Last week the electric big truck maker, Balqon, released their quarterly financial statement (10Q) showing large losses and that the company was almost out of cash. Concurrent with the 10Q they filed an S-1 registration to sell more stock, to raise capital to continue operations. Today Balqon announced a new electric medium duty truck has been added to their product line.
Between December 31, 2010 and June 30 2011 the companies financial status grew more precarious. Cash on hand fell from $4.4 million to $353 thousand, liabilities grew from $3.5 to $4.5 million, accounts receivable grew by $0.5 million. While revenues grew a little over the last years figures, costs outweighed revenue and their loss from operations grew from $1.3 million (for first 6 months of 2010) to $2.5 million (for first six months of 2011). This resulted in shareholder equity shrinking from $7.2 million to $4.5 million. They recorded a net loss of $3.6 million for the six months ending June 30, 2011. Ouch.
The company states their “lack of significant revenue” so far in 2011 is due to the “length and complexity of their product development process”. There is typically a significant lag between receiving an order for products, and delivering on that order. Elsewhere in the 10Q filing they describe several on-going projects. They have a total order backlog of $19 million, of which $16 million is attributable to a large order from Winston Global Energy.
In Jan 2011 Balqon began operating as a distributor for batteries and “high voltage charging systems” from Seven One Limited. This is a Chinese battery company where Balqon’s Chairman, Winston Chung, serves as CEO. In January they received $2.6 million worth of product from Seven One (on consignment), selling some of the battery systems in April.
In Jan 2011 Balqon entered into an agreement with Winston Global Entity (WGE) to deliver 300 electric drive systems for integration into 14-30 passenger mini-busses. They also have a similar deal with Ashok Leyland in India, and in the first half of 2011 they spent considerable resources developing the drive systems to be delivered to both WGE and Ashok Leyland. They delivered one unit to WGE.
The company has a backlog of orders with the City of Los Angeles. The original incentive to launch Balqon was the polluted condition of the Port of Los Angeles due to all the ships and diesel trucks operating there. The original commitment was for Balqon to deliver 20 electric “yard tractors”, 5 short-haul electric tractors, and some associated equipment. As of today they’ve delivered 14 yard tractors and one short-haul tractor, and expect to deliver the rest of the trucks by the end of 2011.
During 2010 they delivered electric drive and lithium battery systems to Ashok Leyland for a demonstration project involving hybrid electric inter-city busses in India. After a successful test they entered into a new agreement, in April 2011, to develop and test electric busses and trucks based on Ashok Leyland’s chassis design. They delivered two systems by July 25, 2011.
In December 2010 they raised $5 million in capital from private stock sales, using that to ramp up production processes during the first half of 2011.
The 10Q filing cites one risk faced by the company, their obvious precarious financial state due to the significant expenditures and financial losses faced this year. In a separate S-1 filing they’ve registered to sell 8.2 million shares at a price of $0.88 per share expecting to receive $7.3 million in additional funding.
Balqon Quarterly Results (10Q), July 29, 2011
Balqon S-1 filing, July 29, 2011