f10k2012_carcharging.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File No. 333-149784

CAR CHARGING GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		03-0608147
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1691 Michigan Avenue, Suite 601
Miami Beach, Florida		33139
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (305) 521-0200

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:	Name of each exchange on which registered:
None	None

Securities registered under Section 12(g) of the Exchange Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form
10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2012: $44,799,458.

As of April 15, 2013, the registrant had 50,442,455 common shares issued and outstanding.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

PART I

ITEM 1.	BUSINESS	1

ITEM 1A.	RISK FACTORS	6

ITEM 1B.	UNRESOLVED STAFF COMMENTS	9

ITEM 2.	PROPERTIES	9

ITEM 3.	LEGAL PROCEEDINGS	9

ITEM 4.	MINE SAFETY DISCLOSURES	9

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	9

ITEM 6.	SELECTED FINANCIAL DATA	12

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	20

ITEM 9A.	CONTROLS AND PROCEDURES	21

ITEM 9B.	OTHER INFORMATION	21

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	22

ITEM 11.	EXECUTIVE COMPENSATION	24

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	27

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	29

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	30

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	31

SIGNATURES		33

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A — Risk Factors” below.

PART I

ITEM 1. BUSINESS

Overview

Car Charging Group, Inc. (“CarCharging” or the “Company”) is a nationwide provider of electric vehicle (“EV”) charging services. CarCharging currently provides comprehensive turnkey EV charging services to commercial, residential, and municipal property owners. These services enable EV drivers to recharge their EVs where they live, work, and play.

CarCharging’s current service offerings are designed to accelerate the adoption of public EV charging services. Our complete turnkey service enables property owners to rollout EV charging services on their properties with no capital outlay in return for long-term service contracts. CarCharging pays for all equipment, installation, maintenance and related services. We believe that this innovative amenity increases property value, retains current tenants, and attracts new tenants.

CarCharging has more than 60 strategic partnerships across multiple business sectors, including multifamily residential and commercial properties, parking garages, shopping malls, retail centers, and municipalities. CarCharging’s strategic partners own or manage a total of 6.5 million parking spaces and include, but are not limited to Ace Parking, Central Parking, Equity One, Equity Residential, Icon Parking, Rapid Parking, Related Properties, USA Parking, Walgreens, Pennsylvania Department of Environmental Protection, City of Miami Beach (FL), City of Hollywood (FL), and City of Santa Clara (CA).

Our revenues are primarily derived from hardware sales and public EV charging services. Car Charging sets its EV charging fees based on a variety of factors, including local electricity tariffs, location, and competitive services and alternative fuels. EV charging fees are set on an hourly rate or a per kilowatt-hour rate. CarCharging is also implementing subscription plans to include electricity for single-family homes, multifamily residential, and CarCharging’s public charging locations.

Our Company is able to facilitate the purchase of EV charging stations through its wholly owned subsidiary, eCharging Stations, LLC. The installation and maintenance of the EV charging equipment is subcontracted through approved local vendors, and are competitively bid to maintain the lowest installation and on-going costs possible.

History

The Company was incorporated in October 2006 in Nevada under the name New Image Concepts, Inc. with the intention of providing personal consultation services to the general public. On December 7, 2009, we entered into a Share Exchange Agreement with Car Charging, Inc., a Delaware corporation (the “Share Exchange”).

Following the Share Exchange we amended our Articles of Incorporation to (1) change our name to Car Charging Group, Inc. and to (ii) authorize 20,000,000 shares of preferred stock. Additionally, we filed a Certificate of Designation designating the rights of the authorized preferred stock of the Company (the “Series A Convertible Preferred Stock”). On June 29, 2012, we increased our authorized preferred stock to 40,000,000 shares.

During February 2011, we decreased our issued and outstanding common stock through a one-for-fifty (1:50) reverse stock-split (the “Reverse Stock-Split”). All share and per share amounts included in this Report and our consolidated financial statements have been adjusted retroactively to reflect the effects of the Reverse Stock-Split.

Corporate Structure

Car Charging Group, Inc. is the parent company of Car Charging, Inc., a Delaware corporation, which serves as the main operating company and is, in turn, the parent company of several distinct wholly-owned subsidiary operating companies.

