Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
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 | 129,566,207 | |
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, 2022 | |
Document Fiscal Year Focus | 2022 | |
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, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 68,351 | $ 94,930 |
Accounts receivable, net | 9,084 | 17,879 |
Related parties | 8,533 | 5,134 |
Other current assets | 10,319 | 9,554 |
Total current assets | 96,287 | 127,497 |
Property and equipment, net | 611 | 677 |
Intangible assets, net | 19,059 | 21,442 |
Goodwill | 19,788 | 19,788 |
Operating lease right of use assets | 1,711 | 1,921 |
Long-term deposit and prepaid expenses | 508 | 824 |
Deferred tax assets | 2,893 | 1,764 |
Restricted cash escrow | 2,388 | 2,417 |
Investment in equity - Micronet Ltd. | 924 | 1,481 |
Total long-term assets | 47,882 | 50,314 |
Total assets | 144,169 | 177,811 |
Short-term loan | 761 | 1,657 |
Trade accounts payable | 8,536 | 14,416 |
Deposit held on behalf of clients | 1,495 | 3,101 |
Related party | 728 | 4 |
Operating lease short term liability | 1,025 | 1,298 |
Other current liabilities | 7,121 | 4,914 |
Total current liabilities | 19,666 | 25,390 |
Operating lease long term liabilities | 763 | 691 |
Deferred tax liabilities | 3,340 | 3,952 |
Accrued severance pay | 49 | 56 |
Total long-term liabilities | 4,152 | 4,699 |
Total liabilities | 23,818 | 30,089 |
Stockholders’ Equity: | ||
Common stock: $0.001 par value, 250,000,000 shares authorized, 129,566,207 and 122,435,576 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 129 | 122 |
Additional paid in capital | 224,889 | 220,786 |
Accumulated other comprehensive (loss) | (522) | (414) |
Accumulated deficit | (107,088) | (76,394) |
MICT, Inc. stockholders’ equity | 117,408 | 144,100 |
Non-controlling interests | 2,943 | 3,622 |
Total equity | 120,351 | 147,722 |
Total liabilities and stockholders’ equity | $ 144,169 | $ 177,811 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
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 | 129,566,207 | 122,435,576 |
Common stock, shares outstanding | 129,566,207 | 122,435,576 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 13,757 | $ 18,515 | $ 35,278 | $ 39,791 |
Cost of revenues | 10,563 | 15,769 | 28,746 | 34,436 |
Gross profit | 3,194 | 2,746 | 6,532 | 5,355 |
Operating expenses: | ||||
Research and development | 568 | 396 | 1,509 | 1,015 |
Selling and marketing | 1,321 | 1,521 | 4,873 | 3,874 |
General and administrative | 9,233 | 6,618 | 30,224 | 26,039 |
Amortization of intangible assets | 787 | 732 | 2,381 | 2,301 |
Total operating expenses | 11,909 | 9,267 | 38,987 | 33,229 |
Loss from operations | (8,715) | (6,521) | (32,455) | (27,874) |
Gain (Loss) from equity investment | (186) | 799 | (557) | 636 |
Other income (loss), net | (303) | (13) | 535 | 70 |
Financial income (expenses), net | 371 | 336 | (718) | 61 |
Loss from loss of control in Micronet Ltd | (1,934) | |||
Loss before income taxes | (8,833) | (5,399) | (33,195) | (29,041) |
Tax benefit | (701) | (70) | (1,782) | (410) |
Net loss | (8,132) | (5,329) | (31,413) | (28,631) |
Net loss attributable to non-controlling interests | (461) | (1) | (719) | (446) |
Net loss attributable to MICT, Inc. | $ (7,671) | $ (5,328) | $ (30,694) | $ (28,185) |
Loss per share attributable to MICT, Inc. | ||||
Basic and diluted loss per share (in Dollars per share) | $ (0.06) | $ (0.05) | $ (0.24) | $ (0.26) |
Weighted average common shares outstanding: | ||||
Basic and diluted (in Shares) | 129,566,207 | 121,419,308 | 126,184,400 | 109,222,674 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Operations (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Diluted loss per share | $ (0.06) | $ (0.05) | $ (0.24) | $ (0.26) |
Diluted | 129,566,207 | 121,419,308 | 126,184,400 | 109,222,674 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (8,132) | $ (5,329) | $ (31,413) | $ (28,631) |
Other comprehensive loss, net of tax: | ||||
Currency translation adjustment | (646) | (412) | (108) | (127) |
Total comprehensive loss | (8,778) | (5,741) | (31,521) | (28,758) |
Comprehensive loss attributable to non-controlling stockholders | (448) | (1) | (679) | (643) |
Comprehensive loss attributable to MICT, Inc. | $ (8,330) | $ (5,740) | $ (30,842) | $ (28,115) |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Capital reserve related to transaction with the minority stockholders | Non- controlling Interest | Total | |
Balance at beginning at Dec. 31, 2020 | $ 68 | $ 102,333 | [1] | $ (39,966) | $ (196) | $ (174) | $ 3,631 | $ 65,696 |
Balance at beginning (in Shares) at Dec. 31, 2020 | 68,757,450 | |||||||
Shares issued to service providers and employees | $ 7 | 9,869 | [1] | 9,876 | ||||
Shares issued to service providers and employees (in Shares) | 7,010,020 | |||||||
Stock based compensation | 585 | [1] | 585 | |||||
Exercising options for employees and consultants | 80 | [1] | 80 | |||||
Exercising options for employees and consultants (in Shares) | 60,000 | |||||||
Net loss | [1] | (28,185) | (446) | (28,631) | ||||
Other Comprehensive loss | [1] | (127) | 174 | (197) | (150) | |||
Loss of control of subsidiary | [1] | (2,989) | (2,989) | |||||
Issuance of shares upon November 2020 Securities Purchase Agreement | $ 3 | 2,673 | [1] | 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 | [1] | 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 | [1] | 48,690 | ||||
Issuance of shares upon March 2021 Securities Purchase Agreement (in Shares) | 19,285,715 | |||||||
Exercising warrants | $ 2 | 2,472 | [1] | 2,474 | ||||
Exercising warrants (in Shares) | 2,450,487 | |||||||
Balance at ending at Sep. 30, 2021 | $ 122 | 220,660 | [1] | (68,151) | (323) | (1) | 152,307 | |
Balance at ending (in Shares) at Sep. 30, 2021 | 122,435,576 | |||||||
Balance at beginning at Jun. 30, 2021 | $ 121 | 218,373 | [1] | (62,823) | 89 | 155,760 | ||
Balance at beginning (in Shares) at Jun. 30, 2021 | 120,700,995 | |||||||
Shares issued to service providers and employees | $ 1 | 1,500 | [1] | 1,501 | ||||
Shares issued to service providers and employees (in Shares) | 910,020 | |||||||
Stock based compensation | 127 | [1] | 127 | |||||
Exercising options for employees and consultants | 52 | [1] | 52 | |||||
Exercising options for employees and consultants (in Shares) | 40,000 | |||||||
Net loss | [1] | (5,328) | (1) | (5,329) | ||||
Other Comprehensive loss | [1] | (412) | (412) | |||||
Exercising warrants | 608 | [1] | 608 | |||||
Exercising warrants (in Shares) | 784,561 | |||||||
Balance at ending at Sep. 30, 2021 | $ 122 | 220,660 | [1] | (68,151) | (323) | (1) | 152,307 | |
Balance at ending (in Shares) at Sep. 30, 2021 | 122,435,576 | |||||||
Balance at beginning at Dec. 31, 2021 | $ 122 | 220,786 | (76,394) | (414) | 3,622 | 147,722 | ||
Balance at beginning (in Shares) at Dec. 31, 2021 | 122,435,576 | |||||||
Shares issued to service providers and employees | $ 7 | 3,817 | 3,824 | |||||
Shares issued to service providers and employees (in Shares) | 7,130,631 | |||||||
Stock based compensation | 286 | 286 | ||||||
Net loss | (30,694) | (719) | (31,413) | |||||
Other Comprehensive loss | (108) | 40 | (68) | |||||
Balance at ending at Sep. 30, 2022 | $ 129 | 224,889 | (107,088) | (522) | 2,943 | 120,351 | ||
Balance at ending (in Shares) at Sep. 30, 2022 | 129,566,207 | |||||||
Balance at beginning at Jun. 30, 2022 | $ 129 | 224,838 | (99,417) | 124 | 3,391 | 129,065 | ||
Balance at beginning (in Shares) at Jun. 30, 2022 | 129,566,207 | |||||||
Stock based compensation | 51 | 51 | ||||||
Net loss | (7,671) | (461) | (8,132) | |||||
Other Comprehensive loss | (646) | 13 | (633) | |||||
Balance at ending at Sep. 30, 2022 | $ 129 | $ 224,889 | $ (107,088) | $ (522) | $ 2,943 | $ 120,351 | ||
Balance at ending (in Shares) at Sep. 30, 2022 | 129,566,207 | |||||||
[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_7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (31,413) | $ (28,631) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
loss of control in Micronet Ltd. | 1,934 | |
Loss (gain) from equity investment | 557 | (636) |
Depreciation and amortization | 2,581 | 2,416 |
Provision for doubtful accounts | 1,114 | |
Issuance of shares for employees and consultants | 3,825 | |
Stock-based compensation for employees and consultants | 286 | 585 |
Changes in assets and liabilities: | ||
Change in deferred taxes, net | (1,741) | (736) |
Change in long-term deposit and prepaid expenses | 316 | 224 |
Change in right of use assets | 210 | (250) |
Change in lease liabilities | (200) | 165 |
Due to related party | 491 | (113) |
Accrued interest and exchange rate differences on Short-term loan | (173) | |
Decrease (increase) in trade accounts receivable, net | 7,681 | (19,556) |
Increase in other current assets | (766) | (5,537) |
(Decrease) increase in trade accounts payable | (5,858) | 17,949 |
Decrease in deposit held on behalf of client | (1,606) | |
Increase (decrease) in other current liabilities | 2,207 | (2,895) |
Net cash used in operating activities | (22,489) | (35,081) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (131) | (546) |
Cash acquired through business combination - Magpie (Appendix B) | 1,834 | |
Payment on business acquired - Beijing Fucheng (Appendix A) | (4,891) | |
Loan to related party | (857) | |
Net cash acquired on a variable interest entity acquired - Guangxi Zhongtong | 460 | |
Net cash acquired on a variable interest entity acquired – All Weather (Appendix E) | 755 | |
Loan to related party – Shareholders of All weather | (776) | |
Receipt of loan from related party (Micronet) | 534 | |
Loan to Tingo pursuant to the merger agreement | (3,700) | |
Deconsolidation of Micronet Ltd. (Appendix C) | (2,466) | |
Net cash used in investing activities | (3,297) | (6,487) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of bank loans | (195) | |
Repayment of short-term loan | (723) | |
Proceeds from issuance of shares and warrants | 115,242 | |
Proceeds from exercise of warrants | 2,554 | |
Net cash (used in) provided by financing activities | (723) | 117,601 |
TRANSLATION ADJUSTMENT ON CASH AND RESTRICTED CASH | (99) | 207 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | (26,608) | 76,240 |
Cash and restricted cash at beginning of the period | 97,347 | 29,049 |
Cash and restricted cash at end of the period | 70,739 | 105,289 |
Amount paid during the period for: | ||
Interest | 5 | 27 |
Taxes | 254 | 195 |
Cash at end of the period | 68,351 | 105,289 |
Restricted cash at end of the period | 2,388 | |
Cash and restricted cash at end of the period | $ 70,739 | $ 105,289 |
Unaudited Condensed Consolida_8
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | Jul. 01, 2021 | May 09, 2021 | Feb. 26, 2021 | Feb. 10, 2021 | Jun. 23, 2020 |
Beijing Fucheng | |||||
Net working capital | $ 106 | ||||
Property and equipment | 26 | ||||
Current liabilities | (55) | ||||
Intangible assets | 4,814 | ||||
Cash | $ 4,891 | ||||
Magpie Securities Limited | |||||
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. | |||||
Net working capital | $ (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) | ||||
Micronet Ltd.investment in fair value | (1,573) | ||||
Non-current liabilities | (558) | ||||
Accumulated other comprehensive income | (28) | ||||
Minority interest | (2,172) | ||||
Property and equipment | 661 | ||||
Intangible assets | 2,475 | ||||
Goodwill | 2,618 | ||||
Right of use assets | 310 | ||||
Other assets | 26 | ||||
Borrowings | (1,676) | ||||
Cash | (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 | ||||
Cash | $ (460) |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
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 Tianjin Bokefa Technology Co., Ltd. (“Bokefa”). On June 10, 2020, MICT Telematics purchased 5,999,996 ordinary shares of Micronet Ltd. (“Micronet”) for aggregate proceeds of New Israeli Shekel (“NIS”) 1,800 (or $515) through tender offer issued by MICT Telematics. As a result, increased our ownership interest in Micronet to 45.53% of Micronet’s issued and outstanding ordinary shares. Subsequently, on June 23, 2020, we purchased, through a public offering consummated by Micronet on the Tel Aviv Stock Exchange (the “TASE”), 10,334,000 of Micronet’s ordinary shares for total consideration of NIS 3,100 (or $887). As a result, we increased our ownership interest in Micronet to 53.39% of Micronet’s outstanding ordinary shares. MICT applied purchase accounting and began to consolidate Micronet’s operating results into our financial statements once the offering was consummated. MICT recognized a $665 gain on previously held equity in Micronet. On October 11, 2020, Micronet consummated a public equity offering on the TASE, in which the Company purchased 520,600 of Micronet’s ordinary shares and 416,480 of Micronet’s stock options convertible into 416,480 Micronet ordinary shares (at a conversion price of NIS 3.5 per share), for total consideration of NIS 4,961 (or $1,417). Following Micronet’s offering, including the purchase of Micronet shares, the exercise of our stock options and the additional purchase of 115,851 Micronet shares from an individual seller, our ownership interest in Micronet was diluted from 53.39% to 50.31% of Micronet’s outstanding share capital. On May 9, 2021, following the exercise of options by minority stockholders, the Company’s ownership interest was further diluted to 49.88% and, as a result we no longer consolidate Micronet’s operating results in our financial statements. As of May 9, 2021, the. Company accounted for the investment in Micronet using the equity method of accounting. Prior to July 1, 2020, MICT operated primarily through its Israel-based majority-owned subsidiary, Micronet. Since July 1, 2020, after MICT completed its acquisition of GFHI pursuant to that certain agreement and plan of merger entered into on November 7, 2019 by and between MICT, GFHI, Global Fintech Holding Ltd. (“GFH”), a British Virgin Islands company and the sole shareholder of GFHI, and MICT Merger Subsidiary Inc., a British Virgin Islands company and a wholly owned subsidiary of MICT, as amended and restated on April 15, 2020 (the “Restated Merger Agreement” or “Merger”). MICT is a holding company conducting financial technology business through its subsidiaries and entities controlled through various VIEs arrangements with a marketplace in China, as well as other areas of the world, and is currently in the process of building various platforms for business opportunities in different insurance platform segments (formerly: 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 $3,000 (the “Purchase Price”). Magpie is licensed to trade securities on leading exchanges in Hong Kong, the U.S. and China, including China A-Shares, all of which are the primary target markets for Company’s global fintech business. The Strategic Agreement provided that the acquisition would be consummated in two phases, an initial