Item 1.01 Entry into Material Definitive Agreement.
Offering of Series A Convertible Preferred Stock and Warrants
On June 4, 2019, MICT, Inc. (the “Company”) entered
into a Securities Purchase Agreement (the “Preferred Securities Purchase Agreement”) with the purchasers named therein
(the “Preferred Purchasers”), 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 (the “Preferred Stock”). The Preferred Stock,
which shall be convertible into up to 6,363,636 shares of common stock of the Company, par value $0.001 per share (the “Common
Stock”), shall be sold together with certain Common Stock purchase warrants (the “Preferred Warrants”) to purchase
up to 4,772,727 shares of Common Stock (representing 75% of the aggregate number of shares of Common Stock into which the Preferred
Stock shall be convertible), for aggregate gross proceeds of $7 million to the Company (the “Preferred Offering”).
The Preferred Stock shall be convertible into Common Stock at
the option of each holder of Preferred Stock at any time and from time to time, and shall also convert automatically upon the occurrence
of certain events, including the completion by the Company of a fundamental transaction. Commencing on March 31, 2020, cumulative
cash dividends shall become payable on the Preferred Stock at the rate per share of 7% per annum, which rate shall increase to
14% per annum on June 30, 2020. The Company shall also have the option to redeem some or all of the Preferred Stock, at any time
and from time to time, beginning on December 31, 2019. The holders of Preferred Stock shall vote together with the holders of Common
Stock as a single class on as-converted basis, and the holders of Preferred Stock holding a majority-in-interest of the Preferred
Stock shall be entitled to appoint an independent director to the Company’s board of directors (the “Preferred Director”).
The Preferred Securities Purchase Agreement provides for customary registration rights.
The Preferred Warrants shall have an exercise price of $1.01
(subject to customary adjustment in the event of future stock dividends, splits and the like), which is above the average price
of the Common Stock during the preceding five trading days, and shall be exercisable immediately, until the earlier of (i) two
years from the date of issuance or (ii) the later of (a) 180 days after the closing by the Company of a change of control transaction,
or (b) the company’s next debt or equity financing of at least $20 million.
The terms of the Preferred Offering, including the issuance
by the Company of the Preferred Stock, remain subject to approval by The Nasdaq Stock Market as to the eligibility of the transactions
contemplated thereby. Following such approval, and on or before the Company’s first sale of Preferred Stock in accordance
with the terms of the Preferred Securities Purchase Agreement, the Company shall file a Certificate of Designation of the Preferences,
Rights and Limitations with the Secretary of State of Delaware (the “CoD”), establishing the rights, preferences, privileges,
qualifications, restrictions, and limitations relating to the Preferred Stock. The CoD shall be disclosed as required by Item 5.03
of Form 8-K within four (4) business days of being filed.
The securities sold in the Preferred Offering shall be issued
in reliance on an exemption from registration under Regulation S of the Securities Act of 1933, as amended (“Regulation S”).
The bases for the availability of this exemption include the facts that the sales of the securities were made to non-U.S. persons
(as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to an offshore transaction, and no directed selling
efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on
behalf of any of the foregoing.
The foregoing description of the Preferred Offering is qualified
in its entirety by reference to the Preferred Securities Purchase Agreement and the Preferred Warrant (the “Preferred Transaction
Documents”), copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2019. The representations, warranties and covenants contained in the Preferred Transaction Documents were made only
for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to the Preferred Transaction
Documents, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Preferred Transaction Documents
are incorporated herein by reference only to provide information regarding the terms of the Preferred Transaction Documents, and
not to provide any other factual information regarding the Company or its business, and should be read in conjunction with the
disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission.
Offering of Convertible Note and Warrants
On June 4, 2019, the Company entered into a Securities Purchase
Agreement (the “Note Purchase Agreement”) with BNN Technology PLC, a United Kingdom Private Company (the “Note
Purchaser” or “BNN”), pursuant to which the Note Purchaser 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 the
Note Purchaser and the Company (collectively, the “Convertible Notes”). The Convertible Notes, which shall be convertible
into up to 2,727,272 shares of Common Stock (using the applicable conversion ratio of $1.10 per share), shall be sold together
with certain Common Stock purchase warrants (the “Note Warrants”) to purchase up to 2,727,272 shares of Common Stock
(representing 100% of the aggregate number of shares of Common Stock into which the Convertible Notes are convertible) (the “Convertible
Note Offering”). The Convertible Notes shall have a duration of two (2) years.
Subject to stockholder approval of the Convertible Note Offering,
the Convertible Notes shall be convertible into Common Stock at the option of the Note Purchaser at any time and from time to time,
and upon the issuance of one or more Convertible Notes, Darren Mercer, the Chief Executive Officer of BNN, shall be appointed to
the Company’s board of directors (the “Note Director”). In connection with the appointment of the Preferred Director
and the Note Director to the Company’s board of directors, as described herein, the Company shall cause one current member
to be removed, such that the Company’s board of directors shall consist of five (5) sitting members following the completion
of the Preferred Offering and the Note Offering. The Note Purchase Agreement provides for customary registration rights.
The Note Warrants shall have an exercise price of $1.01 (subject
to customary adjustment in the event of future stock dividends, splits and the like), and shall be exercisable immediately upon
receipt of stockholder approval of the Convertible Note Offering, until the earlier of (i) two years from the date of issuance
or (ii) the later of (a) 180 days after the closing by the Company of a change of control transaction, or (b) the company’s
next debt or equity financing of at least $20 million.
The terms of the Convertible Note Offering, including the purchase
by the Note Purchaser of the Convertible Notes, remain subject to approval by The Nasdaq Stock Market as to the eligibility of
the transactions contemplated thereby.
The securities sold in the Convertible Note Offering shall be
issued in reliance on an exemption from registration under Regulation S of the Securities Act of 1933, as amended (“Regulation
S”). The bases for the availability of this exemption include the facts that the sales of the securities were made to non-U.S.
persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to an offshore transaction, and no directed
selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person
acting on behalf of any of the foregoing.
The foregoing description of the Convertible Note Offering is
qualified in its entirety by reference to the Note Purchase Agreement, the Note Warrant and the Convertible Notes (the “Convertible
Note Transaction Documents”), copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2019. The representations, warranties and covenants contained in the Convertible Note Transaction
Documents were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to
the Convertible Note Transaction Documents, and may be subject to limitations agreed upon by the contracting parties. Accordingly,
the Convertible Note Transaction Documents are incorporated herein by reference only to provide information regarding the terms
of the Convertible Note Transaction Documents, and not to provide any other factual information regarding the Company or its business,
and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities
and Exchange Commission.