insurance brokerage. We are seeking to secure material contracts in all of these market segments in China while also developing opportunities in order to allow GFHI access to these markets. We will continue to increase the capabilities of our platforms through acquisition and/or licensing different technologies to support our efforts. By building secure, reliable and scalable platforms with high volume processing capability, we intend to provide customized solutions that address the needs of a highly diverse and broad client base.

We implemented our plans by capitalizing on Intermediate’s experience with local markets in China, as well as with the Company’s operating subsidiaries, which have begun to secure material contracts in fast growing market segments in China.

~~Our current opportunities have given us access the following market segments:~~

●

~~Stock trading and wealth management segment;~~

●

~~Commodities in the field of Oil and gas trading segment; and~~

●

~~Insurance brokerage segment~~

These opportunities will continue to be realized and executed through our business development efforts, which include the acquisition of potential target entities, business and assets (such as applicable required licenses) in the relevant business space and segments in which we plan to operate. This allows the Company to enter into the market quickly and leverage existing assets in order to promote our growth strategy.

On April 2, 2022, Shanghai Zhengzhong Energy Technology Co., Ltd. (Zhengzhong Energy”), our wholly owned subsidiary, entered into a transaction with the shareholders of Tianjin Dibao Technology Development Co. Ltd.(“Tianjin Dibao”) the parties have entered into various additional agreements, which was structured pursuant to a Variable Interest Entity (VIE) Structure according to which Zhengzhong Energy is the primary beneficiary of the 76% interest in Dibao, and the remaining 24% equity was held directly by Zhengzhong Energy.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

On April 5, 2022, Beijing Fucheng Lianbao disposed its subsidiary of Beijing Fucheng Prospect Technology Co., Ltd (“Fucheng Prospect”).The shares previously held by Beijing Fucheng Lianbao were transferred to an individual Wang Yuanyuan on April 5, 2022. The stockholders’ deficit of Fucheng Prospect as of April 5, 2022 was $94 and transaction price was zero. The Company recognized a gain of $ 94 for disposing and stopped consolidating its financials starting from April.

~~The following diagram illustrates the Company’s corporate structure, including its subsidiaries, and variable interest entities (“VIEs”), as of June 30, 2022:~~

~~VIE agreements with Guangxi Zhongtong:~~

On January 1, 2021, Bokefa, our wholly foreign-owned enterprise (“WFOE”), Guangxi Zhongtong, and nominee shareholders of Guangxi Zhongtong entered into six agreements, described below, pursuant to which Bokefa is deemed to have controlling financial interest and be the primary beneficiary of Guangxi Zhogntong. Therefore, Guangxi Zhongtong is deemed a VIE of Bokefa:

~~Loan Agreement~~

Pursuant to this agreement, Bokefa agreed to provide loans to the registered shareholders of Guangxi Zhongtong. The term of the loan shall start from the date when the loan is actually paid, until the date on which the loan is repaid in full. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely for Guangxi Zhongtong’s operating expenses and should be exclusively repaid by transferring shares of Guangxi Zhongtong to Bokefa when PRC Law permits.

~~Exclusive Option Agreement~~

The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all the equity interest of Guangxi Zhongtong to Bokefa in accordance with relevant laws and provisions as provided in the agreement, or upon written notice by Bokefa to shareholders. In consideration of Bokefa’s loan arrangement, the shareholders have agreed to grant Bokefa an exclusive option to purchase their equity interest. Distribution of residual profits, if any, are restricted without the approval of Bokefa. Upon request by Bokefa, Guangxi Zhongtong is obligated to distribute profits to the shareholders of Guangxi Zhongtong, who must remit such profits to Bokefa immediately. Guangxi Zhongtong and its shareholders are required to act in a manner that is in the best interest of Bokefa with regards to Guangxi Zhongtong’s business operation.

~~Equity Pledge Agreement~~

The agreement will be terminated upon such date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholders pledged all their equity interest in Guangxi Zhongtong to Bokefa as security for the obligations in the other agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~Business Cooperation Agreement~~

The agreement is effective until terminated by both parties. Guangxi Zhongtong and its shareholders agree that the legal person, directors, general manager and other senior officers of Guangxi Zhongtong should be appointed or elected by Bokefa. Guangxi Zhongtong and its shareholders agree that all the financial and operational decisions for Guangxi Zhongtong will be made by Bokefa.

~~Exclusive Service Agreement~~

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to Guangxi Zhongtong and Guangxi Zhongtong agrees to pay service fees to Bokefa.

~~Entrustment and Power of Attorney Agreement~~

The shareholders of Guangxi Zhongtong agreed to entrust all the rights to exercise their voting power and any other rights as shareholders of Guangxi Zhongtong to Bokefa. The shareholders of Guangxi Zhongtong have each executed an irrevocable power of attorney to appoint Bokefa as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until deregistration of Guangxi Zhongtong.

~~VIE agreements with Beijing Fucheng:~~

On December 31, 2020, as amended on August 25, 2021, Bokefa, Beijing Fucheng Lianbao Technology Co., Ltd. (“Beijing Fucheng”), and the shareholders of Beijing Fucheng entered into six agreements, described below, pursuant to which Bokefa is deemed to have a controlling financial interest and be the primary beneficiary of Beijing Fucheng,. Therefore, Beijing Fucheng is deemed a VIE of Bokefa. Beijing Fucheng was incorporated on December 29, 2020 and had no assets or liabilities as of December 31, 2020.

~~Loan Agreement~~

Pursuant to this agreement, Bokefa agreed to provide loans to the registered shareholders of Beijing Fucheng. The term of the loan under this agreement shall start from the date when the loan is actually paid and shall continue until the shareholders repay all the loan in accordance with this agreement. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely for Beijing Fucheng’s operating expenses, and should be exclusively repaid by transferring shares of Beijing Fucheng to Bokefa when PRC Law permits.

~~Exclusive Option Agreement~~

The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of Bejing Fucheng to Bokefa in accordance with relevant laws and provisions as provided in the agreement, or upon written notice by Bokefa to the shareholders. In consideration for Bokefa’s loan arrangement, the shareholders have agreed to grant Bokefa an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Bokefa. Upon request by Bokefa, Beijing Fucheng is obligated to distribute profits to the shareholders of Beijing Fucheng, who must remit those profits to Bokefa immediately. Beijing Fucheng and its shareholders are required to act in a manner that is in the best interest of Bokefa with regards to Beijing Fucheng’s business operations.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~Equity Pledge Agreement~~

The agreement will be terminated at the date when the other agreements have been terminated. Pursuant to the agreement, the shareholders pledged all their equity interest in Beijing Fucheng to Bokefa as security for their obligations under the agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa.

~~Business Cooperation Agreement~~

The agreement is effective until terminated by both parties. Beijing Fucheng and its shareholders agree that the legal person, directors, general manager and other senior officers of Beijing Fucheng should be appointed or elected by Bokefa. Beijing Fucheng and its shareholders agree that all financial and operational decisions of Beijing Fucheng will be made by Bokefa.

~~Exclusive Service Agreement~~

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to Beijing Fucheng and Beijing Fucheng agrees to pay service fees to Bokefa.

~~Entrustment and Power of Attorney Agreement~~

The shareholders of Beijing Fucheng agreed to entrust all the rights to exercise their voting power and any other rights as shareholders of Beijing Fucheng to Bokefa. The shareholders of Beijing Fucheng have each executed an irrevocable power of attorney to appoint Bokefa as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until deregistration of Beijing Fucheng.

~~VIE agreements with All Weather:~~

On July 1, 2021, Bokefa, All Weather, and nominee shareholders of All Weather entered into six agreements, described below, pursuant to which Bokefa is deemed to have a controlling financial interest and be the primary beneficiary of All Weather. All Weather is deemed a VIE of Bokefa.

~~Loan Agreement~~

Pursuant to this agreement, Bokefa agreed to provide loans to the shareholders of All Weather. The term of the loan is one year and shall start from the date when the loan is actually paid. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely by All Weather for operating expenses, and should be exclusively repaid by transferring shares of All Weather to Bokefa when PRC Law permits.

~~Exclusive Option Agreement~~

The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of All Weather to Bokefa in accordance with relevant laws and provisions in the agreement, or upon written notice by Bokefa to the shareholders. In consideration for Bokefa’s loan arrangement, the shareholders have agreed to grant Bokefa an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Bokefa. Upon request by Bokefa, All Weather is obligated to distribute profits to the shareholders of All Weather, who must remit the profits to Bokefa immediately. All Weather and its shareholders are required to act in a manner that is in the best interest of Bokefa with regard to All Weather’s business operations.

~~Equity Pledge Agreement~~

The agreement will be terminated at the date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholders pledged all of their equity interest in All Weather to Bokefa as security for their obligations pursuant to the other agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa.

~~Business Cooperation Agreement~~

The agreement is effective until terminated by both parties. All Weather and its shareholders agree that the legal person, directors, general manager and other senior officers of All Weather should be appointed or elected by Bokefa. All Weather and its shareholders agree that all the financial and operational decisions of All Weather will be made by Bokefa.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~Exclusive Service Agreement~~

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to All Weather and All Weather agrees to pay service fees to Bokefa.

~~Entrustment and Power of Attorney Agreement~~

The shareholders of All Weather agreed to entrust all their rights to exercise their voting power and any other rights as shareholders of All Weather to Bokefa. The shareholders of All Weather have each executed an irrevocable power of attorney to appoint Bokefa as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until the deregistration of All Weather.

~~VIE agreements with Tianjin Dibao:~~

On April 2, 2022, Zhengzhong Energy, Tianjin Dibao, and nominee shareholder of Tianjin Dibao entered into six agreements, described below, pursuant to which Zhengzhong Energy is deemed to have a controlling financial interest and be the primary beneficiary of Tianjin Dibao. Tianjin Dibao is deemed a VIE of Zhengzhong Energy.

~~Loan Agreement~~

Pursuant to this agreement, Zhengzhong Energy agreed to provide loans to the shareholder of Tianjin Dibao. The term of the loan shall start from the date when the loan is actually paid. The agreement shall terminate when the shareholder repay the loan. The loan should be used solely to purchase Tianjin Dibao‘s 76% equity, and should be exclusively repaid by transferring shares of Tianjin Dibao to Zhengzhong Energy when PRC Law permits.

~~Exclusive Option Agreement~~

The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of Tianjin Dibao to Zhengzhong Energy in accordance with relevant laws and provisions in the agreement, or upon written notice by Zhengzhong Energy to the shareholder. In consideration for Zhengzhong Energy’s loan arrangement, the shareholder have agreed to grant Zhengzhong Energy an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Zhengzhong Energy. Upon request by Zhengzhong Energy, Tianjin Dibao is obligated to distribute profits to the shareholder of Tianjin Dibao, who must remit the profits to Zhengzhong Energy immediately. Tianjin Dibao and its shareholder are required to act in a manner that is in the best interest of Zhengzhong Energy with regard to Tianjin Dibao’s business operations.

~~Equity Pledge Agreement~~

The agreement will be terminated at the date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholder pledged all of their equity interest in Tianjin Dibao to Zhengzhong Energy as security for their obligations pursuant to the other agreements. Zhengzhong Energy has the right to receive dividends on the pledged shares, and all shareholder are required to act in a manner that is in the best interest of Zhengzhong Energy.

~~Business Cooperation Agreement~~

The agreement is effective until terminated by both parties. Tianjin Dibao and its shareholder agree that the legal person, directors, general manager and other senior officers of Tianjin Dibao should be appointed or elected by Zhengzhong Energy. Tianjin Dibao and its shareholder agree that all the financial and operational decisions of Tianjin Dibao will be made by Zhengzhong Energy.sectors.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

~~Exclusive Service~~Acquisition of Tingo Mobile

Overview. On December 1, 2022, the Company acquired Tingo Mobile, an agri-fintech business based in Nigeria, from Tingo Inc., a Nevada corporation (“TMNA”).

Consideration Provided. As consideration for Tingo Mobile, we issued to TMNA 25,783,675 shares of our common stock, par value $0.001 per share (the “Common Stock”), which is equal to 19.9% of our outstanding Common Stock, calculated as of the closing date of the Merger (the “Common Consideration Shares”) and two series of convertible preferred shares – Series A Convertible Preferred Stock (“Series A Preferred Stock”) and Series B Convertible Preferred Stock (“Series B Preferred Stock”).

Key Terms of Series A Preferred Stock. On July 27, 2023, as part of the consideration paid by the Company to TMNA at the closing of the Merger, the Company issued 2,604.28 shares of Series A Preferred Stock which are convertible into 26,042,808 shares of Common Stock equal to approximately 20.1% of the total issued and outstanding Common Stock immediately prior to the closing of the Merger. The Company held a special meeting of stockholders on June 7, 2023, during which shareholder approval was received for the conversion of the 2,604.28 shares of Series A Preferred Stock into 26,042,808 shares of Common Stock.

Key Terms of Series B Preferred Stock. Upon approval by Nasdaq of the change of control of the company and upon the approval of our stockholders, the Series B Preferred Stock will convert into 35.0% of the outstanding shares of our Common Stock, calculated as of the closing date of the Merger, giving TMNA an aggregate ownership of 75.0% of our outstanding Common Stock, if both the Series A Preferred Stock and Series B Preferred Stock are converted in full. If such shareholder or Nasdaq approval is not obtained by June 30, 2023, TMNA will have the right to cause us to redeem all of the Series B Preferred Stock for (x) $666,666,667 or (y) an amount of common stock of TGH equivalent in value to $666,666,667.

On July 5, 2023, the Company entered into a forbearance agreement with the holder of the Series B Preferred Stock under the terms of which the Series B holder agreed not to redeem the Series B Preferred Stock or take any other action in connection with the Series B Preferred Stock until September 30, 2023.

Loan to TMNA. In connection with the Merger Agreement, we also loaned $23.7 million to TMNA. The loan bears interest at 5.0% per annum and matures on May 10, 2024.

Acquisition of Tingo Foods

On February 9, 2023, the Company and MICT Fintech Ltd., an indirect wholly owned subsidiary of the Company organized under the laws of the British Virgin Islands (“Tingo Group Fintech”) purchased from Dozy Mmobuosi 100% of the ordinary shares of Tingo Foods (the “Acquisition”). Mr. Mmobuosi is the majority shareholder and Chief Executive Officer of TMNA.

Tingo Foods started its operational business in September 2022, since which time its food processing activities have been conducted through arrangements with third party rice mills, cashew processing plants and other food processing companies, and the finished food products are sold to large food distributor and wholesaler companies.

As consideration for the Acquisition, the Company agreed to pay Mr. Mmobuosi, a purchase price equal to the cost value of Tingo Foods’ stock, which will be satisfied by the issuance of a secured promissory note (“Promissory Note”) in the amount of US$204,000 and certain undertakings and obligations of the Company. The Promissory Note is for a term of two years with an interest rate of 5%. MICT Fintech agreed to certain covenants with respect to its ability to incur additional debt or create additional liens. The Acquisition will not result in any new issuance of our Common Stock nor of any instruments convertible into shares of the Company.

The parties additionally agreed that Mr. Mmobuosi, as the owner of the real property on which the business of Tingo Foods is located and operates, to finance and complete construction of the building, and for the Company and Tingo Foods to fit out the building and premises, including the installation of mechanized equipment, for the specialized operations of a large food processing facility. Lastly, Mr. Mmobuosi will also provide the Company and Tingo Foods with a long-term lease with respect to the real property.

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Zhengzhong Energy agrees to provide exclusive technical consulting and support services to Tianjin Dibao and Tianjin Dibao agrees to pay service fees to Zhengzhong Energy.

TINGO GROUP, INC. AND SUBSIDIARIES

~~Entrustment~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and ~~Power of Attorney Agreement~~Par Value Data)

Variable Interest Entities (VIEs)

We currently conduct our insurance broker business in China using VIEs. The ~~shareholder~~Company consolidates certain VIEs for which it is the primary beneficiary. VIEs consist of Tianjin Dibao agreed to entrust all their rights to exercise their voting power and any other rights as shareholder of Tianjin Dibao to Zhengzhong Energy. The shareholder of Tianjin Dibao have each executed an irrevocable power of attorney to appoint Zhengzhong Energy as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective untilcertain operating entities not wholly owned by the ~~deregistration of Tianjin Dibao.~~Company.

The assets and liabilities of the Company’s VIEs ~~(All Weather, Beijing Fucheng and Tianjin Dibao)~~prior to intercompany adjustments included in the Company’s unaudited condensed consolidated financial statements as of June 30, ~~2022~~2023, and December 31, ~~2021~~2022 are as follows:

June 30,
2022 December 31,
2021

Current assets:
Cash $ 3,323 $ 1,260
Trade accounts receivable, net 3,359 2,462
Other current assets 3,288 4,550
Total current assets 9,970 8,272

Property and equipment, net 213 208
Intangible assets 5,715 5,718
Long-term prepaid expenses 53 48
Right of use assets 442 530
Restricted cash 1,523 1,632
Deferred tax assets 780 369
Total long-term assets 8,726 8,505

Total assets $ 18,696 $ 16,777

Current liabilities:
Short term loan from others $ 743 $ 1,155
Trade accounts payable 756 697
Related party 2,968 4,583
Other current liabilities 5,626 2,401
Total current liabilities 10,093 8,836

Long-term liabilities:
Lease liability 123 106
Deferred tax liability 224 224
Total long-term liabilities 347 330

Total liabilities $ 10,440 $ 9,166

	June 30, 2023		December 31, 2022
Current assets:
Cash and cash equivalent	$	157	$	3,690
Trade accounts receivable, net		69		6,823
Related party receivables		1,932		2,001
Other current assets		177		2,278
Total current assets		2,335		14,792

Property and equipment, net		37		176
Intangible assets, net		3		5,712
Long-term deposit and other non-current assets		-		48
Right of use assets under operating lease		101		711
Restricted cash escrow		690		1,479
Deferred tax assets		822		793
Total long-term assets		1,653		8,919

Total assets	$	3,988	$	23,711

Current liabilities:
Short-term loan	$	-	$	286
Trade accounts payable		91		4,817
Related party payables		3,822		4,002
Current operating lease liability		100		230
Other current liabilities		28		4,515
Total current liabilities		4,041		13,850

Long-term liabilities:
Long-term loan		-		377
Long-term operating lease liability		-		257
Deferred tax liabilities		-		224
Total long-term liabilities		-		858

Total liabilities	$	4,041	$	14,708

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

Net revenues, ~~loss~~profit (loss) from operations and net ~~loss~~profit (loss) of the VIEs that were included in the Company’s unaudited condensed consolidated financial statements for the three and six ~~month~~months ended June 30, ~~2022~~2023, and ~~2021~~2022 are as ~~follows :~~follows:

For the
six months
Ended For the
six months
Ended For the
Three months
Ended For the
Three months
Ended
June 30, June 30, June 30, June 30,
2022 2021 2022 2021

Net revenues $ 19,593 $ 14,265 $ 10,729 $ 8,055
Loss from operations $ (2,321 ) $ (1,093 ) $ (137 ) $ (1,343 )
Net loss $ (1,504 ) $ (1,101 ) $ 68 $ (1,260 )

	For the six months Ended		For the six months Ended			For the three months Ended		For the three months Ended
	June 30,		June 30,			June 30,		June 30,
	2023		2022			2023		2022

Net revenues	$	30,285	$	19,593		$	11,649	$	10,729
Profit (loss) from operations	$	295	$	(2,321	)	$	1,102	$	(137	)
Net profit (loss)	$	273	$	(1,504	)	$	618	$	68

~~NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Basis of Presentation~~

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s financial position, its results of operations and its cash flows, as applicable, have been made. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s December 31, 2021 annual report on Form 10-K filed on June 17, 2022.

The Company’s operations and business may still be subject to adverse effect due to the unprecedented conditions surrounding the spread of COVID-19 throughout North America, Israel, China and the rest of the world. Although currently the COVID-19 (due to the measures implemented to reduce the spread of the virus) have not had a material adverse effect on the Company’s consolidated financial reports, however, there were lockdowns in numerous provinces, which prevented employees of MICT and representatives of Friedman LLP, MICT’s registered independent audit firm from accessing a number of MICT’s offices in these affected provinces, which cause a delay in filing the financial reports on time. In addition, there was a decrease in revenues from Guangxi Zhongtong as a result of the lockdown in certain cities and regions due to the COVID-19 impacts.; there can be no assurance that Company’s financial reports will not be affected in the future from COVID-19 or resulting from restrictions and other government actions.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

~~Principles of Consolidation~~NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Operating results for the three and six months periods ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Significant Accounting Policies

The ~~accompanying~~significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are ~~prepared in accordance with generally accepted accounting principles~~identical to those applied in the ~~U.S. GAAP. The accompanying unaudited condensed consolidated~~preparation of the latest annual financial statements, ~~include~~except for revenue recognition policy presented below.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of ~~the Company~~certain assets acquired and liabilities assumed through acquisitions, goodwill and its ~~subsidiaries~~impairment, allowance for credit losses, impairment of long-lived and ~~variable interest entities. All significant intercompany transactions~~intangible assets and ~~balances among~~contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the ~~Company and its subsidiaries are eliminated upon consolidation.~~circumstances. Actual results could differ from those estimates.

~~Cash~~Functional currency and Exchange Rate Income (Loss)

~~Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions and have original maturities of less than three months.~~

~~Accounts receivable, net~~

Accounts receivable include trade accounts due from customers. Accounts are considered overdue after thirty (30) days from payment due date. In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of June 30, 2022 and December 31, 2021, allowance for doubtful accounts amounted to approximately $2,557 and $2,606, respectively.

~~Foreign currency translation and transaction~~

The ~~reporting~~functional currency of our foreign entities is their local currency. For these foreign entities, we translate their financial statements into U.S. dollars using average exchange rates for the ~~Company is the U.S. dollar. The Companies~~period for statements of operations amounts and using end-of-period exchange rates for assets and liabilities. We record these translation adjustments in China conducts their businesses in the local currency, Renminbi (RMB), as its functional currency. The Companies in Israel conducts their businesses in the local currency, New Israeli Shekel (NIS), as its functional currency. The Companies in Hong Kong conducts their businesses in the local currency, Hong Kong Dollar (HKD), as its functional currency.

Assets and liabilities are translated at the noon buying rate in the City of New York for cable transfers of RMB, NIS and HKD as certified for customs purposes by the Federal Reserve Bank of New York at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulatedAccumulated other comprehensive income (loss)~~. Transaction~~, a separate component of stockholders’ equity, in our consolidated balance sheets. Exchange gains and losses ~~that arise~~resulting from ~~exchange rate fluctuations on transactions denominated in a~~the conversion of transaction currency ~~other than the~~to functional currency are ~~included in the results~~charged or credited to other comprehensive income (loss), net of tax.

The exchange rate used for conversion balance sheet and statements of operations ~~as incurred.~~data from Nigerian Naira and Renminbi (“RMB”) to USD is presented below:

Currency	For the six months ended June 30, 2023 average		USD exchange rate as of June 30, 2023		USD exchange rate as of December 31, 2022
Naira		481.977		770.38		448.55
RMB		6.928		7.2513		6.8972

~~Segment reporting~~

Accounting Standard Codification (“ASC”) Topic 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”), which is comprised of certain members of the Company’s management team.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

~~Operating leases~~

The Company follows ASC No. 842, Leases. The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use assets (“ROU assets”) represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

~~The Company recognized no impairment of ROU assets as of June 30, 2022 and December 31, 2021.~~

~~The operating lease is included in right-of-use assets and lease liability on the unaudited condensed consolidated balance sheets.~~

~~Investments~~

The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

~~As of June 30, 2022 and December 31, 2021, the Company owned 31.47% and 36.8%, respectively, of shares in Micronet which was accounted for under equity method.~~

As of June 30, 2022 and December 31, 2021, the Company owned 24% of the shares in Beijing Fucheng and was the primary beneficiary of the remaining 76% of Beijing Fucheng through contractual arrangements as discussed in Note 1. Beijing Fucheng was therefore 100% consolidated in the unaudited condensed consolidated financial statements.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~Fair value measurement~~

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

●

~~Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.~~

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

●

~~Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.~~

Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

~~Intangible assets~~

The Company’s intangible assets with definite useful lives primarily consist of licensed software, capitalized development costs, platform system, and land-use rights. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives. The Company did not record any impairment of intangible assets as of June 30, 2022 and December 31, 2021.

Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

		~~Useful Life~~
~~Licensed & software~~		~~indefinite useful life and some of them for 10 years~~
~~Technology know-how~~		~~6 years~~
~~Trade name/ trademarks~~		~~indefinite useful life and some of them for 5 years~~
~~Customer relationship~~		~~5-10 years~~

~~Goodwill~~

Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. We test goodwill for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The standard simplifies the accounting for goodwill impairment by requiring a goodwill impairment to be measured using a single step impairment model, whereby the impairment equals the difference between the carrying amount and the estimated fair value of the specified reporting units in their entirety. This eliminated the second step of the previous impairment model that required companies to first estimate the fair value of all assets in a reporting unit and measure impairments based on those estimated fair values and a residual measurement approach. It also specifies that any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company did not record any impairment of goodwill as of June 30, 2022 and December 31, 2021.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~Use of Estimates and Assumptions~~

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 and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in our consolidated financial statements include the useful lives of plant and equipment and intangible assets, capitalized development costs, impairment of long-lived assets, goodwill, intangible assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position. Actual results could differ from these estimates.