purchase whereby 9% of the share capital of Magpie was acquired and thereafter, the remaining 91% of Magpie would be purchased by BI Intermediate upon, and subject to, the approval of the Hong Kong Securities and Futures Commission (the “SFC”), the principal regulator of Hong Kong’s securities and futures markets. On November 11, 2020, BI Intermediate closed on its acquisition of the first 9% and paid 9% of the Purchase Price. Additionally, pursuant to the Strategic Agreement upon the initial closing, BI Intermediate loaned Magpie an amount equivalent to the remaining 91% of the Purchase Price. Upon closing on the remaining 91%, which remained subject to SFC approval, the loan will be cancelled, and BI Intermediate will acquire the remaining 91% of Magpie. The loan was secured against the pledge of 91% of the share capital of Magpie purchased at such time by BI Intermediate. The obligations of Magpie have been guaranteed by its majority shareholder. On February 26, 2021, we finalized the acquisition of Magpie. The acquisition was consummated following the receipt of approval from the SFC effecting the change in the majority shareholder of Magpie. In consideration for the entire share capital of Magpie, we paid a total Purchase Price of $2,947 (reflecting the net asset value of Magpie estimated at $2,034 recorded as a working capital, and a premium $902 that was recorded as a license in the intangible assets). The Company, through and together with the Company’s wholly owned subsidiaries, Beijing Magpie Securities Consulting Services Co., Ltd (“Beijing Magpie”) and Shenzhen Magpie Information Consulting Technology Co., Ltd (“Shenzhen Magpie”), are in the process of integrating its mobile app platform with Magpie’s licensed trading assets. Upon completion of the acquisition of 100% of the equity interest in Magpie, we were able to obtain the licenses and permits needed for operating our online platform. After we complete the appropriate system testing to ensure scale and reliability, we will be in a position to notify the Hong Kong regulator of our intended launch date. Our initial plan is to launch the online stock trading platform in Hong Kong. On January 1, 2021, we entered into a transaction through our wholly-owned subsidiary, Bokefa, with the shareholders of Guangxi Zhongtong Insurance Agency Co., Ltd (“Guangxi Zhongtong”), a local Chinese entity with business and operations in the insurance brokerage business. Pursuant to the transaction, we loaned the Guangxi Zhongtong shareholders through a frame work loan (the “GZ Frame Work Loan”) the amount of up to RMB 40,000 (approximately $6,125) (“GZ Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for Guangxi Zhongtong. As of September 30, 2022, only RMB 8,010 (approximately $1,243) was drawn down from the GZ Frame Work Loan for working capital and approximately $919 was drawn down for loans to shareholders of Guangxi Zhongtong (as stipulated in the agreement). In consideration for the GZ Frame Work Loan, the parties entered into various additional agreements which was structured pursuant to a Variable Interest Entity (“VIE”) Structure (in which we do not hold the shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with Guangxi Zhongtong, we are regarded as Guangxi Zhongtong’s controlling entity and primary beneficiary of Guangxi Zhongtong business. We have, therefore, consolidated the financial position and operating results of Guangxi Zhongtong into our consolidated financial statements, using the fair value of the assets and liabilities of Guangxi Zhongtong in accordance with U.S. GAAP. Beijing Fucheng Lianbao Technology Co., Ltd (“Beijing Fucheng”) is an entity incorporated on December 29, 2020, in which Bokefa owns 24% equity interest with the remaining 76% controlled by Bokefa through VIE agreements. On February 10, 2021, Beijing Fucheng acquired all of the shares of Beijing Yibao Technology Co., Ltd., (“Beijing Yibao”) which holds 100% of the equity interest in Beijing Fucheng Insurance Brokerage Co., Ltd. (“Fucheng Insurance”). Fucheng Insurance is a Chinese insurance brokerage agency and a nation-wide licensed entity which offers insurance brokerage services for a broad range of insurance products. Fucheng Insurance, through their nationwide license, will give us the flexibility to offer and create tailor-made insurance products, leverage customers directly or through distribution partners and procure better deals with both our existing and new insurance company partners. Fucheng Insurance further enables us to accelerate the onboarding of new agents onto our platforms all throughout China. It also creates the opportunity to promote our business through some of China’s biggest online portals, which will provide business-to-business-to-consumer (B2B2C) as well as business-to-consumer (B2C) channels. When Fucheng Insurance initiates its nationwide rollout of its mobile application, it will facilitate access to those portals’ large customer bases which will also offer MICT’S full suite of insurance products. Beijing Fucheng shares were acquired for approximately $5,700, and funded through MICT. For further information please refer to Note 7. On June 16, 2021, Micronet announced that it completed a public equity offering on the TASE. Pursuant to the offering, Micronet sold an aggregate of 18,400 securities units (the “Units”) at a price of NIS 14.6 per Unit with each Unit consisting of 100 ordinary shares, 25 series A options and 75 series B options, resulting in the issuance of 1,840,000 ordinary shares, 460,000 series A options and 1,380,000 series B options. Micronet raised total gross proceeds of NIS 26,864 (approximately $8,290) in the offering. The Company did not participate in the offering, and, as a result, the Company owned 31.47% of the outstanding ordinary shares of Micronet and 26.77% on a fully diluted basis as of September 30, 2022. On July 1, 2021, Bokefa entered into a transaction with the shareholders of All Weather Insurance Agency Co., Ltd (“All Weather”), a local Chinese entity with business and operations in the field of broker insurance (the “Transaction”). Pursuant to the Transaction, Bokefa agreed to provide the All Weather shareholders with a frame work loan (the “AW Frame Work Loan”) for a total amount of up to RMB 30,000 (approximately $4,700) (the “AW Frame Work Loan Amount”) which, if utilized, will be used for working capital purposes of All Weather. In consideration for the AW Frame Work Loan, the parties entered into various additional agreements which was structured as a VIE structure (pursuant to which we do not technically hold the shares) and as a result of our direct ownership in Bokefa and its contractual arrangements with All Weather, we are regarded as All Weather’s controlling entity and the primary beneficiary of All Weather’s business. On October 27, 2021, the entire AW Frame Work Loan Amount was utilized by the All Weather shareholders and the AW Frame Work Loan Amount was transferred to All Weather for purposes of working capital. In addition, as of September 30, 2022, the Company granted All Weather shareholders an additional loan in the sum of approximately $776 to be provided in advance to a transaction between the parties pursuant to which the VIE structure described above shall be replaced by an equity structure for purchase by MICT of such equity interests in All Weather on such commercial and other terms to be agreed by the parties. All Weather Appraisal Co., Ltd. (All Weather Appraisal) is a subsidiary of All Weather Insurance Agency Co., Ltd, which holds 99.6% equity in All Weather Appraisal. All Weather Appraisal is a nationwide company and is approved by the China Banking and Insurance Regulatory Commission, specializing in the appraisal, evaluation, inspection and damage assessment of subjects of Insurance. On August 23, 2021, Beijing Yibao Technology Co., Ltd, Guangxi Zhongtong Insurance Agency Co., Ltd, and two shareholders of Guangxi Zhongtong entered into a capital increase agreement pursuant to which Beijing Yibao will invest approximately RMB30,000 ($4,700) into Guangxi Zhongtong. On October 21, 2021, Beijing Yibao transferred the funds separately and the transaction closed. As a result of the transaction, Beijing Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the closing, the previous agreements consummated on January 1, 2021, per the GZ Frame Work Loan became null and void, and the loan should be repaid by the shareholders before December 31, 2022. From January through September 2021, Shenzhen Bokefa Technology Co., Ltd (“Shenzhen Bokefa”) and Tianjin Dibao Technology Co., Ltd (“Tianjin Dibao”) were established under BI Intermediate as holding companies to further develop the Company’s insurance business in China. As of September 30, 2022, no substantial operations conducted in those two entities. Our current business, following the completion of the acquisition of GFHI, is primarily comprised and focused on the growth and development of the GFHI financial technology offerings and the marketplace in China. We are in the process of building various platforms for business opportunities in different insurance platform segments (formerly: verticals and technology segments) in order to capitalize on such technology and business. As a result of our acquisition of GFHI and the subsequent work we have undertaken with the management of GFHI, we are positioned to establish ourselves, through our operating subsidiaries and VIEs, to serve the markets as a financial technology company with a significant Chinese marketplace. We plan to expand on a global level as we continue to scale our business. GFHI has built various platforms to capitalize on business opportunities in a range of insurance platform segments (formerly: verticals and technology segments), which currently include stock trading and wealth management, commodities in segments of oil and gas trading and insurance brokerage. We are seeking to secure material contracts in all of these market segments in China while also developing opportunities in order to allow GFHI access to these markets. We will continue to increase the capabilities of our platforms through acquisition and/or licensing different technologies to support our efforts. By building secure, reliable and scalable platforms with high volume processing capability, we intend to provide customized solutions that address the needs of a highly diverse and broad client base. We implemented our plans by capitalizing on Intermediate’s experience with local markets in China, as well as with the Company’s operating subsidiaries, which have begun to secure material contracts in fast growing market segments in China. Our current opportunities have given us access the following market segments: ● Stock trading and wealth management segment; ● Commodities in the field of Oil and gas trading segment; and ● Insurance brokerage segment These opportunities will continue to be realized and executed through our business development efforts, which include the acquisition of potential target entities, business and assets (such as applicable required licenses) in the relevant business space and segments in which we plan to operate. This allows the Company to enter into the market quickly and leverage existing assets in order to promote our growth strategy. On April 2, 2022, Shanghai Zhengzhong Energy Technology Co., Ltd. (Zhengzhong Energy”), our wholly owned subsidiary, entered into a transaction with the shareholders of Tianjin Dibao Technology Development Co. Ltd.(“Tianjin Dibao”) the parties have entered into various additional agreements, which was structured pursuant to a Variable Interest Entity (VIE) Structure according to which Zhengzhong Energy is the primary beneficiary of the 76% interest in Dibao, and the remaining 24% equity was held directly by Zhengzhong Energy. On April 5, 2022, Beijing Fucheng Lianbao disposed its subsidiary of Beijing Fucheng Prospect Technology Co., Ltd (“Fucheng Prospect”). The shares previously held by Beijing Fucheng Lianbao were transferred to an individual Wang Yuanyuan on April 5, 2022. The stockholders’ deficit of Fucheng Prospect as of April 5, 2022, was $94 and transaction price was zero. The Company recognized a gain of $ 94 for disposing and stopped consolidating its financials starting from April. The following diagram illustrates the Company’s corporate structure, including its subsidiaries, and variable interest entities (“VIEs”), as of September 30, 2022: VIE agreements with Guangxi Zhongtong: On January 1, 2021, Bokefa, our wholly foreign-owned enterprise (“WFOE”), Guangxi Zhongtong, and nominee shareholders of Guangxi Zhongtong entered into six agreements, described below, pursuant to which Bokefa is deemed to have controlling financial interest and be the primary beneficiary of Guangxi Zhogntong. Therefore, Guangxi Zhongtong is deemed a VIE of Bokefa: Loan Agreement Pursuant to this agreement, Bokefa agreed to provide loans to the registered shareholders of Guangxi Zhongtong. The term of the loan shall start from the date when the loan is actually paid, until the date on which the loan is repaid in full. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely for Guangxi Zhongtong’s operating expenses and should be exclusively repaid by transferring shares of Guangxi Zhongtong to Bokefa when PRC Law permits. Exclusive Option Agreement The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all the equity interest of Guangxi Zhongtong to Bokefa in accordance with relevant laws and provisions as provided in the agreement, or upon written notice by Bokefa to shareholders. In consideration of Bokefa’s loan arrangement, the shareholders have agreed to grant Bokefa an exclusive option to purchase their equity interest. Distribution of residual profits, if any, are restricted without the approval of Bokefa. Upon request by Bokefa, Guangxi Zhongtong is obligated to distribute profits to the shareholders of Guangxi Zhongtong, who must remit such profits to Bokefa immediately. Guangxi Zhongtong and its shareholders are required to act in a manner that is in the best interest of Bokefa with regards to Guangxi Zhongtong’s business operation. Equity Pledge Agreement The agreement will be terminated upon such date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholders pledged all their equity interest in Guangxi Zhongtong to Bokefa as security for the obligations in the other agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa. 