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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

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.)

 

5081 Howerton Way, Suite A    
Bowie, Maryland   20715
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (305) 521-0200

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on Which Registered
Common Stock   BLNK   The NASDAQ Stock Market LLC

 

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 ☒ 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 ☒ 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 Smaller reporting company
    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

 

As of November 8, 2024, the registrant had 101,175,406 shares of common stock outstanding.

 

 

 

 
 

 

BLINK CHARGING CO.

 

FORM 10-Q

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

 

TABLE OF CONTENTS

 

  Page
PART I - FINANCIAL INFORMATION 1
   
Item 1. Financial Statements. 1
   
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 1
   
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 2
   
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2024 and 2023 3
   
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 4
   
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 5
   
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 6
   
Notes to Unaudited Condensed Consolidated Financial Statements 8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 17
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 26
   
Item 4. Controls and Procedures. 26
   
PART II - OTHER INFORMATION 27
   
Item 1. Legal Proceedings. 27
   
Item 1A. Risk Factors. 27
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 27
   
Item 3. Defaults Upon Senior Securities. 27
   
Item 4. Mine Safety Disclosures. 27
   
Item 5. Other Information. 27
   
Item 6. Exhibits. 28
   
SIGNATURES 29

 

 
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except for share amounts)

 

   September 30,   December 31, 
   2024   2023 
         
Assets          
Current Assets:          
Cash and cash equivalents  $64,584   $121,691 
Accounts receivable, net   48,697    45,447 
Inventory, net   42,312    47,942 
Prepaid expenses and other current assets   4,666    6,654 
           
Total Current Assets   160,259    221,734 
Restricted cash   77    79 
Property and equipment, net   44,045    35,127 
Operating lease right-of-use assets   10,190    9,731 
Intangible assets, net   12,055    16,298 
Goodwill   75,770    144,881 
Other assets   627    669 
           
Total Assets  $303,023   $428,519 
           
Liabilities and Stockholders’ Equity          
           
Current Liabilities:          
Accounts payable  $32,458   $31,193 
Accrued expenses and other current liabilities   10,999    14,143 
Current portion of consideration payable   265    6,792 
Current portion of operating lease liabilities   3,571    3,448 
Current portion of financing lease liabilities   40    512 
Current portion of deferred revenue   16,330    13,613 
           
Total Current Liabilities   63,663    69,701 
Consideration payable, non-current portion   20,891    49,434 
Operating lease liabilities, non-current portion   7,561    7,025 
Financing lease liabilities, non-current portion   106    163 
Other liabilities   337    337 
Deferred revenue, non-current portion   15,955    12,462 
           
Total Liabilities   108,513    139,122 
           
Commitments and contingencies (Note 9)   -    - 
           
Stockholders’ Equity:          
Common stock, $0.001 par value, 500,000,000 shares authorized, 101,154,412 and 92,818,233 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively   101    93 
Additional paid-in capital   858,327    829,563 
Accumulated other comprehensive loss   (1,574)   (2,536)
Accumulated deficit   (662,344)   (537,723)
           
Total Stockholders’ Equity   194,510    289,397 
           
Total Liabilities and Stockholders’ Equity  $303,023   $428,519 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

1
 


 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except for share and per share amounts)

 

   2024   2023   2024   2023 
   For The Three Months Ended   For The Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
                 
Revenues:                    
Product sales  $13,448   $35,059   $64,538   $76,035 
Charging service revenue - company-owned charging stations   5,254    3,859    15,217    11,111 
Network fees   2,332    1,973    6,304    5,268 
Warranty   1,405    849    3,698    2,163 
Grant and rebate   982    47    1,617    284 
Car-sharing services   1,168    903    3,467    2,112 
Other   598    687    1,176    914 
                     
Total Revenues   25,187    43,377    96,017    97,887 
                     
Cost of Revenues:                    
Cost of product sales   9,122    24,619    39,965    49,509 
Cost of charging services - company-owned charging stations   724    566    1,924    2,196 
Host provider fees   2,982    2,399    9,306    6,285 
Network costs   577    407    1,816    1,339 
Warranty and repairs and maintenance   294    561    1,880    2,924 
Car-sharing services   1,156    931    3,302    3,162 
Depreciation and amortization   1,213    1,109    4,573    2,853 
                     
Total Cost of Revenues   16,068    30,592    62,766    68,268 
                     
Gross Profit   9,119    12,785    33,251    29,619 
                     
Operating Expenses:                    
Compensation   15,159    15,268    47,770    75,967 
General and administrative expenses   7,972    8,539    23,782    26,466 
Other operating expenses   4,739    5,300    16,135    13,630 
Change in fair value of consideration payable   364    -      2,811    -   
Impairment of intangible assets   -      5,143    -      5,143 
Impairment of goodwill   69,111    89,087    69,111    89,087 
                     
Total Operating Expenses   97,345    123,337    159,609    210,293 
                     
Loss From Operations   (88,226)   (110,552)   (126,358)   (180,674)
                     
Other Income (Expense):                    
Interest expense   (2)   (970)   (475)   (2,373)
Gain (loss) on extinguishment of notes payable   36    (1,000)   36    (1,000)
Change in fair value of derivative and other accrued liabilities   4    -      (11)   10 
Other expense   (2)   (112)   (2)   (62)
Dividend and interest income   783    720    2,363    1,320 
                     
Total Other Income (Expense)   819    (1,362)   1,911    (2,105)
                     
Loss Before Income Taxes  $(87,407)  $(111,914)  $(124,447)  $(182,779)
                     
Benefit (provision) for income taxes   18    (807)   (174)   (1,225)
                     
Net Loss  $(87,389)  $(112,721)  $(124,621)  $(184,004)
                     
Net Loss Per Share:                    
Basic  $(0.86)  $(1.74)  $(1.24)  $(3.02)
Diluted  $(0.86)  $(1.74)  $(1.24)  $(3.02)
                     
Weighted Average Number of                    
Common Shares Outstanding:                    
Basic   101,113,655    64,626,681    100,676,840    61,006,242 
Diluted   101,113,655    64,626,681    100,676,840    61,006,242 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

2
 

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
                 
Net Loss  $(87,389)  $(112,721)  $(124,621)  $(184,004)
Other Comprehensive Income (Loss):                    
Cumulative translation adjustments   2,599    (1,678)   962    (1,383)
                     
Total Comprehensive Loss  $(84,790)  $(114,399)  $(123,659)  $(185,387)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

3
 

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2024

(in thousands, except for share amounts)

 

   Shares   Amount   Capital   Loss   Deficit   Equity 
               Accumulated         
           Additional   Other       Total 
   Common Stock   Paid-In   Comprehensive   Accumulated   Stockholders’ 
   Shares   Amount   Capital   Loss   Deficit   Equity 
                         
Balance - January 1, 2024   92,818,233   $93   $829,563   $(2,536)  $(537,723)  $289,397 
                               
Common stock issued in public offering, net of issuance costs [1]   8,177,472    8    25,062    -    -    25,070 
                               
Stock-based compensation   837    -    681    -    -    681 
                               
Other comprehensive loss   -    -    -    (1,237)   -    (1,237)
                               
Net loss   -    -    -    -    (17,173)   (17,173)
                               
Balance - March 31, 2024   100,996,542   $101   $855,306   $(3,773)  $(554,896)  $296,738 
                               
Stock-based compensation   -    -    1,269    -    -    1,269 
                               
Common stock issuance, net   70,665    -    825    -    -    825 
                               
Other comprehensive loss   -    -    -    (400)   -    (400)
                               
Net loss   -    -    -    -    (20,059)   (20,059)
                               
Balance - June 30, 2024   101,067,207   $101   $857,400   $(4,173)  $(574,955)  $278,373 
                               
Stock-based compensation   87,205    -    927    -    -    927 
                               
Other comprehensive loss   -    -    -    2,599    -    2,599 
                               
Net loss   -    -    -    -    (87,389)   (87,389)
                               
Balance - September 30, 2024   101,154,412   $101   $858,327   $(1,574)  $(662,344)  $194,510 

 

[1]Includes gross proceeds of $25,651, less issuance costs of $581.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

4
 

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2023

(in thousands, except for share amounts)

 

               Accumulated         
           Additional   Other       Total 
   Common Stock   Paid-In   Comprehensive   Accumulated   Stockholders’ 
   Shares   Amount   Capital   Loss   Deficit   Equity 
                         
Balance - January 1, 2023   51,476,445   $51   $597,982   $(3,046)  $(334,030)  $       260,957 
                               
Common stock issued in public offering, net of issuance costs [1]   8,333,333    8    94,758    -    -    94,766 
                               
Common stock issued upon exercises of warrants   557,733    1    834    -    -    835 
              -                
Stock-based compensation   5,866    -    7,757    -    -    7,757 
                               
Other comprehensive loss   -    -    -    (850)   -    (850)
                               
Net loss   -    -    -    -    (29,801)   (29,801)
                               
