Charge Enterprises Reports Second Quarter 2022 Financial Results

Rhea-AI Summary

Charge Enterprises (CRGE) reported second quarter 2022 revenues of $181.0 million, a 40% increase from the previous year. Gross margin more than tripled to $7.3 million from $2.2 million in 2021. The growth was attributed to expanded orders in Telecommunications and EV Infrastructure sectors, supported by recent acquisitions. Despite increased revenue, the company reported a net loss of $19.6 million, up from $10.1 million a year earlier, largely due to increased operational expenses. The company remains focused on becoming a leading provider in the EV and 5G infrastructure markets.

Positive

• Revenue increased by $51.5 million to $181.0 million, a 40% growth year-over-year.
• Gross margin improved to $7.3 million, up from $2.2 million in the same quarter last year.
• Successful integration of acquisitions: Advanced Network Services, BW Electrical Services, and EV Depot contributed to revenue growth.
• Proforma revenues increased by $38.4 million from the previous year.

Negative

• Net loss increased to $19.6 million compared to $10.1 million in the prior year.
• Stock-based compensation increased by $0.5 million to $9.8 million.
• General and administrative expenses rose by $1.8 million to $3.9 million.
• Significant non-cash charges related to equity conversion impacted financial results.

Reported Revenues Increased 40% to $181.0 Million

Reported Gross Margin More than Tripled to $7.3 Million

Continued Strong Execution toward Becoming the Trusted Infrastructure Provider in Expansive EV Charging and 5G Broadband Space

NEW YORK, NY / ACCESSWIRE / August 15, 2022 / Charge Enterprises, Inc. (Nasdaq:CRGE) ("Charge" or the "Company"), today reported second quarter 2022 revenues of $181.0 million, compared with $129.6 million in the second quarter of 2021. Gross margin increased to $7.3 million, compared with $2.2 million in the prior year period.

"We delivered exceptional second-quarter results through expanded orders from existing customers and new business in both the Telecommunications and EV Infrastructure sectors," said Andrew Fox, Founder, Chairman and Chief Executive Officer. "Charge Enterprises' approach is investment in foundational infrastructure, specifically 5G service and EV charging, and working with businesses that will spread these technologies quickly. Our customer base includes large global telecom carriers, mobile operators, and federal contractors, as well as automotive OEMs, dealerships, and fleet operators."

"Our core strategy is solid, we're focused on organic growth, levering subsidiary expertise, and investing in high growth areas," he said. "A key Charge initiative is our Network Operations Center (‘NOC'), where we provide our customers with high-quality maintenance and service when, how and where they want it, which generates monthly recurring revenue for our business."

According to Fox, the upcoming years represent a pivotal period for EV charging and 5G broadband infrastructure. "Heavy investment will flow into this space from both public and private sources, and we're positioning Charge Enterprises to be the trusted infrastructure provider, which is why we're investing in new systems and advanced technologies and why we provide ongoing maintenance ensuring our customers experience seamless around the clock operation."

Second Quarter 2022 Results - Selected Financial Information

($ in thousands)		As Reported Three months ended June 30,												As Reported Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Total Revenues		$	181,041			$	129,577			$	51,464			$	344,019			$	240,711			$	103,308
Gross Margin			7,281				2,151				5,130				13,751				3,725				10,026
Net Income / (Loss)			(19,642	)			(10,085	)			(9,557	)			(32,782	)			(11,664	)			(21,118	)
Adjusted EBITDA (1)		$	(1,602	)		$	(2,366	)		$	764			$	(3,437	)		$	(3,125	)		$	(312	)
($ in thousands)		Proforma Three months ended June 30,												Proforma Six months ended June 30,
										Increase												Increase
			2022				2021			(Decrease)					2022				2021			(Decrease)
Total Revenues		$	181,041			$	142,617			$	38,424			$	344,249			$	268,168			$	76,081
Gross Margin			7,281				5,629				1,652				13,895				10,651				3,244
Net Income / (Loss)			(19,642	)			(8,416	)			(11,226	)			(32,709	)			(9,373	)			(23,336	)
Adjusted EBITDA (1)		$	(1,602	)		$	(2,548	)		$	946			$	(3,364	)		$	(2,552	)		$	(812	)