Revenue Recognition

~~We recognize our revenue under ASC 606.~~The Company follows ASC 606 ~~establishes principles for reporting information about~~“Revenue from Contracts with Customers” and recognizes revenue when it transfers the ~~nature, amount, timing and uncertainty~~control of ~~revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of~~promised goods or services to customers in an amount that reflects the consideration ~~that it~~the Company expects to be entitled to ~~receive~~ in exchange for those goods or ~~services~~services.

The Company’s revenues from Tingo Mobile’s comprehensive platform service are recognized as performance obligations are satisfied. It also requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on whenupon transfer of control of ~~goods and services transfers to a customer.~~

~~We recognize revenue which represents the transfer of goods and~~promised products or services to customers in an amount that reflects the consideration the Company expects to ~~which we expect to be entitled~~receive in such exchange. We identify contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services are provided to customers.

We use a five-step model to recognize revenue from customer contracts. The five-step model requires us to (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur; (iv) allocate the transaction price to the respective performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligation.

We derive our revenues from sales contracts with our customers with revenues being recognized upon performance of services. Our contracts with customers generally do not include a general right of return relative to the deliveredexchange for those products or services. ~~We applied practical expedient when sales taxes were collected from~~The Company offers customers ~~meaning sales tax is recorded net~~the ability to lease the phones on one-year terms, and purchase data and calls, as well as use of ~~revenue, instead~~the NWASSA platform. As part of ~~cost of~~these contracts, the Company records revenue ~~which are subsequently remitted to governmental authorities and are excluded~~ from the ~~transaction price.~~lease on a straight-line basis over the lease term. The Company also records depreciation expense on a straight-line basis over the useful life of the phones, which is estimated by management at three years.

~~With respect~~The Company exercised judgement in determining the accounting policies related to ~~Micronet applicable revenue recognition U.S. GAAP requirements, Micronet implements~~these transactions, including the following:

●

Determination of whether products and services are considered distinct performance obligations that should be accounted for separately versus together, such as phone leases and purchase of data.

●

Determination of stand-alone selling prices for each distinct performance obligation and for products and services that are not sold separately.

●

The pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation.

●

Estimation of variable consideration when determining the amount of revenue to recognize (i.e., separate items on NWASSA platform)

Tingo Foods is a ~~revenue recognition policy pursuant~~diversified food processing company, which uses domestic inputs purchased from farmers across Nigeria and processes them into finished foods. Since the commencement of its operations in September 2022, the food processing activities of Tingo Foods have been conducted through arrangements with third party rice mills, cashew processing plants and other food processing companies, and the finished food products are sold to large food distributor and wholesaler companies.

In 2023, we launched our global commodities trading platform and export business (“Tingo DMCC”) from DMCC, which ~~it recognizes~~is regarded as the Free Trade Zone and a major global commodity trading center, to facilitate purchases and export of agricultural commodities from both its existing customer base and new customers. Tingo DMCC exports agricultural produce, including rice, wheat, millet and maize.

The Company’s revenues ~~at the amount to which it expects to be entitled~~from Tingo Foods and Tingo DMCC are recognized when control over the finished goods transfers to its customers, which generally occurs upon shipment to, or receipt at, customers’ locations, as determined by the specific terms of the contract. These revenue arrangements generally have single performance obligations.

The arrangements are free from variable consideration and consideration payable to our customers, including applicable discounts, returns, allowances, trade promotion, unsaleable product, consumer coupon redemption and rebates. Amounts billed and due from our customers are classified as receivables and require payment on a short-term basis; therefore, the Company does not have any significant financing components.

The Company records revenues from Tingo Foods and Tingo DMCC on a gross basis because the Company controls the products ~~or services is~~before they are transferred to the customers determined on the basis that: (1) the Company is primarily responsible for fulfilling its ~~customers. Control is generally transferred when~~promise to deliver the specified products to customers; (2) the Company has ~~a present right to payment and title and~~inventory risk before the ~~significant risks and rewards of ownership of~~specified products are transferred to ~~its customers. There is limited~~a customers, and (3) the Company has discretion ~~needed~~ in ~~identifying~~establishing the ~~point control passes: once physical delivery of~~price for the products to the agreed location has occurred, Micronet no longer has physical possession of the product and will be entitled at such time to receive payment while relieved from the significant risks and rewards of the goods delivered. For most of Micronet’s products sales, control transfers when products are shipped.specified products.

The Company’s revenues from the insurance ~~division~~segment are generated from: a) providing customers with marketing promotion and information drainage services, which is to charge information service fees according to the customer traffic information provided to customers with business needs; b) tofrom providing insurance brokerage services or insurance agency services on behalf of insurance carriers. With respect to the information drainage services and insurance brokerage services applicable to revenue recognition U.S. GAAP requirements, the company implements a revenue recognition policy pursuant to which it recognizes its revenues at the amount to which it expects to be entitled when control of the products or services is transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products are transferred to its customers.

Our performance obligation to the insurance carrier is satisfied and commission revenue is recognized at ~~the~~a point in time when an insurance policy becomes effective. The Company provides customers with information ~~drainage~~regarding services and ~~settles service charges with~~commission charge from the customers on ~~the~~a monthly basis. Performance obligation is satisfied at a point in time when the requested information is delivered to the customer.

In accordance with ASC 606-10-55, Revenue Recognition: Principal Agent Considerations, the Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis. To the extent the Company acts as the agent, revenue is reported on a net basis. The determination of whether the Company act as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer.

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

The Company reports its insurance revenue net of amounts due to the insurance companies as the Company is not the primary obligor in the relevant arrangements, the Company does not finalize the pricing, and does not bear any risk related to the insurance policies.

The Company’s revenues from the ~~online stock trading~~Online Stock Trading platform are generated from stock trading commission income. ~~Magpie provides trade execution to its customers.~~ Commission revenue is recognized at a point in time when transfer of control occurs. Trade execution performance obligation generally occurs on the trade date because that is when the underlying financial instrument (for a ~~purchase)~~purchase or ~~purchaser (for~~for a sale) is identified, and the pricing is agreed upon.

NOTE 3 — TINGO MOBILE TRANSACTION

Tingo Mobile, Purchase Price Allocation

The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed and resulting goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date:

Total Merger consideration (1)	$	1,215,241
Total purchase consideration	$	1,215,241
Less:
Net working capital	$	170,327
Property and equipment		760,661
Intangible – farmer cooperative		24,893
Intangible – trade names and trademarks		54,576
Intangible – software		90,030
Deferred tax liability (2)		(50,849	)
	$	1,049,638
Goodwill (3)	$	165,603

(1)

The $1,215,241 value of the Merger consideration transferred was determined in accordance with ASC 820 and ASC 805. ASC 820 requires that fair value to maximize objective evidence and be determined using assumptions that a market participant would use, and when level 1 inputs exist, it should be used unless determined to be not representative. That would have meant using the unadjusted Tingo Group quoted price at the time of completion of the Transaction. The Company is of the opinion however, that the market value per share price as quoted on Nasdaq is not representative of the fair value and should not be used to determine the merger consideration. Using market value per share of Tingo Group would have led to a significant bargain purchase gain and an internal rate of return that was not reasonable as well as other valuation anomalies that it created. Hence, and in accordance with ASC 805-30-30-5, the Company reassessed the determination of the consideration transferred and determined that the use of the quoted price of Tingo, Inc’s share price on the OTC at market close is more appropriate in determining the consideration fair value.

(2)	Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 30%.

(3)	The goodwill is not deductible for tax purposes.

Tingo Group’s net revenues and net profit are presented if the acquisition date of Tingo Mobile had occurred at the beginning of the previous comparable period.

	For the six months ended		For the six months ended		For the three months ended		For the three months ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Revenues	$	1,828,414	$	547,263	$	977,169	$	280,643

Net profit attributable to Tingo Group, Inc	$	273,248	$	82,180	$	96,508	$	58,117

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

In accordance with ASC 606-10-55, Revenue Recognition: Principal Agent Considerations, the Company considers several factors in determining whether it acts as the principal or as an agent in the arrangement of merchandise sales and provision of various related services and thus whether it is appropriate to record the revenues and the related cost of sales on a gross basis or record the net amount earned as service fees. For insurance brokerage services, we have identified our promise to sell insurance policies on behalf of the insurance carriers as the performance obligation in our contracts with the insurance carriers.

~~Income Taxes~~

Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future.

The Company applied FASB ASC Topic 740-10-25, “Income Taxes,” which provides guidance for recognizing and measuring uncertain tax positions and prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense.

~~MICT and its subsidiaries and VIEs within the jurisdiction of the United States, Israel and China are subject to a tax examination for the most recent three, four and five years, respectively.~~

~~Stock-Based Compensation~~

Stock-based compensation granted to the Company’s employees and consultants are measured at fair value on grant date and stock-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.

At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the stock-based compensation changes significantly, stock-based compensation expense may differ materially in the future from that recorded in the current reporting period.

~~Recently issued accounting pronouncements~~

In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments Credit Losses Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company does not expect the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

In October 2021, the FASB issued ASU 2021-08, “Business Combinations”. The amendments in this Update address how to determine whether a contract liability is recognized by the acquirer in a business combination and resolve the inconsistency of measuring revenue contracts with customers acquired in a business combination by providing specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this Update apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combination-Overalls. For public business entities, ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application is permitted. The amendments in this Update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company does not expect the adoption of this standard to have a material impact on its unaudited condensed consolidated financial statements.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, comprehensive loss and cash flows.

~~Note 3 — Stockholders’ Equity~~

On November 2, 2020 the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors for the purpose of raising $25.0 million in gross proceeds for the Company (the “Offering”). Pursuant to the terms of the Purchase Agreement, the Company sold, in a registered direct offering, an aggregate of 10,000,000 units (each, a “Unit”), with each Unit consisting of one share of the Company’s common stock, par value $0.001 per share and one warrant to purchase 0.8 of one share of Common Stock at a purchase price of $2.50 per Unit. The warrants are exercisable nine months after the date of issuance at an exercise price of $3.12 per share and will expire five years following the date the warrants become exercisable. The closing of the sale of Units pursuant to the. Purchase Agreement occurred on November 4, 2020. By December 31, 2020, the Company had received a total of $22.325 million in gross proceeds pursuant to Offering and issued in the aggregate, 7,600,000 Units. The remaining gross proceeds, in the additional aggregate amount of $2.675 million, were received by the Company on March 1, 2021 and in consideration for such proceeds, the Company issued the remaining 2,400,000 units.

On February 11, 2021, the Company announced that it had entered into a securities purchase agreement (the “February Purchase Agreement”) with certain institutional investors for the sale of (i) 22,471,904 shares of common stock, (ii) 22,471,904 Series A warrants to purchase 22,471,904 shares of common stock and (iii) 11,235,952 Series B warrants to purchase 11,235,952 shares of common stock at a combined purchase price of $2.67 (the “February Offering”). The gross proceeds to the Company from the February Offering were expected to be approximately $60.0 million. The Series A warrants will be exercisable nine months after the date of issuance, have an exercise price of $2.80 per share and will expire five and one-half years from the date of issuance. The Series B warrants will be exercisable nine months after the date of issuance, have an exercise price of $2.80 per share and will expire three and one-half years from the date of issuance. The Company received net proceeds of $54.0 million on February 16, 2021 after deducting the placement agent’s fees and other expenses.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

Note 4 — Tingo Foods PLC Purchase Price Allocation

The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed and resulting goodwill. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date. The amounts are provisional and will be adjusted during the measurement period, and additional assets or liabilities may be recognized to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

Total Merger consideration (1)	$	204,000
Total purchase consideration	$	204,000
Less:
Net working capital	$	42,077
Property and equipment		12,235
Intangible – Customer Relationships		125,677
Intangible – trade names and trade marks		22,097
Deferred tax liability (2)		(44,332	)
	$	157,754
Goodwill (3)	$	46,246

(1)

The $204,000 value of the Merger Consideration transferred as the Promissory Note. The Promissory Note is for a term of two years with an interest rate of 5% per annum. The interest rate on the Promissory Note is reasonably reflective of a market-participant rate. MICT Fintech agreed to certain covenants in connection with the Promissory Note, including with regard to its ability to incur additional debt or create additional liens. The Acquisition will not result in any new issuance of shares of Common Stock, nor of any instruments convertible into shares of Common Stock.

(2)	Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 30%.

(3)	The goodwill is not deductible for tax purposes.

Tingo Group’s net revenues and net profit are presented if the acquisition date of Tingo Foods had occurred at the beginning of the previous comparable period. Since Tingo Foods started its operational business in September 2022, revenues and net profit for three and six months ended June 30, 2022, is zero.

(USD in thousands)	For the six months ended June 30, 2023		For the three months ended June 30, 2023
Revenues	$	1,860,348		977,169

Net profit attributable to Tingo Group, Inc.	$	275,626		96,508

The revenues and net profit of Tingo Foods since the acquisition date included in the unaudited condensed consolidated statements of operations for the reporting period are $983,653 and $122,341, respectively.

Note 5 — Exit of All Weather

On ~~March 2,~~July 1, 2021, we entered into a transaction through Tianjin Bokefa Technology Co., Ltd. (“Bokefa”), with the shareholders of All Weather Insurance Agency Co., Ltd. (the “All Weather”), a local Chinese entity with business and operations in the insurance brokerage business. Pursuant to the transaction, we granted loans to All Weather’s shareholders through a framework loan (the “AW Framework Loan”) in the amount of up to RMB 30,000 (approximately $4,700) which is designated, if exercised, to be used as a working capital loan for All Weather. As of December 31, 2021, RMB 30,000 (approximately $4,700) was drawn down from the AW Framework Loan for working capital. In consideration for the AW Framework Loan, the parties entered into various additional agreements as more fully described in our annual report. Through these series of agreement, we determined that we are the primary beneficiary, and consolidated All Weather.

During the second quarter of 2023, the Company's management decided to focus its operations on recent acquisitions of Tingo Mobile and Tingo Foods. That decision led to abandon our interests in All Weather. As part of the decision, the Company demanded the full repayment of the loan granted to All Weather’s shareholders. As of the decision date, the Company is no longer consolidating All Weather. The Company recorded a loss from deconsolidation of All Weather of $3,333 in the consolidated statements of operations.

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

Note 6— Stockholders’ Equity

A. Common Stock:

Common Stock confers upon its holders the rights to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends if declared.

B. Series A Preferred Stock:

As part of the consideration paid by the Company to TMNA at the closing of the Merger on December 1, 2022, the Company issued 2,604.28 shares of Series A Preferred Stock which are convertible into 26,042,808 shares of Common Stock equal to approximately 20.1% of the total issued and outstanding Common Stock immediately prior to closing of the Merger. The Company held a special meeting of stockholders on June 7, 2023, during which shareholder approval was received for the conversion of the Series A Preferred Stock into 26,042,808 shares of Common Stock, which the Company issued on July 27, 2023.

C. Temporary equity:

As part of the consideration paid by the Company to TMNA at the closing of the Merger on December 1, 2022, the Company issued 33,687.21 shares of Series B Preferred Stock which are convertible into 336,872,138 shares of Common Stock equal to approximately 35% of the total issued and outstanding Company common stock immediately prior to the closing date of the Merger. The shares of Series B Preferred Stock will be convertible into Common Stock upon approval by Nasdaq of the change of control of the Company and upon the approval of the Company’s stockholders. If such stockholder or Nasdaq approval is not obtained by June 30, 2023, TMNA shall have the right to (i) cause the redemption of Series B Preferred Stock to take place within 90 days; and (ii) cause the Company to redeem all of the Series B Preferred Stock in exchange for $666,666,667 or an amount of common stock of TGH equivalent in value to $666,666,667. As the redemption provisions to redeem the Series B Preferred Stock in cash is outside the control of the Company and contingent upon the approval of stockholders or Nasdaq approval of the change in control application of the Company, they are required to be presented outside of stockholders’ equity and therefore were presented as temporary equity on the face of the consolidated balance sheets.

On July 5, 2023, the Company entered into a ~~securities purchase~~forbearance agreement ~~(the “March Purchase Agreement”)~~ with ~~certain investors for~~ the ~~purpose~~holder of ~~raising approximately $54.0 million in gross proceeds for~~ the ~~Company. Pursuant to~~Series B Preferred Stock under the terms of which the ~~March Purchase Agreement,~~Series B Preferred Stockholder agreed not to redeem the Company agreed to sell, in a registered direct offering, an aggregate of 19,285,715 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $2.675 per share and in a concurrent private placement, warrants to purchase an aggregate of 19,285,715 shares of common stock, at a purchase price of $0.125 per warrant, for a combined purchase price per share and warrant of $2.80 which was priced at the market under Nasdaq rules. The warrants are immediately exercisable at an exercise price of $2.80 per share, subject to adjustment, and expire five years after the issuance date. The closing date for the transaction consummated under the March Purchase Agreement was on March 4, 2021. The Company received net proceeds of $48.69 million on March 4, 2021, after deducting the placement agent’s fees andSeries B Preferred Stock, or take any other ~~expenses.~~

On May 17, 2021, the Company’s Board of Directors (the “Board”) unanimously approved a grant of fully vested 6,000,000 shares of common stock to Mr. Darren Mercer, the Company’s Chief Executive Officer. The issuance of the shares was pursuant to the Company’s long term incentive plan as previously approved by the stockholders and negotiatedaction in connection with the Company’s acquisition of Global Fintech Holdings Limited. The Board unanimously agreed to issue the shares in recognition of Mr Mercer’s direct contribution to achieving numerous key deliverables including: (i) the completion of several acquisitions, including those of Fucheng Insurance and Magpie; (ii) obtaining regulatory approval from the Hong Kong SFC regarding the acquisition of Magpie; (iii) the execution of several major commercial contracts and partnerships, including with a number of major insurance agents and one of China’s largest payment service providers; (iv) the execution of an exclusive partnership with the Shanghai Petroleum and Natural Gas Trading Center to which allows MICT to provide financial services to its customers; (v) the successful launch of the insurance business in December 2020 and the delivery of significant revenues and revenue growth in Q1 2021; and (vi) the completion of capital raises totaling in excess of $140 million and broadening the Company’s institutional investor base.Series B Preferred Stock, until September 30, 2023.

D. Stock Option Plan:

~~On May 17, 2021, the Board unanimously approved a grant of fully vested 300,000 shares of common stock of the Company to Richard Abrahams, Magpie’s Chief Executive Officer.~~2012 Plan.

Our 2012 Stock Incentive Plan (the “2012 Incentive Plan”) was initially adopted by the ~~Board~~Company’s board of directors (the “Board”) on November 26, 2012, and approved by our stockholders on January 7, 2013, and subsequently amended on September 30, 2014, October 26, 2015, November 15, 2017, and November 8, 2018. Under the 2012 Incentive Plan, as amended, up to 5,000,000 shares of our ~~common stock,~~Common Stock, are currently authorized to be issued pursuant to option awards granted ~~thereunder. On May 17, 2021, May 23, 2021~~thereunder, 4,194,782 shares of which have been issued or have been allocated to be issued as of December 31, 2022, and ~~June 28, 2021,~~805,218 shares remain available for future issuance as December 31, 2022. The 2012 Incentive Plan is intended as an incentive to retain directors, officers, employees, consultants and advisors to the Company, persons of training, experience and ability, to attract new employees, directors, consultants and advisors whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company, by granting to such persons options to purchase shares of Common Stock , shares of the Company’s stock, with or without restrictions, or any other share-based award. The Plan is intended as an incentive to retain in the employ of, and as directors, consultants and advisors to the Company and its subsidiaries (including any “employing company” under Section 102(a) of the Ordinance (as hereinafter defined) and any “subsidiary” within the meaning of Section 424(f) of the United States Internal Revenue Code of 1986, as amended (the “Code”), collectively, the “Subsidiaries”), persons of training, experience and ability, to attract new employees, directors, consultants and advisors whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company and its Subsidiaries, by granting to such persons either (i) options to purchase shares of Common Stock, (the “Options”), (ii) shares of Common Stock, with or without restrictions, or (iii) any other stock-based award, granted to a grantee or an ~~aggregate of 125,000, 370,000 and 245,000 respectively, options~~optionee (as such terms are defined below hereunder) under the 2012 Incentive Plan ~~with an exercise price of $1.41, $1.81~~ and $2.49, respectively, of which 310,000 options vested as of June 30, 2022. This resulted in a stock-based compensation expense of approximately $234,000 recorded for the six months ended June 30, 2022, based on a fair value determined using a Black-Scholes model.

~~On March 22, 2021, 20,000 shares of common~~any stock ~~were issued to an employee who exercised their options at an exercise price of $1.41.~~

~~In September 2021, the Board unanimously approved a grant of 87,000 fully vested shares of common stock of the Company to some of our employees.~~

~~On September 13, 2021, 40,000 shares of common stock were issued to an employee who exercised their options at an exercise price of $1.32.~~

~~On September 28, 2021, MICT granted 823,020 shares of common stock of the Company to China Strategic Investments Limited.~~

~~On May 10, 2022, MICT granted 1,659,500 shares of common stock of the Company to Cushman Holdings Limited, an unrelated third party, as an introducer fee for Tingo, Inc.~~

On May 10, 2022, MICT granted 858,631 shares of common stock of the Company to China Strategic Investments Limited, an unrelated third party, in connection with the GFHI acquisition as discussed in Note 1.

~~On May 10, 2022, MICT granted 612,500 shares of common stock of the Company to some of our Directors and employees. The shares were~~ issued pursuant to the ~~2020 Incentive Plan.~~exercise thereof.

On May 10, 2022, the Company’s Board of Directors (the “Board”) unanimously approved a grant of fully vested 4,000,000 shares of common stock to Mr. Darren Mercer, the Company’s Chief Executive Officer. The shares were issued under the Company’s long term incentive plan as such long term incentive plan previously approved by the stockholders and negotiated in connection with the Company’s acquisition of Global Fintech Holdings Limited. The Board unanimously agreed to issue the shares in recognition of Mr Mercer’s direct contribution to achieving numerous key deliverables including: (i) the completion of several acquisitions, including those of Fucheng Insurance and Magpie; (ii) obtaining regulatory approval from the Hong Kong SFC regarding the acquisition of Magpie; (iii) the execution of several major commercial contracts and partnerships, including with a number of major insurance agents and one of China’s largest payment service providers; (iv) the execution of an exclusive partnership with the Shanghai Petroleum and Natural Gas Trading Center to which allows MICT to provide financial services to its customers; (v) entered into an Agreement and Plan of Merger with Tingo (vi) the completion of capital raises totaling in excess of $140 million and broadening the Company’s institutional investor base.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

2020 Plan. The 2020 Stock Incentive Plan (the “2020 Incentive Plan”) provides for the issuance of up to 25,000,000 shares of our Common Stock plus a number of additional shares issued upon the expiration or cancellation of awards under our 2014 Stock Incentive Plan, which was terminated when the 2020 Incentive Plan was approved by our stockholders. Generally, shares of our Common Stock reserved for awards under the 2020 Incentive Plan that lapse or are canceled (other than by exercise) will be added back to the share reserve available for future awards. However, shares of our Common Stock tendered in payment for an award or shares of our Common Stock withheld for taxes are not available again for future awards. In addition, Shares repurchased by the Company with the proceeds of the option exercise price may not be reissued under the 2020 Incentive Plan.

The following table summarizes information about stock options outstanding and exercisable as of June 30, ~~2022:~~2023:

Six months ended
June 30 Year ended
December 31
2022 2021
Number of
Options Weighted
Average
Exercise
Price Number of
Options Weighted
Average
Exercise
Price

Options outstanding at the beginning of year/period: 1,558,000 $ 1.74 1,158,000 $ 2.24
Changes during the year/period:
Granted - $ - 740,000 $ 1.97
Exercised - $ - (60,000 ) $ 1.35
Forfeited (818,000 ) $ 1.54 (280,000 ) $ 1.41

Options outstanding at end of year/period 740,000 $ 1.97 1,558,000 $ 1.74
Options exercisable at end of year/period 402,500 $ 1.69 1,118,000 $ 1.57

Options Outstanding				Options Exercisable
Number Outstanding on June 30, 2023		Weighted Average Remaining Contractual Life		Number Exercisable on June 30, 2023		Exercise Price
		Years				$
	125,000		8		125,000		1.41
	340,000		8		340,000		1.81
	95,000		8		63,333		2.49
	560,000				528,333

	For the six months ended June 30, 2023					For the year ended December 31, 2022
	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price

Options outstanding at the beginning of period:		590,000		$	1.83		1,558,000		$	1.74
Changes during the period:
Granted		—		$	—		—		$	—
Exercised		—		$	—		—		$	—
Forfeited		(30,000	)	$	1.81		(968,000	)	$	1.68

Options outstanding at the end of the period		560,000		$	1.83		590,000		$	1.83
Options exercisable at the end of the period		528,333		$	1.79		434,167		$	1.74

The Company has warrants outstanding as follows:

Warrants
Outstanding Average
Exercise
Price Remaining
Contractual
Life
Balance, December 31, 2021 62,863,879 $ 2.854 4.5
Granted - $ - -
Forfeited - $ - -
Exercised - $ - -
Balance, June 30, 2022 62,863,879 $ 2.854 4.25

	Warrants Outstanding			Average Exercise Price		Remaining Contractual Life
Balance, December 31, 2022		62,863,879		$	2.854		4.25
Granted		-		$	-		-
Repurchase		(25,981,836	)	$	0.25		-
Exercised		(1,015,386	)	$	3.07		-
Balance, June 30, 2023		35,866,657		$	2.84		3.25

~~NOTE 4 - EQUITY INVESTMENT IN MICRONET~~

The Company is required to assume a dividend yield as an input in the Black-Scholes model. The dividend yield assumption is based on the Company’s historical experience and expectation of future dividends payouts and may be subject to change in the future.

