Blink Charging Co. 10-Q

ITEM 1. FINANCIAL STATEMENTS. BLINK CHARGING CO. Condensed Consolidated Balance Sheets (in thousands, except for share amounts) March 31, December 31, 2024 2023 (unaudited) Assets Current Assets: Cash and cash equivalents $ 93,458 $ 121,691 Accounts receivable, net 53,608 45,447 Inventory, net 44,679 47,942 Prepaid expenses and other current assets 5,990 6,654 Total Current Assets 197,735 221,734 Restricted cash 77 79 Property and equipment, net 37,205 35,127 Operating lease right-of-use asset 9,616 9,731 Intangible assets, net 13,857 16,298 Goodwill 144,881 144,881 Other assets 1,124 669 Total Assets $ 404,495 $ 428,519 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 26,300 $ 31,193 Accrued expenses and other current liabilities 15,477 14,143 Notes payable 6,792 6,792 Current portion of operating lease liabilities 3,794 3,448 Current portion of financing lease liabilities 436 512 Current portion of deferred revenue 14,430 13,613 Total Current Liabilities 67,229 69,701 Consideration payable 19,818 49,434 Operating lease liabilities, non-current portion 6,714 7,025 Financing lease liabilities, non-current portion 123 163 Other liabilities 337 337 Deferred revenue, non-current portion 13,536 12,462 Total Liabilities 107,757 139,122 Commitments and contingencies (Note 8) - - Stockholders’ Equity: Common stock, $ 0.001 par value, 500,000,000 shares authorized, 100,996,579 and 92,818,233 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 101 93 Additional paid-in capital 855,306 829,563 Accumulated other comprehensive loss ( 3,773 ) ( 2,536 ) Accumulated deficit ( 554,896 ) ( 537,723 ) Total Stockholders’ Equity 296,738 289,397 Total Liabilities and Stockholders’ Equity $ 404,495 $ 428,519 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 BLINK CHARGING CO. Condensed Consolidated Statements of Operations (in thousands, except for share and per share amounts) (unaudited) 2024 2023 For The Three Months Ended March 31, 2024 2023 Revenues: Product sales $ 27,508 $ 16,389 Charging service revenue - company-owned charging stations 5,027 2,885 Network fees 2,065 1,628 Warranty 953 393 Grant and rebate 583 49 Car-sharing services 1,097 252 Other 335 72 Total Revenues 37,568 21,668 Cost of Revenues: Cost of product sales 16,602 11,731 Cost of charging services - company-owned charging stations 705 887 Host provider fees 3,042 1,647 Network costs 589 437 Warranty and repairs and maintenance 605 948 Car-sharing services 862 637 Depreciation and amortization 1,744 838 Total Cost of Revenues 24,149 17,125 Gross Profit 13,419 4,543 Operating Expenses: Compensation 14,957 22,709 General and administrative expenses 7,777 8,478 Other operating expenses 6,438 4,195 Change in fair value of consideration payable 1,700 - Total Operating Expenses 30,872 35,382 Loss From Operations ( 17,453 ) ( 30,839 ) Other Income: Interest expense ( 427 ) ( 617 ) Foreign transaction (loss) gain ( 30 ) 1,807 Change in fair value of derivative and other accrued liabilities 2 10 Dividend and interest income 763 50 Total Other Income 308 1,250 Loss Before Income Taxes $ ( 17,145 ) $ ( 29,589 ) Provision for income taxes ( 28 ) ( 212 ) Net Loss $ ( 17,173 ) $ ( 29,801 ) Net Loss Per Share: Basic $ ( 0.17 ) $ ( 0.53 ) Diluted $ ( 0.17 ) $ ( 0.53 ) Weighted Average Number of Common Shares Outstanding: Basic 99,902,470 56,469,928 Diluted 99,902,470 56,469,928 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 BLINK CHARGING CO. Condensed Consolidated Statements of Comprehensive Loss (in thousands) (unaudited) 2024 2023 For the Three Months Ended March 31, 2024 2023 Net Loss $ ( 17,173 ) $ ( 29,801 ) Other Comprehensive Loss: Cumulative translation adjustments ( 1,237 ) ( 850 ) Total Comprehensive Loss $ ( 18,410 ) $ ( 30,651 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 BLINK CHARGING CO. Condensed Consolidated Statements of Changes in Stockholders’ Equity For the Three Months Ended March 31, 2024 (in thousands, except for share amounts) (unaudited) Shares Amount Capital Loss Deficit Equity Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit Equity Balance - January 1, 2024 92,818,233 $ 93 $ 829,563 $ ( 2,536 ) $ ( 537,723 ) $ 289,397 Common stock issued in public offering, net of issuance costs [1] 8,177,472 8 25,062 - - 25,070 Stock-based compensation 837 - 681 - - 681 Other comprehensive loss - - - ( 1,237 ) - ( 1,237 ) Net loss - - - - ( 17,173 ) ( 17,173 ) Balance - March 31, 2024 100,996,542 $ 101 $ 855,306 $ ( 3,773 ) $ ( 554,896 ) $ 296,738 [1] Includes gross proceeds of $ 25,651 , less issuance costs of $ 581 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BLINK CHARGING CO. Condensed Consolidated Statements of Changes in Stockholders’ Equity For the Three Months Ended March 31, 2023 (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, 2023 51,476,445 $ 51 $ 597,982 $ ( 3,046 ) $ ( 334,030 ) $ 260,957 Balance 51,476,445 $ 51 $ 597,982 $ ( 3,046 ) $ ( 334,030 ) $ 260,957 Common stock issued in public offering, net of issuance costs [1] 8,333,333 8 94,758 - - 94,766 Common stock issued upon exercises of warrants 557,733 1 834 - - 835 - Stock-based compensation 5,866 - 7,757 - - 7,757 Other comprehensive loss - - - ( 850 ) - ( 850 ) Net loss - - - - ( 29,801 ) ( 29,801 ) Balance - March 31, 2023 60,373,377 $ 60 $ 701,331 $ ( 3,896 ) $ ( 363,831 ) $ 333,664 Balance 60,373,377 $ 60 $ 701,331 $ ( 3,896 ) $ ( 363,831 ) $ 333,664 [1] Includes gross proceeds of $ 100,000 , less issuance costs of $ 5,234 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 BLINK CHARGING CO. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) 2024 2023 For The Three Months Ended March 31, 2024 2023 Cash Flows From Operating Activities: Net loss $ ( 17,173 ) $ ( 29,801 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,343 3,166 Non-cash lease expense 497 438 Change in fair value of contingent consideration - 8 Gain on disposal of fixed assets ( 32 ) ( 37 ) Change in fair value of derivative and other accrued liabilities 2 10 Change in fair value of consideration payable 1,700 - Provision for slow moving and obsolete inventory 762 - Provision for bad debt 548 555 Stock-based compensation: Common stock 635 3,685 Options 282 4,090 Changes in operating assets and liabilities: Accounts receivable and other receivables ( 10,629 ) ( 4,377 ) Inventory 1,981 ( 4,903 ) Prepaid expenses and other current assets 615 ( 590 ) Other assets ( 459 ) ( 181 ) Accounts payable and accrued expenses ( 5,271 ) 3,876 Other liabilities - 4 Lease liabilities ( 339 ) ( 346 ) Deferred revenue 2,062 226 Total Adjustments ( 4,303 ) 5,624 Net Cash Used In Operating Activities ( 21,476 ) ( 24,177 ) Cash Flows From Investing Activities: Capitalization of engineering costs - ( 550 ) Purchases of property and equipment ( 2,830 ) ( 1,665 ) Net Cash Used In Investing Activities ( 2,830 ) ( 2,215 ) Cash Flows From Financing Activities: Proceeds from sale of common stock in public offering, net [1] 25,070 94,766 Repayment of note payable ( 31,354 ) - Proceeds from exercise of options and warrants - 835 Repayment of financing liability in connection with finance lease ( 169 ) ( 92 ) Payment of financing liability in connection with internal use software ( 250 ) ( 149 ) Net Cash (Used In) Provided By Financing Activities ( 6,703 ) 95,360 Effect of Exchange Rate Changes on Cash and Cash Equivalents 2,774 ( 2,321 ) Net (Decrease) Increase In Cash and Cash Equivalents and Restricted Cash ( 28,235 ) 66,647 Cash and Cash Equivalents and Restricted Cash - Beginning of Period 121,770 36,633 Cash and Cash Equivalents and Restricted Cash - End of Period $ 93,535 $ 103,280 Cash and cash equivalents and restricted cash consisted of the following: Cash and cash equivalents $ 93,458 $ 103,202 Restricted cash 77 78 $ 93,535 $ 103,280 [1] Includes gross proceeds of $ 25,651 , less issuance costs of $ 581 . The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BLINK CHARGING CO. Condensed Consolidated Statements of Cash Flows — Continued (in thousands) (unaudited) 2024 2023 For The Three Months Ended March 31, 2024 2023 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ 1,139 $ - Income taxes $ - $ - Non-cash investing and financing activities: Right-of-use assets obtained in exchange for lease obligations $ 375 $ 1,209 Property and equipment obtained in exchange for finance lease obligations $ 53 $ - Transfer of inventory to property and equipment $ ( 307 ) $ ( 427 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION Organization and Operations Blink Charging Co., through its wholly-owned subsidiaries (collectively, the “Company” or “Blink”), is a leading manufacturer, owner, operator and provider of electric vehicle (“EV”) charging equipment and networked EV charging services in the rapidly growing U.S. and international markets for EVs. Blink offers residential and commercial EV charging equipment and services, enabling EV drivers to recharge at various location types. Blink’s principal line of products and services is its nationwide Blink EV charging 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 is a proprietary, cloud-based system that operates, maintains and manages Blink charging stations and handles the associated charging data, back-end operations and payment processing. The Blink Networks provide property owners, managers, parking companies, state and municipal entities, and other types of commercial customers (“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 an EV based ride-sharing business through its wholly-owned subsidiary, Envoy Mobility, Inc. 