MICT, Inc. Reports Fourth Quarter 2020 and Full Year Results
March 31 2021 - 8:00AM
MICT, Inc. (Nasdaq: MICT), (the "Company"), today announced
its financial results for the fourth quarter and full year ended
December 31, 2020.
2020 Highlights and Recent
Developments
- Generated revenues of $1.2 million in 2020, an increase of 146%
over 2019, of which $824,000 was generated in the fourth
quarter
- During July 2020 completed the acquisition of GFH Intermediate
Holdings Ltd. (“GFHI”).
- In October 2020, entered an agreement to acquire Huapei, a Hong
Kong Securities and investment firm. The Company recently completed
the 100% acquisition, which facilitated the development of the
company’s proprietary stock trading platform by providing the
license to trade securities across a number of international stock
exchanges, including Hong Kong and the U.S.
- During December 2020, launched insurance platform ahead of
schedule, providing revenue late into the fourth quarter and strong
momentum into 2021
- In February 2021, acquired a nationwide license to distribute
insurance products throughout China, significantly expanding
capabilities to develop and sell insurance products b2b, b2b2c and
b2c
- During February 2021 entered into a strategic partnership with
Shanghai Petroleum and Natural Gas Trading Center, under which MICT
will act as a third-party partner to the exchange’s clients to
provide trade execution, margin financing and trade clearing
capabilities for clients trading futures and commodities
contracts.
- Cash balance as of December 31, 2020 of $29 million
- Two fundraises totaling $114 million thus far during 2021
“The year 2020 was pivotal for MICT as we made
the transition from telematics to fintech in the China and
Southeast Asia market, and established a significant cash balance
to execute and support that strategy. Whilst the year presented an
overall loss, this can be balanced by the very significant one-off
costs necessary to achieve the acquisitions that formed the basis
of our go-forward strategy, and we began to reap the benefit of
those investments at the end of the year,” commented Darren Mercer,
MICT’s CEO.
“Our insurance business started strongly
following an encouraging launch in the fourth quarter of 2020, and
we continue to see those revenues grow. Additionally, we are
excited about the impending launch of both our proprietary stock
trading platform, driven by an innovative and targeted marketing
strategy and our commodities and futures trading platform, which is
supported through our unique relationship with a major force in the
Chinese oil and gas industry.
“Whilst the investment in Micronet has begun to
show promise, we are especially excited about the potential of our
three fintech verticals. The importance of our strong cash balance
cannot be understated, given the support it offers to fuel the
company’s growth. Both the insurance division and stock trading
division have significant resources to support their current
respective growth plans, and we are excited to share our upcoming
successes with our shareholders as we execute on these carefully
crafted plans,” concluded Mr. Mercer.
Q4 2020 Review
Three Months Ended December 31, 2020 Review
- Total revenue in the fourth quarter of 2020 was $824,000 versus
$0 in the fourth quarter of 2019. The increase was due in large
part to MICT’s insurance business, which was launched in China in
December 2020, as well as the gaining controlling interest over
Micronet
- Gross profit was ($60,000) in the fourth quarter of 2020 versus
$0 in the fourth quarter of 2019.
- Research and development expenses were $254,000 in the fourth
quarter of 2020 versus ($6,000) in the fourth quarter of 2019. The
increase over the 2019 period was due to our gain of a controlling
interest over Micronet on June 23, 2020 and the acquisition of GFHI
on July 1, 2020.
- General and administrative expenses were $7.9 million in the
fourth quarter of 2020, up from $866,000 in the year-ago period.
The increase over the prior year period was due to (i) the
acquisitions as noted above, and (ii) an increase in professional
and advisory fees in connection with the consummation of the public
offering closed on November 2020 and GFHI merger; and (iii) an
increase associated with the issuance of options and shares to
directors, employees and consultants
- Operating income in the fourth quarter of 2020 was a loss of
$9.1 million, up from a loss of $866,000 in the prior-year period.
The increase in the operating loss was due primarily to the
increase in general and administrative expenses as noted above and
an increase in amortization expenses.
- Total net loss in the fourth quarter of 2020 was $7.6 million
versus a loss of $9.9 million in the prior-year period.
- As of December 31, 2020, MICT had total cash of $29
million.
Twelve Months Ended December 31, 2020
Review
- Total revenue for the full year 2020 was $1.2 million versus
$477,000 in the year-ago period. The increase was primarily due to
MICT’s insurance business, which was launched in China in December
2020
- Gross profit was ($58,000) in 2020 versus negative ($369,000)
during the same period of 2019
- Research and development expenses were $484,000 in 2020 versus
$255,000 in 2019. The increase over the 2019 period was due to our
gain of a controlling interest over Micronet on June 23, 2020 and
the acquisition of GFHI on July 1, 2020.
