Overview

Tingo, Inc. ("we," "us," "our," "Tingo" or the "Company"), a Nevada corporation, was formed on February 17, 2015. Our shares trade on the OTC Markets trading platform under the symbol 'TMNA'. We acquired our wholly-owned subsidiary, Tingo Mobile, PLC, a Nigerian public limited company ("Tingo Mobile"), in a share exchange with its sole shareholder effective August 15, 2021. The Company, including its subsidiary Tingo Mobile, is an Agri-Fintech company offering a comprehensive platform service through use of smartphones - 'device as a service' (using GSM technology) to empower a marketplace to enable subscribers/farmers within and outside of the agricultural sector to manage their commercial activities of growing and selling their production to market participants both domestically and internationally. The ecosystem provides a 'one stop shop' solution to enable such subscribers to manage everything from airtime top ups, bill pay services for utilities and other service providers, access to insurance services and micro finance to support their value chain from 'seed to sale'.

As of December 31, 2021, Tingo had approximately 9.3 million subscribers using its mobile phones and Nwassa payment platform (www.nwassa.com). Nwassa is Africa's leading digital agriculture ecosystem that empowers rural farmers and agri-businesses by using proprietary technology to enable access to markets in which they operate. Farm produce can be shipped from farms across Africa to any part of the world, in both retail and wholesale quantities. Nwassa's payment gateway also has an escrow structure that creates trust between buyers and sellers. Our system provides real-time pricing, straight from the farms, eliminating middlemen. Our users' customers pay for produce bought using available pricing on our platform. Our platform is paperless, verified and matched against a smart contract. Data is efficiently stored on the blockchain.

Our platform has created an escrow solution that secures the buyer, funds are not released to the seller until fulfilment. The platform also facilitates trade financing, ensuring that banks and other lenders compete to provide credit to our members.

Although we have a large retail subscriber base, ours is essentially a business-to-business-to-consumer ("B2B2C") business model. Each of our subscribers is a member of one of two large farmers' cooperatives with whom we have a contractual relationship and which relationship facilitates the distribution of our branded smartphones into various rural communities of member farmers. And it is through our phones and our proprietary applications imbedded therein where we are able to distribute our wider array of agri-fintech services and generate the diverse revenue streams as described in more detail in this report. In the fourth quarter of 2021, we also sold 2.9 million of our smartphones to a third cooperative, the members of which have the option to register for the Company's Nwassa platform to gain access to our Agri-Fintech services and become additions to our subscriber base.

Our principal office is located at 43 West 23rd Street, 2nd Floor, New York, NY 10010, and the telephone number is +1-646-847-0144. Our corporate website is located at www.tingoinc.com. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished to the Securities and Exchange Commission ("SEC"). Our shares are traded on OTC Markets under the ticker symbol "TMNA".

Acquisition of Tingo Mobile plc

On August 15, 2021, the Company acquired all of the share capital of Tingo Mobile plc, a Nigerian corporation ("Tingo Mobile") from Tingo International Holdings, Inc., a Delaware corporation ("TIH"), the sole shareholder of Tingo Mobile. Pursuant to the Acquisition Agreement executed in connection with the transaction, as subsequently amended, we issued TIH 1,028,000,000 shares of our Class A common stock and 65,000,000 shares of our Class B common stock. We also paid various fees and expenses in connection with the transaction, including 27,840,000 shares of our Class A common stock as a finder's fee.



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Results of Operations

Year Ended December 31, 2021 Compared with the Year Ended December 31, 2020

The Company's consolidated results from operations for the years ended December 31, 2021 and 2020 are summarized as follows:



                                            Years Ended December 31,
(in Thousands)                                  % of                      % of
                                   2021        Revenue       2020        Revenue
Revenue                         $   865,838          -    $   585,255          -
Operating Expense                 (800,479)      92.45 %    (383,399)      65.51 %
Operating Income                     65,359       7.55 %      201,856      34.49 %

Other Income (Expenses), net            417          -          8,854       1.51 %
Income before taxes                  65,776       7.60 %      210,710      36.00 %
Income tax expense                (104,802)      12.10 %     (68,740)      11.75 %
Net Income (Loss)               $  (39,026)       4.51 %  $   141,970      24.26 %


Revenue

Generally. Total revenue for Tingo Mobile increased from $585.3 million in 2020 to $865.8 million in 2021, an increase of $280.5 million or 47.9%. This followed an increase of $129.7 million, or 28.5%, in 2020 from revenue of $455.6 million in 2019. The increase in 2021 over 2020 was principally due to the following:

The increased use of our agri-fintech services by our subscribers, which saw a

record increase of approximately $100.0 million, or 101.4% year-over-year, in

revenues for Nwassa, our Agri-fintech platform. Our strategy of enabling rural

? communities with an affordable smartphone 'device as a service' has proved

successful in increasing the volume of agri produce trading being conducted on

the platform, where revenues have increased by 89.9% over 2020 with 2021

revenues of $80.7 million (2020 - $ 42.5 million).

