Blink Charging Co.: Form 10-Q for the period ended Jun 30, 2026

Special Note Regarding Forward-Looking Information

The following discussion and analysis of the results of operations and financial condition of Blink Charging Co. (together with its subsidiaries, “Blink” or the “Company”) as of June 30, 2026 and for the six months ended June 30, 2026 and 2025 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our” and similar terms refer to Blink. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements. Factors that may affect our results include, but are not limited to, the risks and uncertainties set forth under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and under a similar item in subsequent periodic reports, as discussed elsewhere in this Quarterly Report, particularly in Part II, Item 1A - Risk Factors.

Any one or more of these uncertainties, risks and other influences, could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

U.S. dollars are reported in thousands, except for share and per share amounts.

Overview

We are a leading owner, operator, and provider of EV charging equipment and networked EV charging services in the rapidly growing U.S. and international markets for EVs. Blink offers residential and commercial EV charging equipment and services, enabling EV drivers to recharge at various locations. Blink’s principal line of products and services is its Blink Networks and Blink EV charging equipment, also known as EVSE, and other EV-related services. The Blink Networks are a proprietary, cloud-based system that operates, maintains, and manages Blink charging stations and handles the associated charging data, back-end operations, and payment processing. The Blink Networks provide Property Partners, among other types of commercial customers, with cloud-based services that enable the remote monitoring and management of EV charging stations. The Blink Networks also provide EV drivers with vital station information, including station location, availability, and fees (as applicable).

To capture more revenues derived from providing EV charging equipment to commercial customers and to help differentiate Blink in the EV infrastructure market, Blink offers Property Partners a comprehensive range of solutions for EV charging equipment and services that generally fall into one of the business models below, differentiated by who owns the equipment and who bears the costs of installation, equipment, maintenance, and the percentage of revenue shared.

• In our Blink-owned turnkey business model, we incur the charging equipment and installation costs. We own and operate the EV charging station and provide connectivity of the charging station to the Blink Networks. In this model, which favors recurring revenues, we incur most costs associated with the EV charging stations; thus, we retain substantially all EV charging revenues after deducting network connectivity and processing fees. Our agreement with the Property Partner typically lasts nine years, with extensions that can bring it to 27 years.
• In our Blink-owned hybrid business model, we typically incur the charging equipment costs while the Property Partner incurs the installation costs. We own and operate the EV charging station and provide connectivity to the Blink Networks. In this model, since the Property Partner typically incurs the installation costs; we share a more generous portion of the EV charging revenues with the Property Partner after deducting Blink network connectivity and processing fees. Our agreement with the Property Partner typically lasts seven years, with extensions that can bring it to 21 years.
• In our host-owned business model, the Property Partner purchases, owns, and operates the Blink EV charging station and incurs the installation costs. We work with the Property Partner by providing site recommendations, connectivity to the Blink Networks, payment processing, and optional maintenance services. In this model, the Property Partner retains and keeps all the EV charging revenues after deducting Blink network connectivity and processing fees.

As of June 30, 2026, there were approximately 48,015 chargers connected to the Blink Network. Of those, approximately 44,832 were Level 2 commercial chargers and approximately 2,039 DCFC were commercial chargers. Included on Blink Network are approximately 6,804 chargers owned by us. Another estimated 23,820 units were non-networked, on other networks, international sales, or deployments.

Product and Service Offerings

We offer a variety of EV charging products and services to Property Partners and EV drivers.

EV Charging Solutions

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Key Factors Affecting Operating Results

We believe our performance and future success depend on several factors, including those discussed below:

Competition - The EV charging equipment and service market is highly competitive, and we expect the market to become increasingly competitive as new entrants enter this growing market. Our products and services compete on product performance and features, the total cost of ownership, origin of manufacturing, sales capabilities, financial stability, brand recognition, product reliability, customer experience, and the installed base’s size. Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. If our market share decreases due to increased competition, the Company’s revenue and ability to generate profits in the future may be impacted.