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. On August 23, 2021, Beijing Yibao Technology Co., Ltd, Guangxi Zhongtong Insurance Agency Co., Ltd, and two shareholders of Guangxi Zhongtong entered into a capital increase agreement pursuant to which Beijing Yibao will invest approximately RMB30,000 ($4,700) into Guangxi Zhongtong. On October 21, 2021, Beijing Yibao transferred the funds separately and the transaction closed. As a result of the transaction, Beijing Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the closing, the previous agreements consummated on January 1, 2021, per the GZ Frame Work Loan became null and void, and the loan should be repaid by the shareholders before December 31, 2022. VIE agreements with Beijing Fucheng: On December 31, 2020, as amended on August 25, 2021, Bokefa, Beijing Fucheng Lianbao Technology Co., Ltd. (“Beijing Fucheng”), and the shareholders of Beijing Fucheng entered into six agreements, described below, pursuant to which Bokefa is deemed to have a controlling financial interest and be the primary beneficiary of Beijing Fucheng. Therefore, Beijing Fucheng is deemed a VIE of Bokefa. Beijing Fucheng was incorporated on December 29, 2020 and had no assets or liabilities as of December 31, 2020. Loan Agreement Pursuant to this agreement, Bokefa agreed to provide loans to the registered shareholders of Beijing Fucheng. The term of the loan under this agreement shall start from the date when the loan is actually paid and shall continue until the shareholders repay all the loan in accordance with this agreement. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely for Beijing Fucheng’s operating expenses, and should be exclusively repaid by transferring shares of Beijing Fucheng to Bokefa when PRC Law permits. Exclusive Option Agreement The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of Beijing 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 their obligations under the agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa. Business Cooperation Agreement The agreement is effective until terminated by both parties. Beijing Fucheng and its shareholders agree that the legal person, directors, general manager and other senior officers of Beijing Fucheng should be appointed or elected by Bokefa. Beijing Fucheng and its shareholders agree that all financial and operational decisions of Beijing Fucheng will be made by Bokefa. Exclusive Service Agreement The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to Beijing Fucheng and Beijing Fucheng agrees to pay service fees to Bokefa. Entrustment and Power of Attorney Agreement The shareholders of Beijing Fucheng agreed to entrust all the rights to exercise their voting power and any other rights as shareholders of Beijing Fucheng to Bokefa. The shareholders of Beijing Fucheng have each executed an irrevocable power of attorney to appoint Bokefa as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until deregistration of Beijing Fucheng. VIE agreements with All Weather: On July 1, 2021, Bokefa, All Weather, and nominee shareholders of All Weather entered into six agreements, described below, pursuant to which Bokefa is deemed to have a controlling financial interest and be the primary beneficiary of All Weather. All Weather is deemed a VIE of Bokefa. Loan Agreement Pursuant to this agreement, Bokefa agreed to provide loans to the shareholders of All Weather. The term of the loan is one year and shall start from the date when the loan is actually paid. The agreement shall terminate when the shareholders repay the loan. The loan should be used solely by All Weather for operating expenses, and should be exclusively repaid by transferring shares of All Weather to Bokefa when PRC Law permits. Exclusive Option Agreement The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of All Weather to Bokefa in accordance with relevant laws and provisions in the agreement, or upon written notice by Bokefa to the shareholders. In consideration for Bokefa’s loan arrangement, the shareholders have agreed to grant Bokefa an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Bokefa. Upon request by Bokefa, All Weather is obligated to distribute profits to the shareholders of All Weather, who must remit the profits to Bokefa immediately. All Weather and its shareholders are required to act in a manner that is in the best interest of Bokefa with regard to All Weather’s business operations. Equity Pledge Agreement The agreement will be terminated at the date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholders pledged all of their equity interest in All Weather to Bokefa as security for their obligations pursuant to the other agreements. Bokefa has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Bokefa. Business Cooperation Agreement The agreement is effective until terminated by both parties. All Weather and its shareholders agree that the legal person, directors, general manager and other senior officers of All Weather should be appointed or elected by Bokefa. All Weather and its shareholders agree that all the financial and operational decisions of All Weather will be made by Bokefa. Exclusive Service Agreement The effective term of this agreement is for one year and it can be extended an unlimited number of times if agreed by both parties. Bokefa agrees to provide exclusive technical consulting and support services to All Weather and All Weather agrees to pay service fees to Bokefa. Entrustment and Power of Attorney Agreement The shareholders of All Weather agreed to entrust all their rights to exercise their voting power and any other rights as shareholders of All Weather to Bokefa. The shareholders of All Weather have each executed an irrevocable power of attorney to appoint Bokefa as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until the deregistration of All Weather. VIE agreements with Tianjin Dibao: On April 2, 2022, Zhengzhong Energy, Tianjin Dibao, and nominee shareholder of Tianjin Dibao entered into six agreements, described below, pursuant to which Zhengzhong Energy is deemed to have a controlling financial interest and be the primary beneficiary of Tianjin Dibao. Tianjin Dibao is deemed a VIE of Zhengzhong Energy. Loan Agreement Pursuant to this agreement, Zhengzhong Energy agreed to provide loans to the shareholder of Tianjin Dibao. The term of the loan shall start from the date when the loan is actually paid. The agreement shall terminate when the shareholder repay the loan. The loan should be used solely to purchase Tianjin Dibao‘s 76% equity, and should be exclusively repaid by transferring shares of Tianjin Dibao to Zhengzhong Energy when PRC Law permits. Exclusive Option Agreement The effective term of the agreement is unlimited and the agreement shall terminate upon the transfer of all of the equity interest of Tianjin Dibao to Zhengzhong Energy in accordance with relevant laws and provisions in the agreement, or upon written notice by Zhengzhong Energy to the shareholder. In consideration for Zhengzhong Energy’s loan arrangement, the shareholder have agreed to grant Zhengzhong Energy an exclusive option to purchase their equity interest. Distribution of residual profits, if any, is restricted without the approval of Zhengzhong Energy. Upon request by Zhengzhong Energy, Tianjin Dibao is obligated to distribute profits to the shareholder of Tianjin Dibao, who must remit the profits to Zhengzhong Energy immediately. Tianjin Dibao and its shareholder are required to act in a manner that is in the best interest of Zhengzhong Energy with regard to Tianjin Dibao’s business operations. Equity Pledge Agreement The agreement will be terminated at the date when the other agreements have been terminated. Pursuant to the agreement, the nominee shareholder pledged all of their equity interest in Tianjin Dibao to Zhengzhong Energy as security for their obligations pursuant to the other agreements. Zhengzhong Energy has the right to receive dividends on the pledged shares, and all shareholders are required to act in a manner that is in the best interest of Zhengzhong Energy. Business Cooperation Agreement The agreement is effective until terminated by both parties. Tianjin Dibao and its shareholders agree that the legal person, directors, general manager and other senior officers of Tianjin Dibao should be appointed or elected by Zhengzhong Energy. Tianjin Dibao and its shareholder agree that all the financial and operational decisions of Tianjin Dibao will be made by Zhengzhong Energy. 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. Zhengzhong Energy agrees to provide exclusive technical consulting and support services to Tianjin Dibao and Tianjin Dibao agrees to pay service fees to Zhengzhong Energy. Entrustment and Power of Attorney Agreement The shareholder of Tianjin Dibao agreed to entrust all their rights to exercise their voting power and any other rights as shareholder of Tianjin Dibao to Zhengzhong Energy. The shareholder of Tianjin Dibao have each executed an irrevocable power of attorney to appoint Zhengzhong Energy as their attorney-in-fact to vote on their behalf on all matters requiring shareholder approval. The agreement is effective until the deregistration of Tianjin Dibao. The assets and liabilities of the Company’s VIEs (All Weather, Beijing Fucheng and Tianjin Dibao) included in the Company’s unaudited condensed consolidated financial statemen |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 annual report on Form 10-K filed on June 17, 2022. The Company’s operations and business may still be subject to adverse effect due to the unprecedented conditions surrounding the spread of COVID-19 throughout North America, Israel, China and the rest of the world. Although currently the COVID-19 (due to the measures implemented to reduce the spread of the virus) have not had a material adverse effect on the Company’s consolidated financial reports, however, there were lockdowns in numerous provinces, , which cause a decrease in revenues from Guangxi Zhongtong as a result of the lockdown in certain cities and regions due to the COVID-19 impacts.; there can be no assurance that Company’s financial reports will not be affected in the future from COVID-19 or resulting from restrictions and other government actions. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. GAAP. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries and variable interest entities. All significant intercompany transactions and balances among the Company and its subsidiaries are eliminated upon consolidation. 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. Restricted Cash The Company as an insurance broker is required to reserve 10% of its registered capital in cash held in an escrow bank account pursuant to the China Insurance Regulatory Commission (“CIRC”) rules and regulations. As of September 30, 2022 and December 31, 2021, restricted cash amounted to $2,388 and $2,417 respectively. 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, 2022 and December 31, 2021, allowance for doubtful accounts amounted to approximately $3,369 and $2,606, respectively. 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, 2022 and December 31, 2021. Investments The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary. As of September 30, 2022 and December 31, 2021, the Company owned 31.47% and 36.8%, respectively, of shares in Micronet which was accounted for under equity method. As of September 30, 2022 and December 31, 2021, the Company owned 24% of the shares in Beijing Fucheng and was the primary beneficiary of the remaining 76% of Beijing Fucheng through contractual arrangements as discussed in Note 1. Beijing Fucheng was therefore 100% consolidated in the unaudited condensed consolidated financial statements. 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, 2022 and December 31, 2021. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Licensed & software indefinite useful life and some of them for 10 years Technology know-how 6 years Trade name/ trademarks indefinite useful life and some of them for 5 years Customer relationship 5-10 years Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. We test goodwill for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The standard simplifies the accounting for goodwill impairment by requiring a goodwill impairment to be measured using a single step impairment model, whereby the impairment equals the difference between the carrying amount and the estimated fair value of the specified reporting units in their entirety. This eliminated the second step of the previous impairment model that required companies to first estimate the fair value of all assets in a reporting unit and measure impairments based on those estimated fair values and a residual measurement approach. It also specifies that any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company did not record any impairment of goodwill as of September 30, 2022 and December 31, 2021. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in our consolidated financial statements include the useful lives of plant and equipment and intangible assets, capitalized development costs, impairment of long-lived assets, goodwill, intangible assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position. Actual results could differ from these estimates. Revenue Recognition We recognize our revenue under ASC 606. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. 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 from the insurance division 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 at point in time when the requested information is delivered to the customer. The Company’s revenues from the online stock trading platform are generated from stock trading commission income. Magpie provides trade execution to its customers. Commission revenue is recognized when transfer of control occurs. Trade execution performance obligation generally occurs on the trade date because that is when the underlying financial instrument (for a purchase) or purchaser (for a sale) is identified and the pricing is agreed upon. 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 determined our promise to sell insurance policies on behalf of the insurance carriers to be recorded on a net basis as we are acting as an agent. Income Taxes Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. The Company applied FASB ASC Topic 740-10-25, “Income Taxes,” which provides guidance for recognizing and measuring uncertain tax positions and prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense. MICT and its subsidiaries and VIEs within the jurisdiction of the United States, Israel and China are subject to a tax examination for the most recent three, four and five years, respectively. Stock-Based Compensation Stock-based compensation granted to the Company’s employees and consultants are measured at fair value on grant date and stock-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares. At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the stock-based compensation changes significantly, stock-based compensation expense may differ materially in the future from that recorded in the current reporting period. Recently issued accounting pronouncements In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments Credit Losses Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company does not expect the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations”. The amendments in this Update address how to determine whether a contract liability is recognized by the acquirer in a business combination and resolve the inconsistency of measuring revenue contracts with customers acquired in a business combination by providing specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this Update apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combination-Overalls. For public business entities, ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application is permitted. The amendments in this Update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company does not expect the adoption of this standard to have a material impact on its unaudited condensed consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, comprehensive loss and cash flows. