Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 12, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | MICT, INC. | |
Trading Symbol | MICT | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 122,435,576 | |
Amendment Flag | false | |
Entity Central Index Key | 0000854800 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-35850 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0016420 | |
Entity Address, Address Line One | 28 West Grand Avenue | |
Entity Address, Address Line Two | Suite 3 | |
Entity Address, City or Town | Montvale | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07645 | |
City Area Code | (201) | |
Local Phone Number | 225-0190 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 105,289 | $ 29,049 |
Trade accounts receivable, net | 20,644 | 523 |
Inventories | 2,002 | |
Other current assets | 10,214 | 1,756 |
Related parties | 2,167 | |
Held for sales assets | 350 | |
Total current assets | 138,314 | 33,680 |
Property and equipment, net | 631 | 417 |
Intangible assets, net | 18,808 | 17,159 |
Goodwill | 19,788 | 22,405 |
Investment and loan to Magpie (formerly: Huapei) | 3,038 | |
Right-of-use assets | 2,657 | 291 |
Long-term deposit and prepaid expenses | 188 | 266 |
Micronet Ltd. equity method investment | 1,764 | |
Restricted cash escrow | 477 | |
Total long-term assets | 43,836 | 44,053 |
Total assets | 182,150 | 77,733 |
LIABILITIES AND EQUITY | ||
Current maturity of long term bank loans | 884 | |
Trade accounts payable | 18,520 | 838 |
Related party | 163 | |
Lease liabilities- current portion | 1,573 | |
Other current liabilities | 5,241 | 5,102 |
Total current liabilities | 25,334 | 6,987 |
Long term escrow | 477 | |
Lease liabilities | 1,132 | 164 |
Deferred tax liabilities | 3,323 | 4,256 |
Accrued severance pay | 54 | 153 |
Total long-term liabilities | 4,509 | 5,050 |
Total liabilities | 29,843 | 12,037 |
Stockholders’ Equity: | ||
Common stock; $0.001 par value, 250,000,000 shares authorized, 122,435,576 and 68,757,450 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 122 | 68 |
Additional paid in capital | 220,660 | 102,333 |
Capital reserve related to transaction with the minority shareholder | (174) | |
Accumulated other comprehensive loss | (323) | (196) |
Accumulated deficit | (68,151) | (39,966) |
MICT, Inc. stockholders’ equity | 152,308 | 62,065 |
Non-controlling interests | (1) | 3,631 |
Total equity | 152,307 | 65,696 |
Total liabilities and equity | $ 182,150 | $ 77,733 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 122,435,576 | 68,757,450 |
Common stock, shares outstanding | 122,435,576 | 68,757,450 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net revenues | $ 18,515 | $ 349 | $ 39,791 | $ 349 |
Cost of revenues | 15,769 | 347 | 34,436 | 347 |
Gross profit | 2,746 | 2 | 5,355 | 2 |
Operating expenses: | ||||
Research and development | 396 | 230 | 1,015 | 230 |
Selling and marketing | 1,521 | 69 | 3,874 | 69 |
General and administrative | 6,618 | 4,899 | 26,039 | 6,337 |
Amortization of intangible assets | 732 | 820 | 2,301 | 820 |
Total operating expenses | 9,267 | 6,018 | 33,229 | 7,456 |
Loss from operations | (6,521) | (6,016) | (27,874) | (7,454) |
Gain (loss) from equity investment | 799 | 636 | (786) | |
Other income (expenses), net | (13) | 138 | 70 | 138 |
Financial income (expenses), net | 336 | (8,960) | 61 | (8,803) |
Gain (loss) of control in equity investment held in Micronet | (1,934) | 665 | ||
Income (loss) before provision for income taxes | (5,399) | (14,838) | (29,041) | (16,240) |
Tax benefit | (70) | (225) | (410) | (219) |
Net loss | (5,329) | (14,613) | (28,631) | (16,021) |
Net loss attributable to non-controlling interests | (1) | (462) | (446) | (462) |
Net loss attributable to MICT, Inc. | $ (5,328) | $ (14,151) | $ (28,185) | $ (15,559) |
Loss per share attributable to MICT, Inc. | ||||
Basic (in Dollars per share) | $ (0.05) | $ (0.61) | $ (0.26) | $ (1.03) |
Diluted (in Dollars per share) | $ (0.05) | $ (0.61) | $ (0.26) | $ (1.03) |
Weighted average common shares outstanding: | ||||
Basic (in Shares) | 121,419,308 | 22,832,683 | 109,222,674 | 15,048,644 |
Diluted (in Shares) | 121,419,308 | 22,832,683 | 109,222,674 | 15,048,644 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (5,329) | $ (14,613) | $ (28,631) | $ (16,021) |
Other comprehensive income (loss), net of tax: | ||||
Currency translation adjustment | (412) | (152) | (127) | (58) |
Total comprehensive loss | (5,741) | (14,765) | (28,758) | (16,079) |
Comprehensive loss attributable to non-controlling interests | (1) | (172) | (643) | (172) |
Comprehensive loss attributable to MICT, Inc. | $ (5,740) | $ (14,593) | $ (28,115) | $ (15,907) |
Unaudited Statements of Changes
Unaudited Statements of Changes in Equity - USD ($) $ in Thousands | Series B Convertible Preferred Stock | Series A Convertible Preferred Stock | Common Stock | Additional Paid-in Capital – Series B Convertible Preferred Stock (Deficit) | Additional Paid-in Capital – Series A Convertible Preferred Stock | Additional Paid-in Capital – Common Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Non- controlling Interest | Additional Paid-in Capital | [1] | Capital reserve related to transaction with the minority stockholders | Total |
Balance at Dec. 31, 2019 | $ 2 | $ 11 | $ 6,028 | $ 14,107 | $ (16,974) | $ 70 | $ 3,244 | ||||||
Balance (in Shares) at Dec. 31, 2019 | 2,386,363 | 11,089,532 | |||||||||||
Shares issued to service providers and employees | $ 1 | 2,490 | 2,491 | ||||||||||
Shares issued to service providers and employees (in Shares) | 840,909 | ||||||||||||
Exercising options for employees and consultants | $ 1 | 2,365 | 2,366 | ||||||||||
Exercising options for employees and consultants (in Shares) | 1,198,000 | ||||||||||||
Stock based compensation | 186 | 186 | |||||||||||
Comprehensive loss | (15,559) | (347) | (15,906) | ||||||||||
Entering the control of a subsidiary | 2,000 | 2,000 | |||||||||||
Convertible note | $ 14 | 22,400 | 22,414 | ||||||||||
Convertible note (in Shares) | 13,636,364 | ||||||||||||
GFH transaction | $ 23 | 32,026 | 32,049 | ||||||||||
GFH transaction (in Shares) | 22,727,273 | ||||||||||||
YA Exercising warrants | $ 1 | 0 | 1 | ||||||||||
YA Exercising warrants (in Shares) | 584,920 | ||||||||||||
Hardon Exercising warrants | $ 1 | 1,611 | 1,612 | ||||||||||
Hardon Exercising warrants (in Shares) | 1,596,362 | ||||||||||||
Issuance of shares, net- Series A Convertible Preferred Stock | $ 1 | 409 | 410 | ||||||||||
Issuance of shares, net- Series A Convertible Preferred Stock (in Shares) | 795,455 | ||||||||||||
Issuance of shares, net- Series B+A Convertible Preferred Stock | $ (2) | $ (3) | $ 8 | (1,914) | (6,299) | 8,209 | (2) | ||||||
Issuance of shares, net- Series B+A Convertible Preferred Stock (in Shares) | (1,818,182) | (3,181,818) | 8,181,818 | ||||||||||
Issuance of shares, net- Series B Convertible Preferred Stock | $ 2 | 1,914 | 1,916 | ||||||||||
Issuance of shares, net- Series B Convertible Preferred Stock (in Shares) | 1,818,182 | ||||||||||||
Balance at Sep. 30, 2020 | $ 60 | 138 | 83,393 | (32,533) | (277) | 2,000 | 52,781 | ||||||
Balance (in Shares) at Sep. 30, 2020 | 59,855,178 | ||||||||||||
Balance at Jun. 30, 2020 | $ 2 | $ 3 | $ 11 | 1,914 | 6,437 | 14,198 | (18,382) | 164 | 2,172 | 6,519 | |||
Balance (in Shares) at Jun. 30, 2020 | 1,818,182 | 3,181,818 | 11,107,714 | ||||||||||
Shares issued to service providers and employees | $ 1 | 2,468 | 2,469 | ||||||||||
Shares issued to service providers and employees (in Shares) | 822,727 | ||||||||||||
Exercising options for employees and consultants | $ 1 | 2,365 | 2,366 | ||||||||||
Exercising options for employees and consultants (in Shares) | 1,198,000 | ||||||||||||
Stock based compensation | 117 | 117 | |||||||||||
Comprehensive loss | (14,151) | (441) | (14,592) | ||||||||||
Entering the control of a subsidiary | (172) | (172) | |||||||||||
Convertible note | $ 14 | 22,400 | 22,414 | ||||||||||
Convertible note (in Shares) | 13,636,364 | ||||||||||||
GFH transaction | $ 23 | 32,026 | 32,049 | ||||||||||
GFH transaction (in Shares) | 22,727,273 | ||||||||||||
YA Exercising warrants | $ 1 | 0 | 1 | ||||||||||
YA Exercising warrants (in Shares) | 584,920 | ||||||||||||
Hardon Exercising warrants | $ 1 | 1,611 | 1,612 | ||||||||||
Hardon Exercising warrants (in Shares) | 1,596,362 | ||||||||||||
Issuance of shares, net- Series B+A Convertible Preferred Stock | $ (2) | $ (3) | $ 8 | (1,914) | (6,299) | 8,209 | (2) | ||||||
Issuance of shares, net- Series B+A Convertible Preferred Stock (in Shares) | (1,818,182) | (3,181,818) | 8,181,818 | ||||||||||
Balance at Sep. 30, 2020 | $ 60 | $ 138 | $ 83,393 | (32,533) | (277) | 2,000 | 52,781 | ||||||
Balance (in Shares) at Sep. 30, 2020 | 59,855,178 | ||||||||||||
Balance at Dec. 31, 2020 | $ 68 | (39,966) | (196) | 3,631 | $ 102,333 | $ (174) | 65,696 | ||||||
Balance (in Shares) at Dec. 31, 2020 | 68,757,450 | ||||||||||||
Shares issued to service providers and employees | $ 7 | 9,869 | 9,876 | ||||||||||
Shares issued to service providers and employees (in Shares) | 7.010020 | ||||||||||||
Exercising options for employees and consultants | 80 | 80 | |||||||||||
Exercising options for employees and consultants (in Shares) | 60,000 | ||||||||||||
Net loss | (28,185) | (446) | (28,631) | ||||||||||
Other Comprehensive loss | (127) | (197) | 174 | (150) | |||||||||
Loss of control of subsidiary | (2,989) | (2,989) | |||||||||||
Issuance of shares upon November 2020 Securities Purchase Agreement | $ 3 | 2,673 | 2,676 | ||||||||||
Issuance of shares upon November 2020 Securities Purchase Agreement (in Shares) | 2,400,000 | ||||||||||||
Issuance of shares upon February 2021 Purchase Agreement | $ 23 | 53,977 | 54,000 | ||||||||||
Issuance of shares upon February 2021 Purchase Agreement (in Shares) | 22,471,904 | ||||||||||||
Issuance of shares upon March 2021 Securities Purchase Agreement | $ 19 | 48,671 | 48,690 | ||||||||||
Issuance of shares upon March 2021 Securities Purchase Agreement (in Shares) | 19,285,715 | ||||||||||||
Exercising warrants | $ 2 | 2,472 | 2,474 | ||||||||||
Exercising warrants (in Shares) | 2,450,487 | ||||||||||||
Stock based compensation | 585 | 585 | |||||||||||
Balance at Sep. 30, 2021 | $ 122 | (68,151) | (323) | (1) | 220,660 | 152,307 | |||||||
Balance (in Shares) at Sep. 30, 2021 | 122,435,576 | ||||||||||||
Balance at Jun. 30, 2021 | $ 121 | (62,823) | 89 | 218,373 | 155,760 | ||||||||
Balance (in Shares) at Jun. 30, 2021 | 120,700,995 | ||||||||||||
Shares issued to service providers and employees | $ 1 | 1,500 | 1,501 | ||||||||||
Shares issued to service providers and employees (in Shares) | 910,020 | ||||||||||||
Exercising options for employees and consultants | 52 | 52 | |||||||||||
Exercising options for employees and consultants (in Shares) | 40,000 | ||||||||||||
Net loss | (5,328) | (1) | (5,329) | ||||||||||
Other Comprehensive loss | (412) | (412) | |||||||||||
Exercising warrants | 608 | 608 | |||||||||||
Exercising warrants (in Shares) | 784,561 | ||||||||||||
Stock based compensation | 127 | 127 | |||||||||||
Balance at Sep. 30, 2021 | $ 122 | $ (68,151) | $ (323) | $ (1) | $ 220,660 | $ 152,307 | |||||||
Balance (in Shares) at Sep. 30, 2021 | 122,435,576 | ||||||||||||
[1] | 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. |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (28,631) | $ (16,021) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on previously held equity interest in Micronet Ltd. | (665) | |
(Gain) loss from equity investment | (636) | 786 |
Impairment of equity method investment in Micronet Ltd. | (187) | |
Depreciation and amortization | 2,416 | 890 |
Stock-based compensation for employees and consultants | 585 | 2,675 |
Loss from loss of control in Micronet Ltd. | 1,934 | |
Impairment of loan to Micronet Ltd. | (76) | |
Interest and exchange rate differences on loans | 3 | |
Interest and exchange rate differences on loans from others | 13 | |
Changes in assets and liabilities | ||
Change in deferred taxes, net | (736) | (205) |
Change in long-term deposit and prepaid expenses | 224 | |
Change in right of use assets | (250) | |
Change in lease liabilities | 165 | |
Due to related party | (113) | |
Increase in trade accounts receivable, net | (19,556) | 207 |
Decrease in inventories | 83 | |
Decrease in accrued severance pay, net | (5) | |
Increase in other accounts receivable | (5,537) | (907) |
Increase in trade accounts payable | 17,949 | (412) |
