Blink Charging Co. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost- benefit relationship of possible controls and procedures. Management has designed disclosure controls and procedures that reasonably enable the management including the CEO and CFO to deliberate and take timely decisions regarding required disclosure. As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded the Company’s disclosure controls and procedures were not effective as of December 31, 2021 because of a material weakness. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to, in general, provide reasonable assurance to our company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. On May 10, 2021, pursuant to a Share Purchase Agreement dated April 21, 2021, the Company through its wholly owned subsidiary in the Netherlands, Blink Holdings, B.V. acquired all of the outstanding capital stock of Blue Corner NV, a Belgian company (“Blue Corner”). Headquartered in Belgium, with sales representative offices in several other European cities, Blue Corner owns and operates an EV charging network across Europe. As permitted by SEC guidance for newly acquired businesses, because it was not possible to complete an effective assessment of the acquired company’s controls by year-end, management has excluded Blue Corner from its evaluation of disclosure controls and procedures and internal controls over financial reporting and changes therein from the date of such acquisition through December 31, 2021. This subsidiary’s total assets and total revenues represent approximately 4% and 36%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. The framework used by management in making that assessment was the criteria set forth in the document entitled “2013 Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. In performing that assessment management considered the substantial improvements implemented in 2021 to the Company’s internal controls referenced above. Management however concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2021 and that a material weakness in internal control over financial reporting existed as described below. ● The Company identified certain design deficiencies in its management and analytical review controls associated with the financial close, revenue and inventory processes. These deficiencies, individually or in the aggregate, combined with inadequate compensating controls, created a reasonable possibility that a material misstatement to the consolidated financial statements might not be prevented or detected on a timely basis. Management expects to remediate these control deficiencies during 2022. Changes in Internal Control Over Financial Reporting During 2021, management continued to implement improvements to the Company’s internal control system. Throughout the year, from executive management on down, a strong commitment was made to the importance of internal control and to create and maintain an infrastructure to support the Company’s SOX compliance program. The Audit Committee was actively engaged and exercised continuous oversight throughout the process. Further, management and the Audit Committee fostered open and regular dialogue with the Company’s external auditors. Internal control, particularly those relating to subjective judgements, were strengthened and, when possible automated and centralized. Further, improvements included: ● All financially significant business processes and entity-level assessments were documented, evaluated, tested for their adequacy of design. ● The Company’s information technology security and general controls were likewise documented, evaluated and tested for their adequacy of design. ● The Company successfully tested for operational effectiveness its business process and entity level internal controls and information technology general and security controls. As a result of the internal controls initiatives referenced above, the following 2020 reported material weaknesses have been remediated and are operating effectively: ● The Company maintains effective controls over the management of logical and administrative access. ● The Company completed the operational effectiveness of some of the controls due to the timing of the remediation actions taken. Except as described above, there were no changes in the Company’s internal control over the financial reporting during the fourth quarter of 2021 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 33 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING To the Shareholders and Board of Directors of Blink Charging Co. Adverse Opinion on Internal Control over Financial Reporting We have audited Blink Charging Co. and Subsidiaries (the "Company") internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in “Management's Annual Report on Internal Control Over Financial Reporting”: ● Certain of the Company’s controls associated with the financial close and reporting, inventory and revenue processes were not designed effectively. Specifically, the Company had deficiencies in the design of process level controls. These deficiencies, combined with inadequate compensating review controls, created a reasonable possibility that a material misstatement, individually or in the aggregate, to the consolidated financial statements might not be prevented or detected on a timely basis and represents a material weakness in the Company’s internal control over financial reporting. These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal 2021 consolidated financial statements, and this report does not affect our report dated March 16, 2022 on those financial statements. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2021 and 2020 and the related consolidated statements of operations, comprehensive loss, changes in shareholders’ equity, and cash flows for the three years ended December 31, 2021 of the Company and our report dated March 16, 2022 expressed an unqualified opinion on those financial statements . Explanatory Paragraph – Excluded Subsidiaries As described in “Management Annual Report on Internal Control Over Financial Reporting,” management has excluded its wholly-owned subsidiary, Blue Corner NV, from its assessment of internal control over financial reporting as of December 31, 2021 because this entity was acquired by the Company in a purchase business combination during 2021. We have also excluded Blue Corner NV from our audit of internal control over financial reporting. This subsidiary’s total assets and total revenues represent approximately 3.4% and 34.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021 . Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management Annual Report on Internal Control Over Financial Reporting." Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate. /s/ Marcum llp Marcum LLP New York, NY March 16, 2022 34 ITEM 9B. OTHER INFORMATION. None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 35 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Information required by this item is incorporated by reference from our definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed within 120 days of our fiscal 2021 year-end. ITEM 11. EXECUTIVE COMPENSATION. Information required by this item is incorporated by reference from our definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed within 120 days of our fiscal 2021 year-end. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information required by this item is incorporated by reference from our definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed within 120 days of our fiscal 2021 year-end. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Information required by this item is incorporated by reference from our definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed within 120 days of our fiscal 2021 year-end. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Information required by this item is incorporated by reference from our definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed within 120 days of our fiscal 2021 year-end. 36 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS We have filed the exhibits listed on the accompanying Exhibit Index of this registration statement and below in this Item 15: Exhibit Incorporated by Reference Filed or Furnished Number Exhibit Description Form Exhibit Filing Date Herewith 2.1 Share Purchase Agreement, dated April 21, 2021, between the Shareholders of Blue Corner NV and Blink Holdings B.V. 8-K 2.1 05/13/2021 3.1 Articles of Incorporation, as amended most recently on August 17, 2017 10-K 3.1 04/17/2018 3.2 Bylaws, as amended most recently on January 29, 2018 10-K 3.2 04/17/2018 3.3 Certificate of Designations for Series D Preferred Stock 8-K 3.1 02/21/2018 4.1 Warrant Agency Agreement by and between the Company and Worldwide Stock Transfer, LLC and Form of Warrant Certificate for Registered Offering 8-K 4.1 02/21/2018 4.2 Form of Common Stock Purchase Warrant dated April 9, 2018 8-K 4.1 04/19/2018 4.3 Description of the Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 10-K 4.3 04/02/2020 10.1* Executive Employment Agreement by and between the Company and Michael D. Farkas dated October 29, 2010 10-K 10.17 04/16/2013 10.2* First Amendment to Executive Employment Agreement by and between the Company and Michael D. Farkas dated December 23, 2014 8-K 10.4 12/29/2014 10.3 * Second Amendment to Executive Employment Agreement by and between the Company and Michael D. Farkas dated July 24, 2015 10-K 10.4 07/29/2016 10.4 * Third Amendment to Executive Employment Agreement by and between the Company and Michael D. Farkas dated June 15, 2017 S-1/A 10.7 07/06/2017 10.10 Patent License Agreement, dated March 29, 2012, by and among Car Charging Group, Inc., Balance Holdings, LLC and Michael Farkas 10-K 10.21 04/16/2013 10.11 Patent License Agreement, dated March 11, 2016, by and among Car Charging Group, Inc., Balance Holdings, LLC and Michael Farkas 10-Q 10.3 08/04/2016 10.12 Revenue Sharing Agreement, dated April 3, 2013, by and among Car Charging Group, Inc., EV Pass Holdings, LLC, and Synapse Sustainability Trust, Inc. 8-K 10.2 04/26/2013 10.13 Office Lease Agreement, dated April 20, 2018, between Euro American Group, Inc. and Car Charging Inc. 8-K 10.1 05/15/2018 10.14* 2018 Incentive Compensation Plan Proxy - 08/14/2018 10.15 Intentionally omitted 37 Exhibit Incorporated by Reference Filed or Furnished Number Exhibit Description Form Exhibit Filing Date Herewith 10.16 Intentionally omitted 10.17* Employment Agreement, dated January 9, 2020, between Blink Charging Co. and Donald Engel 8-K 10.1 01/10/2020 10.18* Employment Offer Letter, dated February 7, 2020, between Blink Charging Co. and Michael P. Rama 8-K 10.1 02/11/2020 10.20* Employment Offer Letter, dated as of March 29, 2020, between Blink Charging Co. and Brendan S. Jones 8-K 10.1 04/20/2020 10.21* Executive Chairman and CEO Employment Agreement, dated May 28, 2021, between Blink Charging Co. and Michael D. Farkas 8-K 10.1 06/04/2021 10.22* Employment Agreement dated December 27, 2021, between Blink Charging Co. and Brendan Jones 8-K 10.1 12//29/2021 21.1 Subsidiaries of the Registrant X 23.1 Consent of Marcum LLP X 31.1 Rule 13a-14(a) Certification of Principal Executive Officer X 31.2 Rule 13a-14(a) Certification of Principal Financial Officer X 32.1** Section 1350 Certification of Principal Executive Officer X 32.2** Section 1350 Certification of Principal Financial Officer X 101.INS XBRL Instance. X 101.XSD XBRL Schema. X 101.PRE XBRL Presentation. X 101.CAL XBRL Calculation. X 101.DEF XBRL Definition. X 101.LAB XBRL Label. X * Indicates a management contract or compensatory plan or arrangement. ** In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not deemed filed for purposes of Section 18 of the Exchange Act. ITEM 16. FORM 10-K SUMMARY. None. 38 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BLINK CHARGING CO. Date: March 16, 2022 By: /s/ Michael D. Farkas Michael D. Farkas Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Date: March 16, 2022 By: /s/ Michael P. Rama Michael P. Rama Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Michael D. Farkas Chairman of the Board of Directors and Chief Executive Officer March 16, 2022 Michael D. Farkas (Principal Executive Officer) /s/ Michael P. Rama Chief Financial Officer (Principal Financial and Accounting Officer) March 16, 2022 Michael P. Rama /s/ Brendan S. Jones President, Chief Operating Officer and Director March 16, 2022 Brendan S. Jones /s/ Louis R. Buffalino Director March 16, 2022 Louis R. Buffalino /s/ Carmen Perez-Carlton Director March 16, 2022 Carmen Perez-Carlton /s/ Jack Levine Director March 16, 2022 Jack Levine /s/ Kenneth R. Marks Director March 16, 2022 Kenneth R. Marks /s/ Ritsaart J.M. van Montfrans Director March 16, 2022 Ritsaart J.M. van Montfrans 39 BLINK CHARGING CO. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 688 ) F-2 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-4 Consolidated Statements of Operations for the Years Ended December 31, 2021, 2020 and 2019 F-5 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021, 2020 and 2019 F-6 Consolidated Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2021 F-7 Consolidated Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2020 F-8 Consolidated Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2019 F-9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019 F-10 Notes to Consolidated Financial Statements F-12 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Blink Charging Co. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Blink Charging Co. and Subsidiaries (the “Company”), as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2021, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 16, 2022 , expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of the existence of material weaknesses. