Financial and Technical Problems Prompt SEC Filing
San Francisco-based Ecotality, bemoaning the wind-down of the U.S. DoE-based EV Project, a lack of revenue after it failed to being a new Minit Charger to market, quality problems with existing Blink electric vehicle charging installations, and labor difficulties, advised the federal Securities and Exchange Commission Monday that it may have to file for bankruptcy protection.
“Although the Company is currently exploring options for a restructuring or sale of the entire business and/or assets,” Ecotality said in a 8-K filing (dated August 8 and filed August 12), “the Company may need to file a petition commencing a case under the United States Bankruptcy Code as part of any such process or otherwise in the very near future.”
“Neither the Company’s direct sales force nor the independent dealers have generated sales volumes of its commercial EVSE [existing electric vehicle supply] products sufficient, in combination with other sources of revenue, to support the Company’s operations in the second half of 2013,” Ecotality said.
Ecotality (NASDAQ:ECTY) reported that the U.S. DoE has suspended payments in connection with the so-called EV Project. “This suspension has had a significant impact on receivables that were anticipated to be collected.”
Ecotality earlier reported a net loss of $600,000 for the first quarter of 2013 compared with net income of $1.2 million for the first three months of 2012 – this despite a 16% percent revenues rise, to $15.9 million.
Ecotality experienced “unacceptable performance shortfalls during prototype verification testing” of its Minit Charger 12, a product it says “was critical to our growth… Accordingly, there will be no revenues from the product in 2013.” The Minit 12 was intended for industrial customers including material handling vehicles and GSE – airport ground support equipment.
Overheating Has OEMs Worried
An overheating problem with existing Ecotality equipment, severe enough to have melted connector plugs in some instances, has prompted some OEMs to consider telling their customers not to use the products, Ecotality says.
Last, a settlement pursuant to a Department of Labor investigation has forced Ecotality to shell out approximately $855,000 to certain employees and contractors.
Ecotality pledged Monday to continue to operate its Blink network and maintain its Blink chargers, more than 12,000 of which have been installed, until further notice. “The needs of our drivers are paramount to us,” the company said.
Phoenix-based Davin Jader is national accounts manager at Ecotality.
Contact information is only available to premium subscribers. Click here to purchase a subscription.
Source: Ecotality SEC filing with Fleets & Fuels follow-up