Increase (decrease) in other current liabilities | (2,895) | 1,620 |
Net cash used in operating activities | (35,081) | (12,201) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (546) | (4) |
Proceeds from sale of property and equipment | 63 | |
Cash acquired through business combination - Magpie (Appendix B) | 1,834 | |
Payment on business acquired - Beijing Fucheng (Appendix A) | (4,891) | |
Additional investment of Micronet Ltd. | (515) | |
Cash acquired through consolidation of Micronet Ltd. (Appendix D) | 268 | |
Net cash acquired on an variable interest entity acquired – All Weather (Appendix E) | 755 | |
Loan to related party | (857) | (125) |
Loan to related party – Shareholders of All weather | (776) | |
Long Term Deposit | 25 | |
Net cash acquired on an variable interest entity acquired - Guangxi Zhongtong (Appendix F) | 460 | |
Deconsolidation of Micronet Ltd. (Appendix C) | (2,466) | |
Net cash used in investing activities | (6,487) | (288) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of current maturity of long term bank loans | (195) | (184) |
Receipt of short term bank loans | 121 | |
Payment received by convertible notes purchasers | 14,797 | |
Exercise of options | 2,366 | |
Repayment on account of redemption | (15,900) | |
Payments on account of shares | 15,900 | |
Proceeds from issuance of shares and warrants | 115,242 | |
Finance cost related to the convertible notes conversion | 8,877 | |
Proceeds from exercise of warrants | 2,554 | 1,612 |
Issuance of convertible preferred shares net | 409 | |
Net cash provided by financing activities | 117,601 | 27,998 |
NET INCREASE IN CASH AND RESTRICTED CASH | 76,033 | 15,509 |
Cash and restricted cash at beginning of the period | 29,049 | 3,199 |
TRANSLATION ADJUSTMENT ON CASH AND RESTRICTED CASH | 207 | (85) |
Cash and restricted cash at end of the period | 105,289 | 18,623 |
Amount paid during the period for: | ||
Interest | 27 | 25 |
Taxes | 195 | 22 |
Supplemental non-cash financing information: | ||
Conversion of convertible loan to shares | 2,000 | |
Cash at end of the period | 105,289 | 18,146 |
Restricted cash at end of the period | 477 | |
Cash and restricted cash at end of the period | $ 105,289 | $ 18,623 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows (Supplemental non-cash investing and financing activities) - USD ($) $ in Thousands | 1 Months Ended | ||||
Jun. 23, 2020 | Jul. 01, 2021 | May 09, 2021 | Feb. 26, 2021 | Feb. 10, 2021 | |
Beijing Fucheng [Member] | |||||
Net working capital | $ 106 | ||||
Property and equipment | 26 | ||||
Current liabilities | (55) | ||||
Intangible assets | 4,814 | ||||
Cash | $ 4,891 | ||||
Magpie Securities Limited [Member] | |||||
Net working capital | $ 206 | ||||
Investment and loan to Magpie | (2,947) | ||||
Property and equipment | 24 | ||||
Current liabilities | (19) | ||||
Intangible assets | 902 | ||||
Cash | $ (1,834) | ||||
Deconsolidation of Micronet Ltd. [Member] | |||||
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 | ||||
Acquisition of Micronet Ltd., net of cash acquired: [Member] | |||||
Net working capital | $ (351) | ||||
Property and equipment | 661 | ||||
Intangible assets | 2,475 | ||||
Goodwill | 2,618 | ||||
Right of use assets | 310 | ||||
Other assets | 26 | ||||
Borrowings | (1,676) | ||||
Micronet Ltd. investment in fair value | (1,573) | ||||
Non-current liabilities | (558) | ||||
Accumulated other comprehensive income | (28) | ||||
Minority interest | (2,172) | ||||
Net cash provided by acquisition | (268) | ||||
All Weather Insurance Agency [Member] | |||||
Net working capital | $ (908) | ||||
Property and equipment | 153 | ||||
Cash | $ (755) | ||||
Guangxi Zhongtong Insurance Agency Co., Ltd [Member] | |||||
Net working capital | (473) | ||||
Property and equipment | 13 | ||||
Net cash provided by acquisition | $ (460) |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 — DESCRIPTION OF BUSINESS Overview MICT, Inc (“MICT”, the “Company”, “We”, “us”, “our”) was formed as a Delaware corporation on January 31, 2002. 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, Inc. to MICT. Our shares have been listed for trading on The Nasdaq Capital Market under the symbol “MICT” since April 29, 2013. 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 Tianin 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”) 1.8 Million (or $515,000) 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 3,100,200 (or $887,000). 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 $665,000, gain on previously held equity in Micronet. On October 11, 2020, Micronet consummated a public equity offering on the Tel Aviv Stock Exchange (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 4,961,202 (or $1,417,486). 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. 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 (the “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 (“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 verticals and technology segments in order to capitalize on such technology and business. GFHI plans to increase its capabilities and its technological platforms through acquisition and licensing technologies to support its growth efforts 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 securities and investments firm for a total purchase price of approximately $3.0 million (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 (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, the seller of the interests of Magpie under the loan agreement, have been guaranteed by the majority shareholder of Magpie. 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 million (reflecting the net asset value of Magpie estimated at $2.034 million recorded as a working capital, and a premium $902 thousands 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 supporting 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 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 million (approximately $6,125,000) (“GZ Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for Guangxi Zhongtong. As of September 30, 2021, only RMB 8,010,000 (approximately $1,243,000) was drawn down from the GZ Frame Work Loan for working capital and approximately $857,000 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 include: (i) a pledge agreement pursuant to which the shareholders have pledged their shares for the benefit 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. This transaction 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. Please see below for VIE related disclosure. 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, with and 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 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’ vast customer bases which will also offer MICT’S full suite of insurance products. Beijing Fucheng shares were acquired for approximately $5.7 million, 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 26,864,000 (approximately $8,290,000) in the offering. The Company did not participate in the offering, and, as a result, the Company owned 36.95% of the outstanding ordinary shares of Micronet and 26.56% on a fully diluted basis as of September 30, 2021. 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 million (approximately $4.7 million) (the “AW Frame work Loan Amount”) which, if utilized, will be ued for working capital purposes of All Weather. 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 pledged their shares for the benefit of Bokefa in order to secure the amount for 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 in the Option Agreement (which include an exercise price not less than the maximum AW Frame Work Loan Amount and the right to convert the AW 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 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 and (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. The Transaction 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 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 was transferred to All Weather for purposes of working capital. In addition, as of September 30, 2021, the Company granted All Weather shareholders with an additional loan in the sum of approximately $776,000, 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 the purchase by MICT of such equity interests in All Weather on such commercial and other terms to be agreed by the parties. On August 23, 2021, Beijing Yibao, 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, Yibao transferred such funds and the transaction closed. As a result of the transaction, Beijing Yiabo 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. 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 business in China. 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 offering and the marketplace in China. We are in the process of building various platforms for business opportunities in different 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, 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 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. The following diagram illustrates the Company’s corporate structure, including its subsidiaries, and variable interest entities (“VIEs”), as of September 30, 2021: 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 effective term of the loan agreement is unlimited, and 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 shareholder pledged all its 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. 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, Bokefa, Beijing Fucheng, and a shareholder 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 effective term of the loan agreement is unlimited, and the agreement terminates 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. 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 its 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. 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 registered shareholders of All Weather. The effective term of the loan agreement is unlimited, and 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. 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. The assets and liabilities of the Company’s VIEs (Guangxi Zhongtong, All Weather and Beijing Fucheng) included in the Company’s unaudited condensed consolidated financial statements as of September 30, 2021 are as follows: September 30, (Unaudited) Current assets: Cash $ 2,062 Trade accounts receivable, net 17,193 Other current assets 5,433 Total current assets 24,688 Property and equipment, net 254 Long-term prepaid expenses 23 Right of use assets 139 Intangible assets 4,814 Total long-term assets 5,230 Total assets $ 29,918 Current liabilities: Trade accounts payable $ 17,475 Other current liabilities 6,590 Total current liabilities 24,065 Long -term liabilities: Lease liability $ 194 Total long-term liabilities $ 194 Total liabilities $ 24,259 Net revenues, loss from operations and net loss of the VIEs that were included in the Company’s unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021 are as follows: For the For the September 30, September 30, 2021 2021 USD USD (Unaudited) (Unaudited) Net revenues $ 17,445 $ 31,710 Loss from operations $ 603 $ (490 ) Net loss $ 603 $ (490 ) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2020 annual report on Form 10-K filed on March 31, 2021. 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 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 consolidated financial reports; 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. Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. GAAP. Cash 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 September 30, 2021 and December 31, 2020, allowance for doubtful accounts amounted to nil Inventories Inventories consisting of raw materials are stated at the lower of cost (first-in, first-out basis) or realizable value. Cost of work in process is comprised of direct materials, direct production costs and an allocation of production overheads based on normal operating capacity. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Companies 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 accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. 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. 