| Item 4.02(a) | Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. |
In preparation for the planned merger of the Company
with a wholly-owned subsidiary of Nasdaq-listed MICT, Inc. as disclosed in the Company’s Current Report on Form 8-K filed on May
13, 2022, the Company has reviewed and considered its accounting treatment of its acquisition of Tingo Mobile PLC (“Tingo Mobile”)
on August 15, 2021 (the “Acquisition”). Based on this review, the Company has elected to modify its accounting treatment of
the Acquisition as a reverse acquisition of the Company by Tingo Mobile instead of as a forward acquisition of Tingo Mobile by the Company
as had been previously presented.
The decision of the Company to change its accounting
treatment of the Acquisition was made following consultation of Company management with the Audit Committee of its Board of Directors.
Consequently, the Company is proceeding, as promptly as possible, to file amendments to its quarterly reports on Form 10-Q for the third
quarter of 2021 and the first quarter of 2022, as well as its annual report for the year ended December 31, 2021 (collectively, the “Amended
Reports”). The Amended Reports will replace and supersede the respective previously filed reports and financial statements included
therein.
In accordance with reverse acquisition accounting
rules, the Amended Reports will now include the consolidated operating results of Tingo Mobile for the full period cover by the Report,
rather than using forward acquisition accounting as had been presented previously, which included the results of Tingo Mobile only from
the date of the Acquisition.
In addition, certain balance sheet items, such
as goodwill attributed to Tingo Mobile, for example, will therefore need to be modified to instead reflect the goodwill attributable to
the Company as of the relevant balance sheet date. Further, certain non-cash expenses of the Company, such as transaction fees paid in
stock relating to the Acquisition, will be expensed rather than capitalized. Other changes consistent with reverse acquisition accounting
will also be made to the Company’s financial statements and notes thereto.
The expensing of various non-cash items as a result
of the change in accounting treatment is expected to increase the Company’s operational losses on a consolidated basis for the quarter
and nine months ended September 30, 2021, as well as for the year ended December 31, 2021. However, consolidated operating results of
the Company for the quarter ended March 31, 2022 are not expected to change significantly. Moreover, the unconsolidated operational results
of Tingo Mobile for the full year of 2021 and the first quarter of 2022, as the sole operating subsidiary of the Company, are also not
expected to be materially affected as a result of the change.
We have discussed the matters disclosed in this
filing with Gries & Associates, LLC, the Company’s independent accountants who concur with our conclusions.
Safe Harbor and Forward-Looking Statements
This Current Report and exhibits thereto may contain
certain forward-looking statements regarding possible future circumstances. These forward-looking statements are based upon the Company’s
current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements including, in particular, any risks and uncertainties with respect to the Company’s
operations, as well as those contained in the Company’s quarterly, annual, and periodic filings with the Securities and Exchange
Commission. Actual results, events, and performance may differ. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as to the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or
circumstances described in such statements are material.