Blink Charging Co. 10-Q

ITEM 1. FINANCIAL STATEMENTS. BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands except for share amounts) March 31, 2022 December 31, 2021 (unaudited) Assets Current Assets: Cash and cash equivalents $ 161,984 $ 174,795 Accounts receivable, net 7,472 6,346 Inventory, net 10,051 10,369 Prepaid expenses and other current assets 576 1,020 Total Current Assets 180,083 192,530 Restricted cash 79 81 Property and equipment, net 16,219 14,563 Operating lease right-of-use asset 1,607 1,664 Intangible assets, net 3,707 3,455 Goodwill 19,054 19,390 Other assets 517 230 Total Assets $ 221,266 $ 231,913 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 8,125 $ 7,134 Accrued expenses and other current liabilities 6,906 5,678 Current portion of notes payable 10 10 Current portion of operating lease liabilities 884 547 Current portion of deferred revenue 2,741 2,858 Total Current Liabilities 18,666 16,227 Operating lease liabilities, non-current portion 1,125 1,531 Other liabilities 727 193 Deferred revenue, non-current portion 661 128 Total Liabilities 21,179 18,079 Commitments and contingencies (Note 7) - - Stockholders’ Equity: Common stock, $ 0.001 par value, 500,000,000 shares authorized, 42,584,822 and 42,423,514 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 43 42 Additional paid-in capital 460,047 458,046 Accumulated other comprehensive loss ( 2,390 ) ( 1,784 ) Accumulated deficit ( 257,613 ) ( 242,470 ) Total Stockholders’ Equity 200,087 213,834 Total Liabilities and Stockholders’ Equity $ 221,266 $ 231,913 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands except for share and per share amounts) For The Three Months Ended March 31, 2022 2021 Revenues: Product sales $ 8,052 $ 1,671 Charging service revenue - company-owned charging stations 1,107 182 Network fees 161 110 Warranty 67 13 Grant and rebate 75 150 Ride-sharing services 239 46 Other 99 60 Total Revenues 9,800 2,232 Cost of Revenues: Cost of product sales 6,044 1,118 Cost of charging services - company-owned charging stations 523 50 Host provider fees 551 126 Network costs 234 79 Warranty and repairs and maintenance 111 262 Ride-sharing services 426 246 Depreciation and amortization 325 255 Total Cost of Revenues 8,214 2,136 Gross Profit 1,586 96 Operating Expenses: Compensation 9,259 4,748 General and administrative expenses 4,427 1,585 Other operating expenses 2,942 1,149 - Total Operating Expenses 16,628 7,482 Loss From Operations ( 15,042 ) ( 7,386 ) Other Income (Expense): Interest income - 14 Foreign transaction gain 3 - Change in fair value of derivative and other accrued liabilities - 7 Other expense, net ( 104 ) - Total Other (Expense) Income ( 101 ) 21 Net Loss $ ( 15,143 ) $ ( 7,365 ) Net Loss Per Share: Basic $ ( 0.36 ) $ ( 0.18 ) Diluted $ ( 0.36 ) $ ( 0.18 ) Weighted Average Number of Common Shares Outstanding: Basic 42,437,823 41,138,095 Diluted 42,437,823 41,138,095 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Loss (in thousands) 2022 2021 For the Three Months Ended March 31, 2022 2021 Net Loss $ ( 15,143 ) $ ( 7,365 ) Other Comprehensive Loss: Cumulative translation adjustments ( 606 ) - Change in fair value of marketable securities - ( 56 ) Total Comprehensive Loss $ ( 15,749 ) $ ( 7,421 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Statement of Changes in Stockholders’ Equity For the Three Months Ended March 31, 2022 (in thousands except for share amounts) (unaudited) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit Equity Balance - January 1, 2022 42,423,514 $ 42 $ 458,046 $ ( 1,784 ) $ ( 242,470 ) $ 213,834 Common stock issued upon exercises of warrants 16,811 - 69 - - 69 Stock-based compensation 144,497 1 1,932 - - 1,933 Other comprehensive loss - - - ( 606 ) - ( 606 ) Net loss - - - - ( 15,143 ) ( 15,143 ) Balance - March 31, 2022 42,584,822 $ 43 $ 460,047 $ ( 2,390 ) $ ( 257,613 ) $ 200,087 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Statement of Changes in Stockholders’ Equity For the Three Months Ended March 31, 2021 (in thousands except for share amounts) (unaudited) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Income Deficit Equity Balance - January 1, 2021 35,951,097 $ 36 $ 214,479 $ - $ ( 187,351 ) $ 27,164 Beginning balance 35,951,097 $ 36 $ 214,479 $ - $ ( 187,351 ) $ 27,164 Common stock issued in public offering, net of issuance costs [1] 5,660,000 6 221,400 - - 221,406 Common stock issued upon exercise of warrants 239,202 - 999 - - 999 Common stock issued upon cashless option exercise 15,522 - - - - - Common stock issued upon cashless warrant exercise 66,000 - - - - - Common stock issued as consideration for property and equipment 13,123 - 600 - - 600 Stock-based compensation 470 - 419 - - 419 Other comprehensive loss - - - ( 56 ) - ( 56 ) Net loss - - - - ( 7,365 ) ( 7,365 ) Balance - March 31, 2021 41,945,414 $ 42 $ 437,897 $ ( 56 ) $ ( 194,716 ) $ 243,167 Ending balance 41,945,414 $ 42 $ 437,897 $ ( 56 ) $ ( 194,716 ) $ 243,167 [1] Includes gross proceeds of $ 232,060 , less issuance costs of $ 10,654 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) For The Three Months Ended March 31, 2022 2021 Cash Flows From Operating Activities: Net loss $ ( 15,143 ) $ ( 7,365 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 758 514 Non-cash lease expense 55 - Change in fair value of derivative and other accrued liabilities - 7 Provision for bad debt 502 201 Provision for slow moving and obsolete inventory 295 ( 82 ) Stock-based compensation: Common stock 507 29 Options 1,455 386 Changes in operating assets and liabilities: Accounts receivable and other receivables ( 1,722 ) ( 857 ) Inventory ( 698 ) ( 1,965 ) Prepaid expenses and other current assets 297 51 Other assets ( 288 ) 212 Accounts payable and accrued expenses 2,120 305 Other liabilities 101 - Lease liabilities ( 66 ) ( 75 ) Deferred revenue 444 139 Total Adjustments 3,760 ( 1,135 ) Net Cash Used In Operating Activities ( 11,383 ) ( 8,500 ) Cash Flows From Investing Activities: Purchase of marketable securities - ( 36,562 ) Purchases of property and equipment ( 1,368 ) ( 4,021 ) Net Cash Used In Investing Activities ( 1,368 ) ( 40,583 ) Cash Flows From Financing Activities: Proceeds from sale of common stock in public offering [1] - 221,406 Proceeds from exercise of options and warrants 69 1,000 Payment of financing liability in connection with internal use software ( 146 ) ( 20 ) Net Cash (Used In) Provided By Financing Activities ( 77 ) 222,386 Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 158 ) - Net (Decrease) Increase In Cash and Cash Equivalents and Restricted Cash ( 12,986 ) 173,303 Cash and Cash Equivalents and Restricted Cash - Beginning of Period 175,049 22,418 Cash and Cash Equivalents and Restricted Cash - End of Period $ 162,063 $ 195,721 Cash and cash equivalents and restricted cash consisted of the following: Cash and cash equivalents $ 161,984 $ 195,646 Restricted cash 79 75 Total Cash and cash equivalents and restricted cash $ 162,063 $ 195,721 [1] Includes gross proceeds of $ 232,060 , less issuance costs of $ 10,654 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BLINK CHARGING CO. AND SUBSIDIARIES Consolidated Statements of Cash Flows — Continued (in thousands) For The Three Months Ended March 31, 2022 2021 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - Income taxes $ 10 $ - Non-cash investing and financing activities: Capitalization of non-recurring engineering costs $ - $ 237 Common stock issued as consideration for property and equipment $ - $ 600 Common stock issued upon cashless option exercise $ - $ 16 Common stock issued upon cashless warrant exercise $ - $ 66 Interest expense converted into principal $ - $ 2 Right-of-use assets obtained in exchange for lease obligations $ - $ 1,358 Change in fair value of marketable securities $ - $ 56 Intangible assets obtained in exchange for financing liability $ 660 $ - Transfer of inventory to property and equipment $ ( 698 ) $ ( 429 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND RISKS AND UNCERTAINTIES Organization and Operations Blink Charging Co., through its wholly-owned subsidiaries (collectively, the “Company” or “Blink”), is a leading owner, operator, and provider of electric vehicle (“EV”) charging equipment and networked EV charging services. Blink offers residential and commercial EV charging equipment, enabling EV drivers to recharge at various location types. Blink’s principal line of products and services is its Blink EV charging network (the “Blink Network”) and Blink EV charging equipment, also known as electric vehicle supply equipment (“EVSE”) and other EV-related services. The Blink Network provides property owners, managers, parking companies, and state and municipal entities (“Property Partners”) with cloud-based services that enable the remote monitoring and management of EV charging stations. The Blink Network also provides EV drivers with vital station information, including station location, availability and 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. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of March 31, 2022 and for the three months then ended. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2021 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2021 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on March 16, 2022 as part of the Company’s Annual Report on Form 10-K. Risks and Uncertainties The Covid-19 pandemic has impacted global stock markets and economies. The Company 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. 