Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

13.   INCOME TAXES

The Company is subject to U.S. federal and various state income taxes.

 

The income tax provision (benefit) for the years ended December 31, 2021, 2020, and 2019 consists of the following:

 

    For the Year Ended December 31  
    2021     2020     2019  
Federal:                        
Current   $ -     $ -     $ -  
Deferred   (5,691 )   (4,452 )   4,684  
                         
State:                        
Current   $ -     $ -     $ -  
Deferred   (1,348 )   (1,060 )   1,115  
    (7,039 )   (5,512 )   5,799  
Change in valuation allowance   7,039     5,512     (5,799 )
Income tax provision (benefit)   $ -     $ -     $ -  

 

No current tax provision has been recorded for the years ended December 31, 2021, 2020, and 2019 because the Company had net operating losses for federal and state tax purposes. The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. The Company will perform a Section 382 analysis in the future. The related decrease in the deferred tax asset will be offset by the decrease in valuation allowance.

 

 

BLINK CHARGING CO. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands except for share and per share amounts)

 

13.   INCOME TAXES – CONTINUED

 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

    2021     2020     2019  
    For the Year Ended  
    December 31  
    2021     2020     2019  
Tax benefit at federal statutory rate     (21.0 )%     (21.0 )%     (21.0 )%
State income taxes, net of federal benefit     (2.4 )%     (5.0 )%     (5.0 )%
Permanent differences:            
Stock Compensation     0.2 %     (4.0) %     0.0 %
Other     7.9 %     0.0 %     0.8 %
Tax Credits     (0.1 )%     0.0 %     0.2 %
Income from non-includable foreign entities     1.6 %        
Prior year differences     1.0 %     (1.0 )%     85.1 %
Change in valuation allowance     12.8 %     31.0 %     (60.1 )%
Effective income tax rate     0.0 %     0.0 %     0.0 %

 

The Company has determined that a valuation allowance for the entire net deferred tax asset is required. A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero, the amount that will more likely not be realized.

 

The disaggregation of the Company’s domestic and foreign pre-tax loss for the years ended December 31, 2021, 2020, and 2019 is as follows:

 

      2021     2020     2019  
      For the Year Ended December 31  
      2021     2020     2019  
                     
U.S.     $ (50,803 )   $ (17,635 )   $ (9,434 )
Foreign       (4,316 )     (211 )     (215 )
Total     $ (55,119 )   $ (17,846 )   $ (9,649 )

 

 

 

BLINK CHARGING CO. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands except for share and per share amounts)

 

13.   INCOME TAXES – CONTINUED

 

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

 

    2021     2020  
    For the Year Ended December 31  
    2021     2020  
Deferred Tax Assets:                
Net operating loss carryforwards   $ 32,351     $ 26,066  
Stock-based compensation     1,210       401  
Accruals     663       128  
Goodwill     728       729  
Intangible assets     183       212  
Inventory     10       56  
Allowance for doubtful accounts     216       93  
Mark to Market Investments     83       -  
Capital Loss     22       22  
Tax Credits     593       562  
Deferred tax assets, gross     36,059       28,269  
                 
Deferred Tax Liabilities:                
Fixed assets     (793 )     (31 )
Deferred Revenue     4     -
Other     (2 )     (8 )
Deferred Tax Liabilities, gross     (791 )     (39 )
                 
Net deferred tax assets     35,268       28,230  
Valuation Allowance     (35,268 )     (28,230 )
Deferred tax assets,net of valuation allowance   -     -  
                 
Change in valuation allowance   $ (7,038 )   $ 5,511  

 

As of December 31, 2021, the Company had net operating loss carry forwards for federal and state income tax purposes of approximately $124,400, of which, $62,300 may be used to offset future taxable income through 2037 and the remaining $62,100 of net operating loss carry forwards incurred in 2021, 2020 and 2019 do not have an expiration date. The Company has approximately $593 in business credits expiring between 2030 and 2041.

 

 

BLINK CHARGING CO. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands except for share and per share amounts)