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, 2023

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

COMMISSION FILE NUMBER 001-35850

TINGO GROUP, 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		TIO		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 19, 2023, there were 241,952,977 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.	31

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	46

Item 4.	Controls and Procedures.	46

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	48

Item 1A.	Risk Factors.	48

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	50

Item 3.	Defaults Upon Senior Securities.	50

Item 4.	Mine Safety Disclosures.	50

Item 5.	Other Information.	50

Item 6.	Exhibits.	51

SIGNATURES		52

EXHIBIT INDEX

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	53,418	$	500,316
Trade accounts receivable, net		359,185		11,541
Inventories		143		-
Related party receivables		8,953		13,491
Other current assets		200,405		5,828
Total current assets		622,104		531,176

Property and equipment, net		811,287		855,125
Intangible assets, net		280,935		185,407
Goodwill		211,849		101,247
Right of use assets under operating lease		1,132		2,260
Long-term deposit and other non-current assets		438		514
Deferred tax assets		-		3,661
Restricted cash escrow		1,371		2,233
Micronet Ltd. equity method investment		45		735
Total long-term assets		1,307,057		1,151,182

Total assets	$	1,929,161	$	1,682,358

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2023			December 31, 2022
LIABILITIES, TEMPORARY EQUITY AND EQUITY

Short-term loan	$	164		$	460
Trade accounts payable		262,530			11,092
Deposit held on behalf of clients		498			2,528
Related party payables		57,682			57,506
Current operating lease liability		690			1,215
Other current liabilities		136,229			192,594
Total current liabilities		457,793			265,395

Long-term loan		-			377
Long-term operating lease liability		382			905
Promissory note		210,483			-
Deferred tax liabilities		105,460			89,597
Other long-term liability		640			-
Accrued severance pay		46			50
Total long-term liabilities		317,011			90,929

Commitment and Contingencies (Note 11)		-			-

Temporary equity
Series B preferred stock subject to redemption: $0.001 par value, 33,687.21 shares authorized and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.		553,035			553,035

Stockholders’ Equity:
Series A preferred stock: $0.001 par value, 2,604.28 shares authorized and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			3
Common stock: $0.001 par value, 750,000,000 shares authorized, 236,270,476 and 157,599,882 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively		236			158
Additional paid-in capital		949,192			889,579
Accumulated other comprehensive income (loss)		(518,948	)		4,367
Accumulated earnings (deficit)		170,530			(123,463	)
Tingo Group, Inc. stockholders’ equity		601,010			770,644

Non-controlling interest		312			2,355

Total stockholders’ equity		601,322			772,999

Total liabilities, temporary equity and stockholders’ equity	$	1,929,161		$	1,682,358

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

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	For the nine months ended September 30,						For the three months ended September 30,
	2023			2022			2023			2022

Revenues	$	2,414,636		$	35,278		$	586,222		$	13,757
Cost of revenues		1,543,880			28,746			448,336			10,563
Gross profit		870,756			6,532			137,886			3,194

Operating expenses:
Research and development		1,010			1,509			314			568
Selling and marketing		174,933			4,873			726			1,321
General and administrative		127,923			30,224			74,880			9,233
Amortization of intangible assets		35,631			2,381			11,868			787
Loss from deconsolidation of subsidiaries		3,333			-			-			-
Impairment of long-term assets and goodwill		35,438			-			-			-
Total operating expenses		378,268			38,987			87,788			11,909

Profit (loss) from operations		492,488			(32,455	)		50,098			(8,715	)
Other income (loss), net		414			535			777			(303	)
Financial income (expenses), net		(35,021	)		(718	)		(13,644	)		371
Profit (loss) before provision for income taxes		457,881			(32,638	)		37,231			(8,647	)
Income tax expenses (benefit)		164,434			(1,782	)		16,739			(701	)

Net profit (loss) after provision for income taxes		293,447			(30,856	)		20,492			(7,946	)
Loss from equity investment		(690	)		(557	)		(270	)		(186	)
Net profit (loss)		292,757			(31,413	)		20,222			(8,132	)
Net loss attributable to non-controlling interests		(1,236	)		(719	)		(523	)		(461	)

Net profit (loss) attributable to Tingo Group, Inc.	$	293,993		$	(30,694	)	$	20,745		$	(7,671	)

Profit (loss) per share attributable to Tingo Group, Inc.:
Basic profit (loss) per share	$	1.69		$	(0.24	)	$	0.11		$	(0.06	)
Diluted profit (loss) per share	$	0.57		$	(0.24	)	$	0.04		$	(0.06	)

