Blink Charging Co. 10-Q

ITEM 1. FINANCIAL STATEMENTS. BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except for share amounts) September 30, 2022 December 31, 2021 (unaudited) Assets Current Assets: Cash and cash equivalents $ 57,019 $ 174,795 Accounts receivable, net 18,752 6,346 Inventory, net 24,330 10,369 Prepaid expenses and other current assets 3,337 1,020 Total Current Assets 103,438 192,530 Restricted cash, non-current portion 70 81 Property and equipment, net 22,274 14,563 Operating lease right-of-use asset 2,550 1,664 Intangible assets, net 28,644 3,455 Goodwill 201,448 19,390 Other assets 2,493 230 Total Assets $ 360,917 $ 231,913 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 16,416 $ 7,134 Accrued expenses and other current liabilities 11,958 5,678 Current portion of operating lease liabilities 1,417 547 Current portion of financing lease liabilities 306 - Current portion of deferred revenue 8,823 2,858 Notes payable 76 10 Total Current Liabilities 38,996 16,227 Contingent consideration 4,030 - Consideration payable, non-current portion 40,600 - Operating lease liabilities, non-current portion 1,734 1,531 Financing lease liabilities, non-current portion 486 - Deferred revenue, non-current portion 4,900 128 Other liabilities 680 193 Total Liabilities 91,426 18,079 Commitments and contingencies (Note 11) - Stockholders’ Equity: Common stock, $ 0.001 par value, 500,000,000 shares authorized, 50,867,937 and 42,423,514 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 51 42 Additional paid-in capital 582,419 458,046 Accumulated other comprehensive loss ( 7,098 ) ( 1,784 ) Accumulated deficit ( 305,881 ) ( 242,470 ) Total Stockholders’ Equity 269,491 213,834 Total Liabilities and Stockholders’ Equity $ 360,917 $ 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) (unaudited) 2022 2021 2022 2021 For The Three Months Ended For The Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues: Product sales $ 13,358 $ 4,824 $ 30,238 $ 9,762 Charging service revenue - company-owned charging stations 1,256 908 3,857 1,676 Network fees 1,456 205 2,089 421 Warranty 309 87 475 119 Grant and rebate 83 55 283 280 Revenue not from contract with customer 83 55 283 280 Ride-sharing services 367 270 885 504 Other 418 53 706 228 Revenue from contract with customer 17,164 6,347 38,250 12,710 Total Revenues 17,247 6,402 38,533 12,990 Cost of Revenues: Cost of product sales 8,663 3,632 21,134 7,115 Cost of charging services - company-owned charging stations 235 200 769 310 Host provider fees 973 463 2,345 842 Network costs 508 115 924 307 Warranty and repairs and maintenance 803 258 1,437 743 Ride-sharing services 470 422 1,555 1,092 Depreciation and amortization 814 420 2,045 1,118 Total Cost of Revenues 12,466 5,510 30,209 11,527 Gross Profit 4,781 892 8,324 1,463 Operating Expenses: Compensation 17,605 11,745 37,643 25,663 General and administrative expenses 6,594 3,067 20,023 7,110 Other operating expenses 5,079 1,903 12,159 4,246 - Total Operating Expenses 29,278 16,715 69,825 37,019 Loss From Operations ( 24,497 ) ( 15,823 ) ( 61,501 ) ( 35,556 ) Other (Expense) Income: Interest (expense) income ( 917 ) ( 3 ) ( 1,056 ) 6 Loss on settlement - - - ( 1,000 ) Dividend and interest income 233 100 233 162 Loss on foreign exchange ( 595 ) ( 16 ) ( 836 ) ( 124 ) Gain on forgiveness of PPP loan - 379 - 379 Change in fair value of other liabilities 108 53 35 60 Other income (expense) 21 ( 11 ) ( 286 ) ( 72 ) Total Other (Expense) Income ( 1,150 ) 502 ( 1,910 ) ( 589 ) Net Loss $ ( 25,647 ) $ ( 15,321 ) $ ( 63,411 ) $ ( 36,145 ) Net Loss Per Share: Basic $ ( 0.51 ) $ ( 0.36 ) $ ( 1.39 ) $ ( 0.87 ) Diluted $ ( 0.51 ) $ ( 0.36 ) $ ( 1.39 ) $ ( 0.87 ) Weighted Average Number of Common Shares Outstanding: Basic 50,627,173 42,162,228 45,543,518 41,780,669 Diluted 50,627,173 42,162,228 45,543,518 41,780,669 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) (unaudited) 2022 2021 2022 2021 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Loss $ ( 25,647 ) $ ( 15,321 ) $ ( 63,411 ) $ ( 36,145 ) Other Comprehensive Loss: Cumulative translation adjustments ( 2,436 ) ( 527 ) ( 5,314 ) ( 915 ) Change in fair value of marketable securities - ( 29 ) - ( 72 ) Total Comprehensive Loss $ ( 28,083 ) $ ( 15,877 ) $ ( 68,725 ) $ ( 37,132 ) 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 and Nine Months Ended September 30, 2022 (in thousands, except for share amounts) (unaudited) Shares Amount Capital Loss Deficit Equity Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total 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 Stock-based compensation - - 686 - - 686 Common stock issued as purchase consideration of SemaConnect 7,454,975 7 113,830 - - 113,837 Common stock issued as purchase consideration of Electric Blue 152,803 - 2,852 - - 2,852 Common stock issued upon exercise of warrants 3,131 - 13 - - 13 Common stock issued upon exercise of options 5,955 - 10 - - 10 Other comprehensive loss - - - ( 2,272 ) - ( 2,272 ) Net loss - - - - ( 22,621 ) ( 22,621 ) Balance - June 30, 2022 50,201,686 $ 50 $ 577,438 $ ( 4,662 ) $ ( 280,234 ) $ 292,592 Stock-based compensation 617,328 1 4,872 - - 4,873 Common stock issued upon cashless exercise of warrants 8,093 - - - - - Common stock issued upon exercise of warrants 40,830 - 109 - - 109 Other comprehensive loss - - - ( 2,436 ) - ( 2,436 ) Net loss - - - - ( 25,647 ) ( 25,647 ) Balance - September 30, 2022 50,867,937 $ 51 $ 582,419 $ ( 7,098 ) $ ( 305,881 ) $ 269,491 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 and Nine