UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2018
or
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________ to _____________
Commission File No. 001-38392
BLINK CHARGING CO.
(Exact name of registrant as specified in its charter)
Nevada | 03-0608147 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
407 Lincoln Road | ||
Miami Beach, Florida | 33139-3024 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (305) 521-0200
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [X] | Smaller reporting company | [X] |
Emerging growth company | [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
As of November 09, 2018, the registrant had 25,719,585 shares of common stock outstanding.
BLINK CHARGING CO. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018
TABLE OF CONTENTS
2 |
PART 1 – FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS. |
BLINK CHARGING CO. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2018 | December 31, 2017 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 21,304,407 | $ | 185,151 | ||||
Accounts receivable and other receivables, net | 207,122 | 227,918 | ||||||
Inventory, net | 765,870 | 247,466 | ||||||
Current portion of operating lease right-of-use asset | 95,866 | - | ||||||
Prepaid expenses and other current asset | 866,219 | 108,352 | ||||||
Total Current Assets | 23,239,484 | 768,887 | ||||||
Property and equipment, net | 350,106 | 376,920 | ||||||
Operating lease right-of-use asset, non-current portion | 183,746 | - | ||||||
Intangible assets, net | 98,430 | 106,167 | ||||||
Deferred public offering costs | - | 1,367,730 | ||||||
Other assets | 64,673 | 67,309 | ||||||
Total Assets | $ | 23,936,439 | $ | 2,687,013 | ||||
Liabilities and Stockholders’ Equity (Deficiency) | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 1,555,220 | $ | 4,228,073 | ||||
Accrued expenses | 2,737,344 | 23,135,344 | ||||||
Accrued issuable equity | 1,131,474 | 2,939,906 | ||||||
Derivative liabilities | 24,240 | 3,448,390 | ||||||
Current portion of convertible notes payable | - | 50,000 | ||||||
Convertible notes payable - related party | - | 747,567 | ||||||
Notes payable | 337,966 | 597,966 | ||||||
Current portion of operating lease liabilities | 95,866 | - | ||||||
Current portion of deferred revenue | 401,458 | 383,771 | ||||||
Total Current Liabilities | 6,283,568 | 35,531,017 | ||||||
Convertible notes payable, non-current portion, net of debt discount of $0 and $499,435 as of September 30, 2018 and December 31, 2017, respectively | - | 3,200,096 | ||||||
Operating lease liabilities, non-current portion | 187,548 | - | ||||||
Deferred revenue, non-current portion | 18,456 | 50,283 | ||||||
Total Liabilities | 6,489,572 | 38,781,396 | ||||||
Series B Convertible Preferred Stock, 10,000 shares designated, 0 and 8,250 issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | - | 825,000 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ Equity (Deficiency): | ||||||||
Preferred stock, $0.001 par value, 40,000,000 shares authorized; | ||||||||
Series A Convertible Preferred Stock, 20,000,000 shares designated, 0 and 11,000,000 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | - | 11,000 | ||||||
Series C Convertible Preferred Stock, 250,000 shares designated, 0 and 229,551 issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | - | 230 | ||||||
Series D Convertible Preferred Stock, 13,000 shares designated, 5,453 and 0 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 5 | - | ||||||
Common stock, $0.001 par value, 500,000,000 shares authorized, 25,564,103 and 5,523,673 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 25,564 | 5,524 | ||||||
Additional paid-in capital | 175,021,206 | 119,499,141 | ||||||
Accumulated deficit | (157,599,908 | ) | (156,435,278 | ) | ||||
Total Stockholders’ Equity (Deficiency) | 17,446,867 | (36,919,383 | ) | |||||
Total Liabilities and Stockholders’ Equity (Deficiency) | $ | 23,936,439 | $ | 2,687,013 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3 |
BLINK CHARGING CO. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
For The Three Months Ended | For The Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues: | ||||||||||||||||
Charging service revenue - company-owned charging stations | $ | 320,388 | $ | 295,202 | $ | 927,485 | $ | 879,428 | ||||||||