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022. This resulted in a stock-based compensation expense of approximately $284,973 recorded for the nine months ended September 30, 2022, 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. On May 10, 2022, MICT granted 1,659,500 shares of common stock of the Company to Cushman Holdings Limited, an unrelated third party, as an introducer fee for Tingo, Inc. On May 10, 2022, MICT granted 858,631 shares of common stock of the Company to China Strategic Investments Limited, an unrelated third party, in connection with the GFHI acquisition as discussed in Note 1. On May 10, 2022, MICT granted 612,500 shares of common stock of the Company to some of our Directors and employees. The shares were issued pursuant to the 2020 Incentive Plan. On May 10, 2022, the Company’s Board of Directors (the “Board”) unanimously approved a grant of fully vested 4,000,000 shares of common stock to Mr. Darren Mercer, the Company’s Chief Executive Officer. The shares were issued under the Company’s long term incentive plan as such long term incentive plan previously approved by the stockholders and negotiated in connection with the Company’s acquisition of Global Fintech Holdings Limited. The Board unanimously agreed to issue the shares in recognition of Mr. Mercer’s direct contribution to achieving numerous key deliverables including: (i) the completion of several acquisitions, including those of Fucheng Insurance and Magpie; (ii) obtaining regulatory approval from the Hong Kong SFC regarding the acquisition of Magpie; (iii) the execution of several major commercial contracts and partnerships, including with a number of major insurance agents and one of China’s largest payment service providers; (iv) the execution of an exclusive partnership with the Shanghai Petroleum and Natural Gas Trading Center to which allows MICT to provide financial services to its customers; (v) entered into an Agreement and Plan of Merger with Tingo (vi) the completion of capital raises totaling in excess of $140 million and broadening the Company’s institutional investor base. The following table summarizes information about stock options outstanding and exercisable as of September 30, 2022: Nine months ended Year ended Number of Weighted Number of Weighted Options outstanding at the beginning of period: 1,558,000 $ 1.74 1,158,000 $ 2.24 Changes during the period: Granted - $ - 740,000 $ 1.97 Exercised - $ - (60,000 ) $ 1.35 Forfeited (818,000 ) $ 1.54 (280,000 ) $ 1.41 Options outstanding at the end of the period 740,000 $ 1.97 1,558,000 $ 1.74 Options exercisable at the end of the period 484,167 $ 1.82 1,118,000 $ 1.57 The Company has warrants outstanding as follows: Warrants Average Remaining Balance, December 31, 2021 62,863,879 $ 2.854 4.5 Granted - $ - - Forfeited - $ - - Exercised - $ - - Balance, September 30, 2022 62,863,879 $ 2.854 4.25 |
Equity Investment in Micronet
Equity Investment in Micronet | 9 Months Ended |
Sep. 30, 2022 | |
Equity Investment in Micronet [Abstract] | |
EQUITY INVESTMENT IN MICRONET | NOTE 4 - EQUITY INVESTMENT IN 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 31.47% of the outstanding ordinary shares of Micronet and 26.77% on a fully diluted basis as of September 30, 2022. |
Loan to Micronet
Loan to Micronet | 9 Months Ended |
Sep. 30, 2022 | |
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. The loan was repaid on January 4, 2022. On August 13, 2020, MICT Telematics extended to Micronet an additional loan in the aggregate amount of $175 (the “Loan Sum”) which governed the existing outstanding intercompany debt. The loan does not bear any interest and has a term of twelve months. The Loan Sum was granted for the purpose of supporting Micronet’s working capital and general corporate needs. The loan was repaid on August 25, 2021. |
Beijing Fucheng Lianbao Technol
Beijing Fucheng Lianbao Technology Co., Ltd Transaction | 9 Months Ended |
Sep. 30, 2022 | |
Beijing Fucheng Lianbao Technology Co., Ltd Transaction [Abstract] | |
BEIJING FUCHENG LIANBAO TECHNOLOGY CO., LTD TRANSACTION | NOTE 6 — 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. 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 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 |
Guangxi Zhongtong Insurance Age
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition | 9 Months Ended |
Sep. 30, 2022 | |
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition [Abstract] | |
GUANGXI ZHONGTONG INSURANCE AGENCY CO., LTD ACQUISITION | NOTE 7 — Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition 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 granted loans to Guangxi Zhongtong’s shareholders through a frame work loan (the “GZ Frame Work Loan”) the amount of up to RMB 40,000 (approximately $6,125) (“GZ Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for Guangxi Zhongtong. As of September 30, 2022, only RMB 8,010 (approximately $1,243) was drawn down from the GZ Frame Work Loan for working capital and approximately $919 was drawn down for loans to shareholders of Guangxi Zhongtong (as stipulated in the agreement). In consideration for the GZ Frame Work Loan, the parties entered into various additional agreements which 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, Structure (in which we do not hold the shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with Guangxi Zhongtong, we are regarded as Guangxi Zhongtong’s controlling entity and primary beneficiary of Guangxi Zhongtong business. We have, therefore, consolidated the financial position and operating results of Guangxi Zhongtong into our consolidated financial statements, using the fair value of the assets and liabilities of Guangxi Zhongtong in accordance with U.S. GAAP. Beijing Fucheng Lianbao Technology Co., Ltd 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., which holds 100% of the equity interest in Beijing Fucheng Insurance Brokerage Co., Ltd. (“Fucheng Insurance”). Fucheng Insurance is a Chinese insurance brokerage agency and a nation-wide licensed entity which offers insurance brokerage services for a broad range of insurance products. Fucheng Insurance, through their nationwide license, will give us the flexibility to offer and create tailor-made insurance products, leverage customers directly or through distribution partners and procure better deals with both our existing and new insurance company partners. Fucheng Insurance further enables us to accelerate the onboarding of new agents onto our platforms all throughout China. It also creates the opportunity to promote our business through some of China’s biggest online portals, which will provide business-to-business-to-consumer (B2B2C) as well as business-to-consumer (B2C) channels. When Fucheng Insurance initiates its nationwide rollout of its mobile application, it will facilitate access to those portals’ large customer bases which will also offer MICT’S full suite of insurance products. Beijing Fucheng shares were acquired for approximately $5,700, and funded through MICT. On October 21, 2021, Yibao transferred such funds and the transaction closed. As a result of the transaction, Yibao now holds a sixty percent (60%) equity interest in Guangxi Zhongtong and is the controlling shareholder. As a condition of the Closing, the previous agreements consummated on January 1, 2021 per the Frame Work Loan became null and void. Purchased identifiable intangible assets are amortized on a straight-line basis over their respective useful lives. The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date: G uangxi Z I ., Total cash consideration (1) $ - Total Purchase Consideration $ - Less: Debt-free net working capital $ 613 Property and equipment 13 Intangible assets - Licenses 1,926 Intangible assets - customer relationship (1) 248 Deferred Tax liability (2) (544 ) Fair value of net assets acquired $ 2,256 Noncontrolling interest $ (3,231 ) Gain on equity interest 1,128 Equity investment - Change in investment (2,103 ) Goodwill value (3) $ (153 ) (1) The customer database value is based on the cost to recreate, as indicated by management. (2) Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 26%. (3) The goodwill is not deductible for tax purposes. |
All Weather Transaction
All Weather Transaction | 9 Months Ended |
Sep. 30, 2022 | |
All Weather Transaction Abstract | |
ALL WEATHER TRANSACTION | NOTE 8 — ALL WEATHER TRANSACTION On July 1, 2021, we entered into a transaction through Bokefa, with the shareholders of All Weather, a local Chinese entity with business and operations in the insurance brokerage business. Pursuant to the transaction, we granted loans to All Weather’s shareholders through a frame work loan (the “AW Frame Work Loan”) the amount of up to RMB 30,000 (approximately $4,700) (“AW Frame Work Loan Amount”) which is designated, if exercised, to be used as a working capital loan for All Weather. As of September 30, 2022, RMB 30,000 (approximately $4,700) was drawn down from the AW Frame Work Loan for working capital. In consideration for the AW Frame Work Loan, the parties entered into various additional agreements which include: (i) a pledge agreement pursuant to which the shareholders have pledged their shares for the benefit of Bokefa in order to secure the AW Frame work Loan Amount (ii) an exclusive option agreement pursuant to which Bokefa has an exclusive option to purchase the entire issued and outstanding common shares of All Weather from the shareholders (“Option Agreement”) under such terms set forth therein (iii) an entrustment agreement and power of attorney agreement pursuant to which the shareholders irrevocably entrusted and appointed Bokefa as their proxy and trustee to exercise on their behalf any and all rights under applicable law and the articles of association of All Weather in the shareholder’s equity interest in All Weather (iv) a business cooperation agreement and a master exclusive service agreement which grants Bokefa rights related to All Weather’s business and operations in order to secure repayment of the AW Frame Work Loan Amount. This transaction was structured pursuant to a Variable Interest Entity Structure (in which we do not hold the shares). As such, and given our direct ownership in Bokefa and its contractual arrangements with All Weather, we are regarded as All Weather’s controlling entity and primary beneficiary of All Weather’s business. We have, therefore, consolidated the financial position and operating results of All Weather into our consolidated financial statements, using the fair value of the assets and liabilities of All Weather in accordance with U.S. GAAP. Purchased identifiable intangible assets are amortized on a straight-line basis over their respective useful lives. The table set forth below summarizes the estimates of the fair value of assets acquired and liabilities assumed. In addition, the following table summarizes the allocation of the preliminary purchase price as of the acquisition date: All Weather, Purchase Price Allocation Total cash consideration (1) $ - Total Purchase Consideration $ - Less: Debt-free net working capital $ (105 ) Property and equipment 153 Right of use assets 208 Lease liabilities (258 ) Intangible assets - license (1) 849 Intangible assets - customer relationship (1) 54 Deferred Tax liability (2) (226 ) Fair value of net assets acquired $ 675 Noncontrolling interest $ (675 ) Change in investment (675 ) Goodwill value (3) $ - (1) The customer database value is based on the cost to recreate, as indicated by management. (2) Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 25%. (3) The goodwill is not deductible for tax purposes. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2022 | |
Segments [Abstrsct] | |
SEGMENTS | NOTE 9 — 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 insurance platform segments (formerly: verticals and technology segments) including stock trading and insurance brokerage services. We will continue to increase the capabilities of our platforms through acquisition and/or the licensing of different technologies to support our efforts in the different market segments. By building secure, reliable and scalable platforms with high volume processing capability, we intend to provide customized solutions that address the needs of a highly diverse and broad client base. First, we have launched our insurance platform, operated by GFHI, for the Chinese market and have been generating revenues in GFHI. While the revenues were not material in 2020, these revenues are building and we expect these revenues to continue to grow as this business establishes itself in the market as a reputable service available to consumers Secondly, we are currently in the process of launching our securities trading software platform and accelerating the development and business around this segment. This is possible due to the recent completion of the acquisition of Magpie (formerly: Huapei) on February 26, 2021. As a result of such acquisition, we have obtained the necessary licenses and permits to operate our online platform in the Hong Kong stock exchange. As we begin development of our oil and gas trading platform, we are looking to partner with an established and reputable Chinese organization to build out our technology, which will support two major elements of China’s energy sector. During the period between June 23, 2020, and May 9, 2021 we held a controlling interest in Micronet, and we 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 consolidated financial statements. The following table summarizes the financial performance of our operating segments: Nine months ended September 30, 2022 Insurance Mobile Online Consolidated Revenues from external customers $ 35,232 - 46 $ 35,278 Segment operating loss (8,597 )(1) - (8,121 ) (16,718 ) Non allocated expenses (15,737 ) Finance expenses and other (740 ) Consolidated loss before provision for income taxes $ (33,195 ) (1) Includes $2,199 of intangible assets amortization, derived from GFHI acquisition. Three months ended September 30, 2022 Insurance Mobile Online Consolidated Revenues from external customers $ 13,749 - 8 $ 13,757 Segment operating loss (2,507 )(1) - (2,083 ) (4,590 ) Non allocated expenses (4,125 ) Finance expenses and other (118 ) Consolidated loss before provision for income taxes $ (8,833 ) (1) Includes $733 of intangible assets amortization, derived from GFHI acquisition. 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. 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. The following table summarizes the financial statements of our balance sheet accounts of the segments: As of September 30, 2022 (USD in thousands) Insurance Mobile Online Consolidated Assets related to segments $ 55,973 (1) $ - $ 49,816 $ 105,789 Non allocated Assets - - 38,380 Liabilities related to segments (18,104 )(2) - (2,719 ) (20,823 ) Non allocated liabilities - - - (2,995 ) Total Equity $ 120,351 (1) Includes $9,975 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition. (2) Includes $2,593 of deferred tax liability, derived from GFHI acquisition. The following table summarizes the financial statements of our balance sheet accounts of the segments: As of December 31, 2021 (USD in thousands) Insurance Mobile Online Consolidated Assets related to segments $ 86,474 (1) $ - $ 60,581 (3) $ 147,055 Non allocated Assets - 30,756 Liabilities related to segments (23,516 )(2) - (3,953 ) (27,469 ) Non allocated liabilities - - - (2,620 ) Total Equity $ 147,722 (1) Includes $19,292 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition. (2) Includes $3,728 of deferred tax liability, derived from GFHI acquisition. (3) Includes $1,222 of intangible assets. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 10 — INTANGIBLE ASSETS, NET Useful September 30, December 31, life years 2022 2021 Original amount: Technology know-how 6 $ 11,490 $ 11,490 Trade name/ trademarks Indefinite or 5 years 929 923 Customer relationship 5-10 years 4,802 4,802 License Indefinite or 10 years 8,498 8,498 Software 10 156 172 25,875 25,885 Accumulated amortization: Technology know-how (4,309 ) (2,873 ) trade name/ trademarks (261 ) (174 ) Customer related intangible assets (2,055 ) (1,355 ) License (178 ) (39 ) Software (13 ) (2 ) (6,816 ) (4,443 ) Net $ 19,059 $ 21,442 |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2022 | |