Industry Overview

The electric vehicle industry is expected to accelerate over the next several years for various reasons including rising gasoline prices, environmental awareness, and greenhouse gases. Additionally, states such as California have passed laws requiring significant reduction in greenhouse gas emissions from passenger vehicles. While hybrid automobiles are attaining improved gas mileage, they remain a severe pollutant.

Large-scale market penetration and consumer adoption is likely to occur over the next few years due mainly to the following five reasons.

1.	U.S. legislative programs provides incentives to grow the industry

There has been a concerted effort on the part of the federal, state and local governments to foster the EV industry, supporting both the vehicles and the necessary charging infrastructure. There have been an unprecedented number of loans and grants to insure this segment succeeds. The Ford Motor Company was awarded a $5.9 billion loan in June of 2009. Tesla Motors received a $465 million loan to build its plant in Fremont California and to support its production of its Model S 4-door sedan. Both of the aforementioned loans came from the US Government’s $25 billion program dedicated to the development of electric/plug-in hybrid vehicles.

The United States Government has approved a $7,500 tax credit to purchasers of EVs. Additionally, the Federal Government recently extended the alternative fuel vehicle refueling property credit for certain qualifying expenditures for car charging facilities. Fueling equipment for electricity installed is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Fueling station owners who install qualified equipment at multiple sites are allowed to utilize the credit towards each location. Whether it is for the actual manufacturing of a new car, or to startup companies looking to capitalize on new infrastructure technologies, governments have committed to spending billions of dollars to ensure that the EV industry as a whole will succeed.

2.	Maintain a relatively low cost when compared to gasoline

At the beginning of the 20th Century, electricity generally cost over $0.20 per kilowatt-hour, and could have been as high as $0.40 per kilowatt-hour. During that same time period, gasoline could be purchased for $0.05 per gallon. The spread between gasoline and electricity continues to widen. In 2010, the average retail price of gasoline in the U.S. was $2.74, and by 2012, the average retail price increased to $3.56, while the average cost of electricity is $0.11 per kilowatt-hour.

Concurrently, major utility companies are working on upgrading their infrastructure to make it easier to charge an electric vehicle. The “smart-grid” investment that many utilities have already made will provide ample information to predict the required power requirements needed to support a widespread EV infrastructure.

3.	Diverse variety of vehicles at price points from the major auto manufacturers

Almost all of the major car manufacturers have committed to build an electric vehicle by 2015. General Motors, Ford, Chrysler, Nissan, Honda, BMW, Mercedes, and Tesla, are just some of the examples of the car manufacturers committed to making the electric vehicle industry a successful enterprise. As car manufacturers increase the number of electric vehicles they produce each year, we believe the purchase price for such vehicles will continue to decline. For example, the Nissan dropped the price of the 2013 LEAF model by more than $6,000 than the previous model, The price reduction makes the LEAF comparable in price to the Toyota Prius, and leases have been made available for as little as $139 per month.

4.	Battery costs decrease while recharge life increases

Battery technology is advancing at a rapid pace. Not only are battery costs per kilowatt-hour decreasing rapidly, but at the same time the size and weight of the battery are also decreasing. All three variables are necessary components required to drive down the costs of an electric vehicle. Additionally, battery lifespan is critical to EV acceptance, and many companies such as A123Systems are leading the way towards increased battery capacity and longevity.

5.	EV Infrastructure that supports consumer driving habits

Consumers are fickle and do not want to alter their daily routine or driving habits. While many believe that most EV charging will be completed at home, the need for a robust, pervasive public EV charging infrastructure is required to eliminate range anxiety. Public and residential charging eliminates the need for drivers to go out of their way to fill their gas tank. Instead, charging stations will be located in popular destination locations where drivers currently park, whether it be for 20 minutes at a local Walgreens, for a few hours while parking at work, or at home overnight, the recharging infrastructure build-out will be more than sufficient for nearly all drivers.

Equipment and Network Utilized

The majority of the EV charging stations that we currently have installed are within the CT2000 family of ChargePoint Networked Charging Stations, which are manufactured by ChargePoint® and are specifically designed for the North American market. The CT2000 family of charging stations supports fast charging is known as Level 2 (208/240V @ 32A). The ChargePoint Networked Charging Stations combined with the ChargePoint Network Operating System (NOS) form a smart charging infrastructure for plug-in electric vehicles.

Although we do not exclusively use ChargePoint’s charging stations, we believe it benefits the Company to be aligned with their devices and network infrastructure at this time. CarCharging has been provided many charging stations under the ChargePoint America (CPA) program, which enables us to lower our average overall equipment costs. As the market continues to mature, we intend to upgrade as new technologies become available.