~~As of March 31, 2021, the~~The Company held 50.31% of Micronet’s issued and outstanding shares. On May 9, 2021, following the exercise of options by minority stockholders, the Company’s ownership interest was diluted to 49.88% and as a result the Company is no longer required to include Micronet’s operating results in its financial statements. From May 9, 2021, the Company accounted for the investment in Micronetuses historical volatility in accordance with FASB ASC Topic 718, “Compensation - stock compensation”. The computation of volatility uses historical volatility derived from the ~~equity method.~~Company’s exchange-traded shares.

On June 16, 2021, Micronet announced that it had completed a public equity offering on the TASE. Pursuant to the offering, Micronet sold an aggregate number of 18,400 securities units (the “Units”) at a price of 14.6 NIS per Unit with each Unit consisting of 100 ordinary shares, 25 series A options and 75 series B options, resulting in the issuance of 1,840,000 ordinary shares, 460,000 series A options and 1,380,000 series B options. Micronet raised total gross proceeds of 26,864,000 NIS (approximately $8,290,000) in the Offering. The Company did not participate in the Offering, and, as a result, the Company owned 31.47% of the outstanding ordinary shares of Micronet and 26.83% on a fully diluted basis as of June 30, 2022.

	May 9, 2021
~~Micronet’s fair value as of May 9, 2021~~		~~1,127~~
~~Net assets~~		~~(6,185~~	)
~~Capital reserve from currency translation~~		~~134~~
~~Non-controlling interests~~		~~2,990~~
~~Net loss from loss of control~~		~~1,934~~

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

~~NOTE 5 — LOAN TO MICRONET~~

On November 13, 2019, the Company and Micronet executed a convertible loan agreement pursuant to which the Company agreed to loan to Micronet $500,000 (the “Convertible Loan”). The Convertible Loan bears interest at a rate of 3.95% calculated and paid on a quarterly basis. In addition, the Convertible Loan, if not converted, shall be repaid in four equal installments, the first of such installment payable following the fifth quarter after the issuance of the Convertible Loan, with the remaining three installments due on each subsequent quarter thereafter, such that the Convertible Loan shall be repaid in full upon the lapse of 24 months from its issuance. In addition, the outstanding principal balance of the Convertible Loan, and all accrued and unpaid interest, is convertible at the Company’s option, at a conversion price equal to 0.38 NIS per Micronet share. Pursuant to the convertible loan agreement, Micronet also agreed to issue the Company an option to purchase one of Micronet’s ordinary shares for each ordinary share that it issued as a result of a conversion of the Convertible Loan at an exercise price of 0.60 NIS per share, exercisable for a period of 15 months. On July 5, 2020, the Company had a reverse split where the price of the Convertible Loan changed from 0.08 NIS per Micronet share into 5.7 NIS per Micronet share. The option’s exercise price changed from 0.6 NIS per share to 9 NIS per Micronet share.

On January 1, 2020, the Convertible Loan was approved at a general meeting of the Micronet shareholders and as a result, the Convertible Loan and the transactions contemplated thereby became effective. The loan was repaid on January 4, 2022.

On August 13, 2020, MICT Telematics extended to Micronet an additional loan in the aggregate amount of $175 (the “Loan Sum”) which governed the existing outstanding intercompany debt. The loan does not bear any interest and has a term of twelve months. The Loan Sum was granted for the purpose of supporting Micronet’s working capital and general corporate needs. The loan was repaid on August 25, 2021.D. Stock Option Plan - (continued):

~~NOTE 6 — BEIJING FUCHENG LIANBAO TECHNOLOGY CO., LTD TRANSACTION~~

~~On February 10, 2021,~~The risk-free interest assumption is the ~~Company closed~~implied yield currently available on U.S. Treasury zero-coupon bonds, issued with a ~~transaction pursuant~~remaining term equal to ~~which it acquired (via Beijing Fucheng in which it holds 24% and engaged in a VIE structure) all~~the expected life term of the ~~shares of Beijing Yibao Technology Co., Ltd., and indirectly its fully owned subsidiary Beijing Fucheng Insurance Brokerage Co., Ltd. (the “Fucheng Insurance Transaction”).~~Company’s options.

Pre-vesting rates forfeitures were zero based on pre-vesting forfeiture experience.

The ~~table set forth below summarizes the estimates of the~~ fair value of ~~assets acquired and liabilities assumed. In addition,~~each option granted is estimated on the date of grant, using the Black-Scholes option-pricing model with the following ~~table summarizes~~weighted average assumptions: dividend yield of 0% for all years; expected volatility: as of June 30, 2023 and December 31, 2022-87.2%-100.4%; risk-free interest rate: as of June 30, 2023 and December 31, 2022-0.99%-1.64%; and expected life: as of June 30, 2023 and December 31, 2022 -6.5-10 years.

The Company uses the ~~allocation~~simplified method to compute the expected option term for options granted. Compensation expenses in respect of our stock option plans were recorded by the Company in line “General and administrative” expenses in the statements of operations.

On February 2, 2023, the Company entered into settlement and repurchase agreements (the “Repurchase Agreements”) with certain holders of the ~~preliminary purchase price~~outstanding warrants over its Common Stock (“Warrant Holders”). The warrants being repurchased were originally issued by the Company between November 2020 and March 2021 pursuant to three offerings of Common Stock and warrants. The exercise prices of the warrants were $3.12 in the first offering and $2.80 in the subsequent two offerings, with various expiration dates falling between August 16, 2024, and August 16, 2026. The repurchase will result in the surrender and cancellation of the warrants held by each Warrant Holder.

Pursuant to the Repurchase Agreements, the Company paid $0.15 per share in April 2023 and $0.10 per share on May 1, 2023, at an aggregate amount of $6,548.

E. Issuance of Shares:

On February 5, 2023, The Company granted 1,309,500 shares of Common Stock of the Company to Cushman Holdings Limited, an unrelated third party, as a success fee relating to the completion of the acquisition ~~date:~~of Tingo Mobile.

On February 5, 2023, The Company granted 750,000 shares of Common Stock to an unrelated third party, relating to the purchase by GFH Intermediate Holdings Limited of certain software, technology and intellectual property from the beneficial owner of Data Insight Holdings Limited,

On February 5, 2023, The Company granted 100,000 shares of Common Stock to China Strategic Investments Limited as an ex-gratia payment for the provision of corporate finance services.

On February 5, 2023, The Company granted 720,000 shares of Common Stock to certain directors and employees. The shares were issued pursuant to the 2020 Incentive Plan and 2012 Incentive Plan.

~~Beijing Fucheng Lianbao Technology Co., Ltd transaction, Purchase Price Allocation~~

Total cash consideration $ 5,711
Total Purchase Consideration $ 5,711

Less:

Net working capital $ 926
Property and equipment 26
License 4,814
Current liabilities (55 )
Fair value of net assets acquired $ 5,711

~~NOTE 7~~ ~~— Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition~~

On ~~January 1, 2021, we entered~~February 5, 2023, the Company’s Board unanimously approved a grant of 3,200,000 fully vested shares of Common Stock to Mr. Darren Mercer in recognition of the completion of the Merger which is expected to be transformational for the Company. The size of the award takes into ~~a transaction through Bokefa, with~~account the ~~shareholders of Guangxi Zhongtong Insurance Agency Co., Ltd (“Guangxi Zhongtong”), a local Chinese entity with business~~improved terms for the Company that were negotiated in October 2022, and ~~operations in~~also the ~~insurance brokerage business. Pursuant~~value Mr. Mercer is delivering to the ~~transaction, we~~growth of the Company.

On March 6, 2023, The Company granted ~~loans~~48,000 shares of Common Stock to ~~Guangxi Zhongtong’s shareholders through a frame work loan (the “GZ Frame Work Loan”)~~Corprominence LLC as part of the ~~amount~~payment for their services.

On May 12, 2023, The Company granted 60,000 shares of upCommon Stock to ~~RMB 40,000 (approximately $6,125) (“GZ Frame Work Loan Amount”) which is designated, if exercised,~~certain employees. The shares were issued pursuant to ~~be used~~the 2020 Incentive Plan and 2012 Incentive Plan.

On May 12, 2023, The Company granted 250,000 shares of Common Stock to China Strategic Investments Limited as a working capital loan for Guangxi Zhongtong. As of June 30, 2022, only RMB 8,010 (approximately $1,243) was drawn down from the GZ Frame Work Loan for working capital and approximately $919 was drawn down for loans to shareholders of Guangxi Zhongtong (as stipulated in the agreement). In considerationan ex-gratia payment for the ~~GZ Frame Work Loan, the parties entered into various additional agreements which include: (i) a pledge agreement pursuant to which the shareholders have pledged their shares for the benefit~~provision of Bokefa in order to secure the GZ Frame work Loan Amount (ii) an exclusive option agreement pursuant to which Bokefa has an exclusive option to purchase the entire issued and outstanding common shares of Guangxi Zhongtong from the shareholders (“Option Agreement”) under such terms set forth therein (which include an exercise price not less than the maximum GZ Frame Work Loan Amount and the right to convert the GZ Frame Work Loan Amount into the purchased shares) (iii) an entrustment agreement and power of attorney agreement pursuant to which the shareholders irrevocably entrusted and appointed Tianjin Bokefa as their proxy and trustee to exercise on their behalf any and all rights under applicable law and the articles of association of Guangxi Zhongtong in the shareholder’s equity interest in Guangxi Zhongtong (iv) a business cooperation agreement and a master exclusive service agreement which grants Bokefa rights related to Guangxi Zhongtong’s business and operations in order to secure repayment of the GZ Frame Work Loan Amount.corporate finance services.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

~~This transaction was structured~~E. Issuance of Shares - (continued):

On June 23, 2023, The Company issued 65,831 shares of Common Stock to WARBERG WF IX LP as part of the exercise of warrants.

Compensation expenses in respect of shares issued to service providers and employees were recorded by the Company in line “General and administrative” expenses in the statements of operations.

On July 27, 2023, the Company issued 26,042,808 shares of Common Stock, pursuant to ~~a Variable Interest Entity, Structure (in which we do not hold~~ the ~~shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with Guangxi Zhongtong, we are regarded as Guangxi Zhongtong’s controlling entity and primary beneficiary~~conversion of ~~Guangxi Zhongtong business. We have, therefore, consolidated~~2,604.28 shares of Series A Preferred Stock under the ~~financial position and operating results of Guangxi Zhongtong into our consolidated financial statements, using the fair value~~terms of the ~~assets and liabilities~~Series A Preferred Stock Certificate of ~~Guangxi Zhongtong~~Designation (the “Series A Preferred Stock Certificate of Designation”). The Company held a special meeting of stockholders on June 7, 2023, during which shareholder approval was received for such conversion.

On July 27, 2023, the Company issued 13,167,641 shares of Common Stock which are held in ~~accordance with U.S. GAAP. Beijing Fucheng Lianbao Technology Co., Ltd is an entity incorporated on December 29, 2020, in which Bokefa owns 24% equity interest~~escrow with the ~~remaining 76% controlled by Bokefa through VIE agreements. On February 10, 2021, Beijing Fucheng acquired all~~Supreme Court of the State of New York pursuant to the Order. On July 19, 2023, the Company filed a motion to vacate the Order. If the motion to vacate is granted and no judgment has been entered against the Company, the Order Shares will be returned to the Company (for further information see Note 11).

On July 31, 2023, the Company issued 1,000,000 shares of ~~Beijing Yibao Technology Co., Ltd., which holds 100%~~Common Stock as a payment to Hadron Group for financial services.

On August 1, 2023, The Company granted 40,000 shares of Common Stock of the equity interest in Beijing Fucheng Insurance Brokerage Co., Ltd. (“Fucheng Insurance”). Fucheng Insurance is a Chinese insurance brokerage agency and a nation-wide licensed entity which offers insurance brokerage services for a broad rangeCompany to certain employees as part of ~~insurance products. Fucheng Insurance, through~~ their nationwide license, will give us the flexibility to offer and create tailor-made insurance products, leverage customers directly or through distribution partners and procure better deals with both our existing and new insurance company partners. Fucheng Insurance further enables us to accelerate the onboarding of new agents onto our platforms all throughout China. It also creates the opportunity to promote our business through some of China’s biggest online portals, which will provide business-to-business-to-consumer (B2B2C) as well as business-to-consumer (B2C) channels. When Fucheng Insurance initiates its nationwide rollout of its mobile application, it will facilitate access to those portals’ large customer bases which will also offer MICT’S full suite of insurance products. Beijing Fucheng shares were acquired for approximately $5,700, and funded through MICT.

On October 21, 2021, Yibao transferred such funds and the transaction closed. As a result of the transaction, Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the Closing, the previous agreements consummated on January 1, 2021 per the Frame Work Loan became null and void.

Purchased identifiable intangible assets are amortized on a straight-line basis over their respective useful lives. The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date:

G~~uangxi~~ Z~~hongtong~~ I~~nsurance agency co~~., ~~Ltd, Purchase Price Allocation~~

Total cash consideration (1) $ -
Total Purchase Consideration $ -

Less:

Debt-free net working capital $ 613
Property and equipment 13
Intangible assets - Licenses 1,926
Intangible assets - customer relationship (1) 248
Deferred Tax liability (2) (544 )
Fair value of net assets acquired $ 2,256

Noncontrolling interest $ (3,231 )
Gain on equity interest 1,128
Equity investment -
Change in investment (2,103 )

Goodwill value (3) $ (153 )

~~(1)~~

~~The customer database value is based on the cost to recreate, as indicated by management.~~

~~(2)~~

~~Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 26%.~~

~~(3)~~

~~The goodwill is not deductible for tax purposes.~~

employment agreement.

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

NOTE 8 ~~— ALL WEATHER TRANSACTION~~

On July 1, 2021, we entered into a transaction through Bokefa, with the shareholders of All Weather, a local Chinese entity with business and operations in the insurance brokerage business. Pursuant to the transaction, we granted loans to All Weather’s shareholders through a frame work loan (the “AW Frame Work Loan”) the amount of up to RMB 30,000 (approximately $4,700) (“AW Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for All Weather. As of June 30, 2022, RMB 30,000 (approximately $4,700) was drawn down from the AW Frame Work Loan for working capital. In consideration for the AW Frame Work Loan, the parties entered into various additional agreements which include: (i) a pledge agreement pursuant to which the shareholders have pledged their shares for the benefit of Bokefa in order to secure the AW Frame work Loan Amount (ii) an exclusive option agreement pursuant to which Bokefa has an exclusive option to purchase the entire issued and outstanding common shares of All Weather from the shareholders (“Option Agreement”) under such terms set forth therein (iii) an entrustment agreement and power of attorney agreement pursuant to which the shareholders irrevocably entrusted and appointed Bokefa as their proxy and trustee to exercise on their behalf any and all rights under applicable law and the articles of association of All Weather in the shareholder’s equity interest in All Weather (iv) a business cooperation agreement and a master exclusive service agreement which grants Bokefa rights related to All Weather’s business and operations in order to secure repayment of the AW Frame Work Loan Amount.

This transaction was structured pursuant to a Variable Interest Entity Structure (in which we do not hold the shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with All Weather, we are regarded as All Weather’s controlling entity and primary beneficiary of All Weather’s business. We have, therefore, consolidated the financial position and operating results of All Weather into our consolidated financial statements, using the fair value of the assets and liabilities of All Weather in accordance with U.S. GAAP.

~~All Weather, Purchase Price Allocation~~

Total cash consideration (1) $ -
Total Purchase Consideration $ -

Less:

Debt-free net working capital $ (105 )
Property and equipment 153
Right of use assets 208
Lease liabilities (258 )
Intangible assets - licencs (1) 849
Intangible assets - customer relationship (1) 54
Deferred Tax liability (2) (226 )
Fair value of net assets acquired $ 675

Noncontrolling interest $ (675 )
Change in investment (675 )

Goodwill value (3) $ -

~~(1)~~

~~The customer database value is based on the cost to recreate, as indicated by management.~~

~~(2)~~

~~Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 25%.~~

~~(3)~~

~~The goodwill is not deductible for tax purposes.~~

~~MICT, Inc.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In Thousands, except Share and Par Value data)~~

~~NOTE 9~~7 — SEGMENTS

ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, ~~business~~operating segments and major customers in financial statements for detailing the Company’s ~~business~~operating segments.

Operating segments are based upon our internal organization structure, the manner in which our operations are managed and the availability of separate financial information. As a result of our acquisition of GFHI on July 1, 2020, and Tingo Mobile on December 1, 2022, we currently serve the marketplace, through our operating subsidiaries, as a financial technology company (Fintech Industry) targeting the ~~Chinese marketplace~~African, Middle Eastern and South East Asia marketplaces as well as other areas of the world. We have built and/or, are in the process of building, various platforms to capitalize on business opportunities in a range of insurance platform segments (formerly: verticals and technology segments) including stock trading and insurance brokerage services. We will continue to increase the capabilities of our platforms through acquisition and/or the licensing of different technologies to support our efforts in the different market segments. By building secure, reliable and scalable platforms with high volume processing capability, we intend to provide customized solutions that address the needs of a highly diverse and broad client base. First, we have launched our insurance platform, operated by GFHI, for the Chinese market and have been generating revenues in GFHI. While the revenues were not material in 2020, these revenues are building and we expect these revenues to continue to grow as this business establishes itself in the market as a reputable service available to consumers Secondly, we are currently in the process of launching our securities trading software platform and accelerating the development and business around this segment. This is possible due to the recent completion of the acquisition of Magpie (formerly: Huapei) on February 26, 2021.

~~As a result of such acquisition, we have obtained the necessary licenses and permits to operate our online platform in the Hong Kong stock exchange.~~

As we begin development of our oil and gas trading platform, we are looking to partner with an established and reputable Chinese organization to build out our technology, which will support two major elements of China’s energy sector.

During the period between June 23, 2020 and May 9, 2021, we have held a controlling interest in Micronet Ltd. (“Micronet”), and we have presented our mobile resource management (“MRM”) business operated by Micronet as a separate operating segment. As of May 9, 2021, the Company’s ownership interest was diluted and, as a result, we ~~no longer include Micronet’s operating results in our consolidated financial statements.~~deconsolidated Micronet.

As of June 30, 2023, the Company has five segments. This change came with the acquisition of Tingo Foods on February 9, 2023. The Company changed its reporting structure to better reflect what the chief operating decision maker (“CODM”) is reviewing to make organizational decisions and resource allocations. Following the loss of control over Micronet, MRM is no longer a separate operating segment or reportable segment since the CODM does not review discrete financial information for the business. The Company recast the information as of June 30, 2023 to align with this presentation.

The ~~following table summarizes the financial performance~~activities of each of our ~~operating segments:~~reportable segments from which the Company earns revenues, records equity earnings or losses and incurs expenses are described below:

Six months ended June 30, 2022
Insurance
platform Mobile
resource
management Online
stock
trading Consolidated

Revenues from external customers $ 21,483 - 38 $ 21,521
Segment operating loss (6,090 )(1) - (6,038 ) (12,128 )
Non allocated expenses (11,612 )
Finance expenses and other (622 )
Consolidated loss before provision for income taxes $ (24,362 )

●

Verticals and Technology segment develops insurance platform for the Chinese market and have been generating revenues from insurance products in China.

~~(1)~~

~~Includes $1,591 of intangible assets amortization, derived from GFHI acquisition.~~●

Comprehensive Platform Service segment develops Nwassa agri-fintech marketplace platform, which enables customers in Nigeria to trade agricultural produce with customers, as well as to purchase farming inputs, to recharge airtime and data, to pay bills and utilities, to arrange insurance and to procure finance.

Three months ended June 30, 2022
Insurance
platform Mobile
resource
management Online
stock
trading Consolidated

Revenues from external customers $ 11,950 - 8 $ 11,958
Segment operating loss (1,795 )(1) - (2,494 ) (4,288 )
Non allocated expenses (9,481 )
Finance expenses and other (672 )
Consolidated loss before provision for income taxes $ (14,441 )

~~(1)~~

~~Includes $733 of intangible assets amortization, derived from GFHI acquisition.~~

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

Six months ended June 30, 2021
Verticals
and
technology Mobile
resource
management Online
stock
trading Consolidated
Revenues from external customers $ 20,550 726 - $ 21,276
Segment operating loss (4,883 )(1) (827 )(2) (1,956 ) (7,666 )
Non allocated expenses (13,686 )
Finance expenses and other (2,289 )
Consolidated loss before provision for income taxes $ (23,641 )

●

Online Stock Trading segment develops technology investment trading platform that is currently operational in Hong Kong and Singapore.

●

Food Processing segment, which purchases crops and raw foods, before processing them into finished food products through arrangements with third party rice mills, cashew processing plants, and other food processing companies, to be sold to large food distributor and wholesaler companies (Tingo Foods was purchased by the Company in February 2023)

●

Export and Commodity Trading, where both agricultural commodities and processed foods are exported and traded on a global basis through Tingo DMCC, which operates DMCC.

The following table summarizes the financial performance of our operating segments:

	For the six months ended June 30, 2023
(USD in thousands)	Verticals and Technology (1)			Online Stock Trading (4)			Corporate and others (2)			Comprehensive Platform Service (3)			Export and Commodity Trading		Food Processing (5)			Consolidated
Revenues from external customers	$	33,721		$	28		$	-		$	463,016		$	347,997	$	983,652		$	1,828,414
Segment operating Income (loss)		(41,054	)		(4,515	)		(14,744	)		229,289			69,599		203,815			442,390
Other income (loss), net		(492	)		(9	)		-			138			-		-			(363	)
Financial income (expenses), net		81			(439	)		(2,088	)		(17,776	)		-		(1,155	)		(21,377	)
Consolidated profit before provision for income taxes																		$	420,650

(1)	Includes: (1) $1,806 Impairment of intangible assets from Guangxi Zhongtong Insurance Agency Co., Ltd, (2) $7,777 Impairment of intangible assets from GFH transaction (3) $4,814 Impairment of intangible assets from Beijing Fucheng Lianbao Technology Co. (4) $19,788 impairment of goodwill derived from GFHI acquisition. (5) $3,333 loss from All Weather’s deconsolidation (6) $1,578 of intangible assets amortization.

(2)	Corporate and others segment represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(3)	Includes ~~$1,466~~$14,488 of intangible assets amortization, derived from ~~GFHI. acquisitions.~~the Tingo Mobile merger.

~~(2)~~(4)

Includes ~~$103~~$1,253 Impairment of intangible assets from Magpie.

(5)	Includes $7,697 of intangible assets amortization, derived from ~~Micronet consolidation.~~the Tingo Foods acquisition.

	For the three months ended June 30, 2023
(USD in thousands)	Verticals and Technology (1)			Online Stock Trading (2)			Corporate and others (4)			Comprehensive Platform Service (3)			Export and Commodity Trading		Food Processing (5)			Consolidated
Revenues from external customers	$	13,169		$	20		$	-		$	209,550		$	347,997	$	406,433		$	977,169
Segment operating Income (loss)		(37,830	)		(2,814	)		(4,827	)		97,215			69,599		60,370			181,713
Other income (loss), net		(940	)		(1	)		-			153			-		-			(788	)
Financial income (expenses), net		16			(392	)		(1,454	)		(20,119	)		-		(872	)		(22,821	)
Consolidated profit before provision for income taxes																		$	158,104

(1)

Includes: (1) $1,806 Impairment of intangible assets from Guangxi Zhongtong Insurance Agency Co., Ltd, (2) $7,777 Impairment of intangible assets from GFH transaction (3) $4,814 Impairment of intangible assets from Beijing Fucheng Lianbao Technology Co. (4) $19,788 impairment of goodwill derived from GFHI acquisition. (5) $3,333 loss from All Weather’s deconsolidation (6) $782 of intangible assets amortization.

Three months ended June 30, 2021
Verticals
and
technology Mobile
resource
management Online
stock
trading Consolidated
Revenues from external customers $ 12,341 - - $ 12,341
Segment operating loss (2,916 )(1) - (1,956 ) (4,872 )
Non allocated expenses (11,697 )
Finance expenses and other (1,810 )
Consolidated loss before provision for income taxes $ (18,379 )

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

(2)	Includes $1,253 Impairment of assets.

(3)	Includes $7,240 of intangible assets amortization, derived from the Tingo Mobile acquisition.

(4)

Corporate and others segment represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(5)	Includes $4,619 of intangible assets amortization, derived from the Tingo Foods acquisition.