Months Ended September 30, 2021 (in thousands, except for share amounts) (unaudited) Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total 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 6 221,400 - - 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 Issuance costs related to common stock issued in public offering - - ( 73 ) - - ( 73 ) Common stock issued pursuant to cashless option exercise 22,974 - - - - - Common stock issued upon exercise of warrants 102,684 - 428 - - 428 Common stock issued as purchase consideration of Blue Corner 32,382 - 790 - - 790 Stock-based compensation 36,691 - 3,523 - - 3,523 Other comprehensive loss - - - ( 375 ) - ( 375 ) Net loss - - - - ( 13,459 ) ( 13,459 ) Balance - June 30, 2021 42,140,145 $ 42 $ 442,565 $ ( 431 ) $ ( 208,175 ) $ 234,001 Beginning balance 42,140,145 $ 42 $ 442,565 $ ( 431 ) $ ( 208,175 ) $ 234,001 Common stock issued upon exercise of warrants 46,215 - 192 - - 192 Stock-based compensation 13,384 - 6,050 - - 6,050 Other comprehensive loss - - - ( 556 ) - ( 556 ) Net loss - - - - ( 15,321 ) ( 15,321 ) Balance - September 30, 2021 42,199,744 $ 42 $ 448,807 $ ( 987 ) $ ( 223,496 ) $ 224,366 Ending balance 42,199,744 $ 42 $ 448,807 $ ( 987 ) $ ( 223,496 ) $ 224,366 [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 Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) 2022 2021 For The Nine Months Ended September 30, 2022 2021 Cash Flows From Operating Activities: Net loss $ ( 63,411 ) $ ( 36,145 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,175 1,686 Non-cash lease expense 596 690 Dividend and interest income - ( 162 ) Change in fair value of other liabilities 1,128 60 Provision for bad debt 1,024 730 Provision for slow moving and obsolete inventory ( 14 ) 149 Gain on settlement of debt - ( 379 ) Stock-based compensation: Common stock 4,986 1,532 Options 2,835 8,776 Changes in operating assets and liabilities: Accounts receivable ( 7,289 ) ( 2,986 ) Inventory ( 15,790 ) ( 3,575 ) Prepaid expenses and other current assets 3,372 ( 2,240 ) Other assets ( 391 ) 240 Accounts payable, accrued expenses and other current liabilities 6,811 1,151 Other liabilities 54 39 Lease liabilities ( 412 ) ( 505 ) Deferred revenue 3,550 986 Total Adjustments 5,635 6,192 Net Cash Used In Operating Activities ( 57,776 ) ( 29,953 ) Cash Flows From Investing Activities: Proceeds from sale of marketable securities - 6,804 Note receivable ( 1,500 ) - Purchase consideration of SemaConnect, net of cash acquired ( 38,338 ) - Purchase consideration of Electric Blue, net of cash acquired ( 11,360 ) - Purchase of marketable securities - ( 60,267 ) Capitalization of engineering costs paid ( 797 ) ( 237 ) Cash acquired in the purchase of Blue Corner - 243 Purchase consideration of Blue Corner - ( 22,985 ) Purchases of property and equipment ( 2,230 ) ( 5,540 ) Net Cash Used In Investing Activities ( 54,225 ) ( 81,982 ) Cash Flows From Financing Activities: Proceeds from sale of common stock in public offering [1] [1] - 221,333 Repayment of notes payable ( 588 ) - Proceeds from exercise of options and warrants 201 1,619 Repayment of financing liability in connection with finance lease ( 144 ) - Repayment of financing liability in connection with internal use software ( 235 ) ( 39 ) Net Cash (Used In) Provided By Financing Activities ( 766 ) 222,913 Effect of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash ( 5,193 ) ( 165 ) Net (Decrease) Increase In Cash and Cash Equivalents and Restricted Cash ( 117,960 ) 110,813 Cash and Cash Equivalents and Restricted Cash - Beginning of Period 175,049 22,417 Cash and Cash Equivalents and Restricted Cash - End of Period $ 57,089 $ 133,230 Cash and cash equivalents and restricted cash consisted of the following: Cash and cash equivalents $ 57,019 $ 133,153 Restricted cash 70 77 Total Cash and cash equivalents and restricted cash $ 57,089 $ 133,230 [1] Includes gross proceeds of $ 232,060 , less issuance costs of $ 10,727 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BLINK CHARGING CO. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows — Continued (in thousands) (unaudited) For The Nine Months Ended September 30, 2022 2021 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - Income taxes $ 55 $ - Non-cash investing and financing activities: Common stock issued as consideration for property and equipment $ - $ 600 Common stock issued as purchase consideration of SemaConnect $ 113,837 $ - Common stock issued as purchase consideration of Electric Blue $ 2,852 $ - Common stock issued as purchase consideration of Blue Corner $ - $ 790 Interest expense converted into principal $ - $ 2 Right of use assets obtained in exchange for operating lease liabilities $ 398 $ 1,713 Property and equipment obtained in exchange for finance lease obligations $ 931 $ - Change in fair value of marketable securities $ - $ ( 49 ) Intangible assets obtained in exchange for financing liability $ 660 $ - Transfer of inventory to property and equipment $ ( 3,131 ) $ 1,839 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 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 networks (the “Blink Networks”) and Blink EV charging equipment, also known as electric vehicle supply equipment (“EVSE”), and other EV-related services. The Blink Networks provide 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 Networks also provide 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 September 30, 2022 and for the three and nine months then ended. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 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 for the year ended December 31, 2021. 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 have reopened and returns 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. Additionally, other recent macroeconomic events including rising inflation, slowing economic growth, changes in U.S. and foreign government monetary policies, supply chain disruptions, fluctuations in currency exchange rates and the Russian invasion of Ukraine have led to further economic uncertainty. As a result, the Company is unable to predict the ultimate impact of continuing equipment order delays, chip shortages, the impact of other economic conditions 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 Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the Company’s Annual Report on Form 10-K 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 ( 0.9797 for the Euro, 0.0122 for the Indian Rupee, and 1.1156 for the Pound Sterling as of September 30, 2022), while expense accounts are translated at the weighted average exchange rate for the period ( 0.9797 for the Euro, 0.0123 for the Indian Rupee, and 1.1156 for the Pound Sterling for the nine months ended September 30, 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 losses attributable to foreign exchange were $ 595 and $ 836 during the three and nine months ended September 30, 2022, respectively. Transaction losses attributable to foreign exchange were $ 16 and $ 124 during the three and nine months ended September 30, 2021, respectively. REVENUE RECOGNITION The Company recognizes revenue primarily from five different types of contracts: ● 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. ● Charging service revenue – company-owned charging stations - Revenue is recognized at the point when a particular charging session is completed. ● 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 – Other revenues primarily 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 2022 2021 2022 2021 For The Three Months Ended For The Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues - Recognized at a Point in Time: Charging service revenue - company-owned charging stations $ 1,256 $ 908 $ 3,857 $ 1,676 Product sales 13,358 4,824 30,238 9,762 Other 418 53 706 228 Total Revenues - Recognized at a Point in Time 15,032 5,785 34,801 11,666 Revenues - Recognized Over a Period of Time: Ride-sharing services 367 270 885 504 Network and other fees 1,765 292 2,564 540 Total Revenues - Recognized Over a Period of Time 2,132 562 3,449 1,044 Total Revenue $ 17,164 $ 6,347 $ 38,250 $ 12,710 9 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED REVENUE RECOGNITION - CONTINUED The following table summarizes our revenue recognized under ASC 606 in the condensed consolidated statements of operations by geographical area: SCHEDULE OF REVENUE RECOGNITION BY GEOGRAPHICAL AREA 2022 2021 2022 2021 For The Three Months Ended For The Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues by Geographical Area U.S.A $ 12,395 $ 4,129 $ 25,374 $ 9,495 International 4,769 2,218 12,876 3,215 Total Revenue $ 17,164 $ 6,347 $ 38,250 $ 12,710 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 September 30, 2022, the Company had $ 13,723 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 September 30, 2022. The Company expects to satisfy $ 8,823 of its remaining performance obligations for network fees, charging services, warranty revenue, product sales, and other revenues and recognize the revenue within the next twelve months. During the three and nine months ended September 30, 2022, the Company recognized $ 333 and $ 824 , respectively, of revenues related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2021. During the nine months ended September 30, 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 September 30, 2022 and 2021, the Company recognized $ 83 and $ 55 , respectively, related to grant and rebate revenue. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 283 and $ 280 , respectively, related to grant and rebate revenue. At September 30, 2022 and December 31, 2021, there was $ 4,304 and $ 70 of deferred grant and rebate revenue to be amortized. CONCENTRATIONS There were no accounts receivable concentrations as of September 30, 2022. As of December 31, 2021, accounts receivable from a significant customer were approximately 18 % of total accounts receivable. There were no customer concentrations during the three and nine months ended September 30, 2022. During the three months ended September 30, 2021, sales to a significant customer represented 11 % of total revenue. During the three months ended September 30, 2021, sales to another significant customer represented 10 % of total revenue. During the three months ended September 30, 2022, the Company made purchases from a significant supplier that represented 19 % of total purchases. During the nine months ended September 30, 2022, the Company made purchases from a significant supplier that represented 26 % of total purchases. During the nine months ended September 30, 2022, the Company made purchases from another significant supplier that represented 12 % of total purchases. 