8 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the Annual Report for the year ended December 31, 2021, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. FOREIGN CURRENCY TRANSLATION The Company’s reporting currency is the United States dollar. The functional currency of certain subsidiaries is the Euro and the Indian Rupee. Assets and liabilities are translated based on the exchange rates at the balance sheet date ( 1.1112 for the Euro and 0.0132 for the Indian Rupee as of March 31, 2022), while expense accounts are translated at the weighted average exchange rate for the period ( 1.1219 for the Euro and 0.0133 for the Indian Rupee for the three months ended March 31, 2022). 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 gains attributable to foreign exchange were $ 3 during the three months ended March 31, 2022. REVENUE RECOGNITION The Company recognizes revenue primarily from five different types of contracts: ● Charging service revenue – company-owned charging stations - Revenue is recognized at the point when a particular charging session is completed. ● Product sales – Revenue is recognized at the point where the customer obtains control of the goods and the Company satisfies its performance obligation, which generally is at the time it ships the product to the customer. ● Network fees and other – Represents a stand-ready obligation whereby the Company is obligated to perform over a period of time and, as a result, revenue is recognized on a straight-line basis over the contract term. Network fees are billed annually. ● Ride-sharing services – Primarily related to ride-sharing services agreement with the City of Los Angeles which allows customers the ability to rent electric vehicles through a subscription service. The Company recognizes revenue over the contractual period of performance of the subscription. ● Other – Primarily related to charging service revenue from non-company-owned charging stations. Revenue is recognized from non-company-owned charging stations at the point when a particular charging session is completed in accordance with a contractual relationship between the Company and the owner of the station. Other revenues also comprises of revenues generated from alternative fuel credits. The following table summarizes revenue recognized under ASC 606 in the condensed consolidated statements of operations: SCHEDULE OF REVENUE RECOGNITION BY CONTRACT For The Three Months Ended March 31, 2022 2021 Revenues - Recognized at a Point in Time Product sales $ 8,052 $ 1,671 Charging service revenue - company-owned charging stations 1,107 182 Other 99 60 Total Revenues - Recognized at a Point in Time 9,258 1,913 Revenues - Recognized Over a Period of Time: Ride-sharing services 239 46 Network and other fees 228 123 Total Revenues - Recognized Over a Period of Time 467 169 Total Revenue $ 9,725 $ 2,082 9 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 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 For The Three Months Ended March 31, 2022 2021 Revenues by Geographical Area U.S.A $ 5,781 $ 1,085 International 3,944 997 Total Revenue $ 9,725 $ 2,082 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related goods or services, the Company records deferred revenue until the performance obligations are satisfied. As of March 31, 2022, the Company had $ 3,402 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue on the condensed consolidated balance sheet as of March 31, 2022. The Company expects to satisfy $ 2,741 of its remaining performance obligations for network fees, charging services, warranty revenue, product sales, and other and recognize the revenue within the next twelve months. During the three months ended March 31, 2022, the Company recognized $ 181 of revenues related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2021. During the three months ended March 31, 2022, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Grants and rebates which are not within the scope of ASC 606, pertaining to revenues and periodic expenses are recognized as income when the related revenue and/or periodic expense are recorded. Grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the related depreciation expense of the related asset over their useful lives over the useful life of the charging station. During the three months ended March 31, 2022 and 2021, the Company recorded $ 75 and $ 150 , respectively, related to grant and rebate revenue. At March 31, 2022 and December 31, 2021, there was $ 70 of deferred grant and rebate revenue to be amortized. CONCENTRATIONS As of March 31, 2022, accounts receivable from a significant customer were approximately 17 % of total accounts receivable. As of December 31, 2021, accounts receivable from a significant customer were approximately 18 % of total accounts receivable. During the three months ended March 31, 2022, sales to a significant customer represented 13 % of total revenue and sales to another significant customer represented 12 % of total revenue. During the three months ended March 31, 2021, sales to a significant customer represented 21 % of total revenue and another significant customer represented 20 % of total revenues. During the three months ended March 31, 2022 and 2021, the Company made purchases from a significant supplier that represented 14 % and 28 % of total purchases, respectively. 