- General and administrative expenses were $14.2 million in 2020,
up from $3.0 in the year-ago period. The increase over the prior
year period was due to i) the acquisitions as noted above, and (ii)
an increase in professional and advisory fees in connection with
the consummation of the public offering closed on November 2020 and
GFH merger; and (iii) an increase associated with the issuance of
options and shares to directors, employees and consultants.
- Operating income in 2020 was a loss of $16.6 million versus a
loss of $3.9 in the prior-year period. The increase in the
operating loss was due primarily to the higher general and
administrative expenses noted above and the increase in
amortization expenses in 2020.
- Total net loss in 2020 was negative $23.6 million versus a loss
of $4.8 million in the prior year.
Twelve Months Ended December 31, 2020 Non-GAAP
Review
- Non-GAAP net loss for the year ended December 31, 2020 was $3.9
million or ($0.14) per basic share, as compared to $4.2 million, or
($0.39) per basic share, for the year ended December 31, 2019. This
represents a decrease of $356,000, or 8%, for the year ended
December 31, 2020 as compared to the same period last year. We
believe these non-GAAP financial measures reflect our ongoing
business in a manner that allows for meaningful comparisons and
analysis of trends in our business, as they exclude expenses and
gains that are not reflective of our ongoing operating results. We
also believe that these non-GAAP financial measures provide useful
information to investors in understanding and evaluating our
operating results and future prospects in the same manner as
management and in comparing financial results across accounting
periods and to those of peer companies.
About MICT, Inc.
MICT, Inc. (NasdaqCM: MICT) operates through its
subsidiaries, GFH Intermediate Holdings Ltd ("GFHI") and its
various fully owned subsidiaries or VIE structures. And Micronet
Ltd. ("Micronet"). GFHI's versatile proprietary trading technology
platform is designed to serve a large number of high growth sectors
in the global fintech space. Primary areas of focus include online
brokerage for equities trading and sales of insurance products in
several high-growth foreign markets including Asia where GFH owns a
substantial propriety database of users. Micronet operates in the
growing telematics and commercial Mobile Resource Management (MRM)
market, mainly in the United States and Europe. Micronet designs,
develops, manufactures and sells mobile computing solutions that
provide fleet operators and field workforces with computing
solutions in challenging work environments.
Forward-looking Statement
This press release contains express or implied
forward-looking statements within the Private Securities Litigation
Reform Act of 1995 and other U.S. Federal securities laws. All
statements other than statements of historical fact contained in
this press release are forward-looking statements. The words
“believe,” “may” “will,” “estimate,” “continue,” “anticipate,”
“intend,” “expect” and similar expressions, as they relate to us,
are intended to identify forward-looking statements. We have based
these forward-looking statements on our current expectations and
projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy, business prospectus, growth strategy and
liquidity. Such forward-looking statements and their implications
involve known and unknown risks, uncertainties and other factors
that may cause actual results or performance to differ materially
from those projected. The forward-looking statements contained in
this press release are subject to other risks and uncertainties,
including those discussed in the "Risk Factors" section and
elsewhere in the Company's annual report on Form 10-K for the year
ended December 31, 2020 and in subsequent filings with the
Securities and Exchange Commission. Except as otherwise required by
law, the Company is under no obligation to (and expressly disclaims
any such obligation to) update or alter its forward-looking
statements whether as a result of new information, future events or
otherwise.
