MICT, Inc. (Nasdaq: MICT), (the "Company"), today announced
its financial results for the second quarter ended June 30, 2021.
Q2 2021 Highlights and Recent
Developments
- Insurance business revenues increased 50% over the first
quarter to $12.3m versus $8.2m, all from B2B sales.
- Total consolidated revenues increased 38% quarter over
quarter
- Currently in final stages of testing for Magpie stock trading
platform in preparation for full launch in mid-September
- Commodities trading platform anticipated to launch by end of
September
- MICT board approved $60 million capitalization of Magpie
Securities from the Company’s funds to finance the launch and
growth of stock trading platform
- MICT was added to the MSCI USA MicroCap Index on May 27th
- Investment in Micronet reduced to approximately 37%,
eliminating the requirement to consolidate
- As of June 30, 2021, cash position was approximately $114
million
Darren Mercer, MICT’s Chief Executive Officer
commented, “We have delivered significant quarter on quarter growth
from our B2B insurance business, despite having only launched in
December 2020 and being still at the very early stage of executing
on our long-term business plan. We grew our insurance brokerage
business by 50% over Q1, aided by the acquisition of the nationwide
insurance license throughout China. What is particularly exciting
about this achievement we are only at the beginning of the
development of our insurance business. The revenue ramp to date has
been exclusively from B2B sales. We are now poised to expand the
business into B2B2C products that will be distributed via one or
more on-line channels, which will be followed by further expansion
into direct B2C products, many of which are custom designed and
have significantly higher margins compared to our B2B
offerings.
“Another important part of our insurance
business growth strategy is to secure more licenses at a local
level, which alongside our development of strategic partnerships
and alliances in China, enables us to penetrate the higher margin
B2B2C market more quickly, and ultimately create and leverage
relationships with key partners to create the highest margin
penetration into the B2C market, including through the potential
offering of health insurance products.
“We are eagerly awaiting the launch of Magpie,
our stock trading app, which has reached the final stages of
testing and now anticipated to launch in mid-September. We have
also put in place all the components necessary to create a
successful business around our commodities trading platform,
partnering with Shanghai Petroleum and Natural Gas, whose clients
account for 20% of China’s oil and gas trade. Following our
diligent efforts building this platform, we are expecting to launch
it by end of September, following the Magpie launch, which we
believe will place MICT at the forefront of the financial
technology sector in Asia.
“Of note, our Micronet stake was reduced to
approximately 37%, which means we are no longer required to
consolidate the results of this entity into our P&L. By
removing Micronet from our consolidated income statement we will
now be able to provide investors with a clear view of our core
segments, enabling them to better monitor our progress.
“Given all of these developments, we believe we
are well positioned to continue our momentum and, as a result,
expect further growth in revenues in both the third and fourth
quarters of 2021.
“Finally, and perhaps most significantly, we
have, following our two placings in Q1 2021, amassed significant
cash resulting in approximately $114M on our balance sheet at June
30 2021. This strong cash position has multiple advantages
throughout our business segments, including in funding the
expedited build-out of our new businesses while also providing
significant runway to support our various trading segments.
“We are merely at the beginning of each of the
development and growth of our business verticals and the feedback
we have already received has been very positive, I believe there is
reason for optimism, and I am very excited about our future
prospects. Not just for second half of 2021, particularly the
fourth quarter, but 2022 and beyond. In the meantime, we look
forward to providing continued updates to our stockholders as we
progress with all of our businesses” concluded Mr. Mercer.
Q2
2021 Financial
Review
- Revenue in the second quarter was
$12.3 million versus $8.9 million in the prior quarter and $0 in
the year-ago period. The increase over Q1 was primarily
attributable to ramp in the insurance division, which grew 50%
sequentially
- Gross profit in Q2 was $.0.7
million versus $1.9 million in the prior quarter. The margin
reduction was due to incentives used to attract critical mass of
new brokers/customers; margins set to recover in H2 2021
- R&D expenses in Q2 were $0.4
million versus $0.2 in the first quarter
- Selling & marketing expenses in
Q2 was $1.4 million, up from $1.0 million in the first quarter as
resources were spent on the insurance brokerage platform
- General and administrative expenses
were $14.8 million in Q2 versus $4.6 million in Q1, driven by
increased advisor and professional expenses related to recent
acquisitions
- Operating loss in Q2 was $16.6
million versus a loss of $4.8 million in the prior quarter
- As of June 30, 2021, cash position
was approximately $114 million
Conference Call to be
Held August 16, 2021 at 8:30AMPlease note
that registered participants will receive their dial in number upon
registration and will dial directly into the call without delay.