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F- 2 Business Combination – Blue Corner NV Critical Audit Matter Description As described in Note 3 to the consolidated financial statements, the Company acquired Blue Corner NV in May 2021. This acquisition was accounted for as a business combination. We identified the evaluation of the acquisition date fair value of the intangible assets acquired as a critical audit matter. The principal consideration for our determination that the evaluation of the acquisition date fair values of the intangible assets acquired was a critical audit matter is the high degree of subjective auditor judgment associated with evaluating management’s determination of the fair values of the acquired intangible assets, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions. The key assumptions used within the valuation models included prospective financial information, including future revenue growth and an applied discount rate. The calculated fair values are sensitive to changes in these key assumptions. How the Critical Audit Matter was addressed in the Audit Our audit procedures related to the evaluation of acquisition date fair values of intangible assets acquired included the following, among others: ● We evaluated the design effectiveness of certain controls over the acquisition-date valuation process, including controls over the development of the key assumptions such as the revenue growth and the applied discount rate. ● We obtained the purchase price allocation analyses from management and the third-party specialist engaged by management. - We assessed the qualifications and competence of management and the third-party specialist; and - We evaluated the methodologies used to determine the fair values of the intangible assets. ● We tested the assumptions used within the discounted cash flow models to estimate the fair values of the intangible assets, which included key assumptions such as the future revenue growth and the applied discount rate. ● We assessed the reasonableness of management’s forecast by inquiring with management to understand how the forecast was developed and comparing the projections to historical results and external sources including industry trends and peer companies’ historical data. ● We involved an internal valuation specialist who assisted in the evaluation and testing performed of the reasonableness of significant assumptions to the models, including the applied discount rate. Fair Value of Certain Performance Based Stock Option Awards Critical Audit Matter Description The Company issued a performance based stock option award with an aggregate grant date fair value of approximately $13.5 million, approximately $12.2 million of which is included in “ Compensation” in the Company’s consolidated statement of operations for the year ended December 31, 2021. As disclosed in Note 12 and Note 16 to the consolidated financial statements, the fair value of this performance based stock option award was estimated using a Monte Carlo simulation. Auditing management’s estimate of fair value was complex and highly judgmental due to the significant measurement uncertainty in determining the fair values of the performance based stock option award. In particular, the fair value estimates of performance based stock option awards are sensitive to changes in significant assumptions such as discount rates and volatility. These assumptions are affected by expected future market or economic conditions. How the Critical Audit Matter was addressed in the Audit We obtained a copy of the Company’s estimated fair value of the performance stock option award including an independent valuation report used by management, in accordance with ASC 718 ( Compensation – Stock Compensation ). To test the estimated fair values of the stock option award, our audit procedures included: ● We obtained the valuation report prepared by management’s third party valuation specialists. We performed the following procedures in respect to the valuation report: - We assessed the qualifications of the third party specialists who performed the analysis and prepared the report; and - We tested the mathematical accuracy of all the schedules used in the analysis. ● With assistance from our valuation specialists, we evaluated the reasonableness of the valuation methodology and significant inputs and assumptions, including the following: - Volatility; - Risk free rate; - Expected dividend yield; and - Expected term - Sensitivity analysis using inputs provided by management; and - Re-performed a Monte Carlo simulation model. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2014. New York, NY March 16, 2022 F- 3 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands except for share amounts) December 31, 2021 2020 Assets Current Assets: Cash and cash equivalents $ 174,795 $ 22,342 Accounts receivable, net 6,346 348 Inventory, net 10,369 1,816 Prepaid expenses and other current assets 1,020 1,219 Total Current Assets 192,530 25,725 Restricted cash 81 76 Property and equipment, net 14,563 5,636 Operating lease right-of-use asset 1,664 616 Intangible assets, net 3,455 46 Goodwill 19,390 1,501 Other assets 230 388 Total Assets $ 231,913 $ 33,988 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 7,134 $ 3,359 Accrued expenses and other current liabilities 5,678 1,329 Current portion of notes payable 10 574 Current portion of operating lease liabilities 547 404 Current portion of deferred revenue 2,858 479 Total Current Liabilities 16,227 6,145 Operating lease liabilities, non-current portion 1,531 285 Other liabilities 193 90 Notes payable, non-current portion - 297 Deferred revenue, non-current portion 128 7 Total Liabilities 18,079 6,824 Series B Convertible Preferred Stock, 10,000 shares designated, 0 shares issued and outstanding as of December 31, 2021 and 2020 - - Commitments and contingencies (Note 16) 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 December 31, 2021 and 2020 - - Series C Convertible Preferred Stock, 250,000 shares designated, 0 shares issued and outstanding as of December 31, 2021 and 2020 - - Series D Convertible Preferred Stock, 13,000 shares designated, 0 shares issued and outstanding as of December 31, 2021 and 2020 - - Preferred stock, value Common stock, $ 0.001 par value, 500,000,000 shares authorized, 42,423,514 and 35,951,097 shares issued and outstanding as of December 31, 2021 and 2020, respectively 42 36 Additional paid-in capital 458,046 214,479 Accumulated other comprehensive loss ( 1,784 ) - Accumulated deficit ( 242,470 ) ( 187,351 ) Total Stockholders’ Equity 213,834 27,164 Total Liabilities and Stockholders’ Equity $ 231,913 $ 33,988 The accompanying notes are an integral part of these consolidated financial statements. F- 4 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands except for share and per share amounts) For The Years Ended December 31, 2021 2020 2019 Revenues: Product sales $ 15,480 $ 4,432 $ 856 Charging service revenue -company-owned charging stations 2,978 773 1,359 Network fees 667 345 302 Warranty 220 129 53 Grant and rebate 400 22 22 Ride-sharing services 769 168 - Other 426 362 167 Total Revenues 20,940 6,231 2,759 Cost of Revenues: Cost of product sales 11,670 2,860 961 Cost of charging services - company-owned charging stations 707 171 152 Host provider fees 1,386 265 420 Network costs 454 516 255 Warranty and repairs and maintenance 892 331 451 Ride-sharing services 1,458 226 - Depreciation and amortization 1,531 345 128 Total Cost of Revenues 18,098 4,714 2,367 Gross Profit 2,842 1,517 392 Operating Expenses: Compensation 38,389 12,718 6,751 General and administrative expenses 10,516 4,047 1,917 Other operating expenses 9,606 2,566 2,196 Total Operating Expenses 58,511 19,331 10,864 Loss From Operations ( 55,669 ) ( 17,814 ) ( 10,472 ) Other Income (Expense): Interest income 9 16 73 Dividend and interest income 294 - - Foreign transaction loss ( 124 ) - - Gain on forgiveness of PPP loan 856 - - Gain on settlement of debt - - 310 Gain on settlement of accounts payable, net - 22 274 Change in fair value of derivative and other accrued liabilities 69 ( 173 ) ( 65 ) Other (expense) income, net ( 554 ) 103 231 Total Other Income (Expense) 550 ( 32 ) 823 Net Loss $ ( 55,119 ) $ ( 17,846 ) $ ( 9,649 ) Net Loss Per Share: Basic $ ( 1.32 ) $ ( 0.59 ) $ ( 0.37 ) Diluted $ ( 1.32 ) $ ( 0.59 ) $ ( 0.37 ) Weighted Average Number of Common Shares Outstanding: Basic 41,905,340 30,045,095 26,237,486 Diluted 41,905,340 30,045,095 26,237,486 The accompanying notes are an integral part of these consolidated financial statements. F- 5 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (in thousands) For the Years Ended December 31, 2021 2020 2019 Net Loss $ ( 55,119 ) $ ( 17,846 ) $ ( 9,649 ) Other Comprehensive Income (Loss): Reclassification adjustments of gain on sale of marketable securities included in net loss 438 ( 183 ) - Cumulative translation adjustments ( 1,784 ) - - Change in fair value of marketable securities - - 183 Total Comprehensive Loss $ ( 56,465 ) $ ( 18,029 ) $ ( 9,466 ) The accompanying notes are an integral part of these consolidated financial statements. F- 6 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statement of Changes in Stockholders’ Equity For the Year Ended December 31, 2021 (in thousands except for share amounts) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit Equity Balance - January 1, 2021 - 35,951,097 $ 36 $ 214,479 $ - $ ( 187,351 ) $ 27,164 Common stock issued in public offering, net of issuance costs [1] 5,660,000 6 221,327 - - 221,333 Common stock issued upon exercises of options and warrants 534,575 - 2,000 - - 2,000 Common stock issued upon cashless exercises of options and warrants 104,496 - - - - - Common stock issued as consideration for property and equipment 13,123 - 600 - - 600 Common stock issued as purchase consideration of Blue Corner 32,382 - 790 - - 790 Stock-based compensation 127,841 - 18,850 - - 18,850 Common stock issued upon conversion of Series D convertible preferred stock Common stock issued upon conversion of Series D convertible preferred stock, shares Common stock issued upon exercise of warrants Common stock issued upon exercise of warrants, shares Common stock issued in satisfaction of accrued issuable equity Common stock issued in satisfaction of accrued issuable equity, shares Options issued in satisfaction of accrued issuable equity Common stock issued upon cashless warrant exercise Common stock issued upon cashless warrant exercise, shares Common stock issued upon cashless option exercise Common stock issued upon cashless option exercise, shares Other comprehensive loss - - - ( 1,784 ) - ( 1,784 ) Net loss - - - - - ( 55,119 ) ( 55,119 ) Balance - December 31, 2021 - 42,423,514 $ 42 $ 458,046 $ ( 1,784 ) $ ( 242,470 ) $ 213,834 [1] Includes gross proceeds of $ 232,060 , less issuance costs of $ 10,727 . The accompanying notes are an integral part of these consolidated financial statements. F- 7 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statement of Changes in Stockholders’ Equity For the Year Ended December 31, 2020 (in thousands except for share amounts) Convertible Preferred Stock Accumulated Series D Common Stock Additional Paid-In Other Comprehensive Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Income Deficit Equity Balance - January 1, 2020 5,125 $ - 26,322,583 $ 26 $ 176,730 $ 183 $ ( 169,505 ) $ 7,434 Stock-based compensation - - 130,722 - 883 - - 883 Common stock issued in public offering [1] - - 3,597,833 4 19,172 - - 19,176 Common stock issued in public offering - - 3,597,833 4 19,172 - - 19,176 Common stock issued upon conversion of Series D convertible preferred stock ( 5,125 ) - 1,642,628 2 ( 2 ) - - - Common stock issued upon exercise of warrants - - 3,827,181 4 16,261 - - 16,265 Common stock issued in satisfaction of accrued issuable equity - - 102,402 - 200 - - 200 Common stock issued as consideration for acquisition - - 66,454 - 1,219 - - 1,219 Options issued in satisfaction of accrued issuable equity - - - - 16 - - 16 Common stock issued upon cashless warrant exercise - - 253,038 - - - - - Common stock issued upon cashless option exercise - - 8,256 - - - - - Other comprehensive income - - - - - ( 183 ) - ( 183 ) Net loss - - - - - - ( 17,846 ) ( 17,846 ) Balance - December 31, 2020 - $ - 35,951,097 $ 36 $ 214,479 $ - $ ( 187,351 ) $ 27,164 [1] Includes gross proceeds of $ 20,000 , less issuance costs of $ 819 . The accompanying notes are an integral part of these consolidated financial statements. F- 8 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statement of Changes in Stockholders’ Equity For the Year Ended December 31, 2019 (in thousands except for share amounts) Convertible Preferred Stock Accumulated Series D Common Stock Additional Paid-In Other Comprehensive Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Income Deficit Equity Balance - January 1, 2019 5,141 $ - 26,118,075 $ 26 $ 175,925 $ - $ ( 159,856 ) $ 16,095 Balance 5,141 $ - 26,118,075 $ 26 175,925 $ - $ ( 159,856 ) $ 16,095 Stock-based compensation - - 71,724 - 424 - - 424 Restricted stock issued in satisfaction of accrued issuable equity - - 135,722 - 381 - - 381 Common stock issued upon conversion of Series D convertible preferred stock ( 16 ) - 5,128 - - - - - Return and retirement of common stock - - ( 8,066 ) - - - - - Other comprehensive income - - - - - 183 - 183 Net loss - - - - - - ( 9,649 ) ( 9,649 ) Balance - December 31, 2019 5,125 $ - 26,322,583 $ 26 $ 176,730 $ 183 $ ( 169,505 ) $ 7,434 Balance 5,125 $ - 26,322,583 $ 26 176,730 $ 183 $ ( 169,505 ) $ 7,434 The accompanying notes are an integral part of these consolidated financial statements. F- 9 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) For The Years Ended December 31, 2021 2020 2019 Cash Flows From Operating