Trade Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 11 —ACCOUNTS RECEIVABLE, NET For the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021, accounts receivable were comprised of the following: September 30, December 31, 2022 2021 Accounts receivable $ 12,453 $ 20,485 Allowance for doubtful accounts (3,369 ) (2,606 ) $ 9,084 $ 17,879 Movement of allowance for doubtful accounts the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021 are as follows: September 30, December 31, 2022 2021 Beginning balance $ 2,606 $ 5 (Recovery) provision 1,114 2,574 Exchange fluctuation (351 ) 32 Decrease due to deconsolidation of Micronet - (5 ) $ 3,369 $ 2,606 |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets [Abstract] | |
OTHER CURRENT ASSETS | NOTE 12 — OTHER CURRENT ASSETS September 30, December 31, 2022 2021 Prepaid expenses $ 797 $ 1,715 Advance to suppliers 5,951 4,027 Deposit 262 1,335 Business advance to employee 1,578 1,444 Other receivables 1,731 1,033 $ 10,319 $ 9,554 |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2022 | |
Related parties [Abstract] | |
RELATED PARTIES | NOTE 13 — RELATED PARTIES Current assets – related parties September 30, December 31, 2022 2021 Shareholders of All Weather $ 3,696 $ 3,680 Loan to Tingo (*) 3,759 - Convertible loan to Micronet - 535 Tianjin Bokefa and other related parties 300 - Shareholders of Guangxi Zhongtong 778 919 $ 8,533 $ 5,134 (*) On May 13, 2022, the Company and Tingo executed a loan agreement pursuant to which the Company agreed to loan Tingo (“Maker”) a sum of $3,000 (the “Note” and “Loan” respectively). The Loan bear an annual interest of 5%. The principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on May 10, 2024 (“Initial Maturity Date”), provided however that if the merger agreement executed between the parties shall be terminated pursuant to its terms, the Initial Maturity Date shall accelerate and the principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on or before the 30th calendar day following such termination . The principal balance may be prepaid at any time by Maker without penalty. On July 28, 2022, the Company agreed to replace the Note with a new note (“New Note”), pursuant to which the amount of the Loan granted under the New Note is $3,500, with all other terms remaining in effect without a change. On September 28, 2022, the Company agreed to replace the Note with a new note (“New Note”), pursuant to which the amount of the Loan granted under the New Note is $3,700, with all other terms remaining in effect without a change. On October 6, 2022, the Company extended to Tingo a loan in the principal amount of $23,700 with an interest rate of 5% per year, and which shall amend and restate the loan agreement between MICT and Tingo dated September 28, 2022, for a principal amount of $3,700 (the “ Previous Loan Current liabilities – related party September 30, December 31, 2022 2021 Shareholders of Bokefa Petroleum and Gas 119 - Shareholders of All Weather $ 609 $ 4 $ 728 $ 4 |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases [Abstract] | |
OPERATING LEASES | NOTE 14 — OPERATING LEASES The Company follows ASC No. 842, Leases. The Company has operating leases for its office facilities. The Company’s leases have 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 as of September 30, 2022 and December 31, 2021 Assets/liabilities September 30, December 31, 2022 2021 Assets Right-of-use assets $ 1,711 $ 1,921 Liabilities Lease liabilities- current portion $ 1,025 $ 1,298 Lease liabilities- long term 763 691 Total Lease liabilities $ 1,788 $ 1,989 The operating lease expenses for the three and nine months ended September 30, 2022September 30, 2022and 2021 were as follows: Nine months ended Three months ended 2022 2021 2022 2021 Operating lease cost $ 1,203 $ 1,111 $ 530 $ 581 Maturities of operating lease liabilities were as follows: Twelve months ended 2023* 1,185 2024 622 2025 77 2026 12 2027 13 Total lease payment 1,909 Less: imputed interest (88 ) Total 1,821 * include operating leases with a term less than one year which was not capitalized in the right-of-use assets. Lease term and discount rate September 30, Weighted-average remaining lease term (years) – operating leases 2.3 Weighted average discount rate – operating leases 5.46 % |
Provision for Income Taxes
Provision for Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Provision for Income Taxes [Abstract] | |
PROVISION FOR INCOME TAXES | NOTE 15 — PROVISION FOR INCOME TAXES A. Basis of Taxation United States: On December 22, 2017, the U.S. Tax Cuts and Jobs Act, or the Act, was enacted, which significantly changed U.S. tax laws. The Act lowered the tax rate of the Company. The statutory federal income tax rate was 21% in 2020 and in the nine months ended September 30, 2021 and 2022. As of September 30, 2022 the operating loss carry forward were $47,939, among which there was $5,115 expiring from 2025 through 2037, and the remaining $42,824 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 2022. As of September 30, 2022 the operating loss carry forward were $8,218, which does not have an expiration date. Mainland 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, 2022 the operating loss carry forward was $11,511, which will expire from 2023 through 2027. Hong Kong: Our subsidiaries incorporated in Hong Kong, such as Magpie Securities Limited, BI Intermediate Limited, are subject to Hong Kong profit tax on their profits arising from their business operations carried out in Hong Kong. Hong Kong profits tax for a corporation from the year of assessment 2018/2019 onwards is generally 8.25% on assessable profits up to HK$2,000; and 16.5% on any part of assessable profits over HK$2,000. Under the Hong Kong Inland Revenue Ordinance, profits that we derive from sources outside of Hong Kong are generally not subject to Hong Kong profits tax. As of September 30, 2022, the tax loss carry forward was $15,712 for Magpie Securities Limited, and the operating loss carry forward was $5,216 for BI Intermediate Limited. Tax losses can be carried forward indefinitely until utilized. Singapore: Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. In 2021, we did not incur any income tax as there was no estimated assessable profit that was subject to Singapore income tax. As of September 30, 2022, the operating loss carry forward was $104. Subject to qualifying conditions, trade losses can be carried forward indefinitely while unutilized donations can be carried forward for up to 5 years of assessment. B. Provision for (Benefit of) Income Taxes Nine months ended Three months ended 2022 2021 2022 2021 Current Domestic $ 248 $ 72 $ - $ 29 Foreign - 123 - 92 Total $ 248 $ 195 $ - $ 121 Deferred Domestic $ - $ $ - $ Foreign (2,030 ) (605 ) (701 ) (191 ) $ (2,030 ) $ (605 ) $ (701 ) $ (191 ) 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. As of September 30, 2022 and December 31, 2021, 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, 2022 2021 Deferred tax assets Provisions for employee rights and other temporary differences $ 170 $ 260 Provisions for bad debt 842 696 Net operating loss carry forward 18,306 12,034 Valuation allowance (16,425 ) (11,226 ) Deferred tax assets, net of valuation allowance 2,893 1,764 Deferred tax liabilities Recognition of intangible assets arising from business combinations (3,340 ) (3,952 ) Deferred tax liabilities, net $ (447 ) $ (2,188 ) |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2022 | |
Legal Proceedings [Abstract] | |
LEGAL PROCEEDINGS | NOTE 16 — LEGAL PROCEEDINGS There is no open legal proceeding as of September 30, 2022 and as of today. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 — SUBSEQUENT EVENTS On October 6, 2022, the Company, Tingo, the representative for the stockholders of the Company, and the representative for Tingo. entered into the Second Amended and Restated Merger Agreement (the “ Amended Agreement Pursuant to the Amended Agreement, (i) Tingo shall form a British Virgin Islands company and wholly-owned subsidiary (“ Tingo Sub Delaware Sub BVI Sub Subject to the terms and conditions set forth in the Amended Agreement, upon the consummation of the transactions contemplated therein (the “ Closing Business Combination Transactions Business Combination Consideration As consideration for the Business Combination, Tingo shall receive from the MICT: (i) 25,783,675 shares of MICT Common Stock equal to approximately 19.9% of the total issued and outstanding MICT Common Stock calculated as at Closing; (ii) 2,604.28 shares of Series A Preferred Stock convertible into 26,042,808 shares of MICT Common Stock equal to approximately 20.1% of the total issued and outstanding MICT Common Stock calculated as at Closing; and (iii) 33,687.21 shares of Series B Preferred Stock convertible into 336,872,138 shares of MICT Common Stock following which Tingo will hold MICT Common Stock equal to 75% of MICT’s outstanding common stock, provided that 5% of the foregoing consideration shall be withheld in Escrow. Escrow As part of the Amended Agreement, Purchaser Representative, Seller Representative, and a mutually agreeable escrow agent shall enter into an escrow agreement, whereby an amount equal to 5% of the total number of shares of MICT Common Stock, Series A Preferred Stock, and Series B Preferred Stock transferred as part of the consideration for the Business Combination (the “ Escrow Property Series A Preferred Stock Upon the approval of MICT’s stockholders, each share of Series A Preferred Stock issued by MICT to Tingo shall automatically convert into 10,000 shares of MICT Common Stock in accordance with the terms of the Series A Preferred Stock certificate of designation (the “ Series A Conversion If approval by MICT’s stockholders of the Series A Conversion is not obtained by June 30, 2023, all issued and outstanding shares of Series A Preferred Stock shall be redeemed by MICT in exchange for Tingo receiving 27% of the total issued and outstanding shares of MICT Delaware Sub (“ Series A Redemption Series B Preferred Stock Upon approval by Nasdaq of the change of control of MICT and upon the approval of MICT’s stockholders, each share of Series B Preferred Stock issued by MICT to Tingo shall automatically convert into 10,000 shares of MICT Common Stock in accordance with the terms of the Series A Preferred Stock certificate of designation (the “ Series B Conversion If approval by Nasdaq of the change of control of MICT or if approval by MICT’s stockholders of the Series B Conversion is not obtained by June 30, 2023, Tingo shall have the right to (i) cause the Series A Redemption to take place within 90 days; and (ii) cause MICT to redeem all of the Series B Preferred Stock in exchange for (x) $666,666 in cash or (y) an amount of common stock of Delaware Sub equivalent in value to $666,666 (reduced from the aggregate value of the Series B Preferred Stock at issuance, which is $1,000,000). Amended Purchaser Loan Simultaneous with the |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 annual report on Form 10-K filed on June 17, 2022. The Company’s operations and business may still be subject to adverse effect due to the unprecedented conditions surrounding the spread of COVID-19 throughout North America, Israel, China and the rest of the world. Although currently the COVID-19 (due to the measures implemented to reduce the spread of the virus) have not had a material adverse effect on the Company’s consolidated financial reports, however, there were lockdowns in numerous provinces, , which cause a decrease in revenues from Guangxi Zhongtong as a result of the lockdown in certain cities and regions due to the COVID-19 impacts.; there can be no assurance that Company’s financial reports will not be affected in the future from COVID-19 or resulting from restrictions and other government actions. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. GAAP. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries and variable interest entities. All significant intercompany transactions and balances among the Company and its subsidiaries are eliminated upon consolidation. |
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. |
Restricted Cash | Restricted Cash The Company as an insurance broker is required to reserve 10% of its registered capital in cash held in an escrow bank account pursuant to the China Insurance Regulatory Commission (“CIRC”) rules and regulations. As of September 30, 2022 and December 31, 2021, restricted cash amounted to $2,388 and $2,417 respectively. |
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, 2022 and December 31, 2021, allowance for doubtful accounts amounted to approximately $3,369 and $2,606, respectively. |
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, 2022 and December 31, 2021. |
