UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended: September 30, 2021

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

COMMISSION FILE NUMBER 001-35850

MICT, INC.

(Exact Name of Registrant as Specified in its Charter)

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

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

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

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

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

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

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

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

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

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

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

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

As of November 12, 2021, there were 122,435,576 issued and outstanding shares of the registrant’s Common Stock, $0.001 par value per share.

TABLE OF CONTENTS

	PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	34

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	48

Item 4.	Controls and Procedures.	48

	PART II - OTHER INFORMATION

Item 1A.	Risk Factors.	51

Item 3.	Defaults Upon Senior Securities

Item 6.	Exhibits.	52

SIGNATURES		53

EXHIBIT INDEX

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash	$	105,289	$	29,049
Trade accounts receivable, net		20,644		523
Inventories		-		2,002
Other current assets		10,214		1,756
Related parties		2,167		-
Held for sales assets		-		350
Total current assets		138,314		33,680

Property and equipment, net		631		417
Intangible assets, net		18,808		17,159
Goodwill		19,788		22,405
Investment and loan to Magpie (formerly: Huapei)		-		3,038
Right-of-use assets		2,657		291
Long-term deposit and prepaid expenses		188		266
Micronet Ltd. equity method investment		1,764		-
Restricted cash escrow		-		477
Total long-term assets		43,836		44,053

Total assets	$	182,150	$	77,733

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

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2021			December 31, 2020
LIABILITIES AND EQUITY

Current maturity of long term bank loans	$	-		$	884
Trade accounts payable		18,520			838
Related party		-			163
Lease liabilities- current portion		1,573
Other current liabilities		5,241			5,102
Total current liabilities		25,334			6,987

Long term escrow		-			477
Lease liabilities		1,132			164
Deferred tax liabilities		3,323			4,256
Accrued severance pay		54			153
Total long-term liabilities		4,509			5,050
Total liabilities		29,843			12,037

Stockholders’ Equity:
Common stock; $0.001 par value, 250,000,000 shares authorized, 122,435,576 and 68,757,450 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		122			68
Additional paid in capital		220,660			102,333
Capital reserve related to transaction with the minority shareholder		-			(174	)
Accumulated other comprehensive loss		(323	)		(196	)
Accumulated deficit		(68,151	)		(39,966	)
MICT, Inc. stockholders’ equity		152,308			62,065

Non-controlling interests		(1	)		3,631

Total equity		152,307			65,696

Total liabilities and equity	$	182,150		$	77,733

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

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Nine months ended September 30,						Three months ended September 30,
	2021			2020			2021			2020

Net revenues	$	39,791		$	349		$	18,515		$	349
Cost of revenues		34,436			347			15,769			347
Gross profit		5,355			2			2,746			2

Operating expenses:
Research and development		1,015			230			396			230
Selling and marketing		3,874			69			1,521			69
General and administrative		26,039			6,337			6,618			4,899
Amortization of intangible assets		2,301			820			732			820
Total operating expenses		33,229			7,456			9,267			6,018

Loss from operations		(27,874	)		(7,454	)		(6,521	)		(6,016	)
Gain (loss) from equity investment		636			(786	)		799			-
Other income (expenses), net		70			138			(13	)		138
Financial income (expenses), net		61			(8,803	)		336			(8,960	)
Gain (loss) of control in equity investment held in Micronet		(1,934	)		665			-			-
Income (loss) before provision for income taxes		(29,041	)		(16,240	)		(5,399	)		(14,838	)
Tax benefit		(410	)		(219	)		(70	)		(225	)

Net loss		(28,631	)		(16,021	)		(5,329	)		(14,613	)
Net loss attributable to non-controlling interests		(446	)		(462	)		(1	)		(462	)

Net loss attributable to MICT, Inc.	$	(28,185	)	$	(15,559	)	$	(5,328	)	$	(14,151	)

Loss per share attributable to MICT, Inc.
Basic	$	(0.26	)	$	(1.03	)	$	(0.05	)	$	(0.61	)
Diluted	$	(0.26	)	$	(1.03	)	$	(0.05	)	$	(0.61	)

Weighted average common shares outstanding:
Basic		109,222,674			15,048,644			121,419,308			22,832,683
Diluted		109,222,674			15,048,644			121,419,308			22,832,683

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

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(USD In Thousands)

	Nine months ended September 30,						Three months ended September 30,
	2021			2020			2021			2020

Net loss	$	(28,631	)	$	(16,021	)	$	(5,329	)	$	(14,613	)
Other comprehensive income (loss), net of tax:
Currency translation adjustment		(127	)		(58	)		(412	)		(152	)
Total comprehensive loss		(28,758	)		(16,079	)		(5,741	)		(14,765	)
Comprehensive loss attributable to non-controlling interests		(643	)		(172	)		(1	)		(172	)
Comprehensive loss attributable to MICT, Inc.	$	(28,115	)	$	(15,907	)	$	(5,740	)	$	(14,593	)

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

MICT, INC.