Growth - Our growth is highly dependent upon the adoption by consumers of EVs, and we are subject to a risk of any reduced demand for EVs. The market for electric vehicles is still relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements, long development cycles for EV original equipment manufacturers, and changing consumer demands and behaviors. Factors that may influence the purchase and use of electric vehicles, include perceptions about EV quality, safety (in particular with respect to battery chemistries), design, performance, and cost; the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use; improvements in the fuel economy of the internal combustion engine; consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive; the environmental consciousness of consumers; volatility in the cost of oil and gasoline; consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts; government regulations and economic incentives promoting fuel efficiency and alternate forms of energy; access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV; and the availability of tax and other governmental incentives to purchase and operate EVs and future regulation requiring increased use of zero emissions vehicles. If the market for EVs does not gain broad market acceptance or develops slower than we expect, our business, prospects, financial condition and operating results may be adversely affected.

Regulations - Our business is subject to a variety of federal, state and international laws and regulations, including those with respect to government incentives promoting fuel efficiency and alternate forms of energy, electric vehicles and others. These laws and regulations, and the interpretation or application of these laws and regulations, could change. Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, fiscal tightening or other reasons may result in diminished revenues from government sources and diminished demand for our products. In addition, new laws or regulations affecting our business could be enacted. These laws and regulations are frequently costly to comply with and may divert a significant portion of management’s attention. Changes to these applicable laws or regulations could affect business and/or harm our customers, thereby adversely affecting our business, financial condition and results of operations.

Expansion through Acquisitions - We may pursue strategic domestic and international acquisitions to expand our operations. Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment, difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing clients of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, the failure of counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations for the acquired businesses. Fully integrating an acquired company or business into our operations may take a significant amount of time. If we are unable to integrate or pursue strategic acquisitions, our financial condition and results of the operations would be negatively impacted.

Liquidity, Capital Resources, and Going Concern

As of June 30, 2026, the Company had cash and cash equivalents of $34,004 compared to $39,568 in cash and cash equivalents as of December 31, 2025, representing a decrease of $5,564 in available liquidity due to ongoing operating losses and working capital requirements.

In May 2025, we announced the BlinkForward Initiative, a strategic restructuring plan aimed at accelerating the Company’s path to profitability and enhancing operational efficiency. Key pillars of the BlinkForward Initiative were designed to transform the Company into a more agile and lean organization. This included a significant reduction in our global workforce from 513 to 290 as of the filing of this Quarterly Report, reductions in other operating, general and administrative expenses, and a shift to contract manufacturing for our EV hardware to reduce overhead expenses and focus on our intellectual property and customer support efforts. The transition to contract manufacturing was completed in January 2026, and Blink no longer maintains manufacturing facilities in-house.

As reflected in our condensed consolidated financial statements as of June 30, 2026, we had cash and cash equivalents of $34,004, working capital of $10,264 and an accumulated deficit of $840,028. During the six months ended June 30, 2026, we incurred a net loss of $17,602. We have not yet achieved profitability. In December 2025, we completed an underwritten registered public offering of 26,666,666 shares of our common stock at a public offering price of $0.75 per share. We received gross proceeds of $20,000 from the public offering, less underwriting discounts and offering expenses of $1,474, for net proceeds of $18,526. The public offering was made pursuant to our registration statement on Form S-1 filed with the SEC on December 4, 2025, and final prospectus dated December 10, 2025. H.C. Wainwright & Co. and Roth Capital Partners acted as co-placement agents in connection with the offering.

We have not yet achieved profitability and expect cash flows from operations to be volatile. While the BlinkForward Initiative substantially decreased our operating expenses and cash burn, we still need to generate substantial revenues in the near future to achieve profitability, even as our repeatable and recurring revenue from network and charging fees continues to grow. Historically, we have been able to raise funds to support our business operations, although there can be no assurance that we will be successful in raising significant additional funds in the future. We expect that our cash on hand and future cash flows from operations will fund our operations for at least 12 months after the issuance date of the financial statements included in this Quarterly Report.

Since inception, our operations have primarily been funded through proceeds received in equity and debt financings. We believe we have access to capital resources and continue to evaluate additional financing opportunities. There is no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds we might raise will enable us to complete our EV charging development initiatives or attain profitable operations.

Results of Operations

Three and Six Months Ended June 30, 2026 Compared With Three and Six Months Ended June 30, 2025

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Three Months Ended June 30, 2026 Compared With Three Months Ended June 30, 2025

Revenues

Total revenue for the three months ended June 30, 2026 decreased by $7,031 or 24%, to $21,674 compared to $28,705 during the three months ended June 30, 2025.