10 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (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 2022 2021 For the Three and Nine Months Ended September 30, 2022 2021 Warrants 3,156,861 3,293,079 Options 1,055,217 983,110 Unvested restricted common stock - 53,755 Total potentially dilutive shares 4,212,078 4,329,944 3. OTHER ASSETS 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 $ 1,250 to the Target (the “Initial Loan”), in which $ 1,000 was loaned by the Company during the second quarter of 2022 and $ 250 was loaned in July 2022 pursuant to a 6 % Secured Convertible Promissory Note signed by the Target. Under the terms of the Initial Loan, if the Company proceeds with the possible stock purchase of the Target, the principal and accrued interest amount under the Initial 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 Initial Loan will continue to accrue 6 % interest per annum, and mature on the earliest of (i) a “Change of Control” (as defined in such note); (ii) the closing of the next investment round by the Target; (iii) an Event of Default (as defined in such note); or (iv) May 1, 2027. On September 22, 2022, the Company signed a letter agreement concerning the extension of the development work that the Target was performing for a wholly owned subsidiary of the Company (the “Subsidiary”) under a Master Service Agreement that was executed on April 29, 2022 (the “Letter Agreement”). Under the Letter Agreement, the Company agreed to extend additional loans to the Target to enable it to expand the development work and to expedite the delivery of the development outcomes (the “Product”) to the Subsidiary. In addition, the Letter Agreement provided that the Company will extend to the Target additional funding of up to $ 350 for hiring additional developers and an additional $ 600 to support the Target’s operations until the development work is finalized and accepted by the Company, which will be no later than November 30, 2022, or such later date that the parties may agree upon. The total amount of the loans may reach up to $ 950 (the “Development Loan”), in each case upon the Target’s request along with appropriate back-up documentation for such loan. $ 250 was loaned by the Company in September 2022. The Development Loan was made pursuant to a 6% Grid Secured Convertible Promissory Note and an additional letter agreement, dated September 22, 2022, signed by the Target with terms and conditions similar to those of the Initial Loan (the “Grid Note”). The Development Loan has additional terms which provide that the Company may forfeit the Development Loan if the Target timely delivers the Product and the Company fails to close the acquisition of the Target shortly thereafter. If, however, the Target fails to complete the development work on time, the Company will not be obligated to close the acquisition of the Target and the entire Development Loan will be payable to the Company under the same terms of the Initial Loan. 4. BUSINESS COMBINATONS ELECTRIC BLUE LIMITED ACQUISITION On April 22, 2022, pursuant to a Sale and Purchase Agreement dated April 22, 2022, the Company acquired, through its Dutch subsidiary, Blink Holdings B.V., all of the outstanding capital stock of Electric Blue Limited, a private company limited by shares and registered in England and Wales (“EB”), from its shareholders. Headquartered in St. Albans, United Kingdom, EB is a leading provider of electric vehicle charging and sustainable energy solutions and technologies. EB works with local authorities and businesses to create the infrastructure the United Kingdom needs to meet the 2050 net zero emissions target and prepare for the 2030 ban on the sale of new petrol and diesel cars and vans. The fair value purchase price for the acquisition of all of EB’s outstanding capital stock was $ 19,317 , consisting of $ 12,651 in cash, 152,803 shares of the Company’s common stock with a fair value of $ 2,852 , plus the contingent consideration described in the following paragraph. 11 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 4. BUSINESS COMBINATONS – CONTINUED ELECTRIC BLUE LIMITED ACQUISITION – CONTINUED In addition, provided EB reaches specified gross revenue or new EV charger installation targets over the three years post-closing, the Company also agreed to issue up to approximately $ 6,400 in additional shares of its common stock to EB shareholders (the “Contingent Consideration”). The Contingent Consideration was recorded at an estimated fair value of $ 3,814 . As of September 30, 2022, the estimated fair value of the Contingent Consideration was $ 4,030 . The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration liabilities on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are projections over the earn-out period, and the probability outcome percentages that are assigned to each scenario. Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent consideration liabilities. Of the purchase price to be issued to the EB shareholders at closing, approximately $ 650 in cash and 25,466 shares of common stock are being held in escrow accounts for periods of 12 months (cash escrow) and 18 months (stock escrow), respectively, following the closing to cover any losses or damages we may incur by reason of, among other things, any misrepresentation or breach of warranty by EB under the Sale and Purchase Agreement. During the quarter ended September 30, 2022, the Company finalized its fair value determination on the acquired assets and assumed liabilities and completed its assessment of the purchase price allocation. As a result, the Company recognized certain measurement period adjustments, as summarized in the fair values of assets acquired and liabilities assumed in the tables below. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date. The measurement period adjustments did not result in material adjustments to previously reported income statement amounts. Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from this acquisition. Goodwill of $ 10,443 from the acquisition of EB is expected to be deductible for income tax purposes. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date of EB: SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Purchase Price Allocation (Preliminary) Measurement Period Adjustments Purchase Price Allocation (As Revised) Purchase Consideration: Cash $ 12,651 $ - $ 12,651 Common stock 2,852 - 2,852 Deferred cash consideration Contingent consideration 3,400 414 3,814 Total Purchase Consideration $ 18,903 $ 414 $ 19,317 Less: Trade name $ 486 $ 14 $ 500 Customer relationships 3,075 1,781 4,856 Internally developed technology 504 11 515 Non-compete agreements 1,908 84 1,992 Property and equipment 4,162 163 4,325 Right of use asset Other assets Deferred revenue- non current portion ( 730 ) ( 1,959 ) ( 2,689 ) Lease liability- non current portion Debt-free net working capital deficit ( 1,047 ) 422 ( 625 ) Fair Value of Identified Net Assets $ 8,358 $ 516 $ 8,874 Remaining Unidentified Goodwill Value $ 10,545 $ ( 102 ) $ 10,443 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. 12 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 4. BUSINESS COMBINATONS – CONTINUED ELECTRIC BLUE LIMITED ACQUISITION – CONTINUED The components of debt free net working capital deficit are as follows: Purchase Price Allocation (Preliminary) Measurement Period Adjustments Purchase Price Allocation (As Revised) Current assets: Cash $ 1,291 $ - $ 1,291 Restricted cash Accounts receivable 1,618 - 1,618 Inventory Prepaid expenses and other current assets 508 - 508 Total current assets $ 3,417 $ - $ 3,417 Less current liabilities: Accounts payable $ 647 $ - $ 647 Merger consideration payable Current portion of lease liabilities 22 - 22 Current portion of notes payable 611 - 611 Deferred revenue Accrued expenses and other current liabilities 3,184 ( 422 ) 2,762 Total current liabilities $ 4,464 $ ( 422 ) $ 4,042 Debt free net working capital deficit $ ( 1,047 ) $ 422 $ ( 625 ) The condensed consolidated financial statements of the Company include the results of operations of EB from April 22, 2022 to September 30, 2022 and do not include results of operations for periods prior to April 22, 2022. The results of operations of EB from April 22, 2022 to September 30, 2022 included revenues of $ 2,584 and a net loss of $ 2,143 . The following table presents the unaudited pro forma condensed consolidated results of operations for the three and nine months ended September 30, 2022 and 2021 as if the acquisition of EB had occurred at the beginning of fiscal year 2021. The pro forma information provided below is compiled from the pre-acquisition financial information of EB and includes pro forma adjustments for adjustments to certain expenses. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2021 or (ii) future results of operations: SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ 17,247 $ 7,606 $ 40,530 $ 15,258 Net loss $ ( 25,647 ) $ ( 16,546 ) $ ( 65,224 ) $ ( 40,632 ) The above pro forma information includes pro forma adjustments to give effect to the amortization of the acquired intangible assets to the 2021 historical period. As of the date of the acquisition, the Company expected to collect all contractual cash flows related to receivables acquired in the acquisition. Acquisition-related costs are expensed as incurred and are recorded within general and administrative expenses on the condensed consolidated statements of operations. Acquisition-related costs were $ 198 and $ 376 during the three and nine months ended September 30, 2022, respectively. See Note 10 – Fair Value Measurement for additional information. 13 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 4. BUSINESS COMBINATONS – CONTINUED SEMACONNECT ACQUISITION On June 15, 2022, the Company completed the acquisition of SemaConnect, Inc., a Delaware corporation (“SemaConnect”) pursuant to an Agreement and Plan of Merger, dated as of June 13, 2022 (“Acquisition Agreement”), by and among the Company, Blink Sub I Corp., Blink Sub II LLC, SemaConnect and Shareholder Representative Services LLC (solely in its capacity as the stockholders’ representative). Following the closing of the acquisition, SemaConnect became a wholly owned subsidiary of the Company. SemaConnect is a leading provider of EV charging infrastructure solutions in North America. The aggregate purchase price was $ 200,573 , which included excess working capital of $ 1,229 and closing date cash of $ 3,639 . The consideration paid in the acquisition consisted of: (a) $86,736 in cash, (i) of which $46,136 was paid at the closing of the Acquisition Agreement (“Closing”) and (ii) the remaining $40,600 is payable (bearing interest at 7%) until not earlier than nine months following the Closing and not later than three years following the Closing; and (b) 7,454,975 shares of the Company’s common stock with a fair value of $113,837. Included in the cash consideration was $ 8,103 related to payments due to stock option holders of SemaConnect. Subsequent to the closing of the acquisition, payments to the stock option holder were made after the stock option holder signed an option cash-out agreement During the quarter ended September 30, 2022, the Company finalized its fair value determination on the acquired assets and assumed liabilities and completed its assessment of the purchase price allocation. As a result, the Company recognized certain measurement period adjustments, as summarized in the fair values of assets acquired and liabilities assumed in the tables below. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date. The measurement period adjustments did not result in material adjustments to previously reported income statement amounts. 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 $ 174,439 from the acquisition of SemaConnect is not expected to be deductible for income tax purposes. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date of SemaConnect: SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Purchase Price Allocation (Preliminary) Measurement Period Adjustments Purchase Price Allocation (As Revised) Purchase Consideration: Cash $ 46,136 $ - $ 46,136 Deferred cash consideration 40,600 - 40,600 Common stock 113,837 - 113,837 Total Purchase Consideration $ 200,573 $ - $ 200,573 Less: Trade name $ 4,097 $ ( 2,266 ) $ 1,831 Customer relationships 40,973 ( 25,918 ) 15,055 Internally developed technology 2,049 1,558 3,607 Non-compete agreements 20,487 ( 20,246 ) 241 Property and equipment 614 - 614 Right of use asset 1,092 - 1,092 Other assets 449 - 449 Deferred revenue- non current portion ( 702 ) - ( 702 ) Lease liability- non current portion ( 611 ) - ( 611 ) Debt-free net working capital 4,558 - 4,558 Fair Value of Identified Net Assets $ 73,006 $ ( 46,872 ) $ 26,134 Remaining Unidentified Goodwill Value $ 127,567 $ 46,872 $ 174,439 14 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 4. BUSINESS COMBINATONS – CONTINUED SEMACONNECT ACQUISITION - CONTINUED The components of debt free net working capital are as follows: Current assets: Cash $ 3,753 Restricted cash 8,103 Accounts receivable 5,515 Inventory 5,472 Prepaid expenses and other current assets 1,309 Total current assets $ 24,152 Less current liabilities: Accounts payable $ 2,305 Merger consideration payable 8,103 Current portion of lease liability 481 Current portion of notes payable 186 Deferred revenue 2,677 Accrued expenses and other current liabilities 5,842 Total current liabilities $ 19,594 Debt free net working capital $ 4,558 The condensed consolidated financial statements of the Company include the results of operations of SemaConnect from June 15, 2022 to September 30, 2022 and do not include results of operations for periods prior to June 15, 2022. The results of operations of SemaConnect from June 15, 2022 to September 30, 2022 included revenues of $ 8,778 and a net loss of $ 1,216 . The following table presents the unaudited pro forma consolidated results of operations for the three and nine months ended September 30, 2022 and 2021 as if the acquisition of SemaConnect had occurred at the beginning of fiscal year 2021. The pro forma information provided below is compiled from the pre-acquisition financial information of SemaConnect and includes pro forma adjustments for adjustments to certain expenses. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2021 or (ii) future results of operations: SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ 17,247 $ 9,244 $ 47,472 $ 21,532 Net loss $ ( 25,647 ) $ ( 19,698 ) $ ( 74,295 ) $ ( 45,473 ) The above pro forma information includes pro forma adjustments to give effect to the amortization of the acquired intangible assets to the 2021 historical period. 15 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 4. BUSINESS COMBINATONS – CONTINUED SEMACONNECT ACQUISITION – CONTINUED 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 $ 311 and $ 3,407 during the three and nine months ended September 30, 2022, respectively. 5. INTANGIBLE ASSETS AND GOODWILL Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS September 30, 2022 December 31, 2021 Useful Lives Internal use software $ 1,667 $ 600 3 years Capitalized engineering costs 237 237 Indefinite Trade name and patents 2,700 340 1.5 years Customer relationships 20,896 1,677 5.6 years Favorable leases 235 272 1.6 years Internally developed technology 4,913 1,148 3 years Non-compete agreements 2,097 139 2 years Intangible assets, gross 32,745 4,413 Less: accumulated amortization ( 4,101 ) ( 958 ) Intangible assets, net $ 28,644 $ 3,455 The following represents the change in goodwill during the nine months ended September 30, 2022: SCHEDULE OF GOODWILL Goodwill Beginning balance January 1, 2022 $ 19,390 Acquisition of Electric Blue 10,443 Acquisition of SemaConnect 174,439 Effect of translation adjustments ( 2,824 ) Ending balance September 30, 2022 $ 201,448 Changes in the balance of intangible assets and goodwill reflected on the balance sheet include the impact of the change in foreign currency exchange rates. See Note 4 - Business Combinations for additional details. 16 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES September 30, 2022 December 31, 2021 (unaudited) Accrued host fees $ 130 $ 130 Accrued professional, board and other fees 354 543 Accrued wages 5,013 2,678 Accrued commissions 499 144 Warranty payable 140 10 Accrued income, property and sales taxes payable 1,147 462 Accrued issuable equity 542 454 Accrued purchases 1,303 117 Internal use software liability 415 383 Accrued interest 829 - Other accrued expenses 1,586 757 Total accrued expenses $ 11,958 $ 5,678 7. STOCKHOLDERS’ EQUITY COMMON STOCK During the nine months ended September 30, 2022, the Company issued an aggregate of 60,772 shares of common stock pursuant to exercises of warrants to purchase an aggregate of 60,772 shares of common stock for aggregate net proceeds of $ 191 . During the nine months ended September 30, 2022, the