Balance - March 31, 2023   60,373,377   $60   $701,331   $(3,896)  $(363,831)  $333,664 
                               
Stock-based compensation   376,778    -    8,708    -    -    8,708 
                               
Common stock issued in public offering, net of issuance costs [2]   2,842,687    4    18,484    -    -    18,488 
                               
Reclassification of common stock liability to equity   8,235    -    35    -    -    35 
                               
Common stock issued upon cashless exercise of options and warrants   393,240    -    -    -    -    - 
                               
Other comprehensive income   -    -    -    1,145    -    1,145 
                               
Net loss   -    -    -    -    (41,482)   (41,482)
                               
Balance - June 30, 2023   63,994,317   $64   $728,558   $(2,751)  $(405,313)  $320,558 
                               
Common stock issued in public offering, net of issuance costs [3]   2,477,948    3    9,122    -    -    9,125 
                               
Surrender and cancellation of common stock   (27,681)   -    (197)   -    -    (197)
                               
Stock-based compensation   103,843    -    978    -    -    978 
                               
Common stock issued in connection with extinguishment of notes payable   158,372    -    1,000    -    -    1,000 
                        -      
Common stock issued in satisfaction of accrued issuable equity   370,899    -    2,600    -    -    2,600 
                               
Other comprehensive loss   -    -    -    (1,678)   -    (1,678)
                               
Net loss   -    -    -    -    (112,721)   (112,721)
                               
Balance - September 30, 2023   67,077,698   $67   $742,061   $(4,429)  $(518,034)  $219,665 

 

[1]Includes gross proceeds of $100,000, less issuance costs of $5,234.
[2]Includes gross proceeds of $18,868, less issuance costs of $380.
[3]Includes gross proceeds of $9,392, less issuance costs of $267.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5
 

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

   2024   2023 
   For The Nine Months Ended 
   September 30, 
   2024   2023 
Cash Flows From Operating Activities:          
Net loss  $(124,621)  $(184,004)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   9,566    9,694 
Non-cash lease expense   1,473    1,695 
Change in fair value of contingent consideration   -    28 
Loss (gain) on disposal of fixed assets   598    (99)
Change in fair value of derivative and other accrued liabilities   11   10 
Change in fair value of consideration payable   2,811    - 
Provision for slow moving and obsolete inventory   1,306    376 
Provision for credit losses   1,895    1,776 
(Gain) loss on extinguishment of notes payable   (36)   1,000 
Impairment of goodwill   69,111    89,087 
Impairment of intangible assets   -    5,143 
Stock-based compensation   2,877    20,543 
Changes in operating assets and liabilities:          
Accounts receivable   (4,970)   (19,655)
Inventory   (651)   (14,844)
Prepaid expenses and other current assets   2,024    (631)
Other assets   45    947 
Accounts payable and accrued expenses   (1,086)   9,101 
Other liabilities   -    (295)
Lease liabilities   (1,289)   (3,014)
Deferred revenue   6,106    5,980 
           
Total Adjustments   89,791    106,842 
           
Net Cash Used In Operating Activities   (34,830)   (77,162)
           
Cash Flows From Investing Activities:          
Purchase consideration of Envoy, net of cash acquired   -    (4,660)
Capitalization of engineering costs   (161)   (526)
Purchases of property and equipment   (9,577)   (7,265)
           
Net Cash Used In Investing Activities   (9,738)   (12,451)
           
Cash Flows From Financing Activities:          
Proceeds from sale of common stock in public offering, net [1]   25,070    122,379 
Repayment of note payable   (37,881)   - 
Proceeds from exercise of options and warrants   -    835 
Repayment of financing liability in connection with finance lease   (582)   (2,103)
Payment of financing liability in connection with internal use software   (338)   (220)
           
Net Cash (Used In) Provided By Financing Activities   (13,731)   120,891 
           
Effect of Exchange Rate Changes on Cash and Cash Equivalents   1,190    (1,159)
           
Net (Decrease) Increase In Cash and Cash Equivalents and Restricted Cash   (57,109)   30,119 
           
Cash and Cash Equivalents and Restricted Cash - Beginning of Period   121,770    36,633 
           
Cash and Cash Equivalents and Restricted Cash - End of Period  $64,661   $66,752 
           
Cash and cash equivalents and restricted cash consisted of the following:          
Cash and cash equivalents  $64,584   $66,678 
Restricted cash   77    74 
Total Cash and cash equivalents and restricted cash  $64,661   $66,752 

 

[1]Includes gross proceeds of $25,651, less issuance costs of $581.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6
 

 

BLINK CHARGING CO.

 

Unaudited Condensed Consolidated Statements of Cash Flows — Continued

(in thousands)

 

   2024   2023 
   For The Nine Months Ended 
   September 30, 
   2024   2023 
Supplemental Disclosures of Cash Flow Information:          
Cash paid during the period for:          
Interest  $1,436   $- 
Income taxes  $233   $- 
           
Non-cash investing and financing activities:          
Common stock issued in satisfaction of accrued issuable equity  $-   $2,600 
Surrender and cancellation of common stock  $-   $(197)
Right-of-use assets obtained in exchange for lease obligations  $1,076   $5,386 
Property and equipment obtained in exchange for finance lease obligations  $53   $3,733 
Intangible assets obtained in exchange for financing liability  $-   $122 
Note receivable applied to purchase consideration of Envoy  $-   $(1,321)
Common stock issuance, net  $825   $- 
Transfer of inventory to property and equipment  $5,111   $1,688 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

7
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND RISKS AND UNCERTAINTIES

 

Organization and Operations

 

Blink Charging Co., through its wholly-owned subsidiaries (collectively, the “Company” or “Blink”), is a leading manufacturer, owner, operator and provider of electric vehicle (“EV”) charging equipment and networked EV charging services in the rapidly growing U.S. and international markets for EVs. Blink offers residential and commercial EV charging equipment and services, enabling EV drivers to recharge at various location types. Blink’s principal line of products and services is its nationwide Blink EV charging networks (the “Blink Networks”) and Blink EV charging equipment, also known as electric vehicle supply equipment (“EVSE”), and other EV-related services. The Blink Networks is a proprietary, cloud-based system that operates, maintains and manages Blink charging stations and handles the associated charging data, back-end operations and payment processing. The Blink Networks provide property owners, managers, parking companies, state and municipal entities, and other types of commercial customers (“Property Partners”) with cloud-based services that enable the remote monitoring and management of EV charging stations. The Blink Networks also provide EV drivers with vital station information, including station location, availability and fees. Blink also operates an EV based ride-sharing business through its wholly-owned subsidiary, Envoy Mobility, Inc.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of September 30, 2024 and for the three and nine months then ended. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on March 18, 2024 as part of the Company’s Annual Report on Form 10-K (the “Annual Report”).

 

8
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Since the Annual Report for the year ended December 31, 2023, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note.

 

LIQUIDITY

 

As of September 30, 2024, the Company had cash and cash equivalents of $64,584 and working capital of $96,596 During the three and nine months ended September 30, 2024, the Company incurred a net loss of $87,389 and $124,621, respectively. During the nine months ended September 30, 2024, the Company used cash in operating activities of $34,830.

 

During the nine months ended September 30, 2024, the Company sold an aggregate of 8,177,472 shares of common stock under an “at-the-market” equity offering program for aggregate gross proceeds of $25,651, less issuance costs of $581. See Note 5 – Stockholders’ Equity.

 

The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. Historically, the Company has been able to raise funds to support its business operations, although there can be no assurance that it will be successful in raising significant additional funds in the future. The Company expects that its cash on hand will fund its operations for at least 12 months after the issuance date of these financial statements.

 

Since inception, the Company’s operations have primarily been funded through proceeds received in equity and debt financing. The Company believes it has access to capital resources and continues to evaluate additional financing opportunities. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations.

 

The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings. The Company is executing its plan designed to improve the Company’s liquidity by enhancing revenue economics, increasing gross profit through product optimization, integration of acquisitions, and reduction of operating expenses through cost avoidance and cost cutting strategies. There can be no assurances that these strategies will be achieved.

 

INVENTORY

 

As of September 30, 2024, the Company’s inventory was comprised $24,812 of finished goods that were available for sale and $17,500 of raw material and work in process. As of December 31, 2023, the Company’s inventory was comprised of $33,902 of finished goods that were available for sale and $14,040 of raw material and work in process.

 

FOREIGN CURRENCY TRANSLATION

 

Transaction losses attributable to foreign exchange were $389 and $434 during the three and nine months ended September 30, 2024, respectively. Transaction gains attributable to foreign exchange were $144 and $925 during the three and nine months ended September 30, 2023, respectively. Transaction gains and losses attributable to foreign exchange are included within general and administrative expenses on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023.

 

ASSETS HELD FOR SALE

 

The Company initially measures an asset that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell. The Company assesses the fair value of an asset less costs to sell each reporting period that it remains classified as held for sale, and reports any subsequent changes as an adjustment to the carrying amount of the asset. Assets are not depreciated or amortized while they are classified as held for sale.

