Item 1.01 Entry into Material Definitive Agreement.
Amended and Restated Merger Agreement
As previously disclosed in the Current Report
on Form 8-K of MICT, Inc., a Delaware corporation (“MICT” or the “Company”),
filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 13, on November 7, 2019,
the Company and GFH Intermediate Holdings Ltd., a British Virgin Islands company (“Intermediate”), entered
into, and MICT Merger Subsidiary Inc., a to-be-formed British Virgin Islands company and a wholly owned subsidiary of MICT (“Merger
Sub”), was to enter into upon execution of a joinder agreement, an Agreement and Plan of Merger (the “Original
Agreement”).
On April 15, 2020, the Company, Intermediate,
and Global Fintech Holding Ltd., a British Virgin Islands company and the sole shareholder of Intermediate (“GFH”),
entered into, and Merger Sub shall, upon execution of a joinder agreement enter into, an Amended and Restated Agreement
and Plan of Merger (the “Restated Merger Agreement”) pursuant to which, among other things, subject to
the satisfaction or waiver of the conditions set forth in the Restated Merger Agreement, Merger Sub shall merge with and into Intermediate,
with Intermediate continuing as the surviving entity, and each outstanding share of Intermediate shall be cancelled in exchange
for the right of the holder thereof to receive a convertible promissory note in the principal amount of approximately $25,000,000
(the “Consideration Note”), which shall be convertible into shares of common stock of MICT as described
therein (collectively, the “Acquisition”). The Consideration Note shall be issued at the closing of the
Acquisition and shall be, under certain circumstances, automatically convertible into approximately $25,000,000 of shares of common
stock of MICT, at a conversion price of $1.10 per share. The Restated Merger Agreement amends and restates the Original Agreement
in its entirety.
After giving effect to the Acquisition, the
conversion of the Consideration Note, the Convertible Notes (as discussed below) and the conversion or exercise of the securities
issued by MICT pursuant to the offering of Series A convertible preferred stock and warrants as previously described in the Company’s
Current Report on Form 8-K filed with the SEC on June 10, 2019 and the conversion or exercise of the securities issued by MICT
pursuant to the issuance of Series B convertible preferred stock and warrants as previously described in the Company’s Current
Report on Form 8-K filed with the SEC on January 21, 2020, it is expected that MICT will have approximately $19.6 million of cash
and that the current holders of MICT’s common stock (excluding, for the avoidance of doubt, the Company’s outstanding
shares of Series A Preferred Stock, Series B Preferred Stock, and any shares issuable upon the conversion, exchange or exercise,
as applicable, of the Consideration Note, the Convertible Notes, and any outstanding warrants), will own approximately 11,639,532
shares.
Consummation of the Acquisition is subject to
certain closing conditions and termination rights, as described in the Restated Merger Agreement. The Restated Merger Agreement
also contains customary representations, warranties and covenants made by, among others, MICT, Intermediate and Merger Sub, including
as to the conduct of their respective businesses (as applicable) between the date of signing the Restated Merger Agreement and
the closing of the transactions contemplated thereby.
The Restated Merger Agreement provides that
all options to purchase shares of the Company’s common stock that are outstanding and unexercised shall be accelerated in
full effective as of immediately prior to the effective time of the Acquisition. The options shall survive the closing of the Acquisition
for a period of 15 months from the date of the closing of the Acquisition and all equity incentive plans of the Company shall remain
in effect.
The Restated Merger Agreement also provides
for customary registration rights for the shares of the Company’s common stock underlying the Consideration Note, substantially
identical to the registration rights provided to the Purchasers under the Purchase Agreements (as such terms are defined below)
for the shares of common stock underlying the Convertible Note (as defined below)
The foregoing description of the Restated Merger
Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference
to the Restated Merger Agreement, which is filed herewith as Exhibit 2.1 and is incorporated herein by reference.
Convertible Notes Offering
On April 21, 2020, the Company entered into
a series of Note Purchase Agreements (the “Purchase Agreements”) with certain investors identified therein
(the “Purchasers”) pursuant to which, among other things, the Purchasers agreed, subject to the satisfaction
or waiver of the conditions set forth in the Purchase Agreement, to purchase from the Company certain convertible notes (the “Convertible
Notes”) with an aggregate principal amount of approximately $11.0 million (the “Convertible Notes Offering”).
The Convertible Notes shall be convertible into shares of common stock of the Company at a conversion price of $1.10 per share
(the “Conversion Shares”). The Convertible Notes will generally be due two years from the date of issuance,
except that certain convertible notes will be due five years from the date of issuance. The Company is obligated to pay interest
to the Purchasers on the outstanding principal amount at the rate of 1.0% per annum, payable on each conversion date, in cash or,
at the Company’s option, in shares of common stock.
Subject to approval of the Company’s stockholders
of an increase in the number of the Company’s authorized shares of common stock to allow for the conversion of the Convertible
Notes into MICT’s common stock, the Convertible Notes shall be convertible into common stock at the option of the Purchasers
at any time and from time to time. Upon the occurrence of certain events, including, among others, if the Acquisition is not consummated
by May 20, 2020, if approval from MICT’s shareholders with respect to the issuance of shares of common stock underlying the
Convertible Notes, as required by the applicable rules and regulations of Nasdaq, is not obtained by June 30, 2020, or if MICT
has failed to amend its certificate of incorporation to increase the number of shares authorized for issuance to cover the Conversion
Shares by June 30, 2020, the Purchasers are permitted to require the Company to redeem the Convertible Notes, including any interest
that has accrued thereunder, for cash.
The Purchase Agreements provide for customary
registration rights, pursuant to which the Company will be obligated to, among other things, (i) file a registration statement
(the “Resale Registration Statement”) with the SEC within 180 days following the closing of the Convertible
Notes Offering for purposes of registering the Conversion Shares and (ii) use its commercially reasonable efforts to cause the
Resale Registration Statement to be declared effective by the SEC as soon as practicable after filing.
The securities sold in the Convertible Notes
Offering shall be issued in reliance on an exemption from registration under Section 4(a)(2) the Securities Act of 1933, as amended,
and Regulation D promulgated thereunder.
The foregoing description of the Convertible
Notes Offering is qualified in its entirety by reference to the Form of Purchase Agreement and the form of Convertible Note (the
“Convertible Note Transaction Documents”), copies of which are filed as exhibit 10.1 and 4.1 to this
Current Report on Form 8-K, respectively. 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 SEC.