Revenue Increased 15% Quarter-over-Quarter to $13.8 Million

Gross Profit from Insurance Business of $3.2 Million Increased 54% Quarter-Over-Quarter and 16% Year-over-Year

Gross Margin of Insurance Business Increased to a Company Record 23%

Acquisition of Tingo on Track for Completion by November 30, 2022

Tingo, Inc. Reports Q3 2022 Revenues of $291.7 Million and Income Before Tax and Share Based Payments of $160.6 Million

MICT, Inc. (Nasdaq: MICT), (the “Company"), today announced its financial results for the third quarter ended September 30, 2022.

Q3 2022 Highlights and Recent Developments

• Insurance revenues for Q3 2022 amounted to $13.8 million, up 15% on Q2 2022 revenues.
• Gross profit margins for the insurance business also improved, increasing to 23% for Q3 2022 compared to 17% in Q2 2022 and 15% in the year ago period, due to the ongoing focus on writing more profitable business.
• Magpie Securities (Singapore) PTE Ltd received final approval of its Capital Markets License from the Monetary Authority of Singapore, which enables Magpie Securities to onboard clients from numerous countries and offer a number of new services, including, but not limited to, foreign exchange products, commodity trading, leveraged products and CFDs.
• Strategic partnership signed with leading global investment bank for foreign exchange and payment services, enabling the provision of competitive products to clients.
• Acquisition of 100% of Tingo Mobile Limited is scheduled to complete by November 30, 2022, following the filing of Tingo, Inc.’s (OTC Markets: TMNA) Definitive Information Statement.
• Tingo Mobile signed trade deals with (i) the All Farmers Association of Nigeria (“AFAN”), which included a commitment to enroll a minimum of 20 million customers with Tingo Mobile; and, (ii) with the Ashanti Investment Trust (“AIT”), which included a commitment to enroll a minimum of 2 million customers with Tingo Mobile, as well as a target to achieve at least 4 million, the latter of which coincided with the nationwide launch of Tingo Mobile in Ghana.
• Tingo Mobile’s parent company, Tingo, Inc., announced its own third quarter results earlier this morning, reporting revenues for the three months of $291.7 million (compared to $268.7 million in Q2 2022); and income before tax and share based payments of $160.6 million (compared to $151.3 million in Q2 2022).
• Tingo Inc.’s, cumulative income before tax and share based payments for the nine-month period ended September 30, 2022 amounted to $455.2 million, compared to $170.5 million for the year ago period.
• Significant strengthening of professional advisory team through the appointment of global investment bank, Haitong Securities USA LLC, leading international Investor Relations firm, MZ Group, and world leading accounting firm, Deloitte.

Darren Mercer, MICT’s Chief Executive Officer, commented, “We are very pleased with the continued recovery in our insurance business during the third quarter, as China’s COVID-19 protocols continued to ease. Our insurance business has once again delivered a quarter-on-quarter increase in gross profit, achieving our highest ever reported gross margin of 23%.

“Through our nationwide online insurance license, which is supported by our comprehensive coverage of regional, provincial and city licenses, covering the vast majority of developed China, the infrastructure we have established is a necessary and an extremely valuable component to enable us to roll out the Tingo Mobile range of products. This in turn is expected to create substantial value to MICT.

“Magpie’s pivoted focus towards a broker-as-a-service model is aimed at giving white-label solutions to financial services and banking organizations, as well as a foreign exchange offering. We are currently at an advanced stage of discussions on deals with several such organizations, which if consummated, would each add considerable high-margin revenues to the Magpie group of companies. Complimentary developments in the quarter included the receipt of full approval of our Capital Markets License from the Monetary Authority of Singapore and the signing of an agreement with a leading global banking organization, which together with the imminently expected approval of our Money Services Operators License, will allow us to offer a full range of highly competitive payment and foreign exchange services to both white-label partners and end clients, and also to incorporate foreign exchange services into our commodities and export businesses.

“Through our Capital Markets License we are able to offer a number of new products, including commodities trading, foreign exchange trading and leveraged investments. This will enable our Singapore Office to operate as the Commodity Center for the group, including to facilitate our commodity trading business with Tingo Mobile and to handle the significant volumes of exports it is expected to generate from 2023.

“Tingo Inc., and sole subsidiary Tingo Mobile, our acquisition of which is scheduled to complete by November 30, 2022, reported its third quarter results earlier this morning, and we are thrilled with its performance and progress. We believe the revenues and net income of Tingo Mobile will increase considerably in 2023, due to its recently announced trade deals with AFAN in Nigeria and AIT in Ghana, together with the planned acceleration of its international expansion and its considerable export opportunities.

“With an annualized revenue run rate approaching $1.2 billion and a net income before tax run rate approaching $650 million, as reported today in Tingo, Inc.’s Q3 2022 results, we expect to see further increases in Q4 2022, followed by a substantial improvement in both revenue and net income run rates in 2023. In our soon to be launched export and commodity trading businesses, we anticipate that a large proportion of next year’s revenues will be generated in US dollars.

“With the MICT consolidated group expected to become significantly profitable from Q4 2022 onwards, on a proven business model that will see rapid expansion in terms of both revenue and profitability, it is clear, as previously stated last week, there is a huge disconnect between our current share price and the profitability of the consolidated group. With the appointment of a number of key new advisors, including a leading global investment bank and an international IR firm, the Board is committed to addressing this disconnect and delivering a share price that reflects MICT’s true value.”

Q3 2022 Financial Review

• Revenue in the third quarter was $13.8 million versus $12.0 million in the prior quarter. The increase was due to the growth in insurance business revenues, which increased by 15% quarter over quarter.
• Gross profit in the third quarter was $3.2 million, up 54% from $2.1 million in the second quarter. The increase was due to the combination of the increase in revenues in the insurance business, against a partially fixed direct cost base, and a focus on writing more profitable insurance policies.
• Selling & marketing expenses in the third quarter were $1.3 million as compared to $1.0 million in the second quarter. The increase was due to an increase in marketing expenses on the insurance businesses in the third quarter, offset in part by a decrease in marketing expenses for the stock trading businesses.
• General and administrative expenses were $9.2 million in the third quarter, compared to $13.7 million in the second quarter. This represents a decrease of $4.4 million for the three months ended September 30, 2022, as compared to the three months ended June 30, 2022. General and administrative expenses for the third quarter included $1.7 million of transaction expenses relating to the acquisition of Tingo Mobile Limited and $0.1m of share-based payments, compared to $3.1 million of transaction expenses and $3.8 million of share-based payments in the second quarter.
• Operating loss for the third quarter was $8.7 million versus a loss of $13.8 million for the second quarter. This represents a decrease of $5.1 million for the three months ended September 30, 2022, as compared to the three months ended June 30, 2022. The decrease is mainly a result of the decrease in General and administrative expenses and increase in Gross profit.
• As of September 30, 2022, the cash position was approximately $68.4 million, compared to $76.1 million at June 30, 2022. Transaction expenses and other cash outflows of $2.4 million were incurred in relation to the acquisition of Tingo Mobile Limited during the third quarter.