Replies to post #2580 on Tingo Inc (TMNA)

[Perfectson]

The 10Q was pretty clear

Importantly, because we expect to hold 75.0% of the outstanding TIO common stock at some point during 2023, this report will discuss the historical operations of Tingo Mobile as a former subsidiary of the Company, and will discuss the future operations of Tingo Mobile, including the discussion of Risk Factors below, as a pending subsidiary of the Company.

Temporary Investment Company Status. Effective upon the closing of the Merger, the Company became subject to the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, any issuer of securities that has more than 100 beneficial owners and holds investment securities that exceed more than 40% of the value of the issuer’s unconsolidated assets is considered an ‘investment company’ and is therefore subject to various requirements of the 1940 Act, unless an exemption therefrom is applicable. Rule 3a-2 permits issuers such as the Company, to be “deemed not to be engaged in the business of investing, reinvesting, owning, holding or trading in securities” for up to one year from the date that the 1940 Act would have technically applied if (i) the issuer’s business activities are inconsistent with those of an investment company, and (ii) the issuer’s governing board passes a resolution stating the issuer’s “bona fide intent to be engaged primarily, as soon as is reasonably possible” to be “in a business other than that of investing, reinvesting, owning, holding or trading in securities” within such one year period. Because the Company is actively involved in acquiring operating assets or otherwise developing other operating businesses, its present activities are inconsistent with those of an investment company. Moreover, inasmuch as the Company expects to effect a conversion of the Series A Preferred Stock and the Series B Preferred Stock no later than June 30, 2023 and, therefore, consolidate the operations of TIO and its subsidiaries with the Company’s own operations, the Company has expressed its bona fide intent to be in a business other than that of an investment company.

at 75% they would consolidate 75% of revenue and assets into their(TMNA) financials. The investment act doesn't apply and if it did, they would show just an investment line on their balance sheet- they would also be limited on issuing shares, which is probably the main point of contetion if they are using shares to purchase additional companies for example.

The way the 10Q it's clear, they intend to consolidate the company (TIO).

Consolidation—In accordance with Article 6 of Regulation S-X under the Securities Act of 1933, we do not consolidate equity interests we hold in other entities. Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.

Valuation of Our Holdings in TIO—In connection with the sale of Tingo Mobile to TIO, we received shares of TIO common stock and two series of convertible preferred stock of TIO. The shares of TIO common stock are traded on the Nasdaq Capital Market under the symbol ‘TIO’. Because, at December 31, 2022 and March 31, 2023, more than 40% of the value of our unconsolidated assets consists of ‘investment securities’ (as such term is defined pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”), we are considered an ‘investment company’ under the 1940 Act and, as a result, we are required to assess the fair value of our holding in TIO.

While we are considered a temporary investment company, we intend to adjust our net asset value for the changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, if any, on a quarterly basis.

the above assumes they continue as an investment/fund company - which they have no intention to do .

all of the above seems pretty straight forward on the intent.

for me what's holding this back is

number of shares outstanding is 1.3B and now clarity on how much more this can grow, what additional shares they will use in purchses (they only hvae 32K in cash).

the cash and loan balance + the distributed earnings - puts this at around $0.55 assuming no growth and no dilution. So i wager this is why there's a cap right now .

[downthehatch]

While I agree with you that there is some uncertainty regarding specific plans going forward, I have to disagree with you on this statement:

We have no idea what we are investing in. Are we investing in TIO or some company that is going to use their stake in TIO to capitalize future endeavors. We have no idea what those future endeavors will be.

We KNOW that what we are investing in is a 75% stake in TIO, which consists almost entirely of a business developed and grown to its current size and revenues by TMNA's CEO Dozy Mmobuosi. The opeating business of TIO is now our old Tingo Mobile and Tingo Food, and is trading at over $5.00/share. Given that Dozy has already shown he knows how to grow a business, I'm comfortable with whatever direction he decides we should go.

[snow]

thebear37 I agree with what you state about being cryptic about the plans for the TIO share distribution. It is even an understatement. The point is however that if no such shares are distributed the net assets of TMNA will increase by the value of the stake in TIO. You are right that TMNA could retain all the shares in TIO and then sell more or less of them to finance other activities. This creates some degree of uncertainty.

I don't think it is correct that we have no idea what future endeavors will be. I have read some things about this topic but I remember to little to mention anything. However, the African leader of this company has been extremely successful in his business eldeavors so far. The prospects of the African business of TIO seem extremely bright to me. It would make little sense to sell a large part of the TIO shares. The sale of some of those shares could finance other successful business in Africa. I assume TMNA will see to it that this stock gets a listing on a major stock exchange before long. There is thus both a downside and an upside regarding the present uncertainty.