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 September 30, 2021 and December 31, 2020. The operating lease is included in right-of-use assets and lease liability on the unaudited condensed consolidated balance sheets. Investments The Company’s long-term investments consist of equity investments in privately held entities accounted for using the measurement alternative and equity investments accounted for using the equity method. On January 1, 2018, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company accounts for the equity investments at fair value, with gains and losses recorded through net earnings. The Company elected to measure certain equity investments without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly. 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 September 30, 2021, the Company owned 36.95% of shares in Micronet which was accounted for under equity method. As of September 30, 2021, the Company owned 24% of the shares in Beijing Fucheng and controlled the remaining 76% through contractual arrangements as discussed in Note 1. Beijing Fucheng was therefore 100% consolidated in the unaudited condensed consolidated financial statements. 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 September 30, 2021 and December 31, 2020. 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 Technology know-how 6 years Trade name/ trademarks 5 years Customer relationship 5 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 September 30, 2021 and December 31, 2020. 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 In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2014-09. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. We adopted Topic 606 on January 1, 2018 using the modified retrospective transition method, and the adoption did not have a material impact on our consolidated financial statements. We recognize revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which we expect to be entitled 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 delivered products or services. We applied practical expedient when sales taxes were collected from customers, meaning sales tax is recorded net of revenue, instead of cost of revenue, which are subsequently remitted to governmental authorities and are excluded from the transaction price. With respect to Micronet applicable revenue recognition U.S. GAAP requirements, Micronet 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. There is limited discretion needed in identifying the point control passes: once physical delivery of 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. The Company’s revenues 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) to 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 point in time when an insurance policy becomes effective. The Company provides customers with information drainage services and settles service charges with customers on the monthly basis. Performance obligation is satisfied overtime during the contract term. 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. Reclassification Prior to the deconsolidation of Micronet, Micronet had been taking active steps to sell its building within the year 2021. The company reclassified the related assets which were previously included in property and equipment, net and intangible assets, net to held-for-sale as of December 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | 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. 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 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 and 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 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) 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. 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. Our 2012 Stock Incentive Plan (the “2012 Incentive Plan”) was initially adopted by 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, are currently authorized to be issued pursuant to option awards granted thereunder. On May 17, 2021, May 23, 2021 and June 28, 2021, the Company granted an aggregate of 125,000, 370,000 and 245,000 respectively, options 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 September 30, 2021. This resulted in a stock-based compensation expense of approximately $458,000 recorded for the nine months ended September 30, 2021, based on a fair value determined using a Black-Scholes model. On March 22, 2021, 20,000 shares of common 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. The following table summarizes information about stock options outstanding and exercisable as of September 30, 2021: Nine months ended Year ended 2021 2020 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price $ $ Options outstanding at the beginning of year/period: 1,158,000 2.24 1,167,000 2.34 Changes during the year/period: Granted 740,000 1.96 1,300,000 1.32 Exercised (60,000 ) - (1,198,000 ) - Forfeited - - (111,000 ) 2.81 Options outstanding at end of year/period 1,838,000 1.69 1,158,000 2.24 Options exercisable at end of year/period 1,398,000 1.78 1,138,000 2.36 The Company has warrants outstanding as follows: Warrants Outstanding Warrants Exercisable Average Exercise Price Remaining Contractual Life Balance, December 31, 2020 12,994,545 12,994,545 $ 2.31 4.75 Granted 52,993,570 52,993,570 $ 2.8 5.00 Forfeited - - $ - - Exercised (2,450,487 ) (2,450,487 ) $ 1.01 5.00 Balance, September 30, 2021 (Unaudited) 63,537,628 63,537,628 $ 2.76 4.77 |
Equity Investment in Micronet
Equity Investment in Micronet | 9 Months Ended |
Sep. 30, 2021 | |
Equity Investment in Micronet [Abstract] | |
EQUITY INVESTMENT IN MICRONET | NOTE 4 — EQUITY INVESTMENT IN MICRONET Micronet’s net revenues and net loss are presented if the acquisition date had occurred at the beginning of the annual reporting period. Nine months ended Three months ended 2020 2020 USD USD (Unaudited) (Unaudited) Net revenues $ 1,438 $ 349 Net loss (18,565 ) (14,613 ) Management engaged a third-party valuation firm to assist them with the valuation of the intangible assets that are detailed in the schedule below. 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 and resulting gain on bargain purchase. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date: Micronet Ltd. Purchase Price Allocation (USD in thousands) Total cash consideration $ 887 Total Purchase Consideration $ 887 Less: Debt-free net working capital $ 788 Property and equipment 661 Right of use assets 310 Other assets 26 Borrowings (1,675 ) Severance payable (95 ) Lease liabilities (101 ) Intangible assets - trade name/ trademarks 270 Intangible assets - developed technology 1,580 Intangible assets - customer relationship 410 Intangible assets - ground 215 Deferred Tax liability (362 ) Fair value of net assets acquired $ 2,027 Noncontrolling interest $ (2,172 ) Gain on equity interest (665 ) Equity investment (921 ) Change in investment (3,758 ) Goodwill value $ 2,618 Loss of control of Micronet As of March 31, 2021, 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 Micronet in accordance with the equity method. 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 36.95% of the outstanding ordinary shares of Micronet and 26.56% on a fully diluted basis as of September 30, 2021. May 9, USD (Unaudited) 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 |
Loan to Micronet
Loan to Micronet | 9 Months Ended |
Sep. 30, 2021 | |
Loan to Micronet [Abstract] | |
LOAN TO MICRONET | 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. On August 13, 2020, MICT Telematics extended to Micronet an additional loan in the aggregate amount of $175,000 (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. |
GFH Intermediate Holdings Ltd (
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Gfh Intermediate Holdings Ltd Gfhi Acquisition [Abstract] | |
GFH INTERMEDIATE HOLDINGS LTD (“GFHI”) ACQUISITION | NOTE 6 — GFH Intermediate Holdings Ltd (“GFHI”) Acquisition On July 1, 2020, MICT completed its acquisition of GFHI pursuant to the previously announced agreement and plan of merger (the “Merger Agreement”) entered into on November 7, 2019 by and between MICT, Micronet, GFHI, Global Fintech Holding Ltd, 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. As described in the Merger Agreement, upon consummation of the acquisition, the outstanding share of GFHI were cancelled in exchange for a convertible promissory note in the principal amount of $25,000,000 issued to GFH by MICT. This note has been converted into 22,727,273 shares of common stock of MICT at a conversion price of $1.10 per share. As a result of the acquisition goodwill and intangible assets were created. GFHI’s net revenues and net loss are presented as if the Company’s acquisition date had occurred at the beginning of the annual reporting period. Nine months ended September 30, Three months ended 2020 2020 USD USD (Unaudited) (Unaudited) Net revenues $ 349 $ 349 Net loss (16,021 ) (14,613 ) Management engaged a third-party valuation firm to assist them with the valuation of the intangible assets that are detailed in the schedule below. As of the date of this Quarterly Report, COVID-19 and the resulting government regulations enacted in China and elsewhere have not had a material adverse effect on GFH I financial reports; however, there can be no assurance that GFH I financial reports will not be affected in the future from COVID-19 or resulting government actions. 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 and resulting gain on bargain purchase. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date: GFH Intermediate Holdings LTD, Purchase Price Allocation (USD in thousands) Total share consideration (1) $ 32,050 Total Purchase Consideration $ 32,050 Less: Intangible assets - trade name/ trademarks $ 580 Intangible assets - developed technology 11,490 Intangible assets - Customer database (2) 4,500 Deferred Tax liability (3) (4,308 ) Fair value of net assets acquired $ 12,262 Goodwill value (4) $ 19,788 (1) The purchase consideration represented the fair value of the convertible promissory notes that were converted into common stock of MICT. (2) The customer database value is based on the cost to recreate, as indicated by management. (3) 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%. (4) The goodwill is not deductible for tax purposes. |
Beijing Fucheng Lianbao Technol
Beijing Fucheng Lianbao Technology Co., Ltd Transaction | 9 Months Ended |
Sep. 30, 2021 | |
Beijing Fucheng Lianbao Technology Co., Ltd Transaction [Abstract] | |
BEIJING FUCHENG LIANBAO TECHNOLOGY CO., LTD TRANSACTION | NOTE 7 — BEIJING FUCHENG LIANBAO TECHNOLOGY CO., LTD TRANSACTION On February 10, 2021, the Company closed a transaction pursuant to which it acquired (via Beijing Fucheng in which it holds 24% and engaged in a VIE structure) all 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”). The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed and resulting gain on bargain purchase. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date: Beijing Fucheng Lianbao Technology Co., Ltd transaction, Purchase Price Allocation (USD in thousands) (Unaudited) 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 |
Segments
Segments | 9 Months Ended |
Sep. 30, 2021 | |
Segments [Abstrsct] | |