Activities: Net loss $ ( 55,119 ) $ ( 17,846 ) $ ( 9,649 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,731 680 417 Non-cash lease expense 1,246 - - Dividend and interest income ( 62 ) - 105 Change in fair value of derivative and other accrued liabilities 69 ( 173 ) ( 65 ) Provision for bad debt 908 270 103 Loss on disposal of fixed assets 156 279 65 Loss on impairment of intangible assets - - 83 Gain on settlement of debt - - ( 310 ) Provision for slow moving and obsolete inventory ( 187 ) ( 392 ) 437 Gain on forgiveness of PPP loan ( 856 ) - - Gain on settlement of accounts payable, net - ( 22 ) ( 274 ) Stock-based compensation: Common stock 4,391 233 548 Options 14,717 715 181 Changes in operating assets and liabilities: Accounts receivable and other receivables ( 5,212 ) ( 336 ) ( 142 ) Inventory ( 9,227 ) ( 1,247 ) ( 2,023 ) Prepaid expenses and other current assets 710 ( 581 ) 168 Other assets 262 ( 226 ) ( 3 ) Accounts payable and accrued expenses 3,723 842 ( 470 ) Other liabilities 103 - - Lease liabilities ( 1,021 ) ( 184 ) ( 135 ) Deferred revenue 2,098 ( 82 ) 197 Total Adjustments 14,549 ( 224 ) ( 1,116 ) Net Cash Used In Operating Activities ( 40,570 ) ( 18,070 ) ( 10,765 ) Cash Flows From Investing Activities: Proceeds from sale of marketable securities 6,804 2,774 - Purchase of marketable securities ( 7,209 ) - - Capitalization of engineering costs ( 237 ) - - Purchase consideration of Blue Corner, net of cash acquired of $ 243 ( 22,742 ) - - Cash acquired in the purchase of BlueLA Carsharing, LLC - 3 - Cash acquired in the purchase of U-Go Stations, Inc. - 30 - Purchases of property and equipment ( 7,065 ) ( 2,547 ) ( 553 ) Net Cash (Used In) Provided By Investing Activities ( 30,449 ) 260 ( 553 ) Cash Flows From Financing Activities: Proceeds from sale of common stock in public offering [1] 221,333 19,175 - Proceeds from exercise of options and warrants 2,000 16,265 - Proceeds from issuance of notes payable - 856 - Repayment of notes payable - ( 165 ) - Payment of financing liability in connection with internal use software ( 62 ) ( 72 ) ( 52 ) Net Cash Provided By Financing Activities 223,271 36,059 ( 52 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents 206 - - Net Increase In Cash and Cash Equivalents and Restricted Cash 152,458 18,249 ( 11,370 ) Cash and Cash Equivalents and Restricted Cash - Beginning of Year 22,418 4,169 15,539 Cash and Cash Equivalents and Restricted Cash - End of Year $ 174,876 $ 22,418 $ 4,169 Cash and cash equivalents and restricted cash consisted of the following: Cash and cash equivalents $ 174,795 $ 22,342 $ 4,169 Restricted cash 81 76 - Total Cash and cash equivalents and restricted cash $ 174,876 $ 22,418 $ 4,169 [1] For the year ended December 31, 2021, includes gross proceeds of $ 232,060 , less issuance costs of $ 10,727 deducted directly from the offering proceeds. For the year ended December 31, 2020, includes gross proceeds of $ 20,000 , less issuance costs of $ 825 deducted directly from the offering proceeds. The accompanying notes are an integral part of these consolidated financial statements. F- 10 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Cash Flows — Continued (in thousands) For The Years Ended December 31 2021 2020 2019 Supplemental Disclosures of Cash Flow Information: Cash paid during the year for: Interest $ - $ - $ - Non-cash investing and financing activities: Reduction of additional pain-in capital for public offering issuance costs for public offering issuance costs that were previously paid $ - $ ( 39 ) $ - Common stock issued as consideration for property and equipment $ 600 $ - $ - Common stock issued as purchase consideration of Blue Corner $ 790 $ - $ - Options issued in satisfaction of accrued issuable equity $ - $ 16 $ - Net assets (excluding cash) acquired in the acquisition of BlueLA Carsharing, LLC $ - $ 84 $ - Internal use software obtained in exchange for financing liability $ 416 $ - $ - Right-of-use assets obtained in exchange for lease obligations $ 2,129 $ 598 $ - Change in fair value of marketable securities $ - $ - $ 183 Transfer of inventory to property and equipment $ ( 2,189 ) $ ( 1,980 ) $ ( 664 ) Common stock issued as purchase consideration for the acquisition of U-Go Stations,Inc. $ - $ 1,219 $ - Net assets (excluding cash) acquired in the acquisition of U-Go Stations, Inc. $ - $ 1,216 $ - Accrued interest converted to notes payable $ 5 $ 5 $ - Common stock issued in satisfaction of accrued issuable equity $ - $ 201 $ 381 Accrual of additional stock consideration for U-Go Stations, Inc. $ 60 $ - $ - The accompanying notes are an integral part of these consolidated financial statements. F- 11 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS 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 fees. Blink also operates a ride-sharing program through the Company’s wholly owned subsidiary, BlueLA Rideshare, LLC and the City of Los Angeles which allows customers the ability to rent electric vehicles through a subscription service. Risks and Uncertainties The Covid-19 pandemic has impacted global stock markets and economies. The Company closely monitors the impact of the continuing presence of Covid-19 and multiple Covid-19 variants. The Company has taken and continues to take precautions to ensure the safety of its employees, customers and business partners, while assuring business continuity and reliable service and support to its customers. The Company continues to receive orders for its products, although some shipments of equipment have been temporarily delayed. The global chip shortage and supply chain disruption has caused some delays in equipment orders from its contract manufacturer. As federal, state and local economies begin to return to pre-pandemic levels, the Company expects demand for charging station usage to increase, however, the Company is unable to predict the extent of such recovery due to the uncertainty of Covid-19. As a result, the Company is unable to predict the ultimate impact of equipment order delays, chip shortage and continuous presence of Covid-19 will have on its business, future results of operations, financial position, or cash flows. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Blink Charging Co. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the years ended December 31, 2021, 2020 and 2019 include the results of operations of BlueLA Carsharing LLC, U-Go Stations Inc., and Blue Corner NV. of their respective dates of acquisition. USE OF ESTIMATES Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, stock-based compensation, accounts receivable reserves, warranty reserves, inventory valuations ,goodwill, the valuation allowance related to the Company’s deferred tax assets, the carrying amount of intangible assets, right of use assets and related leases payable estimates of future EV sales and the effects thereon, derivative liabilities and the recoverability and useful lives of long-lived assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. F- 12 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents in the consolidated financial statements. The Company has cash on deposits in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. ACCOUNTS RECEIVABLE Accounts receivables are carried at their contractual amounts, less a provision for credit losses. As of December 31, 2021 and 2020, there was an allowance for credit losses of $ 1,262 and $ 356 , respectively. Management estimates the allowance for uncollectible accounts based on an ongoing review of existing economic conditions, the financial conditions of the customers, historical trends in credit losses, and the amount and age of past due accounts. The Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326)” on January 1, 2020 and the Company determined that an adjustment was not required as a result of the implementation of the new standard. INVENTORY Inventory is comprised of electric charging stations and related parts, which are available for sale or for warranty requirements. Inventory is stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. Inventory that is sold to third parties is included within cost of sales and inventory that is installed on the premises of participating owner/operator properties, where the Company retains ownership, is transferred to property and equipment at the carrying value of the inventory. The Company periodically reviews for slow-moving, excess or obsolete inventories. Products that are determined to be obsolete, if any, are written down to net realizable value. Based on the aforementioned periodic reviews, the Company recorded an inventory reserve for slow-moving or excess inventory of $ 162 and $ 217 as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company’s inventory was comprised solely of finished goods that are available for sale. F- 13 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED PROPERTY AND EQUIPMENT Property and equipment is stated at cost, net of accumulated depreciation and amortization which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets. SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Useful Lives Asset (In Years) Computer software and office and computer equipment 3 - 5 Machinery and equipment, automobiles, furniture and fixtures 3 - 10 Installed Level 2 electric vehicle charging stations 3 - 7 Installed Level 3 (DC Fast Chargers (“DCFC”)) electric vehicle charging stations 5 Building 39 When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statements of operations for the respective period. Minor additions and repairs are expensed in the period incurred. Major additions and repairs which extend the useful life of existing assets are capitalized and depreciated using the straight-line method over their remaining estimated useful lives. EV charging stations represents the cost, net of accumulated depreciation, of charging devices that have been installed on the premises of participating owner/operator properties or are earmarked to be installed. The Company had no EV charging stations that were not placed in service as of December 31, 2021 and 2020. The Company’s 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. The Company assesses 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. As electric vehicle charging requirements and technologies change, driven by federal, state or local regulatory authorities or by electric vehicle manufacturers or other technology or services providers for the charging station industry, in particular cellular connectivity technology, the Company may need to upgrade or adapt its charging station products or introduce new products in order to serve new vehicles, conform to new standards, or adapt new technologies to serve existing customers or new customers at substantial research, development, and network upgrades costs. During 2021, many cellular technology providers announced they will require the upgrade from 2G/3G connectivity to 4G LTE during 2022 (the “Upgrade”). The Upgrade is expected to cost approximately $ 1,750 to upgrade certain of the Company’s owned and operated EV charging stations. During the fourth quarter of 2021, the Company concluded the Upgrade was a triggering event in accordance with ASC 360 and, accordingly, assessed the recoverability of its long-lived assets related to its US EV charging stations by performing a recoverability test and determined the estimated undiscounted future cash flows (which included the estimated cash outflows related to the estimated cost of the Upgrade) related to its EV chargers exceeded their carrying value, accordingly, concluded no impairment existed as of December 31, 2021. See Note 5 – Property and Equipment for additional details. F- 14 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED GOODWILL Goodwill is the excess of consideration paid for an acquired entity over the fair value of the amounts assigned to assets acquired, including other identifiable intangible assets, and liabilities assumed in a business combination. To determine the amount of goodwill resulting from a business combination, the Company performs an assessment to determine the acquisition date fair value of the acquired company’s tangible and identifiable intangible assets and liabilities. Goodwill is required to be evaluated for impairment on an annual basis or whenever events or changes in circumstances indicate the asset may be impaired. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors include: macroeconomic and industry conditions, cost factors, overall financial performance and other relevant entity-specific events. If the entity determines that this threshold is met, then the Company may apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The Company determines fair value through multiple valuation techniques and weights the results accordingly. The Company is required to make certain subjective and complex judgments in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of its reporting units. The Company has elected to perform its annual goodwill impairment review on November 1 of each year utilizing a qualitative assessment to determine if it was more likely than not that the fair value of each of its reporting units was less than their respective carrying values and concluded that no impairment existed. During the years ended December 31, 2021, 2020 and 2019, no impairment charge relating to goodwill was recognized. See Note 7, Goodwill, for further information on goodwill. INTANGIBLE ASSETS Identifiable intangible assets primarily include trade name, customer relationships, favorable leases, internally developed technology, capitalized engineering costs and non-compete agreements. Amortizable intangible assets are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the assets may be impaired. If an indicator of impairment exists, the Company will compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment, if any, is measured as the difference between fair value and carrying value, with fair value typically based on a discounted cash flow model. There were no indicators, events or changes in circumstances that would indicate intangible assets were impaired during the year ended December 31. 