Tingo Group Announces Completion of Investigation Into Allegations Made Against the Company in Short-Seller Report and Issues its Response
30 Agosto 2023 - 8:35AM
Tingo Group, Inc. (NASDAQ: TIO) (“Tingo” or the “Company”), a
profitable and fast growing fintech, agri-fintech and food company,
today announced it has completed the investigation of the
allegations made by short seller Hindenburg Research
(“Hindenburg”), that relate directly to the Company and its
businesses.
At the direction of the Company’s independent
directors, independent counsel investigated certain of the
Hindenburg allegations and provided the independent directors with
an interim report summarizing evidence it had reviewed, along with
items requiring further investigation. The Company’s outside
counsel then conducted its own investigation into the allegations,
which included following up on the items identified by independent
counsel. Based on the Company’s outside counsel’s investigation and
further investigative work of its own, the Company has
concluded it can now provide the following response to the
allegations in the Hindenburg report:
- Agri-Fintech Holdings, Inc.
Resignation of Director: Christophe Charlier was a
co-Chairman of OTC-listed company, Agri-Fintech Holdings, Inc.,
which sold Tingo Mobile Limited to the Company on November 30,
2022. Mr. Charlier has never been a member of the Company’s Board
of Directors, nor has he been involved in the management of the
Company. In his resignation letter, which was filed with the SEC,
Mr. Charlier complained only of a lack of communication and
teamwork at Agri-Fintech Holdings.
- Tingo Foods Revenue and
Operating Margin: The revenue reported by Tingo Foods in
Q1 2023 and its operating margin of 24.8 % has been confirmed.
- Tingo Foods Business
Relationships: During the period from September 2022 to
March 31, 2023, Tingo Foods purchased its raw crops from two
organizations in Nigeria, including the All Farmers Association of
Nigeria (“AFAN”), which delivered the crops to third-party food
processors. Tingo Foods then sold the processed food to several
large wholesalers in Nigeria.
- Food Processing
Facility: The construction of the Tingo Foods
processing facility in Nigeria is well underway, with food and
beverage processing operations expected to commence in Q2 2024. The
images and renderings used for the Foods Processing Facility’s
groundbreaking ceremony in February 2023 and in early
presentational materials were stock images provided by an external
marketing company, whereas specific renderings of the actual
facility are currently being utilized. The Company has contracts in
place with the construction company for the project and with Evtec
Energy Plc and TAE Power Solutions Limited for the construction of
a solar power plant to power the processing facility. Evtec Energy
Plc is a special purpose vehicle for the project, whereas TAE Power
Solutions Limited is a part of a multinational group that has been
trading for more than 25 years.
- Tingo Foods Sale of
Inventory: The inventory held by Tingo Foods at the time
it was purchased by the Company in February 2023 was sold to a
customer on March 20, 2023, the proceeds for which were received on
June 29, 2023.
- Tingo Mobile Business
Relationships with Farming Organizations: Tingo Mobile
leases mobile phones to four co-operatives and farming
organizations: the Kebbi (Dala) Multi-Purpose Cooperative Society
(“Kebbi”), the Ailoje Royal Farms Multi-Purpose Cooperative
(“Ailoje”), the All Farmers Association of Nigeria (“AFAN”), and
the Ashanti Investment Trust (“Ashanti”). The two farming
cooperatives referenced in the Hindenburg report were Kebbi and
Ailoje, to which Tingo Mobile has leased 4.5 million and 4.844
million phones respectively. The relationships with all the
co-operatives and farming organizations have been confirmed.
- Mobile License:
Tingo Mobile does not directly provide airtime and data services on
the phones it leases to customers, or through its Nwassa platform.
Such services are currently provided by a third-party vendor. Tingo
Mobile therefore does not require a Mobile License from the
Nigerian Communications Commission. This arrangement allows Tingo
Mobile’s customers to choose the best network provider for their
location from Airtel, MTN, 9 Mobile and Globacom. Tingo Mobile
earns a commission on the airtime and data services purchased by
its customers, which it receives from its vendor, and which were
previously received from Airtel.
