ITEM
1. FINANCIAL STATEMENTS.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
195,646,354
|
|
|
$
|
22,341,433
|
|
Marketable securities
|
|
|
36,506,174
|
|
|
|
-
|
|
Accounts receivable and other receivables, net
|
|
|
1,003,620
|
|
|
|
347,967
|
|
Inventory, net
|
|
|
3,433,216
|
|
|
|
1,816,135
|
|
Prepaid expenses and other current assets
|
|
|
1,168,273
|
|
|
|
1,219,488
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
|
237,757,637
|
|
|
|
25,725,023
|
|
Restricted cash
|
|
|
74,873
|
|
|
|
76,399
|
|
Property and equipment, net
|
|
|
10,375,562
|
|
|
|
5,636,063
|
|
Operating lease right-of-use asset
|
|
|
1,785,810
|
|
|
|
615,825
|
|
Intangible assets, net
|
|
|
267,818
|
|
|
|
46,035
|
|
Goodwill
|
|
|
1,500,573
|
|
|
|
1,500,573
|
|
Other assets
|
|
|
175,826
|
|
|
|
387,617
|
|
Total Assets
|
|
$
|
251,938,099
|
|
|
$
|
33,987,535
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,112,090
|
|
|
$
|
3,358,852
|
|
Accrued expenses and other current liabilities
|
|
|
2,098,384
|
|
|
|
1,328,834
|
|
Current portion of notes payable
|
|
|
439,960
|
|
|
|
574,161
|
|
Current portion of operating lease liabilities
|
|
|
524,241
|
|
|
|
403,915
|
|
Current portion of deferred revenue
|
|
|
610,812
|
|
|
|
479,486
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
6,785,487
|
|
|
|
6,145,248
|
|
Operating lease liabilities, non-current portion
|
|
|
1,448,522
|
|
|
|
285,501
|
|
Other liabilities
|
|
|
90,000
|
|
|
|
90,000
|
|
Notes payable- non-current portion
|
|
|
432,859
|
|
|
|
296,535
|
|
Deferred revenue, non-current portion
|
|
|
14,209
|
|
|
|
6,654
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
8,771,077
|
|
|
|
6,823,938
|
|
|
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock, 10,000 shares designated, 0 issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 40,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
Series A Convertible Preferred Stock, 20,000,000 shares designated, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
-
|
|
|
|
-
|
|
Series C Convertible Preferred Stock, 250,000 shares designated, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
-
|
|
|
|
-
|
|
Series D Convertible Preferred Stock, 13,000 shares designated, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.001 par value, 500,000,000 shares authorized, 41,945,414 and 35,951,097 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
|
|
|
41,945
|
|
|
|
35,951
|
|
Additional paid-in capital
|
|
|
437,897,038
|
|
|
|
214,479,094
|
|
Accumulated other comprehensive income
|
|
|
(56,038
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
|
(194,715,923
|
)
|
|
|
(187,351,448
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
|
|
243,167,022
|
|
|
|
27,163,597
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
251,938,099
|
|
|
$
|
33,987,535
|
|
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations
(unaudited)
|
|
For The Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
|
$
|
1,670,594
|
|
|
$
|
777,423
|
|
Charging service revenue - company-owned charging stations
|
|
|
181,598
|
|
|
|
319,624
|
|
Network fees
|
|
|
109,856
|
|
|
|
55,559
|
|
Warranty
|
|
|
13,217
|
|
|
|
8,060
|
|
Grant and rebate
|
|
|
150,235
|
|
|
|
4,579
|
|
Ride-sharing services
|
|
|
45,512
|
|
|
|
-
|
|
Other
|
|
|
61,050
|
|
|
|
133,619
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
2,232,062
|
|
|
|
1,298,864
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues:
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
|
1,117,915
|
|
|
|
603,998
|
|
Cost of charging services - company-owned charging stations
|
|
|
49,772
|
|
|
|
29,614
|
|
Host provider fees
|
|
|
126,421
|
|
|
|
85,429
|
|
Network costs
|
|
|
79,393
|
|
|
|
75,402
|
|
Warranty and repairs and maintenance
|
|
|
261,151
|
|
|
|
114,909
|
|
Ride-sharing services
|
|
|
246,117
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
254,914
|
|
|
|
80,790
|
|
Total Cost of Revenues
|
|
|
2,135,683
|
|
|
|
990,142
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
96,379
|
|
|
|
308,722
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
4,748,151
|
|
|
|
2,114,467
|
|
General and administrative expenses
|
|
|
1,584,987
|
|
|
|
645,883
|
|
Other operating expenses
|
|
|
1,149,706
|
|
|
|
567,200
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
7,482,844
|
|
|
|
3,327,550
|
|
|
|
|
|
|
|
|
|
|
Loss From Operations
|
|
|
(7,386,465
|
)
|
|
|
(3,018,828
|
)
|
|
|
|
|
|
|
|
|
|
Other Income:
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
14,997
|
|
|
|
15,853
|
|
Change in fair value of derivative and other accrued liabilities
|
|
|
6,993
|
|
|
|
521
|
|
Other income
|
|
|
-
|
|
|
|
41,354
|
|
|
|
|
|
|
|
|
|
|
Total Other Income
|
|
|
21,990
|
|
|
|
57,728
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(7,364,475
|
)
|
|
$
|
(2,961,100
|
)
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.18
|
)
|
|
$
|
(0.11
|
)
|
Diluted
|
|
$
|
(0.18
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of
|
|
|
|
|
|
|
|
|
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
41,138,095
|
|
|
|
26,842,136
|
|
Diluted
|
|
|
41,138,095
|
|
|
|
26,842,136
|
|
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statements of Comprehensive Loss
(unaudited)
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(7,364,475
|
)
|
|
$
|
(2,961,100
|
)
|
Other Comprehensive (Loss) Income:
|
|
|
|
|
|
|
|
|
Reclassification adjustments of gain on sale of marketable securities included in net loss
|
|
|
-
|
|
|
|
(113,526
|
)
|
Change in fair value of marketable securities
|
|
|
(56,038
|
)
|
|
|
(67,942
|
)
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Loss
|
|
$
|
(7,420,513
|
)
|
|
$
|
(3,142,568
|
)
|
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statement of Changes in Stockholders’ Equity
For
the Three Months Ended March 31, 2021
(unaudited)
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Other
|
|
|
|
|
|
Total
|
|
|
|
Common
Stock
|
|
|
Paid-In
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- January 1, 2021
|
|
|
35,951,097
|
|
|
$
|
35,951
|
|
|
$
|
214,479,094
|
|
|
$
|
-
|
|
|
$
|
(187,351,448
|
)
|
|
$
|
27,163,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued in public offering, net of issuance costs [1]
|
|
|
5,660,000
|
|
|
|
5,660
|
|
|
|
221,400,122
|
|
|
|
-
|
|
|
|
-
|
|
|
|
221,405,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued upon exercise of warrants
|
|
|
239,202
|
|
|
|
239
|
|
|
|
999,301
|
|
|
|
-
|
|
|
|
-
|
|
|
|
999,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued upon cashless option exercise
|
|
|
15,522
|
|
|
|
16
|
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued upon cashless warrant exercise
|
|
|
66,000
|
|
|
|
66
|
|
|
|
(66
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued as consideration for property and equipment
|
|
|
13,123
|
|
|
|
13
|
|
|
|
599,987
|
|
|
|
-
|
|
|
|
-
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
470
|
|
|
|
-
|
|
|
|
418,616
|
|
|
|
-
|
|
|
|
-
|
|
|
|
418,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(56,038
|
)
|
|
|
-
|
|
|
|
(56,038
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,364,475
|
)
|
|
|
(7,364,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- March 31, 2021
|
|
|
41,945,414
|
|
|
$
|
41,945
|
|
|
$
|
437,897,038
|
|
|
$
|
(56,038
|
)
|
|
$
|
(194,715,923
|
)
|
|
$
|
243,167,022
|
|
[1]
Includes gross proceeds of $232,060,000, less issuance costs of $10,654,218.
