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

 

PART I - FINANCIAL INFORMATION  
   
Item 1. Financial Statements. 3
   
Condensed Consolidated Balance Sheets as of September 30, 2018 (Unaudited) and December 31, 2017 3
   
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017 4
   
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficiency) for the Three and Nine Months Ended September 30, 2018 5
   
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Deficiency for the Three and Nine Months Ended September 30, 2017 6
   
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 7
   
Notes to Unaudited Condensed Consolidated Financial Statements 9
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 26
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 32
   
Item 4. Controls and Procedures. 32
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings. 34
   
Item 1A. Risk Factors. 34
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 35
   
Item 3. Defaults Upon Senior Securities. 35
   
Item 4. Mine Safety Disclosures. 35
   
Item 5. Other Information. 35
   
Item 6. Exhibits. 36
   
SIGNATURES 37

 

 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)