Affordable pricing of mobile device insurance saw a substantial increase in the

? number of customers that opted for this service, resulting in an increase of

approximately 800.0% from 2020, to post revenues of $14.4 million (2020 : $1.6

million)

A significant number of customers see Nwassa as their chosen method to make

? payments for utilities. The Company recorded a 120.0% growth in this revenue

component in 2021 ($91.1 million) over 2020 ($ 41.5 million).

The significant growth in Nwassa revenues is in line with the company's

? strategy to expand its Agri-Fintech business as its core focus with the access

to mobile devices as an enabler to assure access and connectivity to our Nwassa

platform.

? The favorable Naira-USD exchange rate on December 31, 2021 as compared to

December 31, 2020.

Mobile leasing revenues increased due to timing of the renewal of our 12-month

? leasing contracts. The previous contracts expired in May 2020. The new

contracts commenced in May 2021 and August 2021, renewing over 9.3 million

existing subscribers, the majority of whom are active on the Nwassa platform.

Our agri-fintech monthly revenue growth has increased from $25.4 million in

September 2021 to $31.8 million in December 2021, representing a 24.9%

increase. The key areas that contributed to this significant monthly growth are

the significant increase of the number of agricultural trades executed through

? our system by 56.0%, delivering revenue growth of 77.0% for this activity

alone. Some of this growth may be seasonal but it is a demonstration of a

material increase in the level of activity on Nwassa as the service matures. In

addition, we have experienced double digit growth in mobile insurance and loan

brokerage services during 2021 as compared to 2020.

? In the fourth quarter of 2021, we sold 2.9 million of our smartphones to a

third cooperative in a single transaction,




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generating revenue of approximately $301.0 million. The members of this

cooperative have the option, but not the obligation, to register for the

Company's Nwassa platform to gain access to our agri-fintech services and become

additions to our subscriber base.

Agri-Fintech. The Agri-Fintech component of Tingo Mobile's business was introduced in 2020, and grew from $98.6 million, or 16.8% of total revenue in 2020, to $198.6 million, or 22.9% of total revenue in the year ended December 31, 2021. This represents an increase of 36.0% in Agri-Fintech's overall contribution to our total revenue. In addition, this trend demonstrates the increased activity resulting from the adoption of the smartphone 'Device as a Service' strategy the Company has implemented. Aggregate Nwassa revenue, which includes airtime, loan brokerage fees, insurance, transaction fees on agricultural produce trades, and transaction fees for utility payments, increased by 101.4% for 2021 as compared to 2020. The following table, which breaks out each revenue component, displays the growth, with no increase in airtime purchases for other networks on our Nwassa services by our existing customer base, from 2020 to 2021. We estimate that this represents over $4.0 billion in aggregate transaction processing for 2021 on our platforms.

The percentage growth in the various components of our Nwassa revenue from 2020 to 2021 is shown in the following table:



                                 NWASSA REVENUE

                                           2021              2020        Pct. Increase

Airtime                               $  10,129,247     $ 10,114,806               0.1 %
Brokerage on Loans                        2,334,312        2,975,749            (21.6) %
Insurance                                14,387,594        1,606,707             795.5 %
Agricultural Produce Trading Fees        80,655,494       42,476,778              89.9 %
Utility Payment Transaction Fees         91,132,027       41,471,994             120.0 %

Total                                 $ 198,638,674     $ 98,646,034             101.4 %

Mobile Sales and Leasing. Regarding the lease contracts for our mobile phones, the previous leasing cycle ended in May 2020. Due to Covid 19 and disruption to our supply chains, our new leasing cycles recommenced in May and August of 2021, concomitant with the commencement of leasing agreements with our two principal farmers' cooperatives. Deliveries of 9.0 million devices were staggered between May 2021 and August 2021. We anticipate the level of revenue will increase significantly for subsequent quarters due to the full rollout of approximately 9.3 million devices as of August 2021.