Those without internet access or unable to pre-register may dial in
by calling: 1-833-953-2437 (domestic) or 1-412-317-5766
(international). All callers should dial in approximately 10
minutes prior to the scheduled start time and ask to be joined into
the MICT call.
The conference call will also be available through a live
webcast found here:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=v01zK7nv.
A webcast replay of the call will be available
here approximately one hour after the end of the call through
November 16, 2021. A telephonic replay of the call will be
available through August 30, 2021, and may be accessed by calling
1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
using access code 10159526.
About MICT, Inc.MICT, Inc.
(NasdaqCM: MICT) operates through its wholly-owned subsidiary, GFH
Intermediate Holdings Ltd ("GFHI"), GFHI’s various fully-owned
subsidiaries or VIE structures. 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.
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)MICT, INC. AND
SUBSIDIARIES
|
|
June 30, |
|
|
December
31, |
|
|
|
2021 |
|
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
114,183 |
|
|
$ |
29,049 |
|
Trade accounts receivable, net |
|
|
16,052 |
|
|
|
523 |
|
Inventories |
|
|
- |
|
|
|
2,002 |
|
Other current assets |
|
|
2,314 |
|
|
|
1,756 |
|
Related party |
|
|
1,230 |
|
|
|
- |
|
Held for sales assets |
|
|
- |
|
|
|
350 |
|
Total current assets |
|
|
133,779 |
|
|
|
33,680 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
261 |
|
|
|
417 |
|
Intangible assets, net |
|
|
19,493 |
|
|
|
17,159 |
|
Goodwill |
|
|
19,788 |
|
|
|
22,405 |
|
Investment and loan to Magpie (formerly: Huapei) |
|
|
- |
|
|
|
3,038 |
|
Right-of-use assets |
|
|
2,689 |
|
|
|
291 |
|
Long-term deposit and prepaid expenses |
|
|
172 |
|
|
|
266 |
|
Micronet Ltd. equity method investment |
|
|
965 |
|
|
|
- |
|
Restricted cash escrow |
|
|
477 |
|
|
|
477 |
|
Total long-term assets |
|
|
43,845 |
|
|
|
44,053 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
177,624 |
|
|
$ |
77,733 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturity of long term bank loans |
|
$ |
- |
|
|
$ |
884 |
|
Trade accounts payable |
|
|
11,798 |
|
|
|
838 |
|
Related party |
|
|
- |
|
|
|
163 |
|
Other current liabilities |
|
|
3,489 |
|
|
|
5,102 |
|
Total current liabilities |
|
|
15,287 |
|
|
|
6,987 |
|
|
|
|
|
|
|
|
|
|
Long term escrow |
|
|
477 |
|
|
|
477 |
|
Lease liability |
|
|
2,533 |
|
|
|
164 |
|
Deferred tax liabilities |
|
|
3,513 |
|
|
|
4,256 |
|
Accrued severance pay |
|
|
54 |
|
|
|
153 |
|
Total long-term liabilities |
|
|
6,577 |
|
|
|
5,050 |
|
Total liabilities |
|
|
21,864 |
|
|
|
12,037 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Common stock; $0.001 par value, 250,000,000 shares authorized,
120,700,995 and 68,757,450 shares issued and outstanding as of June
30, 2021 and December 31, 2020, respectively |
|
|
121 |
|
|
|
68 |
|
Additional paid in capital |
|
|
218,373 |
|
|
|
102,333 |
|
Capital reserve related to transaction with the minority
shareholder |
|
|
- |
|
|
|
(174 |
) |
Accumulated other comprehensive income (loss) |
|
|
89 |
|
|
|
(196 |
) |
Accumulated loss |
|
|
(62,823 |
) |
|
|
(39,966 |
) |
MICT, Inc. stockholders’ equity |
|
|
155,760 |
|
|
|
62,065 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
- |
|
|
|
3,631 |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
155,760 |
|
|
|
65,696 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
177,624 |
|
|
$ |
77,733 |
|
MICT, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS(In Thousands, Except Share and
Loss Per Share data)
|
|
Six months ended |
|
|
|
June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
21,276 |
|
|
$ |
- |
|