SEGMENTS | NOTE 8 — 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 segments and major customers in financial statements for detailing the Company’s business 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, we currently serve the marketplace, through our operating subsidiaries, as a financial technology company (Fintech Industry) targeting the Chinese marketplace 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 verticals and technology segments including stock trading and wealth management, oil and gas 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 in the 4th quarter 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, and we have presented our mobile resource management (“MRM”) business operated by Micronet as a 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 financial statements. The following table summarizes the financial performance of our operating segments: Nine months ended September 30, 2021 (USD in thousands) Verticals and technology Mobile resource management Online stock trading Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ 39,065 726 - $ 39,791 Segment operating loss (5,496 )(1) (827 )(2) (4,208 ) (10,531 ) Non allocated expenses (17,343 ) Finance expenses and other (1,167 ) Consolidated loss before provision for income taxes $ (29,041 ) (1) Includes $2,198 of intangible assets amortization, derived from GFHI. acquisitions. (2) Includes $103 of intangible assets amortization, derived from Micronet consolidation. Nine months ended September 30, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ - 349 - $ 349 Segment operating loss (869 ) (769 ) - (1,638 ) Non allocated expenses (5,816 ) Finance expenses and other (8,786 ) Consolidated loss before provision for income taxes $ (16,240 ) Three months ended September 30, 2021 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ 18,515 - - $ 18,515 Segment operating loss (613 ) - (2,252 ) (2,865 ) Non allocated expenses (3,656 ) Finance expenses and other 1,122 Consolidated loss before provision for income taxes $ (5,399 ) (1) Includes $733 of intangible assets amortization, derived from GFHI. acquisitions. Three months ended September 30, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ - 349 - $ 349 Segment operating loss (869 ) (769 ) - (1,638 ) Non allocated expenses (4,378 ) Finance expenses and other (8,822 ) Consolidated loss before provision for income taxes $ (14,838 ) The following table summarizes the financial statements of our balance sheet accounts of the segments: As of September 30, 2021 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets related to segments $ 81,537 (2) $ - 59,807 (4) $ 141,344 Non allocated Assets - 40,806 Liabilities related to segments (25,198 )(3) - (644 ) (25,842 ) Non allocated liabilities - - - (4,001 ) Total Equity $ 152,307 (2) Includes $12,906 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition. (3) Includes $3,322 of deferred tax liability, derived from GFHI acquisition. (4) Includes $989 of intangible assets. As of December 31, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets related to segments $ 7,037 $ 7,017 - $ 14,054 Non allocated Assets - - - 63,679 Liabilities related to segments (638 ) (2,861 ) - (3,499 ) Non allocated liabilities - - - (8,538 ) Total Equity $ 65,696 |
Intengable Assets
Intengable Assets | 9 Months Ended |
Sep. 30, 2021 | |
Intengable Assets [Abstract] | |
INTENGABLE ASSETS | NOTE 9 — INTENGABLE ASSETS Useful life September 30, December 31, (USD in thousands) years 2021 2020 Original amount: (Unaudited) (Unaudited) Technology know-how 5-6 $ 11,490 $ 13,070 Trade name/ trademarks 5-10 597 850 Customer relationship 5-6 4,500 4,910 License 5,787 - Software 102 - 22,476 18,830 Accumulated amortization: Technology know-how (2,394 ) (1,116 ) trade name/ trademarks (145 ) (71 ) Customer related intangible assets (1,125 ) (484 ) Software (4 ) - (3,668 ) (1,671 ) Net $ 18,808 $ 17,159 |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2021 | |
Trade Accounts Receivable, Net [Abstract] | |
TRADE ACCOUNTS RECEIVABLE, NET | NOTE 10 — TRADE ACCOUNTS RECEIVABLE, NET For the nine months ended September 30, 2021 and the year ended December 31, 2020, accounts receivable were comprised of the following: September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Trade accounts receivable $ 20,644 $ 528 Allowance for doubtful accounts - (5 ) $ 20,644 $ 523 Movement of allowance for doubtful accounts for the nine months ended September 30, 2021 and the fiscal year ended December 31, 2020 are as follows: September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Beginning balance $ 5 $ 116 Provision (recovery) - (111 ) Decrease due to deconsolidation of Micronet (5 ) - $ - $ 5 |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2021 | |
Other Current Assets [Abstract] | |
OTHER CURRENT ASSETS | NOTE 11 — OTHER CURRENT ASSETS September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Prepaid expenses $ 3,627 $ 1,300 Advance to suppliers 2,088 230 Government departments and agencies receivables - 67 Prepaid tax 57 92 Others 4,442 67 $ 10,214 $ 1,756 |
Related parties
Related parties | 9 Months Ended |
Sep. 30, 2021 | |
Related parties [Abstract] | |
RELATED PARTIES | NOTE 12 — RELATED PARTIES Current assets – related parties September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Shareholders of All Weather $ 776 $ - Convertible loan to Micronet 534 - Shareholders of Guangxi Zhongtong 857 - $ 2,167 $ - Current liabilities – related parties September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Yulan WU, legal representative of Beijing Fucheng $ - $ 156 Beijing Internet New Network Technology Development Co., Ltd - 7 $ - $ 163 |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2021 | |
Operating Leases [Abstract] | |
OPERATING LEASES | NOTE 13 — 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. The following table provides a summary of leases by balance sheet location for the nine months ended September 30, 2021 and the year ended December 31, 2020: Assets/liabilities September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Assets Right-of-use assets $ 2,657 $ 291 Liabilities Lease liabilities- current portion $ 1,573 - Lease liabilities- long term $ 1,132 $ 164 Total Lease liabilities $ 2,705 164 The operating lease expenses for the nine and three months ended September 30, 2021 and 2020 were as follows: (USD in thousands) Nine months ended Three months ended 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost $ 1,111 $ 343 $ 581 $ 298 Maturities of operating lease liabilities for the nine months ended September 30, 2021 were as follows: Maturity of lease liabilities (USD in thousands) 12 months ending September 30, Operating (Unaudited) 2022 $ 1,573 2023 754 2024 328 2025 2 $ 2,657 Lease term and discount rate September 30, (Unaudited) Weighted-average remaining lease term (years) – operating leases 2.276 Weighted average discount rate – operating leases 10.98 % |
Provision for Income Taxes
Provision for Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Provision for Income Taxes [Abstract] | |
PROVISION FOR INCOME TAXES | NOTE 14 — 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 2019 and in the nine months ended September 30, 2021 and 2020. As of September 30, 2021 the operating loss carry forward were $30,552,000, among which there was $5,115,600 expiring from 2025 through 2037, and the remaining $25,406,400 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 nine months ended September 30, 2021 and 2020. The Company is entitled to various tax benefits in Israel by virtue of being granted the status of an “Approved Enterprise Industrial Company” as defined by the tax regulations. The benefits include, among other things, a reduced tax rate. In addition, the tax rate that applies to Preferred Enterprises in preferred areas is 16%. As of September 30, 2021 the operating loss carry forward were $6,289,000, which does not have an expiration date. China: The Company’s Chinese subsidiaries in the PRC are subject to the PRC Corporate Income Tax Law (“CIT Law”) and are taxed at the statutory income tax rate of 25%. As of September 30, 2021 the operating loss carry forward was $11,187 thousand, which will expire from 2025 through 2026. B. Provision for Taxes (USD in thousands) Nine months ended Three months ended 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current Domestic $ 72 $ - $ 29 $ - Foreign 123 - 92 (6 ) Total $ 195 $ 121 $ (6 ) Deferred Domestic $ $ $ $ Foreign (605 ) (219 ) (191 ) (219 ) Total $ (605 ) $ (219 ) $ (191 ) $ (219 ) C. 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. For the nine months ended September 30, 2021 and the year ended December 31, 2020, deferred tax assets were included in long-term deposit and prepaid expenses, and the Company’s deferred taxes were in respect of the following: September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Deferred tax assets Provisions for employee rights and other temporary differences $ 130 $ 129 Net operating loss carry forward 10,219 9,564 Valuation allowance (10,219 ) (9,564 ) Deferred tax assets, net of valuation allowance 130 129 Deferred tax liabilities Recognition of intangible assets arising from business combinations 3,323 4,256 Deferred tax assets and liabilities, net $ (3,193 ) $ (4,127 ) |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2021 | |
Legal Proceedings [Abstract] | |
LEGAL PROCEEDINGS | NOTE 15 — LEGAL PROCEEDINGS In March 2017, MICT entered into an agreement with Sunrise Securities LLC (“Sunrise”) through Sunrise’s principal, Amnon Mandelbaum (the “Sunrise Agreement”), pursuant to which Sunrise agreed to assist MICT in identifying, analyzing, structuring, and negotiating suitable business opportunities, such as a sale of stock or assets, merger, tender offer, joint venture, financing arrangement, private placement, or any similar transaction or combination thereof. The parties initially disagreed as to the amount of the fee that would be payable upon the closing of the transactions contemplated by the reinstated merger agreement. There were also questions about the applicability of the Sunrise Agreement to the merger, and whether or not Sunrise was properly owed any transaction fee upon the closing of the said merger. In order to resolve the matter, the parties have executed a settlement and release agreement for the release and waiver of the above claims in consideration for the issuance of freely tradable shares of common stock of MICT worth no less than $1,500,000 (the “Shares”), which Shares were delivered as follows: (i) 67.5% of the Shares to Amnon Mandelbaum; (ii) 7.5% of the Shares to INTE Securities LLC; and (iii) 25% of the Shares to Amini LLC. In addition, by no later than February 16, 2021, MICT would issue 200,000 warrants to purchase 200,000 freely tradable registered shares of common stock of MICT and deliver original copies of such warrants within five business days of the date of issuance of the warrants. The Shares issuable upon exercise of the warrants would be registered on a registration statement. 150,000 of these warrants were issued to Amnon Mandelbaum and 50,000 of these warrants were issued to Amini LLC, or its designee as named in writing. Each warrant was exercisable into one share of registered common stock of MICT until one year after the date of issuance of the warrants at an exercise price of $1.01 per share, and in any other respects, on the same material terms and conditions as are applicable to MICT’s current outstanding warrants including, but not limited to: (i) cashless exercise at all times from the date of issuance of the warrants until to the expiration dates of the warrants, (ii) certain exercise price adjustments, and (iii) other terms that are no less favorable to MICT’s recently issued common stock purchase warrant agreements. MICT was not able to timely file a registration statement to register the Shares, and Shares underlying the warrants per the settlement agreement. The Sunrise parties notified MICT that it has breached the settlement agreement. Subsequently, on March 30, 2021, MICT and the Sunrise parties signed an amended settlement agreement whereby MICT was obligated to make a $1,000,000 payment by March 31, 2021 and the share dollar amount set forth above was reduced from $1,500,000 to $500,000. MICT made the $1,000,000 payment. Furthermore, if MICT was not able to file a registration statement with the Securities and Exchange Commission for the Shares by June 4, 2021, we were required to make a $600,000 payment to settle the matter in full and Sunrise would not receive any MICT shares. On July 1, 2021, MICT made the $600,000 payment since there was a disagreement as to whether or not the registration statement was timely filed. This matter with Sunrise is now fully settled. On September 22, 2020, the Company entered into a settlement and release agreement with Craig Marshak, (“Marshak”), in connection with a claim filed by Marshak against the Company and additional defendants. Pursuant to the settlement, and in consideration for a customary release and waiver for the benefit of MICT, MICT agreed to pay Marshak a sum of $125,000 in cash. Marshak then dismissed such claim. On January 15, 2021 the parties executed an amendment to the settlement and release agreement for the payment to Marshak of $315,000 in exchange for the tender back of 60,000 of the Company’s shares that were promised to Marshak as part of the settlement and release agreement. The $315,000 payment was made and this matter is settled in full. On December 31, 2017, MICT, Enertec Systems 2001 Ltd., (“Enertec Systems”), previously our wholly-owned subsidiary, and Enertec Management Ltd., (“Enertec Management”) entered into a share purchase agreement (the “Share Agreement”), with Coolisys Technologies Inc., (“Coolisys”), a subsidiary of DPW Holdings, Inc. (“DPW”). Per