(1) Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization, and amortization of debt discount and debt issue costs adjusted for stock-based compensation, loss on impairment, (income) loss from investments, net, other (income) expense, net, and foreign exchange adjustments. Refer to Appendix for definition and complete non-GAAP reconciliation for Adjusted EBITDA.

Reported financial results include operations from the date of acquisition: Advanced Network Services ("ANS") acquired on May 21, 2021; BW Electrical Services ("BW") acquired on December 27, 2021; and EV Group Holdings ("EV Depot") acquired on January 14, 2022. Due to the timing of certain acquisitions, current quarter results are not necessarily comparable to the year-ago periods.

Proforma financial results include: the full three and six months periods for all of the Company's operations, including acquisitions, for 2021 and 2022 as if they happened on the first day of the respective period. Management believes that presenting proforma results is important to understanding the Company's financial performance and provides better analysis of trends in the Company's underlying businesses as it allows for comparability to prior period results.

Reported revenues increased $51.5 million to $181.0 million in the quarter, and proforma revenues increased $38.4 million to $181.0 million, compared with the second quarter of 2021. The increase in reported and proforma revenues was driven by higher revenues in both of the Company's business segments.

• Telecommunications : Reported revenues and proforma revenues increased $29.6 million, compared with the second quarter of 2021. The increase was primarily driven by higher wholesale traffic volumes, as a result of geo-political unrest in various regions of the world.
• Infrastructure : Reported revenues increased $21.8 million, and proforma revenues increased $8.8 million, compared with the second quarter of 2021. The seven-fold increase in reported revenues was due to the Company's acquisitions of ANS, BW, and EV Depot. The 53% increase in proforma revenues demonstrates the success of the Company's strategy to drive organic growth.

Reported gross margin increased $5.1 million to $7.3 million, and proforma gross margin increased $1.7 million to $7.3 million, compared with the second quarter of 2021. The increase in reported and proforma gross margin was primarily driven by higher revenues and margin expansion in the Company's Infrastructure business segment, partially offset by lower gross margin in its Telecommunications business segment.

Reported net loss was $19.6 million, compared with a net loss of $10.1 million in the prior year period, and proforma net loss was $19.6 million, compared with a net loss of $8.4 million in the second quarter of 2021. On a reported basis, the incremental expenses after gross margin were primarily related to investments the Company continued to make in its people and capital structure, positioning Charge for growth. The largest drivers over the prior year period were:

• $9.8 million in stock-based compensation expense, which represented a $0.5 million increase;
• $3.9 million in general and administrative expense, which represented a $1.8 million increase;
• $4.1 million in salaries and related benefits, which represented a $2.3 million increase, driven by the Company's growth, and acquisitions of ANS, BW, and EV Depot; and
• $7.2 million in total other expense, net, which represented a $6.8 million increase, and included a $4.3 million non-cash charge related to the exchange of convertible notes for preferred equity, allowing the Company to move towards a more favorable capital structure.

The reported net loss of $19.6 million, adjusted for non-cash and certain one-time items, resulted in an Adjusted EBITDA loss of $1.6 million, compared with an Adjusted EBITDA loss of $2.4 million in the prior year period. See Appendix for full reconciliation.

As of June 30, 2022, Charge held $62.9 million in cash, cash equivalents and marketable securities.

Charge's CFO Leah Schweller commented, "During the quarter, our operating subsidiaries' core business models continued to drive proforma organic growth and margin. In addition, we increased our market share, adding additional value through the collaboration between our ANS and BW teams, achieving new revenue growth. It is notable that we were able to improve profitability, within the context of inflation and labor challenges that impacted our entire industry. We continued to invest the incremental gross margin dollars we achieved primarily in our infrastructure businesses and to some extent at the corporate level to build out the overall Company foundation."