2021. SEGMENTS The Company operates a single segment business. The Company’s Chief Executive Officer and Chief Operating Officer, who is the chief operating decision maker, views the Company’s operating performance on a consolidated basis as Blink’s only business is the sale and distribution of electric vehicle charging equipment and its associated revenues earned from customers and/or Property Partners who use equipment connected to its network. FOREIGN CURRENCY TRANSLATION The Company’s reporting currency is the United States dollar. The functional currency of certain subsidiaries is the Euro. Assets and liabilities are translated based on the exchange rates at the balance sheet date ( 1.1325 as of December 31, 2021), while expense accounts are translated at the weighted average exchange rate for the period of 1.1722 for the year ended December 31, 2021. Equity accounts are translated at historical exchange rates. The resulting translation adjustments are recognized in stockholders’ equity as a component of accumulated other comprehensive 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 gains and losses are charged to the statement of operations as incurred. Transaction losses attributable to foreign exchange were $ 124 during the year ended December 31, 2021. F- 15 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED REVENUE RECOGNITION The Company recognizes revenue pursuant to Topic 606 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under previous accounting principles generally accepted in the United States of America (“U.S. GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. 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 between the Company’s wholly-owned subsidiary, BlueLA Rideshare, LLC and 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 comprise revenues generated from alternative fuel credits. The following table summarizes our revenue recognized under ASC 606 in the consolidated statements of operations: SCHEDULE OF REVENUE RECOGNITION BY CONTRACT 2021 2020 2019 For The Years Ended December 31, 2021 2020 2019 Revenues - Recognized at a Point in Time Product sales $ 15,480 $ 4,432 $ 856 Charging service revenue - company-owned charging stations 2,978 773 1,359 Other 426 362 167 Total Revenues - Recognized at a Point in Time 18,884 5,567 2,382 Revenues - Recognized Over a Period of Time: Ride-sharing services 769 168 - Network and other fees 887 474 355 Total Revenues - Recognized Over a Period of Time 1,656 642 355 Total Revenue Under ASC 606 $ 20,540 $ 6,209 $ 2,737 Total Revenue $ 20,540 $ 6,209 $ 2,737 F- 16 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED REVENUE RECOGNITION – CONTINUED The following table summarizes our revenue recognized under ASC 606 in the consolidated statements of operations by geographical area: SCHEDULE OF REVENUE RECOGNITION BY GEOGRAPHICAL AREA 2021 2020 2019 For The Years Ended December 31, 2021 2020 2019 Revenues by Geographical Area U.S.A $ 10,578 $ 3,521 $ 2,678 International 9,962 2,688 59 Revenue 9,962 2,688 59 Total Revenue Under ASC 606 $ 20,540 $ 6,209 $ 2,737 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 December 31, 2021, the Company had $ 2,986 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 December 31, 2021. The Company expects to satisfy $ 2,858 of its remaining performance obligations for network fees, warranty revenue, product sales, and other and recognize the revenue within the next twelve months. During the year ended December 31, 2021, the Company recognized $ 514 of revenues related to network fees and warranty contracts, which was included in deferred revenues as of December 31, 2020. During the year ended December 31, 2020, the Company recognized $ 466 of revenues related to network fees and warranty contracts, which was included in deferred revenues as of December 31, 2019. During the year ended December 31, 2019, the Company recognized $ 191 of revenues related to network fees and warranty contracts, which was included in deferred revenues as of December 31, 2018. During the years ended December 31, 2021, 2020, and 2019, 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 years ended December 31, 2021, 2020 and 2019, the Company recorded $ 400 , $ 22 and $ 22 , respectively, related to grant and rebate revenue. As of December 31, 2021 and 2020, there was $ 70 of deferred grant and rebate revenue to be amortized. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $ 207 , $ 225 and $ 123 , respectively, of revenue related to alternative fuel credits, which is included within other revenue on the consolidated statements of operations. ADVERTISING COSTS The Company participates in various advertising programs. All costs related to advertising of the Company’s products and services are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2021, 2020 and 2019 were $ 84 , $ 15 and $ 8 , respectively, and are included in selling and marketing on the consolidated statements of operations. F- 17 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED CONCENTRATIONS As of December 31, 2021, accounts receivable from a significant customer were approximately 18 % of total accounts receivable. During the year ended December 31, 2021, sales to a significant customer represented 12 % of total revenue. During the year ended December 31, 2020, sales to a significant customer represented 25 % of total revenue. During the year ended December 31, 2020, sales to another significant customer represented 11 % of total revenue. During the year ended December 31, 2019, sales to a significant customer represented 11 % of product sales. During the year ended December 31, 2021 and 2020, the Company made purchases from a significant supplier that represented 23 % and 12 % respectively, of total purchases. STOCK-BASED COMPENSATION The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and then is recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The Company computes the fair value of equity-classified warrants and options granted using the Black-Scholes option pricing model. LEASES The Company determines 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, the Company uses its 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. The Company provides charging services at designated locations on the hosts property at which the charging station is situated. In consideration thereof, the host shares in the monthly revenue generated by the charging station on a percentage basis. As the charging station monthly revenue generated is variable, the host’s monthly revenue derived there from is similarly variable. In accordance with ASC 842 the hosts’ portion of revenue is variable and not predicated on an index or rate, as defined, these payments are not within the scope ASC 842. F- 18 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED INCOME TAXES The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. As of December 31, 2021 and 2020, the Company maintained a full valuation allowance against its deferred tax assets, since it is more likely than not that the future tax benefit on such temporary differences will not be realized. The Company recognizes the tax benefit from an uncertain income tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement by examining taxing authorities. The Company has open tax years going back to 2014 (or the tax year ended December 31, 2011 if the Company were to utilize its NOLs) which will be subject to audit by federal and state authorities upon filing. The Company’s policy is to recognize interest and penalties accrued on uncertain income tax positions in interest expense in the Company’s consolidated statements of operations. As of December 31, 2021 and 2020 the Company had no liability for unrecognized tax benefits. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Under ASC 740, the effects of new legislation are recognized upon enactment. Such provisions did not have a material impact on the Company’s consolidated financial statements. F- 19 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED 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: SCHEDULE OF OUTSTANDING DILUTED SHARES EXCLUDED FROM DILUTED LOSS PER SHARE COMPUTATION For the Years Ended December 31, 2021 2020 2019 Convertible preferred stock - - 1,643 Warrants 3,274,800 3,897 6,840 Options 983,505 573 266 Unvested restricted common stock 50,831 - - Total potentially dilutive shares 4,309,136 4,470 8,748 COMMITMENTS AND CONTINGENCIES Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. 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. RECENTLY ADOPTED ACCOUNTING STANDARDS In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” (“ASU 2019-12”) 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 In January 2021, the FASB issued ASU No. 2021-01 “Reference Rate Reform — Scope,” which clarified the scope of ASC 848 relating to contract modifications. The Company determined that this ASU did not have a material effect on the Company’s business operations and consolidated financial statements. F- 20 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED RECENTLY ADOPTED ACCOUNTING STANDARDS - CONTINUED In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). In April 2020, the FASB issued clarification to ASU 2016-13 within ASU 2020-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This guidance is effective for public business entities that meet the definition of a Securities and Exchange Commission filer, excluding eligible smaller reporting companies, for fiscal years beginning after December 15, 2019. The Company adopted ASU 2016-13 effective January 1, 2020 and its adoption did not have a material impact on its consolidated financial statements or disclosures. In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”) which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost. Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments. The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2020-06 effective January 1, 2022 which eliminates the need to assess whether a beneficial conversion feature needed to be recognized upon either (a) the issuance of new convertible instruments; or (b) the resolution of any contingent beneficial conversion features. In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company adopted ASU 2021-04 effective January 1, 2022 and its adoption did not have a material impact on its consolidated financial statements and disclosures. RECENTLY ISSUED ACCOUNTING STANDARDS In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805)” (“ASU 2021-08”). The ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The update is effective for annual and interim periods within the fiscal year beginning after December 15, 2022, and early adoption is permitted, including adoption in an interim period. The Company is evaluating this new standard and its impact on its consolidated financial statements and related disclosures. F- 21 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATIONS BLUE CORNER NV. ACQUISITION On May 10, 2021, pursuant to a Share Purchase Agreement dated April 21, 2021, the Company through its wholly-owned subsidiary in the Netherlands, Blink Holdings, B.V. closed on the acquisition from the shareholders of Blue Corner NV, a Belgian company (“Blue Corner”), of all of the outstanding capital stock of Blue Corner. Headquartered in Belgium, with sales representative offices in several other European cities, Blue Corner owns and operates an EV charging network across Europe. The acquisition of Blue Corner was made to enter the European market and provide an opportunity to expand the Company’s footprint in this region. The purchase price for the acquisition of all of Blue Corner’s outstanding capital stock was approximately $ 23,775 (or € 20,000 ), consisting of approximately $ 22,985 (or € 19,000 ) in cash and approximately $ 790 ( € 700 ) represented by 32,382 shares of the Company’s common stock (the “Consideration Shares”). The fair value of the 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 ) per share, reduced by a discount for illiquidity due to the 12-month lockup that exists on any sales or transfers. The Company executed management agreements with key Blue Corner personnel, including equity incentive packages consisting of additional shares of the Company’s common stock which is compensatory and not included in the purchase price for this acquisition. The Company entered into an escrow agreement pursuant to the Share Purchase Agreement, under which the Company paid approximately $ 2,100 ( € 1,725 ) of the purchase price into an escrow account for a period of up to 18 months following the closing to cover any losses or damages the Company may incur by reason of any misrepresentation or breach of warranty by Blue Corner under the Share Purchase Agreement. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for Blue Corner, the Company engaged a third-party independent valuation specialist to assist in the determination of fair values. The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as required by ASC Topic 805, Business Combinations (“ASC 805”). The Blue Corner acquisition will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the acquisition date, including intangible assets, accounts receivable, and certain fixed assets. F- 22 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATIONS – CONTINUED BLUE CORNER NV. ACQUISITION-CONTINUED The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date of Blue Corner: SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Purchase price allocation Purchase Consideration: Cash $ 22,985 Common stock 790 Total Purchase Consideration $ 23,775 Less: Fixed assets 1,322 Trade name 343 Customer relationships 1,800 Favorable leases 292 Internally developed technology 1,233 Non-compete agreements 148 Other liabilities ( 144 ) Other assets 283 Debt-free net working capital deficit ( 529 ) Fair Value of Identified Net Assets 4,748 Remaining Unidentified Goodwill Value $ 19,027 Changes in the balance of identified intangible assets and goodwill reflected on the balance sheet are the result of the impact of the change in foreign currency exchange rates. F- 23 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATIONS – CONTINUED BLUE CORNER NV. ACQUISITION-CONTINUED The components of debt free net working capital are as follows: Current assets: Cash $ 245 Accounts receivable 1,927 Prepaid expenses and other current assets 372 Inventory 1,359 Total current assets 3,903 Less current liabilities: Accounts payable and accrued expenses 4,131 Deferred revenue 301 Total current liabilities 4,432 Debt free net working capital deficit $ ( 529 ) Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from this acquisition. Goodwill of $ 19,027 from the acquisition of Blue Corner is expected to be deductible for income tax purposes. The consolidated financial statements of the Company include the results of operations from Blue Corner as of May 10, 2021 to December 31, 2021 and do not include results of operations for the year ended December 31, 2020. The results of operations of Blue Corner from May 10, 2021 to December 31, 2021 included revenues of $ 7,553 and a net loss of $ 2,567 . The following table presents the unaudited pro forma consolidated results of operations for the year ended December 31, 2021 as if the acquisition of Blue Corner had occurred at the beginning of fiscal year 2020. The pro forma information provided below is compiled from the pre-acquisition financial information of Blue Corner and includes pro forma adjustments for interest expense and adjustments to certain expenses. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2020 or (ii) future results of operations: SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS For the Years Ended December 31, 2021 2020 (Unaudited) (Unaudited) Revenues $ 23,882 $ 10,771 Net loss $ ( 55,942 ) $ ( 20,255 ) The above pro forma information includes pro forma adjustments to remove the effect of interest expense recognized in the results of operations of Blue Corner during the years ended December 31, 2021 and 2020 of $ 276 and $ 579 , respectively. F- 24 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATION – CONTINUED BLUELA CARSHARING, LLC ACQUISITION On September 11, 2020 (“Closing Date”), the Company’s wholly-owned subsidiary, Blink Mobility, LLC (the “Purchaser”), entered into an Ownership Interest Purchase Agreement (the “Agreement”) with Blue Systems USA, Inc. (the “Seller”), and pursuant thereto acquired from the Seller all of the ownership interests of BlueLA Carsharing, LLC (“BlueLA”). The consideration by the Purchaser for the acquisition of BlueLA included: (a) a cash payment of $1.00, which was paid to the Seller at closing, and (b) in the event BlueLA timely amends its carsharing services agreement with the City of Los Angeles, California, a cash payment to the Seller of $ 1,000 , payable within three business days after such amendment (“Contingent Consideration”). Under the Agreement, the amendment to the carsharing services agreement with the City of Los Angeles was to be obtained by BlueLA no later than December 31, 2020, subject to an extension to March 31, 2021 if a representative of the City of Los Angeles indicates to the Purchaser by the December 31, 2020 deadline its approval of the modifications to the carsharing services agreement, as more particularly outlined in the Agreement. As of December 31, 2021 and 2020, the Company did not receive an amendment nor indication to amend the carsharing service agreement thus the Company is not obligated to the Contingent Consideration. The Agreement contains customary representations, warranties and covenants for a transaction of this type and nature. Pursuant to the terms of the Agreement, the Seller will indemnify the Company, the Purchaser and their respective affiliates and representatives for breaches of the Seller’s representations and warranties, breaches of covenants and losses related to pre-closing taxes of BlueLA. The Purchaser has agreed to indemnify the Seller and its affiliates and representatives for any breaches of the Purchaser’s representations and warranties, breaches of covenants and losses related to post-closing taxes of BlueLA. The representations and warranties under the Agreement survived until December 10, 2021 . Pursuant to the Agreement, the Seller and BlueLA entered into a Transition Service Agreement pursuant to which the Seller and its affiliate, Bluecarsharing, S.A.S., provided certain transition and support services to BlueLA and the Purchaser following the closing and until December 31, 2020. The Seller also guaranteed the payment of up to $ 175 in parking fees payable by BlueLA to the City of Los Angeles, and BlueLA agreed to pay the Seller for any as-yet uncollected grants and rebates that BlueLA is entitled to obtain under its carsharing services agreement with the City of Los Angeles. In addition, the Seller agreed that, until September 10, 2023, the Seller will not and will cause its subsidiaries or affiliates not to directly or indirectly, (i) own, operate, acquire, or establish a business, or in any other manner engage alone or with others in carsharing and/or electric vehicle charging operation, or activity in the State of California (whether as an operator, manager, employee, officer, director, consultant, advisor, representative or otherwise) excluding any de minimis ownership interest in any business); or (ii) intentionally induce or attempt to induce any customer, supplier or other business relation of BlueLA to cease or refrain from working with BlueLA, or in any way adversely interfere with the relationship between any such customer, supplier or other business relation and BlueLA. The Company had acquired BlueLA in order to expand its presence in the State of California. Under the terms of the City of Los Angeles Agreement, amongst other obligations, during the initial term of the City of Los Angeles Agreement (defined as approximately six years from the effective date of the City of Los Angeles Agreement), BlueLA shall provide, manage, operate and maintain (i) usage agreements for electric vehicles in a quantity of no less than one hundred (100) (see payment terms of Car Lease Agreement) and (ii) charging stations in a quantity of no less than two hundred (200) at approximately forty (40) locations for an aggregate cost of approximately $20 per month. Following the initial term, the City of Los Angeles shall have the right to renew the City of Los Angeles Agreement for renewal terms of two (2) years each, with prior notice required, for a maximum of three renewal terms. The Company has accounted for this transaction as a business combination under ASC 805. Accordingly, the assets acquired and the liabilities assumed were recorded at their estimated fair value based on the date of acquisition. Goodwill from the acquisition principally relates to the Contingent Consideration as well as the excess value of assumed liabilities over the fair value of identified net assets. Since this transaction was a stock acquisition, goodwill is not tax deductible. At the date of acquisition, the purchase consideration consisted of cash, assumed liabilities and Contingent Consideration. The Contingent Consideration of $ 1,000 is non-interest bearing and was recorded at its estimated fair value of $ 245 based on a probability-weighted valuation technique used to determine the fair value of the Contingent Consideration on the acquisition date. See Note 11 – Fair Value Measurement for assumptions utilized in the estimate of fair value of the Contingent Consideration. During the fourth quarter of 2020, the Company recorded a measurement period adjustment in order reduce the Contingent Consideration to $0 as of December 31, 2020 with a corresponding decrease to goodwill. F- 25 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATIONS – CONTINUED BLUELA CARSHARING, LLC ACQUISITION - CONTINUED The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows: SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Purchase price allocation Purchase Consideration: Cash $ - Assumed liabilities 88 Total Purchase Consideration $ 88 Less: Right of use assets 598 Debt-free net working capital deficit ( 286 ) Non-current portion of lease liabilities ( 371 ) Fair Value of Identified Net Liabilities ( 59 ) Remaining Unidentified Goodwill Value $ 147 The components of debt free net working capital deficit are as follows: Current assets: Cash $ 3 Accounts receivable 73 Prepaid expenses and other current assets 88 Total current assets $ 164 Less current liabilities: Accounts payable 163 Current portion of lease liabilities 227 Accrued expenses and other current liabilities 60 Total current liabilities $ 450 Debt free net working capital deficit $ ( 286 ) F- 26 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATION – CONTINUED BLUELA CARSHARING, LLC ACQUISITION – CONTINUED The below table provides select unaudited, pro forma consolidated results of operations as if the acquisition of BlueLA had occurred on January 1, 2019. The pro forma results are not indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually occurred at the beginning of fiscal year 2019 or (ii) future results of operations. SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS For the Year Ended December 31, 2020 2019 (Unaudited) (Unaudited) Revenues $ 6,699 $ 3,337 Net loss $ ( 20,511 ) $ ( 18,323 ) The above pro forma information includes pro forma adjustments to remove the effect of the following non-recurring transactions: 1) Gain of $ 15,550 recognized in the Seller’s results of operations during the year ended December 31, 2020 related to the forgiveness of debt associated with liabilities to the Seller’s parent; 2) Interest expense of $ 165 and $ 322 recognized in the Seller’s results of operations during the year ended December 31, 2020 and 2019, respectively, associated with the debt due to the Seller’s parent that was subsequently forgiven; and 3) Nonrecurring merger expenses of $ 18 recognized in the Company’s results of operations during the year ended December 31, 2020. As of the date of the acquisition, the Company expected to collect all contractual cash flows related to receivables acquired in the acquisition. Acquisition related costs are expensed as incurred and are recorded within general and administrative expenses on the consolidated statements of operations. Acquisition-related costs were $ 18 during the year ended December 31, 2020. F- 27 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATION – CONTINUED U-GO STATIONS, INC. ACQUISITION On November 19, 2020 (“Closing Date”), the Company (the “Buyer”), entered into a Stock Purchase Agreement (the “SPA Agreement”) with U-Go Stations, Inc. (the “Target”), and pursuant thereto acquired from the Seller all of the ownership interests of U-Go Stations, Inc. (“U-Go”). The consideration by the Buyer for the acquisition of U-Go included: (a) 66,454 shares of the Company’s common stock and (b) $60 cash payment on the later of (i) the first anniversary of the closing date; or (ii) the date on which the final project of the Additional Projects is awarded to U-Go and paid in full, the funds shall be held in escrow by the escrow agent until the second anniversary of the closing date. At the expiration of the escrow agreement, the balance of the $ 60 , if any, shall be converted to the Company’s common stock determined by a formula outlined in the agreement. The SPA Agreement contains customary representations, warranties and covenants for a transaction of this type and nature. Pursuant to the terms of the SPA Agreement, the Seller indemnified the Company, the Purchaser and their respective affiliates and representatives for breaches of the Seller’s representations and warranties, breaches of covenants and losses. The Purchaser agreed to indemnify the Seller and its affiliates and representatives for any breaches of the Purchaser’s representations and warranties, breaches of covenants and losses. The Company has accounted for this transaction as a business combination under ASC 805. Accordingly, the assets acquired and the liabilities assumed were recorded at their estimated fair value based on the date of acquisition. Goodwill from the acquisition principally relates to the fair value of the common stock consideration as well as the excess value of assumed liabilities over the fair value of identified net assets. Since this transaction was a stock acquisition, goodwill is not tax deductible. At the date of acquisition, the purchase consideration consisted of the Company’s common stock. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows: SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Purchase price allocation Purchase Consideration: Share consideration $ 1,279 Total Purchase Consideration $ 1,279 Less: Fixed assets 418 Notes payable ( 165 ) Debt-free net working capital deficit ( 388 ) Fair Value of Identified Net Assets ( 135 ) Remaining Unidentified Goodwill Value $ 1,414 F- 28 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 3. BUSINESS COMBINATION – CONTINUED U-GO STATIONS, INC. ACQUISITION – CONTINUED The components of debt free net working capital deficit are as follows: Current assets: Cash $ 30 Accounts receivable 3 Prepaid expenses and other current assets 7 Total current assets $ 40 Less current liabilities: Accounts payable and accrued expenses 428 Total current liabilities $ 428 Debt free net working capital deficit $ ( 388 ) The below table provides select unaudited, pro forma consolidated results of operations as if the acquisition of U-Go had occurred on January 1, 2019. The pro forma results are not indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually occurred at the beginning of fiscal year 2019 or (ii) future results of operations. SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS For the Year Ended December 31, 2020 2019 (Unaudited) (Unaudited) Revenues $ 6,468 $ 2,832 Net loss $ ( 18,022 ) $ ( 9,734 ) The above pro forma information includes pro forma adjustments to remove the effect of the following non-recurring transactions: 1) Nonrecurring merger expenses of $ 6 recognized in the Company’s results of operations during the year ended December 31, 2020. As of the date of the acquisition, the Company expects to collect all contractual cash flows related to receivables acquired in the acquisition. Acquisition related costs are expensed as incurred and are recorded within general and administrative expenses on the consolidated statements of operations. Acquisition-related costs were $ 6 during the year ended December 31, 2020. F- 29 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2021 and 2020, prepaid expenses and other current assets was primarily comprised of alternative fuel credits , prepaid professional fees, prepaid maintenance, and prepaid insurance fees. 5. PROPERTY AND EQUIPMENT Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT 2021 2020 December 31, 2021 2020 EV charging stations $ 10,906 $ 5,511 Building 4,000 - Software 1,700 1,021 Automobiles 2,009 1,331 Office and computer equipment 844 305 Leasehold improvements 202 54 Machinery and equipment 139 162 Property and equipment, gross 19,800 8,384 Less: accumulated depreciation ( 5,237 ) ( 2,748 ) Property and equipment, net $ 14,563 $ 5,636 Depreciation and amortization expense related to property and equipment was $ 1,903 , $ 378 , and $ 187 for the years ended December 31, 2021, 2020 and 2019, respectively, of which, $ 1,531 , $ 345 and $ 128 , respectively, was recorded within cost of sales in the accompanying consolidated statements of operations. During the years ended December 31, 2021, 2020 and 2019, the Company disposed of property and equipment with a net book value of $ 798 , $ 368 and $ 0 which resulted in a loss on disposal of $ 156 , $ 279 and $ 65 , respectively, which was included within general and administrative expenses in the consolidated statements of operations. During the years ended December 31, 2021, 2020, and 2019 the Company transferred charging stations of $ 2,189 , $ 1,980 and $ 664 from inventory into property and equipment. On January 22, 2021, the Company completed its purchase of approximately 10,000 square feet of office condominium space which became the Company’s corporate headquarters. The purchase price was $ 4,000 , of which, $ 600 was paid in the form of the Company’s common stock ( 13,123 shares) and $ 3,400 in cash. See Note 3 - Business Combination for additional details of the acquisition of property and equipment. F- 30 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 6. INTANGIBLE ASSETS Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS 2021 2020 December 31, 2021 2020 Internal use software $ 600 $ 184 Capitalized engineering costs 237 - Trade name 340 - Customer relationships 1,677 - Favorable leases 272 - Internally developed technology 1,148 - Non-compete agreements 138 - Intangible assets, gross 4,413 184 Less: accumulated amortization ( 958 ) ( 138 ) Intangible assets, net $ 3,455 $ 46 During the year ended December 31, 2019, the Company determined the carrying value of its trademarks and patents was not recoverable and, as a result, recorded an impairment charge of $ 83 which was included within general and administrative expenses on the consolidated statement of operations. Amortization expense during the years ended December 31, 2021, 2020, and 2019 were $ 938 , $ 61 , and $ 89 , respectively. Changes in the balance of intangible assets and goodwill reflected on the balance sheet are the result of the impact of the change in foreign currency exchange rates. See Note 3 - Business Combination and Note 7- Goodwill for additional details. The estimated future amortization expense is as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE For the Years Ending December 31, Total 2022 $ 1,239 2023 847 2024 576 2025 400 2026 394 $ 3,455 F- 31 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 7. GOODWILL Goodwill consisted of the following: SCHEDULE OF GOODWILL December 31, 2021 2020 Goodwill Beginning balance as of January 1 $ 1,501 $ - Acquisition of U-Go Stations, Inc. - 1,354 Acquisition of BlueLA Carsharing, LLC - 147 Accrual of additional consideration for U-Go Stations, Inc. 60 - Acquisition of Blue Corner 19,027 - Effect of translation adjustments ( 1,198 ) - Ending balance as of December 31 $ 19,390 $ 1,501 8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 2021 2020 December 31, 2021 2020 Accrued host fees $ 130 $ 120 Accrued professional fees 543 110 Accrued wages 2,678 403 Accrued commissions 144 47 Warranty payable 10 10 Accrued income, property and sales taxes payable 462 357 Accrued issuable equity 454 184 Accrued purchases 117 - Internal use software liability 383 - Other accrued expenses 757 98 Total accrued expenses $ 5,678 $ 1,329 WARRANTY PAYABLE The Company provides a limited product warranty against defects in materials and workmanship for its Blink Network residential and commercial chargers, ranging in length from one to two years. The Company accrues for estimated warranty costs at the time of revenue recognition and records the expense of such accrued liabilities as a component of cost of sales. Estimated warranty costs are based on known warranty issues and anticipated warranty costs. Should actual cost to repair and failure rates differ significantly from estimates, the impact of these unforeseen costs would be recorded as a change in estimate in the period identified. For the year ended December 31, 2020 and 2019, the change in reserve was approximately $ ( 2 ) and $ 2 , respectively. Warranty expenses for the years ended December 31, 2021, 2020 and 2019 were $ 210 , $ 120 and $ 187 , respectively, which has been included within cost of revenues on the consolidated statement of operations. As of December 31, 2021 and 2020 the Company recorded a warranty liability of $ 10 which represents the estimated cost to repair those chargers under warranty or host owned chargers for which the host has procured a maintenance contract. The Company records maintenance and repairs expenses for chargers it owns deployed at host locations as incurred. The Company estimates an approximate cost of $ 73 to repair those deployed chargers which it owns as of December 31, 2021. F- 32 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 9. NOTES PAYABLE PAYCHECK PROTECTION PROGRAM On May 7, 2020, the Company received $ 856 in connection with a loan (the “PPP Loan”) under the CARES Act Paycheck Protection Program (the “PPP”). The PPP provides for loans to qualifying businesses for amounts of up to 2.5 times their average monthly payroll expenses. The loan principal and accrued interest are forgivable, as long as the borrower uses loan proceeds for eligible purposes during the covered period following disbursement, such as payroll, benefits, rent, and utilities, and maintains its payroll levels. The amount of loan forgiveness is reduced if the borrower terminates employees or reduces salaries during the covered period, subject to certain qualifications and exclusions. As of December 31, 2020, the Company had utilized all $ 856 of the proceeds of the PPP Loan. During the year ended December 31, 2021, the Company obtained forgiveness for its PPP Loans in the amount of $ 856 and recorded a gain on settlement of debt on the consolidated statement of operations for the year ended December 31, 2021. OTHER NOTES PAYABLE In connection with the U-Go acquisition, the Company had also assumed $ 165 in notes payable, however, these notes were subsequently repaid during the year ended December 31, 2020. See Note 3 – Business Combination – U-GO Stations, Inc. Acquisition for details. F- 33 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 10. DEFERRED REVENUE The Company is the recipient of various private and governmental grants, rebates and marketing incentives. Reimbursements of periodic expenses are recognized as income when the related expense is incurred. Private and government grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the recognition of the related depreciation expense of the related asset over their useful lives. Deferred revenue consists of the following: SCHEDULE OF DEFERRED REVENUE 2021 2020 December 31, 2021 2020 Prepaid network, charging and maintenance fees $ 2,647 $ 288 AFIG-PAT 70 70 Other 269 128 Total deferred revenue 2,986 486 Deferred revenue, non-current portion ( 128 ) ( 7 ) Current portion of deferred revenue $ 2,858 $ 479 It is anticipated that deferred revenue as of December 31, 2021 will be recognized as follows: SCHEDULE OF DEFERRED REVENUE RECOGNIZED For the Year Ending December 31, Revenue 2022 $ 2,858 2023 118 2024 3 2025 3 2026 3 Thereafter 1 Total $ 2,986 F- 34 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 11. FAIR VALUE MEASUREMENT Assumptions utilized in the valuation of Level 3 liabilities are described as follows: SUMMARY OF ASSUMPTIONS USED FOR VALUATION OF FAIR VALUE LIABILITIES For the Years Ended December 31, 2021 2020 2019 Risk-free interest rate 0.07 %- 0.39 % 0.16 %- 1.69 % 1.47 %- 2.45 % Contractual term (years) 1.00 1.00 - 8.00 1.00 - 10.00 Expected volatility 90 %- 148 % 78 %- 143.8 % 74 %- 140 % Expected dividend yield 0.00 % 0.00 % 0.00 % The following table sets forth a summary of the changes in the fair value of Level 3 warrant liabilities that are measured at fair value on a recurring basis: SUMMARY OF CHANGES IN FAIR VALUE OF LEVEL 3 WARRANT LIABILITIES MEASURED AT RECURRING BASIS 2021 2020 December 31, 2021 2020 Warrant Liability Beginning balance as of January 1 $ 159 $ 5 Change in fair value of warrant liability ( 69 ) 154 Ending balance as of December 31 $ 90 $ 159 Assets and liabilities measured at fair value on a recurring or nonrecurring basis are as follows: SUMMARY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE RECURRING AND NONRECURRING BASIS December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Alternative fuel credits $ - $ 58 $ - $ 58 Total assets $ - $ 58 $ - $ 58 Liabilities: Common stock liability $ 364 $ - $ - $ 364 Warrant liability - - 90 90 Total liabilities $ 364 $ - $ 90 $ 454 December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Alternative fuel credits $ - $ 31 $ - $ 31 Total assets $ - $ 31 $ - $ 31 Liabilities: Warrant liability $ - $ - $ 159 $ 159 Total liabilities $ - $ - $ 159 $ 159 F- 35 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY AUTHORIZED CAPITAL The Company is authorized to issue 500,000,000 shares of common stock, $ 0.001 par value, and 40,000,000 shares of preferred stock, $ 0.001 par value. The holders of the Company’s common stock are entitled to one vote per share. The preferred stock is designated as follows: 20,000,000 shares to Series A Convertible Preferred Stock; 10,000 shares to Series B Convertible Preferred Stock; 250,000 shares to Series C Convertible Preferred Stock; 13 shares to Series D Convertible Preferred Stock; and 19,727 shares undesignated. OMNIBUS INCENTIVE PLANS On September 7, 2018, the Board of the Company, as well as a majority of the Company’s shareholders approved the Company’s 2018 Incentive Compensation Plan (the “2018 Plan”), which enables the Company to grant stock options, restricted stock, dividend equivalents, stock payments, deferred stock, restricted stock units, stock appreciation rights, performance share awards, and other incentive awards to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the 2018 Plan may be non-qualified stock options or incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be non-qualified stock options. The option price must be at least 100 % of the fair market value on the date of grant and if issued to a 10 % or greater shareholder must be at least 110 % of the fair market value on the date of the grant. The 2018 Plan is to be administered by the Compensation Committee of the Board, which shall have discretion over the awards and grants thereunder. The aggregate maximum number of shares of common stock for which stock options or awards may be granted pursuant to the 2018 Plan is 5,000,000 , adjusted as provided in Section 4 of the 2018 Plan. No awards may be issued on or after September 7, 2028. As of December 31, 2021 and 2020, options to purchase 983,505 and 617,071 shares of options were outstanding respectively. As of December 31, 2021 and 2020, 1,244,232 and 1,151,299 shares of common stock were outstanding to employees and members of the Board of Directors of the Company, respectively. As of December 31, 2021 and 2020, there were 2,772,263 and 3,231,630 securities available for future issuance under the 2018 Plan, respectively. 