the Share Agreement, Coolisys agreed to pay, at the closing (“Closing”) of the transaction, a purchase price of $5,250,000 and assume up to $4,000,000 of Enertec Systems’ debt. On May 22, 2018, MICT closed on the sale of all of the outstanding equity of Enertec Systems. Upon Closing, MICT received gross proceeds of approximately $4,700,000, of which 10% was to be held in escrow (“Escrow Amount’) for up to 14 months after the Closing in order to satisfy any potential indemnification claims. The final consideration amount was adjusted due to Enertec Systems’ debts at the Closing. In addition, Coolisys also assumed approximately $4,000,000 of Enertec Systems’ debt. In conjunction with, and as a condition to, the Closing, the Company, Enertec Systems, Coolisys, DPW and Mr. David Lucatz, our former Chief Executive Officer and director, executed a consulting agreement, (the “Consulting Agreement”). Pursuant to the Consulting Agreement, we, via Mr. Lucatz, provided Enertec Systems with certain consulting and transitional services over a 3 year period as necessary (but in no event did the services exceed 20% of Mr. Lucatz’s time). Coolisys (via Enertec Systems) was obligated to pay us an annual consulting fee of $150,000 and to issue to us 150,000 restricted shares of DPW Class A common stock, (the “DPW Shares”). The DPW Shares were to be issued in three equal installments, with the initial installment vesting the day after the Closing and the remaining installments vesting on each of the first two (2) anniversaries of the Closing. The rights and obligations under the Consulting Agreement were assigned to Mr. Lucatz along with the DPW Shares. Coolisys alleged the Company was in breach of the Share Agreement, and the Escrow Amount remained in escrow. On July 21, 2020, MICT management and MICT (the “Seller Parties”) received a statement of claim filed in the District Court of Tel Aviv (the “Court”) by Coolisys against the Seller Parties and its Board members for the approximate amount of $2,500,000, (the “Claim”). Pursuant to the Claim, Coolisys alleged that certain misrepresentations in the Share Agreement resulted in losses to Coolisys and requested, among other things, that the Court instruct the release of the Escrow Amount held by the escrow agent to Coolisys. The Company filed its defense to the Claim on December 15, 2020. On September 14, 2021, the Court adopted a verdict giving effect to the parties settlement agreement pursuant to which the Claim was rejected. The parties have mutually released and waived all claims against the other and in consideration for the aforementioned, the Escrow Amount was released to Coolisys. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 — SUBSEQUENT EVENTS On August 23, 2021, Beijing Yibao , Guangxi Zhongtong, and two shareholders of Guangxi Zhongtong entered into a capital increase agreement, pursuant to which Beijing Yibao will invest RMB30 million RMB (USD 4.7 million) into Guangxi Zhongtong. After the investment, Beijing Yibao will hold 60% of the shares in Guangxi Zhongtong and be the controlling shareholder. The VIE agreements signed with Guangxi Zhongtong on January 1, 2021 would become void once the full investment was received. On October 21, 2021, Guangxi Zhongtong received the funds transferred by Beijing Yibao and the transaction was completed. On October 27, 2021, Bokefa transferred a loan to the shareholders of All Weather in the total amount of RMB 30 million (approximately $4.7 million). The loan was granted pursuant to the loan agreement signed on July 1, 2021, which is a part of a VIE Structure. The loan is designated to be used as working capital for All Weather. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2020 annual report on Form 10-K filed on March 31, 2021. 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 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 consolidated financial reports; 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. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. GAAP. |
Cash | Cash 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, 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 September 30, 2021 and December 31, 2020, allowance for doubtful accounts amounted to nil |
Inventories | Inventories Inventories consisting of raw materials are stated at the lower of cost (first-in, first-out basis) or realizable value. Cost of work in process is comprised of direct materials, direct production costs and an allocation of production overheads based on normal operating capacity. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Companies 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 accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. |
Segment reporting | 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. |
Operating leases | 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 September 30, 2021 and December 31, 2020. The operating lease is included in right-of-use assets and lease liability on the unaudited condensed consolidated balance sheets. |
Investments | Investments The Company’s long-term investments consist of equity investments in privately held entities accounted for using the measurement alternative and equity investments accounted for using the equity method. On January 1, 2018, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company accounts for the equity investments at fair value, with gains and losses recorded through net earnings. The Company elected to measure certain equity investments without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly. 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 September 30, 2021, the Company owned 36.95% of shares in Micronet which was accounted for under equity method. As of September 30, 2021, the Company owned 24% of the shares in Beijing Fucheng and controlled the remaining 76% through contractual arrangements as discussed in Note 1. Beijing Fucheng was therefore 100% consolidated in the unaudited condensed consolidated financial statements. |
Fair value measurement | 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 | 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 September 30, 2021 and December 31, 2020. 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 Technology know-how 6 years Trade name/ trademarks 5 years Customer relationship 5 years |
Goodwill | 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 September 30, 2021 and December 31, 2020. |
Use of Estimates and Assumptions | 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 | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2014-09. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. We adopted Topic 606 on January 1, 2018 using the modified retrospective transition method, and the adoption did not have a material impact on our consolidated financial statements. We recognize revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which we expect to be entitled 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 delivered products or services. We applied practical expedient when sales taxes were collected from customers, meaning sales tax is recorded net of revenue, instead of cost of revenue, which are subsequently remitted to governmental authorities and are excluded from the transaction price. With respect to Micronet applicable revenue recognition U.S. GAAP requirements, Micronet 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. There is limited discretion needed in identifying the point control passes: once physical delivery of 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. The Company’s revenues 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) to 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 point in time when an insurance policy becomes effective. The Company provides customers with information drainage services and settles service charges with customers on the monthly basis. Performance obligation is satisfied overtime during the contract term. 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 | 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 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. |
Reclassification | Reclassification Prior to the deconsolidation of Micronet, Micronet had been taking active steps to sell its building within the year 2021. The company reclassified the related assets which were previously included in property and equipment, net and intangible assets, net to held-for-sale as of December 31, 2020. |
Description of Business (Tables
Description of Business (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities | September 30, (Unaudited) Current assets: Cash $ 2,062 Trade accounts receivable, net 17,193 Other current assets 5,433 Total current assets 24,688 Property and equipment, net 254 Long-term prepaid expenses 23 Right of use assets 139 Intangible assets 4,814 Total long-term assets 5,230 Total assets $ 29,918 Current liabilities: Trade accounts payable $ 17,475 Other current liabilities 6,590 Total current liabilities 24,065 Long -term liabilities: Lease liability $ 194 Total long-term liabilities $ 194 Total liabilities $ 24,259 |
Schedule of net revenues, loss from operations and net loss | For the For the September 30, September 30, 2021 2021 USD USD (Unaudited) (Unaudited) Net revenues $ 17,445 $ 31,710 Loss from operations $ 603 $ (490 ) Net loss $ 603 $ (490 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Useful Life Licensed & software indefinite useful life Technology know-how 6 years Trade name/ trademarks 5 years Customer relationship 5 years |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrants outstanding | Nine months ended Year ended 2021 2020 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price $ $ Options outstanding at the beginning of year/period: 1,158,000 2.24 1,167,000 2.34 Changes during the year/period: Granted 740,000 1.96 1,300,000 1.32 Exercised (60,000 ) - (1,198,000 ) - Forfeited - - (111,000 ) 2.81 Options outstanding at end of year/period 1,838,000 1.69 1,158,000 2.24 Options exercisable at end of year/period 1,398,000 1.78 1,138,000 2.36 |
Schedule of warrants outstanding | Warrants Outstanding Warrants Exercisable Average Exercise Price Remaining Contractual Life Balance, December 31, 2020 12,994,545 12,994,545 $ 2.31 4.75 Granted 52,993,570 52,993,570 $ 2.8 5.00 Forfeited - - $ - - Exercised (2,450,487 ) (2,450,487 ) $ 1.01 5.00 Balance, September 30, 2021 (Unaudited) 63,537,628 63,537,628 $ 2.76 4.77 |
Equity Investment in Micronet (
Equity Investment in Micronet (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity Investment in Micronet [Abstract] | |
Schedule of net revenues and net Loss | Nine months ended Three months ended 2020 2020 USD USD (Unaudited) (Unaudited) Net revenues $ 1,438 $ 349 Net loss (18,565 ) (14,613 ) |
Schedule of purchase price of acquisition | Total cash consideration $ 887 Total Purchase Consideration $ 887 Less: Debt-free net working capital $ 788 Property and equipment 661 Right of use assets 310 Other assets 26 Borrowings (1,675 ) Severance payable (95 ) Lease liabilities (101 ) Intangible assets - trade name/ trademarks 270 Intangible assets - developed technology 1,580 Intangible assets - customer relationship 410 Intangible assets - ground 215 Deferred Tax liability (362 ) Fair value of net assets acquired $ 2,027 Noncontrolling interest $ (2,172 ) Gain on equity interest (665 ) Equity investment (921 ) Change in investment (3,758 ) Goodwill value $ 2,618 |
Schedule of outstanding ordinary shares of micronets | May 9, USD (Unaudited) 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 |
GFH Intermediate Holdings Ltd_2
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Gfh Intermediate Holdings Ltd Gfhi Acquisition [Abstract] | |
Schedule of GFHI's net revenue and net Loss | Nine months ended September 30, Three months ended 2020 2020 USD USD (Unaudited) (Unaudited) Net revenues $ 349 $ 349 Net loss (16,021 ) (14,613 ) |
Schedule of allocation of the preliminary purchase price | Total share consideration (1) $ 32,050 Total Purchase Consideration $ 32,050 Less: Intangible assets - trade name/ trademarks $ 580 Intangible assets - developed technology 11,490 Intangible assets - Customer database (2) 4,500 Deferred Tax liability (3) (4,308 ) Fair value of net assets acquired $ 12,262 Goodwill value (4) $ 19,788 |
Beijing Fucheng Lianbao Techn_2
Beijing Fucheng Lianbao Technology Co., Ltd Transaction (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Beijing Fucheng Lianbao Technology Co., Ltd Transaction Table [Abstract] | |