 

Office Space

 

During the first quarter of 2024, the Company commenced plans to sell its approximately 10,000 square feet of office space in Miami Beach, Florida. The asset is included within property and equipment on the condensed consolidated balance sheet as of September 30, 2024. The asset’s carrying value was $3,781 and $3,692 as of September 30, 2024 and December 31, 2023, respectively. The Company recorded a loss on sale of $459 within general and administrative expenses during the three and nine months ended September 30, 2024. Subsequent to September 30, 2024, the Company completed the sale of its office space in Miami Beach, Florida for approximately $3,425 of proceeds.

 

Underperforming Subsidiary

 

During the first quarter of 2024, the Company’s Board of Directors approved a plan for the sale of underperforming assets of a subsidiary. On April 30, 2024, the Company entered into an agreement to sell installed and inventory charging units and the associated agreements with existing customers, hosts, and drivers. This transaction was completed and funded on July 3, 2024. As a result, the Company recorded a loss of $262 and $945 for the three and nine months ended September 30, 2024, respectively, which is included in operating expenses on the accompanying condensed consolidated statements of operations. The Company elected not to present this underperforming subsidiary as discontinued operations because it is not material to the Company’s condensed consolidated financial statements.

 

9
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

 

REVENUE RECOGNITION

 

The Company recognizes revenue primarily from the following:

 

Product sales – Revenue is recognized at the point where the customer obtains control of the goods and the Company satisfies its performance obligation, which generally is at the time it ships the product to the customer.
Charging service revenue – company-owned charging stations - Revenue is recognized at the point when a particular charging session is completed.
Network fees and warranty – Represents a stand-ready obligation whereby the Company is obligated to perform over a period of time and, as a result, revenue is recognized on a straight-line basis over the contract term. Network fees are billed annually.
Car-sharing services – Relates to revenues attributable to a car-sharing services which provides customers the ability to rent electric vehicles through a subscription service.
Other – Other revenues are primarily comprised of revenues generated from alternative fuel credits.

 

The following table summarizes revenue recognized in the condensed consolidated statements of operations:

 

  2024   2023   2024   2023 
  For The Three Months Ended   For The Nine Months Ended 
  September 30,   September 30, 
  2024   2023   2024   2023 
Revenues - Recognized at a Point in Time                    
Product sales  $13,448   $35,059   $64,538   $76,035 
Charging service revenue - company-owned charging stations   5,254    3,859    15,217    11,111 
Other   598    687    1,176    914 
Total Revenues - Recognized at a Point in Time   19,300    39,605    80,931    88,060 
                     
Revenues - Recognized Over a Period of Time:                    
Network fees   2,332    1,973    6,304    5,268 
Warranty   1,405    849    3,698    2,163 
Total Revenues - Recognized Over a Period of Time   3,737    2,822    10,002    7,431 
                     
 Revenues- Other                    
Car-sharing services   1,168    903    3,467    2,112 
Grant and rebate   982    47    1,617    284 
Total Revenues - Other   2,150    950    5,084    2,396 
                     
Total Revenue  $25,187   $43,377   $96,017   $97,887 

 

The following table summarizes our revenue recognized in the condensed consolidated statements of operations by geographical area:

 

   2024   2023   2024   2023 
   For The Three Months Ended   For The Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
Revenues by Geographical Area                    
U.S.A  $17,656   $34,126   $69,475   $71,736 
International   7,531    9,251    26,542    26,151 
Total Revenue  $25,187   $43,377   $96,017   $97,887 

 

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied.

 

As of September 30, 2024, the Company had $32,285 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue on the condensed consolidated balance sheets as of September 30, 2024. The Company expects to satisfy $16,330 of its remaining performance obligations for network fees, warranty revenue, product sales, and other and recognize the revenue within the next twelve months.

 

The Company has elected to apply the practical expedient to expense costs to obtain contracts at the time the liability is incurred when the expected amortization period is one year or less.

 

During the three and nine months ended September 30, 2024, the Company recognized $2,860 and $7,932 of revenues, respectively, related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2023. During the three and nine months ended September 30, 2024, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods as specified by ASC 606-10-50-12A.

 

10
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

 

REVENUE RECOGNITION – CONTINUED

 

Grants, rebates and alternative fuel credits, which are not within the scope of ASC 606, pertaining to revenues and periodic expenses are recognized as income when the related revenue and/or periodic expense are recorded. Grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the related depreciation expense of the related asset over their useful lives over the useful life of the charging station. During the three months ended September 30, 2024 and 2023, the Company recognized $117 and $65 respectively, of revenue related to alternative fuel credits. During the nine months ended September 30, 2024 and 2023, the Company recognized $192 and $168, respectively, of revenue related to alternative fuel credits.

 

Car-sharing services is accounted for under ASC Topic 842, Leases, and pertains to revenues and expenses related to a car-sharing services agreement with the City of Los Angeles which allows customers the ability to rent electric vehicles through a subscription service. The Company accounts for such rentals as operating leases. The lease terms are included in the Company’s contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. The Company’s lease revenues do not include material amounts of variable payments. The Company does not provide an option for the lessee to purchase the rented equipment at the end of the lease.

 

The Company is unsure of when the customer will return rented equipment. As such, the Company does not know how much the customer will owe it upon return of the equipment and, therefore, cannot provide a maturity analysis of future lease payments. The Company’s equipment is generally rented for short periods of time (generally a few minutes to a few hours). Lessees do not provide residual value guarantees on rented equipment.

 

The Company expects to derive significant future benefits from its equipment following the end of the rental term. The Company’s equipment is typically rented for the majority of the time that the Company owns it. The Company recognizes revenue over the contractual period of performance of the subscription which are short term in nature.

 

CONCENTRATIONS

 

During the three months ended September 30, 2024, sales to a significant customer represented 16% of total revenue.

 

During the three months ended September 30, 2024 and 2023, the Company made purchases from a significant supplier that represented less than 10% and 17% of total purchases, respectively. During the nine months ended September 30, 2024 and 2023, the Company made purchases from the same significant supplier that represented 15% and 20% of total purchases, respectively. As of September 30, 2024, accounts payable to a significant vendor represented 10% of total accounts payable. As of December 31, 2023, accounts payable to two significant vendors were approximately 16% and 10% of total accounts payable.

 

RECLASSIFICATIONS

 

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share.

 

NET LOSS PER COMMON SHARE

 

Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if the common share equivalents had been issued (computed using the treasury stock or if converted method), if dilutive.

 

The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive:

 

   2024   2023 
   For the Three and Nine Months Ended 
   September 30, 
   2024   2023 
Warrants   1,150,152    1,150,152 
Restricted stock units   8,537    - 
Options   905,297    1,035,867 
Total potentially dilutive shares   2,063,986    2,186,019 

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 


In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 to require more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements and related disclosures.

11
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

3. IMPAIRMENT OF GOODWILL

 

During the three months ended September 30, 2024, the Company considered the decline in its stock price to be an indicator of impairment and, accordingly, performed a quantitative impairment assessment of its goodwill. This assessment involved comparing the estimated fair value of each of its reporting units to the reporting unit’s carrying value, inclusive of the goodwill balance allocated to the reporting unit.

 

Estimation of the fair value of each reporting unit involved the projection of discounted future cash flows using certain assumptions that are subjective in nature, including assumptions related to historical and market growth rates and gross margin improvements, as well as future operating expense synergies and optimization, among other factors. Based on its analysis, the Company determined that the carrying value exceeded the estimated fair value as of September 30, 2024 in certain reporting units. Consequently, the Company recognized a goodwill impairment charge of $69,111 during the three and nine months ended September 30, 2024 in the condensed consolidated statements of operations. The Company recognized a goodwill impairment charge of $89,087 during the three and nine months ended September 30, 2023 in the condensed consolidated statements of operations.

 

The fair value measurements used in the evaluation described above are considered to be Level 3 valuations within the fair value hierarchy, as the measurements involve projections of discounted future cash flows, which are derived from unobservable assumptions, the most subjective of which are the discount rates for each respective reporting unit. The discount rate used in for all reporting units ranged from 19.50% to 23.50% during the three and nine months ended September 30, 2024. The discount rate used for all reporting units ranged from 20% to 22.5% during the three and nine months ended September 30, 2023.

 

Based on its analysis, the Company determined that the Legacy Blink reporting unit’s carrying value exceeded the estimated fair value as of September 30, 2024. Consequently, the Company recognized a goodwill impairment charge of $69,111 during the three and nine months ended September 30, 2024 in the condensed consolidated statements of operations.