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statement of Changes in Stockholders’ Equity
For
the Three Months Ended March 31, 2020
(unaudited)
|
|
Convertible
Preferred Stock
|
|
|
|
|
|
Additional
|
|
|
Accumulated
Other
|
|
|
|
|
|
Total
|
|
|
|
Series
D
|
|
|
Common
Stock
|
|
|
Paid-In
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- January 1, 2020
|
|
|
5,125
|
|
|
$
|
5
|
|
|
|
26,322,583
|
|
|
$
|
26,323
|
|
|
$
|
176,729,926
|
|
|
$
|
183,173
|
|
|
$
|
(169,504,981
|
)
|
|
$
|
7,434,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
276,675
|
|
|
|
-
|
|
|
|
-
|
|
|
|
276,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued upon conversion of Series D convertible preferred stock
|
|
|
(5,125
|
)
|
|
|
(5
|
)
|
|
|
1,642,628
|
|
|
|
1,642
|
|
|
|
(1,637
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(181,468
|
)
|
|
|
-
|
|
|
|
(181,468
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,961,100
|
)
|
|
|
(2,961,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- March 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
27,965,211
|
|
|
$
|
27,965
|
|
|
$
|
177,004,964
|
|
|
$
|
1,705
|
|
|
$
|
(172,466,081
|
)
|
|
$
|
4,568,553
|
|
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
For
The Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
Cash
Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(7,364,475
|
)
|
|
$
|
(2,961,100
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
514,383
|
|
|
|
146,351
|
|
Dividend
and interest income
|
|
|
-
|
|
|
|
(84,162
|
)
|
Change
in fair value of derivative and other accrued liabilities
|
|
|
6,993
|
|
|
|
521
|
|
Provision/(benefit)
for bad debt
|
|
|
201,130
|
|
|
|
(59,170
|
)
|
Benefit
for slow moving and obsolete inventory
|
|
|
(81,861
|
)
|
|
|
(10,878
|
)
|
Non-cash
compensation:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
28,538
|
|
|
|
(84,959
|
)
|
Options
|
|
|
385,522
|
|
|
|
312,319
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable and other receivables
|
|
|
(856,783
|
)
|
|
|
(27,685
|
)
|
Inventory
|
|
|
(1,964,638
|
)
|
|
|
(76,267
|
)
|
Prepaid
expenses and other current assets
|
|
|
51,215
|
|
|
|
(1,356,043
|
)
|
Other
assets
|
|
|
211,791
|
|
|
|
-
|
|
Accounts
payable and accrued expenses
|
|
|
304,861
|
|
|
|
618,469
|
|
Lease
liabilities
|
|
|
(75,061
|
)
|
|
|
(46,079
|
)
|
Deferred
revenue
|
|
|
138,881
|
|
|
|
215,542
|
|
|
|
|
|
|
|
|
|
|
Total
Adjustments
|
|
|
(1,135,029
|
)
|
|
|
(452,041
|
)
|
|
|
|
|
|
|
|
|
|
Net
Cash Used In Operating Activities
|
|
|
(8,499,504
|
)
|
|
|
(3,413,141
|
)
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
Proceeds
from sale of marketable securities
|
|
|
-
|
|
|
|
1,100,516
|
|
Purchase
of marketable securities
|
|
|
(36,562,212
|
)
|
|
|
-
|
|
Purchases
of property and equipment
|
|
|
(4,020,696
|
)
|
|
|
(300,902
|
)
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used In) Provided By Investing Activities
|
|
|
(40,582,908
|
)
|
|
|
799,614
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock in public offering [1]
|
|
|
221,405,782
|
|
|
|
-
|
|
Proceeds
from exercise of warrants
|
|
|
999,540
|
|
|
|
-
|
|
Payment
of financing liability in connection with internal use software
|
|
|
(19,515
|
)
|
|
|
(17,989
|
)
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided By (Used In) Financing Activities
|
|
|
222,385,807
|
|
|
|
(17,989
|
)
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) In Cash
|
|
|
173,303,395
|
|
|
|
(2,631,516
|
)
|
|
|
|
|
|
|
|
|
|
Cash
and Restricted Cash - Beginning of Period
|
|
|
22,417,832
|
|
|
|
3,975,494
|
|
|
|
|
|
|
|
|
|
|
Cash
and Restricted Cash - End of Period
|
|
$
|
195,721,227
|
|
|
$
|
1,343,978
|
|
|
|
|
|
|
|
|
|
|
Cash
and restricted cash consisted of the following:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
195,646,354
|
|
|
$
|
22,341,433
|
|
Restricted
cash
|
|
|
74,873
|
|
|
|
-
|
|
|
|
$
|
195,721,227
|
|
|
$
|
22,341,433
|
|
[1]
Includes gross proceeds of $232,060,000, less issuance costs of $10,654,218.