Competition

The competitive landscape in the development of a national or regional electric vehicle infrastructure is young and still fragmented. No clear leader or leaders have emerged, leaving room for new arrivals to ascend. The terrain, however, is such that competitors may quickly become complimentary to one another, allowing for greater mobility and enhanced driving distance for the electric vehicle operator through the ability to charge at charging stations owned and/or operated by different owners. We anticipate that this, in turn, will work towards further expansion of the electric vehicle industry, bringing additional revenue to all these companies and allowing the infrastructure to grow. Furthermore, because CarCharging is in the business of owning and operating EV charging stations and not developing the technology behind the chargers, potential competitors become partners if and when CarCharging seeks new chargers to with which to equip additional locations as the technology further develops.

The EV charging marketplace is made up of a variety of companies who either offer direct distribution or work with independent distributors, including:

·	General Electric currently offers a Level 2 (220 Volt) Networked Charging Station.

·	Ecotality manufactures and sells Level 2 and 3 “Blink” chargers. Under a Federal Grant “The EV Project” they anticipate installation of approximately 14,000 Level 2 and 300-400 Level 3 chargers in 6 states.

·	NRG offers home and public charging at fixed monthly rates, and currently only offers this in Dallas/Ft Worth and Houston, Texas and now in California. They anticipate a 20-city rollout of EV charging station infrastructure, with an emphasis on monthly subscriptions.

Customers

Sales and Marketing

When evaluating our future, we believe the most important consideration is the number of locations we contract with to install charging stations. We could contract with a parking garage which contains 600 spaces, but only install one charging station upon the signing of our contract. That location now represents 599 other potential charging locations that will yield future potential revenues in an essential EV market. We will have minimum capital requirements to secure future charging station spots in that location, and will only install other charging stations as the market warrants. We are able to monitor the usage of the charging stations. As each market develops, we can increase the number of charging stations installed at each location.

We employ a direct sales team located both on the east and west coast, as well as a team of independent contractors located throughout the United States actively pursuing and closing deals.

CarCharging’s website (www.carcharging.com) is utilized to promote the Company’s services to property owners, EV owners, and consumers. The Company also utilizes public relations to announce new property partnerships to the media. CarCharging also utilizes social media channels such as Facebook and Twitter to educate consumers about EVs and the Company’s developments.

Government/Regulatory Approval

Local regulations for installation of EV charging stations vary from city to city. Compliance with such regulation(s) may cause installation delays, but these issues are standard and expected for any product that requires construction as part of its installation.

Currently, the Company charges customers by the kilowatt-hour for its services in energy deregulated states and hourly for its services in energy regulated states so as not to be treated as a regulated public utility. California, Colorado, Florida, Hawaii, Maryland, Minnesota, Oregon, Virginia, and Washington have determined that companies that sell EV charging services to the public will not be regulated as utilities, therefore allowing us to charge based on kilowatt usage. These individual state determinations are not binding on any other regulator or jurisdiction; however, they demonstrate a trend in the way states view the industry. Other jurisdictions are in the process of adopting such reforms.

Employees

We currently have 14 full-time employees.

Intellectual Property

The Company has entered into a Licensing Agreement with Michael D. Farkas, our Chief Executive Officer, and Balance Holdings, LLC for the exclusive use of filed provisional patent applications for the following inventions:

EVSE Parking Bumper: An inductive charging station in the form of a parking bumper that will reduce the visual and physical clutter in already-congested parking lots and garages (Patent Application Number: 13600058).

Multiple Simultaneous Electric Vehicle Charging: Through the use of a toggle unit, processor, and multiple plugs which allows multiple EVs to plug into the station simultaneously and charge as the current becomes available (Provisional Patent Application Number: 61695839).

Both products allow EV drivers to wirelessly power and pay for their charging services in an automated and seamless transaction.

Other Information

We maintain our principal offices at 1691 Michigan Avenue, Miami Beach, Florida, 33139. Our telephone number is (305) 521-0200. A Silicon Valley office was also recently established to house our marketing and sales departments and to provide improved support for west coast operations. Our website is www.CarCharging.com; we can be contacted by email at info@CarCharging.com.

ITEM 1A. RISK FACTORS

Risks Relating to Our Business

WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.