To support our growth plans, meet evolving customer needs and position us well in the marketplace, we are pursuing additional opportunities to expand our product offerings. We are addressing the increasing demand for maintenance and monitoring services through our NOC and expanding our global Telecommunications business with the execution of Short Message Services (SMS) agreements for commercial use in Application to Person (A2P) messaging."

For further details of the Company's financials, please see Charge Enterprises' Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the Securities and Exchange Commission on August 15, 2022 and available on Charge's website Charge | SEC Filings . Financial statements prior to December 31, 2021 were filed with the OTC Markets.

Second Half 2022 and 2023 Priorities

Charge serves a large addressable market with an urgent need for updated infrastructure at the crossroads of EV Charging and Communications. This combined sector is propelled by strong tailwinds from private and public spending.

Charge's mission over the next 18 months remains focused on the execution of being the trusted infrastructure provider in the EV charging and 5G broadband space. The Company's strategy is to integrate and optimize value from high-quality assets with growing recurring revenue streams across its core competencies by:

• Executing seamlessly for Telecommunications and Infrastructure customers;
• Broadening its value proposition to meet evolving customer needs, adding capabilities both through internal development and targeted strategic and opportunistic M&A to optimize Charge's competitive edge as a trusted advisor;
• Proceeding at a measured and methodical pace to build a healthy foundation with refined processes

for sustained long-term growth; and

• Development of new software products and services.

About Charge Enterprises, Inc.

Telecommunications

Our Telecommunications business ("Telecommunications") has provided routing of both voice and data to Carriers and Mobile Network Operators ("MNOs") globally for over two decades and is poised to selectively add profitable products and services to this long-established business.

Infrastructure

Our Infrastructure business ("Infrastructure") has a primary focus on two fast growing sectors: electric vehicle ("EV") charging, and Telecommunications Network 5G, including cell tower, small cell, and in-building applications. Solutions for these two sectors include: Design and Engineering, Equipment Specification and Sourcing, Installation, Data and Software Solutions, and Service and Maintenance.

To learn more about Charge, visit Charge Enterprises , Inc.

Notice Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect current expectations or beliefs regarding future events or Charge's future performance. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates", "targets" or "believes", or variations of, or the negatives of, such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. All forward-looking statements, including those herein, are qualified by this cautionary statement.

Although Charge believes that the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include the business plans and strategies of Charge, Charge's future business development, market acceptance of electric vehicles, Charge's ability to generate profits and positive cash flow, changes in government regulations and government incentives, subsidies, or other favorable government policies, and other risks discussed in Charge's filings with the U.S. Securities and Exchange Commission ("SEC"). Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive of the factors that may affect forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release or as of the date or dates specified in such statements. For more information on us, investors are encouraged to review our public filings with the SEC which are available on the SEC's website at www.sec.gov . Charge disclaims any intention or obligation to update or revise any forward- looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Notice Regarding Non-GAAP Measures

The press release includes both financial measures in accordance with U.S. generally accepted accounting principles ("GAAP"), as well as non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. See the Appendix for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

Media Contacts:
Steve Keyes (248) 952-7022
Steve.keyes@centigrade.com

Investor Relations:
Christine Cannella (954) 298-6518
Ccannella@charge.enterprises