 

As a result of the impairment analysis it was determined that the Mobility reporting unit qualifies as “at risk” for impairment. The Company quantitatively defines “at risk” as a percentage of the excess of the reporting unit’s fair value over its carrying amount that is less than 10%. An “at risk” reporting unit qualitatively represents a reporting unit with a higher degree of uncertainty of the reporting unit’s ability to meet its forecasted cash flows based upon revenue growth rate and operating margin assumptions relied upon in the estimation of its fair value. As of September 2024, the Mobility reporting unit’s carrying value exceeded its fair value by approximately 4%. The goodwill attributable to the Mobility reporting unit as of September 30, 2024 was $27,536.

 

Changes in goodwill during the nine months ended September 30, 2024 were as follows:

 

      
Beginning balance January 1, 2024  $144,881 
Impairment of goodwill   (69,111)
Ending balance September 30, 2024  $75,770 

 

4. CONSIDERATION PAYABLE

 

SEMACONNECT - NOTES PAYABLE

 

During the nine months ended September 30, 2024, the Company repaid the remaining principal balance of $31,354 due under this note as well as paid $1,139 of accrued interest. The amounts were previously included within consideration payable on the condensed consolidated balance sheets.

 

ENVOY - NOTES PAYABLE

 

During the nine months ended September 30, 2024, the Company repaid the remaining principal balance of $6,527 due under this note as well as paid $297 of accrued interest. The amounts were previously included within consideration payable on the condensed consolidated balance sheets.

 

Changes in consideration payable during the nine months ended September 30, 2024 were as follows:

 SCHEDULE OF CHANGES IN CONSIDERATION PAYABLE

 

      
Beginning balance January 1, 2024  $56,226 
Repayment of Semaconnect note   (31,354)
Repayment of Envoy note   (6,527)
Change in fair value of consideration payable   2,811 
Ending balance September 30, 2024  $21,156 

 

See Note 8 – Fair Value Measurement for additional information.

 

12
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

5. STOCKHOLDERS’ EQUITY

 

AT-THE-MARKET OFFERING

 

On September 2, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Barclays Capital Inc., BofA Securities, Inc., HSBC Securities (USA) Inc., ThinkEquity LLC, H.C. Wainwright & Co., LLC and Roth Capital Partners, LLC, as our sales agents (collectively, the “Agents”) to conduct an at-the-market (“ATM”) equity offering program, pursuant to which we may publicly issue and sell from time to time shares of our common stock having an aggregate offering price of up to $250,000 through the Agents. On November 16, 2023, we entered into an Amendment to the Sales Agreement, effective as of November 2, 2023 (the “Amendment”), with the Agents. The Amendment revised the term “Registration Statement,” as used in the Sales Agreement, to our new shelf registration statement on Form S-3, as amended (File No. 333-275123), and revised the term “Prospectus Supplement,” as used in the Sales Agreement, to our prospectus supplement dated November 2, 2023, relating to the ATM equity offering program contemplated by the Sales Agreement. During the nine months ended September 30, 2024, the Company sold an aggregate of 8,177,472 shares of common stock aggregate gross proceeds of $25,651, less issuance costs of $581, for net proceeds of $25,070. As of September 30, 2024, the Company has approximately $100,000 available under this ATM program.

 

COMMON STOCK

 

During the nine months ended September 30, 2024, the Company issued an aggregate of 837 shares of common stock for services to an employee with an issuance date fair value of $2 and will be recognized ratably over the vesting term. On the grant date, 279 shares vested immediately, 279 shares vested on April 1, 2024, and the remaining 279 shares will vest on April 1, 2025. Expenses related to this award are included within compensation expense on the condensed consolidated statements of operations.

 

During the nine months ended September 30, 2024, the Company issued an aggregate of 157,870 shares of common stock upon vesting of restricted stock units to employees for services with an aggregate grant date fair value of $1,455. Expenses related to this award were included within compensation expense on the condensed consolidated statements of operations.

 

STOCK-BASED COMPENSATION

 

The Company recognized stock-based compensation expense related to common stock, stock options and warrants for the three months and nine months ended September 30, 2024, $927 and $2,877 respectively, which is included within compensation expense on the condensed consolidated statements of operations. The Company recognized stock-based compensation expense related to common stock, stock options and warrants for the three and nine months ended September 30, 2023 of $1,104 and $20,543, respectively, which is included within compensation expense on the condensed consolidated statements of operations. As of September 30, 2024, there was $3,371 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 1.07 years.

 

During the nine months ended September 30, 2024, the Company granted an aggregate of 758,549 shares of restricted stock with an aggregate grant date fair value of $2,133 which will be recognized ratably over the vesting terms. The restricted stock has vesting dates ranging from April 15, 2024 to June 30, 2027. Expenses related to this award are included within compensation expense on the condensed consolidated statements of operations.

 

6. RELATED PARTY TRANSACTIONS

 

JOINT VENTURE

 

The Company and a group of three Cyprus entities entered into a shareholders’ agreement on February 11, 2019, pertaining to the parties’ respective shareholdings in a new joint venture entity, Blink Charging Europe Ltd. (the “Entity”), that was formed under the laws of Cyprus on the same date. The Company owns 40% of the Entity, while the other three parties own 60%. Subsequently, two of the three other parties exited the joint venture, and the remaining other party acquired the ownership of the exiting parties. The Entity currently owns 100% of a Greek subsidiary, Blink Charging Hellas SA (“Hellas”), which operates in the electric vehicle market in Greece. The obligation to fund the Entity’s future operations is limited to the Company’s 40% ownership. During the three and nine months ended September 30, 2024, the Company recognized sales of $36 and $218, respectively, to Hellas. No sales to Hellas were recognized during the three and nine months ended September 30, 2023. In addition, the Company had accounts receivable of $34 and $0 as of September 30, 2024, and December 31, 2023. In addition, as of September 30, 2024, and December 31, 2023, the Company had a payable of approximately $172 and $114, respectively, to Hellas. Furthermore, the Company has provided working capital of $274 and $0 for the nine months ended September 30, 2024 and 2023, respectively, to Hellas. The Company has written off this working capital contribution, since the Company’s proportion of Hellas’s net losses exceeds the working capital contribution.

 

The Company determined that the Entity is a variable interest entity; however, the Company does not have a controlling financial interest and, as a result, the Company is not required to consolidate the Entity and instead has applied equity method accounting to its investment in the Entity. From inception through September 30, 2024, the Entity has not generated net income and, as a result, pursuant to ASC 323, the Company has not recorded a gain or loss on its equity method investment in the Entity during the three and nine months ended September 30, 2024 and 2023.

 

BLINK CHARGING UK LIMITED

 

As of September 30, 2024, several close family members of a senior management employee are providing services to Blink Charging UK Limited. For the three and nine months ended September 30, 2024, these related parties have collectively provided services worth $68 and $185, respectively, to Blink Charging UK Limited. For the three and nine months ended September 30, 2023, these related parties have collectively provided services worth $119 and $244, respectively, to Blink Charging UK Limited. These expenses are included within general and administrative expenses on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023.

 

13
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

7. LEASES

 

Total operating lease expenses for the three and nine months ended September 30, 2024 were $540 and $1,675, respectively, and for the three and nine months ended September 30, 2023 were $578 and $1,727, respectively, which were recorded in other operating expenses on the condensed consolidated statements of operations. Operating lease expenses consist of rent expense, common area maintenance adjustments and other expenses.

 

As of September 30, 2024, the Company did not have additional operating and financing leases that have not yet commenced. As of September 30, 2024, the Company had $154 of right-of-use assets that were classified as financing leases for vehicles associated with the operations of Blink Mobility and are included as a component of property and equipment on the condensed consolidated balance sheet as of September 30, 2024. As of December 31, 2023, the Company had $697 of right-of-use assets that were classified as financing leases for vehicles associated with the operations of Blink Mobility and are included as a component of property and equipment on the consolidated balance sheet as of December 31, 2023.

 

During the three and nine months ended September 30, 2024, the Company recorded $6 and $29, respectively, of interest expense related to finance leases, which were recorded within interest expense on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company recorded $(1) and $115, respectively, of interest (benefit) expense related to finance leases.

 

During the three and nine months ended September 30, 2024 the Company recorded amortization expense of $174 and $710 respectively, related to finance leases. During the three and nine months ended September 30, 2023, the Company recorded amortization expense of $394 and $916 related to finance leases. These expenses were included within depreciation and amortization expense on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023.