We were incorporated in Nevada in October, 2006. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the potentially highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities.

WE NEED TO MANAGE GROWTH IN OPERATIONS TO MAXIMIZE OUR POTENTIAL GROWTH AND ACHIEVE OUR EXPECTED REVENUES AND OUR FAILURE TO MANAGE GROWTH WILL CAUSE A DISRUPTION OF OUR OPERATIONS RESULTING IN THE FAILURE TO GENERATE REVENUE.

In order to maximize growth in our current and potential markets, we believe that we must expand our marketing operations. This expansion will place a significant strain on our management and our operational, accounting, and information systems. We expect that we will need to continue to improve our financial controls, operating procedures and management information systems. We will also need to effectively train, motivate and manage our employees. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues we expect.

In order to achieve the above-mentioned targets, the general strategies of our Company are to maintain and search for hard-working employees who have innovative initiatives; as well as to keep a close eye on expansion opportunities through merger or and/or acquisition.

IF WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR OPERATIONS.

If adequate additional financing is not available on reasonable terms, we may not be able to undertake expansion or continue our marketing efforts and we would have to modify our business plans accordingly. There is no assurance that additional financing will be available to us.

In connection with our growth strategies, we may experience increased capital needs; accordingly, we may not have sufficient capital to fund our future operations without additional capital investments. Our capital needs will depend on numerous factors, including (i) our profitability; (ii) the release of competitive products and/or services by our competition; (iii) the level of our investment in research and development; (iv) the amount of our capital expenditures, including acquisitions, and (v) our growth. We cannot assure you that we will be able to obtain capital in the future to meet our needs.

Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our financial statements as of December 31, 2012 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our independent registered public account firm has issued a report on these financial statements that include a paragraph expressing substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent, amongst other things, our ability to obtain additional equity or debt financing. Our financial statements do not include any adjustment that may result from this uncertainty.

OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE OF OUR OFFICERS.

We are presently dependent to a great extent upon the experience, abilities and continued services of Michael D. Farkas, Andy Kinard and Jack Zwick, our management team. The loss of services of Mr. Farkas, Mr. Kinard or Mr. Zwick could have a material adverse effect on our business, financial condition or results of operation.

NEED FOR ADDITIONAL EMPLOYEES

Our future success also depends upon our ability to attract and retain highly qualified personnel. Expansion of our business and the management and operation of the Company will require additional managers and employees with industry experience, and our success will be highly dependent on our ability to attract and retain skilled management personnel and other employees. There can be no assurance that we will be able to attract or retain highly qualified personnel. As our industry continues to evolve, competition for skilled personnel with the requisite experience will be significant. This competition may make it more difficult and expensive to attract, hire and retain qualified managers and employees.

WE ARE IN AN INTENSELY COMPETITIVE INDUSTRY AND THERE CAN BE NO ASSURANCE THAT WE WILL BE ABLE TO COMPETE WITH OUR COMPETITORS WHO MAY HAVE GREATER RESOURCES.

The Company could face strong competition within the local area from competitors in the EV charging services industry who could duplicate the model. These competitors may have substantially greater financial, marketing and development resources and other capabilities than the Company. In addition, there are very few barriers to enter into the market for our services. There can be no assurance, therefore, that any of our competitors, many of whom have far greater resources, will not independently develop services that are substantially equivalent or superior to our services. Therefore, an investment in the Company is very risky and speculative due to the competitive environment in which the Company intends to operate.

OUR FUTURE SUCCESS IS DEPENDENT UPON THE FUTURE GENERATION OF A MARKET FOR OUR SERVICE

The Company currently remains and will continue to remain in a position of dependence on the creation and sustainability of the electric car market. While a vast majority of the major car manufacturers have made strong financial commitments to the electric vehicle industry going forward, there is no guaranty that the industry will become viable. Without a fleet of electric vehicles on the road needing recharging, there exists no opportunity for the Company to provide its intended service. Therefore, an investment in the Company is very risky and speculative due to the uncertain future of the electric vehicle market.