Company issued an aggregate of 5,955 shares of common stock pursuant to exercises of options to purchase an aggregate of 5,955 shares of common stock for aggregate net proceeds of $ 10 . During the nine months ended September 30, 2022, the Company issued an aggregate of 8,093 shares of the Company’s common stock pursuant to the cashless exercise of warrants. During the nine months ended September 30, 2022, the Company issued an aggregate of 761,825 shares of common stock for services to employees and consultants with an aggregate issuance date fair value of $ 4,956 . See Note 4 – Business Combinations – Electric Blue Limited Acquisition and SemaConnect Acquisition for additional information of common stock issued as partial consideration for acquisitions. AT-THE-MARKET OFFERING On September 2, 2022, the Company entered into a Sales Agreement (“Sales Agreement”) with Barclays Capital Inc., BofA Securities, Inc., HSBC Securities (USA) Inc., ThinkEquity LLC, H.C. Wainwright & Co., LLC and Roth Capital Partners, LLC (the “Agents”) to conduct an “at-the-market” (ATM) equity offering program 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 $ 250,000 through the Agents, as the Company’s sales agents. The shares are being offered pursuant to the Sales Agreement under the Company’s automatic shelf registration statement on Form S-3ASR and a prospectus supplement thereto filed with the SEC on January 6, 2021 and September 2, 2022, respectively. 17 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 7. STOCKHOLDERS’ EQUITY – CONTINUED STOCK-BASED COMPENSATION The Company recognized stock-based compensation expense related to common stock, stock options and warrants for the three and nine months ended September 30, 2022 of $ 4,832 and $ 7,821 , respectively, which is included within compensation expense on the condensed consolidated statements of operations. The Company recognized stock-based compensation expense related to common stock and stock options for the three and nine months ended September 30, 2021 of $ 6,224 and $ 10,308 , respectively, As of September 30, 2022, there was $ 14,394 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 1.9 years. On July 29, 2022, Michael D. Farkas, the Company’s Chairman and Chief Executive Officer, and other senior executives of the Company who are responsible for the acquisition and integration of SemaConnect were granted one-time performance-based restricted stock awards under the Company’s 2018 Incentive Compensation Plan. A total number of 590,458 shares of common stock, with a market value on the grant date of $ 12,000 , were awarded to the executives. The agreements provide that Messrs. Farkas, Brendan S. Jones, President, Michael P. Rama, Chief Financial Officer, Aviv Hillo, General Counsel, and Harjinder Bhade, Chief Technology Officer, will each receive 472,367 , 47,237 , 23,618 , 23,618 and 23,618 shares of common stock, respectively. The awards of performance-based restricted stock are intended to provide an appropriate incentive structure for the executive management team of the Company to integrate and commercialize the SemaConnect acquisition given the transformational nature of the acquisition in a way that is aligned with stockholder interests. The awards of these performance-based restricted stock become vested based on a series of six performance hurdles that must be achieved before the third anniversary of the grants, as described in greater detail below. In addition to the closing of the SemaConnect acquisition with certain cost savings as the initial 20% vesting event, the vesting of the remaining 80% of the restricted stock is generally determined based on the (i) integration of SemaConnect’s hardware and software platforms, (ii) integration of its business processes, (iii) integration of its human capital processes, (iv) delivery and execution of a product rationalization roadmap and new production ready units for UL certification, and (v) our common stock’s closing price reaching on average for a period of ten consecutive trading days a price of $ 23.78 , which is 50 % over the price paid by us to SemaConnect shareholders in the acquisition, in each case without regard to the order of achieving the foregoing hurdles. The Board has discretion to determine when each performance hurdle has been achieved and to accelerate awards pursuant to the program. As of September 30, 2022, the vesting performance hurdles related to the closing of the SemaConnect acquisition and clause (v) outlined above was met. 8. RELATED PARTY TRANSACTIONS JOINT VENTURE The Company and a group of three Cyprus entities entered into a shareholders’ agreement on February 11, 2019, pertaining to the parties ‘respective shareholdings in a new joint venture entity, Blink Charging Europe Ltd. (the “Entity”), that was formed under the laws of Cyprus on the same date. Subsequently, two of the three Cyprus entities exited from the Entity. Pursuant to the agreement, the Company is not required to fund operating losses. The Company owns 40 % of the Entity while another entity owns 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 and nine months ended September 30, 2022, the Company recognized sales of $ 0 and $ 68 , respectively, and $ 28 and $ 800 during the three and nine months ended September 30, 2021, respectively, to Hellas. As of September 30, 2022 and December 31, 2021,the Company had a receivable from Hellas of approximately $ 0 and $ 6 , respectively and a payable to Hellas of approximately $ 33 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 September 30, 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 and nine months ended September 30, 2022 and 2021. BLUE CORNER Earlier during 2022, two 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 September 30, 2022, this related party relationship does not exist since, as of September 30, 2022, those two senior management employees are no longer with Blue Corner. ELECTRIC BLUE LIMITED As of September 30, 2022, several close family members of a senior management employee are providing services to Electric Blue Limited. For the quarter ended September 30, 2022, these related parties have collectively provided services worth $ 50 to Electric Blue Limited Furthermore, as of September 30, 2022, there was a payable of $ 12 and purchase commitments of $ 112 to the same related parties. 