Schedule of purchase price of acquisition | (Unaudited) 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 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segments [Abstrsct] | |
Schedule of the financial statements of balance sheet accounts of the segment | Nine months ended September 30, 2021 (USD in thousands) Verticals and technology Mobile resource management Online stock trading Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ 39,065 726 - $ 39,791 Segment operating loss (5,496 )(1) (827 )(2) (4,208 ) (10,531 ) Non allocated expenses (17,343 ) Finance expenses and other (1,167 ) Consolidated loss before provision for income taxes $ (29,041 ) Nine months ended September 30, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ - 349 - $ 349 Segment operating loss (869 ) (769 ) - (1,638 ) Non allocated expenses (5,816 ) Finance expenses and other (8,786 ) Consolidated loss before provision for income taxes $ (16,240 ) Three months ended September 30, 2021 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ 18,515 - - $ 18,515 Segment operating loss (613 ) - (2,252 ) (2,865 ) Non allocated expenses (3,656 ) Finance expenses and other 1,122 Consolidated loss before provision for income taxes $ (5,399 ) Three months ended September 30, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues from external customers $ - 349 - $ 349 Segment operating loss (869 ) (769 ) - (1,638 ) Non allocated expenses (4,378 ) Finance expenses and other (8,822 ) Consolidated loss before provision for income taxes $ (14,838 ) |
Schedule of the financial statements of balance sheet accounts of the segment | As of September 30, 2021 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets related to segments $ 81,537 (2) $ - 59,807 (4) $ 141,344 Non allocated Assets - 40,806 Liabilities related to segments (25,198 )(3) - (644 ) (25,842 ) Non allocated liabilities - - - (4,001 ) Total Equity $ 152,307 As of December 31, 2020 (USD in thousands) Verticals Mobile Online Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets related to segments $ 7,037 $ 7,017 - $ 14,054 Non allocated Assets - - - 63,679 Liabilities related to segments (638 ) (2,861 ) - (3,499 ) Non allocated liabilities - - - (8,538 ) Total Equity $ 65,696 |
Intengable Assets (Tables)
Intengable Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Intengable Assets Table [Abstract] | |
Schedule of intengable assets | Useful life September 30, December 31, (USD in thousands) years 2021 2020 Original amount: (Unaudited) (Unaudited) Technology know-how 5-6 $ 11,490 $ 13,070 Trade name/ trademarks 5-10 597 850 Customer relationship 5-6 4,500 4,910 License 5,787 - Software 102 - 22,476 18,830 Accumulated amortization: Technology know-how (2,394 ) (1,116 ) trade name/ trademarks (145 ) (71 ) Customer related intangible assets (1,125 ) (484 ) Software (4 ) - (3,668 ) (1,671 ) Net $ 18,808 $ 17,159 |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Trade Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Trade accounts receivable $ 20,644 $ 528 Allowance for doubtful accounts - (5 ) $ 20,644 $ 523 |
Schedule of allowance for doubtful accounts | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Beginning balance $ 5 $ 116 Provision (recovery) - (111 ) Decrease due to deconsolidation of Micronet (5 ) - $ - $ 5 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Current Assets [Abstract] | |
Schedule of other current assets | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Prepaid expenses $ 3,627 $ 1,300 Advance to suppliers 2,088 230 Government departments and agencies receivables - 67 Prepaid tax 57 92 Others 4,442 67 $ 10,214 $ 1,756 |
Related parties (Tables)
Related parties (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related parties [Abstract] | |
Schedule of current assets – related parties | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Shareholders of All Weather $ 776 $ - Convertible loan to Micronet 534 - Shareholders of Guangxi Zhongtong 857 - $ 2,167 $ - |
Schedule of current liabilities – related parties | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Yulan WU, legal representative of Beijing Fucheng $ - $ 156 Beijing Internet New Network Technology Development Co., Ltd - 7 $ - $ 163 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Operating Leases [Abstract] | |
Schedule of leases by balance sheet | Assets/liabilities September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Assets Right-of-use assets $ 2,657 $ 291 Liabilities Lease liabilities- current portion $ 1,573 - Lease liabilities- long term $ 1,132 $ 164 Total Lease liabilities $ 2,705 164 |
Schedule of operating lease expenses | (USD in thousands) Nine months ended Three months ended 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost $ 1,111 $ 343 $ 581 $ 298 |
Schedule of maturities of operating lease liabilities | (USD in thousands) 12 months ending September 30, Operating (Unaudited) 2022 $ 1,573 2023 754 2024 328 2025 2 $ 2,657 |
Schedule of lease term and discount rate | Lease term and discount rate September 30, (Unaudited) Weighted-average remaining lease term (years) – operating leases 2.276 Weighted average discount rate – operating leases 10.98 % |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Provision for Income Taxes [Abstract] | |
Schedule of provision for taxes | (USD in thousands) Nine months ended Three months ended 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current Domestic $ 72 $ - $ 29 $ - Foreign 123 - 92 (6 ) Total $ 195 $ 121 $ (6 ) Deferred Domestic $ $ $ $ Foreign (605 ) (219 ) (191 ) (219 ) Total $ (605 ) $ (219 ) $ (191 ) $ (219 ) |
Schedule of deferred tax assets and liabilities, net | September 30, December 31, 2021 2020 USD USD (Unaudited) (Unaudited) Deferred tax assets Provisions for employee rights and other temporary differences $ 130 $ 129 Net operating loss carry forward 10,219 9,564 Valuation allowance (10,219 ) (9,564 ) Deferred tax assets, net of valuation allowance 130 129 Deferred tax liabilities Recognition of intangible assets arising from business combinations 3,323 4,256 Deferred tax assets and liabilities, net $ (3,193 ) $ (4,127 ) |
Description of Business (Detail
Description of Business (Details) | Jul. 02, 2021USD ($) | Jul. 02, 2021CNY (¥) | Feb. 10, 2021USD ($) | Jan. 02, 2021USD ($) | Jan. 02, 2021CNY (¥) | Oct. 11, 2020USD ($)shares | Oct. 02, 2020USD ($) | Jun. 10, 2020USD ($)shares | Jun. 10, 2020ILS (₪)shares | Jun. 16, 2021USD ($)$ / sharesshares | Jun. 16, 2021ILS (₪) | Jun. 23, 2020USD ($)shares | Jun. 23, 2020ILS (₪)shares | Sep. 30, 2021USD ($) | Sep. 30, 2021CNY (¥) | Aug. 23, 2021USD ($) | Aug. 23, 2021CNY (¥) | Oct. 11, 2020₪ / sharesshares |
Description of Business (Details) [Line Items] | ||||||||||||||||||
Ownership interest | 60.00% | 60.00% | ||||||||||||||||
Total purchase price | $ | $ 3,000,000 | |||||||||||||||||
Share capital percentage | 9.00% | |||||||||||||||||
Remaining share capital percentage | 91.00% | |||||||||||||||||
Business acquisitions, description | 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, the seller of the interests of Magpie under the loan agreement, have been guaranteed by the majority shareholder of Magpie. 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 million (reflecting the net asset value of Magpie estimated at $2.034 million recorded as a working capital, and a premium $902 thousands that was recorded as a license in the intangible assets). | |||||||||||||||||
Frame work loan amount | $ 4,700,000 | ¥ 30,000,000 | ||||||||||||||||
Additional loan amount | $ | $ 776,000 | |||||||||||||||||
Investment Owned, Face Amount | $ 4,700,000 | ¥ 30,000,000 | ||||||||||||||||
Effective agreement term | 1 year | |||||||||||||||||
Micronet [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Total consideration amount | ₪ | ₪ 3,100,200 | |||||||||||||||||
Conversion price per share | ₪ / shares | ₪ 4,961,202 | |||||||||||||||||
Tel Aviv Stock Exchange [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Percentage of shares issued and outstanding | 36.95% | 36.95% | ||||||||||||||||
Ordinary shares | 100 | |||||||||||||||||
Aggregate units per share | $ / shares | $ 14.6 | |||||||||||||||||
Aggregate number of units | 18,400 | |||||||||||||||||
Issuance of ordinary shares | 1,840,000 | |||||||||||||||||
Gross proceeds | $ | $ 8,290,000 | |||||||||||||||||
Basis diluted, percentage | 26.56% | |||||||||||||||||
MICT Telematics [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Purchased shares | 5,999,996 | 5,999,996 | ||||||||||||||||
Aggregate proceeds | $ 515,000 | ₪ 1,800,000 | ||||||||||||||||
Micronet [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Purchased shares | 520,600 | 10,334,000 | 10,334,000 | |||||||||||||||
Percentage of shares issued and outstanding | 45.53% | 45.53% | ||||||||||||||||
Total consideration amount | $ | $ 1,417,486 | $ 887,000 | ||||||||||||||||
Ownership interest | 53.39% | 53.39% | 49.88% | |||||||||||||||
Recognized gain | $ | $ 665,000 | |||||||||||||||||
Ordinary shares | 416,480 | |||||||||||||||||
Convertible ordinary shares | 416,480 | |||||||||||||||||
Additional purchase | 115,851 | |||||||||||||||||
Guangxi Zhongtong Insurance Agency Co., Ltd [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Frame work loan amount | $ 6,125,000 | ¥ 40,000,000 | ||||||||||||||||
Working capital | $ 1,243,000 | ¥ 8,010,000 | ||||||||||||||||
Frame work for working capital | $ | $ 857,000 | |||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Equity interest | 24.00% | 24.00% | ||||||||||||||||
Share acquired price | $ | $ 5,700,000 | |||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | Variable interest entity [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Equity interest | 76.00% | 76.00% | ||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | Beijing Fucheng Insurance Brokerage Co., Ltd [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Equity interest | 100.00% | |||||||||||||||||
Tel Aviv Stock Exchange [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Gross proceeds | ₪ | ₪ 26,864,000 | |||||||||||||||||
Maximum [Member] | Micronet [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Ownership interest | 53.39% | |||||||||||||||||
Minimum [Member] | Micronet [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Ownership interest | 50.31% | |||||||||||||||||
Series A Options [Member] | Tel Aviv Stock Exchange [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Ordinary shares | 25 | |||||||||||||||||
Issuance of ordinary shares | 460,000 | |||||||||||||||||
Series B Options [Member] | Tel Aviv Stock Exchange [Member] | ||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||
Ordinary shares | 75 | |||||||||||||||||
Issuance of ordinary shares | 1,380,000 |
Description of Business (Deta_2
Description of Business (Details) - Schedule of assets and liabilities - VIE [Member] $ in Thousands | Sep. 30, 2021USD ($) |
Current assets: | |
Cash | $ 2,062 |
Trade accounts receivable, net | 17,193 |
Other current assets | 5,433 |
Total current assets | 24,688 |
Property and equipment, net | 254 |
Long-term prepaid expenses | 23 |
Right of use assets | 139 |
Intangible assets | 4,814 |
Total long-term assets | 5,230 |
Total assets | 29,918 |
Current liabilities: | |
Trade accounts payable | 17,475 |
Other current liabilities | 6,590 |
Total current liabilities | 24,065 |
Long -term liabilities: | |
Lease liability | 194 |
Total long-term liabilities | 194 |
Total liabilities | $ 24,259 |
Description of Business (Deta_3
Description of Business (Details) - Schedule of net revenues, loss from operations and net loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Schedule of net revenues, loss from operations and net loss [Abstract] | ||
Net revenues | $ 17,445 | $ 31,710 |
Loss from operations | 603 | (490) |
Net loss | $ 603 | $ (490) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Allowance for doubtful accounts (in Dollars) | $ 5,000 | |
Micronet [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Equity method percentage | 36.95% | |
Beijing Fucheng [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Equity method percentage | 24.00% | |
Contractual arrangements percentage | 76.00% | |
Financial statements percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of estimated useful lives [Abstract] | |
Licensed & software | indefinite useful life |
Technology know-how | 6 years |