UNAUDITED STATEMENTS OF CHANGES IN EQUITY

(USD In Thousands, Except Numbers of Shares)

	Series B Convertible Preferred Stock						Series A Convertible Preferred Stock						Common Stock				Additional Paid-in Capital – Series B Convertible Preferred			Additional Paid-in Capital – Series A Convertible Preferred			Additional Paid-in Capital – Common		Accumulated			Accumulated Other Comprehensive			Non- controlling		Total Stockholders’
	Amount			Shares			Amount			Shares			Amount		Shares		Stock			Stock			Stock		Deficit			Income (loss)			Interest		Equity

Balance, December 31, 2019		-			-			2			2,386,363			11		11,089,532		-			6,028			14,107		(16,974	)		70			-		3,244
Shares issued to service providers and employees		-			-			-			-			1		840,909		-			-			2,490		-			-			-		2,491
Exercising options for employees and consultants		-			-			-			-			1		1,198,000		-			-			2,365		-			-			-		2,366
Stock based compensation																								186										186
Comprehensive loss		-			-			-			-			-		-		-			-			-		(15,559	)		(347	)		-		(15,906	)
Entering the control of a subsidiary		-			-			-			-			-		-		-			-			-		-			-			2,000		2,000
Convertible note		-			-			-			-			14		13,636,364		-			-			22,400		-			-			-		22,414
GFH transaction		-			-			-			-			23		22,727,273		-			-			32,026		-			-			-		32,049
YA Exercising warrants		-			-			-			-			1		584,920		-			-			0		-			-			-		1
Hardon Exercising warrants		-			-			-			-			1		1,596,362		-			-			1,611		-			-			-		1,612
Issuance of shares, net- Series A Convertible Preferred Stock		-			-			1			795,455			-		-		-			409			-		-			-			-		410
Issuance of shares, net- Series B+A Convertible Preferred Stock		(2	)		(1,818,182	)		(3	)		(3,181,818	)		8		8,181,818		(1,914	)		(6,299	)		8,209		-			-			-		(2	)
Issuance of shares, net- Series B Convertible Preferred Stock		2			1,818,182			-			-			-		-		1,914			-			-		-			-			-		1,916
Balance, September 30, 2020		-			-			-			-			60		59,855,178		-			138			83,393		(32,533	)		(277	)		2,000		52,781

	Series B Convertible Preferred Stock						Series A Convertible Preferred Stock						Common Stock				Additional Paid-in Capital - Series B Convertible Preferred			Additional Paid-in Capital - Series A Convertible Preferred			Additional Paid-in Capital – Common		Accumulated			Accumulated Other Comprehensive			Non- controlling			Total Stockholders’
	Amount			Shares			Amount			Shares			Amount		Shares		Deficit			Stock			Stock		Deficit			Income (loss)			Interest			Equity

Balance, June 30, 2020		2			1,818,182			3			3,181,818			11		11,107,714		1,914			6,437			14,198		(18,382	)		164			2,172			6,519
Shares issued to service providers and employees		-			-			-			-			1		822,727		-			-			2,468		-			-			-			2,469
Exercising options for employees and consultants		-			-			-			-			1		1,198,000		-			-			2,365		-			-			-			2,366
Stock based compensation		-			-			-			-			-		-		-			-			117		-			-			-			117
Comprehensive loss		-			-			-			-			-		-		-			-			-		(14,151	)		(441	)		-			(14,592	)
Entering the control of a subsidiary		-			-			-			-			-		-		-			-			-		-			-			(172	)		(172	)
Convertible note		-			-			-			-			14		13,636,364		-			-			22,400		-			-			-			22,414
GFH transaction		-			-			-			-			23		22,727,273		-			-			32,026		-			-			-			32,049
YA Exercising warrants		-			-			-			-			1		584,920		-			-			0		-			-			-			1
Hardon Exercising warrants		-			-			-			-			1		1,596,362		-			-			1,611		-			-			-			1,612
Issuance of shares, net- Series B+A Convertible Preferred Stock		(2	)		(1,818,182	)		(3	)		(3,181,818	)		8		8,181,818		(1,914	)		(6,299	)		8,209		-			-			-			(2	)
Balance, September 30, 2020		-			-			-			-			60		59,855,178		-			138			83,393		(32,533	)		(277	)		2,000			52,781