	For the six months ended June 30, 2022
(USD in thousands)	Verticals and Technology (1)			Online Stock Trading			Corporate and others (2)			Comprehensive Platform Service		Export and Commodity Trading		Food Processing		Consolidated
Revenues from external customers	$	21,483		$	38		$	-		$	-	$	-	$	-	$	21,521
Segment operating loss		(6,090	)		(6,038	)		(11,612	)		-		-		-		(23,740	)
Other income (loss), net		807			51			(20	)		-		-		-		838
Financial income (expenses), net		253			(1,043	)		(299	)		-		-		-		(1,089	)
Consolidated loss before provision for income taxes																$	(23,991	)

(1)	Includes $1,591 of intangible assets amortization, derived from GFHI acquisition.
(2)	Corporate and others segment represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

	For the three months ended June 30, 2022
(USD in thousands)	Verticals and Technology (1)			Online Stock Trading			Corporate and others (2)			Comprehensive Platform Service		Export and Commodity Trading		Food Processing		Consolidated
Revenues from external customers	$	11,950		$	8		$	-		$	-	$	-	$	-	$	11,958
Segment operating loss		(1,795	)		(2,494	)		(9,481	)		-		-		-		(13,770	)
Other income, net		632			51			-			-		-		-		683
Financial income (expenses), net		77			(564	)		(680	)		-		-		-		(1,167	)
Consolidated loss before provision for income taxes																$	(14,254	)

(1)	Includes $733 of intangible assets amortization, derived from ~~GFHI. acquisitions.~~the GFHI Acquisition.
(2)	Corporate and others segment represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

The following table summarizes the financial statements of our balance sheet accounts of the segments:

As of June 30, 2022
Insurance
platform Mobile
resource
management Online
stock
trading Consolidated
Assets related to segments $ 57,504 (2) $ - $ 52,786 (4) $ 110,290
Non allocated Assets - 41,685
Liabilities related to segments (17,880 )(3) - (2,122 ) (20,002 )
Non allocated liabilities - - - (2,908 )
Total Equity $ 129,065

	As of June 30, 2023
(USD in thousands)	Verticals and technology			Online stock trading			Comprehensive platform service (1)			Food processing (2)			Corporate and others			Export and Commodity Trading			Consolidated
Assets related to segments	$	18,245		$	7,629		$	907,887		$	352,570		$	50,860		$	347,997		$	1,685,188
Liabilities and redeemable Series B Preferred Stock related to segments		(6,742	)		(2,664	)		(559,430	)		(94,488	)		(219,843	)		(278,398	)		(1,161,565	)
Total equity																			$	523,623

~~(2)~~(1)

Includes ~~$10,708~~$152,453 of intangible assets and ~~$19,788~~$165,603 goodwill, derived from ~~GFHI’s~~Tingo Mobile acquisition.

~~(3)~~

Includes ~~$2,784~~$45,778 of deferred tax liability, derived from ~~GFHI~~the Tingo Mobile acquisition and $553,035 redeemable Series B Preferred Stock.

(2)	Includes $140,077 of intangible assets and $46,246 goodwill, derived from the Tingo Foods acquisition.

Includes $42,023 of deferred tax liability, derived from the Tingo Foods acquisition.

The following table summarizes the financial statements of our balance sheet accounts of the segments:

As of December 31, 2021
Insurance
platform Mobile
resource
management Online
stock
trading Consolidated

Assets related to segments $ 86,474 (1) $ - $ 60,581 (3) $ 147,055
Non allocated Assets - 30,756
Liabilities related to segments (23,516 )(2) - (3,953 ) (27,469 )
Non allocated liabilities - - - (2,620 )
Total Equity $ 147,722

	As of December 31, 2022
(USD in thousands)	Verticals and technology (1)			Online stock trading (2)			Comprehensive platform service (3)			Corporate and others			Consolidated
Assets related to segments	$	40,831		$	21,077		$	1,541,093		$	79,357		$	1,682,358
Liabilities and Series B Preferred Stock related to segments		(18,406	)		(3,911	)		(877,353	)		(9,689	)		(909,359	)
Total equity													$	772,999

(1)

Includes ~~$19,292~~$17,009 of intangible assets and $19,788 goodwill, derived from ~~GFHI’s acquisition.~~the GFHI Acquisition.

~~(2)~~

Includes ~~$3,728~~$3,125 of deferred tax liability, derived from GFHI, ~~acquisition.~~All Weather and Zhongtong acquisitions.

~~(3)~~

~~Includes $1,222 of intangible assets.~~

~~NOTE 10 — INTANGIBLE ASSETS, NET~~

Useful June 30, December 31,
life years 2022 2021
Original amount:
Technology know-how 6 $ 11,490 $ 11,490
Trade name/ trademarks Indefinite or 5 years 923 923
Customer relationship 5-10 years 4,802 4,802
License Indefinite or 10 years 8,498 8,498
Software 10 167 172
25,880 25,885
Accumulated amortization:
Technology know-how (3,830 ) (2,873 )
trade name/ trademarks (232 ) (174 )
Customer related intangible assets (1,823 ) (1,355 )
License (137 ) (39 )
Software (10 ) (2 )
(6,032 ) (4,443 )
Net $ 19,848 $ 21,442

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

(2)

Includes $1,226 of intangible assets.

(3)

Includes $167,143 of intangible assets and $81,459 goodwill, derived from the Tingo Mobile acquisition.

Includes $50,143 of deferred tax liability, derived from the Tingo Mobile acquisition and $553,035 redeemable Series B Preferred Stock.

NOTE 118 — TRADE ACCOUNTS RECEIVABLE, NET

For the six months ended June 30, ~~2022~~2023, and the fiscal year ended December 31, ~~2021,~~2022, accounts receivable were comprised of the following:

	June 30,			December 31,			June 30,			December 31,
	2022			2021
(USD in thousands)							2023			2022
Trade accounts receivable	$	14,582		$	20,485		$	368,530		$	14,553
Allowance for doubtful accounts		(2,557	)		(2,606	)		(2,508	)		(3,012	)
	$	12,025		$	17,879		$	366,022		$	11,541

Movement of allowance for doubtful accounts for the six months ended June 30, ~~2022~~2023 and the fiscal year ended December 31, ~~2021~~2022 are as follows:

(USD in thousands)	June 30, 2023			December 31, 2022
Beginning balance	$	3,012		$	2,606
Provision		900			618
Recovery		(816	)		-
Exchange rate fluctuation		(588	)		(212	)
	$	2,508		$	3,012

June 30, December 31,
2022 2021
Beginning balance $ 2,606 $ 5
(Recovery) provision 80 2,574
Exchange fluctuation (129 ) 32
Decrease due to deconsolidation of Micronet - (5 )
$ 2,557 $ 2,606

NOTE 129 — OTHER CURRENT ASSETS

	June 30,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Prepaid expenses	$	865	$	1,715	$	267	$	1,019
Advance to suppliers		4,502		4,027		141,739		2,821
Deposit		218		1,335		285		287
Business advance to employee		1,449		1,444
Other receivables		1,062		1,033		11,688		1,701
	$	8,096	$	9,554	$	153,979	$	5,828

NOTE 1310 — RELATED PARTIES

Current assets – related ~~parties~~party receivables

June 30, December 31,
2022 2021
Shareholders of All Weather $ 3,241 $ 3,680
Loan to Tingo (*) 3,018 -
Convertible loan to Micronet - 535
Tianjing Bokefa and other related parties 272 -
Shareholders of Guangxi Zhongtong 827 919
$ 7,358 $ 5,134

	June 30,		December 31,
(USD in thousands)	2023		2022
Shareholders and other related parties of All Weather	$	-	$	4,603
Beijing Fucheng Lianbao Technology Co.		-		267
Loan to Tingo Inc.(1)		8,120		8,099
Beijing Fucheng Prospect Technology Co., Ltd.		314		-
Shareholders and other related parties of Guangxi Zhongtong		378		522
	$	8,812	$	13,491

(1)	Tingo’s loan- as discussed in Note 1.

(*) On May 13, 2022, the Company and Tingo executed a loan agreement pursuant to which the Company agreed to loan Tingo (“Maker”) a sum of $3,000 (the “Note” and “Loan” respectively) . The Loan bear an annual interest of 5%. The principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on May 10, 2024 (“Initial Maturity Date”), provided however that if the merger agreement executed between the parties shall be terminated pursuant to its terms, the Initial Maturity Date shall accelerate and the principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on or before the 30th calendar day following such termination . The principal balance may be prepaid at any time by Maker without penalty.

On July 28, 2022, the Company agreed to replace the Note with a new note (“New Note”), pursuant to which the amount of the Loan granted under the New Note is $3,500, with all other terms remaining in effect without a change.

~~Current liabilities – related party~~

June 30, December 31,
2022 2021
Shareholders of All Weather $ 256 $ 4
$ 256 $ 4

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

Current liabilities – related parties payables

	June 30,		December 31,
(USD in thousands)	2023		2022
Beijing Century Tianyuan Business Management Co., LTD	$	117	$	308
Beijing Global Credit Financial Analysis Technology Co., LTD		276		-
Beijing Internet New Network Technology Development Co. LTD		292		-
Shareholders and other related parties of All Weather		-		659
Shareholders of Tingo Mobile		24,921		56,539
	$	25,606	$	57,506

NOTE 11 — COMMITMENT AND CONTINGENCIES

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, and other factors may result in actual payments differing from the estimates. The following tables summarize our contractual obligations as of June 30, 2023, and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

(USD in thousands)	Total		Less than 1 year		1-3 year		3-5 year		5+ year
Contractual Obligation:
Office leases commitment	$	1,411	$	530	$	840	$	41	$	-
Short-term debt obligations Commitment	$	165	$	165	$	-	$	-	$	-
Services Contract Commitment	$	1,372	$	375	$	749	$	248	$	-
Total	$	2,948	$	1,070	$	1,589	$	289	$	-

Legal Proceedings

The Company is subject to litigation arising from time to time in the ordinary course of its business.

On April 18, 2023, Altium Growth Fund, L.P., Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B, Empery Asset Master Ltd., Empery Tax Efficient, L.P., and Empery Tax Efficient III, L.P. (collectively “Investors”) filed a Motion for Summary Judgment in Lieu of Complaint (“Motion”) against the Company in the Supreme Court of the State of New York, requesting that the Court order the Company to purchase certain warrants from the Investors at the Black Scholes Value of $13,426. The Investors hold various warrants (“Warrants”) issued pursuant to securities purchase agreements (“SPAs”) that the Company is to purchase at their Black Scholes Value upon the Investors’ demand and after a “Fundamental Transaction” (as defined in the Warrants). According to the Investors, the Merger described herein constituted a Fundamental Transaction. The Company initially was of the view that the Merger was not a Fundamental Transaction. However, upon further reflection, the Company concluded that the Investors were correct, and filed a response agreeing that a Fundamental Transaction had occurred, that the Investors were entitled to the Black Scholes Value of their Warrants and requested that the court enter an order directing the Company to pay the Investors accordingly. The day after the Company filed its response, the Investors claimed to rescind their demand for the Black Scholes Value of their Warrants, pursuant to a provision in the SPAs that they say entitles them to do so. After the Investors purported to rescind their demand for the Black Scholes Value of their Warrants and attempted to unilaterally withdraw their Motion, the Investors sought to exercise certain of the Warrants. The Company rejected Investors’ exercise notices and filed a counterclaim alleging that Investors did not have the right to exercise the Warrants because the Motion by which they sought to compel the Company to purchase the Warrants could not be unilaterally withdrawn and was still pending. Investors then filed an amended complaint seeking declaratory relief and unspecified “millions” in damages plus attorney’s fees, based on the Company’s failure to honor their exercise of certain of their Warrants. On July 3, 2023, the court issued the order directing the Company to deposit 13,167,641 shares with the court to serve as security for any judgment plaintiffs may obtain in the action. On July 19, 2023, the Company filed a motion to vacate the order, which is currently scheduled for September 14, 2023. The litigation is ongoing.

On June 8, 2023, two putative class action complaints were filed in the United States District Court for the District of New Jersey against the Company, Dozy Mmobuosi, Darren Mercer, and Kevin Chen. The first complaint was filed by Christopher Arbour, individually and on behalf of a class of “persons or entities that purchased or otherwise acquired Tingo securities between March 31, 2023, and June 6, 2023.” The second was filed the same day by Mark Bloedor, individually and on behalf of a class of “all investors who purchased or otherwise acquired Common Stock between December 1, 2022, and June 6, 2023.” Both complaints are based entirely on the allegations in the Hindenburg short seller report issued on June 6, 2023, following which the Company’s stock price declined by nearly 50 percent. Relying solely on the allegations in the Hindenburg report, both complaints allege defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) and Rule 10b-5 promulgated thereunder, and the individual defendants violated Section 20A of the Securities Exchange Act. The Company and individual defendants deny the allegations in the complaints and intend to vigorously defend the actions. Following the publication of the Hindenburg report, the Company’s independent directors retained independent counsel to conduct an investigation of the Hindenburg allegations.

The Group has not recognized a liability in respect of the Motion and complaints because management does not believe that the Group has incurred a probable material loss by reason of any of this matter.

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

NOTE 1412 — OPERATING LEASES

The Company follows ASC No. 842, Leases. The Company has operating leases for its office facilities. The Company’s leases have remaining terms of approximately 4 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes.

Lessee

The following table provides a summary of leases by balance sheet ~~location as of June 30, 2022 and December 31, 2021~~ location:

Assets/liabilities	June 30,		December 31,		June 30,		December 31,
	2022		2021
(USD in thousands)					2023		2022
Assets
Right-of-use assets	$	1,583	$	1,921	$	1,400	$	2,260

Liabilities
Lease liabilities- current portion	$	1,026	$	1,298	$	834	$	1,215
Lease liabilities- long term		699		691		507		905
Total Lease liabilities	$	1,725	$	1,989	$	1,341	$	2,120

The operating lease expenses ~~for the three and six months ended June 30, 2022 and 2021~~ were as follows:

Six months ended
June 30, Three months ended
June 30,
2022 2021 2022 2021
Operating lease cost $ 673 $ 530 $ 261 $ 229

	For the six months ended June 30,				For the three months ended June 30,
	2023		2022		2023		2022
Operating lease cost	$	956	$	673	$	479	$	261

Maturities of operating lease liabilities were as follows:

	Twelve months ended June 30,
(USD in thousands)				Year ended December 31,
2023*		1,025		$	530
2024		672			559
2025		125			262
2026		14			20
2027		5			15
Thereafter					25
Total lease payment		1,841			1,411
Less: imputed interest		(79	)		(70	)
Total		1,762
Total lease liabilities				$	1,341

*	Not include operating leases with a term less than one ~~year which was not capitalized in the right-of-use assets.~~year.

Lease term and discount rate	June 30, ~~2022~~2023

Weighted-average remaining lease term (years) – operating leases		1.98
Weighted average discount rate – operating leases		~~5.42~~5.70	%

Lessor

The Company leases mobile phones that classified as operating leases. The following table summarizes the components of operating lease revenue recognized during the three and six months ended June 30, 2023:

	For the six months ended June 30,		For the three months ended June 30,
Lease revenue	2023		2023
Fixed contractual payments	$	216,350	$	102,690

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

Future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2023, assuming no new or renegotiated leases or option extensions on lease agreements are executed, are as follows (dollars in thousands):

Years Ending December 31,	Future lease payments due
2023	$	165,497
2024		97,930
2025		-
2026		-
2027		-
Thereafter		-

NOTE 1513 — PROVISION FOR INCOME TAXES

A. Basis of Taxation

United States:

On December 22, 2017, the U.S. Tax Cuts and Jobs Act, or the Act, was enacted, which significantly changed U.S. tax laws. The Act lowered the tax rate of the Company. The statutory federal income tax rate was 21% in 2020 and in the ~~Six~~three months ended June 30, ~~2021~~2023, and 2022. As of June 30, ~~2022~~2023, the operating loss carry forward were ~~$44,735,~~$75,952, among which there was $5,115 expiring from 2025 through 2037, and the remaining ~~$39,620~~$70,837 has no expiration date.

Israel:

The Company’s Israeli subsidiaries and associated are governed by the tax laws of the state of Israel which had a general tax rate of 23% in the ~~six~~three months ended June 30, ~~2021~~2023, and 2022. As of June 30, ~~2022~~2023, the operating loss carry forward ~~were $7,925,~~was $9,330, which does not have an expiration date.

Mainland China:

The Company’s Chinese subsidiaries in ~~the PRC~~China are subject to the PRC Corporate Income Tax Law (“CIT Law”) and are taxed at the statutory income tax rate of 25%. As of June 30, ~~2022~~2023, the operating loss carry forward was ~~$9,361,~~$16,957, which will expire from 2023 through 2027.

Hong Kong:

Our subsidiaries incorporated in Hong Kong, such as Magpie Securities Limited, BI Intermediate Limited, are subject to Hong Kong profit tax on their profits arising from their business operations carried out in Hong Kong. Hong Kong profits tax for a corporation from the year of assessment 2018/2019 onwards is generally 8.25% on assessable profits up to HK$2,000; and 16.5% on any part of assessable profits over HK$2,000. Under the Hong Kong Inland Revenue Ordinance, profits that we derive from sources outside of Hong Kong are generally not subject to Hong Kong profits tax.

As of June 30, ~~2022,~~2023, the tax loss carry forward was ~~$13,789~~$18,726 for Magpie Securities Limited, and the operating loss carry forward was ~~$4,317~~$6,852 for BI Intermediate Limited. Tax losses can be carried forward indefinitely until utilized.

Singapore:

Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. In ~~2021,~~2022, we did not incur any income tax as there was no estimated assessable profit that was subject to Singapore income tax.

As of June 30, ~~2022,~~2023, the operating loss carry forward was ~~$142.~~$1,097.

Subject to qualifying conditions, trade losses can be carried forward indefinitely while unutilized donations can be carried forward for up to 5 years of assessment.

~~B. Provision for (Benefit of) Income Taxes~~

Six months ended
June 30, Three months ended
June 30,
2022 2021 2022 2021
Current
Domestic $ 248 $ 43 $ 245 $ 43
Foreign - 31 - 180
Total $ 248 $ 74 $ 245 $ 223
Deferred
Domestic $ - $ - $ - $ -
Foreign (1,329 ) (413 ) (251 ) (206 )
$ (1,329 ) $ (413 ) $ (251 ) $ (206 )

~~MICT, Inc.~~TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value ~~data)~~Data)

Australia:

Our subsidiaries incorporated in Australia are subject to an income tax rate of 25% for taxable income earned in Australia. Australia does not impose a withholding tax on dividends for resident companies. In 2022, we did not incur any income tax as there was no estimated assessable profit that was subject to Australia income tax.

As of June 30, 2023, the operating loss carry forward was $112.

Nigeria:

The Company’s Nigerian subsidiaries Tingo Mobile and Tingo Foods is governed by the tax laws of the Federal Republic of Nigeria which had a corporate tax rate of 30%. As of June 30, 2023, the operating loss carry forward were nil, which does not have an expiration date.

Dubai:

The Company operates from the Dubai Multi Commodity Centre. Tingo DMCC is subject to a corporate tax rate of 0% under specific circumstances and conditions.

B. Profit (Loss) Before Income Taxes

	For the six months ended June 30,						For the three months ended June 30,
	2023			2022			2023			2022

Domestic	$	(15,721	)	$	(9,851	)	$	(5,759	)	$	(1,153	)
Foreign		436,371			(14,140	)		163,863			(13,101	)
Total	$	420,650		$	(23,991	)	$	158,104		$	(14,254	)

C. Provision for (Benefit of) Income Taxes

	For the six months ended June 30,						For the three months ended June 30,
	2023			2022			2023			2022
Current
Domestic	$	124		$	248		$	84		$	246
Foreign		157,107			-			67,931			-
Total	$	157,231		$	248		$	68,015		$	246
Deferred
Domestic	$	-		$	-		$	-		$	-
Foreign		(9,536	)		(1,329	)		(6,234	)		(251	)
Total	$	(9,536	)	$	(1,329	)	$	(6,234	)	$	(251	)
Total Income tax expenses (benefit)	$	147,695		$	(1,081	)	$	61,781		$	(5	)

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

C.D. Deferred Tax Assets and Liabilities

Deferred tax reflects the net tax effects of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and the amounts used for income tax purposes. As of June 30, ~~2022~~2023, and December 31, ~~2021, deferred tax assets were included in long-term deposit and prepaid expenses, and~~2022, the Company’s deferred taxes were in respect of the following:

June 30, December 31,
2022 2021
Deferred tax assets
Provisions for employee rights and other temporary differences $ 149 $ 260
Provisions for bad debt 640 696
Net operating loss carry forward 16,569 12,034
Valuation allowance (14,827 ) (11,226 )
Deferred tax assets, net of valuation allowance 2,531 1,764
Deferred tax liabilities
Recognition of intangible assets arising from business combinations (3,544 ) (3,952 )
Deferred tax liabilities, net $ (1,013 ) $ (2,188 )

	June 30,			December 31,
(USD in thousands)	2023			2022
Deferred tax assets
Provisions for employee rights and other temporary differences	$	153		$	234
Provisions for bad debt		650			753
Net operating loss carry forward		26,771			21,839
Valuation allowance		(24,025	)		(19,165	)
Deferred tax assets, net of valuation allowance		3,549			3,661
Deferred tax liabilities
Recognition of intangible assets arising from business combinations		(108,974	)		(89,597	)
Deferred tax assets (liabilities), net	$	(105,425	)	$	(85,936	)

~~NOTE 16 — LEGAL PROCEEDINGS~~

~~There~~NOTE 14 — IMPAIRMENT OF INTANGIBLE ASSETS

During the second quarter of 2023, the Company's management decided to forsake its involvement with All Weather and as a result, the Company is no longer consolidating All Weather. We conducted forecasting and strategic reviews and integration assessments of our Verticals and Technology segment, and with performance below expectations since acquisition, we revised internal financial projections of the business to reflect updated expectations of future financial performance. These reviews and the subsequent revisions in the projections highlighted challenges for the Verticals and Technology segment as a result of performance below expectations due to the impact of modified consumer shopping behavior in the post-COVID-19 period.

Also, on July 12, 2023, the Company made a business decision to close its online stock trading business in Hong Kong and Singapore having considered the level of losses being incurred, the ongoing challenges in the market sector, and the fact that the business is no longer core to the Company’s strategy following the acquisitions of Tingo Mobile and Tingo Foods. The Company will however continue to explore opportunities to monetize the proprietary online stock trading technology and products it has developed.

Continuing losses associated with the use of a long-lived assets were considered triggering events requiring interim impairment assessments to be performed relative to the intangible assets that had been recorded as part of these acquisitions in accordance with ASC 360-10 and ASC 350-10 which require the viewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company's evaluation of recoverability is performed at the lowest level of assets group to which identifiable cash flows are ~~no open legal proceeding~~largely independent of the cash flows of another asset group. Recoverability of the asset group (the Verticals and Technology segment and the Online Stock Trading segment) is measured by a comparison of the aggregate undiscounted future cash flows the asset group is expected to generate to the carrying amounts of the asset group. If such evaluation indicates that the carrying amount of the asset group is not recoverable, an impairment loss is calculated based on the excess of the carrying amount of the asset group over its fair value.

The intangible assets that are subject to impairment testing were recorded as part of the intangible assets segments and included indefinite-lived and finite-lived trade name/ trademarks, licenses and finite-lived developed technology and customer relationships. As a result of the interim impairment assessments, we recognized impairment charges for the excess of the book value over the fair value of those intangible assets in amount of $14,397 pre-tax ($11,924 after tax) to write-down these intangible assets to their respective fair values close to $0 as of June 30, ~~2022~~2023 related to the Verticals and Technology segment and $1,253 pre-tax ($1,253 after tax) to write-down these intangible assets to their respective fair values close to $0 as of ~~today.~~June 30, 2023 related to the Online Stock Trading segment. The valuation methods used in the assessments included the relief-from-royalty methodology and excess earnings of the income approach for intangible assets from the acquisitions of our subsidiaries. This noncash charge was included in Impairment of long-term assets and goodwill in our consolidated statement of operations.

This testing involves estimates and significant judgments by management. We believe our estimates and assumptions used in the valuations are reasonable and appropriate to those that would be used by other market participants; however, additional adverse changes in key assumptions and actual unanticipated events and circumstances could differ substantially from those used in the valuation, and to the extent such factors result in a failure to achieve the projected cash flows used to estimate fair value, additional impairment charges could be required in the future. Therefore, although we have recorded the said impairment charges, we cannot guarantee that we will not experience asset impairments in the future.

TINGO GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, except Share and Par Value Data)

NOTE 15 — GOODWILL

	For the six months ended June 30, 2023
(USD in thousands)	Verticals and Technology			Food Processing		Comprehensive Platform Service		Corporate and others		Online Stock Trading		Consolidated
Balance as of January 1, 2023	$	19,788		$	-	$	81,459	$	-	$	-	$	101,247
Impairment loss		-			-		-		-		-		-
Acquisitions in 2023		-			46,246		-		-		-		46,246
Impairment of goodwill		(19,788	)		-		-		-		-		(19,788	)
Adjustments to purchase price allocations		-			-		84,144		-		-		84,144
Balance as of June 30, 2023	$	-		$	46,246	$	165,603	$	-	$	-	$	211,849

	For the year ended December 31, 2022
(USD in thousands)	Verticals and Technology		Food Processing		Comprehensive Platform Service		Corporate and others		Online Stock Trading		Consolidated
Balance as of January 1, 2022	$	19,788	$	-	$	-	$	-	$	-	$	19,788
Impairment loss		-		-		-		-		-		-
Acquisitions in 2022		-		-		81,459		-		-		81,459
Balance as of December 31, 2022	$	19,788	$	-	$	81,459	$	-	$	-	$	101,247

ASC 350-20 “Intangibles-Goodwill and Other” requires to test goodwill (after its allocation to the company's reporting units) for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. As a result of the circumstances described in Note 14 the company decided to perform impairment test for the reporting unit to which the goodwill belongs (the Verticals and Technology segment) as of June 30, 2023.

The goodwill impairment test is performed according to the following principles:

An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than it is carrying amount.

If the Company concludes it is more likely than not (more than 50 percent likelihood) that the fair value of the reporting unit is less than it is carrying amount, a quantitative fair value test is performed. An impairment loss is recognized to the extent that the carrying amount of a reporting unit exceeds its fair value, but not exceeding the total amount of goodwill allocated to that reporting unit.