Weighted average common shares outstanding:
Basic		173,913,223			126,184,400			196,064,571			129,566,207
Diluted		510,825,278			126,184,400			532,976,627			129,566,207

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

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(USD In Thousands)

	For the nine months ended September 30,						For the three months ended September 30,
	2023			2022			2023			2022

Net profit (loss)	$	292,757		$	(31,413	)	$	20,222		$	(8,132	)
Other comprehensive income (loss), net of tax:
Currency translation adjustment		(523,451	)		(68	)		1,688			(633	)
Total comprehensive loss		(230,694	)		(31,481	)		21,910			(8,765	)
Comprehensive loss attributable to non-controlling stockholders		(1,372	)		(679	)		(514	)		(448	)
Comprehensive loss attributable to Tingo Group, Inc.	$	(229,322	)	$	(30,802	)	$	22,424		$	(8,317	)

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

TINGO GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY
EQUITY AND STOCKHOLDERS’ EQUITY

(USD In Thousands, Except Numbers of Shares)

	Series B preferred stock subject to redemption				Series A preferred stock						Common Stock				Additional Paid-in			Accumulated Earnings			Accumulated Other Comprehensive Income			Non- controlling			Total Stockholders’
	Amount		Shares		Amount			Shares			Amount		Shares		Capital			(Deficit)			(Loss)			Interest			Equity
Balance, December 31, 2022	$	553,035		33,687	$	3			2,604		$	158		157,599,882	$	889,579		$	(123,463	)	$	4,367		$	2,355		$	772,999
Shares issued to service providers and employees		-		-		-			-			51		51,196,569		61,867			-			-			-			61,918
Stock based compensation		-		-		-			-			-		-		59			-			-			-			59
Net profit (loss)		-		-		-			-			-		-		-			293,993			-			(1,236	)		292,757
Repurchase of warrants		-		-		-			-			-		-		(6,548	)		-			-			-			(6,548	)
Exercising of warrants		-		-		-			-			1		1,431,217		4,258			-			-			-			4,259
Conversion of Series A preferred stock		-		-		(3	)		(2,604	)		26		26,042,808		(23	)		-			-			-			-
Deconsolidation of subsidiaries		-		-		-			-			-		-		-			-			-			(671	)		(671	)
Other comprehensive income (loss)		-		-		-			-			-		-		-			-			(523,315	)		(136	)		(523,451	)
Balance, September 30, 2023	$	553,035		33,687	$	-			-		$	236		236,270,476	$	949,192		$	170,530		$	(518,948	)	$	312		$	601,322

	Series B preferred stock subject to redemption				Series A preferred stock						Common Stock				Additional Paid-in			Accumulated Earnings		Accumulated Other Comprehensive Income			Non- controlling			Total Stockholders’
	Amount		Shares		Amount			Shares			Amount		Shares		Capital			(Deficit)		(Loss)			Interest			Equity
Balance, June 30, 2023	$	553,035		33,687	$	3			2,604		$	165		164,968,599	$	893,471		$	149,785	$	(520,627	)	$	826		$	523,623
Shares issued to service providers and employees		-		-		-			-			45		44,759,069		54,180			-		-			-			54,225
Stock based compensation		-		-		-			-			-		-		5			-		-			-			5
Net profit (loss)		-		-		-			-			-		-		-			20,745		-			(523	)		20,222
Warrants repurchase agreements		-		-		-			-			-		-		-			-		-			-			-
Exercising of warrants		-		-		-			-			-		500,000		1,559			-		-			-			1,559
Conversion of Series A preferred stock		-		-		(3	)		(2,604	)		26		26,042,808		(23	)		-		-			-			-
Deconsolidation of subsidiaries		-		-		-			-			-		-		-			-		-			-			-
Other comprehensive income (loss)		-		-		-			-			-		-		-			-		1,679			9			1,688
Balance, September 30, 2023	$	553,035		33,687	$	-			-		$	236		236,270,476	$	949,192		$	170,530	$	(518,948	)	$	312		$	601,322

Common Stock

Additional
Paid-in

Accumulated

Accumulated
Other
Comprehensive
Income

Non-
controlling

Total
Stockholders’

Amount

Capital

Deficit

(Loss)

Interest

Equity

Balance, December 31, 2021

122

122,435,576

220,786

(76,394

)

(414

)

3,622

SEC Form 10-Q filed by MICT Inc.