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 $ 232,060 in gross proceeds from the public offering, and $ 221,406 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. F- 36 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY – CONTINUED AT-THE-MARKET OFFERING On April 17, 2020, the Company entered into a sales agreement (“Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”) to conduct an “at-the-market” equity offering program (the “ATM”), pursuant to which the Company may issue and sell from time-to-time shares of its common stock having an aggregate offering price of up to $ 20,000 (the “Shares”) through the Agent. Sales of the Shares under the Sales Agreement were made in transactions that were deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions, including on the Nasdaq Capital Market, at market prices or as otherwise agreed to with the Agent. A “shelf” registration statement on Form S-3 for the Shares was filed with the SEC, which became effective on September 16, 2019, and a prospectus supplement thereto was filed with the SEC on April 17, 2020. During 2020 and through December 31, 2020, the Company sold an aggregate of 3,597,833 shares of common stock under the ATM program for aggregate gross proceeds of $ 20,000 , less issuance costs of $ 819 which were recorded as a reduction to additional paid-in capital. PREFERRED STOCK SERIES D CONVERTIBLE PREFERRED STOCK On February 22, 2019, JMJ elected to convert 16 shares of Series D Convertible Preferred Stock into 5,128 shares of the Company’s common stock at a conversion price of $ 3.12 per share. During the year ended December 31, 2020, a holder elected to convert 5,125 shares of Series D Convertible Preferred Stock into 1,642,628 shares of the Company’s common stock at a conversion price of $ 3.12 per share. The Company determined that the Series D Convertible Preferred Stock did not include a beneficial conversion feature. There are no longer any currently outstanding shares of Series D Convertible Preferred Stock. F- 37 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY – CONTINUED COMMON STOCK On February 19, 2019, the Company retired 8,066 shares of common stock in accordance with a settlement agreement with the former members of 350 Green LLC. See Note 16 – Commitments and Contingencies – Litigation and Disputes for additional details. During the year ended December 31, 2019, the Company issued an aggregate of 178,615 shares of common stock to independent board members and an former officer of the Company pursuant to a certain agreement with an aggregate grant date fair value of $ 474,513 such amount was previously accrued for as of December 31, 2018. During the year ended December 31, 2019, the Company issued an aggregate of 28,831 shares of common stock to consultants with an aggregate issuance date fair value of $ 73,728 . During the year ended December 31, 2020, the Company issued an aggregate of 233,124 shares of common stock to employees of the Company and consultants with an aggregate issuance date fair value of $ 525,769 . See Note 12 – Stockholder’s Equity - Preferred Stock for details associated with the issuance of common stock in connection with the conversion of Series D Convertible Preferred Stock. During the year ended December 31, 2021, the Company issued 32,382 shares as partial consideration for its acquisition of Blue Corner. During the year ended December 31, 2021, the Company issued an aggregate of 127,841 shares as compensation for services. The shares had an issuance date fair value of $ 3,950 . During the year ended December 31, 2021, the Company issued 13,123 shares as partial consideration for the purchase of property and equipment. See Note 5 – Property and Equipment for additional details. During the year ended December 31, 2021, the Company issued an aggregate of 104,496 shares of common stock pursuant to cashless warrant ad options exercises. See elsewhere within this Note, Note 3- Business Combinations and Note 14 – Related Parties for additional details. STOCK-BASED COMPENSATION The Company recognized stock-based compensation expense related to common stock, stock options and warrants for the years ended December 31, 2021, 2020, and 2019 of $ 19,108 , $ 948 , and $ 729 , respectively, which is included within compensation expense on the consolidated statement of operations. As December 31, 2021, there was $ 5,370 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 1.23 years, which includes $ 962 of unrecognized stock-based compensation of expense relating to the special four-year performance option for the Company’s CEO which is expected to be fully recognized by January 2022. F- 38 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY – CONTINUED WARRANT AND OPTION VALUATION The Company has computed the fair value of certain warrants and options granted using the Black-Scholes option pricing model. Option forfeitures are reduction of previous expensed amount at the time of occurrence. The expected term used for options issued is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatility of the Company over a period equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. STOCK OPTIONS In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions: SUMMARY OF BLACK-SCHOLES OPTION PRICING MODEL TO STOCK OPTIONS GRANTED ASSUMPTION For the Years Ended December 31, 2021 2020 2020 Risk free interest rate 0.09 %- 1.539 % 0.33 %- 1.44 % 1.52 %- 1.71 % Expected term (years) 1.00 - 8.00 5.00 - 8.00 5.00 - 6.00 Expected volatility 115.3 %- 140.7 % 121.8 %- 139.9 % 131.10 %- 138.40 % Expected dividends 0.00 % 0.00 % 0.00 % During the year ended December 31, 2020, the Company issued an aggregate of 8,256 shares of the Company’s common stock pursuant to the cashless exercise of options. During the year ended December 31, 2021, the Company issued an aggregate of 38,496 shares of the Company’s common stock pursuant to the cashless exercise of options. During the year ended December 31, 2021, the Company issued an aggregate of 136,500 shares of the Company’s common stock pursuant to a option exercise for aggregate net proceeds of $ 307 . See Note 16 – Commitments and Contingencies – CEO Employment Agreement for details associated with options granted to the Company’s CEO. F- 39 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY – CONTINUED STOCK OPTIONS – CONTINUED A summary of the option activity during the year ended December 31, 2021 is presented below: SUMMARY OF OPTIONS ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Shares Price In Years Value Outstanding, December 31, 2020 572,838 $ 4.38 Granted  616,312 38.15 Exercised ( 183,594 ) 4.08 Cancelled/forfeited/expired ( 22,051 ) 1.38 Outstanding, December 31, 2021 983,505 $ 25.25 4.6 $ 9,416,509 Exercisable, December 31, 2021 171,531 $ 5.59 3.6 $ 3,720,132 The following table presents information related to stock options at December 31, 2021: SCHEDULE OF STOCK OPTIONS Options Outstanding Options Exercisable Weighted Weighted Range of Average Outstanding Average Exercisable Exercise Exercise Number of Remaining Life Number of Price Price Options In Years Options $ 1.73 -$ 9.14 2.24 351,653 3.4 155,191 $ 25.59 -$ 38.45 37.47 591,320 0.2 15,640 $ 40.82 -$ 59.22 46.50 40,532 0.0 700 983,505 3.6 171,531 F- 40 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 12. STOCKHOLDERS’ EQUITY – CONTINUED STOCK WARRANTS Note 11– Fair Value Measurement, and elsewhere within this note for additional details. During the year ended December 31, 2021, the Company issued an aggregate of 388,101 shares of the Company’s common stock pursuant to the exercise of warrants at an exercise price of $ 4.25 per share for aggregate gross proceeds of $ 1,619 . During the year ended December 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 16 – Commitments and Contingencies – Litigation and Disputes for details. The following table accounts for the Company’s warrant activity for the year ended December 31, 2021: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Shares Price In Years Value Outstanding, January 1, 2021 3,893,223 $ 4.93 Issued - - Exercised ( 622,661 ) 4.25 Cancelled/forfeited/expired - - Outstanding, December 31, 2021 3,270,562 $ 5.06 1.1 $ 77,877,434 Exercisable, December 31, 2021 3,270,562 $ 5.06 1.1 $ 77,877,434 The following table presents information related to stock warrants at December 31, 2021: SCHEDULE OF STOCK WARRANTS Warrants Outstanding Warrants Exercisable Weighted Weighted Range of Average Outstanding Average Exercisable Exercise Exercise Number of Remaining Life Number of Price Price Warrants In Years Warrants $ 4.25 -$ 35.00 $ 4.79 3,253,903 1.1 3,253,903 $ 50.00 -$ 150.00 $ 57.99 16,659 0.0 16,659 3,270,562 1.1 3,270,562 F- 41 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 13. INCOME TAXES The Company is subject to U.S. federal and various state income taxes. The income tax provision (benefit) for the years ended December 31, 2021, 2020, and 2019 consists of the following: SCHEDULE OF INCOME TAX PROVISION (BENEFIT) For the Year Ended December 31 2021 2020 2019 Federal: Current $ - $ - $ - Deferred ( 5,691 ) ( 4,452 ) 4,684 State: Current $ - $ - $ - Deferred ( 1,348 ) ( 1,060 ) 1,115 ( 7,039 ) ( 5,512 ) 5,799 Change in valuation allowance 7,039 5,512 ( 5,799 ) Income tax provision (benefit) $ - $ - $ - No current tax provision has been recorded for the years ended December 31, 2021, 2020, and 2019 because the Company had net operating losses for federal and state tax purposes. The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. The Company will perform a Section 382 analysis in the future. The related decrease in the deferred tax asset will be offset by the decrease in valuation allowance. F- 42 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 13. INCOME TAXES – CONTINUED A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: SUMMARY OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE AND EFFECTIVE INCOME TAX RATE 2021 2020 2019 For the Year Ended December 31 2021 2020 2019 Tax benefit at federal statutory rate ( 21.0 ) % ( 21.0 )% ( 21.0 )% State income taxes, net of federal benefit ( 2.4 ) % ( 5.0 )% ( 5.0 )% Permanent differences: Stock Compensation 0.2 % ( 4.0 ) % 0.0 % Other 7.9 % 0.0 % 0.8 % Tax Credits ( 0.1 ) % 0.0 % 0.2 % Income from non-includable foreign entities 1.6 % Prior year differences 1.0 % ( 1.0 )% 85.1 % Change in valuation allowance 12.8 % 31.0 % ( 60.1 )% Effective income tax rate 0.0 % 0.0 % 0.0 % The Company has determined that a valuation allowance for the entire net deferred tax asset is required. A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero, the amount that will more likely not be realized. The disaggregation of the Company’s domestic and foreign pre-tax loss for the years ended December 31, 2021, 2020, and 2019 is as follows: SCHEDULE OF DISAGGREGATION OF DOMESTIC AND FOREIGN PRE-TAX LOSS 2021 2020 2019 For the Year Ended December 31 2021 2020 2019 U.S. $ ( 50,803 ) $ ( 17,635 ) $ ( 9,434 ) Foreign ( 4,316 ) ( 211 ) ( 215 ) Total $ ( 55,119 ) $ ( 17,846 ) $ ( 9,649 ) F- 43 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 13. INCOME TAXES – CONTINUED The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2021 2020 For the Year Ended December 31 2021 2020 Deferred Tax Assets: Net operating loss carryforwards $ 32,351 $ 26,066 Stock-based compensation 1,210 401 Accruals 663 128 Goodwill 728 729 Intangible assets 183 212 Inventory 10 56 Allowance for doubtful accounts 216 93 Mark to Market Investments 83 - Capital Loss 22 22 Tax Credits 593 562 Deferred tax assets, gross 36,059 28,269 Deferred Tax Liabilities: Fixed assets ( 793 ) ( 31 ) Deferred Revenue 4 - Other ( 2 ) ( 8 ) Deferred Tax Liabilities, gross ( 791 ) ( 39 ) Net deferred tax assets 35,268 28,230 Valuation Allowance ( 35,268 ) ( 28,230 ) Deferred tax assets,net of valuation allowance - - Change in valuation allowance $ ( 7,038 ) $ 5,511 As of December 31, 2021, the Company had net operating loss carry forwards for federal and state income tax purposes of approximately $ 124,400 , of which, $ 62,300 may be used to offset future taxable income through 2037 and the remaining $ 62,100 of net operating loss carry forwards incurred in 2021, 2020 and 2019 do not have an expiration date. The Company has approximately $ 593 in business credits expiring between 2030 and 2041. F- 44 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 14. RELATED PARTIES 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 year ended December 31, 2021, 2020, 2019, the Company recognized sales of $ 811 , $ 273 and $ 42 , respectively, to Hellas. As of December 31, 2021 and 2020 the Company had a receivable from Hellas of approximately $ 6 and $ 0 , respectively. 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 December 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 years ended December 31, 2021, 2020, and 2019. BLUE CORNER As of December 31, 2021, three senior management employees in the recently acquired entity Blue Corner had an ownership interest in a major supplier of charging equipment for Blue Corner. As of December 31, 2021, the Company owed approximately $ 800 to this supplier. During the year ended December 31, 2021 the Company purchased approximately $ 3,604 of inventory from this supplier. 15. LEASES OPERATING LEASES See Note 3 – Business Combination regarding details associated with lease agreements for (i) certain parking locations in connection with the City of Los Angeles Agreement. On March 5, 2019, the Company entered into a 26-month lease agreement for an additional 1,241 square feet of office space in its current Miami Beach office building, beginning April 1, 2019 and ending May 31, 2021. The tenant and landlord have the option to cancel the contract after the first six months with 90 day’s written notice. The lease does not contain an option to extend past the lease term. On November 7, 2019 the Company entered into a 18-month lease agreement for an additional 1,600 square feet of office space in its current Miami Beach office building, beginning December 1, 2019 and ending May 31, 2021. The tenant and landlord have the option to cancel the contract after the first six months with 90 day’s written notice. The lease does not contain an option to extend past the lease term. During the year ended December 31, 2021, the Company entered into a lease agreement 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 includes a build-out allowance of $ 137 . Monthly payments under the lease are $ 18 per month. The lease also includes a security deposit of $ 22 . As of December 31, 2021, the Company had no leases that were classified as a financing lease. As of December 31, 2021, the Company did not have additional operating and financing leases that have not yet commenced.  