- Tingo Mobile’s Phone
Suppliers: Since 2020, Tingo Mobile has purchased mobile
phones from two suppliers: UGC Technologies Limited, with which it
has had a contractual relationship since December 2020, and Bullitt
Mobile, with which it has had a distribution agreement since
February 2022.Hindenburg contacted a company called UGC Mobile
Technologies in the U.S., not Tingo Mobile’s supplier, UGC
Technologies Limited, which has offices in Africa and China. Tingo
Mobile has purchased almost all its mobile phones from UGC
Technologies Limited to date, with only a small purchase of 1,000
units of Caterpillar branded phones from Bullitt Mobile in
2022.
- Tingo Mobile’s
Taxes: On April 7, 2023, Tingo Mobile paid in full to the
Nigeria Federal Inland Revenue Service (“FIRS”) its corporate
income tax (“CIT”) and Tertiary Education Tax (“EDT”) for the
fiscal year 2022.
- Tingo Mobile
Ghana: The Company’s recently established operations in
Ghana are currently conducted exclusively through its trade
agreement with the Ashanti Investment Trust. The Company leases
mobile telephones to individuals introduced through the Ashanti
Investment Trust and such customers also have access to Nwassa. The
sim cards, airtime and data are sold to customers through a
third-party vendor, as a result of which Tingo Mobile is not
required to have a license with the National Communications
Authority in Ghana. Tingo Mobile does not currently deal with or
accept any new customers other than through its relationship with
the Ashanti Investment Trust, it is however preparing to further
expand the company’s business in Ghana and is currently recruiting
a workforce and building a website to assist in facilitating
this.
- TingoPay: Tingo
Mobile entered into a partnership with Visa on September 27, 2021,
subsequent to which it has hosted several joint events with Visa,
and it also launched a beta version of TingoPay with Visa on
February 14, 2023. Prior to contracting with Visa, Tingo Mobile
entered into a strategic partnership agreement with Stanbic Bank,
dated November 17, 2020, and work was undertaken by the parties to
develop an integrated e-wallet solution. After a disagreement over
the Tingo Mobile press release in April 2021, the partnership with
Stanbic Bank ceased and Tingo Mobile instead entered into the
partnership and e-wallet integration with Visa.
- Tingo Mobile’s NWASSA
Platform: The Nwassa USSD platform is pre-loaded on the
Tingo Mobile phones that are leased to the cooperatives and their
farmers. Other individuals that have their own mobile phone can
also register on the Nwassa USSD platform and conduct transactions
on the platform. The Nwassa platform can be used by farmers to
purchase items such as farming inputs, insurance, micro-loans, or
additional airtime. The transactions made through Nwassa are
processed by a third-party payment processing company owned by an
American multi-national fintech company, which collects a
commission payment on behalf of Tingo Mobile on each transaction
and remits the commissions to its bank account. Tingo Mobile has
confirmed its Q1 2023 reported revenue from the NWASSA
platform.
- Tingo DMCC: Tingo
DMCC is the Company’s new agricultural export business. As of June
30, 2023, Tingo DMCC had conducted three export sales transactions
totaling $348 million with customers located in neighboring
countries within Africa. Tingo DMCC currently conducts its business
through its direct contacts and sales leads. It is, however, in the
process of developing a separate website for use in the
future.
- Financial Statement
Errors: The “errors” identified by Hindenburg in Tingo
Group’s financial statements and MD&A in its year-end 2022 Form
10-K and Q1 2023 Form 10-Q were typographical errors that were
obvious to the reader from the remainder of the numbers and other
information.All the information required to be disclosed relating
to Certain Relationships and Related Transactions (including the
acquisition of Tingo Mobile on November 30, 2022), and Director
Independence, was included in the Form 10-K.While the Company’s
cash-flow statement inadvertently labeled an increase in trade
receivables as a decrease, the numbers themselves were correct. The
discrepancies Hindenburg identified between the change in
receivables reported on the balance sheet and change in receivables
reported in the cash flow statement reflect Hindenburg’s
misunderstanding of the numbers and the relevant U.S. GAAP
accounting standards, including in relation to how the business
combinations that closed during the relevant accounting periods
impacted the numbers. In both cases, the “difference” resulted from
non-cash adjustments related mainly to the Company’s acquisition of
Tingo Mobile in Q4 2022 and its acquisition of Tingo Foods in Q1
2023, all of which were correct.