Carolyn Capaccio, CFA (212) 838-3777
Ccapaccio@lhai.com

APPENDIX

CHARGE ENTERPRISES, INC.
CONSOLIDATED RESULTS OF OPERATIONS

		As Reported												As Reported
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues
Telecommunications		$	155,607			$	125,960			$	29,647			$	298,966			$	237,087			$	61,879
Infrastructure			25,434				3,617				21,817				45,052				3,624				41,428
Total Revenues			181,041				129,577				51,464				344,018				240,711				103,307
Cost of Goods Sold			173,760				127,426				46,334				330,267				236,986				93,281
Gross Margin			7,281				2,151				5,130				13,751				3,725				10,026
Stock based compensation			9,761				9,230				531				20,504				13,794				6,710
General and administrative			3,908				2,141				1,767				6,905				3,396				3,509
Salaries and related benefits			4,127				1,791				2,336				8,370				2,623				5,747
Professional fees			848				586				262				1,913				832				1,081
Depreciation expense			1,103				98				1,005				1,312				148				1,164
Income (loss) from operations			(12,466	)			(11,695	)			(771	)			(25,253	)			(17,068	)			(8,185	)
Other operating (income) expense			7,188				401				6,787				9,119				(2,211	)			11,330
Income tax expense / (benefit)			(12	)			(2,011	)			1,999				(1,590	)			(3,193	)			1,603
Net income (loss)		$	(19,642	)		$	(10,085	)		$	(9,557	)		$	(32,782	)		$	(11,664	)		$	(21,118	)

		Proforma												Proforma
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues
Telecommunications		$	155,607			$	125,960			$	29,647			$	298,966			$	237,087			$	61,879
Infrastructure			25,434				16,657				8,777				45,283				31,081				14,202
Total Revenues			181,041				142,617				38,424				344,249				268,168				76,081
Cost of Goods Sold			173,760				136,988				36,772				330,354				257,517				72,837
Gross Margin			7,281				5,629				1,652				13,895				10,651				3,244
Stock based compensation			9,761				9,230				531				20,504				13,794				6,710
General and administrative			3,908				2,907				1,001				6,953				4,988				1,965
Salaries and related benefits			4,127				4,591				(464	)			8,383				7,226				1,157
Professional fees			848				678				170				1,913				989				924
Depreciation expense			1,103				196				907				1,312				382				930
Income (loss) from operations			(12,466	)			(11,973	)			(493	)			(25,170	)			(16,728	)			(8,442	)
Other operating (income) expense			7,188				(1,678	)			8,866				9,129				(4,294	)			13,423
Income tax expense / (benefit)			(12	)			(1,879	)			1,867				(1,590	)			(3,061	)			1,471
Net income (loss)		$	(19,642	)		$	(8,416	)		$	(11,226	)		$	(32,709	)		$	(9,373	)		$	(23,336	)

CHARGE ENTERPRISES, INC.
SEGMENT RESULTS OF OPERATIONS

	Telecommunications
		As Reported and Proforma
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues		$	155,607			$	125,960			$	29,647			$	298,966			$	237,087			$	61,879
Cost of Goods Sold			154,520				124,463				30,057				296,451				234,020				62,431
Gross Margin			1,087				1,497				(410	)			2,515				3,067				(552	)
Stock based compensation			-				-				-				-				-				-
General and administrative			495				451				44				1,009				787				222
Salaries and related benefits			179				411				(232	)			498				887				(389	)
Professional fees			10				(1	)			11				35				16				19
Depreciation expense			42				50				(8	)			86				100				(14	)
Income (loss) from operations			361				586				(225	)			887				1,277				(390	)
Other operating (income) expense			(201	)			68				(269	)			(73	)			541				(614	)
Income tax expense / (benefit)			(68	)			(52	)			(16	)			(252	)			(175	)			(77	)
Net income (loss)		$	630			$	570			$	60			$	1,212			$	911			$	301

