Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 14, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MICT, Inc. | |
Entity Central Index Key | 0000854800 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity File Number | 001-35850 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Incorporation State Country Code | DE | |
Entity Common Stock, Shares Outstanding | 11,009,532 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 56 | $ 2,174 |
Trade accounts receivable, net | 1,010 | |
Inventories | 4,345 | |
Other accounts receivable | 130 | 339 |
Total current assets | 186 | 7,868 |
Property and equipment, net | 25 | 661 |
Intangible assets, net and others | 434 | |
Long-term deposit and prepaid expenses | 703 | |
Restricted cash escrow | 477 | 477 |
Micronet Ltd. investment | 1,306 | |
Total long-term assets | 1,808 | 2,275 |
Total assets | 1,994 | 10,143 |
LIABILITIES AND EQUITY | ||
Short term bank credit and current portion of long term bank loans | 251 | 2,806 |
Short term credit from others and current portion of long term loans from others | 1,743 | 3,004 |
Trade accounts payable | 1,531 | |
Other accounts payable | 339 | 1,211 |
Total current liabilities | 2,333 | 8,552 |
Long term escrow | 477 | 477 |
Accrued severance pay, net | 49 | 110 |
Total long term liabilities | 526 | 587 |
Stockholders' Equity: | ||
Preferred stock; $0.001 par value, 5,000,000 shares authorized, none issued and outstanding as of June 30, 2019 | ||
Common stock; $0.001 par value, 25,000,000 shares authorized, 11,009,532 and 9,342,088 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 11 | 9 |
Additional paid in capital | 13,893 | 11,905 |
Accumulated other comprehensive (loss) | (117) | |
Accumulated loss | (14,769) | (12,757) |
MICT, Inc. stockholders' equity | (865) | (960) |
Non-controlling interests | 1,964 | |
Total equity | (865) | 1,004 |
Total liabilities and equity | $ 1,994 | $ 10,143 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 11,009,532 | 9,342,088 |
Common stock, shares outstanding | 11,009,532 | 9,342,088 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 4,701 | $ 477 | $ 10,681 | |
Cost of revenues | 3,169 | 846 | 7,427 | |
Gross profit (loss) | 1,532 | (369) | 3,254 | |
Operating expenses: | ||||
Research and development | 505 | 261 | 1,032 | |
Selling and marketing | 380 | 198 | 834 | |
General and administrative | 670 | 1,314 | 1,660 | 2,526 |
Amortization of intangible assets | 216 | 20 | 438 | |
Total operating expenses | 670 | 2,415 | 2,139 | 4,830 |
Loss from operations | (670) | (883) | (2,508) | (1,576) |
Share in investee losses | (405) | (405) | ||
Net profit from loss of control | 299 | |||
Financial (income) expenses, net | 22 | 460 | (54) | 852 |
Loss before provision for income taxes | (1,097) | (1,343) | (2,560) | (2,428) |
Provision for income taxes | 5 | 4 | 8 | 4 |
Net loss from continued operation | (1,102) | (1,347) | (2,568) | (2,432) |
Net profit from discontinued operation (includes capital gain from disposal amounting to $6,844) | 4,783 | 4,894 | ||
Total net profit (loss) | (1,102) | 3,436 | (2,568) | 2,462 |
Net loss attributable to non-controlling interests | (60) | (556) | (184) | |
Net profit (loss) attributable to MICT, Inc. | $ (1,102) | $ 3,496 | $ (2,012) | $ 2,646 |
Earnings (loss) per share attributable to MICT, Inc. | ||||
Basic and diluted loss per share from continued operation | $ (0.10) | $ (0.14) | $ (0.19) | $ (0.25) |
Basic and diluted earnings per share from discontinued operation | 0.52 | 0.54 | ||
Weighted average common shares outstanding: | $ 11,009,199 | $ 9,144,465 | $ 10,365,744 | $ 9,007,684 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Income Statement [Abstract] | |
Capital gain from disposal amount | $ 6,844 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (1,102) | $ 3,436 | $ (2,568) | $ 2,462 |
Other comprehensive income (loss), net of tax: | ||||
Currency translation adjustment | (780) | (143) | (647) | |
Total comprehensive income (loss) | (1,102) | 2,656 | (2,711) | 1,815 |
Comprehensive (loss) attributable to non-controlling interests | (120) | (463) | (553) | |
Comprehensive (loss) income attributable to MICT, Inc. | $ (1,102) | $ 2,776 | $ (2,248) | $ 2,368 |
Statements of Changes In Equity
Statements of Changes In Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-controlling Interest | Total |
Balance at Dec. 31, 2017 | $ 8 | $ 10,881 | $ (10,147) | $ (363) | $ 5,595 | $ 5,974 |
Balance, Shares at Dec. 31, 2017 | 8,645,656 | |||||
Shares issued to service providers and employees | 51 | 51 | ||||
