Blink Charging Co.: Form 10-Q for the period ended Mar 31, 2025

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 March 31, 2025 and for the three months ended March 31, 2025 and 2024 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 1, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and under a similar item in subsequent periodic reports, as discussed elsewhere in this Quarterly Report, particularly in Part II, Item IA - 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, provider, and manufacturer 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 electric vehicle supply equipment (“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 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 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.

We also own and operate EV car-sharing and ride-sharing programs through our wholly owned subsidiary, Blink Mobility. These programs allow customers to share electric vehicles through subscription services and charge those cars through our charging stations.

As of March 31st 2025, there were 65,772 chargers connected to the Blink networks. Of those, 64,175 were Level 2 commercial chargers and 1,597 DCFC were commercial chargers, Included on Blink networks are 7,091 chargers owned by us. Another estimated 22,676 units were non-networked, on other networks, international sales, or deployments. In total, we have deployed, contracted or sold 112,186 units, which includes public and private chargers, as designated by stations owners, and is net of swap-outs, replacement units, and decommissioned units. Certain commercial chargers include chargers installed in residential settings for commercial purposes. All chargers, including at all international Blink locations, are categorized based on US Department of Energy guidelines.

As reflected in our condensed consolidated financial statements as of March 31, 2025, we had cash and cash equivalents of $42,024 working capital of $65,720 and an accumulated deficit of $756,562 During the three months ended March 31, 2025, we incurred a net loss of $20,707 We have not yet achieved profitability.

Recent Developments

Envoy Technologies, Inc. Direct Listing

Envoy Technologies, Inc., the Company’s wholly owned electric car share subsidiary, filed a registration statement on Form S-1 to go public via a proposed direct listing of its common stock with the U.S. Securities and Exchange Commission on May 1, 2025. Upon approval by the SEC and Nasdaq stock market, Envoy Technologies is expected to be listed under the ticker symbol “EVOY” during the summer of 2025, subject to market and other conditions. The Company had previously planned to go public through an underwritten initial public offering.

Product and Service Offerings

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

EV Charging Solutions

• Level 2. We offer a wide range of Level 2 (AC) EV charging equipment, ideal for commercial and residential use, with the North American standard J1772 connector, the North American Charging Standard (NACS) connector, and the Type 2 connector compatible with electric vehicles in Europe and across Latin America.
• Our commercial Level 2 chargers consist of the EQ, HQ, MQ, and IQ 200 families and the Series 4, 6, 7, and 8 families, which are available in pedestal, wall mount, and pole mount configurations. The MQ and IQ 200, along with the Series 6, 7, and 8 chargers offer an optional cable management system. Additionally, we offer three residential Level 2 chargers for the Americas: the wall-mounted HQ 200, Series 4, and a smart charging cable, the PQ 150, designed for European markets. Our commercial and residential chargers (except the non-networked HQ 150) can connect to the Blink Networks or a local network. Level 2 charging stations typically provide a full charge in two to eight hours. Level 2 chargers are ideally suited for low-cost installations and frequently used parking locations, such as workplaces, multifamily residential, retail, hospitality, and mixed-use, parking garages, municipalities, colleges/schools, hospitals and airports.
• International Products. We offer Level 2 AC and DC products for the rapidly expanding international markets targeted at the residential, workplace, retail, parking garages, leasing companies, hospitality, and other locations. These products are available with the Type 2, GBT, and CCS 2 connectors and include the PQ 150, Series 3 (an ideal product for the 2/3-wheeled vehicles), and the EQ 200.
• Mobile Charger. We offer the HQ 200-M Level 2 charger for the mobile/emergency charging market which requires a portable charger to be used for roadside or other use cases where a connection to the electricity grid is not available.
• DCFC. We offer a complete line of DC Fast Charging equipment (“DCFC”) that ranges from 30kW to 360kW, supports the ‘CHAdeMo’, CCS1, and NACS connectors, and typically provide an 80% charge in less than 30 minutes. Installation of DCFC stations and grid requirements are typically greater than Level 2 charging stations and are ideally suited for transportation hubs and locations between travel destinations. These include the Series 9 30kW DC Fast Charger that works ideally for the fleet and auto dealership segments and is available in wall and pedestal mount configurations, the Blink 30kW DC Fast Charger that boasts a small footprint providing up to 100 amps of output, and the Blink 60kW – 360kW DC Fast Charger that provides from 140 to 500 amps of power.
• Blink Network. The Blink Network is a cloud-based platform that manages our network of EV chargers around the world for remote monitoring, management, payment processing, customer support, and other features required for operating the Blink Networks of EV charging locations.
• Blink Charging Mobile App. We offer Blink Charging Mobile Apps (iOS and Android) that provide EV drivers control by giving them improved search capabilities which allows them to search for nearby amenities, as well as chargers by zip-codes, city, business, category, or address, and expanded keyword search. The app also includes payment functionality, eliminating the need for a credit card.
• Fleet Management. We offer Fleet Management applications, targeted at commercial, municipal, and federal fleets for planning, managing, and optimizing their departure schedules and energy costs. Our Fleet Management applications can be used as standalone tools or integrated into existing fleet management solutions, which allows Blink to be a flexible and value-added solution within existing software stacks.