Risks Associated with Our Common Stock

IF WE FAIL TO ESTABLISH AND MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL, WE MAY NOT BE ABLE TO REPORT OUR FINANCIAL RESULTS ACCURATELY OR TO PREVENT FRAUD. ANY INABILITY TO REPORT AND FILE OUR FINANCIAL RESULTS ACCURATELY AND TIMELY COULD HARM OUR REPUTATION AND ADVERSELY IMPACT THE TRADING PRICE OF OUR COMMON STOCK.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operations and access to capital. We have not performed an in-depth analysis to determine if in the past un-discovered failures of internal controls exist, and may in the future discover areas of our internal control that need improvement. We currently do not have an audit committee or audit committee financial expert. Our Code of Ethics requires members of our management team to report any conduct by our Chief Executive Officer or Chief Financial Officer, believed to be in violation of law or business ethics or in violation of any provision of the Code of Ethics to our audit committee. Because of the lack of an audit committee, violations of our Code of Ethics or violation of law or business ethics by Chief Executive Officer and Chief Financial Officer may go unreported.

OUR COMMON STOCK IS QUOTED ONLY ON THE OTC BULLENTIN BOARD (“OTCBB”), WHICH MAY HAVE AN UNFAVORABLE IMPACT ON OUR STOCK PRICE AND LIQUIDITY.

Our common stock is quoted on the OTCBB. The OTCBB is a significantly more limited market than the New York Stock Exchange or the NASDAQ Stock Market. The quotation of our shares on the OTCBB may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

There can be no assurance that there will be an active market for our shares of common stock either now or in the future. Market liquidity will depend on the perception of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business. As a result holders of our securities may not find purchasers for our securities should they to desire to sell them. Consequently, our securities should be purchased only by investors having no need for liquidity in their investment and who can hold our securities for an indefinite period of time.

OUR SHARES OF COMMON STOCK ARE VERY THINLY TRADED, AND THE PRICE MAY NOT REFLECT OUR VALUE AND THERE CAN BE NO ASSURANCE THAT THERE WILL BE AN ACTIVE MARKET FOR OUR SHARES OF COMMON STOCK EITHER NOW OR IN THE FUTURE .

Our shares of common stock are very thinly traded, and the price, if traded, may not reflect our value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future. The market liquidity will be dependent on the perception of our operating business and any steps that our management might take to increase awareness of the Company with investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business. If a more active market should develop, the price may be highly volatile. Because there may be a low price for our shares of common stock, many brokerage firms may not be willing to effect transactions in the securities. Even if an investor finds a broker willing to effect a transaction in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of such shares of common stock as collateral for loans.

FUTURE ISSUANCE OF OUR COMMON STOCK COULD DILUTE THE INTEREST OF EXISITNG STOCKHOLDERS.

We may issue additional shares of our common stock in the future. The issuance of a substantial amount of common stock could have the effect of substantially diluting the interests of our current stockholders. In addition, the sale of a substantial amount of common stock in the public market, either in the initial issuance or in a subsequent resale by the target company in an acquisition which received such common stock as consideration or by investors who acquired such common stock in a private placement could have an adverse affect on the market price of our common stock.

THE APPLICATION OF THE SECURITY AND EXCHANGE COMMISSION’S “PENNY STOCK” RULES TO OUR COMMON STOCK COULD LIMIT TRADING ACIVITY IN THE MARKET, AND OUR STOCKHOLDERS MAY FIND IT MORE DIFFICULT TO SELL THEIR STOCK.

Our common stock continues to trade at less than $5.00 per share and is therefore subject to the Securities and Exchange Commission’s (“SEC”) penny stock rules. Penny stocks generally are equity securities with a price of less than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

WE DO NOT INTEND TO PAY DIVIDENDS FOR THE FORESEEABLE FUTURE, AND YOU MUST RELY ON INCREASES IN THE MARKET PRICES OF OUR COMMON STOCK FOR RETURNS ON YOUR INVESTMENT.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

ITEM 1B. UNRESOLVED STAFF COMMENTS

This information is not required for smaller reporting companies.

ITEM 2. PROPERTIES

We currently lease 4,244 square feet of office space in Miami Beach, Florida, which serves as our corporate offices. The lease expires in May 2015.

We currently lease an additional office facility in San Jose, California. The lease is for an initial term of 3 years and expires on March 31, 2015. The facility is 1,543 square feet.

Our minimum future aggregate minimum lease payments for these leases based on there initial terms as of December 31, 2013 are:

Year Ended December 31,:	Amount
2014	$	178,466
2015		183,542
2016		72,107
Total	$	434,115

ITEM 3. LEGAL PROCEEDINGS

In March and April 2012, a former officer and director of the Company filed declaratory actions against the Company relating to compensatory matters, certain warrant exercise rights and the termination of his employment. The parties are currently in negotiations to resolve the matters; however, the outcome of the negotiations cannot be determined at this time.