Product sales | 102,958 | 157,264 | 381,557 | 367,808 | ||||||||||||
Network fees | 55,540 | 59,604 | 168,825 | 168,334 | ||||||||||||
Warranty | 25,099 | 36,484 | 89,458 | 103,188 | ||||||||||||
Grant and rebate | 6,724 | 14,978 | 68,062 | 93,798 | ||||||||||||
Other | 36,135 | 43,367 | 131,795 | 122,937 | ||||||||||||
Total Revenues | 546,844 | 606,899 | 1,767,182 | 1,735,493 | ||||||||||||
Cost of Revenues: | ||||||||||||||||
Cost of charging services - company-owned charging stations | 18,823 | 106,606 | 141,644 | 171,284 | ||||||||||||
Host provider fees | 91,564 | 55,047 | 297,296 | 202,432 | ||||||||||||
Cost of product sales | 63,583 | 4,661 | 166,403 | 245,832 | ||||||||||||
Network costs | 73,858 | 21,781 | 218,083 | 236,675 | ||||||||||||
Warranty and repairs and maintenance | 121,957 | 30,771 | 271,686 | (26,325 | ) | |||||||||||
Depreciation and amortization | 70,296 | 86,744 | 222,711 | 298,168 | ||||||||||||
Total Cost of Revenues | 440,081 | 305,610 | 1,317,823 | 1,128,066 | ||||||||||||
Gross Profit | 106,763 | 301,289 | 449,359 | 607,427 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Compensation | 2,842,733 | 1,080,644 | 7,717,733 | 4,091,681 | ||||||||||||
General and administrative expenses | 467,073 | 222,399 | 949,592 | 774,482 | ||||||||||||
Other operating expenses | 319,537 | 227,927 | 996,529 | 681,630 | ||||||||||||
Lease termination costs | - | - | - | 300,000 | ||||||||||||
Total Operating Expenses | 3,629,343 | 1,530,970 | 9,663,854 | 5,847,793 | ||||||||||||
Loss From Operations | (3,522,580 | ) | (1,229,681 | ) | (9,214,495 | ) | (5,240,366 | ) | ||||||||
Other Income (Expense) | ||||||||||||||||
Interest expense | - | (95,215 | ) | (113,516 | ) | (454,164 | ) | |||||||||
Interest expense - related party share transfer (see Note 9) | - | - | (785,200 | ) | - | |||||||||||
Amortization of discount on convertible debt | - | (151,002 | ) | (528,929 | ) | (1,863,680 | ) | |||||||||
(Loss) Gain on settlement of accounts payable, net | - | (1,014 | ) | 920,352 | 22,914 | |||||||||||
Loss on settlement reserve | - | (12,450,000 | ) | (127,941 | ) | (12,975,588 | ) | |||||||||
Change in fair value of derivative and other accrued liabilities | 1,349,886 | (72,101,423 | ) | 4,997,721 | (72,882,216 | ) | ||||||||||
Loss on settlement of liabilities for equity | - | (7,570,581 | ) | (2,136,860 | ) | (7,570,581 | ) | |||||||||
Loss on deconsolidation of 350 Green | - | - | - | (97,152 | ) | |||||||||||
Gain on settlement of liabilities to JMJ for equity | - | - | 5,800,175 | - | ||||||||||||
Non-compliance penalty for SEC registration requirement | - | (21,516 | ) | - | (73,498 | ) | ||||||||||
Other income | 24,063 | - | 24,063 | - | ||||||||||||
- | ||||||||||||||||
Total Other Income (Expense) | 1,373,949 | (92,390,751 | ) | 8,049,865 | (95,893,965 | ) | ||||||||||
- | ||||||||||||||||
Net Loss | (2,148,631 | ) | (93,620,432 | ) | (1,164,630 | ) | (101,134,331 | ) | ||||||||
Dividend attributable to Series C shareholders | - | (828,500 | ) | (607,800 | ) | (2,374,300 | ) | |||||||||
Deemed dividend | - | - | (23,458,931 | ) | - | |||||||||||
Net Loss Attributable to Common Shareholders | $ | (2,148,631 | ) | $ | (94,448,932 | ) | $ | (25,231,361 | ) | $ | (103,508,631 | ) | ||||
Net Loss Per Share | ||||||||||||||||
Basic | $ | (0.09 | ) | $ | (34.68 | ) | $ | (1.33 | ) | $ | (52.04 | ) | ||||
Diluted | $ | (0.13 | ) | $ | (34.68 | ) | $ | (1.47 | ) | $ | (52.04 | ) | ||||
Weighted Average Number of Common Shares Outstanding | ||||||||||||||||
Basic | 24,867,869 | 2,723,437 | 18,916,432 | 1,989,022 | ||||||||||||
Diluted | 25,292,550 | 2,723,437 | 19,113,426 | 1,989,022 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4 |
BLINK CHARGING CO. AND SUBSIDIARIES
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficiency)
For the Three and Nine Months Ended September 30, 2018
(unaudited)
Convertible Preferred Stock | Additional | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||
Series A | Series C | Series D | Common Stock | Paid-In | Accumulated | (Deficiency) | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
Balance - January 1, 2018 | 11,000,000 | $ | 11,000 | 229,551 | $ | 230 | - | $ | - | 5,523,673 | $ | 5,524 | $ | 119,499,141 | $ | (156,435,278 | ) | $ | (36,919,383 | ) | ||||||||||||||||||||||||