Contact information:Tel: (201) 225-0190info@mict-inc.com
MICT, INC.CONSOLIDATED
BALANCE SHEETS(In Thousands, except Share and Par
Value data)
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,049 |
|
|
$ |
3,154 |
|
Restricted cash |
|
|
- |
|
|
|
45 |
|
Trade accounts receivable, net |
|
|
523 |
|
|
|
- |
|
Short-term loan to Related party Micronet Ltd, net |
|
|
- |
|
|
|
281 |
|
Inventories |
|
|
2,002 |
|
|
|
- |
|
Other current assets |
|
|
1,756 |
|
|
|
937 |
|
Total current assets |
|
|
33,330 |
|
|
|
4,417 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
552 |
|
|
|
29 |
|
Intangible assets, net and others |
|
|
17,374 |
|
|
|
- |
|
Goodwill |
|
|
22,405 |
|
|
|
- |
|
Investment and loan to Huapie |
|
|
3,038 |
|
|
|
- |
|
Right of use assets |
|
|
291 |
|
|
|
- |
|
Long-term deposit and prepaid expenses |
|
|
266 |
|
|
|
- |
|
Restricted cash escrow |
|
|
477 |
|
|
|
477 |
|
Micronet Ltd. Equity method investment |
|
|
- |
|
|
|
994 |
|
Total long-term assets |
|
|
44,403 |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
77,733 |
|
|
$ |
5,917 |
|
MICT, INC.CONSOLIDATED
BALANCE SHEETS(In Thousands, except Share and Par
Value data)
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long term bank loans |
|
$ |
884 |
|
|
$ |
- |
|
Trade accounts payable |
|
|
838 |
|
|
|
- |
|
Related party |
|
|
163 |
|
|
|
- |
|
Other current liabilities |
|
|
5,102 |
|
|
|
290 |
|
Total current liabilities |
|
|
6,987 |
|
|
|
290 |
|
|
|
|
|
|
|
|
|
|
Long term loans from others |
|
|
- |
|
|
|
1,856 |
|
Long term escrow |
|
|
477 |
|
|
|
477 |
|
Lease liability |
|
|
164 |
|
|
|
- |
|
Deferred tax liabilities |
|
|
4,256 |
|
|
|
- |
|
Accrued severance pay |
|
|
153 |
|
|
|
50 |
|
Total long term liabilities |
|
|
5,050 |
|
|
|
2,383 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Convertible Preferred stock; $0.001 par value 0 and 2,386,363
shares authorized, issued and outstanding as of December 31, 2020
and December 31, 2019, respectively |
|
|
0 |
|
|
|
2 |
|
Common stock; $0.001 par value, 250,000,000 shares authorized,
68,757,447 and 11,089,532 shares issued and outstanding
as of December 31, 2020 and December 31, 2019, respectively |
|
|
68 |
|
|
|
11 |
|
Additional paid in capital |
|
|
102,195 |
|
|
|
14,107 |
|
Additional paid in capital - preferred stock |
|
|
138 |
|
|
|
6,028 |
|
Capital reserve related to transaction with the minority
shareholder |
|
|
(174 |
) |
|
|
- |
|
Capital reserve from currency translation |
|
|
(196 |
) |
|
|
70 |
|
Accumulated loss |
|
|
(39,966 |
) |
|
|
(16,974 |
) |
MICT, Inc. stockholders’ equity |
|
|
62,065 |
|
|
|
3,244 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
3,631 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
65,696 |
|
|
|
3,244 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
77,733 |
|
|
$ |
5,917 |
|
MICT, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(In Thousands, Except
Share and Loss Per Share data)
|
|
Year ended
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Revenues |
|
$ |
1,173 |
|
|
$ |
477 |
|
Cost of revenues |
|
|
1,231 |
|
|
|
846 |
|
Gross loss |
|
|
(58 |
) |
|
|
(369 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
484 |
|
|
|
255 |
|
Selling and marketing |
|
|
(38 |
) |
|
|
198 |
|
General and administrative |
|
|
14,228 |
|
|
|
3,027 |
|
Amortization of intangible assets |
|
|
1,847 |
|
|
|
20 |
|
Total operating expenses |
|
|
16,521 |
|
|
|
3,500 |
|
Loss from operations |
|
|
(16,579 |
) |
|
|
(3,869 |
) |
|
|
|
|
|
|
|
|
|
Share in investee losses |
|
|
786 |
|
|
|
795 |
|
Gain on previously held equity in Micronet |
|
|
(665 |
) |
|
|
- |
|
Gain from loss of control of subsidiary |
|
|
- |
|
|
|
(299 |
) |
Other income |
|
|
(200 |
) |
|
|
- |
|
Finance expense, net |
|
|
7,462 |
|
|
|
388 |
|
Loss before provision for income taxes |
|
|
(23,962 |
) |
|
|
(4,753 |
) |
Taxes on income (benefit) |
|
|
(326 |
) |
|
|
17 |
|
Total Net Loss |
|
|
(23,636 |
) |
|
|
(4,770 |
) |
Net loss attributable to non-controlling interests |
|
|
664 |
|
|
|
553 |
|
Net loss attributable to MICT |
|
$ |
(22,992 |
) |
|
$ |
(4,217 |
) |
Loss per share attributable to MICT: |
|
|
|
|
|
|
|
|
Basic and diluted loss per share from continued operation |
|
$ |
(0.83 |
) |
|
$ |
(0.39 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
27,623,175 |
|
|
|
10,697,329 |
|
Non-GAAP Financial Measures
In addition to providing financial measurements
based on generally accepted accounting principles in the U.S., or
GAAP, we provide additional financial metrics that are not prepared
in accordance with GAAP, or non-GAAP financial measures. Management
uses non-GAAP financial measures, in addition to GAAP financial
measures, to understand and compare operating results across
accounting periods, for financial and operational decision making,
for planning and forecasting purposes and to evaluate our financial
performance.