 

Supplemental cash flows information related to leases was as follows:

 

   2024   2023 
   For The Nine Months Ended 
   September 30, 
   2024   2023 
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows from operating leases  $1,289   $3,014 
Financing cash flows from finance leases  $582   $2,103 
           
Right-of-use assets obtained in exchange for lease obligations:          
Operating leases  $1,076   $5,386 
Finance leases  $53   $3,733 
           
Weighted Average Remaining Lease Term          
Operating leases   2.71    3.10 
Financing leases   3.74    2.00 
           
Weighted Average Discount Rate          
Operating leases   7.4%   7.7%
Finance leases   6.3%   6.5%

 

Future minimum payments under non-cancellable leases as of September 30, 2024 were as follows:

 

For the Years Ending December 31,  Operating Lease   Finance Lease 
2024  $4,655   $48 
2025   3,054    41 
2026   1,765    39 
2027   1,181    32 
2028   895    3 
Thereafter   1,620    - 
Total future minimum lease payments   13,170    163 
Less: imputed interest   (2,931)   (17)
Total  $10,239   $146 

 

14
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

8. FAIR VALUE MEASUREMENT

 

Assumptions utilized in the valuation of Level 3 liabilities are described as follows:

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
Risk-free interest rate   3.98%   5.40%   3.98%-5.09%   4.64%-5.40%
Contractual term (years)   1.00    1.00    1.00    1.00 
Expected volatility   92%   71%   88%-92%   71%-77%
Expected dividend yield   0.00%   0.00%   0.00%   0.00%

 

The following table sets forth a summary of the changes in the fair value of Level 3 warrant and consideration payable liabilities that are measured at fair value on a recurring basis:

 

   2024 
Consideration payable     
Beginning balance as of January 1,  $18,118 
Change in fair value of consideration payable   2,811 
Ending balance as of September 30,  $20,929 
      
Warrant Liability     
Beginning balance as of January 1  $32 
Change in fair value of warrant liability   (27)
Ending balance as of September 30,  $5 

 

The common stock consideration payable is recorded at fair value of $20,929 and $18,118 as of September 30, 2024 and December 31, 2023, respectively, and is included within consideration payable on the condensed consolidated balance sheets. The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the common stock consideration payable on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are the probability outcome percentages that are assigned to each scenario. Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the common stock consideration liability.

 

Assets and liabilities measured at fair value on a recurring basis are as follows:

 

   September 30, 2024 
   Level 1   Level 2   Level 3   Total 
Assets:                
Alternative fuel credits  $-   $77   $-   $77 
Total assets  $-   $77   $-   $77 
                          
Liabilities:                    
Warrant liability  $-   $-   $5   $5 
Common stock consideration payable   -    -    20,929    20,929 
Total liabilities  $-   $-   $20,934   $20,934 

 

   December 31, 2023 
   Level 1   Level 2   Level 3   Total 
Assets:                    
Alternative fuel credits  $-   $32   $-   $32 
Total assets  $-   $32   $-   $32 
                     
Liabilities:                    
Option liability  $293   $-   $-   $293 
Warrant liability   -    -    32    32 
Common stock liability   743    -    -    743 
Common stock consideration payable   -    -    18,118    18,118 
Total liabilities  $1,036   $-   $18,150   $19,186 

 

15
 

 

BLINK CHARGING CO.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except for share and per share amounts)

 

9. COMMITMENTS AND CONTINGENCIES

 

PURCHASE COMMITMENTS

 

As of September 30, 2024, the Company had purchase commitments of approximately $2,300 which will become payable upon the suppliers’ service of warranty contracts.

 

 

LITIGATION, DISPUTES AND SETTLEMENTS

 

The Company may be subject to lawsuits, investigations, intellectual property matters, claims and proceedings, including, but not limited to, contractual disputes with vendors and customers and liabilities related to employment, health and safety matters that may arise in the ordinary course of business. The Company accrues for losses that are both probable and reasonably estimable. Loss contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex and subject to change.

 

The Company believes it has recorded adequate provisions for any such lawsuits, investigations, claims, and proceedings as of September 30, 2024, and the Company believes it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in the condensed consolidated financial statements. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. However, future events or circumstances, currently unknown to management, may potentially have a material effect on the Company’s financial position, liquidity or results of operations in any future reporting period.

 

In August 2020, a purported securities class action lawsuit, captioned Bush v. Blink Charging Co. et al., Case No. 20-cv-23527, was filed in the United States District Court for the Southern District of Florida against the Company, Michael Farkas (Blink’s former Chairman of the Board and Chief Executive Officer), and Michael Rama (Blink’s Chief Financial Officer) (the “Bush Lawsuit”). In September 2020, another purported securities class action lawsuit, captioned Vittoria v. Blink Charging Co. et al., Case No. 20-cv-23643, was filed in the United States District Court for the Southern District of Florida against the same defendants and seeking to recover the same alleged damages. Following consolidation of the two actions and the court appointing Tianyou Wu, Alexander Yu and H. Marc Joseph to serve as the Co-Lead Plaintiffs, the Co-Lead Plaintiffs filed an Amended Complaint in February 2021. The Amended Complaint alleged, among other things, that the defendants made false or misleading statements about the size and functionality of the Blink Network and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In April 2021, Blink and the other defendants filed a motion to dismiss the Amended Complaint. In November 2023, the court dismissed Co-Lead Plaintiffs’ claims relating to the size of Blink’s charging network and denied the remainder of the motion to dismiss. Following a mediation in April 2024, the parties agreed to the terms of a settlement in which the Defendants agreed to pay $3,750 (inclusive of attorneys’ fees and administrative costs) in exchange for the dismissal with prejudice of all claims. On October 21, 2024, the Court held a final settlement hearing, approved the settlement, dismissed the Bush Lawsuit with prejudice, and closed the case.  The full settlement amount has been paid by the Company’s Directors’ and Officers’ insurance policies.

 

In September 2020, a shareholder derivative lawsuit, captioned Klein (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case No. 20- 19815CA01, was filed in Miami-Dade County Circuit Court seeking to pursue claims belonging to the Company against Blink’s Board of Directors and Michael Rama (the “Klein Lawsuit”). Blink is named as a nominal defendant. The Klein Lawsuit asserted that the Director defendants caused Blink to make the statements at issue in the securities class action and, as a result, the Company incurred costs defending against the Bush Lawsuit and other unidentified investigations. The Klein Lawsuit asserted claims against the Director defendants for breach of fiduciary duties and corporate waste and against all of the defendants for unjust enrichment. Klein did not quantify the alleged damages in his complaint, but he sought damages sustained by the Company as a result of the defendants’ alleged breaches of fiduciary duties, corporate governance changes, restitution, and disgorgement of profits from the defendants and attorneys’ fees and other litigation expenses. In December 2020, another shareholder derivative action, captioned Bhatia (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case No. 20-27632CA01, was filed in Miami-Dade County Circuit Court against the same defendants in the Klein Lawsuit and asserted similar claims, as well as additional claims relating to the Company’s nomination, appointment and hiring of minorities and women and the Company’s decision to retain its outside auditor (the “Bhatia Lawsuit”). In June 2022, the court consolidated the Klein and Bhatia actions under the caption In re Blink Charging Company Stockholder Derivative Litigation, Lead Case No. 2020-019815-CA-01. The action remains stayed. The Company wholly and completely disputes the allegations. The Company has retained legal counsel to defend the action vigorously. The Company has not recorded an accrual related to this matter as of September 30, 2024, as it determined that any such loss contingency was either not probable or estimable.

 

In February 2022, a shareholder derivative lawsuit, captioned McCauley (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case No. A-22-847894-C, was filed in Clark County, Nevada seeking to pursue claims belonging to the Company against Blink’s Board of Directors and Michael Rama (the “McCauley Lawsuit”). Blink is named as a nominal defendant. The McCauley Lawsuit asserted similar claims and sought similar damages as the Klein Lawsuit. The action remains stayed. The Company wholly and completely disputes the allegations. The Company has retained legal counsel to defend the action vigorously. The Company has not recorded an accrual related to this matter as of September 30, 2024, as it determined that any such loss contingency was either not probable or estimable.

 

16
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Special Note Regarding Forward-Looking Information

 

The following discussion and analysis of the results of operations and financial condition of Blink Charging Co. (together with its subsidiaries, “Blink” or the “Company”) as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our” and similar terms refer to Blink. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements. Factors that may affect our results include, but are not limited to, the risks and uncertainties set forth under Part 1, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and under a similar item in subsequent periodic reports, as discussed elsewhere in this Quarterly Report, particularly in Part II, Item IA - Risk Factors.

 

Any one or more of these uncertainties, risks and other influences, could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

 

U.S. dollars are reported in thousands, except for share and per share amounts.

 

Overview

 

We are a leading manufacturer, owner, operator and provider of electric vehicle (“EV”) charging equipment and networked EV charging services in the continuously growing U.S. and international markets for EVs. Blink offers residential and commercial EV charging equipment and services, enabling EV drivers to recharge at various location types. Blink’s principal line of products and services is its Blink EV charging network (the “Blink Networks”) and Blink EV charging equipment, also known as electric vehicle supply equipment (“EVSE”) and other EV-related services. The Blink Networks is a proprietary, cloud-based system that operates, maintains, and manages Blink charging stations and handles the associated charging data, back-end operations, and payment processing. The Blink Networks provide property owners, managers, parking companies, state and municipal entities, and other types of commercial customers, (“Property Partners”) with cloud-based services that enable the remote monitoring and management of EV charging stations. The Blink Networks also provide EV drivers with vital station information, including station location, availability and fees.