The Company carried out a qualitative assessment which included various factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, earnings multiples, gross margin and cash flows from operating activities and other relevant factors. The circumstances mentioned above led management to believe that it is more likely than not that the fair value of the reporting unit is less than its carrying value. As a result, the fair value had to be determined as part of the quantitative assessment.

The fair value of the reporting unit was estimated in accordance with ASC 820, "Fair Value Measurements”. The Company applies assumptions that marketplace participants would consider in determining the fair value of its reporting unit. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment. Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates, and weighted average cost of capital.

As a result of this testing, we recorded an $19,788 pre-tax non-cash impairment charge related to goodwill for the six months period ended June 30, 2023, relating to Verticals and Technology segment reporting unit, representing a full impairment charge for its goodwill balance.

NOTE 16 — SUBSEQUENT EVENTS

On July 12, 2023, the Company made a business decision to close its online stock trading business in Hong Kong and Singapore having considered the level of losses being incurred, the ongoing challenges in the market sector, and the fact that the business is no longer core to the Company’s strategy following the acquisitions of Tingo Mobile and Tingo Foods. The Company will however continue to explore opportunities to monetize the proprietary online stock trading technology and products it has developed.

On July 27, 2023, the Company issued 26,042,808 shares of Common Stock, pursuant to the conversion of 2,604.28 shares of Series A Preferred Stock under the terms of the Series A Preferred Stock Certificate of Designation. The Company held a special meeting of stockholders on June 7, 2023, during which shareholder approval was received for such conversion.

On July 27, 2023, the Company issued 13,167,641 shares of Common Stock which are held in escrow with the Supreme Court of the State of New York pursuant to the order. On July 19, 2023, the Company filed a motion to vacate the order. If the motion to vacate is granted and no judgment has been entered against the Company, the order shares will be returned to the Company (for further information see Note 11).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Quarterly Report on Form 10-Q (the “Quarterly Report”), contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws and is subject to the safe-harbor created by such Act and laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. The statements herein and their implications are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. Such factors include, but are not limited to changes in economic conditions, government regulations, contract requirements and abilities, competitive pressures and constantly changing technology and market acceptance of our products and services and other risks and uncertainties discussed in this ~~annual~~quarterly Form ~~10-K~~10-Q report. Such forward-looking statements appear in this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and may appear elsewhere in this Quarterly Report and include, but are not limited to, statements regarding the following:

●

~~our ownership position in Micronet’s share capital;~~

●

~~the impact of COVID-19 on both our operations and financial outlook and those of Intermediate, Micronet and MICT;~~

●

our financing needs and strategies, and our ability to continue to raise capital in the future;

●

our corporate development objectives;

●

our financial position and the value of and market for our ~~common stock;~~Common Stock;

●

use of proceeds from any future financing, if any; and

●

the sufficiency of our capital resources.

Our business is subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained or implied in this report. Except as required by law, we assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. Further information on potential factors that could affect our business is described in our ~~SEC~~ filing with the U.S. Securities and Exchange Commission (the “SEC”) and the risk factors included in Part II, Item IA below. Readers are also urged to carefully review and consider the various disclosures we have made below and in that report. The following discussion and analysis should be read in conjunction with the Unaudited Consolidated Financial Statements and related notes (the “Financial Statements”) included elsewhere in this Quarterly Report.

~~Overview~~

MICT, Inc. (“MICT”, the “Company”, “we”, “us”, “our”) was formed as a Delaware corporation on January 31, 2002 under the name Lapis Technologies, Inc. On March 14, 2013, we changed our corporate name to Micronet Enertec Technologies, Inc. On July 13, 2018, following the sale of our former subsidiary, Enertec Systems Ltd., we changed our name to MICT, Inc. Our shares have been listed for trading on The Nasdaq Capital Market under the symbol “MICT” since April 29, 2013.

~~MICT~~

Overview

Tingo Group, Inc. is a holding company conducting financial technology business, Agri-fintech and food business through ~~its~~our subsidiaries and entities, both wholly owned and controlled through various VIE arrangements (“VIE entities”). The company is principally focused on developing insurance broker business and products across approximately 120 cities in China through its subsidiaries and VIE entities, with planned expansion into additional markets. The company has developed highly scalable proprietary platforms for insurance products (B2B, B2B2C and B2C) and financial services/products (B2C), the technology for which is highly adaptable for other applications and markets. MICT through its subsidiaries has also acquired and holds the requisite license and approvals with the Hong Kong Securities and Futures Commission to dealare located mainly in ~~securities and provide securities advisory and asset management services. MICT also has memberships/registrations with the Hong Kong Stock Exchange, the London Stock Exchange~~Africa, Southeast Asia and the requisite Hong Kong and China Direct clearing companies. MICT’s financial services business and first financial services product, the Magpie Invest app, is able to trade securities on NASDAQ, NYSE, TMX, HKSE, China Stock Connect, LSE, the Frankfurt Stock Exchange and the Paris Stock Exchange.Middle East.

~~Since July 1, 2020, after MICT completed its acquisition~~As of ~~GFHI (the “GFHI Acquisition”) pursuant to that certain Agreement~~June 30, 2023, we operate in five segments and ~~Plan~~following the recent launch of ~~Merger entered into on November 7, 2019 by and between MICT, GFHI, Global Fintech Holding Ltd. (“GFH”),~~ a ~~British Virgin Islands company and the sole shareholder~~beta version of ~~GFH Intermediate Holdings Ltd. (“GFHI” or “Intermediate”), and MICT Merger Subsidiary Inc.,~~TingoPay we are adding a British Virgin Islands company and a wholly owned subsidiary of MICT (“Merger Sub”), as amended and restated on April 15, 2020 (the “Restated Merger Agreement” or “Merger”), we have been operating in the financial technology sector. GFHI is a financial technology company with a marketplace in China, as well as other areas of the world and is currently in the process of building various platforms for business opportunities in different insurance platform segments (formerly:sixth segment: (i) verticals and technology, ~~segments)~~comprised of our operations in ~~order to capitalize on such technology~~China where we operate our insurance brokerage business (“Verticals and ~~business. GFHI plans to increase its capabilities and its technological platforms through acquisition and licensing technologies to support its growth efforts in~~Technology”); (ii) online stock trading, primarily comprised of the ~~different market segments. After the Merger, MICT included the business of Intermediate, MICT’s wholly-owned subsidiary, operating through Intermediate operating subsidiaries.~~

~~Following Intermediate’s acquisition~~operation of Magpie Securities Limited (“Magpie”)~~, a~~ through which we operate the online stock trading business, primarily out of Hong Kong ~~securities~~ and ~~investment services firm,~~Singapore (“Online Stock Trading"); (iii) comprehensive platform service which includes the operations of Tingo Mobile Limited (“Tingo Mobile”) described below (“Comprehensive Platform Service”); (iv) food processing, where crops and raw foods are processed into finished products, through Tingo Foods PLC (“Tingo Foods”) (purchased by the Company in February 2023) (“Food Processing”); (v) export and commodity trading, where both agricultural commodities and processed foods are exported and traded on ~~February 26, 2021 and the subsequent receipt of regulatory approval~~a global basis through Tingo DMCC (as defined below), which operates from the ~~Hong Kong Securities~~Dubai Multi Commodity Centre (the “DMCC”) (“Export and ~~Futures Commission, Magpie is licensed to deal in securities, futures~~Commodity Trading”); and ~~options, and also undertake the business of securities advisory~~(vi) Consumer Super App, digital payment services and ~~asset management.~~

~~Intermediate launched Magpie Invest,~~merchant services, which in partnership with Visa operates the TingoPay Super App (currently in a ~~global stock trading app, on September 15, 2021, through its wholly owned subsidiary, Magpie Securities Limited (“Magpie”). It is~~beta version), offering retail customers a proprietary technology investment trading platform that is currently operational in Hong Kong. Magpie Invest’s technology allows the platform to connect to all major stock exchanges and we planned to expand into Australia and Switzerland by Q4 2022.

~~These opportunities will continue to be realized and executed through our business development efforts, which include the acquisition~~range of potential target entities, business and assets (such as applicable required licenses) in the relevant business space and segments in which we plan to operate. We believe that this will allow the Company to enter into the market quickly and leverage existing assets in order to promote our growth strategy.

Prior to July 1, 2020, MICT operated primarily through its Israel-based then majority-owned subsidiary, Micronet. Micronet, through both its Israeli and U.S. operational offices, designs, develops, manufactures and sells rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments. Micronet’s vehicle portable tablets are designed to increase workforce productivity and enhance corporate efficiency by offering computing power and communication capabilities that provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage. Furthermore, users are able to manage the drivers in various aspects, such as: driver behavior, driver identification, reporting hours worked, customer/organization working procedures and protocols, route management and navigation based on tasks and time schedule. End users may also receive real time messages for various services, such as pickup and delivery, repair and maintenance, status reports, alerts, notices relating to the start and ending of work, digital forms, issuing and printing of invoices and payments. Through its SmartHub product, Micronet provides its consumers with services such as driver recognition, identifying and preventing driver fatigue, recognizing driver behavior, preventive maintenance, fuel efficiency and an advanced driver assistance system. In addition, Micronet provides TSPs a platform to offer services such as “Hours of Service.” Micronet previously commenced and continues to evaluate integration with other TSPs. On May 9, 2021, following the exercise of options by certain minority stockholders, the Company’s ownership interest of Micronet was diluted to 49.88% and as a result the Company is no longer required to consolidate Micronet’s financial statements with the Company’s and include Micronet’s operating results in its financial statements. the Company owned 31.47% of the outstanding ordinary shares of Micronet and 26.83% on a fully diluted basis as of June 30, 2022.

~~Potential Merger with Tingo, Inc.~~

On May 10, 2022, Tingo, Inc., a Nevada corporation (“Tingo” or the “Seller”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MICT Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of MICT (“Merger Sub”), and MICT, Inc., a Delaware corporation (“MICT”).

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Tingo (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with the Seller continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of MICT. It is expected that current holders of Tingo Shares will own approximately 77% of the total shares of the post-merger company and the current shareholders of MICT will own the remaining 23% of the Shares of the post-merger company.

Tingo is the leading Agri fintech company operating in Africa, with a marketplace platform that empowers social upliftment through mobile, technology and financial access for rural farming communities. Their ‘device as a service’ model allows them to add market leading applications to enable customers to trade, buy top ups, pay bills, access insurance and lending services. With 9.3 million existing customers, Tingo is seeking to expand its operations across select markets in Africa. Tingo’s strategic plan is to become the eminent Pan African Agri-Fintech business delivering social upliftment and financial inclusion to millions of SME farmers and women-led businesses. There can be no assurances given that the Company will consummate this merger since there are several conditions before the merger could be consummated including but not limited to online payments in their domestic or foreign currencies, as well as the ~~approval by the shareholders~~ability to manage their Visa cards, pay bills, arrange insurance, arrange loans and purchase mobile telephone top-ups. TingoPay also offers businesses a range of ~~the Company and Tingo, Regulatory approvals and other closing conditions.~~Visa powered merchant services.

~~As a result~~The Company recently decided to exit its operations of one of its VIEs, All Weather, which operates an insurance platform business in the ~~Merger, all of the issued~~Verticals and ~~outstanding capital stock of the Seller immediately prior~~Technology segment. The Company is currently reconsidering its focus areas and subsequent to the ~~Closing, shall no longer be outstanding and shall automatically be cancelled and shall~~balance sheet date made the decision to cease ~~to exist, in exchange for~~ the ~~right for each Seller Stockholder to receive its Pro Rata Share~~operations of ~~the Merger Consideration, upon the terms and subject to the conditions set forth in the Merger Agreement.~~Magpie.

~~As consideration for the Merger, the Seller Security Holders collectively shall receive from MICT, in the aggregate, a number~~Acquisition of shares of MICT Common Stock equal to (the “Merger Consideration”) the product of (a) 3.44444 and (b) the number of shares of MICT Pre-Closing Common Stock (the total portion of the Merger Consideration amount payable to all Seller Stockholders in accordance with the Merger Agreement). This will result in Tingo shareholders receiving new MICT common shares in an amount equal to approximately 77.5% in the combined company, and current MICT shareholders owning approximately 22.5% on a fully diluted basis following the closing, with a combined estimated group value of $4.09 billion.Mobile

~~On June 15,~~Our business has changed significantly since December 1, 2022, ~~Tingo, Merger Sub and MICT entered into an Amended and Restated Agreement and Plan of Merger,~~ following the completion of ~~extensive due diligence by MICT and its advisors. including financial due diligence, tax due diligence and quality~~the acquisition of ~~earnings analysis by Ernst & Young, financial analysis by Houlihan Lokey, legal, operational, corporate and local due diligence by~~Tingo Mobile. We also consummated the ~~Nigerian office~~significant Acquisition of ~~Dentons and corporate due diligence and securities due diligence by Ellenoff Grossman & Schole.~~Tingo Foods on February 9, 2023.

~~In accordance~~Tingo Mobile is a leading Agri-Fintech company in Africa, with ~~US GAAP, upon Closing, which is subject to Tingo stock holder approval, MICT stock holder approval, the satisfaction~~a comprehensive portfolio of ~~regulatory requirements and the Registration Statement having been declared effective by the SEC, the Merger will be accounted for by MICT in its consolidated financial statements~~innovative products, including a “device as a ~~reverse acquisition.~~service” smartphone and pre-loaded platform product.

Tingo Mobile’s Nwassa platform is believed to be Africa’s leading digital agriculture ecosystem that empowers rural farmers and agri-businesses by using proprietary technology that enables users to access markets in which they operate. Using Tingo Mobile’s ecosystem, farmers can sell their produce throughout Nigeria and beyond. The ~~following diagram illustrates~~ecosystem provides real-time pricing, straight from the ~~Company’s current corporate structure, including its subsidiaries, and variable interest entities (“VIEs”), as of June 30, 2022:~~farms, which eliminates middlemen.

Although Tingo Mobile has a large retail subscriber base, its business model is essentially a business-to-business-to-consumer model. Each of the subscribers is a member of one of a small number of cooperatives with whom we have a contractual relationship, which facilitates the distribution of Tingo Mobile smartphones into to the farmers/agri-worker users.

~~VIE agreements with Guangxi Zhongtong:~~

~~On January 1, 2021, as amended on August 6, 2021, Bokefa, our wholly foreign-owned enterprise (“WFOE”), Guangxi Zhongtong,~~Our revenues from Tingo Mobile are derived from agri-tech business activities including, among other things, smart phone leasing, an agri-marketplace, airtime top ups, utility payment services, bill-pay and ~~nominee shareholders of Guangxi Zhongtong entered into six agreements, (together, the “Guangxi Zhongtong VIE Agreements”), described below, pursuant~~e-wallet, insurance products and access to ~~which Bokefa is deemed to have controlling financial interest~~finance and ~~be the primary beneficiary of Guangxi Zhogntong. Therefore, Guangxi Zhongtong is deemed a VIE of Bokefa.~~

~~Loan Agreement~~

~~Exclusive Option Agreement~~

~~Equity Pledge Agreement~~

~~Business Cooperation Agreement~~

~~Exclusive Service Agreement~~

~~Entrustment and Power of Attorney Agreement~~

On August 23, 2021, Beijing Yibao Technology Co., Ltd (“Beijing Yibao”), Guangxi Zhongtong Insurance Agency Co., Ltd (“Guangxi Zhongtong”), and two shareholders of Guangxi Zhongtong entered into a capital increase agreement pursuant to which Beijing Yibao will invest approximately RMB30 million (USD 4.7 million) into Guangxi Zhongtong. On October 21, 2021, Beijing Yibao transferred the funds separately and the transaction closed. As a result of the transaction, Beijing Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the closing, the previous agreements consummated on January 1, 2021 per the GZ Frame Work Loan became null and void, and the loan should be repaid by the shareholders before December 31, 2022.

~~VIE agreements with Beijing Fucheng:~~

~~Loan Agreement~~

~~Exclusive Option Agreement~~

~~Equity Pledge Agreement~~

~~Business Cooperation Agreement~~

~~Exclusive Service Agreement~~

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to Beijing Fucheng and Beijing Fucheng agrees to pay service fees to Bokefa.

~~Entrustment and Power of Attorney Agreement~~

~~VIE agreements with All Weather:~~

~~Loan Agreement~~

Pursuant to this agreement, Bokefa agreed to provide loans to the shareholders of All Weather. The term of the loan shall start from the date when the loan is actually paid until the date on which the loan is repaid in full. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely by All Weather for operating expenses, and should be exclusively repaid by transferring shares of All Weather to Bokefa when PRC Law permits.

~~Exclusive Option Agreement~~

~~Equity Pledge Agreement~~

~~Business Cooperation Agreement~~

~~Exclusive Service Agreement~~

The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to All Weather and All Weather agrees to pay service fees to Bokefa.

~~Entrustment and Power of Attorney Agreement~~

~~VIE agreements with Tianjin Dibao:~~lending services.

On ~~April 2,~~November 10, 2022, ~~Zhengzhong Energy, Tianjin Dibao,~~Tingo Mobile opened a new regional head office in Ghana and ~~nominee shareholder~~launched operations there, supported by an agreement with the Ashanti Investment Trust which, under the terms of ~~Tianjin Dibao entered~~the agreement, committed to enroll two million new customers in Ghana. On December 14, 2022, Tingo Mobile launched in Malawi as a strategic base from which to expand into ~~six agreements, described below, pursuant to which Zhengzhong Energy is deemed to have a controlling financial interest~~East Africa and ~~be the primary beneficiary of Tianjin Dibao. Tianjin Dibao is deemed a VIE of Zhengzhong Energy.~~target neighboring countries such as Tanzania, Zambia, and Mozambique. The plans for Tingo Mobile Malawi are currently being developed.

In addition to its agri-fintech business, on December 12, 2022, we launched our global Tingo DMCC from DMCC, which is regarded as Free Trade Zone and a major global commodity trading center, to facilitate purchases and export of agricultural commodities from both its existing customer base and new customers. Through the strong relationships between Tingo Mobile and the cooperatives and other parties it deals with in Nigeria and Ghana, we have secured access to significant quantities of agricultural produce for export, including rice, wheat, millet and maize. Since its launch, Tingo DMCC has been working with the farming co-operatives contracted to Tingo Mobile to aggregate large volumes of agricultural produce for export. The first export transactions were completed in May 2023.

~~Loan Agreement~~

~~Pursuant~~As a means of further expanding and strengthening the Tingo eco-system, on February 9, 2023, we acquired the entire share capital of Tingo Foods, which had already commenced food processing operations in September 2022, generating more than $400 million of revenue (prior to ~~this agreement, Zhengzhong Energy agreed~~our acquisition) in its first four months of operations. Through Tingo Foods, we have enhanced our ability to ~~provide loans~~integrate agricultural producers into the ’seed to the shareholder of Tianjin Dibao. The term of the loan shall start from the date when the loan is actually paid. The agreement shall terminate when the shareholder repay the loan. The loan should be used solely to purchase Tianjin Dibao‘s 76% equity,sale’ value chain and ~~should be exclusively repaid by transferring shares of Tianjin Dibao to Zhengzhong Energy when PRC Law permits.~~digital ecosystem.

As part of our strategy to leverage our fintech platforms, infrastructure and the Tingo Mobile brand, we recently launched a beta version of the TingoPay Super App in partnership with Visa, which aims to improve access to digital payments and financial services and drive financial inclusion across Africa. We expect to launch the full version of TingoPay before the end of the third quarter. The launch of the Tingo Visa card, together with the new TingoPay Super App and the TingoPay business portal, opens significant global opportunities to Tingo’s subscribers, allowing secure cashless payments at more than 61 million merchants in over 200 countries through Visa’s global network, as well as the ability for business subscribers to more readily and securely accept payments from customers and other third parties. TingoPay broadens our reach outside of the agricultural sector, targeting retail customers of any age (18+) and demographic. Customers of the TingoPay Super App can make online payments in their domestic or foreign currencies, as well as manage their Visa cards, pay bills, arrange insurance, arrange loans and purchase mobile telephone top-ups.

We are aiming to be the leading fintech and agri-fintech business in Africa, before expanding into southeast Asia and certain other parts of the world, delivering financial inclusion and financial upliftment to our customers, including to rural farming communities through the Company’s agri-fintech platform and products.

~~Exclusive Option Agreement~~Acquisition of Tingo Foods

Overview. On February 9, 2023, the Company and MICT Fintech acquired from Dozy Mmobuosi, the Tingo Mobile founder, all of the outstanding share capital of Tingo Foods, a Nigerian limited company that has operated in the food processing industry since its inception in August 2022, whereby it purchases crops and raw foods, before processing them into finished food products through arrangements with third party rice mills, cashew processing plants, and other food processing companies, to be sold to large food distributor and wholesaler companies. As part of its expansion strategy, Tingo Foods plans to fit out and operate a state-of-the-art food processing facility in the Delta State of Nigeria, which is expected to be the largest of its kind in Africa. The construction of the food processing facility is being carried out in two stages, with the first stage expected to be completed by mid-2024. We have agreed to fit out the Tingo Foods facility with the necessary processing equipment and also agreed that Tingo Foods will enter into a long-term ground lease on the facility, with lease payments to commence when the facility becomes operational.

Consideration Provided. As consideration for Tingo Foods, we issued Mr. Mmobuosi a senior secured promissory note in the principal amount of $204,000,000, bearing interest at 5.0% per annum and maturing in 24 months, and certain undertakings and obligations of the Company. For further information, reference is made to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2023, as amended by Forms 8-K/A filed with the SEC on April 27, 2023 and May 10, 2023.

The ~~effective term~~following diagram illustrates the Company’s current corporate structure, including its subsidiaries and VIEs, as of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of Tianjin Dibao to Zhengzhong Energy in accordance with relevant laws and provisions in the agreement, or upon written notice by Zhengzhong Energy to the shareholder. In consideration for Zhengzhong Energy’s loan arrangement, the shareholder have agreed to grant Zhengzhong Energy an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Zhengzhong Energy. Upon request by Zhengzhong Energy, Tianjin Dibao is obligated to distribute profits to the shareholder of Tianjin Dibao, who must remit the profits to Zhengzhong Energy immediately. Tianjin Dibao and its shareholder are required to act in a manner that is in the best interest of Zhengzhong Energy with regard to Tianjin Dibao’s business operations.June 30, 2023:

~~Equity Pledge Agreement~~

~~Business Cooperation Agreement~~

~~Exclusive Service Agreement~~

~~Entrustment and Power of Attorney Agreement~~

The shareholder of Tianjin Dibao agreed to entrust all their rights to exercise their voting power and any other rights as shareholder of Tianjin Dibao to Zhengzhong Energy. The shareholder of Tianjin Dibao have each executed an irrevocable power of attorney to appoint Zhengzhong Energy as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until the deregistration of Tianjin Dibao.

~~Results of Operations~~

~~Three and Six Months Ended June 30, 2022, Compared to Three and Six Months Ended June 30, 2021.~~

As of June 23, 2020, we increased our ownership interest in Micronet to over 50% and started to consolidate Micronet’s operations into our financial statements up until May 9, 2021 when our ownership in Micronet was diluted to less than 50%. In addition, on July 1, 2020, we completed a merger transaction for the Acquisition of GFHI. We are consolidating the financial results of GFHI as of the date the Acquisition and for the period thereafter. Beginning December 2020, we launched our insurance platform operated by GFHI for the Chinese market and have been generating revenues in GFHI in this segment of our operations. During the first quarter of 2021, as described above, we entered into a certain transaction with Guangxi Zhongtong, Beijing Fucheng Lianbao Technology Co., Ltd. and completed the acquisition of Magpie, which operates in the field of securities trading platforms. As a result of these transactions, we have started to consolidate the financial results of these companies and business lines into our business. On July 1, 2021, we entered into a VIE transaction with All Weather and started to consolidate the financial results and business lines of All Weather into our business once the transaction was consummated. On October 21, 2021 we completed the transaction of Guangxi Zhongtong, we currently holds a sixty percent (60%) equity interest in Guangxi Zhongtong.

Reportable Segments

We report our financial performance based on the following segments: Verticals and Technology, Online Stock Trading, Comprehensive Platform Service, Food Processing and Export and Commodity Trading. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. Additional information on our reportable segments is contained in Note 7 – Segments of the Financial Statements. Following the acquisition of Tingo Mobile, the Company restructured its segments and prospectively applied it to all periods presented.

Verticals and Technology – this segment comprising of our operations in China where we have two VIEs through which we primarily operate, our insurance brokerage business.

Online Stock Trading – this segment comprises mainly the operation of Magpie through which we operate the business of online stock trading, located mainly in Hong Kong and Singapore.

Comprehensive Platform Service – this segment includes the operations of Tingo Mobile described above.

Food Processing - this segment includes the operations of Tingo Foods which commenced food processing operations in September 2022 and was acquired by the Company in February 2023.Tingo Foods has outsourced its processing activities to third-party food processing plants in Nigeria, for which Tingo Foods arranges the supply of raw crops, as well as the customers for the finished processed foods.

Export and Commodity Trading - this segment deals in the export and trade of agricultural commodities and processed foods on a global basis, and is operated through Tingo DMCC, which operates from the Dubai Multi Commodity Centre.

Results of Operations

Three and Six Months Ended June 30, 2023, Compared to Three and Six Months Ended June 30, 2022.

We measure our performance on a consolidated basis as well as the performance of each segment.