Common stock and warrants issued in public offering [1] | - | - | - | - | - | - | 4,353,000 | 4,353 | 14,876,462 | - | 14,880,815 | |||||||||||||||||||||||||||||||||
Common stock issued upon conversion of Series A convertible preferred stock | (11,000,000 | ) | (11,000 | ) | - | - | - | - | 550,000 | 550 | 10,450 | - | - | |||||||||||||||||||||||||||||||
Common stock issued in satisfaction of Series B convertible preferred stock | - | - | - | - | - | - | 223,235 | 223 | 824,777 | - | 825,000 | |||||||||||||||||||||||||||||||||
Common stock issued upon conversion of Series C convertible preferred stock | - | - | (254,557 | ) | (255 | ) | - | - | 9,111,644 | 9,112 | (8,857 | ) | - | - | ||||||||||||||||||||||||||||||
Series D convertible preferred stock issued in satisfaction of liabilities | - | - | - | - | 12,005 | 12 | - | - | 12,004,988 | - | 12,005,000 | |||||||||||||||||||||||||||||||||
Common stock issued in partial satisfaction of debt and other liabilities | - | - | - | - | - | - | 1,488,021 | 1,488 | 4,282,500 | - | 4,283,988 | |||||||||||||||||||||||||||||||||
Warrants reclassified from derivative liabilities | - | - | - | - | - | - | - | - | 36,445 | - | 36,445 | |||||||||||||||||||||||||||||||||
Series C convertible preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||||||
Accrual of dividends earned | - | - | - | - | - | - | - | - | (607,800 | ) | (607,800 | ) | ||||||||||||||||||||||||||||||||
Payment of dividends in kind | - | - | 25,006 | 25 | - | - | - | - | 2,500,575 | 2,500,600 | ||||||||||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | - | - | 932,328 | 932 | 2,664,343 | - | 2,665,275 | |||||||||||||||||||||||||||||||||
Beneficial conversion feature of Series B and C convertible preferred stock | - | - | - | - | - | - | - | - | 23,458,931 | - | 23,458,931 | |||||||||||||||||||||||||||||||||
Deemed dividend related to immediate accretion of beneficial conversion of Series B and C convertible preferred stock | - | - | - | - | - | - | - | - | (23,458,931 | ) | - | (23,458,931 | ) | |||||||||||||||||||||||||||||||
Contribution of capital - related party share transfer (see Note 8) | - | - | - | - | - | - | - | - | 785,200 | - | 785,200 | |||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | - | 2,204,088 | 2,204,088 | |||||||||||||||||||||||||||||||||
Balance - March 31, 2018 | - | $ | - | - | $ | - | 12,005 | $ | 12 | 22,181,901 | $ | 22,182 | $ | 156,868,224 | $ | (154,231,190 | ) | $ | 2,659,228 | |||||||||||||||||||||||||
Common stock issued in partial satisfaction of debt and other liabilities | - | - | - | - | - | - | 25,669 | 25 | 69,975 | - | 70,000 | |||||||||||||||||||||||||||||||||
Common stock issued upon conversion of Series D convertible preferred stock | - | - | - | - | (4,368 | ) | (4 | ) | 1,400,000 | 1,400 | (1,396 | ) | - | - | ||||||||||||||||||||||||||||||
Proceeds from exercise of warrants | - | - | - | - | - | - | 4,033,660 | 4,034 | 17,139,022 | - | 17,143,056 | |||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||||||
Return and retirement of common stock | - | - | - | - | - | - | (2,942,099 | ) | (2,942 | ) | 2,942 | - | - | |||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||||||
Warrants issued in satisfaction of accrued issuable equity | - | - | - | - | - | - | - | - | 409,042 | - | 409,042 | |||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | (1,232,785 | ) | (1,232,785 | ) | |||||||||||||||||||||||||||||||
Balance - June 30, 2018 | - | $ | - | - | $ | - | 7,637 | $ | 8 | 24,699,131 | $ | 24,699 | $ | 174,487,809 | $ | (155,463,975 | ) | $ | 19,048,541 | |||||||||||||||||||||||||
Common stock issued upon conversion of Series D convertible preferred stock | - | - | - | - | (2,184 | ) | (3 | ) | 700,000 | 700 | (697 | ) | - | - | ||||||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | - | - | 188,501 | 189 | 601,128 | - | 601,317 | |||||||||||||||||||||||||||||||||
Return and retirement of common stock previously held as collateral | - | - | - | - | - | - | (23,529 | ) | (24 | ) | (67,034 | ) | - | (67,058 | ) | |||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | (2,135,933 | ) | (2,135,933 | ) | |||||||||||||||||||||||||||||||
Balance - September 30, 2018 | - | $ | - | - | $ | - | 5,453 | $ | 5 | 25,564,103 | $ | 25,564 | $ | 175,021,206 | $ | (157,599,908 | ) | $ | 17,446,867 |