 

To capture more revenues derived from providing EV charging equipment to commercial customers and to help differentiate Blink in the EV infrastructure market, Blink offers Property Partners a comprehensive range of solutions for EV charging equipment and services that generally fall into one of the business models below, differentiated by who own the equipment and who bears the costs of installation, equipment, and maintenance, and the percentage of revenue shared.

 

  In our Blink-owned turnkey business model, we incur the charging equipment and installation costs. We own and operate the EV charging station and provide connectivity of the charging station to the Blink Networks. In this model, which favors recurring revenues, we incur most costs associated with the EV charging stations; thus, we retain substantially all EV charging revenues after deducting network connectivity and processing fees. Our agreement with the Property Partner typically lasts seven years with extensions that can bring the term to 21 years.
     
  In our Blink-owned hybrid business model, we incur the charging equipment costs while the Property Partner incurs the installation costs. We own and operate the EV charging station and provide connectivity to the Blink Networks. In this model, since the Property Partner incurs the installation, we share a more generous portion of the EV charging revenues with the Property Partner after deducting Blink Network connectivity and processing fees. Our agreement with the Property Partner lasts five years with extensions that can bring the term to 15 years.
     
  In our host-owned business model, the Property Partner purchases, owns and operates the Blink EV charging station and incurs the installation costs. We work with the Property Partner by providing site recommendations, connectivity to the Blink Networks, payment processing, and optional maintenance services. In this model, the Property Partner retains and keeps all the EV charging revenues after deducting Blink Network connectivity and processing fees.
     
  In our Blink-as-a-Service model, we own and operate the EV charging station, while the Property Partner incurs the installation costs. The Property Partner pays us a fixed monthly fee for the service and keeps all the EV charging revenues after deducting Blink network connectivity and processing fees. Typically, our agreement with the Property owner typically lasts five years.

 

We also own and operate an EV car-sharing program through our wholly owned subsidiary, Envoy Mobility, Inc. This program allows customers to share electric vehicles through subscription services and charge those cars through our charging stations.

 

In pursuit of our commitment to fostering the widespread adoption of EVs through the establishment and management of EV charging infrastructure on a global scale, we remain steadfast in our dedication to mitigating climate change. This dedication is evidenced by our efforts to diminish greenhouse gas emissions stemming from gasoline-powered vehicles With the goal of being a leader in the build-out of EV charging infrastructure and maximizing our share of the EV charging market, we have established strategic commercial, municipal, and retail partnerships across industry verticals and encompassing numerous transit/destination locations, including airports, auto dealers, healthcare/medical, hotels, mixed-use, municipal sites, multifamily residential and condos, parks and recreation areas, parking lots, religious institutions, restaurants, retailers, schools and universities, stadiums, supermarkets, transportation hubs, and workplace locations.

 

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We have agreements with significant customers, including the United States Postal Service (USPS), Mack Trucks, McArthurGlen, BluePoint, Mike Albert Fleet Solutions, Royal Farms, John Henry General Store, Moberly Motor Company, Arcos Dorados (McDonald’s Puerto Rico), AAA, Allegiant Stadium (Las Vegas), Village of Tuckahoe (NY), Miami Beach (FL), Metropolitan Government of Nashville-Davidson County, and Salt Lake City International Airport, Mitsubishi, Cushman & Wakefield, Triple J, Q-Park, Best Buy, UBS, Bosch Mexico, Porsche Puerto Rico and Guatemala, Veris Residential, Greystar, Cambium, and the cities of Atlanta (GA), Rockford (IL), Newton (IA), and Winslow (NJ), Leeds (UK) that expand our potential for unit sales and deployments.

 

As of September 30, 2024, we contracted, sold or deployed 105,239 chargers, of which 84,696 were on Blink Networks (comprised of 60,164 Level 2 commercial chargers, 1,278 DCFC commercial chargers, 682 residential chargers, and 22,572 chargers pending to be commissioned). Included on Blink Networks are 6,442 chargers owned by us. The remaining 20,543 were non-networked, on other networks, international sales, or deployments (comprised of 4,012 Level 2 commercial chargers, 72 DC Fast Charging chargers, 12,267 residential Level 2 Blink EV chargers, 2,467 sold to other U.S. networks and, 1,725 sold internationally). Blink networked chargers include public and private chargers, as designated by stations owners, and are net of swap-outs, replacement units, and decommissioned units.  Certain commercial chargers include chargers installed in residential settings for commercial purposes.  All chargers, including at all international Blink locations, are categorized based on US Department of Energy guidelines.

 

As reflected in our condensed consolidated financial statements as of September 30, 2024, we had cash and cash equivalents of $64,584, working capital of $96,596 and an accumulated deficit of $662,344. During the three and nine months ended September 30, 2024, we incurred net losses of $87,389 and $124,621, respectively. During the nine months ended September 30, 2024, we used cash in operations of 34,830. We have not yet achieved profitability.

 

Recent Developments

 

At-the-Market Offering

 

On September 2, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Barclays Capital Inc., BofA Securities, Inc., HSBC Securities (USA) Inc., ThinkEquity LLC, H.C. Wainwright & Co., LLC and Roth Capital Partners, LLC, as our sales agents (collectively, the “Agents”) to conduct an at-the-market (“ATM”) equity offering program, pursuant to which we may publicly issue and sell from time to time shares of our common stock having an aggregate offering price of up to $250,000 through the Agents. We are using the net proceeds from the sale of our shares of common stock under the ATM equity offering program to supplement our operating cash flows in order to fund our EV charging station deployments and other growth plans. We are also using a portion of the net proceeds we receive for working capital and other corporate purposes. The amounts and timing of our use of the net proceeds will depend on a number of factors, such as the timing and progress of our EV charging station deployment efforts, the timing and progress of any partnering and collaboration efforts, and technological advances. Under the Sales Agreement, the Agents are entitled to an aggregate fixed commission of up to 3% of the gross proceeds from shares sold and we have provided the Agents with customary indemnification rights.

 

On November 16, 2023, we entered into an Amendment to the Sales Agreement, effective as of November 2, 2023 (the “Amendment”), with the Agents. The Amendment revised the term “Registration Statement,” as used in the Sales Agreement, to our new shelf registration statement on Form S-3, as amended (File No. 333-275123), and revised the term “Prospectus Supplement,” as used in the Sales Agreement, to our prospectus supplement dated November 2, 2023, relating to the ATM equity offering program contemplated by the Sales Agreement.

 

During the year ended December 31, 2023, the Company sold 30,914,695 shares of its common stock pursuant to the ATM program for gross proceeds of approximately $116,651 and net proceeds of approximately $114,317 after deducting offering expenses.

 

During the nine months ended September 30, 2024, the Company sold 8,177,472 shares of its common stock pursuant to the ATM program for gross proceeds of approximately $25,651 and net proceeds of approximately $25,070 after deducting offering expenses. As of September 30, 2024, 39,650,888 shares have been sold pursuant to the ATM program, representing gross proceeds of approximately $149,999.

 

Product and Service Offerings

 

We offer a variety of EV charging products and services to Property Partners and EV drivers.

 

EV Charging Solutions

 

Level 2. We offer a wide range of Level 2 (AC) EV charging equipment, ideal for commercial and residential use, with the North American standard J1772 connector, the North American Charging Standard (NACS) connector, and the Type 2 connector compatible with electric vehicles in Europe and across Latin America.
   
Our commercial Level 2 chargers consist of the EQ, HQ, MQ, and IQ 200 families and the Series 4, 6, 7, and 8 families, which are available in pedestal, wall mount, and pole mount configurations. The MQ and IQ 200, along with the Series 6, 7, and 8 chargers offer an optional cable management system. Additionally, we offer three residential Level 2 chargers for the Americas: the wall-mounted HQ 200, Series 4, and a smart charging cable, the PQ 150, designed for European markets. Our commercial and residential chargers (except the non-networked HQ 150) can connect to the Blink Networks or a local network. Level 2 charging stations typically provide a full charge in two to eight hours. Level 2 chargers are ideally suited for low-cost installations and frequently used parking locations, such as workplaces, multifamily residential, retail, hospitality, and mixed-use, parking garages, municipalities, colleges/schools, hospitals and airports.
   
International Products. We offer Level 2 AC and DC products for the rapidly expanding international markets targeted at the residential, workplace, retail, parking garages, leasing companies, hospitality, and other locations. These products are available with the Type 2, GBT, and CCS 2 connectors and include the PQ 150, Series 3 (an ideal product for the 2/3-wheeled vehicles), and the EQ 200.
   
Mobile Charger. We offer the HQ 200-M Level 2 charger for the mobile/emergency charging market which requires a portable charger to be used for roadside or other use cases where a connection to the electricity grid is not available.