Infrastructure

		As Reported												As Reported
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues		$	25,434			$	3,617			$	21,817			$	45,052			$	3,624			$	41,428
Cost of Goods Sold			19,240				2,963				16,277				33,816				2,966				30,850
Gross Margin			6,194				654				5,540				11,236				658				10,578
Stock based compensation			-				-				-				-				-				-
General and administrative			1,148				513				635				2,208				898				1,310
Salaries and related benefits			2,248				350				1,898				4,368				433				3,935
Professional fees			81				14				67				141				19				122
Depreciation expense			1,061				48				1,013				1,226				48				1,178
Income (loss) from operations			1,656				(271	)			1,927				3,293				(740	)			4,033
Other operating (income) expense			365				(33	)			398				814				(29	)			843
Income tax expense / (benefit)			(15	)			(45	)			30				(105	)			(45	)			(60	)
Net income (loss)		$	1,306			$	(193	)		$	1,499			$	2,584			$	(666	)		$	3,250

		Proforma												Proforma
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues		$	25,434			$	16,657			$	8,777			$	45,283			$	31,081			$	14,202
Cost of Goods Sold			19,240				12,525				6,715				33,903				23,497				10,406
Gross Margin			6,194				4,132				2,062				11,380				7,584				3,796
Stock based compensation			-				-				-				-				-				-
General and administrative			1,148				1,279				(131	)			2,256				2,490				(234	)
Salaries and related benefits			2,248				3,150				(902	)			4,381				5,036				(655	)
Professional fees			81				106				(25	)			141				176				(35	)
Depreciation expense			1,061				146				915				1,226				282				944
Income (loss) from operations			1,656				(549	)			2,205				3,376				(400	)			3,776
Other operating (income) expense			365				(2,112	)			2,477				823				(2,112	)			2,935
Income tax expense / (benefit)			(15	)			87				(102	)			(105	)			87				(192	)
Net income (loss)		$	1,306			$	1,476			$	(170	)		$	2,658			$	1,625			$	1,033

Non-Operating Corporate

		As Reported and Proforma
($ in thousands)		Three months ended June 30,												Six months ended June 30,
										Increase												Increase
		2022				2021				(Decrease)				2022				2021				(Decrease)
Revenues		$	-			$	-			$	-			$	-			$	-			$	-
Cost of Goods Sold			-				-				-				-				-				-
Gross Margin			-				-				-				-				-				-
Stock based compensation			9,761				9,230				531				20,504				13,794				6,710
General and administrative			2,265				1,177				1,088				3,688				1,711				1,977
Salaries and related benefits			1,700				1,030				670				3,504				1,303				2,201
Professional fees			757				573				184				1,737				797				940
Depreciation expense			-				-				-				-				-				-
Income (loss) from operations			(14,483	)			(12,010	)			(2,473	)			(29,433	)			(17,605	)			(11,828	)
Other operating (income) expense			7,024				366				6,658				8,379				(2,723	)			11,102
Income tax expense / (benefit)			71				(1,914	)			1,985				(1,233	)			(2,973	)			1,740
Net income (loss)		$	(21,578	)		$	(10,462	)		$	(11,116	)		$	(36,579	)		$	(11,909	)		$	(24,670	)