These business activities conducted by ~~MICT~~the Company, in combination with the completion of the above acquisitions, contributed to the following ~~P&L~~statements of operations items:

Revenues

Net revenues for the three and six months ended June 30, ~~2022~~2023, were $977,169,000 and $1,828,414,000, respectively, compared to $11,958,000 and $21,521,000 respectively, compared to $12,341,000 and $21,276,000 for the three and six months ended June 30, 2021, respectively. This represents a decrease of $383,000 and increase of $245,000 for the three and six months ended June 30, 2022, respectively, as compared to the same period last year.

Net revenues related to the MRM segment for the three and six months ended June 30, 2022 were $0 and $0, respectively, as compared to $0 and $726,000, for the three and six months ended June 30, 2021 and reflects a decrease of $0 and $726,000 for the three and six months ended June 30, 2022. MRM revenues were solely contributed by Micronet. The change is attributed to the consolidation of the MRM segment (Micronet) results with the company during the first quarter of 2021 but not the first quarter of 2022 as described above.

Net revenues related to the insurance platform segment for the three and six months ended June 30, 2022 were $11,950,000 and $21,483,000, as compared to $12,341,000 and $20,550,000 revenues for the three and six months ended June 30, 2021, respectively, and reflects a decrease of $391,000 and increase of $933,000, for the three and six months ended June 30, 2022, respectively. ~~On the one hand we have~~This represents an increase ~~from the VIE transaction with All Weather which we started to consolidate their financial results~~of $965,211,000 and business lines of All Weather into our business once the transaction was consummated on July 1, 2021, on the other hand we have decrease in revenues from Guangxi Zhongtong as a result of the lockdown in certain cities and regions due to COVID-19.

~~Net revenues related to the online stock trading platform segment~~$1,806,893,000 for the three and six months ended June 30, ~~2022 was $8,000 and $38,000,~~2023, respectively, as compared to $0the same period last year, which is primarily attributable to the Tingo Mobile and $0Tingo Foods acquisitions, which were completed on December 1, 2022, and February 9, 2023, respectively. The U.S. Dollar reported revenues ~~for~~of Tingo Mobile and Tingo Foods were materially affected in the ~~three and six months ended~~second quarter by the significant devaluation of Nigeria’s currency, which ensued following the Nigerian Government’s lifting of certain foreign exchange restrictions. The exchange rate moved from Naira 462.88 / $1.00 on June 13, 2023, to Naira 770.38 on June 30, ~~2021, respectively~~2023, equating to a devaluation of 66.4%. The businesses of Tingo Mobile and ~~reflects an increase~~Tingo Foods were also temporarily adversely affected during the second quarter by the economic disruption following Nigeria’s government elections in February 2023 and the subsequent change of ~~$8,000 and $38,000, for~~presidential administrations. The impact of these challenges was partly offset by the three and six months ended June 30, 2022, respectively. The increase is attributed to the acquisition of Magpie that was finalized on February 26, 2021, (as further detailed above). As the global stock markets trading keep going downwards, we stopped market campaignCompany commencing its first export trades through Tingo DMCC in ~~the beginning of the year.~~May 2023.

Cost of revenues

Cost of revenues for the three and six months ended June 30, ~~2022~~2023, were $631,153,000 and $1,095,544,000, respectively, compared to $9,885,000 and $18,183,000 respectively, compared to $11,675,000 and $18,667,000 for the three and six months ended June 30, 2021, respectively. This represents a decrease of $1,790,000 and $484,000, for the three and six months ended June 30, 2022 as compared to the same period last year.

Cost of revenues related to the MRM segment for the three and six months ended June 30, 2022 were $0 and $0, as compared to $0 and $716,000 for the three and six months ended June 30, 2021, respectively, and reflects a decrease of $0 and $716,000 for the three and six months ended June 30, 2022, respectively. ~~The change is attributed to the consolidation~~This represents an increase of ~~the MRM segment (Micronet) results with the company during the first quarter of 2021 but not the first quarter of 2022 as described above .~~

~~Cost of revenues related to the insurance platform segment~~$621,268,000 and $1,077,361,000, for the three and six months ended June 30, ~~2022, were $9,870,000 and $18,163,000, respectively,~~2023, as compared to ~~$11,620,000 and $17,896,000 for~~ the ~~three and six months ended June 30, 2021, respectively, and reflects a decrease of $1,750,000 and increase of $267,000, respectively, for the three and six months ended June 30, 2022. The increase~~same period last year, which again is ~~attributed~~primarily attributable to the ~~VIE transaction with All Weather which we started to consolidate their financial results~~Tingo Mobile and ~~business lines~~Tingo Foods acquisitions and the commencement of ~~All Weather into our business once the transaction was consummated on July 1, 2021.~~export trades through Tingo DMCC.

Cost of revenues related to the online stock trading platform segment for the three and six months ended June 30, 2022 was $15,000 and $20,000 as compared to $55,000 and $55,000 Cost of revenues for the three and six months ended June 30, 2021, respectively, and reflects a decrease of $40,000 and $35,000, for the three and six months ended June 30, 2022, respectively. The increase is attributed to the acquisition of Magpie that was finalized on February 26, 2021, (as further detailed above).

Gross profit

Gross profit for the three and six months ended June 30, ~~2022~~2023, was ~~$2,073,000~~$346,016,000 and ~~$3,338,000,~~$732,870,000, respectively, and represents ~~17%~~35% and ~~16%~~40% of the revenues. This is in comparison to gross profit of ~~$666,000~~$2,073,000 and ~~$2,609,000,~~$3,338,000, representing 5%17% and ~~12%~~16% of the revenues, for the three and six months ended June 30, ~~2021,~~2022, respectively, and reflects an increase of ~~$1,407,000~~$343,943,000 and ~~$729,000,~~$729,532,000, for the three and six months ended June 30, 2023 as compared to the same period last year, and is again attributable to the addition of the Tingo Mobile and Tingo Foods acquisitions and Tingo DMCC. The reduction in the gross margins in the second quarter compared to the first quarter is attributable to the combined impact of the material change in the exchange rate of Nigeria’s currency against the U.S. dollar and the commencement of the Tingo DMMC export business, which targets a gross margin of between 20% and 25%.

SEGMENT RESULTS OF OPERATIONS

	For the six months ended June 30,						For the three months ended June 30,
	2023			2022			2023			2022
Revenue
Verticals and Technology	$	33,721,000		$	21,483,000		$	13,169,000		$	11,950,000
Online Stock Trading		28,000			38,000			20,000			8,000
Corporate and others		-			-			-			-
Export and Commodity Trading		347,997,000			-			347,997,000
Comprehensive Platform Service		463,016,000			-			209,550,000			-
Food Processing		983,652,000			-			406,433,000			-
Total	$	1,828,414,000		$	21,521,000		$	977,169,000		$	11,958,000

Profit (loss) from operations
Verticals and Technology	$	(41,054,000	)	$	(6,090,000	)	$	(37,830,000	)	$	(1,795,000	)
Online Stock Trading		(4,515,000	)		(6,038,000	)		(2,814,000	)		(2,494,000	)
Corporate and others		(14,744,000	)		(11,612,000	)		(4,827,000	)		(9,481,000	)
Export and Commodity Trading		69,599,000			-			69,599,000			-
Comprehensive Platform Service		229,289,000			-			97,215,000			-
Food Processing		203,815,000			-			60,370,000			-
Total	$	442,390,000		$	(23,740,000	)	$	181,713,000		$	(13,770,000	)

Verticals and Technology

●

Net revenues related to the fintech business and insurance agency business for the three and six months ended June 30, 2023, were $13,169,000 and $33,721,000, respectively, as compared to $11,950,000 and $21,483,000 for the three and six months ended June 30, 2022, respectively, and reflects an increase of $1,219,000 and $12,238,000, for the three and six months ended June 30, 2023, as compared to the same period last year. The increase is attributable to the following factors: (1) Chinese government has eased a three-year-long restriction for COVID at the beginning of 2023, which stimulated consumption, travel and rapid business growth and; (2) The Company opened several new branches, for example in the cities of Weifang and Chengdu and; (3) The Company increased its telemarketing activity, which stimulated business growth and; (4) The Company successfully improved customer satisfaction levels, creating customer “stickiness”, and recruited additional senior business development management, which assisted to increase top line revenue.

●

Cost of revenues for the three and six months ended June 30, 2023, were $10,921,000 and $28,939,000, respectively, as compared to $9,870,000 and $18,163,000 for the three and six months ended June 30, 2022, respectively, reflecting an increase of $1,051,000 and $10,776,000, for the three and six months ended June 30, 2023, as compared to the same period last year. The increase is attributable to: (1) an increase in sales activity due to the lifting of COVID-19 restrictions and; (2) the opening of several new branches; (3) the Company increasing its telemarketing activity, and; (4) an increase in top line revenues that arose through increasing customer satisfaction levels.

●

Gross profit for the three and six months ended June 30, 2023, was $2,248,000 and $4,782,000, respectively, as compared to $2,080,000 and $3,320,000 gross profit for the three and six months ended June 30, 2022, respectively, reflecting an increase of $168,000 and $1,462,000, for the three and six months ended June 30, 2023, as compared to the same period last year. The increase is attributable to the uplift in revenues as discussed above.

●

The loss from operations related to the fintech business and insurance agency business for the three and six months ended June 30, 2023, was $37,830,000 and $41,054,000, respectively, as compared to $1,795,000 and $6,090,000 for the three and six months ended June 30, 2022, respectively, and reflects an increase of $36,035,000 and $34,964,000, for the three and six months ended June 30, 2023, respectively, as compared to the same period last year. The increase is attributable to the impairment of long-term assets and goodwill, further described in Note 14 and Note 15 to the Financial Statements, and from loss from deconsolidation of All Weather as from May 31, 2023, further described in Note 5 to the Financial Statements.

Online Stock Trading

●

Net revenues related to the Online Stock Trading platform segment for the three and six months ended June 30, 2023, were $20,000 and $28,000, respectively as compared to $8,000 and $38,000 revenues for the three and six months ended June 30, 2022, respectively and reflects an increase of $12,000 and a decrease of $10,000, for the three and six months ended June 30, 2023, respectively, as compared to the same period last year. The decrease is attributable to the general decrease in retail stock trading business as the Company reduced its marketing activity in this area and began to pivot away from this segment.

●

Cost of revenues related to the Online Stock Trading platform segment for the three and six months ended June 30, 2023, were $0 and $22,000 as compared to $15,000 and $20,000 for the three and six months ended June 30, 2022, respectively, and reflects a decrease of $15,000 and an increase of $2,000, for the three and six months ended June 30, 2023, respectively, as compared to the same period last year.

●

Gross profit (loss) related to the Online Stock Trading platform segment for the three and six months ended June 30, 2023 was $20,000 and $6,000, respectively, as compared to $(7,000) and $18,000 gross loss and profit for the three and six months ended June 30, 2022, respectively, and reflects an increase of $27,000 and decrease of $12,000, respectively, for the three and six months ended June 30, 2023 as compared to the same period last year. The variance is attributed to the combination of the decreased in revenues and the increased in the broker minimum charges.

●

The loss from operations related to the Online Stock Trading platform segment for the three and six months ended June 30, 2023, was $2,814,000 and $4,515,000, respectively, as compared to $2,494,000 and $6,038,000 for the three and six months ended June 30, 2022, respectively, and reflects an increase of $320,000 and decrease of $1,523,000, respectively, for the three and six months ended June 30, 2023, as compared to the same period last year. The change is due to the cost savings that the Company made as it reduced staff numbers, cut back on marketing activity and commenced to pivot away from the B2C retail stock trading market and explore opportunities as a B2B, white-label operator and also adapt its technology with a view to launching payment service product in the future. On July 12, 2023, the Company made a business decision to close its online stock trading business in Hong Kong and Singapore having considered the level of losses being incurred, the ongoing challenges in the market sector, and the fact that the business is no longer core to the Company’s strategy following the acquisitions of Tingo Mobile and Tingo Foods. The Company will however continue to explore opportunities to monetize the proprietary online stock trading technology and products it has developed.

Comprehensive Platform Service

●

Net revenues related to the Comprehensive Platform Service segment for the three and six months ended June 30, 2023, were $209,550,000 and $463,016,000, respectively, as compared to $0 for the three and six months ended June 30, 2022. The year-over-year increase is attributable to the Tingo Mobile acquisition which was completed on December 1, 2022.

The segment’s U.S. dollar reported net revenues for the second quarter were materially affected by the substantial devaluation of Nigeria’s currency against the U.S. dollar, following the Nigerian Government’s lifting of certain foreign exchange restrictions. This resulted in a devaluation of the Naira against the U.S. Dollar of 66.4%. Net revenues from the Nwassa agri-fintech platform were also further adversely affected in the second quarter by the economic disruption following Nigeria’s government elections in February 2023 and the subsequent change of presidential administrations. We believe the exchange rate between the Naira and U.S. Dollar has now begun to stabilize and that the actions of Nigeria’s new government will ultimately improve economic stability and deliver economic growth for the country. We also expect the net revenues from the Comprehensive Platform Service to materially benefit from the distribution of the six million new Tingo Mobile handsets that have been ordered and partlially paid and are expected to be delivered to members of the All Farmers Association of Nigeria before the end of the third quarter.

●

Cost of revenues related to the Comprehensive Platform Service segment for the three and six months ended June 30, 2023, were $87,826,000 and $185,282,000, respectively, as compared to $0 for the three and six months ended June 30, 2022. The increase is again attributable to the Tingo Mobile acquisition.

●

Gross profit related to the Comprehensive Platform Service segment for the three and six months ended June 30, 2023, was $121,724,000 and $277,734,000 respectively, representing a gross margin of 58% and 60%, respectively. The gross margin of the Comprehensive Platform Service segment fell slightly for the second quarter as compared to the first quarter due to the combination of the impact of the devaluation of the Naira against the U.S. Dollar and the adverse impact of Nigeria’s economic instability, following its recent change of presidential administrations, on Nwassa’s revenues.

●

The profit from operations related to the Comprehensive Platform Service segment for the three and six months ended June 30, 2023, was $97,215,000 and $229,289,000, respectively, as compared to nil for the three and six months ended June 30, 2022. The increase is again attributable to the Tingo Mobile acquisition. The profit from the operations of the Comprehensive Platform Service segment was lower for the second quarter compared to the first quarter, which again was due to the combination of the impact of the devaluation of the Naira against the U.S. Dollar and the adverse impact on Nwassa’s revenues arising from Nigeria’s economic instability following its recent change of presidential administrations.

Food Processing

●

Net revenues related to the Food Processing segment for the three and six months ended June 30, 2023, were $406,433,000 and $983,652,000, respectively, as compared to $0 for the three and six months ended June 30, 2022. The year-over-year increase is attributable to the Tingo Foods acquisition, which was completed on February 9, 2023, resulting in the inclusion of the revenues of Tingo Foods from the months of February and March and the full second quarter of 2023.

The segment’s net revenues for the second quarter were affected by the material devaluation of Nigeria’s currency following the Nigerian Government’s lifting of certain foreign exchange restrictions, which resulted in a devaluation of the Naira against the U.S. Dollar of 66.4%. This in turn resulted in a lower U.S. Dollar conversion of the Naira revenue of Tingo Foods. The Food Processing segment was also further adversely affected in the second quarter by the economic disruption following Nigeria’s government elections in February 2023 and the subsequent change of presidential administrations. We believe that the exchange rate between the Naira and U.S. Dollar has now begun to stabilize and that the actions of Nigeria’s new government will ultimately improve economic stability and deliver economic growth to the country.

●

Cost of revenues related to the Foods Processing segment for the three and six months ended June 30, 2023, were $254,008,000 and $602,903,000, respectively, as compared to $0 for the three and six months ended June 30, 2022. The increase is again attributable to the Tingo Foods acquisition and the inclusion of its cost of revenues, which relate to the cost of the purchase of raw crops and the processing of those crops into finished food products from the months of February and March and the full second quarter of 2023.

●

Gross profit related to the Food Processing segment for the three and six months ended June 30, 2023, was $152,425,000 and $380,749,000, respectively, representing 37% and 39% margin. The gross margin of the Food Processing segment fell slightly for the second quarter as compared to the first quarter due to the impact of the devaluation of the Naira against the dollar and the related increases in processing costs that could not be passed on immediately to customers.

●

The profit from operations related to the Food Processing segment for the three and six months ended June 30, 2023, was $60,370,000 and $203,815,000, respectively. The increase is again attributable to the Tingo Foods acquisition. The profit from the operations of the Food Processing segment fell for the second quarter, which again was due to the combination of the impact of the devaluation of the Naira against the U.S. Dollar and the related increases in processing costs and distribution costs that could not be passed on immediately to customers.

Export and Commodity Trading

●

Net revenues related to the Export and Commodity Trading segment for both the three and six months ended June 30, 2023, were $347,997,000, as compared to $0 for the three and six months ended June 30, 2022. The increase is attributable to the commencement of sales from the Export and Commodity Trading segment in May 2023.

●

Cost of revenues related to the Export and Commodity Trading segment for both the three and six months ended June 30, 2023, was $278,398,000, as compared to $0 for the three and six months ended June 30, 2022. The increase is again attributable to the commencement of sales from the Export and Commodity Trading segment in May 2023.

●

Gross profit related to the Export and Commodity Trading segment for both the three and six months ended June 30, 2023, was $69,599,000 representing a gross profit margin of 20%.

●

The profit from operations related to the Export and Commodity Trading segment for both the three and six months ended June 30, 2023, was $69,599,000.

Selling and Marketing Expenses

Selling and marketing expenses are part of operating expenses. Selling and marketing costs for the three and six months ended June 30, 2023, were $89,139,000 and $174,207,000, respectively, as compared to expenses of $1,035,000 and $3,552,000 for the three and six months ended June 30, 2022, ~~as compared to the same period last year. The change was primarily attributable to the insurance platform segment as discussed below.~~

~~Gross profit related to the MRM (Micronet) segment~~respectively. This represents an increase of $88,104,000 and $170,655,000, for the three and six months ended June 30, ~~2022 were $0 and $0,~~2023, respectively, as compared to gross profit of $0 and $10,000 for the three and six months ended June 30, 2021, respectively, and reflects a decrease of $0 and $10,000 for the three and six months ended June 30, 2022. MRM Gross profit were solely contributed by Micronet The change is attributed to the consolidation of the MRM segment (Micronet) results with the company during the first quarter of 2021 but not the first quarter of 2022 as described above.

Gross profit related to the insurance platform segment for the three and six months ended June 30, 2022 were $2,079,000 and $3,320,000, respectively, as compared to $721,000 and 2,654,000 for the three and six months ended June 30, 2021, respectively, and reflects an increase of $1,358,000 and $ 666,000, for the three and six months ended June 30, 2022 as compared to the same period last year. The increase is ~~attributed~~mainly attributable to: (1) the inclusion of the sales and marketing expenses of Tingo Foods following its acquisition, which amounted to ~~the VIE transaction with All Weather which we started to consolidate their financial results~~$84,851,000 and ~~business lines of All Weather into our business once the transaction was consummated on July 1, 2021.~~

~~Gross profit (loss) related to the online stock trading platform segment~~$164,047,000 for the three and six months ended June 30, ~~2022 were $(6,000)~~2023, respectively; (2) the inclusion of the sales and ~~$18,000, respectively, as compared~~marketing expenses of Tingo Mobile, which amounted to ~~$(55,000)~~$4,050,000 and ~~$(55,000) gross profit~~$$6,743,000 for the three and six months ended June 30, ~~2021,~~2023, respectively, and; (3) offset by a decrease in the sales and ~~reflects an increase of $49,000 and $73,000, respectively, for~~marketing expenses from the three and six months ended June 30, 2022 as compared to the same period last year. The increase is attributed to the acquisition of Magpie that was finalized on February 26, 2021 (as further detailed above).Online Stock Trading business.

~~Selling and Marketing Expenses~~

Selling and Marketing expenses are part of operating expenses. Selling and marketing cost for the three and six months ended June 30, 2022, were $1,035,000 and $3,552,000, respectively, as compared to expenses of $1,351,000 and 2,352,000 for three and six months ended June 30, 2021. This represents a decrease of $316,000 and increase of $1,200,000, for the three and six months ended June 30, 2022 as compared to the same period last year. The change is attributed to the decrease in Selling and Marketing expenses related to the insurance companies offset by increase in the online stock trading platform. The decrease is mainly a result of decrease in Selling and Marketing expenses in a total amount of $613,000 and increase of $150,000, for the three and six months ended June 30, 2022. offset by the increase from the acquisition of online stock trading platform segment that was finalized on February 26, 2021 in a total amount of $297,000 and $1,076,000, for the three and six months ended June 30, 2022.

General and Administrative Expenses

General and administrative expenses are part of operating expenses. General and administrative expenses for the three and six months ended June 30, ~~2022~~2023, were $23,416,000 and $53,043,000, respectively, compared to $13,665,000 and $20,991,000 ~~respectively, compared to $14,853,000 and $19,421,000 for the three and six months ended June 30, 2021, respectively. This represents a decrease of $1,188,000 and increase of $1,570,000,~~ for the three and six months ended June 30, 2022, respectively. This represents an increase of $9,751,000 and $32,052,000, for the three and six months ended June 30, 2023, respectively, as compared to the same period last year. The ~~change in general and administrative~~increase is mainly as a result of: (i) the inclusion of ~~(i) a decrease associated with~~ the ~~issuance costs~~expenses of ~~shares~~Tingo Foods for the five months from its date of acquisition, which amounted to $2,587,000 and ~~options~~$5,190,000 for the three and six months ended June 30, 2023; (ii) the inclusion of the expenses of Tingo Mobile for the three and six months, which amounted to ~~Directors, officers,~~$13,218,000 and $27,213,000, and; (iii) an increase in in share-based expenses to directors and employees ~~and service providers~~ in ~~a total~~the of amount of ~~$4,717,000~~$3,688,000 for the six months ended June 30, 2023, and; (iv) partially offset by a ~~non-cash expenses; and; (ii)~~reduction in the cost base of the Online Stock Trading business as cut backs were made, including a ~~decrease~~reduction in ~~retainer for professional advice from various services providers,~~staff numbers, in connection with the ~~completion~~winding down of ~~the public offering closed in February 2021 and March 2021~~that business, and; (v) partially offset by ~~increase~~a reduction in expenses in the fintech business and insurance agency business related to the ~~insurance companies as well as increase in the online stock trading platform. The increase associated with the salary expenses following the acquisition~~deconsolidation of new subsidiaries and VIEs transactions during 2021 and; (ii) an increase associated with the rent and maintenance expenses following the acquisition of new subsidiaries and VIEs transactions during 2021, (iii) increase in merger transaction expenses related to the Tingo transaction in the amount of $3,136,000.All Weather from May 31, 2023.

Research and Development Expenses

Research and development expenses are part of operating expenses. Research and development ~~costs,~~expenses, which mainly include wages, materials and sub-contractors, for the three and six months ended June 30, ~~2022~~2023, respectively, were $333,000 and $696,000, compared to $346,000 and $941,000 ~~respectively, compared to $388,000 and $619,000 for the three and six months ended June 30, 2021, respectively. This represents a decrease of $42,000 and increase of $322,000,~~ for the three and six months ended June 30, 2022, respectively. This represents a decrease of $13,000 and $245,000, for the three and six months ended June 30, 2023, respectively, as compared to the same period last year. The ~~change~~decrease is attributed to a reduction in spend on research and development activity in connection with the ~~(i) decrease~~Online Stock Trading platform.

Impairment of ~~$209,000~~long-term assets and ~~increase~~goodwill

During the second quarter of ~~$118,000 for~~2023, the ~~three~~Company's management decided to focus its operations on our recent acquisitions of Tingo Mobile and ~~six months ended June 30, 2022, as compared~~Tingo Foods. That decision led to the ~~same period last year related~~decision to dispose of our interests in All Weather. As part of the decision, the Company demanded the full repayment of the loan granted to the ~~development~~shareholders of All Weather. As of May 31, 2023, the Company is no longer consolidating All Weather. The result of the ~~Stock trading application and; (ii) increase~~loss from disposal appears in ~~$167,000 and $435,000 for~~ the ~~three and six months ended June 30, 2022,~~statement of operations as ~~compared to~~loss from deconsolidation of subsidiaries in the ~~same period last year related to~~amount of $3,333,000 in the development of the insurance core system and sales platform and; (iii) a decrease of $0 and $231,000 for the three and six months ended June 30, 2022, as compared to the same period last year from consolidation of the MRM segment (Micronet) results with the company during the first quarter of 2021 but not the first quarter of 2022 as described above.period.

~~Loss~~As result of the decision above, the Company also considered the need for impairment of its assets. We conducted forecasting and strategic reviews and integration assessments of our Verticals and Technology business, and with performance below expectations since acquisition, we revised internal financial projections of the business to reflect updated expectations of future financial performance. These reviews and the subsequent revisions in the projections highlighted challenges for the and Technology segment and Online Stock Trading segment as a result of performance below expectations due to the impact of modified consumer shopping behavior in the post-COVID-19 period.

Also, on July 12, 2023, the Company made a business decision to close its Online Stock Trading business in Hong Kong and Singapore having considered the level of losses being incurred, the ongoing challenges in the market sector, and the fact that the business is no longer core to the Company’s strategy following the acquisitions of Tingo Mobile and Tingo Foods. The Company will however continue to explore opportunities to monetize the proprietary online stock trading technology and products it has developed.