Revenue from product sales was $7,439 for the three months ended June 30, 2026 as compared to $14,509 during the three months ended June 30, 2025, a decrease of $7,070, or 49%. The decrease was primarily attributable to the Company’s strategic repositioning toward higher-margin market segments and more disciplined customer selection, including a reduction in lower-margin product sales. Product revenue was also adversely affected by continued softness in the electric vehicle charging market, particularly lower demand for commercial Level 2 chargers and DC fast chargers, compared to the prior-year period.

Charging service revenue from Blink-owned charging stations was $11,484 for the three months ended June 30, 2026 as compared to $10,809 for the three months ended June 30, 2025, an increase of $675 or 6%. The increase is due to the higher utilization of the chargers and deployment of new chargers on the Blink Networks.

Cost of Revenues

Cost of revenues primarily consists of electricity reimbursements, revenue share payments to our Property Partner hosts, the cost of charging stations sold, connectivity charges provided by telco and other networks, warranty, repairs and maintenance services, and depreciation of our installed charging stations. Cost of revenues for the three months ended June 30, 2026 were $13,233 as compared to $23,873 for the three months ended June 30, 2025, a decrease of $10,640 or 45%, and in line with the decline in the product revenues as discussed above.

There is a degree of variability in our costs in relationship to our revenues from period to period, primarily due to:

• electricity reimbursements that are unique to those Property Partner host agreements which provide for such reimbursements;
• revenue share payments are predicated on the contractual obligation under the property partner agreement and the revenue generated by the applicable chargers;
• cost of charging stations sold is predicated on the mix of types of charging stations and parts sold during the period;
• network costs are fixed in nature based on the number of chargers connected to the telco network regardless of whether the charger generates revenue;
• provisions for excess and obsolete inventory; and
• warranty and repairs and maintenance expenses are based on both the number of service cases completed during the period.

Cost of product sales decreased by $9,126, or 65%, from $14,074 for the three months ended June 30, 2025 as compared to $4,948 for the three months ended June 30, 2026. Approximately $4,720 of this decrease is due to the reduction in product sales volume. In addition, the loss on adjustment for excess and obsolete inventory decreased by $634 during the three months ended June 30, 2026 compared to the same period in 2025. Furthermore, the Company recorded a loss on disposal of non-performing chargers of $3,856 during the three months ended June 30, 2025.

Cost of charging services (electricity reimbursements) decreased by $399, or 6%, to $5,823 for the three months ended June 30, 2026 as compared to $6,222 for the three months ended June 30, 2025. The decrease in 2026 was attributable to the decreased number and mix of charging stations generating charging service revenues subject to electricity reimbursement.

Depreciation and amortization expense decreased by $110 or 9%, to $1,098 for the three months ended June 30, 2026 as compared to $1,208 for the three months ended June 30, 2025. The decrease in depreciation expense was attributable to an increase in the grant revenue that is presented as an offset to the depreciation expense, and the decrease in the number of vehicles associated with the ride-share services as a part of the sale of Envoy.

Operating Expenses

Compensation expense decreased by $5,415 or 39%, to $8,352 (consisting of $7,658 of cash compensation and benefits and $694 of non-cash compensation) for the three months ended June 30, 2026. Compensation expense was $13,767 (consisting of $12,980 of cash compensation and benefits and $787 of non-cash compensation) for the three months ended June 30, 2025. The decrease in compensation expense for the three months ended June 30, 2026 compared to the same period in 2025 was primarily related to decreases in personnel and compensation in executive, marketing, sales and operations departments as a result of cost savings and synergies realized.

General and administrative expenses decreased by $8,936 or 84%, to $1,750 for the three months ended June 30, 2026 as compared to $10,686 for the three months ended June 30, 2025. The decrease was primarily attributable to the difference in the credit loss reserve of $5,511, decrease in professional services of $1,657 and decrease in accounting related fees of $956.

Other operating expenses decreased by $2,603, or 39%, to $4,122 for the three months ended June 30, 2026 from $6,725 for the three months ended June 30, 2025. The decrease was primarily attributable to the assets impairment in the amount of $1,732 recorded during the three months ended June 30, 2025, a decrease of $301 related to research and development activities and a decrease of $281 related to rent.

