SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LIQUIDITY |
LIQUIDITY
As of March 31, 2024, the Company had cash and cash equivalents of $93,458 and working capital of $130,506. During the three months ended March 31, 2024, the Company incurred a net loss of $17,173. During the three months ended March 31, 2024, the Company used cash in operating activities of $21,476.
During the three months ended March 31, 2024, the Company sold an aggregate of shares of common stock under an “at-the-market” equity offering program for aggregate gross proceeds of $25,651, less issuance costs of $581 which were recorded as a reduction to additional paid-in capital.
The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that the Company’s operating expenses will continue to increase and, as a result, it will eventually need to generate significant product revenues to achieve profitability. 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. During 2023, the Company commenced a plan designed to improve the Company’s liquidity by enhancing revenue economics and reducing selling, general, and administrative expenses. The plan seeks to achieve these goals by increasing gross profit through product optimization, integration of SemaConnect, Blink UK/EB and Blue Corner acquisitions, and reduction of operating expenses through cost avoidance and cost cutting strategies. There can be no assurances that these strategies will be achieved.
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
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| FOREIGN CURRENCY TRANSLATION |
FOREIGN CURRENCY TRANSLATION
The Company’s reporting currency is the United States dollar. The functional currency of certain subsidiaries is the Euro, Indian Rupee, and Pound Sterling. Assets and liabilities are translated based on the exchange rates at the balance sheet date (1.0796 for the Euro, 0.1199 for the Indian Rupee and 1.2627 for the Pound Sterling, as of March 31, 2024. Expense accounts are translated at the weighted average exchange rate for the period (1.0806 for the Euro, 0.0120 for the Indian Rupee and 1.2638 for the Pound Sterling, during the three months ended March 31, 2024 and 1.0741 for the Euro, 0.0122 for the Indian Rupee, and 1.2206 for the Pound Sterling for the three months ended March 31, 2023). Equity accounts are translated at historical exchange rates. The resulting translation adjustments are recognized in stockholders’ equity as a component of accumulated other comprehensive (loss) income. Comprehensive income (loss) is defined as the change in equity of an entity from all sources other than investments by owners or distributions to owners and includes foreign currency translation adjustments as described above. Transaction (losses) gains attributable to foreign exchange were ($30) and 1,807 during the three months ended March 31, 2024 and 2023, respectively.
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| ASSETS HELD FOR SALE |
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 Building
During
the three months ended March 31, 2024, the Company commenced plans to sell an office building in Miami Beach, Florida containing
approximately 10,000-square feet
of office space. The asset is included within property and equipment on the condensed consolidated balance sheet as of March 31,
2024. The asset’s carrying value was $3,675
and $3,692 as of March 31, 2024 and December 31, 2023, respectively.
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 is expected to close during the second quarter of 2024. As a result of the approved plan and sale agreement, the Company recorded an estimated loss of $564 from the pending transaction for the three months ended March 31, 2024, which is included in operating expenses on the accompanying condensed consolidated statement of operations for the three months ended March 31, 2024. 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.
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| REVENUE RECOGNITION |
REVENUE RECOGNITION
The Company recognizes revenue primarily from four different types of contracts:
The following table summarizes revenue recognized in the condensed consolidated statements of operations:
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
The following table summarizes our revenue recognized in the condensed consolidated statements of operations by geographical area:
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 March 31, 2024, the Company had $27,966 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue on the consolidated balance sheets as of March 31, 2024. The Company expects to satisfy $14,430 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 months ended March 31, 2024, the Company recognized $1,042 revenues related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2023. During the three months ended March 31, 2024, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods.
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 the useful life of the charging station. During the three months ended March 31, 2024 and 2023, the Company recorded $583 and $49, respectively, related to grant and rebate revenue. During the three months ended March 31, 2024 and 2023, the Company recognized $44 and $51, 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. During the three months ended March 31, 2024 and 2023, the Company recognized $1,097 and $252, respectively, related to car-sharing services revenue.
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| CONCENTRATIONS |
CONCENTRATIONS
During the three months ended March 31, 2024, sales to a significant customer represented 14% of total revenue. During the three months ended March 31, 2023, sales to a significant customer represented 13% of total revenue. During the three months ended March 31, 2024 and 2023, the Company made purchases from a significant supplier that represented 10% and 16% of total purchases, respectively. During the three months ended March 31, 2024, the Company made purchases from another significant supplier that represented 10% of total purchases.
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| RECLASSIFICATIONS |
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.
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
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| 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.
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