Blink Charging Co. — Form 10-Q Summary
Reporting period: Three and six months ended June 30, 2018; filed August 13, 2018. Blink owns and operates EV charging stations, sells charging equipment, and provides networked charging services. It reported approximately 14,259 deployed stations across its network and partner-owned installations as of August 6, 2018.
Financial performance and liquidity
- Q2 revenue: $624,418, up 17% from $532,974. Product sales rose 151% to $142,839 and company-owned station charging revenue rose 23% to $301,350.
- Q2 gross profit and margin: $170,775 and approximately 27.3%, compared with $142,925 and approximately 26.8% in Q2 2017. Operating expenses were $2.01 million; operating loss was $1.83 million. Net loss was $1.23 million, versus $4.42 million.
- Six-month revenue: $1.22 million, up 8%. Gross profit was $342,596, approximately 28.1% of revenue, versus $306,138 and approximately 27.1% in 2017. Operating loss widened to $5.64 million from $4.01 million.
- Six-month bottom line: Net income was $971,303 versus a $7.51 million net loss in 2017. This did not reflect operating profitability: other income of $6.61 million included substantial non-operating settlement and fair-value gains. Net loss attributable to common shareholders was $23.10 million, including a $23.46 million deemed dividend and $607,800 of preferred dividends.
- Cash flow: Cash used in operations was $7.90 million, versus $1.56 million in the prior-year period. Investing used $34,524; financing provided $31.74 million. Cash increased by $23.81 million to $24.00 million.
- Balance sheet at June 30: Working capital was $17.58 million, compared with a $34.76 million deficiency at December 31, 2017. Total liabilities were $7.13 million; notes payable were $337,966, and no convertible notes remained outstanding. Stockholders’ equity was $19.05 million, versus a $36.92 million deficiency at year-end.
- Funding and commitments: The February public offering generated $14.88 million net proceeds; warrant exercises generated $17.14 million. The company had a $2.17 million remaining commitment for second-generation charging stations, payable upon delivery.
Changes, outlook, and key risks
- Revenue growth reflected increased commercial equipment sales and a larger company-owned charging network. Grant and rebate revenue fell 47% in Q2 and 48% for the half; management said it had not recently received new grants and 2018 amounts largely reflected prior grants.
- Six-month compensation expense rose 60% to $4.82 million, mainly due to non-cash stock awards. Warranty and repair costs also increased. Management noted that charging-service margins vary with host revenue-sharing terms, electricity reimbursements, and maintenance costs.
- Management stated that available cash should fund operating and capital needs for at least twelve months from the filing date. It warned that additional capital may be needed thereafter; no new financing commitments were in place, and financing may not be available on acceptable terms.
- The company reported a $155.46 million accumulated deficit and said it had not achieved operating profitability. Continued losses, dilution from warrants and convertible preferred stock, and possible share sales after lock-up expirations were identified as risks.
- Disclosure controls were deemed ineffective because previously identified material weaknesses in internal control over financial reporting remained. The company said it was hiring finance and accounting personnel and planned outside assistance with remediation.
- Tax matters included delinquent federal and state income-tax filings for 2014–2017 and approximately $225,000 accrued for sales-tax matters. Delinquent payroll taxes had been remitted by June 30, 2018. Litigation included a claim for approximately $53,069 plus interest and costs; the filing also described unresolved obligations involving former 350 Green principals.
- No formal revenue, earnings, or margin guidance was provided. The filing cautions that interim results are not necessarily indicative of full-year results.
Important facts for investors to verify
- How much of reported six-month net income depended on JMJ debt settlement and fair-value accounting gains, rather than recurring operations.
- The company’s ongoing operating cash burn, ability to meet the stated twelve-month liquidity horizon, and funding needs beyond it.
- Potential dilution from outstanding warrants and Series D preferred stock, including the timing and effect of lock-up expirations.
- Progress in remediating material weaknesses and the status of outstanding tax filings, sales-tax accruals, and legal matters.
- Delivery and deployment of the second-generation stations and the remaining $2.17 million purchase commitment.