In examining the financial model of Tingo, we believe it is important to understand that the provision of smartphones is the means to drive a higher level of access to Nwassa, our Agri-Fintech platform, to enable our customers to participate in our Agri-marketplace, top up their airtime, pay for utilities, insure their mobile devices and access credit services through partner institutions. Typical fees and commissions on these services can be up to 4.0%. Insurance revenue is fixed at $0.24 per device per month. Our focus on providing an affordable mobile device is core to the delivery of our fintech services and we call that 'Device as a Service' model. The richness of our Agri-Fintech service and related payment services deliver a very unique model of social upliftment and financial inclusion to rural communities. The agri-marketplace we have created provides our customers with an opportunity to market their fresh produce to reduce the 'time to market' and contribute towards our objectives to support the rural farming community with products and services that enable reduction in 'post-harvest losses' - a key area of focus for us as part of our investment to deliver services through use of smartphones to drive tangible social upliftment through increased sales for such farmers using the Nwassa platform.

Cost of Revenues



The following table sets forth the cost of revenues for the years ended December
31, 2021 and 2020:

                                            Year Ended December 31,
                                             2021             2020

Commission to Cooperatives and Agents $ 9,378,916 $ 10,884,336 Cost of Resold Mobile Phones

               274,800,172      353,499,376

Total cost of revenues                   $ 284,179,088    $ 364,383,712


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Our cost of revenues for 2021 was $284.2 million as compared to $364.4 million in 2020, a decrease of $80.2 million. Cost of revenues principally consists of obligations to our manufacturer for our branded mobile phones that we resell, as well as the cost of providing our agri-fintech services. With respect to our leased phones, we do not recognize the cost of the phones as a cost of sales, but rather depreciate such cost on a straight line basis over the useful life of the devices, estimated at three years. Because overall cost of revenues also includes the cost of our agri-fintech services, the trending decrease in cost of revenues as a percentage of overall revenue is inversely related to the proportional increase over time of revenue generation from our higher margin agri-fintech services as described below. In other words, as we expand our Nwassa platform and revenue streams associated therewith, we expect our overall cost of revenues, as a percentage of overall revenue, to decrease accordingly.

Cost of revenues consists of two key elements:

Commissions to Cooperatives and Agents - the Company has over 17,000 agents

? that support the rollout of our services through our farmers' cooperative

partners and an independent agency network of rural farmers and women.

? Cost of Resold Mobile Phones - we match the cost of mobile devices which we

offer for resale to the costs we pay our manufacturer.

Selling, General & Administrative Expenses

The following table sets forth selling, general and administrative expenses for the years ended December 31, 2021 and 2020:



                                                  Years Ended December 31,
                                                    2021             2020
Payroll and related expenses                       72,990,188       2,630,454
Distribution expenses                                 985,801         268,337
Professional fees                                 192,842,115         298,768
Bank fees and charges                                 926,256         909,233
Depreciation and amortization                     247,177,230       5,769,462

General and administrative expenses - other 1,278,898 440,415 Bad debt expenses

                                      99,247       8,698,024

Selling, General and Administrative Expenses $ 516,299,735 $ 19,014,693

As the lessor of branded phones to our cooperative customers, we recognize depreciation expense ratably over the three-year estimated useful life of these devices. Other than the foregoing, prior year expenses mainly relate to general and administrative expenses only. Our acquisition of Tingo Mobile and the attendant expenses to maintain our status as a public reporting company has substantially increased these expenses. In addition, in 2021, we adopted our 2021 Equity Incentive Plan which provided for, among other awards, shares of restricted stock to Plan participants. This resulted in stock-based compensation expense of $149.4 million for the year, which included stock-based payments to officers, directors, and employees of $68.7 million and stock-based payments of professional fees of $80.8 million. Eliminating non-cash expenditures such as compensation expense relating to these stock awards, the Company had profit before tax of approximately $215.2 million on a consolidated basis during 2021. A detailed breakdown of other expenses included in Selling General and Administrative Expenses are contained in the Consolidated Profit and Loss Statement. A substantial part of these expenses relate to Tingo Mobile's operations in Nigeria. Also included under Professional Fees is a finder's fee paid in stock to third parties of $111.3 million in connection with the acquisition of Tingo Mobile.

Gross Profit and Income from Operations

Our gross profit for 2021 was $581.7 as compared to $220.9 million in 2020, an increase of $360.8 million or 163.3%. The substantial increase in gross profit from 2020 to 2021 was consistent with the increase from 2019 to 2020, where gross profit rose $81.8 million, or 58.9%, from $139.1 million in 2019. The increases from 2019 through 2021 were principally due to a significant increase in the revenue growth of our Nwassa agri-fintech platform, where we earn up to a 4.0% commission on various financial transactions and have relatively insignificant marginal expenses as compared to our sales and leasing business. With increased adoption rates and growth in our subscriber base, as Nwassa becomes a progressively larger component of our aggregate revenue, we expect overall gross profit margins to increase accordingly.