Depreciation and amortization expense included in operating expenses increased by $283, or 20%, to $1,715 for the three months ended June 30, 2026 as compared to $1,432 for the three months ended June 30, 2025.

The Company recorded a gain on change in fair value of consideration payable and earn-out liabilities related to the Zemetric acquisition of $1,273 for the three months ended June 30, 2026 as compared to a loss of $1,784 for the three months ended June 30, 2025 due to the change in the inputs to the probability-weighted discounted cash flow model.

Other Income (Expense)

We recorded other income of $250 during the three months ended June 30, 2026 as compared to other income of $345 for the three months ended June 30, 2025. The decrease in other income was primarily related to a decrease in dividend and interest income of $105 during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Net Loss

Our net loss for the three months ended June 30, 2026 decreased by $23,273, or 79%, to $6,039 as compared to $29,312 for the three months ended June 30, 2025. The decrease was primarily attributable to a decrease in operating expenses, partially offset by a decline in revenues, and was accompanied by an improvement in gross profit.

Total Comprehensive Loss

Our total comprehensive loss for the three months ended June 30, 2026 was $6,923 whereas our total comprehensive loss for the three months ended June 30, 2025 was $24,649.

Six Months Ended June 30, 2026 Compared With Six Months Ended June 30, 2025

Revenues

Total revenue for the six months ended June 30, 2026 decreased by $6,970, or 14%, to $42,453 compared to $49,423 during the six months ended June 30, 2025.

Revenue from product sales was $13,633 for the six months ended June 30, 2026 as compared to $22,889 during the six months ended June 30, 2025, a decrease of $9,256, or 40%. The decrease was primarily attributable to the Company’s strategic repositioning toward higher-margin market segments and more disciplined customer selection, including a reduction in lower-margin product sales. Product revenue was also adversely affected by continued softness in the electric vehicle charging market, particularly lower demand for commercial Level 2 chargers and DC fast chargers, compared to the prior-year period.

Charging service revenue from Blink-owned charging stations was $23,714 for the six months ended June 30, 2026 as compared to $20,315 for the six months ended June 30, 2025, an increase of $3,399, or 17%. The increase is due to the higher utilization of the chargers and deployment of new chargers on the Blink Networks.

Cost of Revenues

Cost of revenues primarily consists of electricity reimbursements, revenue share payments to our Property Partner hosts, the cost of charging stations sold, connectivity charges provided by telco and other networks, warranty, repairs and maintenance services, and depreciation of our installed charging stations. Cost of revenues for the six months ended June 30, 2026 were $27,373 as compared to $37,522 for the six months ended June 30, 2025, a decrease of $10,149 or 27%, and in line with the decline in the product revenues as discussed above.

There is a degree of variability in our costs in relationship to our revenues from period to period, primarily due to:

• electricity reimbursements that are unique to those Property Partner host agreements which provide for such reimbursements;
• revenue share payments are predicated on the contractual obligation under the property partner agreement and the revenue generated by the applicable chargers;
• cost of charging stations sold is predicated on the mix of types of charging stations and parts sold during the period;
• network costs are fixed in nature based on the number of chargers connected to the telco network regardless of whether the charger generates revenue;
• provisions for excess and obsolete inventory; and
• warranty and repairs and maintenance expenses are based on both the number of service cases completed during the period.

Cost of product sales decreased by $10,951, or 56%, from $19,622 for the six months ended June 30, 2025 as compared to $8,671 for the six months ended June 30, 2026. Approximately $5,633 of this decrease is due to the reduction in product sales volume. In addition, the adjustment for excess and obsolete inventory was $1,462 during the six months ended June 30, 2026 compared to $4,571 during the same period in 2025. Furthermore, the Company recorded a loss on disposal of non-performing chargers of $3,856 during the six months ended June 30, 2025.

Cost of charging services (electricity reimbursements) increased by $1,699, or 15%, to $13,202 for the six months ended June 30, 2026 as compared to $11,503 for the six months ended June 30, 2025. The increase in 2026 was attributable to the increased number and mix of charging stations generating charging service revenues subject to electricity reimbursement.