Shares issued to service providers and employees, shares | 42,500 | |||||
Issuance of warrants | 28 | 28 | ||||
Comprehensive loss | 2,646 | (141) | (690) | 1,815 | ||
Stock based compensation in subsidiary | (137) | 137 | 0 | |||
Issuance of shares, net | $ 1 | 478 | 479 | |||
Issuance of shares, net, shares | 456,309 | |||||
Balance at Jun. 30, 2018 | $ 9 | 11,301 | (7,501) | (504) | 5,042 | 8,347 |
Balance, Shares at Jun. 30, 2018 | 9,144,465 | |||||
Balance at Mar. 31, 2018 | $ 9 | 11,364 | (10,997) | 154 | 5,163 | 5,692 |
Balance, Shares at Mar. 31, 2018 | 9,144,465 | |||||
Comprehensive loss | 3,496 | (658) | (184) | 2,655 | ||
Stock based compensation in subsidiary | (63) | 63 | ||||
Balance at Jun. 30, 2018 | $ 9 | 11,301 | (7,501) | (504) | 5,042 | 8,347 |
Balance, Shares at Jun. 30, 2018 | 9,144,465 | |||||
Balance at Dec. 31, 2018 | $ 9 | 11,905 | (12,757) | (117) | 1,964 | 1,004 |
Balance, Shares at Dec. 31, 2018 | 9,342,115 | |||||
Shares issued to service providers and employees | 533 | 533 | ||||
Shares issued to service providers and employees, shares | 420,600 | |||||
Stock based compensation | 39 | 39 | ||||
Comprehensive loss | (2,012) | (306) | (393) | (2,711) | ||
Stock based compensation in subsidiary | 70 | (70) | 0 | |||
Loss of control of subsidiary | 423 | (1,501) | (1,078) | |||
Issuance of shares, net | $ 2 | 1,346 | 1,348 | |||
Issuance of shares, net, shares | 1,246,817 | |||||
Balance at Jun. 30, 2019 | $ 11 | 13,893 | (14,769) | 0 | 0 | (865) |
Balance, Shares at Jun. 30, 2019 | 11,009,532 | |||||
Balance at Mar. 31, 2019 | $ 11 | 13,518 | (13,667) | (138) | ||
Balance, Shares at Mar. 31, 2019 | 10,734,232 | |||||
Shares issued to service providers and employees | 358 | 358 | ||||
Shares issued to service providers and employees, shares | 275,300 | |||||
Stock based compensation | 17 | 17 | ||||
Comprehensive loss | (1,102) | (1,102) | ||||
Balance at Jun. 30, 2019 | $ 11 | $ 13,893 | $ (14,769) | $ 0 | $ 0 | $ (865) |
Balance, Shares at Jun. 30, 2019 | 11,009,532 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net profit (loss) from continued operations | $ (2,568) | $ (2,432) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Profit from loss of control | (299) | (6,844) |
Share in investee losses | 405 | |
Depreciation and amortization | 86 | 592 |
Change in fair value of derivatives, net | (10) | |
Accrued interest and exchange rate differences on bank loans | 109 | (97) |
Extinguishment of loan costs and commissions | 360 | |
Accrued interest and exchange rate differences on loans from others | 85 | (38) |
Stock-based compensation for employees and consultants | 502 | 189 |
Decrease in trade accounts receivable, net | 672 | 1,303 |
Decrease in inventories | 348 | 180 |
Decrease in accrued severance pay, net | (7) | (8) |
Decrease (increase) in other accounts receivable | (312) | 541 |
Increase in trade accounts payable | (394) | (1,471) |
Increase (decrease) in other accounts payable | 15 | (1,404) |
Net cash (used in) operating activities | (1,355) | (2,295) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Consideration from disposal of discontinued operation | 4,295 | |
Purchase of property and equipment | (57) | (179) |
Deconsolidation of Micronet Ltd. (Appendix A) | (608) | |
Net cash (used by) provided investing activities | (665) | 4,116 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Short term bank credit | (101) | (411) |
Receipt of loans from others, net | 4,971 | |
Extinguishment of loan costs | (360) | |
Repayment of short term loans | (4,413) | |
Issuance of shares, net | 479 | |
Issuance of warrants net | 28 | |
Net cash (used by) provided financing activities | (101) | 294 |
NET CASH (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (2,121) | 2,115 |
Cash, Cash Equivalents and restricted cash at the beginning of the period | 2,174 | 2,398 |
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS | 3 | (51) |
Cash, Cash Equivalents and restricted cash at end of the period | 56 | 4,462 |
Amount paid during the period for: | ||
Interest | 135 | 503 |
Taxes | $ 3 | $ 7 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 13, 2019 | Feb. 21, 2019 | Feb. 24, 2019 |
Statement of Cash Flows [Abstract] | |||
Working capital other than cash | $ (2,301) | ||
Finance lease | 359 | ||
Accrued severance pay, net | 60 | ||
Translation reserve | (423) | ||
Micronet Ltd investment in fair value | 1,711 | ||
Non controlling interests | 1,501 | ||
Net profit from loss of control | (299) | ||
Cash | $ 608 | ||
Shares of its common stock | 996,817 | 250,000 | |
Conversion value | $ 1,000 | $ 250 | |