CHARGE ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

		June 30,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	46,581,305			$	18,238,264
Accounts receivable net of allowances of $202,220 and $176,949, respectively			75,068,872				73,334,183
Inventory			168,430				111,070
Deposits, prepaids and other current assets			3,034,526				1,721,222
Investments in marketable securities			16,325,152				9,618,743
Investments in non-marketable securities			100,000				100,000
Cost in excess of billings			8,258,082				4,812,483
Total current assets			149,536,367				107,935,965
Property, plant and equipment, net			1,697,810				2,011,668
Intangible assets, net			11,063,395				-
Finance lease asset			381,110				469,645
Operating lease right-of-use asset			3,800,935				1,558,052
Non-current assets			232,000				-
Goodwill			36,017,209				26,054,522
Deferred tax asset			4,579,213				5,579,660
Total assets		$	207,308,039			$	143,609,512
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	99,752,963			$	71,428,301
Accrued liabilities			8,162,742				5,739,475
Deferred revenue			5,276,074				7,017,392
Derivative Liability			40,442,518				-
Convertible notes payable, net of discount			-				2,700,337
Line of credit			2,757,218				1,898,143
Finance lease liability			159,215				159,215
Operating lease liability			1,325,013				125,191
Total current liabilities			157,875,743				89,068,054
Non-current liabilities
Finance lease liability, non-current			134,639				218,825
Operating lease liability, non-current			2,552,449				1,442,743
Notes payable, net of discount			22,253,430				26,087,523
Convertible notes payable, net of discount			-				4,475,260
Total liabilities			182,816,261				121,292,405
Mezzanine Equity
Series B Preferred Stock (239,510 and 2,395,105 shares issued and outstanding at June 30, 2022 and December 31, 2021)			685,000				6,850,000
Series C Preferred Stock (6,226,379 shares issued and outstanding at June 30, 2022)			16,571,656				-
Total Mezzanine Equity			17,256,656				6,850,000
Commitments, contingencies and concentration risk (Note 16)
Stockholders' Equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;
Series C:2,370,370 shares issued and outstanding at December 31, 2021			-				237
Series D: 1,177,023 shares issued and outstanding at June 30, 2022			118				-
Common stock, $0.0001 par value; 750,000,000 shares authorized 206,082,652 and 184,266,934 issued and outstanding at June 30, 2022 and December 31, 2021			20,608				18,426
Common stock to be issued, 0 shares at June 30, 2022 and 6,587,897 December 31, 2021			-				658
Additional paid in capital			182,479,967				126,869,604
Accumulated other comprehensive income (loss)			(32,859	)			(32,289	)
Accumulated deficit			(175,232,712	)			(111,389,529	)
Total stockholders' equity			7,235,122				15,467,107
Total liabilities and stockholders' equity		$	207,308,039			$	143,609,512

CHARGE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		For the three months ended June 30,								For the six months ended June 30,
		2022				2021				2022				2021
Revenues		$	181,040,612			$	129,576,795			$	344,018,502			$	240,710,698
Cost of Goods Sold			173,759,629				127,425,665				330,267,261				236,985,532
Gross Margin			7,280,983				2,151,130				13,751,241				3,725,166
Operating expenses
Stock based compensation			9,760,707				9,230,400				20,504,339				13,793,596
General and administrative			3,907,831				2,140,701				6,904,515				3,395,701
Salaries and related benefits			4,127,328				1,791,076				8,370,009				2,623,460
Professional fees			848,122				585,449				1,912,609				832,601
Depreciation and amortization expense			1,103,065				97,956				1,312,119				147,903
Total operating expenses			19,747,053				13,845,582				39,003,591				20,793,261
(Loss) from operations			(12,466,070	)			(11,694,452	)			(25,252,350	)			(17,068,095	)
Other income (expenses):
Income (loss) from investments, net			(912,369	)			859,614				(1,022,375	)			4,261,328
Amortization of debt discount			(6,414,071	)			(920,914	)			(7,443,668	)			(982,788	)
Amortization of debt discount, related party			-				-				-				(95,127	)
Interest expense			(745,728	)			(267,681	)			(1,480,781	)			(448,683	)
Other income (expense), net			715,238				(10,508	)			913,591				(10,838	)
Foreign exchange adjustments			169,411				(61,234	)			(86,191	)			(512,712	)
Total other expenses, net			(7,187,519	)			(400,723	)			(9,119,424	)			2,211,180
Income (loss) before income taxes			(19,653,589	)			(12,095,175	)			(34,371,774	)			(14,856,915	)
Income tax benefit (expense)			11,337				2,010,198				1,589,620				3,192,832
Net (loss)		$	(19,642,252	)		$	(10,084,977	)		$	(32,782,154	)		$	(11,664,083	)
Deemed dividend			(32,841,317	)			-				(36,697,317	)			-
Preferred dividends			(352,826	)			-				(619,813	)			-
Net loss available to common stockholders		$	(52,836,395	)		$	(10,084,977	)		$	(70,099,284	)		$	(11,664,083	)
Basic and diluted loss per share available to common stockholders		$	(0.27	)		$	(0.07	)		$	(0.37	)		$	(0.08	)
Weighted average number of shares outstanding, basic and diluted			193,507,946				151,120,416				190,965,948				149,463,702