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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, 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, its 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 alternative fuel 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 alternative fuel vehicles, and specifically EVs, 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 or future regulation requiring increased use of nonpolluting 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 operations would be negatively impacted.

Results of Operations

Three Months Ended March 31, 2025 Compared With Three Months Ended March 31, 2024

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Revenues

Total revenue for the three months ended March 31, 2025 decreased by $16,814 or 45%, to $20,754 compared to $37,568 during the three months ended March 31, 2024.

Revenue from product sales was $8,381 for the three months ended March 31, 2025 as compared to $27,508 during the three months ended March 31, 2024, a decrease of $19,127 or 70%. This decrease was attributable to decreased unit sales and the product mix of commercial chargers, DC fast chargers and residential chargers when compared to the same period in 2024.

Charging service revenue was $6,780 for the three months ended March 31, 2025 as compared to $5,027 for the three months ended March 31, 2024, an increase of $1,753, or 35%. The increase is due to the increase in utilization of chargers and an increased number of chargers on the Blink Networks.

Network fee revenues were $2,626 for the three months ended March 31, 2025 as compared to $2,065 for the three months ended March 31, 2024, an increase of $561, or 27%. The increase was attributable to increases in host owned units during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

Warranty revenues were $955 for the three months ended March 31, 2025 as compared to $953 for the three months ended March 31, 2024, an increase of $2. The increase was primarily attributable to an increase in warranty contracts sold for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. During the three months ended March 31, 2025, the Company recognized net revenues for the sale of Blink warranty programs to a third party of ($19).

Grant and rebate revenues were $160 during the three months ended March 31, 2025 as compared to $583 during the three months ended March 31, 2024, a decrease of $423, or 73%. Grant and rebates relating to equipment and the related installation are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. The decrease in revenue was primarily related to the timing of the amortization of previous years’ state grants/rebates associated with the installation of chargers during the three months March 31, 2025 and 2024.

Car-sharing services revenues were $1,175 during the three months ended March 31, 2025 as compared to $1,097 during the three months ended March 31, 2024, an increase of $78, or 7%. The increase in revenues is due to the increase in properties and participants subscribing to the car-sharing services.

Other revenue increased by $342 or 102% to $677 for the three months ended March 31, 2025 as compared to $335 for the three months ended March 31, 2024. The increase was primarily attributable to increases in transaction fees and Low Carbon Fuel Standard (LCFS) credits generated during the three months March 31, 2025 compared to the same period in 2024.

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 other networks, warranty, repairs and maintenance services, and depreciation of our installed charging stations. Cost of revenues for the three months ended March 31, 2025 were $13,385 as compared to $24,149 for the three months ended March 31, 2024, a decrease of $10,764 or 45%.

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 $11,054, or 67%, from $16,602 for the three months ended March 31, 2024, as compared to $5,548 for the three months ended March 31, 2025. The decrease was primarily due to the decrease in product sales of commercial chargers, DC fast chargers and home residential chargers during the three months ended March 31, 2025, compared to the same period in 2024.