Conversion price | $ 1.10 | $ 1 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Description of Business [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 — DESCRIPTION OF BUSINESS Overview MICT Inc., or we or the Company, was formed as a Delaware corporation on January 31, 2002. On March 14, 2013, the Company changed its corporate name from Lapis Technologies, Inc. to Micronet Enertec Technologies, Inc. On July 13, 2018, following the sale of its former subsidiary Enertec Systems Ltd., the Company changed the Company name from Micronet Enertec Technologies, Inc. to MICT, Inc. Our shares have been listed for trade on the Nasdaq Capital Market, or Nasdaq, since April 29, 2013. The Company's business relates to its ownership interest in its Israel-based, a former subsidiary, Micronet Ltd., or Micronet, in which the Company previously held a majority ownership interest that has since been diluted to a minority ownership interest. Micronet operates in the growing commercial Mobile Resource Management, or MRM, market. Micronet through both its Israeli and U.S. operational offices designs, develops, manufactures and sells rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments. As of December 31, 2018, the Company held 49.89% of Micronet's issued and outstanding shares, and together with an irrevocable proxy in our benefit from Mr. David Lucatz, the Company's President and Chief Executive Officer, we held 50.07% of the voting interest in Micronet as of such date. On February 24, 2019, Micronet closed a public equity offering on the Tel Aviv Stock Exchange, or the TASE. As a result of Micronet's offering, our ownership interest in Micronet was diluted from 49.89% to 33.88%. On February 24, 2019, Mr. David Lucatz, our President and Chief Executive Officer, executed an irrevocable proxy assigning his voting power over 1,980,000 shares of Micronet for our benefit. As a result, our current voting interest in Micronet stands at 39.53% of the issued and outstanding shares of Micronet. The decrease in the Company's voting interest in Micronet resulted in the deconsolidation of Micronet's operating results from our financial statements as of February 24, 2019. Therefore, commencing from February 24, 2019, the Company account for the investment in Micronet in accordance with the equity method. As a result of the deconsolidation, the Company recognized a net profit of $299 in February 2019. On December 18, 2018, the Company, Global Fintech Holdings Ltd., a British Virgin Islands corporation, or BVI Pubco, GFH Merger Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of BVI Pubco, or Merger Sub, BNN Technology PLC, a United Kingdom Private limited company, or BNN, Brookfield Interactive (Hong Kong) Limited, a Hong Kong company and a subsidiary of BNN, or BI China, ParagonEx LTD, a British Virgin Islands company, or ParagonEx, certain holders of ParagonEx's outstanding ordinary shares and a trustee thereof, and Mark Gershinson, in the capacity as the representative of the ParagonEx sellers, entered into an Acquisition Agreement, or the Acquisition Agreement, pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Acquisition Agreement, Merger Sub will merge with and into the Company, as a result of which each outstanding share of the Company's common stock and warrant to purchase the same shall be cancelled in exchange for the right of the holders thereof to receive 0.93 substantially equivalent securities of BVI Pubco, after which BVI Pubco will acquire (i) all of the issued and outstanding securities of BI China in exchange for newly issued ordinary shares of BVI Pubco and (ii) all of the issued and outstanding ordinary shares of ParagonEx for a combination of cash in the amount equal to approximately $25,000 (the majority of which was raised in a private placement by BVI Pubco), unsecured promissory notes and newly issued ordinary shares of BVI Pubco, or collectively, the Acquisitions. In July 2019, the Company paid all of its outstanding bank loans in the amount of $251 and expects to pay the outstanding principal balance of the Series A Convertible Debentures issued and sold to YA II in the aggregate amount of $1,743 by the end of 2019. The Company filed a Form S-3 registration statement (File No. 333-219596) under the Securities Act of 1933, as amended, with the SEC using a "shelf" registration process, which was declared effective on July 31, 2017. Under this shelf registration process, the Company may, from time to time, sell common stock, warrants or units in one or more offerings up to a total dollar amount of $30,000, subject