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, 2024 and for the three months then ended. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 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, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on March 18, 2024 as part of the Company’s Annual Report on Form 10-K. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the Annual Report for the year ended December 31, 2023, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. LIQUIDITY As of March 31, 2024, the Company had cash and cash equivalents of $ 93,458 and working capital of $ 130,506 . During the three months ended March 31, 2024, the Company incurred a net loss of $ 17,173 . During the three months ended March 31, 2024, the Company used cash in operating activities of $ 21,476 . During the three months ended March 31, 2024, the Company sold an aggregate of 8,177,472 shares of common stock under an “at-the-market” equity offering program for aggregate gross proceeds of $ 25,651 , less issuance costs of $ 581 which were recorded as a reduction to additional paid-in capital. The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that the Company’s operating expenses will continue to increase and, as a result, it will eventually need to generate significant product revenues to achieve profitability. Historically, the Company has been able to raise funds to support its business operations, although there can be no assurance that it will be successful in raising significant additional funds in the future. The Company expects that its cash on hand will fund its operations for at least 12 months after the issuance date of these financial statements. Since inception, the Company’s operations have primarily been funded through proceeds received in equity and debt financing. The Company believes it has access to capital resources and continues to evaluate additional financing opportunities. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings. During 2023, the Company commenced a plan designed to improve the Company’s liquidity by enhancing revenue economics and reducing selling, general, and administrative expenses. The plan seeks to achieve these goals by increasing gross profit through product optimization, integration of SemaConnect, Blink UK/EB and Blue Corner acquisitions, and reduction of operating expenses through cost avoidance and cost cutting strategies. There can be no assurances that these strategies will be achieved. 8 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED FOREIGN CURRENCY TRANSLATION The Company’s reporting currency is the United States dollar. The functional currency of certain subsidiaries is the Euro, Indian Rupee, and Pound Sterling. Assets and liabilities are translated based on the exchange rates at the balance sheet date ( 1.0796 for the Euro, 0.1199 for the Indian Rupee and 1.2627 for the Pound Sterling, as of March 31, 2024. Expense accounts are translated at the weighted average exchange rate for the period ( 1.0806 for the Euro, 0.0120 for the Indian Rupee and 1.2638 for the Pound Sterling, during the three months ended March 31, 2024 and 1.0741 for the Euro, 0.0122 for the Indian Rupee, and 1.2206 for the Pound Sterling for the three months ended March 31, 2023). Equity accounts are translated at historical exchange rates. The resulting translation adjustments are recognized in stockholders’ equity as a component of accumulated other comprehensive (loss) income. Comprehensive income (loss) is defined as the change in equity of an entity from all sources other than investments by owners or distributions to owners and includes foreign currency translation adjustments as described above. Transaction (losses) gains attributable to foreign exchange were ($ 30 ) and 1,807 during the three months ended March 31, 2024 and 2023, respectively. ASSETS HELD FOR SALE The Company initially measures an asset that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell. The Company