Investments | Investments The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary. As of September 30, 2022 and December 31, 2021, the Company owned 31.47% and 36.8%, respectively, of shares in Micronet which was accounted for under equity method. As of September 30, 2022 and December 31, 2021, the Company owned 24% of the shares in Beijing Fucheng and was the primary beneficiary of the remaining 76% of Beijing Fucheng through contractual arrangements as discussed in Note 1. Beijing Fucheng was therefore 100% consolidated in the unaudited condensed consolidated financial statements. |
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, 2022 and December 31, 2021. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Licensed & software indefinite useful life and some of them for 10 years Technology know-how 6 years Trade name/ trademarks indefinite useful life and some of them for 5 years Customer relationship 5-10 years |
Goodwill | Goodwill 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, 2022 and December 31, 2021. |
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 We recognize our revenue under ASC 606. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. 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 from the insurance division 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 at point in time when the requested information is delivered to the customer. The Company’s revenues from the online stock trading platform are generated from stock trading commission income. Magpie provides trade execution to its customers. Commission revenue is recognized when transfer of control occurs. Trade execution performance obligation generally occurs on the trade date because that is when the underlying financial instrument (for a purchase) or purchaser (for a sale) is identified and the pricing is agreed upon. 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 determined our promise to sell insurance policies on behalf of the insurance carriers to be recorded on a net basis as we are acting as an agent. |
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. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments Credit Losses Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company does not expect the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations”. The amendments in this Update address how to determine whether a contract liability is recognized by the acquirer in a business combination and resolve the inconsistency of measuring revenue contracts with customers acquired in a business combination by providing specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this Update apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combination-Overalls. For public business entities, ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application is permitted. The amendments in this Update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company does not expect the adoption of this standard to have a material impact on its unaudited condensed consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, comprehensive loss and cash flows. |
Description of Business (Tables
Description of Business (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities | September 30, December 31, Current assets: Cash $ 2,057 $ 1,260 Accounts receivable, net 4,168 2,462 Related parties 1,418 - Other current assets 3,872 4,550 Total current assets 11,515 8,272 Property and equipment, net 186 208 Intangible assets 5,713 5,718 Long-term prepaid expenses 42 48 Right of use assets 716 530 Restricted cash 1,434 1,632 Deferred tax assets 722 369 Total long-term assets 8,813 8,505 Total assets $ 20,328 $ 16,777 Current liabilities: Short term loan from others $ 592 $ 1,155 Trade accounts payable 2,293 697 Related party 3,536 4,583 Operating lease short term liability 327 - Other current liabilities 4,573 2,401 Total current liabilities 11,321 8,836 Long-term liabilities: Lease liability 304 106 Deferred tax liability 224 224 Total long-term liabilities 528 330 Total liabilities $ 11,849 $ 9,166 |
Schedule of net revenues, loss from operations and net loss | For the For the For the For the September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Net revenues $ 32,915 $ 31,710 $ 13,322 $ 17,445 Loss from operations $ (1,599 ) $ (490 ) $ 722 $ 603 Net loss $ (996 ) $ (490 ) $ 508 $ 603 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Useful Life Licensed & software indefinite useful life and some of them for 10 years Technology know-how 6 years Trade name/ trademarks indefinite useful life and some of them for 5 years Customer relationship 5-10 years |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock options outstanding | Nine months ended Year ended Number of Weighted Number of Weighted Options outstanding at the beginning of period: 1,558,000 $ 1.74 1,158,000 $ 2.24 Changes during the period: Granted - $ - 740,000 $ 1.97 Exercised - $ - (60,000 ) $ 1.35 Forfeited (818,000 ) $ 1.54 (280,000 ) $ 1.41 Options outstanding at the end of the period 740,000 $ 1.97 1,558,000 $ 1.74 Options exercisable at the end of the period 484,167 $ 1.82 1,118,000 $ 1.57 |
Schedule of warrants outstanding | Warrants Average Remaining Balance, December 31, 2021 62,863,879 $ 2.854 4.5 Granted - $ - - Forfeited - $ - - Exercised - $ - - Balance, September 30, 2022 62,863,879 $ 2.854 4.25 |
Beijing Fucheng Lianbao Techn_2
Beijing Fucheng Lianbao Technology Co., Ltd Transaction (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Beijing Fucheng Lianbao Technology Co., Ltd Transaction Table [Abstract] | |
Schedule of purchase price of allocation | Total cash consideration $ 5,711 Total Purchase Consideration $ 5,711 Less: Net working capital $ 926 Property and equipment 26 License 4,814 Current liabilities (55 ) Fair value of net assets acquired $ 5,711 |
Guangxi Zhongtong Insurance A_2
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition [Abstract] | |
Schedule of purchase price allocation | Total cash consideration (1) $ - Total Purchase Consideration $ - Less: Debt-free net working capital $ 613 Property and equipment 13 Intangible assets - Licenses 1,926 Intangible assets - customer relationship (1) 248 Deferred Tax liability (2) (544 ) Fair value of net assets acquired $ 2,256 Noncontrolling interest $ (3,231 ) Gain on equity interest 1,128 Equity investment - Change in investment (2,103 ) Goodwill value (3) $ (153 ) (1) The customer database value is based on the cost to recreate, as indicated by management. (2) Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 26%. (3) The goodwill is not deductible for tax purposes. |
All Weather Transaction (Tables
All Weather Transaction (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
All Weather Transaction Abstract | |
Schedule of purchase price of acquisition | Total cash consideration (1) $ - Total Purchase Consideration $ - Less: Debt-free net working capital $ (105 ) Property and equipment 153 Right of use assets 208 Lease liabilities (258 ) Intangible assets - license (1) 849 Intangible assets - customer relationship (1) 54 Deferred Tax liability (2) (226 ) Fair value of net assets acquired $ 675 Noncontrolling interest $ (675 ) Change in investment (675 ) Goodwill value (3) $ - (1) The customer database value is based on the cost to recreate, as indicated by management. (2) Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 25%. (3) The goodwill is not deductible for tax purposes. |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segments [Abstract] | |
Schedule of the financial performance of operating segments | Nine months ended September 30, 2022 Insurance Mobile Online Consolidated Revenues from external customers $ 35,232 - 46 $ 35,278 Segment operating loss (8,597 )(1) - (8,121 ) (16,718 ) Non allocated expenses (15,737 ) Finance expenses and other (740 ) Consolidated loss before provision for income taxes $ (33,195 ) Three months ended September 30, 2022 Insurance Mobile Online Consolidated Revenues from external customers $ 13,749 - 8 $ 13,757 Segment operating loss (2,507 )(1) - (2,083 ) (4,590 ) Non allocated expenses (4,125 ) Finance expenses and other (118 ) Consolidated loss before provision for income taxes $ (8,833 ) 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 ) 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 ) |
Schedule of the financial statements of balance sheet accounts of the segment | As of September 30, 2022 (USD in thousands) Insurance Mobile Online Consolidated Assets related to segments $ 55,973 (1) $ - $ 49,816 $ 105,789 Non allocated Assets - - 38,380 Liabilities related to segments (18,104 )(2) - (2,719 ) (20,823 ) Non allocated liabilities - - - (2,995 ) Total Equity $ 120,351 As of December 31, 2021 (USD in thousands) Insurance Mobile Online Consolidated Assets related to segments $ 86,474 (1) $ - $ 60,581 (3) $ 147,055 Non allocated Assets - 30,756 Liabilities related to segments (23,516 )(2) - (3,953 ) (27,469 ) Non allocated liabilities - - - (2,620 ) Total Equity $ 147,722 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net [Abstract] | |
Schedule of intangible assets, net | Useful September 30, December 31, life years 2022 2021 Original amount: Technology know-how 6 $ 11,490 $ 11,490 Trade name/ trademarks Indefinite or 5 years 929 923 Customer relationship 5-10 years 4,802 4,802 License Indefinite or 10 years 8,498 8,498 Software 10 156 172 25,875 25,885 Accumulated amortization: Technology know-how (4,309 ) (2,873 ) trade name/ trademarks (261 ) (174 ) Customer related intangible assets (2,055 ) (1,355 ) License (178 ) (39 ) Software (13 ) (2 ) (6,816 ) (4,443 ) Net $ 19,059 $ 21,442 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Trade Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | September 30, December 31, 2022 2021 Accounts receivable $ 12,453 $ 20,485 Allowance for doubtful accounts (3,369 ) (2,606 ) $ 9,084 $ 17,879 |
Schedule of allowance for doubtful accounts | September 30, December 31, 2022 2021 Beginning balance $ 2,606 $ 5 (Recovery) provision 1,114 2,574 Exchange fluctuation (351 ) 32 Decrease due to deconsolidation of Micronet - (5 ) $ 3,369 $ 2,606 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets [Abstract] | |
Schedule of other current assets | September 30, December 31, 2022 2021 Prepaid expenses $ 797 $ 1,715 Advance to suppliers 5,951 4,027 Deposit 262 1,335 Business advance to employee 1,578 1,444 Other receivables 1,731 1,033 $ 10,319 $ 9,554 |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related parties [Abstract] | |
Schedule of current assets – related parties | September 30, December 31, 2022 2021 Shareholders of All Weather $ 3,696 $ 3,680 Loan to Tingo (*) 3,759 - Convertible loan to Micronet - 535 Tianjin Bokefa and other related parties 300 - Shareholders of Guangxi Zhongtong 778 919 $ 8,533 $ 5,134 (*) On May 13, 2022, the Company and Tingo executed a loan agreement pursuant to which the Company agreed to loan Tingo (“Maker”) a sum of $3,000 (the “Note” and “Loan” respectively). The Loan bear an annual interest of 5%. The principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on May 10, 2024 (“Initial Maturity Date”), provided however that if the merger agreement executed between the parties shall be terminated pursuant to its terms, the Initial Maturity Date shall accelerate and the principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on or before the 30th calendar day following such termination . The principal balance may be prepaid at any time by Maker without penalty. |
Schedule of current liabilities – related party | September 30, December 31, 2022 2021 Shareholders of Bokefa Petroleum and Gas 119 - Shareholders of All Weather $ 609 $ 4 $ 728 $ 4 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases [Abstract] | |
Schedule of leases by balance sheet | Assets/liabilities September 30, December 31, 2022 2021 Assets Right-of-use assets $ 1,711 $ 1,921 Liabilities Lease liabilities- current portion $ 1,025 $ 1,298 Lease liabilities- long term 763 691 Total Lease liabilities $ 1,788 $ 1,989 |
Schedule of operating lease expenses | Nine months ended Three months ended 2022 2021 2022 2021 Operating lease cost $ 1,203 $ 1,111 $ 530 $ 581 |
Schedule of operating lease liabilities | Twelve months ended 2023* 1,185 2024 622 2025 77 2026 12 2027 13 Total lease payment 1,909 Less: imputed interest (88 ) Total 1,821 * include operating leases with a term less than one year which was not capitalized in the right-of-use assets. |
Schedule of lease term and discount rate | Lease term and discount rate September 30, Weighted-average remaining lease term (years) – operating leases 2.3 Weighted average discount rate – operating leases 5.46 % |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Provision for Income Taxes [Abstract] | |
Schedule of provision for taxes | Nine months ended Three months ended 2022 2021 2022 2021 Current Domestic $ 248 $ 72 $ - $ 29 Foreign - 123 - 92 Total $ 248 $ 195 $ - $ 121 Deferred Domestic $ - $ $ - $ Foreign (2,030 ) (605 ) (701 ) (191 ) $ (2,030 ) $ (605 ) $ (701 ) $ (191 ) |
Schedule of deferred tax assets and liabilities | September 30, December 31, 2022 2021 Deferred tax assets Provisions for employee rights and other temporary differences $ 170 $ 260 Provisions for bad debt 842 696 Net operating loss carry forward 18,306 12,034 Valuation allowance (16,425 ) (11,226 ) Deferred tax assets, net of valuation allowance 2,893 1,764 Deferred tax liabilities Recognition of intangible assets arising from business combinations (3,340 ) (3,952 ) Deferred tax liabilities, net $ (447 ) $ (2,188 ) |
Description of Business (Detail
Description of Business (Details) ₪ / shares in Units, ₪ in Thousands, ¥ in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||||||||||||||||||
Apr. 05, 2022 USD ($) | Feb. 10, 2021 USD ($) | Jan. 01, 2021 USD ($) | Jan. 01, 2021 CNY (¥) | Nov. 11, 2020 | Oct. 11, 2020 USD ($) shares | Oct. 11, 2020 ILS (₪) ₪ / shares shares | Jun. 10, 2020 USD ($) shares | Jun. 10, 2020 ILS (₪) shares | Jul. 31, 2021 USD ($) | Jul. 31, 2021 CNY (¥) | Jun. 16, 2021 USD ($) | Jun. 16, 2021 ILS (₪) ₪ / shares shares | Jun. 23, 2020 USD ($) shares | Jun. 23, 2020 ILS (₪) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Apr. 02, 2022 | Oct. 21, 2021 | Aug. 23, 2021 USD ($) | Aug. 23, 2021 CNY (¥) | May 09, 2021 | Dec. 29, 2020 | Oct. 02, 2020 USD ($) | |
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Total consideration amount | ₪ | ₪ 4,961 | ₪ 3,100 | ||||||||||||||||||||||
Ownership interest | 60% | |||||||||||||||||||||||
Total purchase price (in Dollars) | $ | $ 3,000 | |||||||||||||||||||||||
Share capital percentage | 9% | |||||||||||||||||||||||
Remaining share capital percentage | 91% | |||||||||||||||||||||||