The intangible assets that are subject to impairment testing were recorded as part of the intangible assets segments and included indefinite-lived and finite-lived Trade name/ trademarks, licenses and finite-lived Developed technology and customer relationships. As a result of the interim impairment assessments, we recognized impairment charges for the excess of the book value over the fair value of those intangible assets in amount of $14,397,000 pre-tax ($11,924,000 after tax) to write-down these intangible assets to their respective fair values close to nil as of June 30, 2023 related to the Verticals and Technology segment and $1,253,000 pre-tax ($1,253,000 after tax) to write-down these intangible assets to their respective fair values close to nil as of June 30, 2023 related to the Online Stock Trading segment. The valuation methods used in the assessments included the relief-from-royalty methodology and excess earnings of the income approach for intangible assets from the acquisitions of our subsidiaries. This noncash charge was included in Impairment of long-term assets and goodwill in our consolidated statement of operations.

We also recorded an $19,788,000 pre-tax non-cash impairment charge related to goodwill for the six months period ended June 30, 2023, relating to Verticals and Technology segment reporting unit, representing a full impairment charge for its goodwill balance.

Profit from Operations

Our ~~loss~~profit from operations for the three and six months ended June 30, ~~2022 were $13,770,000~~2023, was $181,713,000 and ~~$23,740,000,~~$442,390,000, respectively, compared to a loss from operations of ~~$16,569,000~~$13,770,000 and ~~$21,352,000, respectively, for the three and six months ended June 30, 2021. The change in loss from operations is mainly a result of the increase in gross profit as mention above.~~

~~Financial Income (Expense), Net~~

~~Financial income (expenses), net~~$23,740,000, for the three and six months ended June 30, 2022, respectively. The year-over-year increase in profit from operations is mainly attributed to the acquisitions of Tingo Mobile and Tingo Foods, and the commencement of Tingo DMCC’s export activity as explained above.

Our profit from operations in the second quarter was materially affected by the impact on the revenues and profitability of Tingo Mobile and Tingo Foods from the significant devaluation of Nigeria’s currency against the U.S. Dollar, which ensued following the Nigerian Government’s lifting of certain foreign exchange restrictions. This resulted in a devaluation of the Naira of 66.4% against the U.S. Dollar. The profit from operations of Tingo Mobile and Tingo Foods, and therefore the Company, were ~~expenses~~also temporarily adversely affected during the second quarter of ~~$1,168,000~~2023 by the economic disruption following Nigeria’s government elections in February 2023 and ~~$1,089,000, respectively, compared to an income~~the subsequent change of ~~$291,000 and~~presidential administrations. The impact of these challenges was partly offset by the Company commencing its first export trades through Tingo DMCC in May 2023.

Financial Income (Expense), Net

Financial expenses ~~of $275,000~~ for the three and six months ended June 30, ~~2021, respectively. This represents an increase in financial expenses of $1,459,000~~2023, amounted to $22,821,000 and ~~$814,000,~~$21,377,000, respectively, ~~for the three~~compared to $1,167,000 and ~~six months ended June 30, 2022. The change in financial expenses, net~~$1,089,000 for the three and six months ended June 30, 2022, respectively. This represents an increase of $21,654,000 and $20,288,000 for the three and six months ended June 30, 2023, respectively, as compared to the same period last year, which is primarily due to ~~the~~increased borrowings and exchange ~~rate.~~rate changes.

Net ~~Loss~~Profit (Loss) Attributed to ~~MICT, Inc.~~the Company

~~Our~~The net profit attributed to the Company for the three and six months ended June 30, 2023, amounted to $96,508,000 and $273,248,000, respectively, compared to a net loss ~~attributed to MICT, Inc.~~of $14,337,000 and $23,023,000, for the three and six months ended June 30, 2022, ~~were $14,337,000~~respectively. This represents an increase of $110,845,000 and ~~$23,023,000 compared to $18,396,000 and $22,857,000,~~$296,271,000, for the three and six months ended June 30, ~~2021. This represents a decrease of $4,059,000 and increase of $166,000 for the three and six months ended June 30, 2022,~~2023, respectively, as compared to the same period last ~~year. The change for~~year, which is primarily attributable to the ~~three~~acquisitions of Tingo Mobile and ~~six months ended June 30, 2022 is mainly~~Tingo Foods and the commencement of export trades through Tingo DMCC, as explained above.

Our net profit attributed to the Company in the second quarter was materially affected by the impact on the revenues and net profit of Tingo Mobile and Tingo Foods from the significant devaluation of Nigeria’s currency against the U.S. Dollar, which ensued following the Nigerian Government’s lifting of certain foreign exchange restrictions. This decision resulted in a ~~result~~devaluation of the ~~decrease~~Naira of 66.4% against the U.S. Dollar. The profits from operations of Tingo Mobile and Tingo Foods, and therefore the Company, were also temporarily adversely affected during the second quarter by the economic disruption following Nigeria’s government elections in ~~operating expenses~~February 2023 and ~~increase~~the subsequent change of presidential administrations. The impact of these challenges was partly offset by the Company commencing its first export trades through Tingo DMCC in ~~gross profit.~~May 2023.

Liquidity and Capital Resources

We have funded our operations with proceeds from the sales of shares of our Common Stock, which we undertook in November 2020 and February and March 2021. As of June 30, ~~2022,~~2023, our total cash and cash equivalents balance was ~~$76,053,000,~~$53,195,000, as compared to ~~$94,930,000~~$500,316,000 as of December 31, ~~2021.~~2022. This reflects a decrease of ~~$18,877,000~~$447,121,000 in cash and cash equivalents which relates to the operations of Tingo Mobile and Tingo Foods, and fluctuations of Nigerian Naira against U.S. dollar for the ~~reasons described below.~~six months ended June 30, 2023. Notwithstanding the material levels of cash balances held by Tingo Mobile and Tingo Foods, it should be noted that the majority of the cash is held at banks in Nigeria, and there are certain foreign currency and exchange restrictions in place that limit the conversion of such cash into US Dollars and other currencies. As stated in numerous recent Company announcements, we have adopted a strategy to dollarize the business of Tingo Mobile, with the goal of generating or converting a higher portion of income in US Dollars, including through the Tingo DMCC commodity trading platform and export business, where produce is paid for primarily in Naira and sales are made primarily in US Dollars or other freely tradeable currencies; as well as through expansion into other countries that have freely tradeable currency, such as Ghana, Malawi and Dubai; and through the launch of TingoPay in partnership with Visa. In addition, the Company, with the assistance of its banks in Nigeria, is progressing applications to the Central Bank of Nigeria to convert significant amounts of its Naira cash balances into U.S. Dollars, and transfer such U.S. Dollars to the Company’s bank accounts in the U.S.

The Company’s operations are cash generative following the acquisition of Tingo Mobile and Tingo Foods. There is however the possibility that the Company may seek to raise external financing in the future, if required to fund its growth plans and expansion strategy

Even taking into account the foreign exchange restrictions on the Naira cash balances held in Tingo Mobile, based on our current operating plan we believe that our cash and cash equivalents, as of June 30, 2023, will be sufficient to fund our currently projected operating expenses for at least the next 12 months.

Change in Cash and Liquidity from March 31, 2023. The Company’s operating activities generated a net cash inflow during the period. The Company did however make several significant substantial investments and outlays into fixed assets and stock purchases, which combined with the devaluation of the Naira against the U.S. Dollar, resulted in a short-term reduction in our cash and cash equivalents from $780,153,000 as of March 31, 2023, to $53,195,000 on June 30, 2023. The change in our cash position was principally due to the following:

●

Change in the official NGN-USD exchange rate. On June 14, 2023, the Nigerian Central Bank announced that it would allow the Nigerian Naira to float against major world currencies. The effective rate of exchange increased from NGN 460.35 on March 31, 2023, to 770.38 as of June 30, 2023. Because a substantial portion of our cash balances are held in Naira but expressed in U.S. dollars, we incurred a loss on foreign exchange of $114,001,000 during the quarter.

●

Prepayment on purchase of mobile phone handsets. During the second quarter of 2023, we paid our supplier of mobile phone handsets, $434,224,000 as a prepayment toward the manufacture of six million units for distribution to new customers of Tingo Mobile, which have been and continue to be refereed by All Farmers Association of Nigeria under the terms of the trade agreement signed with them on October 20, 2022.

●

Prepayments for stock for Tingo Foods. On June 30, 2023, we prepaid the amount of $140,190,555 to All Farmers Association of Nigeria for the purchase of agricultural produce stock that was subsequently delivered, processed and sold. Taking into account the payables balance due to All Farmers Association of Nigeria on March 31, 2023, which amounted to $195,945,446, the net cash movement on the Tingo Foods account with All Farmers Association of Nigeria amounted to $336,136,001 during the second quarter, resulting in a decrease in our cash reserves of the corresponding amount.

●

Working capital funding on export trades for Tingo DMCC. During the second quarter of 2023, we self-funded agricultural stock purchases for our export business in Tingo DMCC in the amount of $225,801,657 using the exchange rate as of the date of the payment. The revenue receipts for these trades are expected to be received during the third quarter of 2023.

●

Tax Payments. During the second quarter of 2023, we paid income taxes on the taxable profits of Tingo Mobile for 2022, which amounted to NGN 73,808,855,344, together with an education tax payment in the amount of NGN 6,088,740,636, which equated to approximately $174,000,000.

Exchange Rate Fluctuations

The Nigerian Naira and the RMB represents the largest foreign currency denomination of our contractual and operational exposure. As a result, a portion of our revenue and expenses are subject to exchange rate fluctuations. We have translated the Naira and the RMB into U.S. dollars using the following average exchange rates based on data obtained from Central Bank of Nigeria:

Currency	For the six months ended June 30, 2023 average		USD exchange rate as of June 30, 2023		USD exchange rate as of December 31, 2022
Naira		481.977		770.38		448.55
RMB		6.928		7.2513		6.8972

Sales of our Securities

On February 11, 2021, the Company announced that it has entered into a securities purchase agreement with certain institutional investors for the sale of (i) 22,471,904 shares of Common Stock, (ii) 22,471,904 Series A Warrants (the “Series A Warrants”) to purchase 22,471,904 shares of Common Stock and (iii) 11,235,952 Series B Warrants (the “Series B Warrants”) to purchase 11,235,952 shares of Common Stock at a combined purchase price of $2.67 (the “February Offering”). The gross proceeds to the Company from the February Offering were expected to be approximately $60.0 million. The Series A Warrants are exercisable nine months after the date of issuance, have an exercise price of $2.80 per share and will expire five and one-half years from the date of issuance. The Series B Warrants are exercisable nine months after the date of issuance, have an exercise price of $2.80 per share and will expire three and one-half years from the date of issuance. The Company received net proceeds of $54.0 million on February 16, 2021 after deducting the placement agent’s fees and other expenses.

On March 2, 2021, the Company entered into a securities purchase agreement (the “March Purchase Agreement”) with certain investors for the purpose of raising approximately $54.0 million in gross proceeds for the Company. Pursuant to the terms of the March Purchase Agreement, the Company agreed to sell, in a registered direct offering, an aggregate of 19,285,715 shares of Common Stock, at a purchase price of $2.675 per share and in a concurrent private placement, warrants to purchase an aggregate of 19,285,715 shares of Common Stock, at a purchase price of $0.125 per warrant, for a combined purchase price per share and warrant of $2.80 which was priced at the market under Nasdaq rules. The warrants are immediately exercisable at an exercise price of $2.80 per share, subject to adjustment, and expire five years after the issuance date. The closing date for the March Purchase Agreement was on March 4, 2021. The Company received net proceeds of $48.69 million on March 4, 2021, after deducting the placement agent’s fees and other expenses.

On February 2, 2023, the Company entered into Repurchase Agreements with certain Warrant Holders. The warrants being repurchased were originally issued by the Company between November 2020 and March 2021 pursuant to three offerings of Common Stock and warrants. The exercise prices of the warrants were $3.12 in the first offering and $2.80 in the subsequent two offerings, with various expiration dates falling between August 16, 2024, and August 16, 2026. The repurchase will result in the surrender and cancellation of the warrants held by each Warrant Holder.

Pursuant to the Repurchase Agreements, the Company paid $0.15 per warrant in April 2023 and $0.10 per warrant on May 1, 2023, with each warrant having the right to convert to one share, at an aggregate amount of $6,548,115.99.

Loans Provided by ~~MICT~~

~~On November 13, 2019,~~ the Company and Micronet executed a convertible loan agreement pursuant to which the Company agreed to loan Micronet $500,000 (the “Convertible Loan”). The Convertible Loan bears interest at a rate of 3.95% calculated and paid on a quarterly basis. In addition, the Convertible Loan, if not converted, shall be repaid in four equal installments, the first of such installment payable following the fifth quarter after the issuance of the Convertible Loan, with the remaining three installments due on each subsequent quarter thereafter, such that the Convertible Loan shall be repaid in full upon the lapse of 24 months from its issuance. In addition, the outstanding principal balance of the Convertible Loan, and all accrued and unpaid interest, is convertible at the Company’s option, at a conversion price equal to 0.38 NIS per Micronet share. Pursuant to the Convertible Loan agreement, Micronet also agreed to issue the Company an option to purchase one of Micronet’s ordinary shares for each ordinary share that it issued as a result of a conversion of the Convertible Loan at an exercise price of 0.60 NIS per share, exercisable for a period of 15 months. On July 5, 2020, Micronet had a reverse split where the price of the Convertible Loan changed from 0.08 NIS per Micronet share into 5.7 NIS per Micronet share. The option’s exercise price changed from 0.6 NIS per share to 9 NIS per Micronet share.

On January 1, 2020, the Convertible Loan was approved at a general meeting of the Micronet shareholders, and the Convertible Loan and the transactions contemplated thereby became effective. The loan was repaid on January 4, 2022.

On August 13, 2020, MICT Telematics extended to Micronet an additional loan in the aggregate amount of $175,000 (the “Third Loan”) which governed the existing outstanding intercompany debt. The Third Loan does not bear any interest and has a term of twelve (12) months. The Third Loan was extended for the purpose of supporting Micronet’s working capital and general corporate needs. The loan was repaid on August 25, 2021.

On May 13, 2022, the Company and ~~Tingo~~TMNA executed a loan agreement pursuant to which the Company agreed to loan ~~Tingo~~TMNA (“Maker”) a sum of $3,000,000 (the “Note” and “Loan” respectively). The Loan ~~bear~~bears an annual interest of 5%. The principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on May 10, 2024 (“Initial Maturity Date”), provided however that if the merger agreement executed between the parties shall be terminated pursuant to its terms, the Initial Maturity Date shall accelerate and the principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on or before the 30th calendar day following such termination .2024. The principal balance may be prepaid at any time by Maker without penalty.

On July 28, 2022, the Company agreed to replace the Note with a new note (“New Note”), pursuant to which the amount of the Loan granted under the New Note is $3,500,000, with all other terms remaining in effect without a change.

On September 28, 2022, the Company agreed to replace the New Note with a second new note (“Second New Note”), pursuant to which the amount of the Loan granted under the New Note is $3,700,000, with all other terms remaining in effect without a change.

On October 6, 2022, the Company agreed to replace the Second New Note with a third new note (“Third New Note”) in the aggregate principal amount of $23,700,000 with all other terms remaining in effect without a change.

On December 21, 2022, the Company and its subsidiary, MICT Fintech executed a loan agreement pursuant to which the Company agreed to loan MICT Fintech a sum of $10,000,000, with interest charged at a rate of 10% per annum. The principal balance of the loan and any accrued and unpaid interest shall be due and payable on December 31, 2023. On the same date, MICT Fintech loaned $10,000,000 to its subsidiary, Tingo Mobile, with interest charged at a rate of 25% per annum. The principal balance of this loan and any accrued and unpaid interest shall also be due and payable on December 31, 2023. The purpose of the loan is to fund dollar denominated time-sensitive costs relating to the purchase of smartphone handsets to be provided under operating lease agreements to two key customers of Tingo Mobile and Tingo Ghana Limited, which in turn is expected to facilitate a number of business revenue streams for Tingo Mobile and Tingo Ghana Limited, including but not limited to operating lease revenues, platform transaction revenues, product sale commissions and commodity export revenues.

On January 24, 2023, the Company and its subsidiary, MICT Fintech executed a loan agreement pursuant to which the Company agreed to loan MICT Fintech a sum of $1,480,000, with interest charged at a rate of 25% per annum. The principal balance of the loan and any accrued and unpaid interest shall be due and payable on December 31, 2023. On the same date, MICT Fintech loaned $1,480,000 to its subsidiary, Tingo Mobile, with interest charged at a rate of 25% per annum. The principal balance of this loan and any accrued and unpaid interest shall also be due and payable on December 31, 2023. The purpose of the loan is to fund costs relating to the purchase of smartphone handsets to be provided under operating lease agreements to two key customers of Tingo Mobile and Tingo Ghana Limited, which in turn is expected to facilitate a number of business revenue streams for Tingo Mobile and Tingo Ghana Limited, including but not limited to operating lease revenues, platform transaction revenues, product sale commissions and commodity export revenues.

~~Debt Repayment~~

~~As of June 30, 2022,~~On February 3, 2023, the Company ~~had short-term loans from others~~and its subsidiary, MICT Fintech executed a loan agreement pursuant to which the Company agreed to loan MICT Fintech a sum of ~~$922,000 comprised as follows: $922,000 loans~~$5,000,000, with interest charged at a rate of ~~All Weather Insurance Agency that bear an~~25% per annum. The principal balance of the loan and any accrued and unpaid interest ~~of 0% will~~shall be ~~repaid~~due and payable on December 31, ~~2022.~~2023. On the same date, MICT Fintech loaned $5,000,000 to its subsidiary, Tingo Mobile, with interest charged at a rate of 25% per annum. The principal balance of this loan and any accrued and unpaid interest shall also be due and payable on December 31, 2023. The purpose of the loan is to fund costs relating to the purchase of smartphone handsets to be provided under operating lease agreements to two key customers of Tingo Mobile and Tingo Ghana Limited, which in turn is expected to facilitate a number of business revenue streams for Tingo Mobile and Tingo Ghana Limited, including but not limited to operating lease revenues, platform transaction revenues, product sale commissions and commodity export revenues.

~~As of June 30, 2022,~~On May 17, 2023, the Company, ~~had short term lease liabilities~~and its subsidiary, Tingo DMCC executed a loan agreement pursuant to which the Company agreed to loan Tingo DMCC a sum of ~~$1,026,000 which~~$1,000,000, with interest charged at a rate of 25% per annum. The principal balance of the loan and any accrued and unpaid interest shall be due and payable on May 15, 2025. The purpose of the loan is ~~due June 30, 2023,~~to fund the purchase of certain crops and ~~long-term lease liabilities~~produce, via members of ~~$699,000, among which $672,000 is due June 30, 2024, $125,000 is due June 30, 2025, $14,000 is due June 30, 2026~~the All Farmers Association of Nigeria, to fulfil purchase orders from customers based in Chad and ~~$5,000 is due June 30, 2027.~~Niger.

~~Total Current Assets, Trade Accounts Receivable~~On May 30, 2023, the Company and its subsidiary, Tingo Group Holdings LLC executed a loan agreement pursuant to which the Company agreed to loan Tingo Group Holdings LLC a sum of $5,000,000, with interest charged at a rate of 25% per annum. The principal balance of the loan and any accrued and unpaid interest shall be due and payable on May 31, 2024. For the principal purpose of assisting Tingo Holdings with its funding costs and the consummation of certain commodities export transactions from Nigeria where a relatively small part of the costs, including for logistics and AFAN/PCX fees, require payment in US Dollars.

Working Capital

As of June 30, ~~2022,~~2023, our ~~total current assets were $103,532,000, as~~working capital was $291,704,000, compared to ~~$127,497,000 as of~~$265,781,000 for the year ended December 31, ~~2021.~~2022. The ~~decrease~~increase is mainly due to the ~~decrease~~increase in our ~~cash~~trade account receivable, in relation to Tingo DMCC and Tingo Mobile, as described above. Based on our current business plan, and in view of our cash balance following the completion of the acquisition of Tingo Foods, we anticipate that our cash balances will be sufficient to permit us to conduct our operations and carry out our contemplated business plans for at least the next 12 months from the date of this Report.

~~Our trade accounts receivable as of June 30, 2022, were $12,025,000 as compared to $17,879,000 as of December 31, 2021.~~

~~As of June 30, 2022, our working capital was $84,915,000, compared to $102,107,000 as of December 31, 2021. The decrease is mainly due to the decrease in our cash as described above.~~

For the
Six Months Ended
June 30,
2022 2021
USD in
thousands USD in
thousands
(unaudited) (unaudited)
Net Cash Used in Operating Activities $ (16,134 ) $ (16,074 )
Net Cash Used in Investing Activities (2,570 ) (5,857 )
Net Cash Provided by (Used in) Financing Activities (736 ) 107,065
Translation adjustment on cash and restricted cash 445 -
Cash and restricted cash at Beginning of Period 97,347 29,526
Cash and restricted cash at end of period $ 78,352 $ 114,660

	For the six months ended June 30,
	2023			2022
	USD in thousands			USD in thousands
Net Cash Provided by (Used in) Operating Activities	$	68,894		$	(16,544	)
Net Cash Used in Investing Activities		(377,516	)		(2,570	)
Net Cash Used in Financing Activities		(13,833	)		(736	)
Translation adjustment on cash and cash equivalents and restricted cash		(125,520	)		445
Cash and cash equivalents and restricted cash at beginning of period		502,549			99,036
Cash and cash equivalents and restricted cash at end of period	$	54,574		$	79,631

Cash Flow from Operating Activities

For the six months ended June 30, 2023, net cash provided by operating activities was $68,894,000, which related to net profit adjusted for non-cash expenses, primarily depreciation and amortization and share based compensation in the amount of $532,814,000, as well as (1) changes in deferred tax, net of $(9,688,000) which relates in the main to the deferred tax arising on the purchase price allocation for the acquisition of Tingo Mobile and Tingo Foods; and (2) effects of changes in working capital in the amount of $(454,232,000), which in the main relate to the acquisition and consolidation of Tingo Foods, which completed on February 9, 2023.

For the six months ended June 30, 2022, net cash used in operating activities was ~~$16,134,000,~~$(16,544,000), which primarily consists of net loss of ~~$23,281,000~~$(23,281,000) and various non-cash items of $6,219,000, as well as (1) changes in deferred tax, net of ~~$1,174,000,~~$(1,174,000), (2) changes in trade account receivable of ~~$(5,774,000),~~$5,774,000, (3) changes in trade accounts payable of ~~6,137,000,~~(6,137,000), (4) changes in deposit held on behalf of clients of ~~$1,622,000,~~$(1,622,000), (5) changes in other current assets of ~~$ (1,458,000),~~$1,048,000, (6) changes in other current liabilities of ~~$(1,692,000),~~$1,692,000, (7) changes in related party of ~~$(494,000),~~$494,000, (8) changes in long-term deposit and ~~prepaid expenses~~other non-current assets of ~~$(369,000),~~$369,000, (9) changes in right of use assets of ~~$(338,000),~~$338,000, and (10) change in lease liabilities of ~~$264,000.~~

For the six months ended June 30, 2021, net cash used in operating activities was $16,074,000, which consists of the net cash used in operating activities of $7,228,000 and with net loss of $23,302,000. The total net cash used in operating activities primarily consisted of: (1) Stock-based compensation for employees and consultants of $(458,000), (2) Loss from loss of control in Micronet of $(1,934,000), (3) Loss from equity investment of $(163,000), (4) Depreciation and amortization of $ (1,648,000), (5) issuance of shares for employees and consultants of $ (8,375,000), (6) Changes in assets and liabilities of $ 5,350,000.$(264,000).

Cash Flow from Investing Activities

For the six months ended June 30, 2023, we had net cash used in investing activities of $(377,516,000), which consisted of the net cash provided by additional investment of the Company of $ 56,849,000, and advances and purchases of property and equipment of $(434,365,000).

For the six months ended June 30, 2022, we had net cash used in investing activities of ~~$2,570,000,~~$ (2,570,000), which consisted of (1) net cash used in investing of purchase of property and equipment of $(104,000) and (2) receipt of loan back from Micronet Ltd. of $534,000, and (3) loan to ~~Tingo~~TMNA of $(3,000,000).

For the six months ended June 30, 2021, we had net cash used in investing activities of $5,857,000, which consisted of the net cash used in investing activities of $3,097,000, deconsolidation of Micronet operations of $2,466,000, and purchase of property and equipment of $294,000. The majority net cash used in investing was for the investment in new companies and expansion of business activities.

Cash Flow from Financing Activities

For the six months ended June 30, 2023, we had net cash used in financing activities of $ (13,833,000), which primarily consisted of: (1) repayment of loan to related party and others of $(9,831,000) and (2) repayment of short-term loan of $(154,000), and (3) repurchase of warrants $(6,548,000), and (4) exercise of warrants in amount of $2,700,000.

For the six months ended June 30, 2022, we had net cash used in financing activities of ~~$736,000,~~$(736,000), which solely consisted of repayment of loan to others.

For the six months ended June 30, 2021, we had net cash provided by financing activities of $107,065,000, which primarily consisted of: (1) Proceeds from issuance of shares and warrants of $105,366,000 from our public offering in February and March 2021; (2) proceeds from the exercise of warrants of $1,894,000; (3) Repayment of current maturity of long-term bank loans of $(195,000).

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the U.S., or GAAP, we provide additional financial metrics that are not prepared in accordance with GAAP, or non-GAAP financial measures. Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance.