 

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DCFC. We offer a complete line of DC Fast Charging equipment (“DCFC”) that ranges from 30kW to 360kW, supports the ‘CHAdeMo’, CCS1, and NACS connectors, and typically provide an 80% charge in less than 30 minutes. Installation of DCFC stations and grid requirements are typically greater than Level 2 charging stations and are ideally suited for transportation hubs and locations between travel destinations. These include the Series 9 30kW DC Fast Charger that works ideally for the fleet and auto dealership segments and is available in wall and pedestal mount configurations, the Blink 30kW DC Fast Charger that boasts a small footprint providing up to 100 amps of output, and the Blink 60kW – 360kW DC Fast Charger that provides from 140 to 500 amps of power.
   
Blink Network. The Blink Network is a cloud-based platform that manages our network of EV chargers around the world for remote monitoring, management, payment processing, customer support, and other features required for operating the Blink Networks of EV charging locations.
   
Blink Charging Mobile App. We offer Blink Charging Mobile Apps (iOS and Android) that provide EV drivers control by giving them improved search capabilities which allows them to search for nearby amenities, as well as chargers by zip-codes, city, business, category, or address, and expanded keyword search. The app also includes payment functionality, eliminating the need for a credit card.
   
Fleet Management. We offer Fleet Management applications, targeted at commercial, municipal, and federal fleets for planning, managing, and optimizing their departure schedules and energy costs. Our Fleet Management applications can be used as standalone tools or integrated into existing fleet management solutions, which allows Blink to be a flexible and value-added solution within existing software stacks.

 

Key Factors Affecting Operating Results

 

We believe our performance and future success depend on several factors, including those discussed below:

 

Competition - The EV charging equipment and service market is highly competitive, and we expect the market to become increasingly competitive as new entrants enter this growing market. Our products and services compete on product performance and features, the total cost of ownership, origin of manufacturing, sales capabilities, financial stability, brand recognition, product reliability, and the installed base’s size. Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. If our market share decreases due to increased competition, its revenue and ability to generate profits in the future may be negatively impacted.

 

Growth - Our growth is highly dependent upon the adoption by consumers of EVs, and we are subject to a risk of any reduced demand for EVs. The market for alternative fuel vehicles is still relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements, long development cycles for EV original equipment manufacturers, and changing consumer demands and behaviors. Factors that may influence the purchase and use of alternative fuel vehicles, and specifically EVs, include perceptions about EV quality, safety (in particular with respect to battery chemistries), design, performance and cost; the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use; improvements in the fuel economy of the internal combustion engine; consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive; the environmental consciousness of consumers; volatility in the cost of oil and gasoline; consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts; government regulations and economic incentives promoting fuel efficiency and alternate forms of energy; access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV; and the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles. If the market for EVs does not gain broad market acceptance or develops slower than we expect, our business, prospects, financial condition and operating results may be adversely affected.

 

Regulations - Our business is subject to a variety of federal, state and international laws and regulations, including those with respect to government incentives promoting fuel efficiency and alternate forms of energy, electric vehicles and others. These laws and regulations, and the interpretation or application of these laws and regulations, could change. Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, fiscal tightening or other reasons may result in diminished revenues from government sources and diminished demand for our products. In addition, new laws or regulations affecting our business could be enacted. These laws and regulations are frequently costly to comply with and may divert a significant portion of management’s attention. Changes to these applicable laws or regulations could affect business and/or harm our customers, adversely affecting our business, financial condition and results of operations.

 

Expansion through Acquisitions - We may pursue strategic domestic and international acquisitions to expand our operations. Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment, difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing clients of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, the failure of counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations for the acquired businesses. Fully integrating an acquired company or business into our operations may take a significant amount of time. If we are unable to integrate or pursue strategic acquisitions, our financial condition and results of operations would be negatively impacted.

 

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Results of Operations

 

Three and Nine Months Ended September 30, 2024 Compared With Three and Nine Months Ended September 30, 2023

 

   For The Three Months Ended   For The Nine Months Ended         
   September 30,   September 30,   3 Months   9 Months 
   2024   2023   2024   2023   Difference $   Difference %   Difference $   Difference % 
                                 
Revenues:                                        
Product sales  $13,448   $35,059   $64,538   $76,035   $(21,611)   -62%  $(11,497)   -15%
Charging service revenue - company-owned charging stations   5,254    3,859    15,217    11,111    1,395    36%   4,106    37%
Network fees   2,332    1,973    6,304    5,268    359    18%   1,036    20%
Warranty   1,405    849    3,698    2,163    556    65%   1,535    71%
Grant and rebate   982    47    1,617    284    935    1989%   1,333    469%
Car-sharing services   1,168    903    3,467    2,112    265    29%   1,355    64%
Other   598    687    1,176    914    (89)   -13%   262    29%
                                         
Total Revenues   25,187    43,377    96,017    97,887    (18,190)   -42%   (1,870)   -2%
                                         
Cost of Revenues:                                        
Cost of product sales   9,122    24,619    39,965    49,509    (15,497)   -63%   (9,544)   -19%
Cost of charging services - company-owned charging stations   724    566    1,924    2,196    158    28%   (272)   -12%
Host provider fees   2,982    2,399    9,306    6,285    583    24%   3,021    48%
Network costs   577    407    1,816    1,339    170    42%   477    36%
Warranty and repairs and maintenance   294    561    1,880    2,924    (267)   -48%   (1,044)   -36%
Car-sharing services   1,156    931    3,302    3,162    225    24%   140    4%
Depreciation and amortization   1,213    1,109    4,573    2,853    104    9%   1,720    60%
                                       
Total Cost of Revenues   16,068    30,592    62,766    68,268    (14,524)   -47%   (5,502)   -8%
                                         
Gross Profit   9,119    12,785    33,251    29,619    (3,666)   -29%   3,632    12%
                                         
Operating Expenses:                                        
Compensation   15,159    15,268    47,770    75,967    (109)   -1%   (28,197)   -37%
General and administrative expenses   7,972    8,539    23,782    26,466    (567)   -7%   (2,684)   -10%
Other operating expenses   4,739    5,300    16,135    13,630    (561)   -11%   2,505    18%
Change in fair value of consideration payable   364    -    2,811    -    364    0%   2,811    0%
Impairment of intangible assets   -    5,143    -    5,143    (5,143)   -100%   (5,143)   -100%
Impairment of goodwill   69,111    89,087    69,111    89,087    (19,976)   -22%   (19,976)   -22%
                                       
Total Operating Expenses   97,345    123,337    159,609    210,293    (25,992)   -21%   (50,684)   -24%
                                         
Loss From Operations   (88,226)   (110,552)   (126,358)   (180,674)   22,326    -20%   54,316    -30%
                                         
Other Income (Expense):                                        
Interest expense   (2)   (970)   (475)   (2,373)   968    -100%   1,898    -80%
Gain (loss) on extinguishment of notes payable   36    (1,000)   36    (1,000)   1,036    -104%   1,036    -104%
Change in fair value of derivative and other accrued liabilities   4    -    (11)   10    4    0%   (21)   -210%
Other expense   (2)   (112)   (2)   (62)   110    -98%   60    -97%
Dividend and interest income   783    720    2,363    1,320    63    9%   1,043    79%
                                         
Total Other Income (Expense)   819    (1,362)   1,911    (2,105)   2,181    -160%   4,016    -191%
                                         
Loss Before Income Taxes  $(87,407)  $(111,914)  $(124,447)  $(182,779)  $24,507    -22%  $58,332    -32%
                                         
Benefit (provision) for income taxes   18    (807)   (174)   (1,225)   825    -102%   1,051    -86%
                                         
Net Loss  $(87,389)  $(112,721)  $(124,621)  $(184,004)  $25,332    -22%  $59,383    -32%

 

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Three Months Ended September 30, 2024 Compared With Three Months Ended September 30, 2023

 

Revenues

 

Total revenue for the three months ended September 30, 2024 decreased by $18,190, or 42%, to $25,187 compared to $43,377 during the three months ended September 30, 2023.

 

Revenue from product sales was $13,448 for the three months ended September 30, 2024 as compared to $35,059 during the three months ended September 30, 2023, a decrease of $21,611, or 62%. This decrease was attributable to decreased sales of commercial chargers, DC fast chargers and residential chargers when compared to the same period in 2023.

 

Charging service revenue from Company-owned charging stations was $5,254 for the three months ended September 30, 2024 as compared to $3,859 for the three months ended September 30, 2023, an increase of $1,395, or 36%. The increase is due to the increase in utilization of chargers and an increased number of chargers on the Blink Networks.

 

Network fee revenues were $2,332 for the three months ended September 30, 2024 as compared to $1,973 for the three months ended September 30, 2023, an increase of $359, or 18%. The increase was attributable to increases in host owned units during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

 

Warranty revenues were $1,405 for the three months ended September 30, 2024 as compared to $849 for the three months ended September 30, 2023, an increase of $556, or 65%. The increase was primarily attributable to an increase in warranty contracts sold for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. As of September 30, 2024, we recorded a liability of $3,112 which represents the estimated cost of existing backlog of known warranty cases.