	Common Stock				(A) Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Capital reserve related to transaction with the Minority			Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Loss			stockholders			Interest			Equity
Balance, December 31, 2020		68		68,757,450		102,333		(39,966	)		(196	)		(174	)		3,631			65,696
Shares issued to service providers and employees		7		7.010,020		9,869		-			-			-			-			9,876
Stock based compensation		-		-		585		-			-			-			-			585
Exercising options for employees and consultants				60,000		80		-			-			-			-			80
Net loss		-		-		-		(28,185	)		-			-			(446	)		(28,631	)
Other Comprehensive loss		-		-		-		-			(127	)		174			(197	)		(150	)
Loss of control of subsidiary		-		-		-		-			-			-			(2,989	)		(2,989	)
Issuance of shares upon November 2020 Securities Purchase Agreement		3		2,400,000		2,673		-			-			-			-			2,676
Issuance of shares upon February 2021 Purchase Agreement		23		22,471,904		53,977		-			-			-			-			54,000
Issuance of shares upon March 2021 Securities Purchase Agreement		19		19,285,715		48,671		-			-			-			-			48,690
Exercising warrants		2		2,450,487		2,472		-			-			-			-			2,474
Balance, September 30, 2021		122		122,435,576		220,660		(68,151	)		(323	)		-			(1	)		152,307

(A)

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

	Common Stock				(B) Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Capital reserve related to transaction with the minority		Non- controlling			Total Stockholders’
	Amount		Shares		Capital		Deficit			Income			stockholders		Interest			Equity
Balance, June 30, 2021		121		120,700,995		218,373		(62,823	)		89			-		-			155,760
Shares issued to service providers and employees		1		910,020		1,500		-			-			-		-			1,501
Stock based compensation		-		-		127		-			-			-		-			127
Exercising options for employees and consultants				40,000		52													52
Net loss		-		-		-		(5,328	)		-			-		(1	)		(5,329	)
Other Comprehensive loss		-		-		-		-			(412	)		-		-			(412	)
Exercising warrants		-		784,561		608		-			-			-		-			608
Balance, September 30, 2021		122		122,435,576		220,660		(68,151	)		(323	)		-		(1	)		152,307

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

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

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD In Thousands)

	Nine months ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(28,631	)	$	(16,021	)

Adjustments to reconcile net loss to net cash used in operating activities:
Gain on previously held equity interest in Micronet Ltd.		-			(665	)
(Gain) loss from equity investment		(636	)		786
Impairment of equity method investment in Micronet Ltd.		-			(187	)
Depreciation and amortization		2,416			890
Stock-based compensation for employees and consultants		585			2,675
Loss from loss of control in Micronet Ltd.		1,934			-
Impairment of loan to Micronet Ltd.		-			(76	)
Interest and exchange rate differences on loans		-			3
Interest and exchange rate differences on loans from others		-			13
Changes in assets and liabilities
Change in deferred taxes, net		(736	)		(205	)
Change in long-term deposit and prepaid expenses		224			-
Change in right of use assets		(250	)		-
Change in lease liabilities		165			-
Due to related party		(113	)		-
Increase in trade accounts receivable, net		(19,556	)		207
Decrease in inventories		-			83
Decrease in accrued severance pay, net		-			(5	)
Increase in other accounts receivable		(5,537	)		(907	)
Increase in trade accounts payable		17,949			(412	)
Increase (decrease) in other current liabilities		(2,895	)		1,620
Net cash used in operating activities		(35,081	)		(12,201	)

MICT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD In Thousands)

	Nine months ended September 30,
	2021			2020
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	$	(546	)	$	(4	)
Proceeds from sale of property and equipment					63
Cash acquired through business combination - Magpie (Appendix B)		1,834			-
Payment on business acquired - Beijing Fucheng (Appendix A)		(4,891	)		-
Additional investment of Micronet Ltd.		-			(

SEC Form 10-Q filed by MICT, Inc.