- Independent
Auditors: The engagement with Brightman Almagor Zohar
& Co., a firm in the Deloitte Global Network, was after
consideration of the relevant factors regarding the location of
auditors. Such factors included that the Company does not have any
operations in the U.S., and the consolidation process and
preparation for the group’s financial statement and SEC filings is
performed by the Company’s finance function in Israel.
- Bank Balances:
Bank statements were obtained directly from the banks used by Tingo
Mobile and Tingo Foods, and interviews with the banks were
conducted over video conference calls. The bank balances of each
company were confirmed at several dates, including at the Quarter
End dates of March 31, 2023, June 30, 2023, and as late as August
3, 2023, which reconciled and agreed to each company’s accounting
records and financial statements.Tingo Mobile earns interest only
on funds held in a fixed deposit account. Due to its cash needs
from time to time, Tingo Mobile is unable to encumber a large
portion of its funds in a fixed-deposit account that would earn
interest.
Having concluded the investigation into the
allegations made by Hindenburg against the Company and its
businesses, which was deemed to be the highest priority, the
Company and its outside counsel will now proceed to investigate
Hindenburg’s allegations against the founder of Tingo Mobile and
Tingo Foods, Dozy Mmobuosi.
About Tingo Group
Tingo Group, Inc. (Nasdaq: TIO) is a global
Fintech and Agri-Fintech group of companies with operations in
Africa, Southeast Asia and the Middle East. Tingo Group’s wholly
owned subsidiary, Tingo Mobile, is a leading Agri-Fintech company
operating in Africa, with a comprehensive portfolio of innovative
products, including a ‘device as a service’ smartphone and a
value-added service platform. As part of its globalization
strategy, Tingo Mobile has recently begun to expand internationally
and entered into trade partnerships that are contracted to increase
the number of subscribed farmers from 9.3 million in 2022 to more
than 32 million, providing them with access to services including,
among others, the Nwassa ‘seed-to-sale’ marketplace platform,
insurance, micro-finance, and mobile phone and data top-up. Tingo
Group’s other Tingo business verticals include: TingoPay, a
SuperApp in partnership with Visa, that is currently in beta
version, offering a wide range of B2C and B2B services including
payment services, an e-wallet, foreign exchange and merchant
services; Tingo Foods, a food processing business that processes
raw foods into finished products such as rice, groundnut oil, nut
products, wheat, millet and maize; and Tingo DMCC, a commodity
trading platform and agricultural commodities export business based
out of the Dubai Multi Commodities Center. In addition to its Tingo
business verticals, Tingo Group also holds and operates an
insurance brokerage platform business in China; and Magpie
Securities, a regulated finance services Fintech business operating
out of Hong Kong and Singapore. For more information visit
tingogroup.com.
Disclaimer
The information in this news release includes
certain information and statements about management and the
Company’s board of director’s view of future events, expectations,
plans and prospects that constitute forward looking statements.
These statements are based upon assumptions that are subject to
significant risks and uncertainties. Because of these risks and
uncertainties and as a result of a variety of factors, the actual
results, expectations, achievements or performance may differ
materially from those anticipated and indicated by these
forward-looking statements. Any number of factors could cause
actual results to differ materially from these forward-looking
statements as well as future results. Although the Company believes
that the expectations reflected in forward looking statements are
reasonable, it can give no assurance that the expectations of any
forward-looking statements will prove to be correct. These
forward-looking statements involve a number of risks, uncertainties
or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, those discussed and identified in public
filings made with the SEC by the Company and: (i) the results of
the independent review; (ii) the risk of restatement of the
Company’s previously reported financial statements or the
identification of one or more material weaknesses in internal
control over financial reporting; (iii) costs relating to the
independent review, which are likely to be material; (iv) the
outcome of any legal proceedings that may be instituted against the
Company, including as may result from the independent review and
(v) the ability to meet stock exchange continued listing standards.
Except as required by law, the Company disclaims any intention and
assumes no obligation to update or revise any forward-looking
statements to reflect actual results, whether as a result of new
information, future events, changes in assumptions, changes in
factors affecting such forward-looking statements or otherwise.
Investor Relations
Contact949-491-8235TIO@mzgroup.uswww.mzgroup.us
Tingo (NASDAQ:TIO)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Tingo (NASDAQ:TIO)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024