Blink Charging Co. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; comparative period is Q1 2020. Blink owns, operates and provides EV charging equipment and networked charging services. Financial statements are unaudited.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 / prior date |
|---|---|---|
| Revenue | $2.23 million | $1.30 million |
| Gross profit (margin) | $96,379 (4.3%) | $308,722 (23.8%) |
| Operating expenses | $7.48 million | $3.33 million |
| Operating loss | $7.39 million | $3.02 million |
| Net loss | $7.36 million; $0.18 per share | $2.96 million; $0.11 per share |
| Cash from operations | $(8.50) million | $(3.41) million |
| Cash and cash equivalents | $195.65 million | $22.34 million at Dec. 31, 2020 |
| Working capital | $230.97 million | $19.58 million at Dec. 31, 2020 |
| Notes payable, gross | $872,819 | $870,696 at Dec. 31, 2020 |
Cash used in investing activities was $40.58 million, including $36.56 million invested in marketable securities and $4.02 million in property and equipment. Financing provided $222.39 million, primarily from the January public offering. Marketable securities totaled $36.51 million at quarter-end. Current liabilities were $6.79 million; total liabilities were $8.77 million. Operating lease liabilities were $1.97 million in total, including current and non-current amounts.
Changes versus the prior comparable period
- Revenue rose 72%, chiefly from product sales, which increased 115% to $1.67 million. Company-owned charging-service revenue fell 43% to $181,598, which management attributed to lower station use during COVID-19.
- Cost of revenue grew 116%, faster than sales; gross profit fell from $308,722 to $96,379, reducing gross margin to 4.3% from 23.8%.
- Operating expenses increased 125% to $7.48 million. Compensation rose 125%, and general and administrative expenses rose 145%; management cited hiring and growth initiatives, acquisitions, and higher professional and operating costs.
- Net loss increased 149% to $7.36 million. Weighted-average basic shares rose to 41.14 million from 26.84 million.
Outlook, risks and notable items
- Funding and profitability: Blink said it had not achieved profitability and expected continued operating cash outflows and rising expenses. It expected cash on hand to fund operations for at least 12 months after issuance of the financial statements, while noting future funding may be needed and may not be available on acceptable terms. The risk-factor discussion says losses raise substantial doubt about the company’s ability to continue as a going concern.
- Equity financing: The January offering of 5.66 million shares at $41 per share generated $232.06 million gross and $221.41 million net proceeds. The company planned to use proceeds for charger deployment, acquisitions or investments, working capital and general corporate purposes.
- Acquisition after quarter-end: On May 10, 2021, Blink completed its acquisition of Belgium-based Blue Corner for approximately $24 million, comprising about $23 million cash and $1.2 million in stock.
- COVID-19: Management reported temporary shipment delays and lower charging-station use, and said the ultimate effect on results and cash flows could not be predicted.
- Concentration and commitments: Two customers accounted for 21% and 20% of Q1 revenue. Two customers represented 49% and 23% of accounts receivable at quarter-end. Purchase commitments were approximately $10 million, payable upon supplier delivery.
- Legal matters: Securities and shareholder derivative lawsuits remained outstanding; Blink recorded no accrual, determining losses were not probable or estimable. A separate warrant dispute was settled by delivery of 66,000 shares, without a cash payment or incremental expense.
- Controls: Management concluded disclosure controls were ineffective at March 31, 2021 because previously reported material weaknesses in internal control over financial reporting continued. Remediation efforts were underway.
- Operating scale and grant: Blink reported 17,302 chargers sold or deployed, including 7,191 on its network. It also disclosed a roughly $1.7 million Vermont grant for 11 DC fast chargers to be deployed over two years.
Important facts for investors to verify
- Whether product-sales growth translates into improved gross margin and recurring network or charging-service revenue.
- Actual cash burn, deployment spending and acquisition-related cash needs relative to available liquidity and management’s stated funding horizon.
- Blue Corner’s purchase accounting, operating contribution and integration costs, which are not reflected in Q1 results.
- Progress in remediating material control weaknesses and any developments in the disclosed litigation.
- Customer concentration, supplier commitments and the continuing effects of COVID-19 on utilization, shipments and collections.