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows — Continued
(unaudited)
|
|
For
The Three Months Ended
|
|
|
|
March
31,
|
|
|
2021
|
|
|
2020
|
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
Cash
paid during the periods for:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
$
|
-
|
|
|
$
|
-
|
|
Non-cash
investing and financing activities:
|
|
|
|
|
|
|
|
|
Capitalization
of non-recurring engineering costs
|
|
$
|
237,127
|
|
|
$
|
-
|
|
Common
stock issued upon cashless option exercise
|
|
$
|
16
|
|
|
$
|
-
|
|
Common
stock issued upon cashless warrant exercise
|
|
$
|
66
|
|
|
$
|
-
|
|
Common
stock issued as consideration for property and equipment
|
|
$
|
600,000
|
|
|
$
|
-
|
|
Interest
expense converted into principal
|
|
$
|
2,123
|
|
|
$
|
-
|
|
Right-of-use
assets obtained in exchange for lease obligations
|
|
$
|
1,358,408
|
|
|
$
|
-
|
|
Change
in fair value of marketable securities
|
|
$
|
56,038
|
|
|
$
|
(181,468
|
)
|
Transfer
of inventory to property and equipment
|
|
$
|
(429,418
|
)
|
|
$
|
(542,236
|
)
|
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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 owner,
operator, and provider of electric vehicle (“EV”) charging equipment and networked EV charging services. Blink offers residential
and commercial EV charging equipment, 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 Network”) and Blink EV charging equipment, also known as electric
vehicle supply equipment (“EVSE”) and other EV-related services. The Blink Network provides property owners, managers, parking
companies, and state and municipal entities (“Property Partners”) with cloud-based services that enable the remote monitoring
and management of EV charging stations. The Blink Network also provides EV drivers with vital station information, including station
location, availability, and any fees (if applicable).
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
March 31, 2021 and for the three months then ended. The results of operations for the three months ended March 31, 2021 are not necessarily
indicative of the operating results for the full year ending December 31, 2021 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, 2020 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”)
on March 31, 2021 as part of the Company’s Annual Report on Form 10-K.
Risks
and Uncertainties
The
Covid-19 pandemic has impacted global stock markets and economies. The Company continues to closely monitor the impact the impact of
the outbreak of the coronavirus (“Covid-19”). The Company has taken precautions to ensure the safety of our employees, customers
and business partners, while assuring business continuity and reliable service and support to its customers. The Company continue to
receive orders for our products, although some shipments of equipment have been temporarily delayed. The Company has experienced what
it expects is a temporary reduction in the usage of our charging stations, which has resulted in a decrease in charging service revenue.
As federal, state and local economies begin to reopen and with a vaccine underway the Company expects demand for charging station usage
to return, but the Company is unable to predict the ultimate impact that it may have on the business, future results of operations, financial
position, or cash flows.
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Since
the Annual Report for the year ended December 31, 2020, there have been no material changes to the Company’s significant accounting
policies, except as disclosed in this note.
INVESTMENTS
Available-for-sale
debt securities are recorded at fair value with the net unrealized gains and losses (that are deemed to be temporary) reported as a component
of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining
net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments
for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s
fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and
intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an
impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance
sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized
cost basis of the investment and it is not adjusted for subsequent recoveries in fair value.
The
following summarizes the Company’s investments as of March 31, 2021 and December 31, 2020:
|
|
March 31, 2021
|
|
|
December
31, 2020
|
|
|
|
|
|
|
|
|
Short-term
investments:
|
|
|
|
|
|
|
|
|
Available-
for-sale investments
|
|
$
|
36,506,174
|
|
|
$
|
-
|
|
The
following is a summary of the unrealized gains, losses, and fair value by investment type as of March 31, 2021:
|
|
March
31, 2021
|
|
|
|
Amortized
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized Losses
|
|
|
Fair
Value
|
|
Fixed
income
|
|
$
|
36,562,212
|
|
|
$
|
-
|
|
|
$
|
(56,038
|
)
|
|
$
|
36,506,174
|
|
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
|
REVENUE
RECOGNITION
The
Company recognizes revenue primarily from five different types of contracts:
●
|
Charging
service revenue – company-owned charging stations - Revenue is recognized at the point when a particular charging session
is completed.
|
●
|
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.
|
●
|
Network
fees and other – 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.
|
●
|
Ride-sharing
services – Primarily related to ride-sharing services agreement with the City of Los Angeles which allows customers the
ability to rent electric vehicles through a subscription service. The Company recognizes revenue over the contractual period of performance
of the subscription.
|
●
|
Other
– Primarily related to charging service revenue from non-company-owned charging stations. Revenue is recognized
from non-company-owned charging stations at the point when a particular charging session is completed in accordance with a
contractual relationship between the Company and the owner of the station. Other revenues also comprises of revenues
generated from alternative fuel credits.
|
On
February 8, 2021, the Company was awarded a state-wide grant of approximately $1.7 million for the deployment of 11 new DC fast chargers
across the state of Vermont in the next two years.
The
following table summarizes revenue recognized under ASC 606 in the condensed consolidated statements of operations:
|
|
For
The Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Revenues
- Recognized at a Point in Time:
|
|
|
|
|
|
|
|
|
Charging
service revenue - company-owned charging stations
|
|
$
|
181,598
|
|
|
$
|
319,624
|
|
Product
sales
|
|
|
1,670,594
|
|
|
|
777,423
|
|
Other
|
|
|
61,050
|
|
|
|
133,619
|
|
Total
Revenues - Recognized at a Point in Time
|
|
|
1,913,242
|
|
|
|
1,230,666
|
|
|
|
|
|
|
|
|
|
|
Revenues
- Recognized Over a Period of Time:
|
|
|
|
|
|
|
|
|
Ride-sharing
services
|
|
|
45,512
|
|
|
|
-
|
|
Network
and other fees
|
|
|
123,073
|
|
|
|
63,619
|
|
Total
Revenues - Recognized Over a Period of Time
|
|
|
168,585
|
|
|
|
63,619
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue Under ASC 606
|
|
$
|
2,081,827
|
|
|
$
|
1,294,285
|
|
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
|
REVENUE
RECOGNITION - CONTINUED
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 goods or services, the Company records deferred revenue until the performance obligations are satisfied.
As
of March 31, 2021, the Company had $625,021 related to contract liabilities where performance obligations have not yet been satisfied,
which has been included within deferred revenue on the condensed consolidated balance sheet as of March 31, 2021. The Company expects
to satisfy its remaining performance obligations for network fees and warranty revenue and recognize the revenue within the next twelve
months.
During
the three months ended March 31, 2021, the Company recognized $275,579 of revenues related to network fees and warranty contracts, which
were included in deferred revenues as of December 31, 2020. During the three months ended March 31, 2021, there was no revenue recognized
from performance obligations satisfied (or partially satisfied) in previous periods.
Grants
and rebates 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 March 31, 2021 and 2020, the Company recorded $150,235 and $4,579, respectively,
related to grant and rebate revenue. At March 31, 2021 and December 31, 2020, there was $69,792 and $70,356, respectively, of deferred
grant and rebate revenue to be amortized.
CONCENTRATIONS
As
of March 31, 2021, a significant customer represented 49% of total accounts receivable. Another significant customer represented 23%
of total accounts receivable.
