Blink Charging Co. — FY2022 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2022; it is not a standalone fourth-quarter report. Blink manufactures, sells, owns and operates EV chargers and provides network services, charging services and EV ride-sharing. It reported 66,478 chargers sold or deployed by year-end, including 50,167 in the Blink Networks. Comparisons with 2021 are affected by the April acquisition of Electric Blue and June acquisition of SemaConnect, whose results are included only from their respective acquisition dates.
Key financial metrics
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $61.1 million | $20.9 million |
| Gross profit / gross margin | $14.8 million / 24.2% | $2.8 million / 13.6% |
| Operating expenses | $104.1 million | $58.5 million |
| Operating loss | $89.3 million | $55.7 million |
| Net loss | $91.6 million | $55.1 million |
| Net loss per share, basic and diluted | $1.95 | $1.32 |
| Cash used in operations | $82.4 million | $40.6 million |
| Cash and cash equivalents at year-end | $36.6 million | $174.8 million |
| Working capital at year-end | $49.0 million | $176.3 million |
Amounts are converted from the filing’s stated thousands of dollars. No meaningful positive profit margin was reported: the company remained loss-making, and its operating and net losses widened.
Revenue increased 192%. Product sales were $46.0 million, up 197%; charging service revenue was $6.9 million, up 131%; and network fees were $4.4 million, up 555%. Acquired businesses contributed materially to the increase. Gross margin improved to 24.2% from 13.6%, but operating expenses rose 78%, led by compensation, general and administrative costs, and other operating expenses.
The company reported $40.6 million of debt in its liquidity discussion, primarily reflecting SemaConnect deferred acquisition consideration; the balance sheet lists $40.6 million of consideration payable and only $10,000 of notes payable. Lease liabilities are additional. The filing reports $57.4 million of net cash used in investing activities in the cash-flow statement, while the MD&A narrative gives $58.8 million; investors should reconcile this discrepancy.
Material changes versus the prior year
- Revenue more than doubled, partly due to acquisitions and higher product sales, network fees and charging utilization.
- Net loss grew by $36.4 million to $91.6 million, while operating cash use approximately doubled.
- Cash fell by $138.2 million during 2022. Investing cash use included acquisition payments and charger and fixed-asset purchases; the company also made $2.2 million of loans to a potential acquisition target.
- SemaConnect was acquired for stated aggregate consideration of $200.6 million, including $113.8 million in Blink shares and $40.6 million in deferred cash consideration. Electric Blue was acquired for stated fair-value consideration of $19.3 million, including contingent consideration.
- Goodwill increased to $203.7 million from $19.4 million, mainly from the SemaConnect and Electric Blue acquisitions.
Outlook, risks and unusual items
- Outlook: Management expects continued revenue growth from equipment sales, charger deployments, expanded sales channels and recurring network and charging services. It provided no specific revenue, earnings or profitability guidance. Management expects year-end cash, together with available resources, to fund operations for at least 12 months after the financial statements’ issuance, but cautions that additional financing may be needed.
- Subsequent financing: In February 2023, Blink raised approximately $100 million gross and $95 million net by issuing 8,333,333 common shares at $12 per share. The underwriters also received a 30-day option for additional shares. The offering increases liquidity but dilutes existing holders.
- Commitments and funding: Purchase commitments were approximately $60.5 million, expected to be received over the next 12–24 months. The company also reported roughly $5.5 million of operating and finance lease obligations over five years and a $250 million ATM equity program, of which about $7.7 million gross had been raised by year-end.
- Execution and market risks: Risks include continuing losses and cash burn, dependence on EV adoption and government incentives, competition, supply-chain and chip constraints, inflation, acquisition integration, technology changes, and possible future capital needs. Management cited pandemic-related uncertainty and geopolitical and foreign-exchange risks. The 2G/3G-to-4G charger upgrade was substantially complete; $3.8 million was incurred in 2022.
- Controls and audit: Management and the auditor identified material weaknesses in IT change-management and access controls at a subsidiary and in controls over share-based compensation calculations. Management said it expects remediation during 2023; disclosure controls were deemed ineffective at December 31, 2022, and the auditor issued an adverse opinion on internal control over financial reporting. SemaConnect and Electric Blue were excluded from the control assessment because they were acquired during 2022. The auditor gave an unqualified opinion on the financial statements.
- Contingencies: A securities class action and several derivative suits remained pending or stayed; the company disputed the allegations and recorded no accrual because losses were not considered probable or estimable. A separate director-compensation derivative action was settled, including $190,000 in plaintiff legal fees paid by the company.
- Other unusual items: 2022 included acquisition-related expenses, acquisition-related amortization, foreign-exchange loss and interest expense on deferred SemaConnect consideration. The company also reported a $176,000 estimated liability for known warranty-case backlog.
Important facts for investors to verify
- Reconcile the MD&A’s $58.8 million investing cash outflow with the cash-flow statement’s $57.4 million figure.
- Track cash burn, working capital and the use of the February 2023 offering proceeds against management’s stated 12-month cash runway.
- Assess whether acquired businesses deliver sustainable revenue, integration benefits and returns relative to the substantial purchase price and goodwill recorded.
- Monitor remediation and independent testing of the disclosed material weaknesses, including controls at the acquired subsidiaries.
- Review the terms, timing and potential dilution from the SemaConnect deferred consideration, ATM program, outstanding equity awards and acquisition-related contingent consideration.
- Follow the status of pending litigation, supplier and purchase commitments, and warranty costs.