Management believes that ~~these non-GAAP financial measures reflect~~EBITDA reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in our business, as they exclude expenses and gains that are not reflective of our ongoing operating results. Management also believes that ~~these non-GAAP financial measures provide~~EBITDA is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions. The Company believes EBITDA is useful ~~information~~ to investors infor the purposes of comparing our results period-to-period and alongside peers and understanding and evaluating our operating results ~~and future prospects~~ in the same manner as our management team and board of directors.

These supplemental measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in ~~comparing~~conjunction with, the GAAP financial ~~results across accounting periods~~measures presented. In addition, since these non-GAAP measures are not determined in accordance with GAAP, they are susceptible to varying calculations and may not be comparable to ~~those~~other similarly titled non-GAAP measures of ~~peer~~other companies.

~~The non-GAAP financial measures do~~EBITDA does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

EBITDA is defined as net income from continuing operations calculated in accordance with GAAP, less net income attributable to non-controlling interests, plus the sum of income tax expense, interest expense, net, depreciation and amortization (“EBITDA”).

The ~~non-GAAP adjustments, and~~following is a reconciliation of net profit (loss), the ~~basis for excluding them from~~most directly comparable GAAP financial measure, to EBITDA (a non-GAAP financial ~~measures, are outlined below:~~measure) for each of the periods indicated.

●

~~Amortization of acquired intangible assets~~ - We are required to amortize the intangible assets, included in our GAAP financial statements, related to the Transaction and the Acquisition. The amount of an acquisition’s purchase price allocated to intangible assets and term of its related amortization are unique to these transactions. The amortization of acquired intangible assets are non-cash charges. We believe that such charges do not reflect our operational performance. Therefore, we exclude amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-transaction operating results.

	For the three months ended June 30,
Dollars in Thousands	2023			2022
Net profit (loss) attributable to Tingo Group, Inc.	$	96,508		$	(14,337	)
Adjusted for:
Net loss attributable to non-controlling stockholders		(397	)		(99	)
Loss from equity investment		212			187
Income tax expenses (benefit)		61,781			(5	)
Financial expenses, net		22,821			1,167
Depreciation and amortization		102,202			838
Total EBITDA attributable to Tingo Group, Inc.	$	283,127		$	(12,249	)

●

~~Expenses related to the settlement agreements~~ - These expenses relate to a settlement agreement as described in part III -Item 1. Legal Proceedings of this reports. We believe that these expenses do not reflect our operational performance. Therefore, we exclude them to provide the investors with a consistent basis for comparing pre- and post-transaction operating results.

	For the six months ended June 30,
*Dollars in Thousands*	2023			2022
Net profit (loss) attributable to Tingo Group, Inc.	$	273,248		$	(23,023	)
Adjusted for:
Net loss attributable to non-controlling stockholders		(713	)		(258	)
Loss from equity investment		420			371
Income tax expenses (benefit)		147,695			(1,081	)
Financial expenses, net		21,377			1,089
Depreciation and amortization		213,257			1,709
Total EBITDA attributable to Tingo Group, Inc.	$	655,284		$	(21,193	)

●

~~Stock-based compensation -~~ is share based awards granted to certain individuals. They are non-cash and affected by our historical stock prices which are irrelevant to forward-looking analyses and are not necessarily linked to our operational performance.

●

~~Options-based compensation –~~ Refers to compensation components which includes stock options awards granted to certain employees, officers, directors or consultants of the Company. This is a non cash personal compensation component for our employees, officers, directors or consultants and its cost to the Company is calculated based on B&S. This these costs attributed to the grant of stock options are irrelevant to the forward-looking analyses and are not necessarily linked to our operational performance.

The following table reconciles, for the periods presented, GAAP net loss attributable to MICT to non-GAAP net income attributable to MICT. and GAAP loss per diluted share attributable to MICT to non-GAAP net loss per diluted share attributable to MICT.

Six months ended
June 30,

(Dollars in Thousands,
other than share and
per share amounts)
2022 2021
GAAP net loss attributable to MICT, Inc. $ (23,023 ) $ (22,857 )
Amortization of acquired intangible assets 1,594 1,568
Expenses related to settlement agreements 143 532
Options- based compensation 235 458
Stock-based compensation 3,824 8,368
Income tax-effect of above non-GAAP adjustments (410 ) (414 )
Total Non-GAAP net loss attributable to MICT, Inc. $ (17,637 ) $ (12,345 )

Non-GAAP net loss per diluted share attributable to MICT, Inc. $ (0.14 ) $ (0.12 )
Weighted average common shares outstanding used in per share calculations 124,455,921 102,992,830
GAAP net loss per diluted share attributable to MICT, Inc. $ (0.18 ) $ (0.22 )
Weighted average common shares outstanding used in per share calculations 124,455,921 102,992,830

Three months ended
June 30,

(Dollars in Thousands,
other than share and
per share amounts)
2022 2021
GAAP net loss attributable to MICT, Inc. $ (14,337 ) $ (18,396 )
Amortization of acquired intangible assets 797 782
Expenses related to settlement agreements - 67
Options- based compensation 110 458
Stock-based compensation 3,824 8,368
Income tax-effect of above non-GAAP adjustments (206 ) (215 )
Total Non-GAAP net loss attributable to MICT, Inc. $ (9,812 ) $ (8,936 )

Non-GAAP net loss per diluted share attributable to MICT, Inc. $ (0.07 ) $ (0.08 )
Weighted average common shares outstanding used in per share calculations 126,431,864 117,634,776
GAAP net loss per diluted share attributable to MICT, Inc. $ (0.11 ) $ (0.16 )
Weighted average common shares outstanding used in per share calculations 126,431,864 117,634,776

Financing Needs

The Company’s operations are cash generative following the acquisition of Tingo Mobile and Tingo Foods. There is however the possibility that the Company ~~will be~~may seek to raise external financing in the future if required to ~~support~~fund its ~~own operational financial needs,~~growth plans and expansion strategy, for example in relation to financing the Tingo Foods share of the fit out and equipment installation at the new food processing facility, which ~~include, among others, our general~~is currently being constructed by the landowner and administrative costs (such as for our various consultants in regulatory, tax, legal, accounting and other areas of business) and our financing costs related to the loans and funding instruments assumed by us.joint venture partner.

~~We expect~~In the ~~net proceeds from~~event that any external financing is required to cover the ~~sale~~Tingo Foods share of the ~~securities~~fit out and equipment installation at the food processing facility, which is estimated at approximately $500 million, the Company will ~~be used~~seek to fund the growth and development of our business, as well as for working capital and for other general corporate purposes. We may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies that are complementary to our business, but we currently have no commitments or agreements relating to any of these types of transactions.do so by raising debt funding.

Based on ~~our~~the Company’s current business plan, and ~~in view of our~~taking into account its cash balance, ~~following~~accounts receivable and operating cash flows, it is anticipated that the ~~transactions described in this Item 2, we anticipate that our~~Company’s cash balances will be sufficient to permit usit to conduct ~~our~~ operations and carry out ~~our~~the contemplated business plans for at least the next 12 months from the date of this Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~We conducted an evaluation~~Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the ~~supervision of~~Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer ~~(our Principal Executive Officer~~(together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and ~~Principal Financial Officer, respectively), regarding~~with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the ~~Company’s~~design and operation of our disclosure controls and procedures ~~(as~~as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange ~~Act) as of June 30, 2022 and management~~Act. Based on this evaluation, the Certifying Officers concluded that ~~our~~the Company’s disclosure controls and procedures ~~over financial reporting is not effective~~ at ~~the reasonable assurance level due to the material weaknesses described below.~~June 30, 2023 were effective.

Changes in Internal Control Over Financial Reporting

~~The Company identified certain material weaknesses in~~As permitted by SEC guidance, management has excluded from its assessment of internal control over financial reporting ~~for~~ the ~~year ended December 31, 2021 as described in the last Form 10-Q filed with the SEC~~internal controls related to Tingo Foods acquired on ~~July 25, 2022. With provinces opening again within the PRC, MICT is in the process~~February 9, 2023. As of hiring additional staff in its finance department. During the quarter covered by this report, we hired an additional controller, as well as a new financial manager. Additionally, we conducted a mappingJune 30, 2023, total assets and total operating revenues excluded from management’s assessment of the processes and controls that support financial reporting and also performed tests to examine the effectiveness of the controls. As part of the effectiveness test, gaps in the ITGC control process were identified for the companies that were acquired and did not manage to produce a control environment without gaps. These gaps were mapped and identified by us, and we built a remediation plan to reduce and to fix the gaps as early as this fiscal year. Our IT team has begun implementing the remediation plan and are in the process of fixing the gaps.

~~Other than as described above, there were not changes has occurred in the Company’s~~ internal control over financial reporting related to this Tingo Foods represented approximately 21% and 54% of the Company’s consolidated total assets and total operating revenues, respectively.

There have been no other changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the ~~quarterly period ended June 30, 2022,~~most recent fiscal quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

Item 5. Other.

None.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

~~There are no open legal proceeding as~~The Company is subject to litigation arising from time to time in the ordinary course of ~~June 30, 2022 and as of today.~~ its business.

On April 18, 2023, the Investors filed the Motion against the Company in the Supreme Court of the State of New York (the “Court”), requesting that the Court order the Company to purchase certain Warrants from the Investors at the Black Scholes Value of $13,425,727.30. The Investors hold the Warrants issued pursuant to the SPAs that the Company is to purchase at their Black Scholes Value upon the Investors’ demand and after a “Fundamental Transaction” (as defined in the Warrants). According to the Investors, the Merger described herein constituted a Fundamental Transaction. The Company initially was of the view that the Merger was not a Fundamental Transaction. However, upon further reflection, the Company concluded that the Investors were correct, and filed a response agreeing that a Fundamental Transaction had occurred, that the Investors were entitled to the Black Scholes Value of their Warrants and requested that the Court enter an order directing the Company to pay the Investors accordingly. The day after the Company filed its response, the Investors claimed to rescind their demand for the Black Scholes Value of their Warrants, pursuant to a provision in the SPAs that they say entitles them to do so. After the Investors purported to rescind their demand for the Black Scholes Value of their Warrants and attempted to unilaterally withdraw their Motion, the Investors sought to exercise certain of the Warrants. The Company rejected Investors’ exercise notices and filed a counterclaim alleging that Investors did not have the right to exercise the Warrants because the Motion by which they sought to compel the Company to purchase the Warrants could not be unilaterally withdrawn and was still pending. Investors then filed an Amended Complaint seeking declaratory relief and unspecified “millions” in damages plus attorney’s fees, based on the Company’s failure to honor their exercise of certain of their warrants. On July 3, 2023, the Court issued an order (the “Order”) directing the Company to deposit 13,167,641 shares with the Court to serve as security for any judgment Plaintiffs may obtain in the action. On July 19, 2023, the Company filed a motion to vacate the Order, which is currently scheduled for September 14, 2023. The litigation is ongoing.

On June 8, 2023, two putative class action complaints were filed in the United States District Court for the District of New Jersey against the Company, Dozy Mmobuosi, Darren Mercer, and Kevin Chen. The first complaint was filed by Christopher Arbour, individually and on behalf of a class of “persons or entities that purchased or otherwise acquired Tingo securities between March 31, 2023, and June 6, 2023.” The second was filed the same day by Mark Bloedor, individually and on behalf of a class of “all investors who purchased or otherwise acquired Common Stock between December 1, 2022, and June 6, 2023.” Both complaints are based entirely on the allegations in the Hindenburg short seller report issued on June 6, 2023, following which the Company’s stock price declined by nearly 50 percent. Relying solely on the allegations in the Hindenburg report, both complaints allege defendants violated Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder and the individual defendants violated Section 20A of the Securities Exchange Act. The Company and individual defendants deny the allegations in the complaints and intend to vigorously defend the actions. Following the publication of the Hindenburg report, the Company’s independent directors retained independent counsel to conduct an investigation of the Hindenburg allegations.

Item 1A. Risk Factors.

Please refer to our note on forward-looking statements on page 1629 of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in our ~~2021~~2022 Annual Report. The risks described in such ~~2021~~2022 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, operating results and stock price.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit Number		Description

10.1*		Forbearance Agreement with respect to Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock.

31.1*		Rule 13a-14(a) Certification of Chief Executive Officer.

31.2*		Rule 13a-14(a) Certification of Chief Financial Officer.

32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101*		The following materials from ~~MICT, Inc.’s~~the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2022,~~2023, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith

**	Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~MICT,~~TINGO GROUP, INC.

Date: August ~~22, 2022~~31, 2023	By:	/s/ Darren Mercer
		Name:	Darren Mercer
		Title:	Chief Executive Officer

Date: August ~~22, 2022~~31, 2023

By:

/s/ Kevin Chen

Name:

Kevin Chen

Title:

Chief Financial Officer

(Principal Financial Officer)

5445

0.09 0.16 0.16 0.22 102992830 117634776 124455921 126431864 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Upon the conversion of Series A and B convertible preferred stock, all preferred stock and common stock additional paid-in capital was combined into one account. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 The customer database value is based on the cost to recreate, as indicated by management. Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 26%. The goodwill is not deductible for tax purposes. 0 0 0 Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 25%. 0 6090000 0 0 1795000 0 0 4883000 827000 0 0 2916000 0 0 0 17880000 0 0 0 0 0 0 0 23516000 0 0 0 0 0 0 0 0 include operating leases with a term less than one year which was not capitalized in the right-of-use assets. 0 0 0 false --12-31 Q2 0000854800 ~~indefinite useful life and some of them for 10 years indefinite useful life and some of them for 5 years~~us-gaap:AdditionalPaidInCapitalMember 2022-12-31 iso4217:~~ILS~~USD xbrli:shares

	June 30, 2022			December 31, 2021
LIABILITIES AND EQUITY

Short-term loan	$	922		$	1,657
Trade accounts payable		8,328			14,416
Deposit held on behalf of clients		1,479			3,101
Related party		256			4
Lease liabilities – current portion		1,026			1,298
Other current liabilities		6,606			4,914
Total current liabilities		18,617			25,390

Lease liabilities		699			691
Deferred tax liabilities		3,544			3,952
Accrued severance pay		50			56
Total long-term liabilities		4,293			4,699
Total liabilities		22,910			30,089

Stockholders’ Equity:
Common stock; $0.001 par value, 250,000,000 shares authorized, 129,566,207 and 122,435,576 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		129			122
Additional paid in capital		224,838			220,786
Accumulated other comprehensive income (loss)		124			(414	)
Accumulated deficit		(99,417	)		(76,394	)
MICT, Inc. stockholders’ equity		125,674			144,100

Non-controlling interests		3,391			3,622

Total equity		129,065			147,722

Total liabilities and equity	$	151,975		$	177,811

	Six months ended June 30,						Three months ended June 30,
	2022			2021			2022			2021

Revenues	$	21,521		$	21,276		$	11,958		$	12,341
Cost of revenues		18,183			18,667			9,885			11,675
Gross profit		3,338			2,609			2,073			666

Operating expenses:
Research and development		941			619			346			388
Selling and marketing		3,552			2,352			1,035			1,351
General and administrative		20,991			19,421			13,665			14,853
Amortization of intangible assets		1,594			1,569			797			643
Total operating expenses		27,078			23,961			15,843			17,235

Loss from operations		(23,740	)		(21,352	)		(13,770	)		(16,569	)
Loss from equity investment		(371	)		(163	)		(187	)		(163	)
Other income (loss), net		838			83			683			(4	)
Financial income (expenses), net		(1,089	)		(275	)		(1,167	)		291
Loss from loss of control in Micronet Ltd		-			(1,934	)		-			(1,934	)
Loss before provision for income taxes		(24,362	)		(23,641	)		(14,441	)		(18,379	)
Taxes on income (tax benefit)		(1,081	)		(339	)		(5	)		17

Net loss		(23,281	)		(23,302	)		(14,436	)		(18,396	)
Net loss attributable to non-controlling interests		(258	)		(445	)		(99	)		-

Net loss attributable to MICT, Inc.	$	(23,023	)	$	(22,857	)	$	(14,337	)	$	(18,396	)

Loss per share attributable to MICT, Inc.
Basic and diluted loss per share	$	(0.18	)	$	(0.22	)	$	(0.11	)	$	(0.16	)

Weighted average common shares outstanding:
Basic and diluted		124,455,921			102,992,830			126,431,864			117,634,776

	Common Stock				(A) Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Capital reserve related to transaction with the minority			Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Income (Loss)			stockholders			Interest			Equity
Balance, December 31, 2020		68		68,757,450		102,333		(39,966	)		(196	)		(174	)		3,631			65,696
Shares issued to service providers and employees		6		6,100,000		8,369		-			-			-			-			8,375
Stock based compensation		-		-		458		-			-			-			-			458
Exercising options for employees and consultants				20,000		28		-			-			-			-			28
Net loss		-		-		-		(22,857	)		-			-			(445	)		(23,302	)
Other Comprehensive loss		-		-		-		-			285			174			(197	)		262
Loss of control of subsidiary		-		-		-		-			-			-			(2,989	)		(2,989	)
Issuance of shares upon November 2020 Securities Purchase Agreement		3		2,400,000		2,673		-			-			-			-			2,676
Issuance of shares upon February 2021 Purchase Agreement		23		22,471,904		53,977		-			-			-			-			54,000
Issuance of shares upon March 2021 Securities Purchase Agreement		19		19,285,715		48,671		-			-			-			-			48,690
Exercising warrants		2		1,665,926		1,864		-			-			-			-			1,866
Balance, June 30, 2021		121		120,700,995		218,373		(62,823	)		89			-			-			155,760

	Common Stock				(B) Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Capital reserve related to transaction with the minority			Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Income			stockholders			Interest			Equity
Balance, March 31, 2021		114		114,177,951		208,566		(44,427	)		410			(174	)		2,992			167,481
Shares issued to service providers and employees		6		6,030,894		8,669		-			-			-			-			8,675
Stock based compensation		-		-		458		-			-			-			-			458
Net loss		-		-		-		(18,396	)		-			-			-			(18,396	)
Other Comprehensive loss		-		-		-		-			(321	)		174			(3	)		(150	)
Loss of control of subsidiary		-		-		-		-			-			-			(2,989	)		(2,989	)
Exercising warrants		1		492,150		680		-			-			-			-			681
Balance, June 30, 2021		121		120,700,995		218,373		(62,823	)		89			-			-			155,760

	Six months ended June 30,
	2022			2021
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(104	)		(294	)
Cash acquired through business combination - Magpie (Appendix B)		-			1,834
Payment on business acquired - Beijing Fucheng (Appendix A)		-			(4,891	)
Loan to related party		-			(500	)
Net cash acquired on an variable interest entity acquired - Guangxi Zhongtong		-			460
Receipt of loan from related party (Micronet)		534			-
Loan to Tingo pursuant to the merger agreement		(3,000	)		-
Deconsolidation of Micronet Ltd. (Appendix C)		-			(2,466	)
*Net cash used in investing activities*		(2,570	)		(5,857	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of bank loans		-			(195	)
Repayment of short-term loan		(736	)		-
Proceeds from issuance of shares and warrants					105,366
Proceeds from exercise of warrants		-			1,894
*Net cash (used in) provided by financing activities*		(736	)		107,065

TRANSLATION ADJUSTMENT ON CASH AND RESTRICTED CASH		445			-

NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH		(18,995	)		85,134

Cash and restricted cash at beginning of the period		97,347			29,526

Cash and restricted cash at end of the period	$	78,352		$	114,660

Supplemental disclosure of cash flow information:
Amount paid during the period for:

Interest	$	5		$	27
Taxes	$	254		$	63

Cash at end of the period	$	76,053	$	114,183
Restricted cash at end of the period		2,299		477
Cash and restricted cash at end of the period	$	78,352	$	114,660

	February 10, 2021
Net working capital	$	106
Property and equipment		26
Current liabilities		(55	)
Intangible assets		4,814
Cash	$	4,891

	February 26, 2021
Net working capital	$	206
Investment and loan to Magpie		(2,947	)
Property and equipment		24
Current liabilities		(19	)
Intangible assets		902
Cash	$	(1,834	)

	May 9, 2021
Working capital other than cash	$	(3,849	)
Finance lease		33
Accrued severance pay, net		96
Translation reserve		134
Micronet Ltd.investment in fair value		1,128
Non-controlling interests		2,990
Net loss from loss of control		1,934
Cash	$	2,466

	Six months ended June 30					Year ended December 31
	2022					2021
	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price

Options outstanding at the beginning of year/period:		1,558,000		$	1.74		1,158,000		$	2.24
Changes during the year/period:
Granted		-		$	-		740,000		$	1.97
Exercised		-		$	-		(60,000	)	$	1.35
Forfeited		(818,000	)	$	1.54		(280,000	)	$	1.41

Options outstanding at end of year/period		740,000		$	1.97		1,558,000		$	1.74
Options exercisable at end of year/period		402,500		$	1.69		1,118,000		$	1.57

Total cash consideration	$	5,711
Total Purchase Consideration	$	5,711

Less:

Net working capital	$	926
Property and equipment		26
License		4,814
Current liabilities		(55	)
Fair value of net assets acquired	$	5,711

Total cash consideration (1)	$	-
Total Purchase Consideration	$	-

Less:

Debt-free net working capital	$	613
Property and equipment		13
Intangible assets - Licenses		1,926
Intangible assets - customer relationship (1)		248
Deferred Tax liability (2)		(544	)
Fair value of net assets acquired	$	2,256

Noncontrolling interest	$	(3,231	)
Gain on equity interest		1,128
Equity investment		-
Change in investment		(2,103	)

Goodwill value (3)	$	(153	)

	Six months ended June 30, 2022
	Insurance platform			Mobile resource management		Online stock trading			Consolidated

Revenues from external customers	$	21,483			-		38		$	21,521
Segment operating loss		(6,090	)(1)		-		(6,038	)		(12,128	)
Non allocated expenses										(11,612	)
Finance expenses and other										(622	)
Consolidated loss before provision for income taxes									$	(24,362	)

	Three months ended June 30, 2022
	Insurance platform			Mobile resource management		Online stock trading			Consolidated

Revenues from external customers	$	11,950			-		8		$	11,958
Segment operating loss		(1,795	)(1)		-		(2,494	)		(4,288	)
Non allocated expenses										(9,481	)
Finance expenses and other										(672	)
Consolidated loss before provision for income taxes									$	(14,441	)

	Six months ended June 30, 2021
	Verticals and technology			Mobile resource management			Online stock trading			Consolidated
Revenues from external customers	$	20,550			726			-		$	21,276
Segment operating loss		(4,883	)(1)		(827	)(2)		(1,956	)		(7,666	)
Non allocated expenses											(13,686	)
Finance expenses and other											(2,289	)
Consolidated loss before provision for income taxes										$	(23,641	)

	Three months ended June 30, 2021
	Verticals and technology			Mobile resource management		Online stock trading			Consolidated
Revenues from external customers	$	12,341			-		-		$	12,341
Segment operating loss		(2,916	)(1)		-		(1,956	)		(4,872	)
Non allocated expenses										(11,697	)
Finance expenses and other										(1,810	)
Consolidated loss before provision for income taxes									$	(18,379	)

	As of June 30, 2022
	Insurance platform			Mobile resource management		Online stock trading			Consolidated
Assets related to segments	$	57,504	(2)	$	-	$	52,786	(4)	$	110,290
Non allocated Assets					-					41,685
Liabilities related to segments		(17,880	)(3)		-		(2,122	)		(20,002	)
Non allocated liabilities		-			-		-			(2,908	)
Total Equity									$	129,065

	As of December 31, 2021
	Insurance platform			Mobile resource management		Online stock trading			Consolidated

Assets related to segments	$	86,474	(1)	$	-	$	60,581	(3)	$	147,055
Non allocated Assets					-					30,756
Liabilities related to segments		(23,516	)(2)		-		(3,953	)		(27,469	)
Non allocated liabilities		-			-		-			(2,620	)
Total Equity									$	147,722

	Useful	June 30,			December 31,
	life years	2022			2021
Original amount:
Technology know-how	6	$	11,490		$	11,490
Trade name/ trademarks	Indefinite or 5 years		923			923
Customer relationship	5-10 years		4,802			4,802
License	Indefinite or 10 years		8,498			8,498
Software	10		167			172
			25,880			25,885
Accumulated amortization:
Technology know-how			(3,830	)		(2,873	)
trade name/ trademarks			(232	)		(174	)
Customer related intangible assets			(1,823	)		(1,355	)
License			(137	)		(39	)
Software			(10	)		(2	)
			(6,032	)		(4,443	)
Net		$	19,848		$	21,442

	June 30,		December 31,
	2022		2021
Shareholders of All Weather	$	256	$	4
	$	256	$	4

	Six months ended June 30,
	(Dollars in Thousands, other than share and per share amounts)
	2022			2021
GAAP net loss attributable to MICT, Inc.	$	(23,023	)	$	(22,857	)
Amortization of acquired intangible assets		1,594			1,568
Expenses related to settlement agreements		143			532
Options- based compensation		235			458
Stock-based compensation		3,824			8,368
Income tax-effect of above non-GAAP adjustments		(410	)		(414	)
Total Non-GAAP net loss attributable to MICT, Inc.	$	(17,637	)	$	(12,345	)

Non-GAAP net loss per diluted share attributable to MICT, Inc.	$	(0.14	)	$	(0.12	)
Weighted average common shares outstanding used in per share calculations		124,455,921			102,992,830
GAAP net loss per diluted share attributable to MICT, Inc.	$	(0.18	)	$	(0.22	)
Weighted average common shares outstanding used in per share calculations		124,455,921			102,992,830