Total operating lease expenses for the year ended December 31, 2021, 2020, and 2019 was $ 566 , $ 220 , and $ 409 , respectively, and is recorded in other operating expenses on the consolidated statements of operations. Operating lease expenses consist of rent expense, CAM adjustments and other expenses. F- 45 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 15. LEASES – CONTINUED OPERATING LEASES – CONTINUED Supplemental cash flows information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES For The Year Ended December 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,019 $ 207 $ 158 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,129 $ 598 $ 143 Weighted Average Remaining Lease Term Operating leases 4.77 2.10 1.42 Weighted Average Discount Rate Operating leases 4.7 % 6.0 % 6.0 % Future minimum payments under non-cancellable leases as of December 31, 2021 were as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS For the Years Ending December 31, Amount 2022 $ 887 2023 334 2024 247 2025 255 2026 263 Thereafter 384 Total future minimum lease payments 2,370 Less: imputed interest ( 292 ) Total $ 2,078 F- 46 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 16. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS As of December 31, 2021, the Company had purchase commitments of approximately $ 32,000 of which approximately $ 13,000 is with a related party, 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, deployments of charging stations, inventory management planning and other related items, all of which are expected to be received during the next 12-24 months. PATENT LICENSE AGREEMENT On March 29, 2012, the Company, as licensee (the “Licensee”) entered into an exclusive patent license agreement with the Executive Chairman of the Board and Balance Holdings, LLC (an entity controlled by the Executive Chairman) (collectively, the “Licensor”), whereby the Company agreed to pay a royalty of 10 % of the gross profits received by the Company from commercial sales and/or use of two provisional patent applications, one relating to an inductive charging parking bumper and one relating to a process which allows multiple EVs to plug into an EV charging station simultaneously and charge as the current becomes available. On March 11, 2016, the Licensee and the Licensor entered into an agreement related to the March 29, 2012 patent license agreement. The parties acknowledged that the Licensee has paid a total of $ 9 in registration and legal fees for the U.S. Provisional Patent Application No. 61529016 (the “Patent Application”) (related to the inductive charging parking bumper) to date. Effective March 11, 2016, the patent license agreement, solely with respect to the Patent Application and the parties’ rights and obligations thereto, was terminated. The Executive Chairman of the Board agreed to be solely responsible for all future costs and fees associated with the prosecution of the patent application. In the event the Patent Application is successful, the Executive Chairman of the Board shall grant a credit to the Licensee in the amount of $9 to be applied against any outstanding amount(s) owed to him. If the Licensee does not have any outstanding payment obligations to the Executive Chairman of the Board at the time the Patent Application is approved, the Executive Chairman of the Board shall remit the $9 to the Licensee within twenty (20) days of the approval. The parties agreed to a mutual release of any claims associated with the patent license agreement. As of December 31, 2021, the Company has not paid nor incurred any royalty fees related to this patent license agreement. LITIGATION, DISPUTES AND SETTLEMENTS On March 26, 2020, James Christodoulou, the former President and Chief Operating Officer of the Company, filed a Complaint in the Miami-Dade County Court, State of Florida, James Christodoulou vs. Blink Charging Co. et al. The Complaint asserts claims against the Company, as well as Michael Farkas, Aviv Hillo and Yechiel Baron. Mr. Farkas is Chairman of the Board and Chief Executive Officer. Messrs. Hillo and Baron are the Company’s General Counsel and Assistant General Counsel, respectively. The Complaint asserted claims for breach of contract in connection with Mr. Christodoulou’s termination by the Company in March 2020, as well as claims under Florida state law for alleged retaliatory termination and slander. Among other things, Mr. Christodoulou asserted that the Company terminated his employment without cause and in retaliation for his alleged plan to disclose that Company executives had engaged in alleged “questionable business practices.” As previously reported in the Company’s Current Report on Form 8-K filed with the SEC on October 9, 2020, the litigation between the Company and its former President pending in Miami-Dade County Court, State of Florida, James Christodoulou vs. Blink Charging Co. et al., has been settled for an aggregate sum of $ 400 , of which $ 125 related to compensation related matters. As a result, the Company has recorded a loss on settlement of $ 400 within operating expenses on its consolidated statement of operations during the year ended December 31, 2020. F- 47 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 16. COMMITMENTS AND CONTINGENCIES – CONTINUED LITIGATION, DISPUTES AND SETTLEMENTS – CONTINUED 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, which has now been fully briefed and is ready for review. The Company 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 December 31, 2021 as it determined that any such loss contingency was either not probable or estimable. 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 December 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 terms of the warrant grant. 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 court subsequently vacated the consolidation order and explained the parties should first file a motion to transfer, which the parties have done. The Company 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 December 31, 2021 as it determined that any such loss contingency was either not probable or estimable. F- 48 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 16. COMMITMENTS AND CONTINGENCIES – CONTINUED LITIGATION, DISPUTES AND SETTLEMENTS – CONTINUED 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. On September 15, 2021, the parties entered into a term sheet in which they agreed to settle the claims subject to the court’s approval. On January 25, 2022 the court preliminarily approved the settlement and subsequently scheduled a final hearing for April 12, 2022. If the court gives final approval to the settlement, the Company has agreed to make certain changes to its compensation practices for its directors and officers, including, among other things, eliminating the practice of making cash payments to directors to cover expected income taxes on stock grants and placing a $ 200 annual limit for two years on the combined stock and cash Awards to outside directors. The defendants do not admit any liability or wrongdoing in the settlement and will not make any cash payment as part of the settlement, but the Company will be responsible for paying the costs to give notice of the settlement to the Company’s shareholders and to pay $ 190 in attorney’s fees to the plaintiff’s counsel which was accrued for as of December 31, 2021. On February 7, 2022, another shareholder derivative lawsuit, captioned McCauley (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case No. A-22-847894-C, was filed in the Eighth Judicial District Court in Clark County, Nevada, seeking to pursue claims belonging to the Company against six of Blink’s directors and Michael Rama (the “McCauley Lawsuit”). Blink is named as a nominal defendant. The complaint filed in the McCauley Lawsuit asserts similar allegations to the Klein Lawsuit relating to the statements at issue in the securities class action and asserts claims for breach of fiduciary duty and unjust enrichment. The McCauley Lawsuit seeks both injunctive and monetary relief from the individual defendants, as well as an award of attorneys’ fees and costs. The Company has not recorded an accrual related to this matter as of December 31, 2021 as it determined that any such loss contingency was either not probable or estimable. On November 12, 2021, the Company’s Board of Directors approved a Confidential Settlement and Release Agreement with Aviv Hillo, the Company’s General Counsel. In consideration for Mr. Hillo releasing any and all claims of harassment involving a former executive, the Company issued Mr. Hillo 60,000 shares of its common stock with an issuance date fair value of $ 2,680 in full settlement of the matter. WARRANTY The Company estimates an approximate cost of $ 73 to repair deployed chargers, which the Company owns as of December 31, 2021. F- 49 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019 (in thousands except for share and per share amounts) 16. COMMITMENTS AND CONTINGENCIES – CONTINUED EMPLOYMENT AGREEMENTS MICHAEL D. FARKAS EMPLOYMENT AGREEMENT On May 28, 2021, the Company entered into a new employment agreement (the “Employment Agreement”) with the Company’s Executive Chairman and Chief Executive Officer (the “CEO”). The term of the Employment Agreement is January 1, 2021 through December 31, 2023 (the “Term”). Under the Employment Agreement, the CEO will receive a base salary of $ 800 for 2021 and $ 850 and $ 900 for 2022 and 2023, respectively. The CEO will be eligible to receive an annual performance bonus (payable in cash and securities), with a target bonus of 100 % of the base salary, with the CEO eligible to receive up to 200 % of the base salary based on the achievement of key performance indicators established by the Board of Directors and the CEO (“KPIs”). The CEO will receive equity awards (one-half in restricted stock and one-half in stock options) with a target aggregate value of $ 1,000 , the CEO is eligible to receive up to 200% of the target aggregate value based on the achievement of KPIs during each year of the Term. The CEO also received a special four-year performance option to purchase 475,285 shares of common stock at an exercise price of $ 37.40 per share, which will vest if the Company’s stock price on the NASDAQ exchange reaches and remains on average for a period of 20 consecutive market days at a closing price of $ 90 per share during the four-year term of the option. The performance option had a grant date fair value of approximately $ 13,500 , which was estimated using a third-party specialist who utilized a Monte Carlo simulation model. The assumptions used in the Monte Carlo simulation model were as follows: the closing stock price on the valuation date of $ 34.00 , exercise price of $ 37.40 , the contractual term of four years , expected volatility of the Company’s stock of 143.98 % , and the risk free rate of interest of 0.54 % . The Company is recognizing the fair value over the derived service period of the award, which was determined to be 0.64 years Additionally, the CEO received one-time awards and payments in satisfaction of his 2020 bonuses, equity awards, and a salary catch-up since the expiration of his prior agreement in September 2020. The Employment Agreement provides that, if the CEO is terminated without cause, resigns for good reason, dies or becomes disabled during the Term, he will receive his base salary for the remainder of the Term and payment of 2.6 times his target performance bonus/equity awards and base salary. In the event of a termination without cause or resignation for good reason within nine months prior to or 18 months following a change in control, the multiple in the previous sentence will be 3.5 times. The Employment Agreement also contains covenants (a) restricting Mr. Farkas from engaging in any activities competitive with the Company’s business during the Term and one year thereafter, (b) prohibiting Mr. Farkas from disclosure of confidential information regarding the Company at any time and (c) confirming that all intellectual property developed by Mr. Farkas during the term of the employment agreement which specifically relates to the EV charging business constitutes the Company’s sole and exclusive property. Mr. Farkas may be entitled to additional bonuses should his developments be commercialized by the Company. The Employment Agreement provides that a commission sales agreement entered into on November 17, 2009 between an entity controlled by the CEO and a predecessor to the Company will remain suspended and no payments will be due thereunder for as long as the CEO is a full-time employee of the Company and is paid a monthly salary of at least $ 30 . Finally, the Company and the CEO agreed to resolve a dispute over the CEO’s transfer of 260,000 shares of the Company’s common stock to a prior institutional investor through a settlement agreement and payment of $ 1,000 from the Company to the CEO. The payment of $ 1,000 was recognized as a part of other operating expenses in the statements of operations during the year ended December 31, 2021. MATERIAL AGREEMENT In October 2021, the Company negotiated and executed an amendment and extension to its agreement with a contract manufacturer of the Company. The amendment extends the term of the agreement for an additional five (5) years. Accordingly, the Company could potentially incur additional costs related to units ordered that were subsequently canceled or otherwise not fulfilled. F- 50