10 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 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 Three Months Ended March 31, 2022 2021 Warrants 3,257,989 3,510,129 Options 977,473 644,987 Unvested restricted common stock - 48,819 Total potentially dilutive shares 4,235,462 4,203,935 3. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES March 31, 2022 December 31, 2021 (unaudited) Accrued host fees $ 130 $ 130 Accrued professional, board and other fees 323 543 Accrued wages 4,022 2,678 Accrued commissions 233 144 Warranty payable 8 10 Accrued income, property and sales taxes payable 198 462 Accrued issuable equity 486 454 Accrued purchases - 117 Internal use software liability 364 383 Other accrued expenses 1,142 757 Total accrued expenses $ 6,906 $ 5,678 11 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 4. STOCKHOLDERS’ EQUITY COMMON STOCK During the three months ended March 31, 2022, the Company issued an aggregate of 16,811 shares of common stock pursuant to exercises of warrants to purchase an aggregate of 16,811 shares of common stock for aggregate net proceeds of $ 69 . During the three months ended March 31, 2022, the Company issued an aggregate of 144,497 shares of common stock for services to employees and consultants with an aggregate issuance date fair value of $ 331 . STOCK-BASED COMPENSATION The Company recognized stock-based compensation expense related to common stock, stock options and warrants for the three months ended March 31, 2022 and 2021 of $ 1,962 and $ 415 , respectively, which is included within compensation expense on the condensed consolidated statements of operations. As of March 31, 2022, there was $ 5,692 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 1.84 years. 5. RELATED PARTY TRANSACTIONS See Note 7 – Commitments and Contingencies – Purchase Commitments for disclosure of a commitment made to a related party. JOINT VENTURE The Company and a group of three Cyprus entities entered into a shareholders’ agreement on February 11, 2019, pertaining to the parties’ respective shareholdings in a new joint venture entity, Blink Charging Europe Ltd. (the “Entity”), that was formed under the laws of Cyprus on the same date. Pursuant to the agreement, the Company is not required to fund operating losses. The Company owns 40 % of the Entity while the other three entities own 60 % of the Entity. The Entity currently owns 100 % of a Greek subsidiary, Blink Charging Hellas SA (“Hellas”), which started operations in the Greek EV market. There are currently no plans for the Company to make any capital contributions or investments. During the three months ended March 31, 2022 and 2021, the Company recognized sales of $ 68 and $ 477 , respectively, to Hellas. As of March 31, 2022 and December 31, 2021 the Company had a receivable from Hellas of approximately $ 0 and $ 6 , 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 March 31, 2022, the Entity has not generated net income and, as a result, pursuant to ASC 323, the Company has not recorded a gain or loss on its equity method investment in the Entity during the three months ended March 31, 2022 and 2021. BLUE CORNER As of March 31, 2022, 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 March 31, 2022 and December 31, 2021, the Company owed approximately $ 43 and $ 800 to this supplier, respectively. During the three months ended March 31, 2022, the Company purchased approximately $ 1,512 of inventory from this supplier. 12 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 6. LEASES OPERATING LEASES As of March 31, 2022, the Company had no leases that were classified as a financing lease . As of March 31, 2022, the Company had additional operating leases for vehicles obtained in relation to the operations of Blink Mobility. As of March 31, 2022, the leases had not commenced since the vehicles were not available to the Company until the second quarter of 2022. The duration of the leases are three years and the Company is expected to pay approximately $ 1,044 throughout the term. Total operating lease expenses for the three months ended March 31, 2022 and 2021 were $ 168 and $ 170 , respectively, and are recorded in other operating expenses on the condensed consolidated statements of operations. Supplemental cash flows information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES For The Three Months Ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 66 $ 169 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ - $ 1,358 Weighted Average Remaining Lease Term Operating leases 4.65 5.96 Weighted Average Discount Rate Operating leases 4.7 % 4.9 % 13 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 6. LEASES – CONTINUED Future minimum payments under non-cancellable leases as of March 31, 2022 were as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS For the Years Ending December 31, Amount 2022 $ 862 2023 330 2024 236 2025 236 2026 236 Thereafter 336 Total future minimum lease payments 2,236 Less: imputed interest ( 227 ) Total $ 2,009 7. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS As of March 31, 2022, the Company had purchase commitments of approximately $ 35,000 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. LITIGATION AND DISPUTES On August 24, 2020, a purported securities class action lawsuit, captioned Bush v. Blink Charging Co. et al., Case No. 20-cv-23527, was filed in the United States District Court for the Southern District of Florida against the Company, Michael Farkas (Blink’s Chairman of the Board and Chief Executive Officer), and Michael Rama (Blink’s Chief Financial Officer) (the “Bush Lawsuit”). On September 1, 2020, another purported securities class action lawsuit, captioned Vittoria v. Blink Charging Co. et al., Case No. 20-cv-23643, was filed in the United States District Court for the Southern District of Florida against the same defendants and seeking to recover the same alleged damages (the “Vittoria Lawsuit”). On October 1, 2020, the court consolidated the Vittoria Lawsuit with the Bush Lawsuit and on December 21, 2020 the court appointed Tianyou Wu, Alexander Yu and H. Marc Joseph to serve as the Co-Lead Plaintiffs. The Co-Lead Plaintiffs filed an Amended Complaint on February 19, 2021. The Amended Complaint alleges, among other things, that the defendants made false or misleading statements about the size and functionality of the Blink Network, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Amended Complaint does not quantify damages but seeks to recover damages on behalf of investors who purchased or otherwise acquired Blink’s common stock between March 6, 2020 and August 19, 2020. On April 20, 2021, Blink and the other defendants filed a motion to dismiss the Amended Complaint, which has now been fully briefed and is ready for review. On April 7, 2022, the court held oral argument on the motion to dismiss but did not issue a decision. 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 March 31, 2022 as it determined that any such loss contingency was either not probable or estimable. 14 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 7. COMMITMENTS AND CONTINGENCIES – CONTINUED LITIGATION AND DISPUTES – CONTINUED On September 15, 2020, a shareholder derivative lawsuit, captioned Klein (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case No. 20- 19815CA01, was filed in Miami-Dade County Circuit Court seeking to pursue claims belonging to the Company against Blink’s Board of Directors and Michael Rama (the “Klein Lawsuit”). Blink is named as a nominal defendant. The Klein Lawsuit asserts that the Director defendants caused Blink to make the statements that are at issue in the securities class action and, as a result, the Company will incur costs defending against the consolidated Bush Lawsuit and other unidentified investigations. The Klein Lawsuit asserts claims against the Director defendants for breach of fiduciary duties and corporate waste and against all of the defendants for unjust enrichment. Klein did not quantify the alleged damages in his complaint, but he seeks damages sustained by the Company as a result of the defendants’ breaches of fiduciary duties, corporate governance changes, restitution, and disgorgement of profits from the defendants and attorneys’ fees and other litigation expenses. The parties agreed to temporarily stay the Klein Lawsuit until there is a ruling on the motion to dismiss filed in the consolidated Bush Lawsuit. The Company has not recorded an accrual related to this matter as of March 31, 2022 as it determined that any such loss contingency was either not probable or estimable. 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 March 31, 2022 as it determined that any such loss contingency was either not probable or estimable. On February 12, 2021, another shareholder derivative lawsuit, captioned Wolery (derivatively on behalf of Blink Charging Co.) v. Buffalino et al., Case No. A-21-829395-C, was filed in the Eighth Judicial District Court in Clark County, Nevada seeking to pursue claims belonging to the Company against Blink’s Board of Directors (the “Wolery Lawsuit”). Blink is named as a nominal defendant. The Wolery complaint alleges that the amount of restricted stock awarded to Blink’s outside directors in December 2020 exceeded the amounts permitted by Blink’s incentive compensation plan. The complaint asks the court to rescind the excess restricted stock awards, as well as other relief. 