Depreciation and amortization expense decreased by $210, or 8%, to $2,293 for the six months ended June 30, 2026 as compared to $2,503 for the six months ended June 30, 2025. The decrease in depreciation expense was attributable to an increase in the grant revenue that is presented as an offset to the depreciation expense, and the decrease in the number of vehicles associated with the ride-share services as a part of the sale of Envoy.

Operating Expenses

Compensation expense decreased by $8,806, or 32%, to $18,515 (consisting of $16,493 of cash compensation and benefits and $2,022 of non-cash compensation) for the six months ended June 30, 2026. Compensation expense was $27,321 (consisting of $25,568 of cash compensation and benefits and $1,753 of non-cash compensation) for the six months ended June 30, 2025. The decrease in compensation expense for the six months ended June 30, 2026 compared to the same period in 2025 was primarily related to decreases in personnel and compensation in executive, marketing, sales and operations departments as a result of cost savings and synergies realized.

General and administrative expenses decreased by $12,597, or 70%, to $5,302 for the six months ended June 30, 2026 as compared to $17,899 for the six months ended June 30, 2025. The decrease was primarily attributable to the difference in the credit loss reserve of $6,811, a decrease in professional services of $2,674, a decrease in accounting related fees of $1,039, a decrease in tax compliance fees of $788 and a decrease in marketing expenditures of $749.

Other operating expenses decreased by $4,319, or 36%, to $7,755 for the six months ended June 30, 2026 from $12,074 for the six months ended June 30, 2025. The decrease was primarily attributable to the asset impairment in the amount of $1,732 recorded during the six months ended June 30, 2025, a decrease of $819 related to research and development activities and a decrease of $566 related to rent.

Depreciation and amortization expense included in operating expenses decreased by $305, or 10%, to $2,782 for the six months ended June 30, 2026 as compared to $3,087 for the six months ended June 30, 2025.

The Company recorded a gain on change in fair value of consideration payable and earn-out liabilities related to the Zemetric acquisition of $1,273 for the six months ended June 30, 2026 as compared to a loss of $2,463 for the six months ended June 30, 2025 due to the change in the inputs to the probability-weighted discounted cash flow model.

Other Income (Expense)

We recorded other income of $492 during the six months ended June 30, 2026 as compared to $746 for the six months ended June 30, 2025. The decrease in other income was primarily related to a decrease of $261 in dividend and interest income.

Net Loss

Our net loss for the six months ended June 30, 2026 decreased by $32,718 or 65%, to $17,602 as compared to $50,320 for the six months ended June 30, 2025. The decrease was primarily due to lower operating expenses, partially offset by the decline in revenues, and was accompanied by an improvement in gross profit.

Total Comprehensive Loss

Our total comprehensive loss for the six months ended June 30, 2026 was $18,719 whereas our total comprehensive loss for the six months ended June 30, 2025 was $42,906.

Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:

(Unaudited)

During the six months ended June 30, 2026, we financed our activities from proceeds derived from equity financings occurring in prior periods. A significant portion of the funds raised from the sale of capital stock has been used to cover working capital needs and personnel, office expenses and various consulting and professional fees.

For the six months ended June 30, 2026 and 2025, we used cash of $3,382 and $28,541, respectively, in operations. Our cash use for the six months ended June 30, 2026 was primarily attributable to our net loss of $17,602 adjusted for net non-cash expenses in the aggregate amount of $7,480, partially offset by $6,740 of net cash provided by changes in the levels of operating assets and liabilities. Our cash use for the six months ended June 30, 2025, was primarily attributable to our net loss of $50,320, adjusted for net non-cash expenses in the aggregate amount of $22,692, and $913 of net cash used in changes in the levels of operating assets and liabilities.

During the six months ended June 30, 2026, net cash used in investing activities was $616, of which $852 was provided by government grants, $954 was used to purchase property and equipment, $485 of cash was disposed of in connection with the sale of Envoy, and $29 was used for capitalized engineering costs. During the six months ended June 30, 2025, net cash provided by investing activities was $10,106, of which $13,630 was provided by the sale of marketable securities and $223 was provided by the sale of an equity method investment, offset by $205 of capitalized engineering costs and $3,542 of which was used to purchase charging stations and other fixed assets.