assesses the fair value of an asset less costs to sell each reporting period that it remains classified as held for sale, and reports any subsequent changes as an adjustment to the carrying amount of the asset. Assets are not depreciated or amortized while they are classified as held for sale. Office Building During the three months ended March 31, 2024, the Company commenced plans to sell an office building in Miami Beach, Florida containing approximately 10,000 -square feet of office space. The asset is included within property and equipment on the condensed consolidated balance sheet as of March 31, 2024. The asset’s carrying value was $ 3,675 and $ 3,692 as of March 31, 2024 and December 31, 2023, respectively. Underperforming Subsidiary During the first quarter of 2024, the Company’s Board of Directors approved a plan for the sale of underperforming assets of a subsidiary. On April 30, 2024, the Company entered into an agreement to sell installed and inventory charging units and the associated agreements with existing customers, hosts, and drivers. This transaction is expected to close during the second quarter of 2024. As a result of the approved plan and sale agreement, the Company recorded an estimated loss o f $ 564 from the pending transaction for the three months ended March 31, 2024, which is included in operating expenses on the accompanying condensed consolidated statement of operations for the three months ended March 31, 2024. The Company elected not to present this underperforming subsidiary as discontinued operations because it is not material to the Company’s condensed consolidated financial statements. REVENUE RECOGNITION The Company recognizes revenue primarily from four 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. ● Other – Other revenues primarily is comprise d of revenues generated from alternative fuel credits. The following table summarizes revenue recognized in the condensed consolidated statements of operations: SCHEDULE OF REVENUE RECOGNITION BY CONTRACT 2024 2023 For The Three Months Ended March 31, 2024 2023 Revenues - Recognized at a Point in Time Product sales $ 27,508 $ 16,389 Charging service revenue - company-owned charging stations 5,027 2,885 Other 335 72 Total Revenues - Recognized at a Point in Time 32,870 19,346 Revenues - Recognized Over a Period of Time: Network and other fees 3,018 2,021 Total Revenues - Recognized Over a Period of Time 3,018 2,021 Revenues- Other Car-sharing services 1,097 252 Grant and rebate 583 49 Total Revenues - Other 1,680 301 Total Revenue $ 37,568 $ 21,668 9 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED REVENUE RECOGNITION - CONTINUED The following table summarizes our revenue recognized in the condensed consolidated statements of operations by geographical area: SCHEDULE OF REVENUE RECOGNITION BY GEOGRAPHICAL AREA 2024 2023 For The Three Months Ended March 31, 2024 2023 Revenues by Geographical Area U.S.A $ 27,976 $ 13,175 International 9,592 8,493 Total Revenue $ 37,568 $ 21,668 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of March 31, 2024, the Company had $ 27,966 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue on the consolidated balance sheets as of March 31, 2024. The Company expects to satisfy $ 14,430 of its remaining performance obligations for network fees, warranty revenue, product sales, and other and recognize the revenue within the next twelve months. The Company has elected to apply the practical expedient to expense costs to obtain contracts at the time the liability is incurred when the expected amortization period is one year or less. During the three months ended March 31, 2024, the Company recognized $ 1,042 revenues related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2023. During the three months ended March 31, 2024, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Grants, rebates and alternative fuel credits, which are not within the scope of ASC 606, pertaining to revenues and periodic expenses are recognized as income when the related revenue and/or periodic expense are recorded. Grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the related depreciation expense of the related asset over the useful life of the charging station. During the three months ended March 31, 2024 and 2023, the Company recorded $ 583 and $ 49 , respectively, related to grant and rebate revenue. During the three months ended March 31, 2024 and 2023, the Company recognized $ 44 and $ 51 , respectively, of revenue related to alternative