CHARGE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		For the Six Months Ended June 30,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(32,782,154	)		$	(11,664,084	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,312,119				147,903
Stock-based compensation			20,086,367				13,819,067
Stock issued for services			-				278,903
Change in fair value of derivative liabilities			-				400
Amortization of debt discount			7,443,668				982,788
Amortization of debt discount, related party			-				95,127
Amortization of debt issue costs			-				10,438
Loss on foreign currency exchange			86,191				533,663
Net (income) loss from investments			1,022,375				(4,261,328	)
Other (income) expense, net			(854,850	)			-
Income tax (benefit) expense			(1,589,620	)			(3,195,383	)
Changes in working capital requirements:
Accounts receivable			(1,733,639	)			5,630,739
Accrued revenue			3,842,574				(654,303	)
Inventory			(57,360	)			(25,759	)
Deposits, prepaids and other current assets			(304,368	)			2,317,539
Other assets			(29,538	)			(103,260	)
Costs in excess of billings			(7,288,173	)			-
Accounts payable			27,162,062				(3,031,568	)
Accrued expenses			1,235,985				482,204
Other current liabilities			(173,601	)			-
Deferred revenue			(1,741,320	)			-
Other comprehensive income			(571	)			(82,086	)
Net cash used in operating activities			15,636,147				1,281,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of fixed assets			(70,542	)			(801,254	)
Sale of intellectual property			159,434				-
Purchase of marketable securities			(43,255,509	)			(42,529,309	)
Sale of marketable securities			34,901,415				39,731,309
Purchase of non-marketable securities			-				(100,000	)
Acquisition of ANS			-				(12,948,324	)
Acquisition of EV Depot			(1,231,250	)			-
Cash acquired in acquisition			104,485				40,940
Net cash (used in) provided by investing activities			(9,391,967	)			(16,606,638	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash receipts from issuance of notes payable			-				10,000,000
Cash receipts from issuance of convertible notes payable			-				5,000,000
Proceeds from sale of Common Stock			10,000,025				-
Proceeds from sale of Series C Preferred Stock			10,845,000				-
Proceeds from exercise of warrants			1,072,424				-
Proceeds from exercise of stock options			20,000				-
Draws from revolving line of credit, net			859,075				(703,650	)
Cash paid for contingent liability			-				(61,232	)
Payment on financing lease			(102,295	)			(7,525	)
Payment of dividends			(498,598	)			-
Net cash provided by financing activities			22,195,631				14,227,593
Foreign currency adjustment			(96,770	)			(485,222	)
NET INCREASE IN CASH AND CASH EQUIVALENTS			28,343,041				(1,583,267	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			18,238,264				11,629,303
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	46,581,305			$	10,046,036
Supplemental disclosure of cash flow information
Cash paid for interest expense		$	1,476,842			$	247,900
Non-cash investing and financing activities:
Issuance of Series B Preferred Stock for acquisition			-				6,850,000
Issuance of common stock for acquisition		$	17,530,278			$	-
Debt discount associated with promissory notes		$	-			$	4,296,911

Non-GAAP Measures

In this press release, the Company has supplemented the presentation of its financial results calculated in accordance with U.S. generally accepted accounting principles ("GAAP") with the following financial measures that are not calculated in accordance with GAAP: EBITDA and Adjusted EBITDA. Management uses both GAAP and non-GAAP measures to assist in making business decisions and assessing overall performance. The Company's measurement of these non-GAAP financial measures may be different from similarly titled financial measures used by others and therefore may not be comparable. These non-GAAP financial measures should not be considered superior to the GAAP measures in the tables included within this material.