to certain limitations as set forth in General Instruction I.B.6. of Form S-3, pursuant to which the Company have sold approximately $1,000 of our securities to date. On June 4, 2019, the Company entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell 3,181,818 shares of newly designated Series A Convertible Preferred Stock with a stated value of $2.20 per share, or the Preferred Stock. The Preferred Stock, which shall be convertible into up to 6,363,636 shares of common stock of the Company, was sold together with certain common stock purchase warrants, or the Preferred Warrants, to purchase up to 4,772,727 shares of common stock, for aggregate gross proceeds of $7 million to the Company, or the Preferred Offering. Concurrently with the Preferred Offering, the Company entered into a Securities Purchase Agreement, or the Note Purchase Agreement, with BNN, pursuant to which BNN agreed to purchase from the Company $2 million of convertible notes, which subscription amount shall be subject to increase by up to an additional $1 million as determined by BNN and the Company, or collectively, the Convertible Notes. The Convertible Notes, which shall be convertible into up to 2,727,272 shares of common stock, shall be sold together with certain common stock purchase warrants to purchase up to 2,727,272 shares of common stock. The Convertible Notes shall have a duration of two years. On July 29, 2019, the Company completed the first closing in the Preferred Offering, pursuant to which it sold 2,386,363 shares of Preferred Stock and 3,579,544 accompanying Preferred Warrants for aggregate gross proceeds of $5,250,000. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission, or the SEC, regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America, or U.S. GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year 2019 or for other interim periods or for future years. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Furthermore, from February 24, 2019 the Company will account for the investment in Micronet in accordance with the equity method, and therefore, the results of operations for the three months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year 2019 or for other interim periods or for future years. Principles of Consolidation The accompanying financial statements are prepared in accordance with U.S. GAAP. |
Loans from Others
Loans from Others | 6 Months Ended |
Jun. 30, 2019 | |
Loans from Others [Abstract] | |
LOANS FROM OTHERS | Note 3 — Loans from others On March 29, 2018, the Company and MICT Telematics Ltd. (formerly known as Enertec Electronics Ltd.), or MICT Telematics, a subsidiary of the Company, executed and closed on a securities purchase agreement with YA II whereby the Company issued and sold to YA II (1) certain Series A Convertible Debentures in the aggregate principal aggregate amount of $3,200, or the Series A Debentures, and (2) a Series B Convertible Debenture in the principal aggregate amount of $1,800, or the Series B Debenture. The Series A Debentures were issued in exchange for the cancellation and retirement of certain promissory notes issued by the Company to YA II on October 28, 2016, December 22, 2016, June 8, 2017 and August 22, 2017, with a total outstanding aggregate principal amount of $3,200. The Series B Debenture was issued and sold for aggregate gross cash proceeds of $1,800. In addition, pursuant to the terms of the securities purchase agreement, the Company agreed to issue to YA II a warrant to purchase up to 375,000 shares of the Company's common stock at an exercise price of $2.00 per share, a warrant to purchase up to 200,000 shares of the Company's common stock at an exercise price of $3.00 per share and a warrant to purchase up to 112,500 shares of the Company's common stock at an exercise price of $4.00 per share. In conjunction with the issuance of the Series A Debentures and the Series B Debentures, a total of $273 in fees and expenses were deducted from the aggregate gross proceeds and paid to YA II. As of February 21, 2019, the Company issued to YA II 250,000 shares of its common stock as part of a conversion of $250 of the Series A Debenture at a conversion price of $1.00 per share. On March 13, 2019, the Company issued an additional 996,817 shares of its common stock as part of a conversion of $1,000 of the Series A Debenture at a conversion price of $1.10 per share. Concurrently with the Preferred Offering (as defined in Note 7), the Company entered into a Note Purchase Agreement, or the Note Purchase Agreement, with BNN, pursuant to which BNN agreed to purchase from the Company $2,000 of convertible notes which subscription amount shall be subject to increase by up to an additional $1,000 as determined by BNN and the Company, or collectively, the Convertible Notes. The Convertible Notes issued to date, which shall be convertible into up to 2,727,272 shares of common stock, were sold together with certain common stock purchase warrants to purchase up to 2,727,272 shares of common stock. The Convertible Notes have a duration of two years from the date of issuance. See also note 7. |