fuel credits. Car-sharing services is accounted for under ASC Topic 842, Leases, and pertains to revenues and expenses related to a car-sharing services agreement with the City of Los Angeles which allows customers the ability to rent electric vehicles through a subscription service. The Company accounts for such rentals as operating leases. The lease terms are included in the Company’s contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. The Company’s lease revenues do not include material amounts of variable payments. The Company does not provide an option for the lessee to purchase the rented equipment at the end of the lease. The Company is unsure of when the customer will return rented equipment. As such, the Company does not know how much the customer will owe it upon return of the equipment and, therefore, cannot provide a maturity analysis of future lease payments. The Company’s equipment is generally rented for short periods of time (generally a few minutes to a few hours). Lessees do not provide residual value guarantees on rented equipment. The Company expects to derive significant future benefits from its equipment following the end of the rental term. The Company’s equipment is typically rented for the majority of the time that the Company owns it. The Company recognizes revenue over the contractual period of performance of the subscription which are short term in nature. During the three months ended March 31, 2024 and 2023, the Company recognized $ 1,097 and $ 252 , respectively, related to car-sharing services revenue. CONCENTRATIONS During the three months ended March 31, 2024, sales to a significant customer represented 14 % of total revenue. During the three months ended March 31, 2023, sales to a significant customer represented 13 % of total revenue. During the three months ended March 31, 2024 and 2023, the Company made purchases from a significant supplier that represented 10 % and 16 % of total purchases, respectively. During the three months ended March 31, 2024, the Company made purchases from another significant supplier that represented 10% of total purchases. RECLASSIFICATIONS Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. 10 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED 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 2024 2023 For the Three Months Ended March 31, 2024 2023 Warrants 1,150,152 1,169,031 Unvested restricted common stock 387,569 - Options 971,671 1,084,580 Total potentially dilutive shares 2,509,392 2,253,611 3. NOTES PAYABLE SEMACONNECT- NOTES PAYABLE During the three months ended March 31, 2024, the Company repaid the remaining principal balance of $ 31,354 due under this note as well as paid $ 1,139 of accrued interest. 11 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 4. STOCKHOLDERS’ EQUITY AT-THE-MARKET OFFERING During the three months ended March 31, 2024, the Company sold an aggregate of 8,177,472 shares of common stock aggregate gross proceeds of $ 25,651 , less issuance costs of $ 581 , for net proceeds of $ 25,070 . COMMON STOCK During the three months ended March 31, 2024, the Company issued an aggregate of 837 shares of common stock for services to an employee with an issuance date fair value of $ 2 . 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, 2024 and 2023 of $ 917 and $ 7,775 , respectively, which is included within compensation expense on the condensed consolidated statements of operations. As of March 31, 2024, there was $ 3,228 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 1.3 years. During the three months ended March 31, 2024, the Company granted an aggregate of 141,275 shares of restricted stock with an aggregate grant date fair value of $ 467 which will be recognized ratably over the vesting terms. The restricted stock have vesting dates ranging from April 15, 2024 to April 15, 2026. 5. RELATED PARTY TRANSACTIONS See Note 8 – 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. The Company owns 40 % of the Entity while the other three parties own 60% of the Entity. Subsequently, two of the three other parties exited the joint venture, and the remaining other party acquired the ownership of the exiting parties. The Entity currently owns 100 % of a Greek subsidiary, Blink Charging Hellas SA (“Hellas”), which operates in the electric vehicle market in Greece. The obligation to fund the future operations of the Entity is limited to the Company’s 40 % ownership. During the three months ended March 31, 2024 and 2023, the Company did not recognized any sales to Hellas. As of March 31, 2024 and December 31, 2023, the Company had a payable of approximately $ 174 and $ 114 , respectively, to Hellas. In addition, the Company has provided working capital of $ 279 and $ 177 as of March 31, 2024 and December 31, 2023 respectively, in Hellas. The Company has written off this working capital contribution, since Company’s proportion of Hellas’s net losses exceeds the working capital contribution. 