Cost of revenues |
|
|
18,667 |
|
|
|
- |
|
Gross profit |
|
|
2,609 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
619 |
|
|
|
- |
|
Selling and marketing |
|
|
2,352 |
|
|
|
- |
|
General and
administrative |
|
|
19,421 |
|
|
|
1,438 |
|
Amortization of intangible
assets |
|
|
1,569 |
|
|
|
- |
|
Total operating expenses |
|
|
23,961 |
|
|
|
1,438 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(21,352 |
) |
|
|
(1,438 |
) |
Loss from equity
investment |
|
|
(163 |
) |
|
|
(786 |
) |
Other (income) loss, net |
|
|
83 |
|
|
|
- |
|
Financial income (expenses),
net |
|
|
(275 |
) |
|
|
157 |
|
Gain (loss) on equity
investment held in Micronet |
|
|
(1,934 |
) |
|
|
665 |
|
Income (loss) before provision
for income taxes |
|
|
(23,641 |
) |
|
|
(1,402 |
) |
Taxes on income (tax
benefit) |
|
|
(339 |
) |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(23,302 |
) |
|
|
(1,408 |
) |
Net loss attributable to
non-controlling interests |
|
|
(445 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to MICT, Inc. |
|
$ |
(22,857 |
) |
|
$ |
(1,408 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
attributable to MICT, Inc. |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.22 |
) |
|
$ |
(0.12 |
) |
Diluted |
|
$ |
(0.22 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
102,992,830 |
|
|
|
11,092,144 |
|
Diluted |
|
|
102,992,830 |
|
|
|
11,092,144 |
|
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.:
|
|
Six months ended |
|
|
|
June 30, |
|
|
|
(Dollars in Thousands, |
|
|
|
other than share and |
|
|
|
per share amounts) |
|
|
|
2021 |
|
|
2020 |
|
GAAP net loss attributable to
MICT, Inc. |
|
$ |
(22,857 |
) |
|
$ |
(1,408 |
) |
Amortization of acquired
intangible assets |
|
|
1,568 |
|
|
|
- |
|
Expenses related to settlement
agreements |
|
|
532 |
|
|
|
- |
|
Options- based
compensation |
|
|
458 |
|
|
|
- |
|
Stock-based compensation |
|
|
8,368 |
|
|
|
- |
|
Income tax-effect of above
non-GAAP adjustments |
|
|
(414 |
) |
|
|
- |
|
Total Non-GAAP net loss
attributable to MICT, Inc. |
|
$ |
(12,345 |
) |
|
$ |
(1,408 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per diluted
share attributable to MICT, Inc. |
|
$ |
(0.12 |
) |
|
$ |
(0.13 |
) |
Weighted average common shares
outstanding used in per share calculations |
|
|
102,992,830 |
|
|
|
11,092,144 |
|
GAAP net loss per diluted
share attributable to MICT, Inc. |
|
$ |
(0.22 |
) |
|
$ |
(0.12 |
) |
Weighted average common shares
outstanding used in per share calculations |
|
|
102,992,830 |
|
|
|
11,092,144 |
|
|
|
Three months ended |
|
|
|
June 30, |
|
|
|
(Dollars in Thousands, |
|
|
|
other than share and |
|
|
|
per share amounts) |
|
|
|
2021 |
|
|
2020 |
|
GAAP net loss attributable to
MICT, Inc. |
|
$ |
(18,396 |
) |
|
$ |
227 |
|
Amortization of acquired
intangible assets |
|
|
782 |
|
|
|
- |
|
Expenses related to settlement
agreements |
|
|
67 |
|
|
|
- |
|
Options- based
compensation |
|
|
458 |
|
|
|
- |
|
Stock-based compensation |
|
|
8,368 |
|
|
|
- |
|
Income tax-effect of above
non-GAAP adjustments |
|
|
(215 |
) |
|
|
- |
|
Total Non-GAAP net loss
attributable to MICT, Inc. |
|
$ |
(8,936 |
) |
|
$ |
227 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per diluted
share attributable to MICT, Inc. |
|
$ |
(0.08 |
) |
|
$ |
0.02 |
|
Weighted average common shares
outstanding used in per share calculations |
|
|
117,634,776 |
|
|
|
11,094,784 |
|
GAAP net loss per diluted
share attributable to MICT, Inc. |
|
$ |
(0.16 |
) |
|
$ |
0.02 |
|
Weighted average common shares
outstanding used in per share calculations |
|
|
117,634,776 |
|
|
|
11,094,784 |
|
MICT (NASDAQ:MICT)
Historical Stock Chart
From Apr 2024 to May 2024
MICT (NASDAQ:MICT)
Historical Stock Chart
From May 2023 to May 2024