Blink Charging Co. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Amounts below are in U.S. dollars; financial statement amounts are converted from thousands to millions unless stated otherwise. The filing was signed May 10, 2022.
Business context and reporting period
Blink sells EV charging equipment and operates networked charging services, with business models ranging from host-owned equipment to Blink-owned stations. It also operates a Los Angeles EV ride-sharing program. By March 31, Blink reported 20,569 chargers sold or deployed; 7,727 were on the Blink Network. Its acquired Blue Corner subsidiary reported 15,768 independent charge points.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $9.80 million | $2.23 million |
| Cost of revenue | $8.21 million | $2.14 million |
| Gross profit / margin | $1.59 million / 16.2% | $0.10 million / 4.3% |
| Operating expenses | $16.63 million | $7.48 million |
| Loss from operations | $(15.04) million | $(7.39) million |
| Net loss | $(15.14) million | $(7.37) million |
| Basic and diluted loss per share | $(0.36) | $(0.18) |
| Cash used in operating activities | $(11.38) million | $(8.50) million |
Revenue increased 339%, led by product sales ($8.05 million, up 382%) and charging services from Blink-owned stations ($1.11 million, up 508%). Management attributed part of the increases to Blue Corner, acquired in May 2021. Gross margin improved, but operating expenses rose 122%, and net loss more than doubled.
At March 31, cash and cash equivalents were $161.98 million, working capital was $161.42 million, and total assets were $221.27 million. Total liabilities were $21.18 million. Notes payable were $10,000; operating lease liabilities were approximately $2.01 million. Cash and restricted cash declined by $12.99 million during the quarter. Investing cash use was $1.37 million, principally for property and equipment; financing cash use was $0.08 million. Accumulated deficit was $257.61 million.
Material changes versus the prior comparable period
- Revenue grew substantially, including $2.42 million of product sales and $0.72 million of company-owned charging service revenue attributed to Blue Corner.
- Operating expenses increased by $9.15 million. Compensation rose to $9.26 million, reflecting additional personnel, growth-related hiring, acquisition-related costs, and higher stock-based compensation. General and administrative expenses rose to $4.43 million, and other operating expenses to $2.94 million.
- Operating cash use increased from $8.50 million to $11.38 million, while investing cash use fell from $40.58 million to $1.37 million. Q1 2021 investing outflow included $36.56 million of marketable securities purchases; that quarter also included $221.41 million of net public-offering proceeds, versus none in Q1 2022.
- Stock-based compensation expense increased to $1.96 million from $0.42 million. Shares outstanding at quarter-end were 42.58 million, compared with 42.42 million at December 31, 2021.
Outlook, risks, contingencies, and unusual items
- Outlook and funding: No specific revenue or earnings guidance was provided. Blink said it expected continued operating cash outflows and higher operating expenses, but expected cash on hand to fund operations for at least 12 months from the financial statements’ issuance date. It cautioned that future financing may be needed and may not be available on acceptable terms.
- Supply chain and technology: COVID-19, chip shortages, and supply-chain disruptions had delayed some equipment shipments; the company could not estimate their ultimate effect. A 2G/3G-to-4G LTE upgrade for certain owned and operated stations was estimated to cost $1.785 million; $0.341 million of related expense was recorded in the quarter.
- Commitments: Purchase commitments totaled approximately $35 million, including $13 million with a related party, and were expected to be received over the next 12–24 months. These commitments become payable upon supplier delivery.
- Post-quarter acquisition: Blink acquired UK-based Electric Blue Limited on April 22, 2022. Stated consideration was up to £18 million (approximately $23.4 million), including cash, shares, and a potential share earn-out tied to performance targets.
- Potential acquisition and loan: Blink signed a non-binding letter of intent on April 19, 2022 regarding a possible U.S. acquisition and made a $1 million secured convertible loan to the target at 6% interest. The acquisition was not definitive.
- Legal matters: A securities class action and several shareholder derivative suits remained pending or stayed; the company recorded no accrual for those matters because losses were considered not probable or estimable. A separate director-compensation derivative suit was settled after quarter-end; the company accrued $190,000 in attorneys’ fees and agreed to compensation-practice changes. The filing also estimated $155,000 to repair deployed chargers.
- Internal controls: Management concluded disclosure controls were not effective at March 31, 2022 because previously reported material weaknesses in internal control over financial reporting continued. Remediation efforts were ongoing.
- Revenue presentation: The income statement reports total revenue of $9.800 million, while the ASC 606 revenue schedules report $9.725 million. The filing presents grants and rebates separately from the ASC 606 schedule; investors should confirm the reconciliation.
Most important facts for investors to verify
- Whether revenue growth and improved gross margin persist after separating acquired Blue Corner activity from organic growth.
- Whether operating costs and cash burn can be controlled, and whether management’s stated minimum 12-month cash runway remains adequate after subsequent acquisitions and commitments.
- The delivery timing, cancellation terms, and funding needs associated with the $35 million purchase commitments, particularly the $13 million related-party portion.
- Progress in remediating material weaknesses in financial reporting controls and any resulting changes to reported results.
- The final Electric Blue purchase accounting and cash, share, and earn-out obligations, along with the outcome of the proposed U.S. acquisition and related loan.
- Developments in litigation, equipment supply delays, and the estimated cost and execution of the network connectivity upgrade.