Cost of charging services (electricity reimbursements) increased by $199, or 28%, to $904 for the three months ended March 31, 2025 as compared to $705 for the three months ended March 31, 2024. The increase in 2025 was attributable to the mix of charging stations generating charging service revenues subject to electricity reimbursement.

Host provider fees increased by $610, or 20%, to $3,652 during the three months ended March 31, 2025, as compared to $3,042 during the three months ended March 31, 2024. This increase was a result of the mix of chargers generating revenue and their corresponding revenue share percentage payments to Property Partner hosts pursuant to their agreements.

Network costs decreased by $126 or 21%, to $463 during the three months ended March 31, 2025 as compared to $589 during the three months ended March 31, 2024. The decrease was a result of the decrease in expenses associated with charging stations on our network.

Warranty and repairs and maintenance costs increased by $235, or 39%, to $840 during the three months ended March 31, 2025, from $605 during the three months ended March 31, 2024. The increase in 2025 was attributable to an increase in warranty contracts sold for the three months March 31, 2025, as compared to the three months March 31, 2024.

Cost of car-sharing services was $685 during the three months ended March 31, 2025 as compared to $862 during the 2024 period, a decrease of $177 or 21%. The decrease was due to a decrease in vehicles used in this operation during the period.

Depreciation and amortization expense decreased by $451, or 26%, to $1,293 for the three months ended March 31, 2025, as compared to $1,744 for the three months ended March 31, 2024. The change in depreciation expense was attributable to an increase in the number of EV charging stations partially offset by the amortization of grant funding related to the reimbursement associated with charging station capital expenditures.

Operating Expenses

Compensation expense decreased by $1,408, or 9%, to $13,549 (consisting of approximately $12.5 million of cash compensation and benefits and approximately $1.0 million of non-cash compensation) for the three months ended March 31, 2025. Compensation expense was $14,957 (consisting of approximately $14.1 million of cash compensation and benefits and approximately $0.9 million of non-cash compensation) for the three months ended March 31, 2024. The decrease in compensation expense for the three months ended March 31, 2025 compared to the same period in 2024 was primarily related to decreases in personnel and compensation in executive, marketing, sales and operations departments.

General and administrative expenses increased by $1,065, or 14%, to $8,872 for the three months ended March 31, 2025 as compared to $7,807 for the three months ended March 31, 2024. The increase was primarily attributable to increases in accounting/auditing, credit cards fees, provision for expected credit losses and currency exchange losses of $1,958 partially offset by decreases in legal, consulting/other professional services, marketing, software licensing, recruiting, and investor/public relations of $1,110.

Other operating expenses decreased by $1,089 or 17%, to $5,349 for the three months ended March 31, 2025 from $6,438 for the three months ended March 31, 2024. The decrease was primarily attributable to decreases in loss on disposal of assets, travel expenses, website expenses, rent, and hardware and software development costs of $2,202, partially offset by increases in insurance, software licensing and property/use tax expenditures of $1,251.

The Company recorded a loss on the change in fair value of consideration payable related to the Envoy acquisition of $679 during the three months ended March 31, 2025 and $1,700 for the three months ended March 31, 2024, a decrease of $1,021 or 60%. The decrease was due to the change in the inputs to the probability-weighted discounted cash flow model.

Other Income

Other income increased by $63 or 19% from $338 for the three months ended March 31, 2024 to $401 for the three months ended March 31, 2025. The increase in other income (expense) was primarily attributable to a decrease in interest expense of $371 and dividend and interest income of $308.

Net Loss

Our net loss for the three months ended March 31, 2025, increased by $3,534, or 21%, to $20,707 as compared to $17,173 the three months ended March 31, 2024. The increase was primarily attributable to an decrease in operating expenses, and partially offset by a decrease in gross profit.

Total Comprehensive Loss

Our total comprehensive loss for the three months ended March 31, 2025, was $17,956 whereas our total comprehensive loss for the three months ended March 31, 2024, was $18,410, a decrease of $454 or 2%.