In October 2012, a former officer and director of the Company resigned his position from the Company and filed a claim with the California Labor Board (“Labor Board”) relating to certain compensatory matters. As of December 31, 2012, the matter was being heard before the Labor Board however no decision had been rendered. The parties are currently in negotiations; however, the outcome of the negotiations cannot be determined at this time.

The Company has a lawsuit pending for past due fees due to a consulting firm in the amount of $41,000. Although the outcome of this matter is uncertain, the Company has reserved for this amount in accounts payable and accrued expenses at December 31, 2012 and December 31, 2011, respectively.

General Litigation

From time to time, the Company is a defendant or plaintiff in various legal actions which arise in the normal course of business. As such the Company is required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of the provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter. The provision may change in the future due to new developments or changes in circumstances. Changes in the provision could increase or decrease the Company’s earnings in the period the changes are made. It is the opinion of management, after consultation with legal counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock has traded on the OTC Bulletin Board system under the symbol “CCGI” since December 2009. The OTCBB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (“OTC”) equity securities. An OTCBB equity security generally is any equity that is not listed or traded on a national securities exchange.

Price Range of Common Stock

The following table sets forth, for the periods indicated, the high and low bid prices per share for our common stock as reported by the OTCBB quotation service. Bid prices prior to February 25, 2011 are adjusted based on the Company’s 50 for 1 reverse stock split, effective that day. These bid prices represent prices quoted by broker-dealers on the OTCBB quotation service. The prices reflect inter-dealer quotations, do not include retail mark-ups, markdowns or commissions and do not necessarily reflect actual transactions.

Quarter ended	Low Price		High Price

December 31, 2012	$	1.25	$	2.00
September 30, 2012	$	0.60	$	1.60
June 30, 2012	$	0.77	$	1.85
March 31, 2012	$	1.26	$	2.08

December 31, 2011	$	0.68	$	2.20
September 30, 2011	$	1.05	$	2.90
June 30, 2011	$	1.75	$	6.24
March 31, 2011	$	0.09	$	6.00

Security Holders

As of April 15, 2013 there were approximately 159 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

Dividends

To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

On November 30, 2012, the Board of the Company, as well as a majority of the Company’s shareholders, approved the Company’s 2012 Omnibus Incentive Plan (the “Plan”), which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock and dividend equivalent rights to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the Plan may be Non-Qualified Stock Options or Incentive Stock Options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be Non-Qualified Stock Options. The Plan is to be administered by the Board, which shall have discretion over the awards and grants thereunder. The aggregate maximum number of shares of Common Stock for which stock options or awards may be granted pursuant to the Plan is 5,000,000, adjusted as provided in Section 11 of the Plan. The Plan expires on December 1, 2014. As of December 31, 2012, 4,500,000 stock options had been issued to employees and consultants of the Company. All options vest ratably over three years from date of issuance, December 27, 2012 and expire in five years from date of issuance. The following table provides further information regarding the Plan.

Plan Category	Number of securities to be issued upon exercise of outstanding options warrants and rights		Weighted-average exercise price of outstanding options warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		4,500,000	$	1.49		400,000
Equity compensation plans not approved by security holders		--		--		--
Total		4,500,000	$	1.49		400,000

On January 11, 2013, the Board of the Company approved the Company’s 2013 Omnibus Incentive Plan (the “2013 Plan”), which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock and dividend equivalent rights to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the Plan may be Non-Qualified Stock Options or Incentive Stock Options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be Non-Qualified Stock Options. The Plan is to be administered by the Board, which shall have discretion over the awards and grants thereunder. The aggregate maximum number of shares of Common Stock for which stock options or awards may be granted pursuant to the Plan is 5,000,000, adjusted as provided in Section 11 of the Plan. The Plan expires on December 1, 2015. The Plan was approved by a majority of the Company’s shareholders on February 13, 2013.