This trend is evidenced by the increased level of income from operations we have posted for 2021 as compared to 2020. This illustrates the significant value of the increased mix of Nwassa revenues relative to mobile sales/leasing will have a significant impact on margins and profitability into the future.



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Other Income

Other income was insignificant in 2021, or less than $0.5 million, as compared to approximately $8.9 million in 2020, and $0.4 million in 2019. The principal reason for the significant increase in 2020 was the recovery of bad debts. Given the manner in which we bundle our services with our branded phones, we do not typically incur a substantial amount of bad debt. Accordingly, we do not expect other income relating to the recovery of bad debts to be a significant revenue item in future periods.

2021 Equity Incentive Plan

On October 6, 2021, the Board adopted our 2021 Equity Incentive Plan ("Incentive Plan"), the purpose of which was to promote the interests of the Company by encouraging directors, officers, employees, and consultants of Tingo to develop a long-term interest in the Company, align their interests with that of our stockholders, and provide a means whereby they may develop a proprietary interest in the development and financial success of the Company and its stockholders. The Incentive Plan is also intended to enhance the ability of the Company and its subsidiaries to attract and retain the services of individuals who are essential for the growth and profitability of the Company. The Incentive Plan permits the award of restricted stock, common stock purchase options, restricted stock units, and stock appreciation awards. The maximum number of shares of our Class A common stock that are subject to awards granted under the Incentive Plan is 131,537,545 shares. The term of the Incentive Plan will expire on October 6, 2031. On October 12, 2021, our stockholders approved our Incentive Plan and, during the fourth quarter of 2021, the Tingo Compensation Committee granted awards of restricted stock under the Incentive Plan to certain directors, executive officers, employees, and consultants in the aggregate amount of 108,870,000 shares. The majority of the awards so issued are each subject to a vesting requirement over a 2-year period unless the recipient thereof is terminated or removed from their position without "cause", or as a result of constructive termination, as such terms are defined in the respective award agreements entered into by each of the recipients and the Company. We account for share-based compensation using the fair value method, as prescribed by ASC 718, Compensation-Stock Compensation. Accordingly, for restricted stock awards, we measure the grant date fair value based upon the market price of our common stock on the date of the grant and amortize the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term. In connection with these awards, we recorded compensation expense of $149.4 million for the year ended December 31, 2021.

As of December 31, 2021, total compensation expense to be recognized in future periods is $66.4 million. The weighted average period over which this expense is expected to be recognized is 1.8 years.



The following table summarizes the activity related to granted, vested, and
unvested restricted stock awards under the Incentive Plan for the year ended
December 31, 2021:

                                                                     Weighted
                                                   Number of      Average Grant
                                                    Shares       Date Fair Value
Unvested shares outstanding, January 1, 2021                -                   -
Shares Granted                                    108,870,000    $           1.75
Shares Vested                                      71,919,167    $           1.73
Shares Forfeited                                            -                   -
Unvested shares outstanding, December 31, 2021     36,950,833    $           1.80

Current Market Conditions

After a weeks-long buildup of forces along the Ukranian border in January and February 2022, armed forces of the Russian Federation invaded the country along multiple points on February 24, 2022. Western countries, largely led by the United States, issued substantial economic sanctions against Russia, including a complete ban on oil and gas imports into North America, the suspension of a number of Russian banks from the SWIFT banking communication system, and the freezing of assets beneficially owned by individuals with ties to the Russian government. The short-term effect of the invasion and its economic repercussions has been most acute on commodity prices, particularly agricultural and extractive products, with wheat prices up more than 70% from twelve months earlier, and oil prices rising to multi-year highs in March 2022. Equity markets, which had already started 2022 on a downward trend, were further suppressed by geopolitical events and the reaction of investors to them.

According to the IMF, the global economy grew at an estimated 5.9% rate for 2021, a full one point increase from 2020 (4.9%) and is expected to increase by 4.9% during 2022. Meanwhile, inflation has increased markedly in the United States and some emerging market economies. As restrictions are relaxed, demand has accelerated, but supply has been slower to respond. Although price pressures



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are expected to subside in most countries in 2022, inflation prospects are highly uncertain. Consumer prices, which had largely been held in check during the pandemic, began to rise steadily in the second quarter of 2021 and, by the third quarter of 2021, had reached an annualized rate of 5.4%. Although a number of commentators suggested that the price rises would be temporary due to supply and logistical constraints, the fourth quarter of 2021 saw further increases, with a non-core annualized rate of inflation of 7.0% by the end of 2021. February 2022 again saw a further increase to an annualized rate of 7.9%, the highest since January 1982. Notwithstanding tightening moves by central banks in the first quarter of 2022, the conflict in Ukraine is expected by many analysts to exacerbate underlying inflationary pressures.