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 have been guaranteed by its majority shareholder. On February 26, 2021, we finalized the acquisition of Magpie. The acquisition was consummated following the receipt of approval from the SFC effecting the change in the majority shareholder of Magpie. In consideration for the entire share capital of Magpie, we paid a total Purchase Price of $2,947 (reflecting the net asset value of Magpie estimated at $2,034 recorded as a working capital, and a premium $902 that was recorded as a license in the intangible assets). The Company, through and together with the Company’s wholly owned subsidiaries, Beijing Magpie Securities Consulting Services Co., Ltd (“Beijing Magpie”) and Shenzhen Magpie Information Consulting Technology Co., Ltd (“Shenzhen Magpie”), are in the process of integrating its mobile app platform with Magpie’s licensed trading assets. | |||||||||||||||||||||||
Equity interest | 100% | 100% | ||||||||||||||||||||||
Gross proceeds | $ 8,290 | ₪ 26,864 | ||||||||||||||||||||||
Frame work loan amount | $ 4,700 | ¥ 30,000 | ||||||||||||||||||||||
Additional loan amount (in Dollars) | $ | $ 776 | |||||||||||||||||||||||
Equity holds | 99.60% | |||||||||||||||||||||||
Invest amount | $ (4,700) | ¥ 30,000 | ||||||||||||||||||||||
Net assets (in Dollars) | $ | $ 94 | |||||||||||||||||||||||
Transaction price | zero | |||||||||||||||||||||||
Gain on disposing (in Dollars) | $ | $ 94 | |||||||||||||||||||||||
Loan agreement percentage | 76% | 76% | ||||||||||||||||||||||
Agreement term | 1 year | |||||||||||||||||||||||
Tel Aviv Stock Exchange [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Percentage of shares issued and outstanding | 31.47% | 31.47% | ||||||||||||||||||||||
Ordinary shares (in Shares) | 100 | |||||||||||||||||||||||
Aggregate number of units (in Shares) | 18,400 | |||||||||||||||||||||||
Aggregate units per share (in New Shekels per share) | ₪ / shares | ₪ 6 | |||||||||||||||||||||||
Issuance of ordinary shares (in Shares) | 1,840,000 | |||||||||||||||||||||||
Basis diluted, percentage | 26.77% | 26.77% | ||||||||||||||||||||||
Tel Aviv Stock Exchange [Member] | Series A Options [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Ordinary shares (in Shares) | 25 | |||||||||||||||||||||||
Issuance of ordinary shares (in Shares) | 460,000 | |||||||||||||||||||||||
Tel Aviv Stock Exchange [Member] | Series B Options [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Ordinary shares (in Shares) | 75 | |||||||||||||||||||||||
Issuance of ordinary shares (in Shares) | 1,380,000 | |||||||||||||||||||||||
MICT Telematics [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Purchased shares (in Shares) | 5,999,996 | 5,999,996 | ||||||||||||||||||||||
Aggregate proceeds | $ 515 | ₪ 1,800 | ||||||||||||||||||||||
Micronet [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Purchased shares (in Shares) | 520,600 | 520,600 | 10,334,000 | 10,334,000 | ||||||||||||||||||||
Percentage of shares issued and outstanding | 45.53% | 45.53% | ||||||||||||||||||||||
Total consideration amount | $ | $ 1,417 | $ 887 | ||||||||||||||||||||||
Ownership interest | 53.39% | 53.39% | 49.88% | |||||||||||||||||||||
Held equity (in Dollars) | $ | $ 665 | |||||||||||||||||||||||
Ordinary shares (in Shares) | 416,480 | |||||||||||||||||||||||
Convertible ordinary shares (in Shares) | 416,480 | 416,480 | ||||||||||||||||||||||
Conversion price per share (in New Shekels per share) | ₪ / shares | ₪ 5 | |||||||||||||||||||||||
Additional purchase (in Shares) | 115,851 | |||||||||||||||||||||||
Micronet [Member] | Maximum [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Ownership interest | 53.39% | |||||||||||||||||||||||
Micronet [Member] | Minimum [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Ownership interest | 50.31% | |||||||||||||||||||||||
Guangxi Zhongtong Insurance Agency Co., Ltd [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Frame work loan amount | $ 6,125 | ¥ 40,000 | ||||||||||||||||||||||
Working capital | $ 1,243 | ¥ 8,010 | ||||||||||||||||||||||
Frame work for working capital (in Dollars) | $ | $ 919 | |||||||||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Equity interest | 24% | 24% | ||||||||||||||||||||||
Share acquired price (in Dollars) | $ | $ 5,700 | |||||||||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | Variable interest entity [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Equity interest | 76% | |||||||||||||||||||||||
Beijing Fucheng Lianbao Technology Co Ltd [Member] | Beijing Fucheng Insurance Brokerage Co., Ltd [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Equity interest | 100% | |||||||||||||||||||||||
Beijing Yibao Technology Co., Ltd [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Ownership interest | 60% | |||||||||||||||||||||||
Invest amount | $ (4,700) | ¥ 30,000 | ||||||||||||||||||||||
Zhengzhong Energy [Member] | ||||||||||||||||||||||||
Description of Business (Details) [Line Items] | ||||||||||||||||||||||||
Equity interest | 76% |
Description of Business (Deta_2
Description of Business (Details) - Schedule of assets and liabilities - VIE [Member] - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 2,057 | $ 1,260 |
Accounts receivable, net | 4,168 | 2,462 |
Related parties | 1,418 | |
Other current assets | 3,872 | 4,550 |
Total current assets | 11,515 | 8,272 |
Property and equipment, net | 186 | 208 |
Intangible assets | 5,713 | 5,718 |
Long-term prepaid expenses | 42 | 48 |
Right of use assets | 716 | 530 |
Restricted cash | 1,434 | 1,632 |
Deferred tax assets | 722 | 369 |
Total long-term assets | 8,813 | 8,505 |
Total assets | 20,328 | 16,777 |
Current liabilities: | ||
Short term loan from others | 592 | 1,155 |
Trade accounts payable | 2,293 | 697 |
Related party | 3,536 | 4,583 |
Operating lease short term liability | 327 | |
Other current liabilities | 4,573 | 2,401 |
Total current liabilities | 11,321 | 8,836 |
Long-term liabilities: | ||
Lease liability | 304 | 106 |
Deferred tax liability | 224 | 224 |
Total long-term liabilities | 528 | 330 |
Total liabilities | $ 11,849 | $ 9,166 |
Description of Business (Deta_3
Description of Business (Details) - Schedule of net revenues, loss from operations and net loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of Net Revenues Loss from Operations and Net Loss [Abstract] | ||||
Net revenues | $ 13,322 | $ 17,445 | $ 32,915 | $ 31,710 |
Loss from operations | 722 | 603 | (1,599) | (490) |
Net loss | $ 508 | $ 603 | $ (996) | $ (490) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Required reserve capital | 10% | ||
Restricted cash (in Dollars) | $ 2,388 | $ 2,417 | |
Allowance for doubtful accounts (in Dollars) | $ 3,369 | $ 2,606 | |
Micronet [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Equity method percentage | 31.47% | 36.80% | |
Beijing Fucheng [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Equity method percentage | 24% | 24% | |
Contractual arrangements percentage | 76% | 76% | |
Financial statements percentage | 100% | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives | 9 Months Ended |
Sep. 30, 2022 | |
Licensed & software [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Estimated useful life, description | indefinite useful life and some of them for 10 years |
Technology know-how [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Estimated useful life | 6 years |
Trade name/ trademarks [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Estimated useful life, description | indefinite useful life and some of them for 5 years |
Customer Relationship [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Estimated useful life | 5 years |
Customer Relationship [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Estimated useful life | 10 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Mar. 02, 2021 | Mar. 01, 2021 | Feb. 11, 2021 | Nov. 02, 2020 | Sep. 30, 2022 | Dec. 31, 2020 | May 10, 2022 | May 17, 2021 | |
Stockholders' Equity (Details) [Line Items] | ||||||||
Purchase price of warrant (in Dollars per share) | $ 0.8 | |||||||
Preferred stock exchange agreements, description | 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 “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, 2022. This resulted in a stock-based compensation expense of approximately $284,973 recorded for the nine months ended September 30, 2022, 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. On May 10, 2022, MICT granted 1,659,500 shares of common stock of the Company to Cushman Holdings Limited, an unrelated third party, as an introducer fee for Tingo, Inc. On May 10, 2022, MICT granted 858,631 shares of common stock of the Company to China Strategic Investments Limited, an unrelated third party, in connection with the GFHI acquisition as discussed in Note 1. On May 10, 2022, MICT granted 612,500 shares of common stock of the Company to some of our Directors and employees. The shares were issued pursuant to the 2020 Incentive Plan. | |||||||
Fully vested granted shares | 4,000,000 | |||||||
Raise in excess of capital (in Dollars) | $ 140,000 | |||||||
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 par value (in Dollars per share) | $ 0.001 | |||||||
Purchase price per unit (in Dollars per share) | 2.5 | |||||||
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 | 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. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of stock options outstanding - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Stock Options Outstanding Abstract | ||
Number of options outstanding at beginning of year | 1,558,000 | 1,158,000 |
Weighted average exercise price options outstanding at beginning of year | $ 1.74 | $ 2.24 |
Number of options granted | 740,000 | |
Weighted average exercise price granted | $ 1.97 | |
Number of options exercised | (60,000) | |
Weighted average exercise price exercised | $ 1.35 | |
Number of options forfeited | (818,000) | (280,000) |
Weighted average exercise price forfeited | $ 1.54 | $ 1.41 |
Number of options outstanding at end of year | 740,000 | 1,558,000 |
Weighted average exercise price options outstanding at end of year | $ 1.97 | $ 1.74 |
Number of options exercisable at year end | 484,167 | 1,118,000 |
Weighted average exercise price options exercisable at year end | $ 1.82 | $ 1.57 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of warrants outstanding | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Schedule Of Warrants Outstanding Abstract | |
Warrants outstanding balance beginning | 62,863,879 |
Average exercise price balance beginning (in Dollars per share) | $ / shares | $ 2.854 |
Remaining Contractual Life balance beginning | 4 years 6 months |
Warrants outstanding granted | |
Average exercise price granted (in Dollars per share) | $ / shares | |
Remaining Contractual Life granted | |
Warrants outstanding Forfeited | |
Warrants exercisable Forfeited | |
Average exercise price Forfeited (in Dollars per share) | $ / shares | |
Warrants outstanding exercised | |
Warrants exercisable exercised | |
Average exercise price exercised (in Dollars per share) | $ / shares | |
Warrants outstanding balance ending | 62,863,879 |
Average exercise price balance ending (in Dollars per share) | $ / shares | $ 2.854 |
Remaining Contractual Life balance ending | 4 years 3 months |
Equity Investment in Micronet (
Equity Investment in Micronet (Details) | 1 Months Ended | 9 Months Ended | ||
Jun. 16, 2021 | Sep. 30, 2022 | May 09, 2021 | Mar. 31, 2021 | |
Equity Investment in Micronet [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 31.47% of the outstanding ordinary shares of Micronet and 26.77% on a fully diluted basis as of September 30, 2022. |
Loan to Micronet (Details)
Loan to Micronet (Details) $ in Thousands | Jul. 05, 2020 ₪ / shares | Nov. 13, 2019 USD ($) | Aug. 13, 2020 USD ($) | Nov. 13, 2019 ₪ / shares |
Loan to Micronet (Details) [Line Items] | ||||
Convertible loan (in Dollars) | $ | $ 500,000 | $ 175 | ||
Convertible loan bears interest | 3.95% | |||
Conversion price | ₪ 0.38 | |||
Exercise price | ₪ 0.6 | |||
Convertible loan | ₪ 0.08 | |||
Per Share | 5.7 | |||
Minimum [Member] | ||||
Loan to Micronet (Details) [Line Items] | ||||
Exercised option price | 0.6 | |||
Maximum [Member] | ||||
Loan to Micronet (Details) [Line Items] | ||||
Exercised price per share | ₪ 9 |
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% |
Beijing Fucheng Lianbao Techn_4
Beijing Fucheng Lianbao Technology Co., Ltd Transaction (Details) - Schedule of purchase price of allocation $ in Thousands | Sep. 30, 2022 USD ($) |
Schedule Of Purchase Price Of Allocation 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 |
Guangxi Zhongtong Insurance A_3
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |||||
Dec. 29, 2020 | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Oct. 21, 2021 | Feb. 10, 2021 | Jan. 01, 2021 USD ($) | Jan. 01, 2021 CNY (¥) | |
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Details) [Line Items] | |||||||
Construction loan | $ 1,243 | ¥ 8,010 | $ 6,125 | ¥ 40,000 | |||
Working capital (in Dollars) | $ 919 | ||||||
Equity interest in percentage | 24% | 26% | 26% | 60% | 100% | ||
Agreement interest in percentage | 76% | ||||||
Beijing Fucheng [Member] | |||||||
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Details) [Line Items] | |||||||
Shares acquired (in Dollars) | $ 5,700 |
Guangxi Zhongtong Insurance A_4
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Details) - Schedule of purchase price allocation - GUANGXI ZHONGTONG INSURANCE AGENCY CO., LTD ACQUISITION [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Guangxi Zhongtong Insurance Agency Co., Ltd Acquisition (Details) - Schedule of purchase price allocation [Line Items] | ||
Total cash consideration | [1] | |
Total Purchase Consideration | ||
Debt-free net working capital | 613 | |
Property and equipment | 13 | |
Intangible assets - Licenses | 1,926 | |
Intangible assets - customer relationship | 248 | [1] |
Deferred Tax liability | (544) | [2] |
Fair value of net assets acquired | 2,256 | |
Noncontrolling interest | (3,231) | |
Gain on equity interest | 1,128 | |
Equity investment | ||
Change in investment | (2,103) | |
Goodwill value | $ (153) | [3] |
[1] The customer database value is based on the cost to recreate, as indicated by management. Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 26%. The goodwill is not deductible for tax purposes. |
All Weather Transaction (Detail
All Weather Transaction (Details) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2022 | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Jul. 01, 2021 USD ($) | Jul. 01, 2021 CNY (¥) | |
All Weather Transaction (Details) [Line Items] | |||||
Working capital | $ 4,700 | ¥ 30,000 | |||
Statutory income tax rate | 25% | ||||
AW Frame [Member] | |||||
All Weather Transaction (Details) [Line Items] | |||||
Work loan | $ 4,700 | ¥ 30,000 |
All Weather Transaction (Deta_2
All Weather Transaction (Details) - Schedule of purchase price of acquisition - Assets Acquired and Liabilities [Member] $ in Thousands | Sep. 30, 2022 USD ($) | |
All Weather Transaction (Details) - Schedule of purchase price of acquisition [Line Items] | ||
Total cash consideration | [1] | |
Total Purchase Consideration | ||