During
the three months ended March 31, 2021, sales to a significant customer represented 21% of total revenue and another significant customer
represented 20% of total revenues. During the three months ended March 31, 2020, sales to a significant customer represented 33% of total
revenues.
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:
|
|
For
the Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
Warrants
|
|
|
3,510,129
|
|
|
|
6,840,049
|
|
Options
|
|
|
644,987
|
|
|
|
382,844
|
|
Unvested
restricted common stock
|
|
|
48,819
|
|
|
|
110,160
|
|
Total
potentially dilutive shares
|
|
|
4,203,935
|
|
|
|
7,333,053
|
|
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
|
RECENTLY
ISSUED ACCOUNTING STANDARDS
In
December 2019, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update
(“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is
intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the
general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is
effective for the Company beginning in fiscal 2021. The adoption of this ASU did not have a material impact on the
Company’s condensed consolidated financial statements and related disclosures.
3.
PROPERTY AND EQUIPMENT
On
January 22, 2021, the Company closed on the purchase of approximately 10,000 square feet of office condominium space which is the Company’s
corporate headquarters. The purchase price was $4 million, of which, $600,000 was paid in the Company’s common stock (13,123 shares)
and $3,400,000 in cash.
4.
ACCRUED EXPENSES
Accrued
expenses consist of the following:
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
|
|
(unaudited)
|
|
|
|
|
Accrued
host fees
|
|
$
|
122,758
|
|
|
$
|
119,906
|
|
Accrued
professional, board and other fees
|
|
|
80,624
|
|
|
|
109,809
|
|
Accrued
wages
|
|
|
1,146,535
|
|
|
|
403,024
|
|
Accrued
commissions
|
|
|
57,767
|
|
|
|
46,577
|
|
Warranty
payable
|
|
|
9,000
|
|
|
|
10,000
|
|
Accrued
income, property and sales taxes payable
|
|
|
337,624
|
|
|
|
357,467
|
|
Accrued
issuable equity
|
|
|
177,241
|
|
|
|
184,234
|
|
Other
accrued expenses
|
|
|
166,835
|
|
|
|
97,817
|
|
Total
accrued expenses
|
|
$
|
2,098,384
|
|
|
$
|
1,328,834
|
|
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
PUBLIC
OFFERING
In
January 2021, the Company completed an underwritten registered public offering of 5,660,000 shares of common stock at a public
offering price of $41.00 per share. The Company received approximately $232.1 million in gross proceeds from the public offering,
and approximately $221.4 million in net proceeds after deducting the underwriting discount and offering expenses paid by the Company.
The Company’s Chief Executive Officer and one other officer participated in the offering by selling a total of 550,000 shares
of the Company’s common stock from the exercise of the underwriter’s option to purchase additional shares. The public
offering was made pursuant to the Company’s automatic shelf registration statement on Form S-3 filed with the SEC on January
6, 2021 and prospectus supplement dated January 7, 2021.
STOCK
OPTIONS
During
the three months ended March 31, 2021, the Company issued an aggregate of 15,522 shares of the Company’s common stock pursuant
to the cashless exercise of options.
STOCK
WARRANTS
During
the three months ended March 31, 2021, the Company issued an aggregate of 239,202 shares of the Company’s common stock pursuant
to the exercise of warrants at an exercise price of $4.25 for aggregate net proceeds of $999,540.
During
the three months ended March 31, 2021, the Company issued 66,000 shares of the Company’s common stock representing a modification
of the initial warrant exercise pursuant to a legal settlement. See Note 9 – Commitments and Contingencies – Litigation
and Disputes for details.
STOCK-BASED
COMPENSATION
The
Company recognized stock-based compensation expense related to common stock, stock options and warrants for the three months ended
March 31, 2021 and 2020 of $414,060 and $227,361, respectively, which is included within compensation expense on the condensed
consolidated statements of operations. As of March 31, 2021, there was $4,252,540 of unrecognized stock-based compensation expense
that will be recognized over the weighted average remaining vesting period of 2.57 years.
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. Pursuant to the agreement, the Company is not required to fund operating
losses. The Company owns 40% of the Entity while the other three entities own 60% of the Entity. The Entity currently owns 100%
of a Greek subsidiary, Blink Charging Hellas SA (“Hellas”), which started operations in the Greek EV market. There
are currently no plans for the Company to make any capital contributions or investments. During the three months ended March 31,
2021 and 2020, the Company recognized sales of $477,313 and $98,000, respectively, to Hellas. As of March 31, 2021, the Company
had a receivable from Hellas of approximately $492,000. 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 March 31,
2021, 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 months ended March 31, 2021 and 2020.
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
OPERATING
LEASES
As
of March 31, 2021, the Company had no leases that were classified as a financing lease. As of March 31, 2021, the Company did
not have additional operating and financing leases that have not yet commenced.
Total
operating lease expenses for the three months ended March 31, 2021 and 2020 were $169,678 and $113,599, respectively, and are
recorded in other operating expenses on the condensed consolidated statements of operations.
During
the three months ended March 31, 2021, the Company entered into a lease for approximately 27,540 square feet of space in Arizona.
The lease commenced on January 1, 2021 and will terminate on May 31, 2028. The lease also includes a build-out allowance of $137,000.
Monthly payments under the lease, net of buildout allowance, is $18,235 per month. The lease also includes a security deposit
of $22,032.
Supplemental
cash flows information related to leases was as follows:
|
|
For The Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
|
|
|
Operating cash flows from operating leases
|
|
$
|
169,126
|
|
|
$
|
52,743
|
|
|
|
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
|
|
|
|
|
Operating leases
|
|
$
|
1,358,408
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Remaining Lease Term
|
|
|
|
|
|
|
|
|
Operating leases
|
|
|
5.96
|
|
|
|
1.41
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Discount Rate
|
|
|
|
|
|
|
|
|
Operating leases
|
|
|
4.9
|
%
|
|
|
6.0
|
%
|
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Future
minimum payments under non-cancellable leases as of March 31, 2021 were as follows:
For the Years Ending December 31,
|
|
Amount
|
|
|
|
|
|
2021
|
|
$
|
385,831
|
|
2022
|
|
|
468,138
|
|
2023
|
|
|
291,546
|
|
2024
|
|
|
218,818
|
|
2025
|
|
|
218,818
|
|
Thereafter
|
|
|
528,810
|
|
Total future minimum lease payments
|
|
|
2,111,961
|
|
Less: imputed interest
|
|
|
(139,198
|
)
|
Total
|
|
$
|
1,972,763
|
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
PURCHASE
COMMITMENTS
As
of March 31, 2021, the Company had a remaining purchase commitment of approximately $10,000,000, which will become payable upon
the suppliers’ delivery of the charging stations and other related items. The purchase commitments were made primarily for
future sales and deployments of these charging stations and other related items.
