Blink Charging Co. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter report. Unless stated otherwise, financial figures below are in U.S. dollars and millions; the filing presents most amounts in thousands.
Business context
Blink sells and operates electric-vehicle charging equipment and provides charging-network services, alongside a smaller EV car-sharing business. Its models range from equipment sales to Blink-owned charging stations that generate usage revenue. On May 10, 2021, Blink acquired Belgian charging-network operator Blue Corner for approximately $23.8 million, expanding its European presence.
Financial results and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $20.94 million | $6.23 million |
| Gross profit / gross margin | $2.84 million / 13.6% | $1.52 million / 24.3% |
| Operating loss | $55.67 million | $17.81 million |
| Net loss | $55.12 million | $17.85 million |
| Net loss per share, basic and diluted | $1.32 | $0.59 |
| Cash used in operating activities | $40.57 million | $18.07 million |
| Cash and cash equivalents at year-end | $174.80 million | $22.34 million |
| Working capital at year-end | $176.30 million | $19.58 million |
| Notes payable, gross | $0.01 million | $0.87 million |
Revenue rose 236%, led by product sales ($15.48 million, up 249%) and company-owned charging services ($2.98 million, up 285%). Blue Corner contributed $7.55 million of revenue from acquisition through year-end. Despite higher sales, gross margin declined as costs of revenue grew faster than revenue and the business mix and acquired operations affected results.
Operating expenses increased 203% to $58.51 million, including compensation of $38.39 million. Compensation included approximately $16.4 million of non-cash expense; a CEO performance option accounted for approximately $12.6 million of recognized expense. Blink reported an accumulated deficit of $242.47 million and stated it had not achieved profitability.
Cash used in investing activities was $30.45 million, including $22.74 million in net cash consideration for Blue Corner and $7.07 million in property and equipment purchases. Financing activities provided $223.27 million, primarily from $221.33 million in net proceeds from a January 2021 stock offering. Year-end liquidity was substantially supported by that equity financing; management expected cash on hand to fund operations for at least 12 months after the financial statements’ issuance.
Besides notes payable, year-end liabilities included $2.08 million of operating lease obligations. Blink disclosed approximately $32 million in purchase commitments, including approximately $13 million with a related party, expected to be fulfilled over the following 12–24 months.
Material changes versus the prior year
- Revenue increased from $6.23 million to $20.94 million, with substantial growth in product sales and charging-service revenue; Blue Corner contributed materially following its May acquisition.
- Net loss widened from $17.85 million to $55.12 million. Compensation, general and administrative, and other operating expenses increased significantly as Blink expanded personnel and operations, integrated acquisitions, and incurred notable compensation and settlement costs.
- Cash and working capital increased sharply, principally following the January 2021 public offering, which generated approximately $221.4 million in net proceeds.
- Blink acquired Blue Corner for approximately $23.8 million, recording approximately $19.0 million of goodwill. The acquired business reported $7.55 million in post-acquisition revenue and a $2.57 million net loss through year-end.
Outlook, risks, contingencies and unusual items
- Outlook: The filing gives no specific quantified revenue or earnings guidance. Management described growth plans focused on equipment sales, expanding Blink-owned charging stations and sales channels, and adding station occupancy fees, driver subscriptions, advertising, and fleet services. New charger products and a fleet-management portal were announced in January 2022.
- Grants and infrastructure: Blink said it was awarded approximately $26 million in federal and state grants during 2021, expected to be recognized as revenue in future periods as contract terms or asset lives permit. FY2021 grant and rebate revenue recognized was $0.40 million.
- Supply-chain and market risks: COVID-19, semiconductor shortages, and supplier disruption delayed some equipment shipments. Blink relies on a limited number of equipment vendors. The company also cited EV-adoption uncertainty, competition, changing regulation and incentives, inflation, and the potential effects of the war in Ukraine on European operations and suppliers.
- Internal controls: Management concluded disclosure controls and internal control over financial reporting were not effective at year-end because of a material weakness in controls over financial close and reporting, revenue, and inventory. The independent auditor issued an adverse opinion on internal control; it separately gave an unqualified opinion on the financial statements. Management expected to remediate the control deficiencies during 2022. Blue Corner was excluded from the year-end control assessment.
- Legal matters and settlements: Securities and shareholder derivative litigation remained pending; Blink recorded no accrual for those matters because management considered losses not probable or estimable. A director-award derivative case had a proposed settlement subject to final court approval, including $190,000 in accrued plaintiff legal fees and changes to compensation practices. Blink also issued 60,000 shares, valued at $2.68 million, to settle a matter with its general counsel, and recorded a separate $1.0 million payment to its CEO under a settlement.
- Other unusual items: A $0.86 million gain from forgiveness of a Paycheck Protection Program loan partly offset expenses. A required 2G/3G-to-4G LTE upgrade was estimated to cost approximately $1.75 million; Blink concluded no impairment of the relevant charging-station assets was required at year-end.
Most important facts for investors to verify
- Whether revenue growth converts into improved gross margins and lower operating cash burn, given the wider FY2021 loss and $40.57 million of cash used in operations.
- How much of the $26 million in grant awards is ultimately recognized, when it is recognized, and whether related deployment obligations are met.
- Blue Corner’s continuing revenue, profitability, integration progress, and the assumptions supporting its acquisition-related goodwill and intangible-asset values.
- Progress in remediating the material weakness, and whether subsequent filings report effective controls.
- Fulfillment, timing, and related-party terms of the $32 million purchase commitments, including the approximately $13 million related-party portion.
- Developments in securities and derivative litigation, the director-compensation settlement, and any resulting costs or governance changes.
- Future capital needs and dilution: Blink funded FY2021 growth chiefly through an equity offering and disclosed substantial outstanding warrants and options.