Blink(US:BLNK)2024-05-10 20:16PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Presents unaudited condensed consolidated financial statements for Q1 2024 and 2023, detailing financial position, performance, cash flows, and notes Condensed Consolidated Balance Sheets Snapshot of financial position as of March 31, 2024, compared to December 31, 2023, detailing assets, liabilities, and equity | Metric | March 31, 2024 ($k) | December 31, 2023 ($k) | | :-------------------------------- | :-------------------- | :--------------------- | | Total Assets | 404,495 | 428,519 | | Total Liabilities | 107,757 | 139,122 | | Total Stockholders' Equity | 296,738 | 289,397 | | Cash and cash equivalents | 93,458 | 121,691 | | Working Capital | 130,506 | 152,033 | | Accumulated Deficit | (554,896) | (537,723) | | Common Shares Outstanding | 100,996,579 | 92,818,233 | Unaudited Condensed Consolidated Statements of Operations Highlights financial performance for Q1 2024, showing significant revenue growth and reduced net loss compared to Q1 2023 | Metric | Q1 2024 ($k) | Q1 2023 ($k) | Change ($k) | Change (%) | | :----------------------- | :----------- | :----------- | :---------- | :--------- | | Total Revenues | 37,568 | 21,668 | 15,900 | 73% | | Gross Profit | 13,419 | 4,543 | 8,876 | 195% | | Loss From Operations | (17,453) | (30,839) | 13,386 | -43% | | Net Loss | (17,173) | (29,801) | 12,628 | -42% | | Net Loss Per Share (Basic) | (0.17) | (0.53) | 0.36 | -68% | | Net Loss Per Share (Diluted) | (0.17) | (0.53) | 0.36 | -68% | Unaudited Condensed Consolidated Statements of Comprehensive Loss Presents total comprehensive loss for Q1 2024 and 2023, including net loss and cumulative translation adjustments | Metric | Q1 2024 ($k) | Q1 2023 ($k) | | :--------------------------- | :----------- | :----------- | | Net Loss | (17,173) | (29,801) | | Cumulative translation adjustments | (1,237) | (850) | | Total Comprehensive Loss | (18,410) | (30,651) | Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity Details changes in stockholders' equity for Q1 2024 and 2023, reflecting common stock issuance, compensation, and net loss | Item | Q1 2024 ($k) | Q1 2023 ($k) | | :------------------------------------------ | :----------- | :----------- | | Common stock issued in public offering, net | 25,070 | 94,766 | | Stock-based compensation | 681 | 7,757 | | Other comprehensive loss | (1,237) | (850) | | Net loss | (17,173) | (29,801) | Unaudited Condensed Consolidated Statements of Cash Flows Provides insight into cash generation and usage across operating, investing, and financing activities for Q1 2024 and 2023 | Cash Flow Activity | Q1 2024 ($k) | Q1 2023 ($k) | | :------------------------------------------ | :----------- | :----------- | | Net Cash Used In Operating Activities | (21,476) | (24,177) | | Net Cash Used In Investing Activities | (2,830) | (2,215) | | Net Cash (Used In) Provided By Financing Activities | (6,703) | 95,360 | | Cash and Cash Equivalents and Restricted Cash - End of Period | 93,535 | 103,280 | Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed explanations supporting financial statements, covering organization, accounting policies, instruments, commitments, and events 1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Blink Charging Co. is a leading manufacturer, owner, operator, and provider of electric vehicle (EV) charging equipment and networked EV charging services in the U.S. and international markets153 - The company operates proprietary, cloud-based Blink EV charging networks and offers EVSE and other EV-related services, including an EV-based ride-sharing business through Envoy Mobility, Inc153 - Blink has not yet achieved profitability and expects continued cash outflows from operations, but anticipates cash on hand will fund operations for at least 12 months155175 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FOREIGN CURRENCY TRANSLATION: The Company's reporting currency is USD, with functional currencies for certain subsidiaries being Euro, Indian Rupee, and Pound Sterling. Foreign transaction (losses) gains were ($30k) in Q1 2024 compared to $1,807k in Q1 202325 - ASSETS HELD FOR SALE: During Q1 2024, the Company commenced plans to sell an office building in Miami Beach, with a carrying value of $3,675k as of March 31, 2024204 - Underperforming Subsidiary: The Board approved a plan to sell underperforming assets of a subsidiary, expected to close in Q2 2024, resulting in an estimated loss of $564k recorded in Q1 2024 operating expenses26 - REVENUE RECOGNITION: Revenue is recognized from product sales (at shipment), charging service (at session completion), network