LITIGATION
AND DISPUTES
On
August 24, 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
Chairman of the Board and Chief Executive Officer), and Michael Rama (Blink’s Chief Financial Officer) (the “Bush
Lawsuit”). On September 1, 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 (the “Vittoria Lawsuit”). On October 1, 2020, the
court consolidated the Vittoria Lawsuit with the Bush Lawsuit and on December 21, 2020 the court appointed Tianyou Wu, Alexander
Yu and H. Marc Joseph to serve as the Co-Lead Plaintiffs. The Co-Lead Plaintiffs filed an Amended Complaint on February 19, 2021.
The Amended Complaint alleges, among other things, that the defendants made false or misleading statements about the size and
functionality of the Blink Network, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The Amended Complaint does not quantify damages but seeks to recover damages on behalf of investors who purchased or otherwise
acquired Blink’s common stock between March 6, 2020 and August 19, 2020. On April 20, 2021, Blink and the other defendants
filed a motion to dismiss the Amended Complaint. The deadline for the Co-Lead Plaintiffs to file an opposition brief in response
to the motion to dismiss is June 21, 2021 and the deadline for Blink to file a reply in support of the motion to dismiss is July
21, 2021. The Company believes that the claim has no merit, and wholly and completely disputes the allegations therein. The Company
has retained legal counsel in order to defend the action vigorously. The Company has not recorded an accrual related to this matter
as of March 31, 2021 as it determined that any such loss contingency was either not probable or estimable.
BLINK
CHARGING CO. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
8.
|
COMMITMENTS AND CONTINGENCIES – CONTINUED
|
LITIGATION
AND DISPUTES – CONTINUED
On
September 15, 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 asserts that the Director defendants caused Blink to make the statements that are at issue in the securities
class action and, as a result, the Company will incur costs defending against the consolidated Bush Lawsuit and other unidentified
investigations. The Klein Lawsuit asserts 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 seeks damages sustained by the Company as a result of the defendants’ breaches of fiduciary duties, corporate governance
changes, restitution, and disgorgement of profits from the defendants and attorneys’ fees and other litigation expenses.
The parties agreed to temporarily stay the Klein Lawsuit until there is a ruling on the motion to dismiss filed in the consolidated
Bush Lawsuit. The Company has not recorded an accrual related to this matter as of March 31, 2021 as it determined that any such
loss contingency was either not probable or estimable.
On
December 22, 2020, JMJ Financial v. Blink Charging Co. was filed in the United States District Court for the Southern District
of New York, seeking to pursue claims for alleged breach of contract and conversion (the “JMJ Lawsuit”). The complaint
alleges that JMJ Financial purchased warrants to acquire 147,057 shares of Blink common stock on or about April 9, 2018, which
permitted a cashless exercise, and that on November 23, 2020, JMJ Financial delivered a notice of warrant exercise to Blink and
that the Company failed to deliver the shares. The claim alleges breach of contract and conversion; the plaintiff requests damages
of at least $4.2 million, attorneys’ fees, and specific enforcement requiring delivery of the shares. In January 2021, the
Company entered into a settlement agreement with JMJ under which the parties exchanged releases and the litigation was discontinued
with prejudice. The Company did not make a cash payment in the settlement, but rather delivered 66,000 shares of stock, representing
a modification of the initial warrant exercise but did not result in the recognition of any incremental expense.
On
December 23, 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 sued in the Klein Lawsuit
and asserting 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”). On
February 17, 2021, the parties agreed to consolidate the Klein and Bhatia actions, which the court consolidated under the caption
In re Blink Charging Company Stockholder Derivative Litigation, Lead Case No. 2020-019815-CA-01. The parties also agreed to keep
in place the temporary stay. The Company believes that the claim has no merit, and wholly and completely disputes the allegations
therein. The Company has retained legal counsel in order to defend the action vigorously. The Company has not recorded an accrual
related to this matter as of March 31, 2021 as it determined that any such loss contingency was either not probable or estimable.
On
February 12, 2021, another shareholder derivative lawsuit, captioned Wolery (derivatively on behalf of Blink Charging Co.) v.
Buffalino et al., Case No. A-21-829395-C, was filed in the Eighth Judicial District Court in Clark County, Nevada seeking to pursue
claims belonging to the Company against Blink’s Board of Directors (the “Wolery Lawsuit”). Blink is named as
a nominal defendant. The Wolery complaint alleges that the amount of restricted stock awarded to Blink’s outside directors
in December 2020 exceeded the amounts permitted by Blink’s incentive compensation plan. The complaint asks the court to
rescind the excess restricted stock awards, as well as other relief. The parties have agreed that the defendants could have an
extension to respond to the complaint and consequently no response has been filed. The Company has not recorded an accrual related
to this matter as of March 31, 2021 as it determined that any such loss contingency was either not probable or estimable.
On May 10, 2021, pursuant to a Share Purchase
Agreement dated April 21, 2021, the Company closed on the acquisition from Blue Corner N.V., a Belgian company (“Blue Corner”),
all of its outstanding capital stock. Headquartered in Belgium, Blue Corner owns and operates an EV charging network across Europe. The
purchase price for the acquisition of all of Blue Corner’s outstanding capital stock was approximately $24 million (or 20 million
Euros), consisting of approximately $23 million (or 19 million Euros) in cash and approximately $1.2 million (1 million Euros) represented
by 32,382 shares of the Company’s common stock (the “Consideration Shares”). The number of Consideration Shares was
calculated based on the average price of the Company’s common stock during the 30 consecutive trading days immediately preceding
the closing date of the Share Purchase Agreement, which equaled $37.66 (or 30.88 Euros) per share.
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” and the “Company”) as of March 31, 2021 and for the three ended March 31, 2021 and
2020 should be read in conjunction with our financial statements and the notes to those financial statements that are included
elsewhere in this Amendment No.1 to the 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 Amendment No.1 to the Form 10-Q contains forward-looking statements as that term is defined in the federal securities
laws. The events described in forward-looking statements contained in this Amendment No.1 to the Form 10-Q 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 and the projections
upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties
set forth under Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020,
as discussed elsewhere in this Amendment No.1 to the Form 10-Q, particularly in Part II, Item IA - Risk Factors.
At
Blink Charging, our highest priority remains the safety, health and well-being of our employees, their families and our communities
and we remain committed to serving the needs of our customers. The Covid-19 pandemic is a highly fluid situation and it is not
currently possible for us to reasonably estimate the impact it may have on our financial and operating results. We will continue
to evaluate the impact of the Covid-19 pandemic on our business as we learn more and the impact of Covid-19 on our industry becomes
clearer.