During the six months ended June 30, 2026, cash used in financing activities was $63 which was used to pay down our liability in connection with a finance lease. During the six months ended June 30, 2025, cash provided by financing activities was $874, of which $17 was used to pay down our liability in connection with a finance lease, offset by $891 provided by offering proceeds related to the sale of common stock.

As of June 30, 2026, we had cash and cash equivalents, working capital and an accumulated deficit of $34,004, $10,264 and $840,028, respectively. During the three and six months ended June 30, 2026, we had a net loss of $6,039 and $17,602, respectively, and used cash of $3,382 in operating activities. The Company has not yet achieved profitability and expects cash flows from operations to be volatile. The Company’s future operating needs include the planned costs to operate its business, including amounts required to fund working capital and future liquidity needs.

The Company has no agreements, commitments, or understandings with respect to any financing alternatives. Any equity issuance would be dilutive to stockholders. In December 2025, we completed an underwritten registered public offering of 26,666,666 shares of our common stock at a public offering price of $0.75 per share. We received gross proceeds of $20,000 from the public offering, less underwriting discounts and offering expenses of $1,474, for net proceeds of $18,526. The public offering was made pursuant to our registration statement on Form S-1 filed with the SEC on December 4, 2025, and final prospectus dated December 10, 2025. H.C. Wainwright & Co. and Roth Capital Partners acted as co-placement agents in connection with the offering.

Contractual Obligations and Commitments

We have operating lease obligations over the next five years of approximately $4,204. These operating lease obligations are primarily related to corporate office space and warehousing.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and the related disclosures. We base our estimates on historical experience and on assumptions that we believe are reasonable under the circumstances; actual results may differ from these estimates.

Our critical accounting estimates are described in Part II, Item 7, Critical Accounting Estimates in our Annual Report on Form 10-K for the year ended December 31, 2025, and our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies in our financial statements included elsewhere in this quarterly report. There have been no material changes to our critical accounting estimates or significant accounting policies since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025.

Foreign Currency Risk

We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the euro, causing both our revenue and our operating results to be impacted by fluctuations in the exchange rates. Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies impact our net loss. A hypothetical decrease in all foreign currencies against the U.S. dollar of 1% would not result in a material foreign currency loss on foreign-denominated balances as of June 30, 2026. As our foreign operations expand, our results may be more materially impacted by fluctuations in the exchange rates of the currencies in which we do business. At this time, we do not enter into financial instruments to hedge our foreign currency exchange risk.

Evaluation of Disclosure Controls and Procedures

As of June 30, 2026, being the end of the period covered by this Quarterly Report, our management conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting as discussed in Item 9A. Controls and Procedures – in the Company’s Form 10-K for the fiscal year ended December 31, 2025, under the heading “Management’s Annual Report on Internal Control Over Financial Reporting”.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2026, management continued to commit effort and resources to the remediation of the material weakness reported in the Company’s Form 10-K for the fiscal year ended December 31, 2025.

Except for the above, there were no other changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the information set forth under Item 1A of Part I in our Annual Report on Form 10-K for the year ended December 31, 2025, and under a similar item in subsequent periodic reports, the information set forth at the beginning of Management’s Discussion and Analysis entitled “Special Note Regarding Forward-Looking Information,” and updates noted below, you should consider that there are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operation may be materially and adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment. These risk factors may not identify all risks that we face and our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations.

We have a history of substantial net losses and expect losses to continue in the future; if we do not achieve and sustain profitability, our financial condition could suffer.

We have experienced annual and quarterly net losses which may continue and which may negatively impact our ability to achieve our business objectives. We incurred a net loss of approximately $6.0 million for the three months ended June 30, 2026. As of June 30, 2026, we had net working capital of approximately $10.3 million and an accumulated deficit of approximately $840 million. We have not yet achieved profitability.

If our revenues grow slower than we anticipate, or if our operating expenses are higher than we expect, we may not be able to achieve profitability on an annual or quarterly basis in the future and our financial condition could suffer. We can give no assurance that we will ever achieve profitable operations. Even if we achieve profitability in the future, we may not be able to sustain it in subsequent periods. Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted. We may need to borrow additional funds or sell our debt or equity securities, or some combination of both, to provide funding for our operations in the future. Such additional funding may not be available on commercially reasonable terms, or at all.