 

Grant and rebate revenues were $982 during the three months ended September 30, 2024 as compared to $47 during the three months ended September 30, 2023, an increase of $935, or 1,989%. Grant and rebates relating to equipment and the related installation are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. The decrease in revenue was primarily related to the timing of the amortization of previous years’ state grants/rebates associated with the installation of chargers during the three months ended September 30, 2024 and 2023.

 

Car-sharing services revenues were $1,168 during the three months ended September 30, 2024 as compared to $903 during the three months ended September 30, 2023, an increase of $265, or 29%. The increase in revenues is due to the increase in properties and participants subscribing to the car-sharing services.

 

Other revenue decreased by $89 or 13% to $598 for the three months ended September 30, 2024 as compared to $687 for the three months ended September 30, 2023. The increase was primarily attributable to higher Low Carbon Fuel Standard (LCFS) credits generated during the three months ended September 30, 2024 compared to the same period in 2023. We generate these credits from the electricity utilized by our electric car charging stations as a byproduct from our charging services in the states of California and Oregon.

 

Cost of Revenues

 

Cost of revenues primarily consists of electricity reimbursements, revenue share payments to our Property Partner hosts, the cost of charging stations sold, connectivity charges provided by telco and other networks, warranty, repairs and maintenance services, and depreciation of our installed charging stations. Cost of revenues for the three months ended September 30, 2024 were $16,068 as compared to $30,592 for the three months ended September 30, 2023, a decrease of $14,524 or 47%. There is a degree of variability in our costs in relationship to our revenues from period to period, primarily due to:

 

  electricity reimbursements that are unique to those Property Partner host agreements which provide for such reimbursements;
  revenue share payments are predicated on the contractual obligation under the property partner agreement and the revenue generated by the applicable chargers;
  cost of charging stations sold is predicated on the mix of types of charging stations and parts sold during the period;
  network costs are fixed in nature based on the number of chargers connected to the telco network regardless of whether the charger generates revenue;
  provisions for excess and obsolete inventory; and
  warranty and repairs and maintenance expenses are based on both the number of service cases completed during the period.

 

Cost of product sales decreased by $15,497, or 63%, from $24,619 for the three months ended September 30, 2023 as compared to $9,122 for the three months ended September 30, 2024. The decrease was primarily due to the reduction of the volume of product sold during the three months ended September 30, 2024 compared to the same period in 2023.

 

Cost of charging services-company-owned charging stations (electricity reimbursements) increased by $158, or 28%, to $724 for the three months ended September 30, 2024 as compared to $566 for the three months ended September 30, 2023. The decrease in 2024 was attributable to the mix of charging stations generating charging service revenues subject to electricity reimbursement.

 

Host provider fees increased by $583, or 24%, to $2,982 during the three months ended September 30, 2024 as compared to $2,399 during the three months ended September 30, 2023. This increase was a result of the mix of chargers generating revenue and their corresponding revenue share percentage payments to Property Partner hosts pursuant to their agreements.

 

Network costs increased by $170 or 42%, to $577 during the three months ended September 30, 2024 as compared to $407 during the three months ended September 30, 2023. The increase was a result of the increase in charging stations on our network and costs incurred related to the upgrading of our network system compared to the same period in 2023.

 

Warranty and repairs and maintenance costs decreased by $267 or 48%, to $294 during the three months ended September 30, 2024 from $561 during the three months ended September 30, 2023. The decrease in 2024 was attributable to significant efforts expended to reduce the backlog in warranty and repairs and maintenance cases in the prior year.

 

Cost of car-sharing services was $1,156 during the three months ended September 30, 2024 as compared to $931 during the 2023 period. The increase was due to a reduction in costs related to vehicles used in this operation during the period.

 

Depreciation and amortization expense increased by $104, or 9%, to $1,213 for the three months ended September 30, 2024 as compared to $1,109 for the three months ended September 30, 2023. The increase in depreciation expense was attributable to an increase in the number of EV charging stations and vehicles associated with the ride-share services.

 

Operating Expenses

 

Compensation expense decreased by $109, or 1%, to $15,159 (consisting of approximately $14,300 of cash compensation and benefits and approximately $900 of non-cash compensation) for the three months ended September 30, 2024. Compensation expense was $15,268 (consisting of approximately $14,100 of cash compensation and benefits and approximately $1,100 of non-cash compensation) for the three months ended September 30, 2023. The decrease in compensation expense for the three months ended September 30, 2024 compared to the same period in 2023 was primarily related to decreases in personnel and compensation in executive, marketing, sales and operations departments as a result of cost savings and synergies realized. The decrease in compensation expense was partially offset by severance expense of $0.6 million recorded during the three months ended September 30, 2024 associated with the cost reduction plans we initiated during this period.

 

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General and administrative expenses decreased by $567, or 7%, to $7,972 for the three months ended September 30, 2024 as compared to $8,539 for the three months ended September 30, 2023. The decrease was primarily attributable to decreases in legal, marketing, recruiting, software licensing, investor/public relations and external consulting/other professional service expenditures of $1,827 partially offset by increases in accounting/auditing and bad debt expenses of $735.

 

Other operating expenses decreased by $561, or 11%, to $4,739 for the three months ended September 30, 2024 from $5,300 for the three months ended September 30, 2023. The decrease was primarily attributable to decreases in website, rent, vehicle, travel, annual meeting, hardware and software development costs of $1,981. The decrease was primarily offset by increases in software licensing expenses, property/use tax expenditures and insurance expense of $963.

 

The Company recorded a loss on change in fair value of consideration payable related to the Envoy acquisition of $364 in the 2024 period due to the change in the inputs to the probability-weighted discounted cash flow model. There was no such amount recognized in the 2023 period.

 

During the three months ended September 30, 2024, we observed certain triggering events, including a decline in our stock price and, as a result, we conducted a quantitative impairment analysis of our goodwill and intangible assets and determined that the fair value of certain reporting units were less than the carrying amount and, as a result, recorded an impairment charge of $69,111 related to goodwill during the 2024 period. During the three months ended September 30, 2023, we observed certain triggering events, including a decline in our stock price and, as a result, we conducted a quantitative impairment analysis of our goodwill and intangible assets and determined that the fair value of our reporting units were less than the carrying amount and, as a result, recorded an impairment charge of $89,087 related to goodwill and $5,143 related to intangible assets during the 2023 period.

 

Other Income (Expense)

 

We recorded other income of $819 during the three months ended September 30, 2024 as compared to other expense of $(1,362) for the three months ended September 30, 2023. The increase in other income was primarily due to an increase of $63 related to dividend and interest income, partially offset by a decrease in interest expense of $968 compared to the 2023 period and a decrease in loss on extinguishment on notes payable.

 

Net Loss

 

Our net loss for the three months ended September 30, 2024 decreased by $25,332, or 22%, to $87,389 as compared to $112,721 for the three months ended September 30, 2023. The decrease was primarily attributable to a decrease in operating expenses, partially offset by an increase in gross profit.

 

Total Comprehensive Loss

 

Our total comprehensive loss for the three months ended September 30, 2024 was $84,790 whereas our total comprehensive loss for the three months ended September 30, 2023 was $114,399.

 

Nine Months Ended September 30, 2024 Compared With Nine Months Ended September 30, 2023

 

Revenues

 

Total revenue for the nine months ended September 30, 2024 increased by $1,870, or 2%, to $96,017 compared to $97,887 during the nine months ended September 30, 2023.

 

Revenue from product sales was $64,538 for the nine months ended September 30, 2024 as compared to $76,035 during the nine months ended September 30, 2023, a decrease of $11,497, or 15%. This decrease was attributable to decreased sales of commercial chargers, DC fast chargers and residential chargers when compared to the same period in 2023.

 

Charging service revenue from Company-owned charging stations was $15,217 for the nine months ended September 30, 2024 as compared to $11,111 for the nine months ended September 30, 2023, an increase of $4,106, or 37%. The increase is due to the increase in utilization of chargers and an increased number of chargers on the Blink Networks.

 

Network fee revenues were $6,304 for the nine months ended September 30, 2024 as compared to $5,268 for the nine months ended September 30, 2023, an increase of $1,036, or 20%. The increase was attributable to increases in host owned units during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

 

Warranty revenues were $3,698 for the nine months ended September 30, 2024 as compared to $2,163 for the nine months ended September 30, 2023, an increase of $1,535, or 71%. The increase was primarily attributable to an increase in warranty contracts sold for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. As of September 30, 2024, we recorded a liability of $782 which represents the estimated cost of existing backlog of known warranty cases.

 

Grant and rebate revenues were $1,617 during the nine months ended September 30, 2024 as compared to $284 during the nine months ended September 30, 2023, an increase of $1,333, or 469%. Grant and rebates relating to equipment and the related installation are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. The increase in revenue was primarily related to the timing of the amortization of previous years’ state grants/rebates associated with the installation of chargers during the nine months ended September 30, 2024 and 2023.

 

Car-sharing services rev