Liquidity and Capital Resources

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

(Unaudited)

During the three months ended March 31, 2025, 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 three months ended March 31, 2025 and 2024, we used cash of $11,855 and $21,476, respectively, in operations. Our cash use for the three months ended March 31, 2025 was primarily attributable to our net loss of $20,707 adjusted for net non-cash expenses in the aggregate amount of $7,785, plus $1,067 of net cash used in changes in the levels of operating assets and liabilities. Our cash use for the three months ended March 31, 2024 was primarily attributable to our net loss of $17,173, adjusted for net non-cash expenses in the aggregate amount of $7,737, and $12,040 of net cash used to fund changes in the levels of operating assets and liabilities.

During the three months ended March 31, 2025, net cash provided by investing activities was $11,091 of which $13,630 was provided by the sale of marketable securities, offset by $173 of capitalized engineering costs and $2,366 of which was used to purchase charging stations and other fixed assets. During the three months ended March 31, 2024, net cash used in investing activities was $171, of which $2,830 was used to purchase charging stations and other fixed assets , $341 was used in the purchase of marketable securities, offset by $3,000 provided by the sale of marketable securities.

During the three months ended March 31, 2025, cash provided by financing activities was $883, of which, $8 was used to pay down our liability in connection with a finance lease and offset by $891 provided by offering proceeds related to the sale of common stock. During the three months ended March 31, 2024, cash used in financing activities was $6,703, of which, $31,354 was used to pay down notes payable, $169 was used to pay down our liability in connection with a finance lease and $250 was used to pay down our liability in connection with internal use software, partially offset by $25,070 provided by offering proceeds related to the sale of common stock.

As of March 31, 2025, we had cash and cash equivalents, marketable securities, working capital and an accumulated deficit of $42,024, $0, $65,720 and $756,562, respectively. During the three months ended March 31, 2025, we had a net loss of $20,707 and used $11,855 of cash in operating activities. The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. The Company’s future operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures.

Because of the uncertainty of the timing to achieving profitability and cash flows provided by operating activities to support the Company’s future operating needs, the above conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the time the condensed consolidated financial statements are issued. Management is undertaking, or has undertaken, several initiatives to mitigate the conditions or events that raise substantial doubt about our ability to continue as a going concern, which include the following:

• Engaging with third parties to raise debt or equity capital;
• Evaluating the Company’s existing arrangements to minimize current and future obligations;
• Successfully optimizing its products and services and entering into collaborations with other companies;
• Pursuing initiatives to reduce operating expenses, including fully recognizing the synergies of prior acquisitions.

Historically, the Company has been able to raise funds to support its business operations. During the three months ended March 31, 2025, the Company sold an aggregate of 681,330 shares of common stock under an “at-the-market” equity offering program for aggregate gross proceeds of $909, less issuance costs of $18 which were recorded as a reduction to additional paid-in capital. The Company is required to file a Form S-1 to issue new equity and raise proceeds in the future. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. Lastly, there can be no assurances that these other initiatives will be achieved. However, based on its considerations, management believes these initiatives can be effectively implemented and will be sufficient to mitigate the circumstances resulting in substantial doubt for a period not less than one year from the date the condensed consolidated financial statements are issued.

Contractual Obligations and Commitments

We have operating and finance lease obligations over the next five years of approximately $10,071. These operating lease and financing lease obligations are primarily related to corporate office space, warehousing, and parking spaces related to our car-sharing services.

Critical Accounting Estimates

The preparation of financial statements and related disclosures are in conformity with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are reasonable based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

Management has identified certain critical accounting estimates which are outlined below. In addition, there are other items within our financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.

Our accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies, in our financial statements included elsewhere in this quarterly report. For a comprehensive list of our critical accounting estimates, refer to Part II, Item 7, Critical Accounting Estimates in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting policies and estimates since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024.

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 March 31, 2025. 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 March 31, 2025, being the end of the period covered by this 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 15d15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2025, our disclosure controls and procedures were not effective due to the material weaknesses 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, 2024, 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 March 31, 2025, management continued to commit resources to the remediation of the material weaknesses reported in the Company’s Form 10-K for the fiscal year ended December 31, 2024.

Except for the above, there were no other changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025, 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, 2024, 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 annual and quarterly net losses which may continue and which may negatively impact our ability to achieve our business objectives.

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 $21 million for the three months ended March 31, 2025. As of March 31, 2025, we had net working capital of approximately $66 million and an accumulated deficit of approximately $757 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.