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, 2024, 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, 2024 and 2023. BLINK CHARGING UK LIMITED As of March 31, 2024, several close family members of a senior management employee of the Company are providing services to Electric Blue Limited. For the three months ended March 31, 2024, these related parties have collectively provided services worth $ 82 to Electric Blue Limited. 12 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 6. LEASES OPERATING LEASES Total operating lease expenses for the three months ended March 31, 2024 and 2023 were $ 788 and $ 493 , respectively, and were recorded in other operating expenses on the condensed consolidated statements of operations. Operating lease expenses consist of rent expense, common area maintenance adjustments and other expenses. As of March 31, 2024, the Company did not have additional operating and financing leases that have not yet commenced. A s of March 31, 2024, the Company had $ 177 of right-of-use assets that were classified as financing leases for vehicles associated with the operations of Blink Mobility and are included as a component of property and equipment on the condensed consolidated balance sheet as of March 31, 2024. During the three months ended March 31, 2024 and 2023, the Company recorded $ 10 and $ 10 , respectively, of interest expense related to finance leases, which were recorded within interest expense on the condensed consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Company recorded amortization expense of $ 48 and $ 169 , respectively, related to finance leases. Supplemental cash flows information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES 2024 2023 For The Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 339 $ 346 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 339 $ 346 Financing cash flows from finance leases $ 169 $ 92 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 169 $ 92 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 375 $ 1,209 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 375 $ 1,209 Finance leases $ 53 $ - Right-of-use assets obtained in exchange for lease obligations: Finance leases $ 53 $ - Weighted Average Remaining Lease Term Operating leases 2.72 3.45 Financing leases 2.27 2.00 Weighted Average Discount Rate Operating leases 7.3 % 5.5 % Finance leases 6.3 % 6.2 % Future minimum payments under non-cancellable leases as of March 31, 2024 were as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS For the Years Ending December 31, Operating Lease Finance Lease 2024 $ 5,091 $ 497 2025 3,249 41 2026 1,779 41 2027 1,160 35 2028 659 18 Thereafter 1,207 - Total future minimum lease payments 13,145 632 Less: imputed interest ( 2,637 ) ( 73 ) Total $ 10,508 $ 559 13 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 7 . FAIR VALUE MEASUREMENT Assumptions utilized in the valuation of Level 3 liabilities are described as follows: SUMMARY OF ASSUMPTIONS USED FOR VALUATION OF FAIR VALUE LIABILITIES For the Three Months Ended March 31, 2024 2023 Risk-free interest rate 5.03 % 4.64 % Contractual term (years) 1.00 1.00 Expected volatility 88 % 77 % Expected dividend yield 0.00 % 0.00 % The following table sets forth a summary of the changes in the fair value of Level 3 warrant liabilities that are measured at fair value on a recurring basis: SUMMARY OF CHANGES IN FAIR VALUE OF LEVEL 3 WARRANT LIABILITIES MEASURED AT RECURRING BASIS 2024 Consideration payable Beginning balance as of January 1, $ 18,118 Change in fair value of consideration payable 1,700 Ending balance as of March 31, $ 19,818 Warrant Liability Beginning balance as of January 1 $ 32 Change in fair value of warrant liability 2 Ending balance as of March 31, $ 34 The common stock consideration payable is recorded at fair value of $ 19,818 and $ 18,118 as of March 31, 2024 and December 31, 2023, respectively, and is included within consideration payable on the condensed consolidated balance sheets. The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the