fees (straight-line over contract term), and other (primarily alternative fuel credits)27 - Car-sharing services: Accounted for under ASC Topic 842, Leases, with revenues recognized over the short-term contractual period of performance. Q1 2024 revenue was $1,097k vs $252k in Q1 2023183184 - CONCENTRATIONS: In Q1 2024, sales to one significant customer represented 14% of total revenue (13% in Q1 2023). Purchases from a significant supplier were 10% in Q1 2024 (16% in Q1 2023), and another significant supplier was 10% in Q1 2024185213 - RECLASSIFICATIONS: Certain prior year balances were reclassified to conform to current year presentation, with no effect on previously reported results of operations or loss per share214 NET LOSS PER COMMON SHARE - Basic and diluted net loss per common share were $(0.17) for Q1 2024 and $(0.53) for Q1 202310 - Potentially dilutive shares (warrants, unvested restricted common stock, options) totaling 2,509,392 in Q1 2024 (vs 2,253,611 in Q1 2023) were excluded from EPS calculation due to their anti-dilutive effect31217 3. NOTES PAYABLE - SEMACONNECT- NOTES PAYABLE: During Q1 2024, the Company repaid the remaining principal balance of $31,354k and $1,139k of accrued interest31 - ENVOY-NOTES PAYABLE: Subsequent to March 31, 2024, the Company repaid $6,824k of its notes payable related to the Envoy acquisition, which includes principal and accrued interest44 4. STOCKHOLDERS' EQUITY - AT-THE-MARKET OFFERING: In Q1 2024, the Company sold 8,177,472 shares of common stock under its ATM program for aggregate gross proceeds of approximately $25,651k, resulting in net proceeds of $25,070k after issuance costs23218 - STOCK-BASED COMPENSATION: Recognized $917k in stock-based compensation expense in Q1 2024, a decrease from $7,775k in Q1 2023. As of March 31, 2024, $3,228k of unrecognized expense remains, to be recognized over a weighted average remaining vesting period of 1.3 years219 5. RELATED PARTY TRANSACTIONS - JOINT VENTURE: The Company holds a 40% interest in Blink Charging Europe Ltd., a variable interest entity, but does not consolidate it due to lack of controlling financial interest. The entity has not generated net income, so no gain or loss was recorded on the equity method investment60220 - BLINK CHARGING UK LIMITED: Close family members of a senior management employee provided services worth $82k to Electric Blue Limited (a subsidiary) during Q1 2024253 6. LEASES - OPERATING LEASES: Total operating lease expenses were $788k in Q1 2024, up from $493k in Q1 202336 | Year Ending December 31, | Operating Lease ($k) | Finance Lease ($k) | | :----------------------- | :------------------- | :----------------- | | 2024 | 5,091 | 497 | | 2025 | 3,249 | 41 | | 2026 | 1,779 | 41 | | 2027 | 1,160 | 35 | | 2028 | 659 | 18 | | Thereafter | 1,207 | - | | Total future minimum lease payments | 13,145 | 632 | | Less: imputed interest | (2,637) | (73) | | Total | 10,508 | 559 | - Weighted average remaining operating lease term is 2.72 years with a weighted average discount rate of 7.3% as of March 31, 2024255 7. FAIR VALUE MEASUREMENT - Fair value of consideration payable was $19,818k as of March 31, 2024, reflecting a $1,700k change in fair value during Q1 202464257 - Fair value of warrant liability was $34k as of March 31, 2024, reflecting a $2k change in fair value during Q1 202464 - Valuation of Level 3 liabilities (warrant liability, common stock liability, consideration payable) uses a probability-weighted discounted cash flow approach, considering inputs such as risk-free interest rate (5.03%), contractual term (1.00 year), and expected volatility (88%) for Q1 202494224257 8. COMMITMENTS AND CONTINGENCIES - PURCHASE COMMITMENTS: As of March 31, 2024, the Company had purchase commitments of approximately $20,540k, primarily for future sales, charging station deployments, and inventory, expected to be received within the next 12-24 months66117 - LITIGATION, DISPUTES AND SETTLEMENTS: A settlement was agreed upon in April 2024 for the consolidated securities class action lawsuits (Bush, Vittoria), expected to be covered by the Company's insurance. Shareholder derivative actions (Klein, Bhatia, McCauley) are ongoing, with the Company disputing allegations and not recording accruals due to uncertain probability or estimability of loss. A demand for arbitration was filed by The Farkas Group, Inc. on March 29, 2024, alleging unpaid commissions, which the Company denies4267228259261292 - WARRANTY: The Company estimates an approximate cost of $700k to repair deployed chargers as of March 31, 2024230 9. SUBSEQUENT EVENTS - Subsequent to March 31, 2024, the Company repaid $6,824k of its notes payable related to the Envoy transaction, including principal and accrued interest44 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Analyzes Blink Charging Co.'s Q1 2024 financial condition and operations, covering business overview, recent developments, detailed results, liquidity, and critical accounting estimates Special Note Regarding Forward-Looking Information - The report contains forward-looking statements subject to uncertainties, risks, and influences beyond the company's control, which may affect their accuracy45 - Factors affecting results include risks and uncertainties detailed in the Company's Annual Report on Form 10-K for FY2023 and subsequent reports45 Overview - Blink is a leading manufacturer, owner, operator, and provider of electric vehicle (EV) charging equipment and networked EV charging services in growing U.S. and international markets46 - The company offers residential and commercial EV charging equipment and services through its proprietary, cloud-based Blink EV charging network46 - Blink operates three primary business models: host-owned, Blink-owned turnkey, and Blink-as-a-Service, differentiated by equipment ownership, installation costs, and revenue sharing4772234 - The company also owns and operates EV car-sharing and ride-sharing programs through its wholly-owned subsidiary, Blink Mobility73 - As of March 31, 2024, the company had cash and cash equivalents of $93,458k, working capital of $130,506k, and an accumulated deficit of $554,896k, with a net loss of $17,173k for Q1 2024267 Recent Developments - At-the-Market Offering: During Q1 2024, the Company sold 8,177,472 shares of common stock under its ATM program for gross proceeds of approximately $25,651k and net proceeds of approximately $25,070k237 - EV Charging Solutions: As of March 31, 2024, Blink sold or deployed 94,476 chargers, with 77,157 in the Blink Networks (including 5,832 company-owned) and 17,319 non-networked or international sales74 - The company entered into agreements with significant new customers in 2023 and 2022, including USPS, Mack Trucks, Mitsubishi, and various cities, expanding its potential for unit sales and deployments235 Product and Service Offerings - Level 2 Chargers: Offers a wide range of Level 2 (AC) EV charging equipment for commercial and residential use, compatible with North American (J1772, NACS) and European (Type 2) standards, ideal for workplaces, multifamily residential, retail, and hospitality238270 - International Products: Provides Level 2 AC and DC products (PQ 150, Series 3, EQ 200) for international markets, compatible with Type 2, GBT, and CCS 2 connectors52 - DC Fast Charging (DCFC): Offers a complete line of DCFC equipment (30kW to 360kW) supporting CHAdeMo, CCS1, and NACS connectors, typically providing an 80% charge in less than 30 minutes, suited for transportation hubs and travel destinations271 - Blink Network: A cloud-based platform that manages the global network of EV chargers for remote monitoring, management, payment processing, and customer support53 - Blink Charging Mobile App: Provides EV drivers with enhanced search capabilities, station information, and payment functionality240 - Mobile Charger: Offers the HQ 200-M Level 2 charger for mobile/emergency charging needs78 - Fleet Management: Provides applications targeted at commercial, municipal, and federal fleets for planning, managing, and optimizing departure schedules and energy costs79 Key Factors Affecting Operating Results - Growth: Highly dependent on consumer adoption of EVs, subject to risks from reduced demand, rapidly changing technologies, price competition, evolving government regulation, and changing consumer behaviors80 - Competition: The EV charging equipment and service market is highly competitive and expected to become increasingly so, with competition based on product performance, total cost of ownership, reliability, and brand recognition241 - Regulations: The business is subject to various federal, state, and international laws and regulations, including government incentives. Any reduction or elimination of these incentives could diminish revenues and demand for products273 - Expansion through Acquisitions: Strategic domestic and international acquisitions are pursued for expansion, but carry risks such as difficulties in integration, assimilating and retaining employees, retaining existing clients, and unforeseen liabilities55106 Results of Operations - Three Months Ended March 31, 2024 Compared With Three Months Ended March 31, 2023:274 | Metric | Q1 2024 ($k) | Q1 2023 ($k) | Change ($k) | Change (%) | | :----------------------- | :----------- | :----------- | :---------- | :--------- | | Total Revenues | 37,568 | 21,668 | 15,900 | 73% | | Gross Profit | 13,419 | 4,543 | 8,876 | 195% | | Loss From Operations | (17,453) | (30,839) | 13,386 | -43% | | Net Loss | (17,173) | (29,801) | 12,628 | -42% | - Revenues:243 | Revenue Type | Q1 2024 ($k) | Q1 2023 ($k) | Change ($k) | Change (%) | | :--------------------------------------- | :----------- | :----------- | :---------- | :--------- | | Product sales | 27,508 | 16,389 | 11,119 | 68% | | Charging service revenue - company-owned | 5,027 | 2,885 | 2,142 | 74% | | Network fees | 2,065 | 1,628 | 437 | 27% | | Warranty | 953 | 393 | 560 | 142% | | Grant and rebate | 583 | 49 | 534 | 1090% | | Car-sharing services | 1,097 | 252 | 845 | 335% | | Other | 335 | 72 | 263 | 365% | - Cost of Revenues:58 | Cost Type | Q1 2024 ($k) | Q1 2023 ($k) | Change ($k) | Change (%) | | :--------------------------------------- | :----------- | :----------- | :---------- | :--------- | | Cost of product sales | 16,602 | 11,731 | 4,871 | 42% | | Cost of charging services - company-owned | 705 | 887 | (182) | -21% | | Host provider fees | 3,042 | 1,647 | 1,395 | 85% | | Network costs | 589 | 437 | 152 | 35% | | Warranty and repairs and maintenance | 605 | 948 | (343) | -36% | | Car-sharing services | 862 | 637 | 225 | 35% | | Depreciation and amortization | 1,744 | 838 | 906 | 108% | - Operating Expenses:279 | Expense Type | Q1 2024 ($k) | Q1 2023 ($k) | Change ($k) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :---------- | :--------- | | Compensation | 14,957 | 22,709 | (7,752) | -34% | | General and administrative expenses | 7,777 | 8,478 | (701) | -8% | | Other operating expenses | 6,438 | 4,195 | 2,243 | 53% | | Change in fair value of consideration payable | 1,700 | - | 1,700 | 100% | - Other Income: Total other income decreased by $942k or 75% to $308k in Q1 2024, primarily due to a foreign exchange loss of $30k (compared to a gain of $1,807k in Q1 2023), partially offset by a $713k increase in dividend and interest income56113 - Total Comprehensive Loss: Total comprehensive loss decreased by $12,241k to $(18,410)k in Q1 2024 from $(30,651)k in Q1 202312281 Liquidity and Capital Resources - As of March 31, 2024, the Company had cash and cash equivalents of $93,458k, working capital of $130,506k, and an accumulated deficit of $554,896k283 - Net cash used in operating activities was $21,476k in Q1 2024, primarily attributable to the net loss adjusted for non-cash expenses and changes in operating assets and liabilities115 - Net cash used in investing activities was $2,830k in Q1 2024, mainly for the purchase of charging stations and other fixed assets303 - Net cash used in financing activities was $6,703k in Q1 2024, including $31,354k for notes payable repayment, partially offset by $25,070k from common stock sales90 - The Company expects cash on hand to fund operations for at least 12 months but acknowledges no assurance of obtaining additional funds on commercially acceptable terms304 - The Company has operating and finance lease obligations of approximately $11,067k over the next five years, primarily for corporate office space, warehousing, and car-sharing parking spaces305 Critical Accounting Estimates - Critical accounting estimates involve significant assumptions about highly uncertain matters, where changes could materially impact financial condition or results of operations118285 - Business Combination: Identifiable assets acquired and liabilities assumed are recorded at fair value, requiring judgment in estimating fair value of intangible assets (customer relationships, developed technology, trade names) using income-based valuation approaches307 - Consideration payable: Estimated using a Monte Carlo simulation model to determine the probability of achieving certain milestones, considering the probability of a public offering and discount rates. Fair value is reviewed quarterly94 - Goodwill: Evaluated annually or when impairment indicators exist. A qualitative assessment is performed first, followed by a quantitative test if needed, to determine if the fair value of a reporting unit is less than its carrying amount288 - Long-Lived Assets: Reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, assessing recoverability by monitoring current selling prices, EV adoption rates, and projected car charging utilization120 Contractual Obligations and Commitments - As of March 31, 2024, the Company had purchase commitments of approximately $20,540k, primarily for future sales, deployments of charging stations, and inventory management, expected to be received during the next 12-24 months117 