[1] Includes gross proceeds of $18,504,320, less issuance costs of $3,623,505.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5 |
BLINK CHARGING CO. AND SUBSIDIARIES
Condensed Consolidated Statement of Changes in Stockholders’ Deficiency
For the Three and Nine Months Ended September 30, 2017
(unaudited)
Convertible Preferred Stock | Additional | Non Controlling | Total | |||||||||||||||||||||||||||||||||||||
Series A | Series C | Common Stock | Paid-In | Accumulated | Interest | Stockholders’ | ||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | Deficiency | |||||||||||||||||||||||||||||||
Balance - January 1, 2017 | 11,000,000 | $ | 11,000 | 150,426 | $ | 150 | 1,609,530 | $ | 1,610 | $ | 64,078,182 | $ | (81,071,782 | ) | $ | (3,831,314 | ) | $ | (20,812,154 | ) | ||||||||||||||||||||
Stock-based compensation | - | - | - | - | - | - | 35,961 | - | - | 35,961 | ||||||||||||||||||||||||||||||
Series C convertible preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||
Accrual of dividends earned | - | - | - | - | - | - | (754,900 | ) | - | - | (754,900 | ) | ||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (3,097,732 | ) | - | (3,097,732 | ) | ||||||||||||||||||||||||||||
Balance - March 31, 2017 | 11,000,000 | $ | 11,000 | 150,426 | $ | 150 | 1,609,530 | $ | 1,610 | $ | 63,359,243 | $ | (84,169,514 | ) | $ | (3,831,314 | ) | $ | (24,628,825 | ) | ||||||||||||||||||||
Stock-based compensation | - | - | - | - | - | - | 25,766 | - | - | 25,766 | ||||||||||||||||||||||||||||||
Series C convertible preferred stock issued in satisfaction of public information fee | - | - | 30,235 | 30 | - | - | 3,023,470 | - | - | 3,023,500 | ||||||||||||||||||||||||||||||
Series C convertible preferred stock issued in satisfaction of registration rights penalty | - | - | 12,455 | 13 | - | - | 1,245,487 | - | - | 1,245,500 | ||||||||||||||||||||||||||||||
Series C convertible preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||
Accrual of dividends earned | - | - | - | - | - | - | (790,900 | ) | - | - | (790,900 | ) | ||||||||||||||||||||||||||||
Payment of dividends in kind | - | - | 19,050 | 19 | - | - | 1,904,981 | - | - | 1,905,000 | ||||||||||||||||||||||||||||||
Common stock issued in partial satisfaction of debt | - | - | - | - | 21,166 | 21 | 181,904 | - | - | 181,925 | ||||||||||||||||||||||||||||||
Deconsolidation of 350 Green | - | - | - | - | - | - | - | - | 3,831,314 | 3,831,314 | ||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (4,416,167 | ) | - | (4,416,167 | ) | ||||||||||||||||||||||||||||
Balance - June 30, 2017 | 11,000,000 | $ | 11,000 | 212,166 | $ | 212 | 1,630,696 | $ | 1,631 | $ | 68,949,951 | $ | (88,585,681 | ) | $ | - | $ | (19,622,887 | ) | |||||||||||||||||||||
Stock-based compensation | - | - | - | - | 10,000 | 10 | 142,209 | - | - | 142,219 | ||||||||||||||||||||||||||||||
Series C convertible preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||
Accrual of dividends earned | - | - | - | - | - | - | (828,500 | ) | - | - | (828,500 | ) | ||||||||||||||||||||||||||||
Payment of dividends in kind | - | - | 8,266 | 8 | - | - | 826,492 | - | - | 826,500 | ||||||||||||||||||||||||||||||
Common stock issued in exchange for warrants | - | - | - | - | 3,170,937 | 3,171 | 46,384,662 | - | - | 46,387,833 | ||||||||||||||||||||||||||||||
Impact of share rounding as a result of reverse stock split | - | - | - | - | 999 | 1 | - | - | - | 1 | ||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (93,620,432 | ) | - | (93,620,432 | ) | ||||||||||||||||||||||||||||
Balance - September 30, 2017 | 11,000,000 | $ | 11,000 | 220,432 | $ | 220 | 4,812,632 | $ | 4,813 | $ | 115,474,814 | $ | (182,206,113 | ) | $ | - | $ | (66,715,266 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6 |
BLINK CHARGING CO. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
For The Nine Months Ended | ||||||||
September 30, | ||||||||
2018 | 2017 | |||||||
Cash Flows From Operating Activities | ||||||||
Net loss | $ | (1,164,630 | ) | $ | (101,134,331 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 290,181 | 323,186 | ||||||
Accretion of interest expense | - | 239,711 | ||||||
Amortization of discount on convertible debt | 528,929 | 1,863,680 | ||||||
Change in fair value of derivative and other accrued liabilities | (4,997,721 | ) |