common stock consideration payable on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are 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 common stock consideration liability. Assets and liabilities measured at fair value on a recurring basis are as follows: SUMMARY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE RECURRING AND NONRECURRING BASIS March 31, 2024 Level 1 Level 2 Level 3 Total Assets: Alternative fuel credits $ - $ 26 $ - $ 26 Total assets $ - $ 26 $ - $ 26 Liabilities: Option liability $ 293 $ - $ - $ 293 Warrant liability - - 34 34 Common stock liability 775 - - 775 Consideration payable 19,818 - - 19,818 Total liabilities $ 20,886 $ - $ 34 $ 20,920 December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Alternative fuel credits $ - $ 32 $ - $ 32 Total assets $ - $ 32 $ - $ 32 Liabilities: Option liability $ 293 $ - $ - $ 293 Warrant liability - - 32 32 Common stock liability 743 - - 743 Consideration payable 18,118 - - 18,118 Total liabilities $ 19,154 $ - $ 32 $ 19,186 14 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 8. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS As of March 31, 2024, the Company had purchase commitments of approximately $ 20,540 , 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, DISPUTES AND SETTLEMENTS The Company may be subject to lawsuits, investigations, intellectual property matters, claims and proceedings, including, but not limited to, contractual disputes with vendors and customers and liabilities related to employment, health and safety matters that may arise in the ordinary course of business. The Company accrues for losses that are both probable and reasonably estimable. Loss contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex and subject to change. The Company believes it has recorded adequate provisions for any such lawsuits, investigations, claims, and proceedings as of March 31, 2024, and the Company believes it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in the condensed consolidated financial statements. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. However, future events or circumstances, currently unknown to management, may potentially have a material effect on the Company’s financial position, liquidity or results of operations in any future reporting period. 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 former 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 Networks 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. On November 27, 2023, the court dismissed Co-Lead Plaintiffs’ claims relating to the size of Blink’s charging network and denied the remainder of the motion to dismiss. Following a mediation on April 3, 2024, the parties agreed to the terms of a settlement, which will be subject to final documentation and court approval. The terms of the settlement are confidential, but will be made public when the parties file a motion in the court seeking preliminary approval. The Company expects the settlement amount, less any remaining retention at the time of payment, which is estimated to be less than $ 100 , will be covered by the Company’s insurance. 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. On June 17, 2022, the court substituted the executrix of Klein’s estate as the plaintiff. The Company has not recorded an accrual related to this matter as of March 31, 2024 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. On June 22, 2022, the court re-consolidated the Klein and Bhatia actions and reinstated the temporary stay. The Company wholly and completely disputes the allegations therein. The Company has retained legal counsel to defend the action vigorously. The Company has not recorded an accrual related to this matter as of March 31, 2024, as it determined that any such loss contingency was either not probable or estimable. 15 BLINK CHARGING CO. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share amounts) 8. COMMITMENTS AND CONTINGENCIES – CONTINUED LITIGATION, DISPUTES AND SETTLEMENTS – CONTINUED 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, 2024, as it determined that any such loss contingency was either not probable or estimable. WARRANTY The Company estimates an approximate cost of $ 700 to repair deployed chargers, which the Company owns as of March 31, 2024. 9. SUBSEQUENT EVENTS ENVOY-NOTES PAYABLE Subsequent to March 31, 2024, the Company repaid $ 6,824 of its notes payable related to the Envoy transaction which includes principal and accrued interest. 16