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 April 18, 2022, the court signed a final judgment approving the settlement and dismissing the lawsuit with prejudice. As a result of 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 March 31, 2022 and December 31, 2021, which was paid in April 2022. 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. On March 29, 2022, the Nevada court approved the parties’ stipulation to temporarily stay the McCauley Lawsuit until there is a ruling on the motion to dismiss filed in the consolidated Bush Lawsuit. The Company has not recorded an accrual related to this matter as of March 31, 2022 as it determined that any such loss contingency was either not probable or estimable. WARRANTY The Company estimates an approximate cost of $ 155 to repair deployed chargers, which the Company owns as of March 31, 2022. 15 BLINK CHARGING CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands except for share and per share amounts) (UNAUDITED) 7. COMMITMENTS AND CONTINGENCIES – CONTINUED CHARGING NETWORK UPGRADES 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”). As of March 31, 2022, the Company estimates the Upgrade will cost approximately $ 1,785 to upgrade certain of the Company’s owned and operated EV charging stations. 8. SUBSEQUENT EVENTS ACQUISITION On April 22, 2022, pursuant to a Sale and Purchase Agreement dated April 22, 2022, the Company closed and acquired, through its Dutch subsidiary, Blink Holdings B.V., all of the outstanding capital stock of Electric Blue Limited, a private company limited by shares and registered in England and Wales (“EB”), from its shareholders. Headquartered in St. Albans, United Kingdom, EB is a leading, independently owned provider of electric vehicle charging and sustainable energy solutions and technologies. EB works with local authorities and businesses to create the infrastructure the United Kingdom needs to meet the 2050 net zero emissions target and prepare for the 2030 ban on the sale of new petrol and diesel cars and vans. The purchase price for the acquisition of all of EB’s outstanding capital stock was up to 18,000 British Pounds (“GBP”) (approximately $ 23,400 ), consisting of 10,000 GBP (approximately $ 13,000 ) in cash, and 3,000 GBP (approximately $ 3,900 ) represented by 152,803 shares of the Company’s common stock (the “Consideration Shares”). The number of Consideration Shares was calculated based on the volume weighted average price of the Company’s common stock during the 30 consecutive trading days ending on the closing date of the Sale and Purchase Agreement, which equalled $ 25.17 per share. The Company also agreed in the Sale and Purchase Agreement, provided EB reaches specified gross revenue or new EV charger installation targets over the three years post-closing, to issue up to 5,000 GBP (approximately $ 6,500 ) in additional shares of its common stock to EB shareholders (the “Earn-Out”) . Of the Consideration Shares to be issued to the EB shareholders at closing, the sum of 500 GBP (approximately $ 650 ) in cash and 25,466 shares of common stock (valued at 500 GBP or approximately $ 650 ) are being held in escrow accounts for periods of 12 months (cash escrow) and 18 months (stock escrow), respectively, following the closing to cover any losses or damages the Company may incur by reason of, among other things, any misrepresentation or breach of warranty by EB under the Sale and Purchase Agreement. LETTER OF INTENT On April 19, 2022, the Company signed a non-binding letter of intent with a U.S. privately-held company (the “Target”) providing for the possible purchase by the Company of all of the outstanding shares of the Target from its shareholders in consideration for cash, a note and, under certain circumstances, shares of common stock of a subsidiary of the Company or, if such subsidiary’s shares are not publicly-traded, common stock of the Company. In addition, in the letter of intent, the Company agreed to extend a loan of $ 1,000 to the Target (the “Loan”), which was subsequently made by the Company pursuant to a 6 % Secured Convertible Promissory Note signed by the Target. Under the terms of the Loan, if the Company proceeds with the possible stock purchase of the Target, the principal and accrued interest amount under the Loan will be deducted from the cash consideration paid to the Target’s shareholders at closing. If, however, the Company determines not to proceed with the possible stock purchase of the Target, the Loan will continue to accrue 6 % interest per annum, and mature on the earliest of (i) a “Change of Control” (as defined); (ii) the closing of the next investment round by the Target; (iii) an Event of Default (as defined); or (iv) May 1, 2027. 16