Stockholders' Equity (Deficienc
Stockholders' Equity (Deficiency) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIENCY) | Note 4 — Stockholders' Equity (Deficiency) On February 7, 2019, and on April 4, 2019, the company issued 145,300 and 275,300, respectively, shares of its common stock to its lawyers directors and consultants. The Company booked total expenses of $533 in the six months ended on June 30, 2019. |
Discontinued Operation
Discontinued Operation | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATION | NOTE 5 — DISCONTINUED OPERATION On December 31, 2017, the Company, Enertec Systems 2001 Ltd., or Enertec, previously our wholly-owned subsidiary, and Enertec Management Ltd., entered into a Share Purchase Agreement, or the Share Purchase Agreement, with Coolisys Technologies Inc., or Coolisys, a subsidiary of DPW Holdings, Inc., or DPW, pursuant to which the Company agreed to sell the entire share capital of Enertec to Coolisys. As consideration for the sale of Enertec’s entire share capital, Coolisys agreed to pay, at the closing of the transaction, a purchase price of $5,250 as well as assume up to $4,000 of Enertec debt. Enertec met the definition of a component as defined by Accounting Standards Codification, or ASC, Topic 205. The Company believes the sale represented a strategic shift in its business. Accordingly, its assets and liabilities were classified as held for sale and the results of operations in the statement of operations and prior periods’ results have been reclassified as a discontinued operation. On May 22, 2018, the Company closed on the sale, or the Closing, of all of the outstanding equity of Enertec pursuant to the Share Purchase Agreement. At the Closing, the Company received aggregate gross proceeds of approximately $4,700, of which 10% will be held in escrow for up to 14 months after the Closing to satisfy certain potential indemnification claims (see Note 7). Therefore, the Company has recorded such escrowed amount on its balance sheet as restricted cash and a liability. The final consideration amount was adjusted, pursuant to the terms of the Share Purchase Agreement, as a result of adjustments relating to certain Enertec debts at the Closing. In addition, Coolisys also assumed approximately $4,000 of Enertec’s debt. The Company’s capital gain from the sale of Enertec, based on the Company’s balance sheet at the closing date was approximately $6,800. |
Loss of Control of Subsidiary
Loss of Control of Subsidiary | 6 Months Ended |
Jun. 30, 2019 | |
Loss of Control of Subsidiary [Abstract] | |
LOSS OF CONTROL OF SUBSIDIARY | NOTE 6 — LOSS OF CONTROL OF SUBSIDIARY As of December 31, 2018, we held 49.89% of Micronet’s issued and outstanding shares, and together with an irrevocable proxy in our benefit from Mr. David Lucatz, our President and Chief Executive Officer, we held 50.07% of the voting interest in Micronet as of such date. On February 24, 2019, Micronet closed a public equity offering on the TASE. As a result of Micronet’s offering, our ownership interest in Micronet was diluted from 49.89% to 33.88%. On February 24, 2019, Mr. David Lucatz, our President and Chief Executive Officer, executed an irrevocable proxy assigning his voting power over 1,980,000 shares of Micronet for our benefit. As a result, our current voting interest in Micronet stands at 39.53% of the issued and outstanding shares of Micronet. The decrease in the Company’s voting interest in Micronet resulted in the loss of control of Micronet. As a result, effective as of February 24, 2019, we no longer include Micronet’s operating results in our financial statements. Therefore, commencing from February 24, 2019, the Company will account for the investment in Micronet in accordance with the equity method. While Micronet is a publicly traded company in Israel, its shareholder base is widely spread and we continue to be Micronet’s largest shareholder, controlling 39.53% of its issued and outstanding shares. We believe that since most items that may require shareholder approval required majority