Item 3. Quantitative and Qualitative Disclosures About Market Risk. Discusses the company's exposure to market risks, primarily foreign currency risk, and its current approach to managing these risks Foreign Currency Risk - The Company faces foreign currency risks related to revenues and operating expenses denominated in currencies other than the U.S. dollar, primarily the Euro122 - A hypothetical 1% decrease in all foreign currencies against the U.S. dollar would not result in a material foreign currency loss on foreign-denominated balances as of March 31, 2024122 - The Company does not currently enter into financial instruments to hedge its foreign currency exchange risk, but this may change as foreign operations expand122 Item 4. Controls and Procedures. Details the evaluation of disclosure controls and internal control over financial reporting, noting material weaknesses and ongoing remediation efforts Evaluation of Disclosure Controls and Procedures - Management, including the chief executive officer and chief financial officer, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2024289 - Disclosure controls and procedures were concluded to be not effective as of March 31, 2024, due to material weaknesses in internal control over financial reporting, as discussed in the Company's Form 10-K for FY2023311 Limitations on Effectiveness of Controls and Procedures - Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired control objectives due to inherent limitations and resource constraints290 Changes in Internal Control over Financial Reporting - During Q1 2024, management continued to commit resources to the remediation of the material weaknesses reported in the Company's Form 10-K for FY2023312 - Resources were also committed to the ongoing evaluation of the internal control over financial reporting of its previously exempted subsidiary, Envoy, acquired in April 2023312 - Except for the above, there were no other changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, controls during Q1 202498 PART II - OTHER INFORMATION Item 1. Legal Proceedings. Refers to Note 8 – Commitments and Contingencies – Litigation, Disputes, and Settlements in Part 1, Item 1 for legal proceedings details - For a description of the Company's legal proceedings, refer to Note 8 – Commitments and Contingencies – Litigation, Disputes, and Settlements in Part 1, Item 1 of this Quarterly Report on Form 10-Q99 Item 1A. Risk Factors. The company faces ongoing net losses, uncertain profitability, potential funding needs, and various risks that may prevent achieving its goals - The Company has a history of annual and quarterly net losses, which may continue and negatively impact its ability to achieve business objectives100293 - As of March 31, 2024, the Company incurred a net loss of approximately $17.1 million for Q1 2024, and had an accumulated deficit of approximately $555 million293 - There is no assurance that the Company will ever achieve profitable operations or sustain it, and additional funding may be required, which might not be available on commercially reasonable terms127 - Numerous and varied risks, known and unknown, may prevent the Company from achieving its goals, potentially leading to a material adverse effect on its business, financial condition, or results of operation314 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. States that there were no unregistered sales of equity securities or use of proceeds to report for the period - None101315 Item 3. Defaults Upon Senior Securities. Indicates that there were no defaults upon senior securities to report - None128294 Item 4. Mine Safety Disclosures. States that mine safety disclosures are not applicable to the company - Not applicable102316 Item 5. Other Information. Indicates that there is no other information to report - None129 Item 6. Exhibits. Lists the exhibits filed with the Form 10-Q, including certifications and financial statements in Inline XBRL format - Exhibits include Rule 13a-14(a) or 15d-14(a) Certifications of Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2)295 - Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer are furnished (Exhibits 32.1, 32.2)130 - The Company's Quarterly Report on Form 10-Q for Q1 2024, including condensed consolidated financial statements and notes, is formatted in Inline XBRL (Exhibit 101)104130 SIGNATURES Contains the signatures of the President and Chief Executive Officer and the Chief Financial Officer, certifying the report's submission - The report was signed on May 10, 2024, by Brendan S. Jones, President and Chief Executive Officer, and Michael P. Rama, Chief Financial Officer132319