Trade name/ trademarks | 5 years |
Customer relationship | 5 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 02, 2021 | Feb. 11, 2021 | Nov. 02, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | May 17, 2021 |
Stockholders' Equity (Details) [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 2.5 | $ 0.001 | $ 0.001 | |||
Preferred stock exchange agreements, description | 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. | |||||
Excess capital (in Dollars) | $ 140,000 | |||||
Stock incentive plan, description | 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, are currently authorized to be issued pursuant to option awards granted thereunder. On May 17, 2021, May 23, 2021 and June 28, 2021, the Company granted an aggregate of 125,000, 370,000 and 245,000 respectively, options 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 September 30, 2021. This resulted in a stock-based compensation expense of approximately $458,000 recorded for the nine months ended September 30, 2021, based on a fair value determined using a Black-Scholes model.On March 22, 2021, 20,000 shares of common 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. | |||||
Board of Directors [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Shares issued of common stock | 6,000,000 | |||||
Chief Executive Officer [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Shares issued of common stock | 300,000 | |||||
Purchase Agreement [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Aggregate gross proceeds (in Dollars) | $ 25,000 | $ 22,325 | ||||
Shares issued of common stock | 10,000,000 | |||||
Common stock per value (in Dollars per share) | $ 0.001 | |||||
Exercise price (in Dollars per share) | $ 3.12 | |||||
Warrant expire | 5 years | |||||
Aggregate units | 7,600,000 | |||||
Received additional amount (in Dollars) | $ 2,675 | |||||
Remaining issued | 2,400,000 | |||||
Securities purchase agreement, description | 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 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 and other expenses. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of stock options outstanding and exercisable - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of stock options outstanding and exercisable [Abstract] | ||
Number of options outstanding at the beginning of year/period: | 1,158,000 | 1,167,000 |
Weighted average exercise price options outstanding at the beginning of year/period: | $ 2.24 | $ 2.34 |
Number of options granted | 740,000 | 1,300,000 |
Weighted average exercise price granted | $ 1.96 | $ 1.32 |
Number of options exercised | (60,000) | (1,198,000) |
Weighted average exercise price exercised | ||
Number of options forfeited | (111,000) | |
Weighted average exercise price forfeited | $ 2.81 | |
Number of options outstanding at end of year/period | 1,838,000 | 1,158,000 |
Weighted average exercise price options outstanding at end of year/period | $ 1.69 | $ 2.24 |
Number of options exercisable at end of year/period | 1,398,000 | 1,138,000 |
Weighted average exercise price options exercisable at end of year/period | $ 1.78 | $ 2.36 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of warrants outstanding | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of warrants outstanding [Abstract] | |
Warrants outstanding balance beginning | 12,994,545 |
Warrants exercisable balance beginning | 12,994,545 |
Average exercise price balance beginning (in Dollars per share) | $ / shares | $ 2.31 |
Remaining contractual life balance beginning | 4 years 9 months |
Warrants outstanding granted | 52,993,570 |
Warrants exercisable granted | 52,993,570 |
Average exercise price granted (in Dollars per share) | $ / shares | $ 2.8 |
Remaining contractual life granted | 5 years |
Warrants outstanding Forfeited | |
Warrants exercisable Forfeited | |
Average exercise price Forfeited (in Dollars per share) | $ / shares | |
Remaining contractual life Forfeited | |
Warrants outstanding exercised | (2,450,487) |
Warrants exercisable exercised | (2,450,487) |
Average exercise price exercised (in Dollars per share) | $ / shares | $ 1.01 |
Remaining contractual life exercised | 5 years |
Warrants outstanding balance ending | 63,537,628 |
Warrants exercisable balance ending | 63,537,628 |
Average exercise price balance ending (in Dollars per share) | $ / shares | $ 2.76 |
Remaining contractual life balance ending | 4 years 9 months 7 days |
Equity Investment in Micronet_2
Equity Investment in Micronet (Details) | 1 Months Ended | 9 Months Ended | ||
Jun. 16, 2021 | Sep. 30, 2021 | May 09, 2021 | Mar. 31, 2021 | |
Business Combinations [Abstract] | ||||
Issued and outstanding percentage | 50.31% | |||
Ownership interest was diluted percentage | 49.88% | |||
Loss of control of Micronet description | 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 $8,290,000) in the Offering. | |||
Debt conversion, description | The Company did not participate in the Offering, and, as a result, the Company owned 36.95% of the outstanding ordinary shares of Micronet and 26.56% on a fully diluted basis as of September 30, 2021. |
Equity Investment in Micronet_3
Equity Investment in Micronet (Details) - Schedule of net revenues and net Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Schedule of net revenues and net Loss [Abstract] | ||
Net revenues | $ 349 | $ 1,438 |
Net loss | $ (14,613) | $ (18,565) |
Equity Investment in Micronet_4
Equity Investment in Micronet (Details) - Schedule of purchase price of acquisition - Micronet Ltd. [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Business Acquisition [Line Items] | |
Total cash consideration | $ 887 |
Total Purchase Consideration | 887 |
Goodwill value | 2,618 |
Debt-free net working capital | 788 |
Property and equipment | 661 |
Right of use assets | 310 |
Other assets | 26 |
Borrowings | (1,675) |
Severance payable | (95) |
Lease liabilities | (101) |
Intangible assets - trade name/ trademarks | 270 |
Intangible assets - developed technology | 1,580 |
Intangible assets - customer relationship | 410 |
Intangible assets - ground | 215 |
Deferred Tax liability | (362) |
Fair value of net assets acquired | 2,027 |
Noncontrolling interest | (2,172) |
Gain on equity interest | (665) |
Equity investment | (921) |
Change in investment | $ (3,758) |
Equity Investment in Micronet_5
Equity Investment in Micronet (Details) - Schedule of outstanding ordinary shares of micronets $ in Thousands | May 09, 2021USD ($) |
Schedule of outstanding ordinary shares of micronets [Abstract] | |
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 |
Loan to Micronet (Details)
Loan to Micronet (Details) | Jul. 05, 2020₪ / shares | Nov. 13, 2019USD ($) | Aug. 13, 2020USD ($) | Nov. 13, 2019₪ / shares |
Debt Disclosure [Abstract] | ||||
Convertible loan (in Dollars) | $ | $ 500,000 | $ 175,000 | ||
Convertible loan bears interest | 3.95% | |||
Conversion price | ₪ 0.38 | |||
Exercise price | ₪ 0.6 | |||
Convertible loan | ₪ 0.08 | |||
Per Share | 5.7 | |||
Exercised option price | 0.6 | |||
Exercised price per share | ₪ 9 |
GFH Intermediate Holdings Ltd_3
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Details) [Line Items] | ||
Converted shares of common stock | 22,727,273 | |
conversion price | $ 1.1 | |
Statutory income tax rate | 26.00% | |
GFH Intermediate Holdings Ltd [Member] | ||
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Details) [Line Items] | ||
Principal amount | $ 25,000,000 |
GFH Intermediate Holdings Ltd_4
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Details) - Schedule of GFHI's net revenue and net Loss - GFHI [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Loss Contingencies [Line Items] | ||
Net revenues | $ 349 | $ 349 |
Net loss | $ (14,613) | $ (16,021) |
GFH Intermediate Holdings Ltd_5
GFH Intermediate Holdings Ltd (“Gfhi”) Acquisition (Details) - Schedule of allocation of the preliminary purchase price $ in Thousands | Sep. 30, 2021USD ($) | |
Schedule of allocation of the preliminary purchase price [Abstract] | ||
Total share consideration | $ 32,050 | [1] |
Total Purchase Consideration | 32,050 | |
Less: | ||
Intangible assets - trade name/ trademarks | 580 | |
Intangible assets - developed technology | 11,490 | |
Intangible assets - Customer database | 4,500 | [2] |
Deferred Tax liability | (4,308) | [3] |
Fair value of net assets acquired | 12,262 | |
Goodwill value | $ 19,788 | [4] |
[1] | The purchase consideration represented the fair value of the convertible promissory notes that were converted into common stock of MICT. | |
[2] | The customer database value is based on the cost to recreate, as indicated by management. | |
[3] | 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%. | |
[4] | The goodwill is not deductible for tax purposes. |
Beijing Fucheng Lianbao Techn_3
Beijing Fucheng Lianbao Technology Co., Ltd Transaction (Details) | Feb. 10, 2021 |
Beijing Fucheng Lianbao Technology Co Ltd Transaction [Abstract] | |
Percentage of transaction pursuant acquired | 24.00% |
Beijing Fucheng Lianbao Techn_4
Beijing Fucheng Lianbao Technology Co., Ltd Transaction (Details) - Schedule of purchase price of acquisition $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of purchase price of acquisition [Abstract] | |
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 |
Segments (Details)
Segments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Segments (Details) [Line Items] | |
Intangible assets amortization | $ 733 |
Intangible assets | 989 |
GFHI Acquisitions [Member] | |
Segments (Details) [Line Items] | |
Intangible assets amortization | 2,198 |
Intangible assets | 12,906 |
Goodwill | 19,788 |
Deferred tax liability | 3,322 |
Micronet [Member] | |
Segments (Details) [Line Items] | |
Intangible assets amortization | $ 103 |
Segments (Details) - Schedule o
Segments (Details) - Schedule of the financial performance of operating segments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Verticals and technology [Member] | |||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||
Revenues from external customers | $ 18,515 | $ 39,065 | |||
Segment operating loss | (613) | (869) | (5,496) | [1] | (869) |
Mobile resource management [Member] | |||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||
Revenues from external customers | 349 | 726 | 349 | ||
Segment operating loss | (769) | (827) | [2] | (769) | |
Online stock trading [Member] | |||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||
Revenues from external customers | |||||
Segment operating loss | (2,252) | (4,208) | |||
Consolidated [Member] | |||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||
Revenues from external customers | 18,515 | 349 | 39,791 | 349 | |
Segment operating loss | (2,865) | (1,638) | (10,531) | (1,638) | |
Non allocated expenses | (3,656) | (4,378) | (17,343) | (5,816) | |
Finance expenses and other | 1,122 | (8,822) | (1,167) | (8,786) | |
Consolidated loss before provision for income taxes | $ (5,399) | $ (14,838) | $ (29,041) | $ (16,240) | |
[1] | Includes $2,198 of intangible assets amortization, derived from GFHI. acquisitions. | ||||
[2] | Includes $103 of intangible assets amortization, derived from Micronet consolidation. |
Segments (Details) - Schedule_2
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Verticals and technology [Member] | |||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | |||
Assets related to segments | $ 81,537 | [1] | $ 7,037 |
Non allocated Assets | |||
Liabilities related to segments | (25,198) | [2] | (638) |
Non allocated liabilities | |||
Online stock trading [Member] | |||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | |||
Assets related to segments | 59,807 | [3] | |
Non allocated Assets | |||
Liabilities related to segments | (644) | ||
Non allocated liabilities | |||
Consolidated [Member] | |||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | |||
Assets related to segments | 141,344 | 14,054 | |
Non allocated Assets | 40,806 | 63,679 | |
Liabilities related to segments | (25,842) | (3,499) | |
Non allocated liabilities | (4,001) | (8,538) | |
Total Equity | 152,307 | 65,696 | |
Mobile resource management [Member] | |||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | |||
Assets related to segments | 7,017 | ||
Non allocated Assets | |||
Liabilities related to segments | [2] | (2,861) | |
Non allocated liabilities | |||
[1] | Includes $12,906 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition. | ||