Any
one or more of these uncertainties, risks and other influences, as well as our inability to avail ourselves of the loan forgiveness
provisions of the PPP Loan, 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
Overview
We
are a leading 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 EV’s. 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
network (the “Blink Network”) and Blink EV charging equipment, also known as electric vehicle supply equipment (“EVSE”)
and other EV-related services. The Blink Network 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 Network provides
property owners, managers, parking companies, and state and municipal entities (“Property Partners”),
among other types of commercial customers, with cloud-based services that enable the remote monitoring and management
of EV charging stations. The Blink Network also provides EV drivers with vital station information, including station location,
availability, and any fees (if applicable).
In
order to capture more of 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 bears the costs of installation, equipment, maintenance, and the percentage of revenue shared (as applicable).
|
●
|
In
our Blink-owned turnkey business model, Blink incurs the costs of the charging equipment and installation. We own and operate
the EV charging station and provide connectivity of the charging station to the Blink Network. In this model,
which favors recurring revenues, Blink incurs most costs associated with the EV charging stations; thus, Blink retains
substantially all EV charging revenues after deducting network connectivity and processing fees.
|
|
|
|
|
●
|
In
our Blink-owned hybrid business model, Blink incurs the costs of the charging equipment while the Property Partner incurs
the costs of installation costs. We own and operate the EV charging station and provide connectivity of the charging station
to the Blink Network. In this model, the Property Partner incurs the installation costs associated with the EV station; thus,
Blink shares a more generous portion of the EV charging revenues with the Property Partner generated from the EV charging
station after deducting network connectivity and processing fee.
|
|
●
|
In
our host-owned business model, the Property Partner purchases, owns and operates the Blink EV charging station and incurs
the installation costs. Blink works with the Property Partner, providing site recommendations, connectivity to the Blink Network,
payment processing, and optional maintenance services. In this model, the Property Partner retains and keeps all the EV charging
revenues after deducting network connectivity and processing fees.
|
|
|
|
|
●
|
In
our Blink-as-a-service model, Blink owns and operates the EV charging station, while the Property Partner incurs the installation
cost. The Property Partner pays to Blink a fixed monthly fee and keeps all the EV charging revenues after deducting network
connectivity and processing fees.
|
As
part of Blink’s mission to facilitate the adoption of EVs through the deployment and operation of EV charging infrastructure
globally, we are dedicated to slowing climate change by reducing
greenhouse gas emissions caused by road vehicles. With the goal of leading the build out of EV charging infrastructure and
of maximizing Blink’s 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.
As
of March 31, 2021, we sold or deployed 17,302 chargers , of which 7,191 were on the Blink Network (4,471 Level 2 publicly accessible
commercial chargers, 1,441 Level 2 private commercial chargers, 121 DC Fast Charging EV publicly accessible chargers, 11 DC Fast
Charging EV private chargers, and 1,147 residential Level 2 Blink EV chargers), and the remainder were non-networked, on other
networks or international sales or deployments (225 Level 2 commercial chargers, 6 DC Fast Charging chargers, 9,218 residential
Level 2 Blink EV chargers, 607 sold internationally and 55 deployed internationally).
As
reflected in our unaudited condensed consolidated financial statements as of March 31, 2021, we had a cash balance of $195,646,354,
working capital of $230,972,150 and an accumulated deficit of $194,715,923. During the three months ended March 31, 2021 and 2020,
we incurred net losses of $7,364,475 and $2,961,100, respectively. We have not yet achieved profitability.
Recent
Developments
2021 Acquisition
On May 10, 2021, pursuant
to a Share Purchase Agreement dated April 21, 2021, the Company closed on the acquisition from Blue Corner N.V., a Belgian company (“Blue
Corner”), all of its outstanding capital stock. Headquartered in Belgium, Blue Corner owns and operates an EV charging network
across Europe. The purchase price for the acquisition of all of Blue Corner’s outstanding capital stock was approximately $24 million
(or 20 million Euros), consisting of approximately $23 million (or 19 million Euros) in cash and approximately $1.2 million (1 million
Euros) represented by 32,382 shares of the Company’s common stock (the “Consideration Shares”). The number of Consideration
Shares was calculated based on the average price of the Company’s common stock during the 30 consecutive trading days immediately
preceding the closing date of the Share Purchase Agreement, which equaled $37.66 (or 30.88 Euros) per share.
January
2021 Underwritten Public Offering
In
January 2021, we completed an underwritten registered public offering of 5,660,000 shares of our common stock at a public offering
price of $41.00 per share. We received approximately $232.1 million in gross proceeds from the public offering, and approximately
$221.4 million in net proceeds after deducting the underwriting discount and offering expenses paid by us. We anticipate using
the net proceeds to supplement our operating cash flows to fund EV charging station deployment and to finance the costs of acquiring
or investing in competitive and complementary businesses, products and technologies as a part of our growth strategy. We also
plan to use any remaining proceeds we receive for working capital and other corporate purposes. Our Chief Executive Officer
and one other officer participated in the offering by selling a total of 550,000 shares of our common stock from the exercise
of the underwriter’s option to purchase additional shares. The public offering was made pursuant to our automatic shelf
registration statement on Form S-3 filed with the SEC on January 6, 2021 and prospectus supplement dated January 7, 2021. Barclays
Capital Inc. served as the lead book-running manager of the offering.
Note
on Covid-19
The
Covid-19 pandemic has impacted global stock markets and economies. We continue to closely monitor the impact the impact of the
outbreak of the coronavirus (“Covid-19”). We have taken precautions to ensure the safety of our employees, customers
and business partners, while assuring business continuity and reliable service and support to our customers. We continue to receive
orders for our products, although some shipments of equipment have been temporarily delayed. We have experienced what we expect
is a temporary reduction in the usage of our charging stations, which has resulted in a decrease in our charging service revenue.
As federal, state and local economies begin to reopen and with a vaccine underway we expect demand for charging station usage
to return, but we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial
position, or cash flows. The extent to which our operations may be impacted by the Covid-19 pandemic will depend largely on future
developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning
the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact. We intend to continue
to monitor the impact of Covid-19 pandemic on our business closely.
Consolidated
Results of Operations
Revenues
Total
revenue for the three months ended March 31, 2021 increased by $933,198, or 72%, to $2,232,062 compared to $1,298,864 during the
three months ended March 31, 2020.
Charging
service revenue from Company-owned charging stations was $181,598 for the three months ended March 31, 2021 as compared to $319,624
for the three months ended March 31, 2020, a decrease of $138,026, or 43%. The decrease was primarily attributable to the decrease
in usage of charging stations as a result of COVID-19.
Revenue
from product sales was $1,670,594 for the three months ended March 31, 2021 compared to $777,423 during the three months ended
March 31, 2020, an increase of $893,171, or 115%. This increase was attributable to increased sales of Generation 2 chargers,
DC fast chargers and residential chargers when compared to the same period in 2020.