These increases in consumer prices are occurring even as employment rates are below pre-pandemic levels in many economies, forcing difficult choices on policymakers. As of the end of 2021, the global unemployment rate stood at approximately 6.2%, still above levels experienced prior to the onset of COVID-19, but substantially below the highs of the first half of 2020 during the initial months of the pandemic. Economists are projecting a global unemployment rate of 5.9% for all of 2022.

With respect to food security and agricultural production, we expect that Tingo's focus on providing market solutions for the agriculture sector will increase in importance as the world seeks viable food security solutions in alternate geographical areas such as Africa. With a significant and established presence with millions of rural farmers using NWASSA, we intend to develop and consider strategic growth plans and deepen our interest in agritech and outgrower programs ('seed to offtake'). We also intend to make use of 'Big Data' to support improved productivity and expansion of our agri-marketplace linked to impact driven agri-finance and insurance solutions to support the expected growth and focus on Africa. Interestingly, as the cost of agri-commodities increase in price and farmers trade on Nwassa, such activity will increase the Company's revenue as we earn a fixed percentage of all trade. We are considering how we can extend our marketplace for both domestic and international markets and demand to respond in a positive and deliberate way to deliver solutions towards the acute concern around food security resulting from the crisis.

Liquidity and Capital Resources

Sources and Uses of Cash: Our principal sources of liquidity are our cash and cash equivalents, and cash generated from operations. On September 24, 2021, we filed a Form D with the Securities and Exchange Commission indicating the sale of our securities in one or more private transactions (the "Private Offering"). We expect that, as a result of the Private Offering, we will also be able to secure sufficient operating and working capital for our parent company activities for the next twelve months.

Cash on Hand. As of December 31, 2021, our cash and cash equivalents totaled $128.4 million on a consolidated basis as compared to $28.2 million in cash and cash equivalents at December 31, 2020. Virtually all of our cash is denominated in Nigerian Naira and deposited in Nigeria-based financial institutions.

Cash Provided from (Used in) Operating Activities. Operating activities provided approximately $123.8 million during the year ended December 31, 2021 as compared to cash generated of approximately $61.7 million for the year ended December 31, 2020. The increase was primarily due to the increase in trade and other payables and deferred income for significant sales of mobile phones in Q4 of 2021.

Cash Provided from (Used in) Investing Activities. For the year ended December 31, 2021, our net cash used in investing activities was approximately $1.2 million, compared to net cash used in investing activities of approximately $199.3 million for all of 2020, the principal difference being the acquisition of work in process during 2020.

Cash Provided from (Used in) Financing Activities. For the year ended December 31, 2021, our net cash used in financing activities was zero, compared to net cash used in financing activities of approximately $8.9 million for all of 2020. The principal reason was for repayments on debts outstanding in 2020 that were not outstanding in 2021.

Indebtedness: The Company had no financial debt as of December 31, 2021 or 2020.

We expect our cash on hand, proceeds received from our assets and operations, cash flow from operations, and availability of funds from our private offering, will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months. There can be no assurance that we will continue to generate cash flows at or above current levels or that we will be able to raise additional financing to support our parent company's operating and compliance expenditures.

Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions, regulatory requirements, changes in technologies, demand for our products and services,



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availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base, particularly in our principal markets, is critical to our ability to maintain a positive cash flow from operations. The foregoing events individually or collectively could affect our results.

We are evaluating the impact of current market conditions on our Company and its ability to generate dollar-denominated income. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance routine capital expenditures through the next twelve months.

Off Balance Sheet Arrangements

None.

Dividends

On November 10, 2021, our Board adopted a Dividend Policy for the Company. The Policy provides a process that the Board will undertake when approving quarterly, annual, and special dividends for the Company including, but not limited to, various financial criteria and macroeconomic factors, as well as certain financial and economic factors specific to the Company. In the case of quarterly dividends, within ninety (90) calendar days following the end of each fiscal year, the Board will determine the dividend payment, if any, that will be made to holders of the Company's capital stock. Such dividend will generally be expressed as a cash amount equal to a percentage of the Company's consolidated after-tax net income for such prior fiscal year, and will be divided into fourths, with one-fourth of the amount payable each quarter. As of December 31, 2021, the Company has not paid any dividends in its history.

Subsequent Events

Our Management performed an evaluation of the Company's activity through the date the financial statements were issued, noting there were no subsequent events.

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