18 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 9. LEASES As of September 30, 2022, the Company had $ 745 of right of use assets that were classified as financing leases for vehicles associated with the operations of Blink Mobility are included as a component of property and equipment on the condensed consolidated balance sheet as of September 30, 2022. The duration of the leases are three years and the Company is expected to pay approximately $ 1,020 throughout the term. Total operating lease expenses for the three and nine months ended September 30, 2022 were $ 185 and $ 528 , respectively, and for the three and nine months ended September 30, 2021 were $ 155 and $ 429 , respectively, which were recorded in other operating expenses on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2022, the Company recorded $ 13 and $ 26 of interest expense, respectively, related to finance leases, which were recorded within interest expense on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2022, the Company recorded amortization expense of $ 210 and $ 390 , respectively, related to finance leases. Finance lease liabilities are included within accrued expenses and other liabilities on the condensed consolidated balance sheet as of September 30, 2022. Supplemental cash flows information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES For The Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 412 $ 440 Financing cash flows from finance leases $ 144 $ - Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 398 $ 1,713 Finance leases $ 931 $ - Weighted Average Remaining Lease Term Operating leases 3.21 4.90 Finance leases 2.50 - Weighted Average Discount Rate Operating leases 3.8 % 6.0 % Finance leases 6.2 % 0.0 % SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS For the Years Ending December 31, Operating Lease Finance Lease 2022 $ 1,505 $ 340 2023 649 340 2024 405 170 2025 350 - 2026 283 - Thereafter 154 - Total future minimum lease payments 3,346 850 Less: imputed interest ( 195 ) ( 58 ) Total $ 3,151 $ 792 19 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 10. FAIR VALUE MEASUREMENT 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 September 30, 2022 Level 1 Level 2 Level 3 Total Assets: Alternative fuel credits $ - $ 35 $ - $ 35 Total assets $ - $ 35 $ - $ 35 Liabilities: Common stock liability $ 558 $ - $ - $ 558 Contingent consideration - - 4,030 4,030 Warrant liability - - 55 55 Total liabilities $ 558 $ - $ 4,085 $ 4,643 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 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 Contingent Consideration Beginning balance as of January 1, 2022 $ - Contingent consideration assumed in Electric Blue acquisition 3,814 Change in fair value of contingent consideration 216 Ending balance as of September 30, 2022 $ 4,030 Warrant Liability Beginning balance as of January 1, 2022 $ 90 Change in fair value of warrant liability ( 35 ) Ending balance as of September 30, 2022 $ 55 20 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 11. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS As of September 30, 2022, the Company had purchase commitments of approximately $ 55,000 which will become payable upon the suppliers’ delivery of the charging stations and other related items. The purchase commitments were made primarily for future sales, deployments of charging stations, inventory management planning and other related items, all of which are expected to be received during the next 12 to 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 September 30, 2022 as it determined that any such loss contingency was either not probable or estimable. 21 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 11. 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 September 30, 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 September 30, 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 September 30, 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 September 30, 2022 as it determined that any such loss contingency was either not probable or estimable. 22 BLINK CHARGING CO. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 11. COMMITMENTS AND CONTINGENCIES – CONTINUED WARRANTY The Company estimates an approximate cost of $ 346 to repair deployed chargers, which the Company owns as of September 30, 2022. 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 September 30, 2022, the remaining cost for the Upgrade is approximately $ 870 for certain host owned and Company owned and operated EV charging stations. During the nine months ended September 30, 2022, the Company incurred $ 2,762 related to these upgrades. The Upgrade project is expected to be completed by December 31, 2022. 23