Debt-free net working capital | (105) | |
Property and equipment | 153 | |
Right of use assets | 208 | |
Lease liabilities | (258) | |
Intangible assets - license | 849 | [1] |
Intangible assets - customer relationship | 54 | [1] |
Deferred Tax liability | (226) | [2] |
Fair value of net assets acquired | 675 | |
Noncontrolling interest | (675) | |
Change in investment | (675) | |
Goodwill value | [3] | |
[1] The customer database value is based on the cost to recreate, as indicated by management. Represents the income tax effect of the difference between the accounting and income tax bases of the identified intangible assets, using an assumed statutory income tax rate of 25%. The goodwill is not deductible for tax purposes. |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segments (Details) [Line Items] | |||||
Intangible assets | $ 1,222 | ||||
GFHI Acquisitions [Member] | |||||
Segments (Details) [Line Items] | |||||
Intangible assets amortization | $ 733 | $ 733 | $ 2,199 | $ 2,198 | |
Intangible assets | 9,975 | 9,975 | 19,292 | ||
Goodwill | 19,788 | 19,788 | 19,788 | ||
Deferred tax liability | $ 2,593 | $ 2,593 | $ 3,728 | ||
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||||
Insurance platform [Member] | |||||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||||
Revenues from external customers | $ 13,749 | $ 35,232 | |||||
Segment operating loss | (2,507) | [1] | (8,597) | [2] | |||
Mobile resource management [Member] | |||||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||||
Revenues from external customers | $ 726 | ||||||
Segment operating loss | (827) | [3] | |||||
Online stock trading [Member] | |||||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||||
Revenues from external customers | 8 | 46 | |||||
Segment operating loss | (2,083) | (2,252) | (8,121) | (4,208) | |||
Consolidated [Member] | |||||||
Segments (Details) - Schedule of the financial performance of operating segments [Line Items] | |||||||
Revenues from external customers | 13,757 | 18,515 | 35,278 | 39,791 | |||
Segment operating loss | (4,590) | (2,865) | (16,718) | (10,531) | |||
Non allocated expenses | (4,125) | (3,656) | (15,737) | (17,343) | |||
Finance expenses and other | (118) | 1,122 | (740) | (1,167) | |||
Consolidated loss before provision for income taxes | $ (8,833) | (5,399) | $ (33,195) | (29,041) | |||
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) | $ (5,496) | [4] | ||||
[1]Includes $733 of intangible assets amortization, derived from GFHI acquisition.[2]Includes $2,199 of intangible assets amortization, derived from GFHI acquisition.[3]Includes $103 of intangible assets amortization, derived from Micronet consolidation.[4]Includes $2,198 of intangible assets amortization, derived from GFHI. acquisitions. |
Segments (Details) - Schedule_2
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | ||
Insurance platform [Member] | ||||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | ||||
Assets related to segments | $ 55,973 | [1] | $ 86,474 | [2] |
Liabilities related to segments | (18,104) | [3] | (23,516) | [4] |
Non allocated liabilities | ||||
Mobile resource management [Member] | ||||
Segments (Details) - Schedule of the financial statements of balance sheet accounts of the segment [Line Items] | ||||
Assets related to segments | ||||
Non allocated Assets | ||||
Liabilities related to segments | ||||
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 | 49,816 | 60,581 | [5] | |
Non allocated Assets | ||||
Liabilities related to segments | (2,719) | (3,953) | ||
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 | 105,789 | 147,055 | ||
Non allocated Assets | 38,380 | 30,756 | ||
Liabilities related to segments | (20,823) | (27,469) | ||
Non allocated liabilities | (2,995) | (2,620) | ||
Total Equity | $ 120,351 | $ 147,722 | ||
[1]Includes $9,975 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition.[2]Includes $19,292 of intangible assets and $19,788 goodwill, derived from GFHI’s acquisition.[3]Includes $2,593 of deferred tax liability, derived from GFHI acquisition.[4]Includes $3,728 of deferred tax liability, derived from GFHI acquisition.[5]Includes $1,222 of intangible assets. |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Original amount: | ||
Original amount | $ 25,875 | $ 25,885 |
Accumulated amortization: | ||
Accumulated amortization | (6,816) | (4,443) |
Net | $ 19,059 | 21,442 |
Technology know-how [Member] | ||
Original amount: | ||
Useful life years | 6 years | |
Original amount | $ 11,490 | 11,490 |
Accumulated amortization: | ||
Accumulated amortization | $ (4,309) | (2,873) |
Trade name/ trademarks [Member] | ||
Original amount: | ||
Useful life years | 5 years | |
Original amount | $ 929 | 923 |
Accumulated amortization: | ||
Accumulated amortization | (261) | (174) |
Customer relationship [Member] | ||
Original amount: | ||
Original amount | $ 4,802 | 4,802 |
Customer relationship [Member] | Minimum [Member] | ||
Original amount: | ||
Useful life years | 5 years | |
Customer relationship [Member] | Maximum [Member] | ||
Original amount: | ||
Useful life years | 10 years | |
License [Member] | ||
Original amount: | ||
Useful life years | 10 years | |
Original amount | $ 8,498 | 8,498 |
Accumulated amortization: | ||
Accumulated amortization | $ (178) | (39) |
Software [Member] | ||
Original amount: | ||
Useful life years | 10 years | |
Original amount | $ 156 | 172 |
Accumulated amortization: | ||
Accumulated amortization | (13) | (2) |
Customer related intangible assets [Member] | ||
Accumulated amortization: | ||
Accumulated amortization | $ (2,055) | $ (1,355) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accounts Receivable [Abstract] | ||
Accounts receivable | $ 12,453 | $ 20,485 |
Allowance for doubtful accounts | (3,369) | (2,606) |
Total | $ 9,084 | $ 17,879 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of allowance for doubtful accounts - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Allowance For Doubtful Accounts [Abstract] | ||
Beginning balance | $ 2,606 | $ 5 |
(Recovery) provision | 1,114 | 2,574 |
Exchange fluctuation | (351) | 32 |
Decrease due to deconsolidation of Micronet | (5) | |
Total | $ 3,369 | $ 2,606 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of other current assets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Other Current Assets Abstract | ||
Prepaid expenses | $ 797 | $ 1,715 |
Advance to suppliers | 5,951 | 4,027 |
Deposit | 262 | 1,335 |
Business advance to employee | 1,578 | 1,444 |
Other receivables | 1,731 | 1,033 |
Total other current assets | $ 10,319 | $ 9,554 |
Related Parties (Details)
Related Parties (Details) - USD ($) | Oct. 06, 2022 | Sep. 28, 2022 | Jul. 28, 2022 | May 13, 2022 |
Related Parties (Details) [Line Items] | ||||
Loan amount | $ 3,700 | $ 3,500,000 | $ 3,000,000 | |
Annual loan interest percentage | 5% | |||
Subsequent Event [Member] | ||||
Related Parties (Details) [Line Items] | ||||
Loan amount | $ 23,700 | |||
Interest rate | 5% | |||
Principal amount | $ 3,700 |
Related Parties (Details) - Sch
Related Parties (Details) - Schedule of current assets – related parties - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | $ 8,533 | $ 5,134 | |
Shareholders of All Weather [Member] | |||
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | 3,696 | 3,680 | |
Loan to Tingo [Member] | |||
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | [1] | 3,759 | |
Convertible loan to Micronet [Member] | |||
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | 535 | ||
Tianjin Bokefa and Other Related Parties [Member] | |||
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | 300 | ||
Shareholders of Guangxi Zhongtong [Member] | |||
Related Parties (Details) - Schedule of current assets – related parties [Line Items] | |||
Current assets- related parties | $ 778 | $ 919 | |
[1]On May 13, 2022, the Company and Tingo executed a loan agreement pursuant to which the Company agreed to loan Tingo (“Maker”) a sum of $3,000 (the “Note” and “Loan” respectively). The Loan bear an annual interest of 5%. The principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on May 10, 2024 (“Initial Maturity Date”), provided however that if the merger agreement executed between the parties shall be terminated pursuant to its terms, the Initial Maturity Date shall accelerate and the principal balance of the Loan and any accrued and unpaid interest due under the Note shall be due and payable on or before the 30th calendar day following such termination . The principal balance may be prepaid at any time by Maker without penalty. |
Related Parties (Details) - S_2
Related Parties (Details) - Schedule of current liabilities – related party - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Related Parties (Details) - Schedule of current liabilities – related party [Line Items] | ||
Current liabilities – related parties | $ 728 | $ 4 |
Shareholders of Bokefa Petroleum and Gas [Member] | ||
Related Parties (Details) - Schedule of current liabilities – related party [Line Items] | ||
Current liabilities – related parties | 119 | |
Shareholders of All Weather [Member] | ||
Related Parties (Details) - Schedule of current liabilities – related party [Line Items] | ||
Current liabilities – related parties | $ 609 | $ 4 |
Operating Leases (Details)
Operating Leases (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases [Abstract] | |
Operating lease term | 4 years |
Operating lease initial term | 12 months |
Operating Leases (Details) - Sc
Operating Leases (Details) - Schedule of leases by balance sheet - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Right-of-use assets | $ 1,711 | $ 1,921 |
Liabilities | ||
Lease liabilities- current portion | 1,025 | 1,298 |
Lease liabilities- long term | 763 | 691 |
Total Lease liabilities | $ 1,788 | $ 1,989 |
Operating Leases (Details) - _2
Operating Leases (Details) - Schedule of operating lease expenses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Operating Lease Expenses Abstract | ||||
Operating lease cost | $ 530 | $ 581 | $ 1,203 | $ 1,111 |
Operating Leases (Details) - _3
Operating Leases (Details) - Schedule of operating lease liabilities $ in Thousands | Sep. 30, 2022 USD ($) |
Schedule Of Operating Lease Liabilities Abstract | |
2023 | $ 1,185 |
2024 | 622 |
2025 | 77 |
2026 | 12 |
2027 | 13 |
Total lease payment | 1,909 |
Less: imputed interest | (88) |
Total | $ 1,821 |
Operating Leases (Details) - _4
Operating Leases (Details) - Schedule of lease term and discount rate | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of lease term and discount rate [Abstract] | |
Weighted-average remaining lease term (years) – operating leases | 2 years 3 months 18 days |
Weighted average discount rate – operating leases | 5.46% |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Provision for Income Taxes (Details) [Line Items] | ||
Operating loss carry forward, description | As of September 30, 2022 the operating loss carry forward were $47,939, among which there was $5,115 expiring from 2025 through 2037, and the remaining $42,824 has no expiration date. | |
Operating loss carry forward (in Dollars) | $ 104 | |
Expiry date, description | As of September 30, 2022 the operating loss carry forward was $11,511, which will expire from 2023 through 2027. | |
Profits tax, description | Hong Kong profits tax for a corporation from the year of assessment 2018/2019 onwards is generally 8.25% on assessable profits up to HK$2,000; and 16.5% on any part of assessable profits over HK$2,000. | |
Income tax rate | 17% | |
Carried forward term | 5 years | |
United States [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Federal income tax rate | 21% | 21% |
Israel [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
General tax rate | 23% | 23% |
Operating loss carry forward (in Dollars) | $ 8,218 | |
China [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Operating loss carry forward (in Dollars) | $ 11,511 | |
Statutory income tax rate | 25% | |
BI Intermediate Limited [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Operating loss carry forward (in Dollars) | $ 5,216 | |
Magpie Securities Limited [Member] | ||
Provision for Income Taxes (Details) [Line Items] | ||
Tax loss carry forward (in Dollars) | $ 15,712 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Current | ||||
Domestic | $ 29 | $ 248 | $ 72 | |
Foreign | 92 | 123 | ||
Total | 121 | 248 | 195 | |
Deferred | ||||
Domestic | ||||
Foreign | (701) | (191) | (2,030) | (605) |
Total | $ (701) | $ (191) | $ (2,030) | $ (605) |
Provision for Income Taxes (D_3
Provision for Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Provisions for employee rights and other temporary differences | $ 170 | $ 260 |
Provisions for bad debt | 842 | 696 |
Net operating loss carry forward | 18,306 | 12,034 |
Valuation allowance | (16,425) | (11,226) |
Deferred tax assets, net of valuation allowance | 2,893 | 1,764 |
Deferred tax liabilities | ||
Recognition of intangible assets arising from business combinations | (3,340) | (3,952) |
Deferred tax liabilities, net | $ (447) | $ (2,188) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 9 Months Ended | |
Sep. 28, 2022 | Sep. 30, 2022 | |
Subsequent Events (Details) [Line Items] | ||
Business combination description | As consideration for the Business Combination, Tingo shall receive from the MICT: (i) 25,783,675 shares of MICT Common Stock equal to approximately 19.9% of the total issued and outstanding MICT Common Stock calculated as at Closing; (ii) 2,604.28 shares of Series A Preferred Stock convertible into 26,042,808 shares of MICT Common Stock equal to approximately 20.1% of the total issued and outstanding MICT Common Stock calculated as at Closing; and (iii) 33,687.21 shares of Series B Preferred Stock convertible into 336,872,138 shares of MICT Common Stock following which Tingo will hold MICT Common Stock equal to 75% of MICT’s outstanding common stock, provided that 5% of the foregoing consideration shall be withheld in Escrow. | |
Escrow agreement, percentage | 5% | |
Issued and outstanding shares, percentage | 27% | |
Preferred stock, description | If approval by Nasdaq of the change of control of MICT or if approval by MICT’s stockholders of the Series B Conversion is not obtained by June 30, 2023, Tingo shall have the right to (i) cause the Series A Redemption to take place within 90 days; and (ii) cause MICT to redeem all of the Series B Preferred Stock in exchange for (x) $666,666 in cash or (y) an amount of common stock of Delaware Sub equivalent in value to $666,666 (reduced from the aggregate value of the Series B Preferred Stock at issuance, which is $1,000,000). | |
Principal loan amount (in Dollars) | $ 3,700 | $ 23,700,000 |
Interest rate | 5% | |
Series A Preferred Stock [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Shares issued (in Shares) | 10,000 | |
Series B Preferred Stock [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Shares issued (in Shares) | 10,000 |