[2] | Includes $3,322 of deferred tax liability, derived from GFHI acquisition. | ||
[3] | Includes $989 of intangible assets. |
Intengable Assets (Details) - S
Intengable Assets (Details) - Schedule of intengable assets - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | $ 22,476 | $ 18,830 |
Accumulated amortization | (4) | |
Net | 18,808 | 17,159 |
Technology know-how [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 11,490 | 13,070 |
Accumulated amortization | (2,394) | (1,116) |
Trade name/ trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 597 | 850 |
Accumulated amortization | (145) | (71) |
Customer relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 4,500 | 4,910 |
Accumulated amortization | (1,125) | (484) |
License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 5,787 | |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 102 | |
Accumulated amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (3,668) | $ (1,671) |
Minimum [Member] | Technology know-how [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 5 years | |
Minimum [Member] | Trade name/ trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 5 years | |
Minimum [Member] | Customer relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 5 years | |
Maximum [Member] | Technology know-how [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 6 years | |
Maximum [Member] | Trade name/ trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 10 years | |
Maximum [Member] | Customer relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life years | 6 years |
Trade Accounts Receivable, Ne_2
Trade Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of accounts receivable [Abstract] | ||
Trade accounts receivable | $ 20,644 | $ 528 |
Allowance for doubtful accounts | (5) | |
Total | $ 20,644 | $ 523 |
Trade Accounts Receivable, Ne_3
Trade Accounts Receivable, Net (Details) - Schedule of allowance for doubtful accounts - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 5 | $ 116 |
Provision (recovery) | (111) | |
Decrease due to deconsolidation of Micronet | (5) | |
Total | $ 5 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of other current assets - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of other current assets [Abstract] | ||
Prepaid expenses | $ 3,627 | $ 1,300 |
Advance to suppliers | 2,088 | 230 |
Government departments and agencies receivables | 67 | |
Prepaid tax | 57 | 92 |
Others | 4,442 | 67 |
Total | $ 10,214 | $ 1,756 |
Related parties (Details) - Sch
Related parties (Details) - Schedule of current assets – related parties - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Related parties (Details) - Schedule of current assets – related parties [Line Items] | ||
Current assets- related parties | $ 2,167 | |
Shareholders of All Weather [Member] | ||
Related parties (Details) - Schedule of current assets – related parties [Line Items] | ||
Current assets- related parties | 776 | |
Convertible loan to Micronet [Member] | ||
Related parties (Details) - Schedule of current assets – related parties [Line Items] | ||
Current assets- related parties | 534 | |
Shareholders of Guangxi Zhongtong [Member] | ||
Related parties (Details) - Schedule of current assets – related parties [Line Items] | ||
Current assets- related parties | $ 857 |
Related parties (Details) - S_2
Related parties (Details) - Schedule of current liabilities – related parties - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Related parties (Details) - Schedule of current liabilities – related parties [Line Items] | ||
Current liabilities – related parties | $ 163 | |
Yulan WU, legal representative of Beijing Fucheng [Member] | ||
Related parties (Details) - Schedule of current liabilities – related parties [Line Items] | ||
Current liabilities – related parties | 156 | |
Beijing Internet New Network Technology Development Co., Ltd [Member] | ||
Related parties (Details) - Schedule of current liabilities – related parties [Line Items] | ||
Current liabilities – related parties | $ 7 |
Operating Leases (Details)
Operating Leases (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Operating Leases [Abstract] | |
Operating lease term | 4 years |
Operating Leases (Details) - Sc
Operating Leases (Details) - Schedule of leases by balance sheet - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Right-of-use assets | $ 2,657 | $ 291 |
Liabilities | ||
Lease liabilities- current portion | 1,573 | |
Lease liabilities- long term | 1,132 | 164 |
Total Lease liabilities | $ 2,705 | $ 164 |
Operating Leases (Details) - _2
Operating Leases (Details) - Schedule of operating lease expenses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of operating lease expenses [Abstract] | ||||
Operating lease cost | $ 581 | $ 298 | $ 1,111 | $ 343 |
Operating Leases (Details) - _3
Operating Leases (Details) - Schedule of maturities of operating lease liabilities $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of maturities of operating lease liabilities [Abstract] | |
2022 | $ 1,573 |
2023 | 754 |
2024 | 328 |
2025 | 2 |
Total lease liabilities | $ 2,657 |
Operating Leases (Details) - _4
Operating Leases (Details) - Schedule of lease term and discount rate | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of lease term and discount rate [Abstract] | |
Weighted-average remaining lease term (years) – operating leases | 2 years 3 months 9 days |
Weighted average discount rate – operating leases | 10.98% |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Provision for Income Taxes (Details) [Line Items] | ||
Operating loss carry forward, description | the operating loss carry forward were $30,552,000, among which there was $5,115,600 expiring from 2025 through 2037, and the remaining $25,406,400 has no expiration date. | |
Operating loss carry forward (in Dollars) | $ 6,289,000 | |
Expire term, description | will expire from 2025 through 2026 | |
United States [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Federal income tax rate | 21.00% | |
Israel [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
General tax rate | 23.00% | 23.00% |
Preferred tax rate | 16.00% | |
China [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Operating loss carry forward (in Dollars) | $ 11,187,000 | |
Statutory income rate | 25.00% |
Provision for Income Taxes (D_2
Provision for Income Taxes (Details) - Schedule of provision for taxes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Current | ||||
Domestic | $ 29 | $ 72 | ||
Foreign | 92 | (6) | 123 | |
Total | 121 | (6) | 195 | |
Deferred | ||||
Domestic | ||||
Foreign | (191) | (219) | (605) | (219) |
Total | $ (191) | $ (219) | $ (605) | $ (219) |
Provision for Income Taxes (D_3
Provision for Income Taxes (Details) - Schedule of deferred tax assets and liabilities, net - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Provisions for employee rights and other temporary differences | $ 130 | $ 129 |
Net operating loss carry forward | 10,219 | 9,564 |
Valuation allowance | (10,219) | (9,564) |
Deferred tax assets, net of valuation allowance | 130 | 129 |
Deferred tax liabilities | ||
Recognition of intangible assets arising from business combinations | 3,323 | 4,256 |
Deferred tax assets and liabilities, net | $ (3,193) | $ (4,127) |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) | Jul. 01, 2021 | Jun. 04, 2021 | Jan. 15, 2021 | Sep. 22, 2020 | Jul. 21, 2020 | Dec. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2021 | Mar. 31, 2021 |
Legal Proceedings (Details) [Line Items] | |||||||||
Tradable shares of common stock | $1,500,000 | ||||||||
Legal proceedings description | (i) 67.5% of the Shares to Amnon Mandelbaum; (ii) 7.5% of the Shares to INTE Securities LLC; and (iii) 25% of the Shares to Amini LLC. In addition, by no later than February 16, 2021, MICT would issue 200,000 warrants to purchase 200,000 freely tradable registered shares of common stock of MICT and deliver original copies of such warrants within five business days of the date of issuance of the warrants. The Shares issuable upon exercise of the warrants would be registered on a registration statement. 150,000 of these warrants were issued to Amnon Mandelbaum and 50,000 of these warrants were issued to Amini LLC, or its designee as named in writing. Each warrant was exercisable into one share of registered common stock of MICT until one year after the date of issuance of the warrants at an exercise price of $1.01 per share, and in any other respects, on the same material terms and conditions as are applicable to MICT’s current outstanding warrants including, but not limited to: (i) cashless exercise at all times from the date of issuance of the warrants until to the expiration dates of the warrants, (ii) certain exercise price adjustments, and (iii) other terms that are no less favorable to MICT’s recently issued common stock purchase warrant agreements. MICT was not able to timely file a registration statement to register the Shares, and Shares underlying the warrants per the settlement agreement. The Sunrise parties notified MICT that it has breached the settlement agreement. | ||||||||
MICT payments | $ 1,000,000 | ||||||||
Payment was made | $ 1,000,000 | ||||||||
Payment to settle | $ 600,000 | $ 600,000 | |||||||
Pursuant to settlement and in consideration | $ 125,000 | ||||||||
Release agreement for the payment | $ 315,000 | ||||||||
Exchange for the tender (in Shares) | 60,000 | ||||||||
Legal proceeding, description | Upon Closing, MICT received gross proceeds of approximately $4,700,000, of which 10% was to be held in escrow (“Escrow Amount’) for up to 14 months after the Closing in order to satisfy any potential indemnification claims. The final consideration amount was adjusted due to Enertec Systems’ debts at the Closing. In addition, Coolisys also assumed approximately $4,000,000 of Enertec Systems’ debt. In conjunction with, and as a condition to, the Closing, the Company, Enertec Systems, Coolisys, DPW and Mr. David Lucatz, our former Chief Executive Officer and director, executed a consulting agreement, (the “Consulting Agreement”). Pursuant to the Consulting Agreement, we, via Mr. Lucatz, provided Enertec Systems with certain consulting and transitional services over a 3 year period as necessary (but in no event did the services exceed 20% of Mr. Lucatz’s time). Coolisys (via Enertec Systems) was obligated to pay us an annual consulting fee of $150,000 and to issue to us 150,000 restricted shares of DPW Class A common stock, (the “DPW Shares”). The DPW Shares were to be issued in three equal installments, with the initial installment vesting the day after the Closing and the remaining installments vesting on each of the first two (2) anniversaries of the Closing. The rights and obligations under the Consulting Agreement were assigned to Mr. Lucatz along with the DPW Shares. | ||||||||
Seller parties board members amount | $ 2,500,000 | ||||||||
Mr. Marshak [Member] | |||||||||
Legal Proceedings (Details) [Line Items] | |||||||||
Release agreement for the payment | $ 315,000 | ||||||||
Maximum [Member] | |||||||||
Legal Proceedings (Details) [Line Items] | |||||||||
Share dollar amount | 1,500,000 | ||||||||
Purchase price | $ 5,250,000 | ||||||||
Minimum [Member] | |||||||||
Legal Proceedings (Details) [Line Items] | |||||||||
Purchase price | $ 4,000,000 | ||||||||
Minimum [Member] | Share Dollar Amount Reduced [Member] | |||||||||
Legal Proceedings (Details) [Line Items] | |||||||||
Share dollar amount | $ 500,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | |
Oct. 27, 2021 | Aug. 23, 2021 | |
Subsequent Events (Details) [Line Items] | ||
Subsequent event, description | Beijing Yibao , Guangxi Zhongtong, and two shareholders of Guangxi Zhongtong entered into a capital increase agreement, pursuant to which Beijing Yibao will invest RMB30 million RMB (USD 4.7 million) into Guangxi Zhongtong. After the investment, Beijing Yibao will hold 60% of the shares in Guangxi Zhongtong and be the controlling shareholder. The VIE agreements signed with Guangxi Zhongtong on January 1, 2021 would become void once the full investment was received. On October 21, 2021, Guangxi Zhongtong received the funds transferred by Beijing Yibao and the transaction was completed. | |
Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Subsequent event, description | On October 27, 2021, Bokefa transferred a loan to the shareholders of All Weather in the total amount of RMB 30 million (approximately $4.7 million). |