consent, we exert a high level of influence over such voting matters which may include the appointment and removal of directors. In that regard, to date, we have appointed a majority of the directors of Micronet’s board of directors. Based on the above, although we are unable to fully consolidate Micronet’s financial statements according to U.S. GAAP, we also do not consider Micronet to be a discontinued operation since we consider ourselves in effective control of Micronet and the raising of equity by Micronet that diluted our interests was done in order to continue its operations. The following is the composition from Micronet’s operation for the six months ended June 30, 2019 and June 30, 2018, respectively: Three months ended Six months ended 2019 2019 Revenues 1,477 $ 3,027 Gross profit (loss) (85 ) (91 ) Loss from operations (1,169 ) (2,210 ) Net Loss (1,192 ) $ (2,300 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 — SUBSEQUENT EVENTS On June 4, 2019, the Company entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell 3,181,818 shares of newly designated Series A Convertible Preferred Stock with a stated value of $2.20 per share, or the Preferred Stock. The Preferred Stock, which is convertible into up to 6,363,636 shares of common stock of the Company, shall be sold together with certain warrants to purchase up to 4,772,727 shares of common stock, for aggregate gross proceeds of $7,000 to the Company, or the Preferred Offering. Between July 29, 2019 and July 31, 2019, the Company completed closings of the Preferred Offering, pursuant to which it sold 2,386,363 shares of Preferred Stock and 3,579,544 accompanying warrants for aggregate gross proceeds of $5,250. On July 18, 2019, the Company received a written notice from Coolisys directed to the escrow agent, IBI Trust Management, regarding the funds being held in escrow relating to the Share Purchase Agreement relating to the sale of Enertec. The notice alleges that certain escrowed funds should not be released to the Company to satisfy certain claims for indemnity that are being asserted against Enertec Management Ltd. As a result, the escrow agent is therefore required to reserve all of the escrowed funds until the matter is resolved. On July 29, 2019, the Company completed the first closing in the Preferred Offering, pursuant to which it sold an aggregate of 2,386,363 shares of Preferred Stock and 3,579,544 accompanying warrants for aggregate gross proceeds of $5,250. The Company received $1,500 on July 31, 2019 (after payment of certain offering expenses) in connection with the Convertible Notes – See note 3. In order to mitigate the effect and manage the delays and decrease in its sales, Micronet intends to continue implementing operational and business processes with the aim of increasing its efficiency, particularly related to its manufacturing process, increasing credit lines and sources from banks or other funding sources (such as government grants) and engaging in the realization of its real estate asset. Micronet is also examining additional possibilities for raising capital in the public and private markets. In addition, it received a commitment from the Company for financial support in the amount of up to $500, in the absence of its ability to secure other sources of financing. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission, or the SEC, regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America, or U.S. GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year 2019 or for other interim periods or for future years. The consolidated balance sheet as of June 30, 2019 is derived from reviewed financial statements as of that date; however, it does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Furthermore, from February 24, 2019 the Company will account for the investment in Micronet in accordance with the equity method, and therefore, the results of operations for the three months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year 2019 or for other interim periods or for future years. |
Principles of Consolidation | Principles of Consolidation The accompanying financial statements are prepared in accordance with U.S. GAAP. |
Loss of Control of Subsidiary (
Loss of Control of Subsidiary (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Micronet [Member] | |
Schedule of discontinued operation | Three months ended Six months ended 2019 2019 Revenues 1,477 $ 3,027 Gross profit (loss) (85 ) (91 ) Loss from operations (1,169 ) (2,210 ) Net Loss (1,192 ) $ (2,300 ) |
Description of Business (Detail
Description of Business (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 04, 2019 | Mar. 13, 2019 | Jul. 31, 2019 | Jul. 29, 2019 | Jun. 04, 2019 | Feb. 28, 2019 | Feb. 24, 2019 | Dec. 18, 2018 | Jul. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Description of Business (Textual) | ||||||||||||||
Ordinary shares for aggregate gross proceeds | $ 1,348 | $ 479 | ||||||||||||
Irrevocable proxy assigning his voting power | 1,980,000 | |||||||||||||
Voting interest of Micronet increased | 39.53% | |||||||||||||
Losses | $ (1,102) | $ 3,496 | (2,012) | 2,646 | ||||||||||
Net profit (loss) from deconsolidation of Micronet Ltd. | $ 299 | |||||||||||||
Total comprehensive loss | (1,102) | 2,656 | (2,711) | 1,815 | ||||||||||
Net cash used in operating activities | (1,355) | (2,295) | ||||||||||||
Total dollar amount | $ 30,000 | |||||||||||||
Proceeds from sale of securities | $ 1,000 | |||||||||||||
Voting interest | 50.07% | |||||||||||||
Percentage of shares issued and outstanding | 49.89% | |||||||||||||
Outstanding bank loans | $ 251 | 251 | $ 251 | 251 | $ 2,806 | |||||||||
Preferred Stock stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Aggregate amount | $ 1,743 | $ 1,743 | $ 1,743 | $ 1,743 | $ 3,004 | |||||||||
Common Stock | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of an aggregate shares of gross proceeds | 1,246,817 | 456,309 | ||||||||||||
Ordinary shares for aggregate gross proceeds | $ 2 | $ 1 | ||||||||||||
Sale of stock issued | 6,363,636 | |||||||||||||
Gross proceeds | $ 7,000 | |||||||||||||
Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of stock issued | 2,386,363 | 2,386,363 | ||||||||||||
Warrant [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of stock issued | 4,772,727 | |||||||||||||
Warrant [Member] | Subsequent Event [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of stock issued | 3,579,544 | 3,579,544 | ||||||||||||
Gross proceeds | $ 5,250 | $ 5,250 | ||||||||||||
Securities Purchase Agreement [Member] | Convertible Preferred Stock [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of stock issued | 3,181,818 | |||||||||||||
Sale of stock price per share | $ 2.20 | $ 2.20 | ||||||||||||
Securities Purchase Agreement [Member] | Convertible Notes Payable [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Sale of stock issued | 2,727,272 | 2,727,272 | ||||||||||||
Purchase amount of convertible notes from company | $ 2,000 | $ 2,000 | ||||||||||||
Additional amount increased by BNN | $ 1,000 | $ 1,000 | ||||||||||||
Warrants to purchase of common stock | 2,727,272 | 2,727,272 | ||||||||||||
BVI Pubco [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Acquisitions description | Merger Sub will merge with and into the Company, as a result of which each outstanding share of the Company's common stock and warrant to purchase the same shall be cancelled in exchange for the right of the holders thereof to receive 0.93 substantially equivalent securities of BVI Pubco, after which BVI Pubco will acquire (i) all of the issued and outstanding securities of BI China in exchange for newly issued ordinary shares of BVI Pubco and (ii) all of the issued and outstanding ordinary shares of ParagonEx for a combination of cash in the amount equal to approximately $25,000 (the majority of which was raised in a private placement by BVI Pubco), unsecured promissory notes and newly issued ordinary shares of BVI Pubco, or collectively, the Acquisitions. | |||||||||||||
Maximum [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Ownership interest in Micronet, diluted | 49.89% | |||||||||||||
Minimum [Member] | ||||||||||||||
Description of Business (Textual) | ||||||||||||||
Ownership interest in Micronet, diluted | 33.88% |
Loans from Others (Details)
Loans from Others (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 13, 2019 | Jun. 04, 2019 | Feb. 21, 2019 | Mar. 29, 2018 |
Loans from Others (Textual) | ||||
Fees and expenses | $ 273 | |||
Conversion price per share | $ 1.10 | $ 1 | ||
Issued to shares of common stock converted | 250,000 | |||
Conversion amount | $ 250 | |||
Securities Purchase Agreement [Member] | ||||
Loans from Others (Textual) | ||||
Securities purchase agreement , description | The Company and MICT Telematics Ltd. (formerly known as Enertec Electronics Ltd.), or MICT Telematics, a subsidiary of the Company, executed and closed on a securities purchase agreement with YA II whereby the Company issued and sold to YA II (1) certain Series A Convertible Debentures in the aggregate principal aggregate amount of $3,200, or the Series A Debentures, and (2) a Series B Convertible Debenture in the principal aggregate amount of $1,800, or the Series B Debenture. The Series A Debentures were issued in exchange for the cancellation and retirement of certain promissory notes issued by the Company to YA II on October 28, 2016, December 22, 2016, June 8, 2017 and August 22, 2017, with a total outstanding aggregate principal amount of $3,200. The Series B Debenture was issued and sold for aggregate gross cash proceeds of $1,800. | |||
Securities Purchase Agreement [Member] | Convertible Notes [Member] | ||||
Loans from Others (Textual) | ||||
Conversion price per share | $ 1.10 | |||
Issued to shares of common stock converted | 996,817 | |||
Conversion amount | $ 1,000 | |||
Sale of stock issued | 2,727,272 | 2,727,272 | ||
Purchase amount of convertible notes from company | $ 2,000 | $ 2,000 | ||
Additional amount increased by BNN | $ 1,000 | $ 1,000 | ||
Warrants to purchase of common stock | 2,727,272 | 2,727,272 | ||
Convertible notes, terms | 2 years | |||
Securities Purchase Agreement [Member] | YA II [Member] | ||||
Loans from Others (Textual) | ||||
Securities purchase agreement , description | Pursuant to the terms of the securities purchase agreement, the Company agreed to issue to YA II a warrant to purchase up to 375,000 shares of the Company's common stock at an exercise price of $2.00 per share, a warrant to purchase up to 200,000 shares of the Company's common stock at an exercise price of $3.00 per share and a warrant to purchase up to 112,500 shares of the Company's common stock at an exercise price of $4.00 per share. |
Stockholders' Equity (Deficie_2
Stockholders' Equity (Deficiency) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Apr. 04, 2019 | Feb. 07, 2019 | |
Stockholders' Equity (Deficiency) (Textual) | |||
Shares issued of commom stock | 275,300 | 145,300 | |
Total expenses | $ 533 |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2017 | |
Discontinued Operation (Textual) | ||
Purchase price | $ 5,250 | |
Enertec debt | $ 4,000 | |
Aggregate gross proceeds | $ 4,700 | |
Percentage of held in escrow | 10.00% | |
Capital gain from the sale of enertec | $ 6,800 | |
Coolisys [Member] | ||
Discontinued Operation (Textual) | ||
Enertec debt | $ 4,000 |
Loss of Control of Subsidiary_2
Loss of Control of Subsidiary (Details) - Micronet [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Revenues | $ 1,477 | $ 3,027 |
Gross profit (loss) | (85) | (91) |
Loss from operations | (1,169) | (2,210) |
Net Loss | $ 1,192 | $ (2,300) |
Loss of Control of Subsidiary_3
Loss of Control of Subsidiary (Details Textual) - shares | 1 Months Ended | 12 Months Ended |
Feb. 24, 2019 | Dec. 31, 2018 | |
Unconsolidated Subsidiary (Textual) | ||
Irrevocable proxy assigning his voting power | 1,980,000 | |
Voting interest of Micronet increased | 39.53% | |
Percentage of shares issued and outstanding | 49.89% | |
Micronet [Member] | ||
Unconsolidated Subsidiary (Textual) | ||
Voting interest of Micronet increased | 50.07% | |
Ownership interest in Micronet, diluted | 49.89% | |
Percentage of shares issued and outstanding | 39.53% | |
Minimum [Member] | ||
Unconsolidated Subsidiary (Textual) | ||
Ownership interest in Micronet, diluted | 33.88% | |
Maximum [Member] | ||
Unconsolidated Subsidiary (Textual) | ||
Ownership interest in Micronet, diluted | 49.89% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 04, 2019 | Mar. 13, 2019 | Jul. 31, 2019 | Jul. 29, 2019 | Jun. 04, 2019 |
Securities Purchase Agreement [Member] | Convertible Preferred Stock [Member] | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 3,181,818 | ||||
Sale of stock price per share | $ 2.20 | $ 2.20 | |||
Convertible Notes [Member] | Securities Purchase Agreement [Member] | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 2,727,272 | 2,727,272 | |||
Subsequent Event [Member] | |||||
Subsequent Events (Textual) | |||||
Received a commitment | $ 500 | ||||
Subsequent Event [Member] | Convertible Notes [Member] | |||||
Subsequent Events (Textual) | |||||
Amount received on behalf of convertible notes | $ 1,500 | ||||
Warrant [Member] | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 4,772,727 | ||||
Warrant [Member] | Subsequent Event [Member] | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 3,579,544 | 3,579,544 | |||
Gross proceeds | $ 5,250 | $ 5,250 | |||
Preferred Stock [Member] | Subsequent Event [Member] | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 2,386,363 | 2,386,363 | |||
Common Stock | |||||
Subsequent Events (Textual) | |||||
Sale of stock, shares | 6,363,636 | ||||
Gross proceeds | $ 7,000 |