Warrants Granted

The following table summarizes outstanding warrants by Expiration Date at December 31, 2012:

		Exercise			Expiration
Quantity		Price			Date

	5,000	$	15.00		April 1, 2013
	50,000	$	3000		April 1, 2013
	2,200,000	$	3.00		April 27, 2013
	500,000	$	5.00		August 10, 2013
	500,000	$	7.50		August 10, 2013
	500,000	$	10.00		August 10, 2013
	4,652,165	$	3.00		August 25, 2013
	10,000	$	51.50		August 25, 2013
	1,277,170	$	1.66	*	July 13, 2014
	65,000	$	1.00		September 14, 2014
	250,000	$	1.50		November 15, 2014
	20,000	$	1.00		December 2, 2014
	56,000	$	1.00		December 11, 2014
	5,000	$	1.00		December 28, 2014
	3,834	$	30.00		May 5, 2015
	100,000	$	1.00		October 10, 2015
	50,000	$	1.00		October 12, 2015
	500,000	$	2.25		October 25, 2015
	25,000	$	2.25		November 14, 2015
	100,000	$	1.64		December 13, 2015
	50,000	$	20.00		January 11, 2016
	5,000	$	1.75		March 19, 2016
	5,000	$	1.75		March 19, 2017
	250,000	$	1.00		June 28, 2017
	11,800	$	1.00		December 13, 2017
	5,000	$	1.75		March 19, 2018
	100,000	$	1.00		September 22, 2018
	11,295,968	Total

*Price may be lower if market closes at lower price on exercise date.

On December 13, 2012, we issued a warrant to purchase 100,000 shares of our common stock at a $1.64 per share as a fee for services to a company that is owned by our Chief Executive Officer. The warrant expires on December 13, 2015.

Unregistered Sales of Equity Securities and Use of Proceeds

In October 2012 we issued convertible notes in the aggregate amount of $150,000 secured by all of our assets due April 2013 with interest at 12% per anum. The note is convertible, at the discretion of the holders into our common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. The noteholders are entitled to be repaid $25,000 for every $1,000,000 raised in equity by us. In conjunction with the issuance of the notes, we issued warrants to purchase 150,000 shares of our common stock at an exercise price of $1.00 per share. The warrants expire in October 2015.

On November 14, 2012 we did a final closing under a private offering (the “Offering”) with certain investors, in which we received $25,000 and issued 25,000 shares of our common stock and warrants to purchase 25,000 shares of our common stock at an exercise price of $2.25 per share which expires on November 14, 2015 (the “Warrants”). The foregoing descriptions of the terms of the Offering, including the terms of the Warrant, are qualified in its entirety by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2012.

In December 2012, we issued unsecured convertible notes in the amount of $76,000, due June 2013, with interest at 12% per anum. The note is convertible, at the discretion of the holder into our common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. In conjunction with the issuance of the note, we issued warrants to purchase 76,000 shares of our common stock at an exercise price of $1.00 per share. The warrants expire in December 2014.

On December 7, 2012, we issued a warrant to purchase 100,000 shares of our common stock at an exercise price of $1.59 per share as a fee for services to a company that is owned by our Chief Executive Officer. The warrant expires on December 7, 2015.

On December 14, 2012, we issued 200,000 shares of our common stock to our Chairman of the Board and issued warrants to purchase 10,000 shares of our common stock at an exercise price of a $1.00 per share, pursuant to his director agreement. The warrant expires on December 14, 2017.

On December 14, 2012 we issued 47,392 shares of our common stock for consulting services and issued a warrant to purchase 1,800 shares of our common stock at an exercise price of $1.00 per share. The warrants expire on December 14, 2017.

On December 28, 2012, we issued our Chief Executive Officer an unsecured convertible note in the amount of $5,000, due June 28, 2013, with interest at 12% per anum. The note is convertible, at the discretion of the holder into our common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. In conjunction with the issuance of the note, we issued a warrant, to our Chief Executive Officer to purchase 5,000 shares of our common stock at an exercise price of $1.00 per share. The warrant expires on December 28, 2014.

On December 31, 2012, we issued 100,000 shares of our common stock to employees as compensation for services under the Plan.

During the quarter ended December 31, 2012 we issued an aggregate of 194,445 shares of our common stock as compensation for consulting services.

All shares and related securities, as described above, were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1934, as amended (the “Securities Act”). These shares of our common stock qualified for exemption under Section 4(2) since the issuance shares by us did not involve a public offering. In addition, the recipients had the necessary intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

ITEM 6. SELECTED FINANCIAL DATA

We are not required to provide the information required by this Item because we are a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition for the year ended December 31, 2012 and 2011 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Forward-Looking Statements.”

Overview

Car Charging Group, