4. BUSINESS COMBINATONS

ELECTRIC BLUE LIMITED ACQUISITION

On April 22, 2022, pursuant to a Sale and Purchase Agreement dated April 22, 2022, the Company acquired, through its Dutch subsidiary, Blink Holdings B.V., all of the outstanding capital stock of Electric Blue Limited, a private company limited by shares and registered in England and Wales (“EB”), from its shareholders. Headquartered in St. Albans, United Kingdom, EB is a leading, independently-owned provider of electric vehicle charging and sustainable energy solutions and technologies. EB works with local authorities and businesses to create the infrastructure the United Kingdom needs to meet the 2050 net zero emissions target and prepare for the 2030 ban on the sale of new petrol and diesel cars and vans.

The fair value purchase price for the acquisition of all of EB’s outstanding capital stock is $18,903, consisting of $12,651 in cash, and 152,803 of the Company’s common stock (the “Consideration Shares”) with a fair value of $2,852.

In addition, provided EB reaches specified gross revenue or new EV charger installation targets over the three years post-closing, the Company also agreed to issue up to approximately $6,400 in additional shares of its common stock to EB shareholders (the “Contingent Consideration”). The Contingent Consideration was recorded at an estimated fair value of $3,400. As of June 30, 2022, the estimated fair value of the Contingent Consideration was $3,514. The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration liabilities on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are projections over the earn-out period, and 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 contingent consideration liabilities.

Of the purchase price to be issued to the EB shareholders at closing, approximately $650 in cash and 25,466 shares of common stock are being held in escrow accounts for periods of 12 months (cash escrow) and 18 months (stock escrow), respectively, following the closing to cover any losses or damages we may incur by reason of, among other things, any misrepresentation or breach of warranty by EB under the Sale and Purchase Agreement.

BLINK CHARGING CO. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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

4. BUSINESS COMBINATONS – CONTINUED

ELECTRIC BLUE LIMITED ACQUISITION - CONTINUED

The Company engaged a third-party independent valuation specialist to assist in the determination of fair values of tangible and intangible assets acquired and liabilities assumed for EB. The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as required by ASC Topic 805. The EB acquisition will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the acquisition date, including intangible assets, accounts receivable and certain fixed assets.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date of EB:

 SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

Changes in the balance of identified intangible assets and goodwill reflected on the balance sheet are the result of the impact of the change in foreign currency exchange rates.

BLINK CHARGING CO. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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

4. BUSINESS COMBINATONS – CONTINUED

ELECTRIC BLUE LIMITED ACQUISITION – CONTINUED

Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from this acquisition. Goodwill of $10,545 from the acquisition of EB is expected to be deductible for income tax purposes.

The condensed consolidated financial statements of the Company include the results of operations of EB from April 22, 2022 to June 30, 2022 and do not include results of operations for periods prior to April 22, 2022. The results of operations of EB from April 22, 2022 to June 30, 2022 included revenues of $1,362 and a net loss of $743.

The following table presents the unaudited pro forma condensed consolidated results of operations for the three and six months ended June 30, 2022 and 2021 as if the acquisition of EB had occurred at the beginning of fiscal year 2021. The pro forma information provided below is compiled from the pre-acquisition financial information of EB and includes pro forma adjustments for interest expense and adjustments to certain expenses. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2021 or (ii) future results of operations

 SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS

The above pro forma information includes pro forma adjustments to remove the effect of merger expenses recognized in the results of operations of the Company during the three and six months ended June 30, 2022 of $138 and $178, respectively.

As of the date of the acquisition, the Company expected to collect all contractual cash flows related to receivables acquired in the acquisition. Acquisition-related costs are expensed as incurred and are recorded within general and administrative expenses on the condensed consolidated statements of operations.

See Note 10 – Fair Value Measurement for additional information.

BLINK CHARGING CO. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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

4. BUSINESS COMBINATONS – CONTINUED

SEMACONNECT ACQUISITION

On June 15, 2022, the Company completed the acquisition of SemaConnect, Inc., a Delaware corporation (“SemaConnect”), pursuant to an Agreement and Plan of Merger, dated as of June 13, 2022 (“Acquisition Agreement”), by and among the Company, Blink Sub I Corp., Blink Sub II LLC, SemaConnect and Shareholder Representative Services LLC (solely in its capacity as the stockholders’ representative). Upon consummation of the acquisition, SemaConnect became a wholly owned subsidiary of the Company. SemaConnect is a leading provider of EV charging infrastructure solutions in North America.

The aggregate fair value purchase price was $200,573, which includes excess working capital of $1,229 and closing date cash of $3,639. The consideration paid in the acquisition consisted of: (a) $86,736 in cash, (i) $46,136 of which was paid at the closing of the Acquisition Agreement (“Closing”) and (ii) the remaining $40,600 is payable (bearing interest at 7%) until not earlier than nine months following the Closing and not later than three years following the Closing; and (b) 7,454,975 shares of the Company’s common stock (the “Stock Payment”) with a fair value of $113,837. Included in the cash consideration is $8,103 related to payments due to stock option holders of SemaConnect. Subsequent to the acquisition date, payments to the stock option holder were made after the stock option holder signed an option cash-out agreement. As of June 30, 2022, there was an unpaid balance of $4,058 which is classified as restricted cash on condensed consolidated balance sheet as of June 30, 2022, all of which was paid during July 2022.

In order to determine the estimated fair values of tangible and intangible assets acquired and liabilities assumed for SemaConnect, the Company performed internal calculations and analysis based on information and resources available. The Company engaged a third-party independent valuation specialist to assist in the determination of fair values which will become available during the third quarter of 2022. The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as required by ASC Topic 805. The SemaConnect acquisition will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the acquisition date, including intangible assets, accounts receivable and certain fixed assets.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date of SemaConnect:

SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED 

BLINK CHARGING CO. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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

4. BUSINESS COMBINATONS – CONTINUED

SEMACONNECT ACQUISITION - CONTINUED

The components of debt free net working capital are as follows:

Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from this acquisition. Goodwill of $127,567 from the acquisition of SemaConnect is not expected to be deductible for income tax purposes.

The condensed consolidated financial statements of the Company include the results of operations of SemaConnect from June 15, 2022 to June 30, 2022 and do not include results of operations for periods prior to June 15, 2022. The results of operations of SemaConnect from June 15, 2022 to June 30, 2022 included revenues of $1,414 and a net loss of $194.

The following table presents the unaudited pro forma consolidated results of operations for the three and six months ended June 30, 2022 and 2021 as if the acquisition of SemaConnect had occurred at the beginning of fiscal year 2021. The pro forma information provided below is compiled from the pre-acquisition financial information of SemaConnect and includes pro forma adjustments for interest expense and adjustments to certain expenses. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2021 or (ii) future results of operations:

SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS 

The above pro forma information includes pro forma adjustments to remove the effect of merger expenses recognized in the results of operations of the Company during the three and six months ended June 30, 2022 of $3,078 and $3,096, respectively.

As of the date of the acquisition, the Company expected to collect all contractual cash flows related to receivables acquired in the acquisition. Acquisition-related costs are expensed as incurred and are recorded within general and administrative expenses on the consolidated statements of operations. Acquisition-related costs were $3,216 and $3,274 during the three and six months ended June 30, 2022, respectively.

BLINK CHARGING CO. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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