Management believes that these non-GAAP
financial measures reflect our ongoing business in a manner that
allows for meaningful comparisons and analysis of trends in our
business, as they exclude expenses and gains that are not
reflective of our ongoing operating results. Management also
believes that these non-GAAP financial measures provide useful
information to investors in understanding and evaluating our
operating results and future prospects in the same manner as
management and in comparing financial results across accounting
periods and to those of peer companies.
The non-GAAP financial measures do not replace the presentation
of our GAAP financial results and should only be used as a
supplement to, not as a substitute for, our financial results
presented in accordance with GAAP.
The non-GAAP adjustments, and the basis for
excluding them from non-GAAP financial measures, are outlined
below:
|
● |
Amortization of acquired intangible assets - We
are required to amortize the intangible assets, included in our
GAAP financial statements, related to the Transaction and the
Acquisition. The amount of an acquisition’s purchase price
allocated to intangible assets and term of its related amortization
are unique to these transactions. The amortization of acquired
intangible assets are non-cash charges. We believe that such
charges do not reflect our operational performance. Therefore, we
exclude amortization of acquired intangible assets to provide
investors with a consistent basis for comparing pre- and
post-transaction operating results. |
|
|
|
|
● |
Expenses related to beneficial conversion feature
expense - Those expenses are non-cash expenses and are
related to the difference between the stock price at the closing of
the Note Purchase Agreements and the conversion price of $1.10 per
share. |
|
|
|
|
● |
Stock-based compensation is share based
awards granted to certain individuals. They are non-cash and
affected by our historical stock prices which are irrelevant to
forward-looking analyses and are not necessarily linked to our
operational performance. |
|
|
|
|
● |
Expenses related to the purchase of a business -
These expenses relate directly to the purchase of the GFH I
transaction and consist mainly of legal and accounting fees,
insurance fees and other consultants. We believe that these
expenses do not reflect our operational performance. Therefore, we
exclude them to provide investors with a consistent basis for
comparing pre- and post-Vehicle Business purchase operating
results. |
|
|
|
|
● |
Expenses related to settlement agreement - These
expenses relate directly to the settlement agreement with Maxim and
Sunrise. More information can be found in the legal proceeding
part. |
The following table reconciles, for the periods
presented, GAAP net loss attributable to MICT to non-GAAP net
income attributable to MICT. and GAAP loss per diluted share
attributable to MICT to non-GAAP net loss per diluted share
attributable to MICT.:
|
|
Year ended December 31, |
|
|
|
(Dollars in Thousands, other than share and per share
amounts) |
|
|
|
2020 |
|
|
2019 |
|
GAAP net loss attributable to Mict, Inc. |
|
$ |
(22,992 |
) |
|
$ |
(4,217 |
) |
Amortization of acquired intangible assets |
|
|
1,572 |
|
|
|
- |
|
Expenses related to beneficial conversion feature expense |
|
|
8,482 |
|
|
|
- |
|
Stock-based compensation |
|
|
3,571 |
|
|
|
- |
|
Expenses related to purchase of a business |
|
|
3,364 |
|
|
|
- |
|
One time expenses relates to settlement agreement |
|
|
2,440 |
|
|
|
|
|
Income tax-effect of above non-GAAP adjustments |
|
|
(398 |
) |
|
|
- |
|
Total Non-GAAP net loss attributable to Mict, Inc. |
|
$ |
(3,961 |
) |
|
$ |
(4,217 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per diluted share attributable to Mict, Inc. |
|
$ |
(0.14 |
) |
|
$ |
(0.39 |
) |
Weighted average common shares outstanding used in per share
calculations |
|
|
27,623,175 |
|
|
|
10,697,329 |
|
GAAP net loss per diluted share attributable to Mict,
Inc. |
|
$ |
(0.83 |
) |
|
$ |
(0.39 |
) |
Weighted average common shares outstanding used in per share
calculations |
|
|
27,623,175 |
|
|
|
10,697,329 |
|
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