Network
fee revenues were $109,856 for the three months ended March 31, 2021 compared to $55,559 for the three months ended March 31,
2010, an increase of $54,927, or 98%. The increase was attributable to increases in host owned units as well as
billings and invoicing to Property Partners during the three months ended 2021 compared to the months ended March 31,
2020.
Warranty
revenues were $13,217 for the three months ended March 31, 2021 compared to $8,060 for the three months ended March 31, 2020,
an increase of $5,157 or 64%. The increase was primarily attributable to an increase in warranty contracts sold for the three
months ended March 31, 2021 compared to the three months ended March 31, 2020.
Grant
and rebate revenues were $150,235 during the three months ended March 31, 2021, compared to $4,579 during the three months ended
March 31, 2020, an increase of $145,656, or 3,181%. Grant and rebates relating to equipment and the related installation are generally
deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. The
2021 revenue was related recognition of $140,000 in Michigan grants associated with the installation of six DC fast charges during
the three months ended March 31, 2021 as well as the amortization of previous years’ grants.
Ride-sharing
services revenues were $45,512 during the three months ended March 31, 2021 which relates to ride-sharing subscription services
with the City of Los Angeles which was associated with the acquisition of BlueLA in September 2020.
Other
revenue decreased by $72,569 to $61,050 for the three months ended March 31, 2021 as compared to $133,619 for the three months
ended March 31, 2020. The decrease was primarily attributable to lower Low Carbon Fuel Standard (LCFS) credits generated during
the three months ended March 31, 2021 compared to the same period in 2020. 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 March 31, 2021 were $2,135,683
as compared to $990,142 for the three months ended March 31, 2020, an increase of $1,145,541 or 116%. 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;
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●
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provisions
for excess and obsolete inventory; and
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warranty
and repairs and maintenance expenses are based on both the number of service cases completed during the period.
|
Cost
of charging services-company-owned charging stations (electricity reimbursements) increased by $20,158 to $49,772 for the three
months ended March 31, 2021 as compared to $29,614 for the three months ended March 31, 2020. The increase in 2021 was attributable
to the mix of charging stations generating charging service revenues subject to electricity reimbursement.
Host
provider fees increased by $40,992, or 48%, to $126,421 during the three months ended March 31, 2021 as compared to $85,429 during
the three months ended March 31, 2020. 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, as well as a reduction in utilization
due to COVID-19.
Cost
of product sales increased by $513,917 or 85%, from $603,998 for the three months ended March 31, 2020 as compared to $1,117,915
for the three months ended March 31, 2021. The increase is primarily due to the increase in product sales during the three months
ended March 31, 2021 compared to the same period in 2020. The increase was primarily due to the increase in product sales of Generation
2, DC fast chargers and home residential chargers during the three months ended March 31, 2021 compared to the same period in
2020. Furthermore, the three months ended March 31, 2021 included a reduction in the provision for excess and obsolete inventory
of $81,861 relating to the increased sales of residential home charger units. The three months ended March 31, 2020 included a
reduction in the provision for excess and obsolete inventory of $10,878.
Network
costs increased by $3,991 or 5%, to $79,393 during the three months ended March 31, 2021 as compared to $75,402 during the three
months ended March 31, 2020. 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 as compared to the same period in 2020.
Warranty
and repairs and maintenance costs increased by $261,151 or 127%, to $114,909 during the three months ended March 31, 2021 from
$114,909 during the three months ended March 31, 2020. The increase in 2021 was attributable to significant efforts expended to
reduce the backlog in warranty and repairs and maintenance cases. As of March 31, 2021, we recorded a liability of $9,000 which
represents the estimated cost of existing backlog of known warranty cases.
Cost
of ride-sharing services was $246,117 during the three months ended March 31, 2021 which relates to ride-sharing subscription
services with the City of Los Angeles which was associated with the acquisition of BlueLA in September 2020.
Depreciation
and amortization expense increased by $174,124, or 216%, to $254,914 for the three months ended March 31, 2021 as compared to
$80,790 for the three months ended March 31, 2020. The increase in depreciation expense was attributable to an increase
in the number of EV charging stations and vehicles purchased in December 2020 for the recently
acquired BlueLA operations.
Operating
Expenses
Compensation
expense increased by $2,633,684, or 125%, to $4,748,151 (consisting of approximately $4.3 million of cash compensation and benefits
and approximately $0.4 million of non-cash compensation) for the three months ended March 31, 2021. Compensation expense was $2,114,467
(consisting of approximately $1.9 million of cash compensation and benefits and approximately $0.2 million of non-cash compensation)
for the three months ended March 31, 2020. The increase in compensation expense for the three months ended March 31, 2021 compared
to the same period in 2020 was primarily related to increases in personnel and compensation in executive, marketing, sales and
operations departments as a result of the anticipated growth of the Company. In addition, compensation expense during the three
months ended March 31, 2021 compared the same period in 2020 increased due to additional personnel in conjunction with the acquisitions
of BlueLA and U-Go made during 2020.
General
and administrative expenses increased by $939,104 or 145%, to $1,584,987 for the three months ended March 31, 2021. General and
administrative expenses were $645,883 for the three months ended March 31, 2020. The increase was primarily attributable to increases
in legal, investor relations, marketing, consulting and other professional service expenditures of $527,901. Also contributing
to the increase in general and administrative expenses were operating expenditures related to the 2020 acquisitions of BlueLA
and U-Go which were acquired subsequent to March 31, 2020.
Other
operating expenses increased by $582,506, or 103%, to $1,149,706 for the three months ended March 31, 2021 from $567,200 for the
three months ended March 31, 2020. The increase was primarily attributable to increases in insurance, software licensing, rent,
and use tax expenditures of $566,611. The increase was partially offset by reductions in travel expenses as a result of COVID-19.
Other
Income
Other
income decreased by $35,738 from $57,728 for the quarter ended March 31, 2020 to $21,990 for the quarter ended March 31, 2021.
During the quarter ended March 31, 2021, other income was primarily attributable to interest income of $14,997. During the quarter
ended March 31, 2020, other income included earned interest income and dividend income of $15,853 from our cash and marketable
securities portfolio, and changes in value of Low Carbon Fuel Standard credits of $32,072.
Net
Loss
Our
net loss for the three months ended March 31, 2021 increased by $4,403,375 or 149%, to $7,364,475 as compared to $2,961,100 for
the three months ended March 31, 2020. The increase was primarily attributable to an increase in compensation expense and general
and administrative expenses.
Total
Comprehensive Loss
Our
total comprehensive loss for the three months ended March 31, 2021 was $7,420,513 whereas our total comprehensive loss for the
three months ended March 31, 2020 was $3,142,568.