Certain information presented in this press release reflects adjustments to GAAP measures such as EBITDA and Adjusted EBITDA as an additional way of assessing certain aspects of the Company's operations that, when viewed with the GAAP financial measures, provide a more complete understanding of its on-going business. EBITDA is defined as income (loss) before interest, income taxes, depreciation and amortization, and amortization of debt discount and debt issue costs. Adjusted EBITDA represents EBITDA adjusted for stock-based compensation, income (loss) from investments, net, other (income) expense, net, and foreign exchange adjustments.

CHARGE ENTERPRISES, INC.
NON-GAAP RECONCILIATION

($ in thousands)		As Reported Three months ended June 30,								As Reported Six months ended June 30,
		2022				2021				2022				2021
Adjusted EBITDA:
Net income (loss)		$	(19,642	)		$	(10,085	)		$	(32,782	)		$	(11,664	)
Income tax expense (benefit)			(12	)			(2,010	)			(1,590	)			(3,193	)
Interest expense			746				268				1,481				449
Depreciation & Amortization			1,103				98				1,312				148
Amortization of debt discount			6,414				921				7,444				983
Amortization of debt discount, related party			-				-				-				95
EBITDA			(11,391	)			(10,808	)			(24,135	)			(13,182	)
Adjustments:
Stock based compensation			9,761				9,230				20,504				13,794
(Income) loss from investments, net			912				(860	)			1,022				(4,261	)
Other (income) expense, net			(715	)			11				(914	)			11
Foreign exchange adjustments			(169	)			61				86				513
Adjusted EBITDA		$	(1,602	)		$	(2,366	)		$	(3,437	)		$	(3,125	)
($ in thousands)		Proforma Three months ended June 30,								Proforma Six months ended June 30,
			2022				2021				2022				2021
Adjusted EBITDA:
Net income (loss)		$	(19,642	)		$	(8,416	)		$	(32,709	)		$	(9,373	)
Income tax expense (benefit)			(12	)			(1,879	)			(1,590	)			(3,061	)
Interest expense			746				276				1,481				470
Depreciation & Amortization			1,103				196				1,312				382
Amortization of debt discount			6,414				921				7,444				983
Amortization of debt discount, related party			-				-				-				95
EBITDA			(11,391	)			(8,902	)			(24,062	)			(10,504	)
Adjustments:
Stock based compensation			9,761				9,230				20,504				13,794
(Income) loss from investments, net			912				(860	)			1,022				(4,261	)
Other (income) expense, net			(715	)			(2,077	)			(914	)			(2,094	)
Foreign exchange adjustments			(169	)			61				86				513
Adjusted EBITDA		$	(1,602	)		$	(2,548	)		$	(3,364	)		$	(2,552	)

SOURCE: Charge Enterprises Inc.

View source version on accesswire.com:
https://www.accesswire.com/712007/Charge-Enterprises-Reports-Second-Quarter-2022-Financial-Results

FAQ

What were Charge Enterprises' (CRGE) revenues for the second quarter of 2022?

Charge Enterprises reported revenues of $181.0 million, a 40% increase from the previous year.

How did Charge Enterprises (CRGE) perform in terms of gross margin in Q2 2022?

The gross margin for Charge Enterprises increased to $7.3 million, significantly higher than $2.2 million in Q2 2021.

What was Charge Enterprises' (CRGE) net loss for Q2 2022?

Charge Enterprises reported a net loss of $19.6 million in the second quarter of 2022, compared to $10.1 million the previous year.

How have recent acquisitions affected Charge Enterprises' (CRGE) revenue?

Recent acquisitions such as Advanced Network Services and BW Electrical Services significantly contributed to the revenue increase, reflecting a successful integration strategy.

What is Charge Enterprises' (CRGE) strategy for growth in the EV and telecommunications sectors?

Charge Enterprises aims to be the trusted infrastructure provider in EV charging and 5G broadband by expanding its service offerings and optimizing value from high-quality assets.