Liquidity
and Capital Resources
We
measure our liquidity in a number of ways, including the following:
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|
March 31, 2021
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|
|
December 31, 2020
|
|
|
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(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
195,646,354
|
|
|
$
|
22,341,433
|
|
|
|
|
|
|
|
|
|
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Working Capital
|
|
$
|
230,972,150
|
|
|
$
|
19,579,775
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|
|
|
|
|
|
|
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Notes Payable (Gross)
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|
$
|
872,819
|
|
|
$
|
870,696
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During
the three months ended March 31, 2021, we financed our activities from proceeds derived from debt and equity financings occurring
in prior periods. A significant portion of the funds raised from the sale of capital stock has been used to cover working capital
needs and personnel, office expenses and various consulting and professional fees.
For
the three months ended March 31, 2021 and 2020, we used cash of $8,497,978 and $3,413,141, respectively, in operations. Our cash
use for the three months ended March 31, 2021 was primarily attributable to our net loss of $7,364,475, adjusted for net non-cash
expenses in the aggregate amount of $1,054,705, and $2,188,208 of net cash used in changes in the levels of operating assets and
liabilities. Our cash used for the three months ended March 31, 2020 was primarily attributable to our net loss of $2,961,100,
adjusted for net non-cash expenses in the aggregate amount of $220,023, and $672,064 of net cash used in changes in the levels
of operating assets and liabilities.
During
the three months ended March 31, 2021, net cash used in investing activities was $40,582,908, of which, $36,562,212 was provided
in connection with the purchase of marketable securities and $4,020,696 was used to purchase charging stations and other fixed
assets. During the three months ended March 31, 2020, net cash provided by investing activities was $799,614, of which, $1,100,516
was provided in connection with the sale of marketable securities and $300,902 was used to purchase charging stations and other
fixed assets.
During
the three months ended March. 31, 2021, cash provided in financing activities was $222,385,807, of which, $221,405,782 was provided
by the sale of common stock in a public offering and $999,540 was provided upon the exercise of warrants, this was offset by $19,515
used to pay down our liability in connection with internal use software. During the three months ended March. 31, 2020, cash used
in financing activities was $17,989 which was used to pay down our liability in connection with internal use software.
As
of March 31, 2021, we had cash, working capital and an accumulated deficit of $195,646,354, $230,972,150 and $194,715,923, respectively.
During the three months ended March 31, 2021, we had a net loss of $7,364,475.
In
January 2021, we completed an underwritten registered public offering of 5,660,000 shares of our common stock at a public offering
price of $41.00 per share. We received approximately $232.1 million in gross proceeds from the public offering, and approximately
$221.4 million in net proceeds after deducting the underwriting discount and offering expenses paid by us. The public offering
was made pursuant to our automatic shelf registration statement on Form S-3 filed with the SEC on January 6, 2021 and prospectus
supplement dated January 7, 2021.
We
are using the net proceeds from the public offering to supplement our operating cash flows to fund EV charging station deployment
and finance the costs of acquiring competitive and complementary businesses, products and technologies as a part of our growth
strategy, and for working capital and general corporate purposes.
We
have not yet achieved profitability and expect to continue to incur cash outflows from operations. It is expected that our operating
expenses will continue to increase and, as a result, we will eventually need to generate significant product revenues to achieve
profitability. Historically, we have been able to raise funds to support our business operations, although there can be no assurance
that we will be successful in raising significant additional funds in the future. We expect that our cash on hand will fund our
operations for at least 12 months after from the issuance date of the financial statements included in this quarterly report.
Since
inception, our operations have primarily been funded through proceeds received in equity and debt financings. We believe we have
access to capital resources and continue to evaluate additional financing opportunities. There is no assurance that we will be
able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds we might
raise will enable us to complete our development initiatives or attain profitable operations.
Our
operating needs include the planned costs to operate our business, including amounts required to fund working capital and capital
expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our
ability to successfully commercialize our 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 our product
and service offerings.
Critical
Accounting Policies and Estimates
The
preparation of financial statements and related disclosures in conformity with U.S. GAAP. These accounting principles require
us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial
statements as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates
and judgments upon which it relies are reasonably based upon information available to us at the time that it makes these estimates
and judgments. To the extent that there are material differences between these estimates and actual results, our financial results
will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the
most critical to aid in fully understanding and evaluating our reported financial results are described below.
The
following is not intended to be a comprehensive list of all of our accounting policies or estimates. Our accounting policies are
more fully described in Note 2 – Summary of Significant Accounting Policies, in our financial statements included elsewhere
in this quarterly report.
Revenue
Recognition
We
recognize revenue primarily from five different types of contracts:
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Charging
service revenue – company-owned charging stations - Revenue is recognized at the point when a particular charging
session is completed.
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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.
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Network
fees and other – 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.
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●
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Ride-sharing
services – Primarily related to a ride-sharing services agreement with the City of Los Angeles, which allows customers
the ability to rent electric vehicles through a subscription service. The Company recognizes revenue over the contractual
period of performance of the subscription.
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●
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Other
– Primarily related to charging service revenue from non-company-owned charging stations. Revenue is recognized
from non-company-owned charging stations at the point when a particular charging session is completed in accordance with a
contractual relationship between the Company and the owner of the station. Other revenues also comprises of revenues
generated from alternative fuel credits.
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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.
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.
Stock-Based
Compensation
We
measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award on the
date of grant. The fair value amount of the shares expected to ultimately vest is then recognized over the period for which services
are required to be provided in exchange for the award, usually the vesting period. The estimation of stock-based awards that will
ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such
amounts are recorded as a cumulative adjustment in the period that the estimates are revised. We account for forfeitures as they
occur.
Long-Lived
Assets
Long-lived
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. We assess the recoverability of its long-lived assets by monitoring current selling prices of car charging
units in the open market, the adoption rate of various auto manufacturers in the EV market and projected car charging utilization
at various public car charging stations throughout its network in determining fair value. An impairment loss would be recognized
when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying
amount.
Income
Taxes
We
account for income taxes pursuant to the asset and liability method of accounting for income taxes pursuant to FASB ASC 740, “Income
Taxes.” Deferred tax assets and liabilities are recognized for taxable temporary differences and operating loss carry forwards.
Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.
Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Operating
Leases
We
determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”)
assets and operating lease liabilities in our consolidated balance sheets.
ROU
assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make
lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on
the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use an incremental
borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments
at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease
terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease
expense for lease payments is recognized on a straight-line basis over the lease term.
Recently
Issued Accounting Standards
For
a description of our recently issued accounting standards, see Note 2 – Summary of Significant Accounting Policies in Part
1, Item 1 of this Amendment No.1 to the Form 10-Q.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons,
also known as “special purpose entities” (SPEs).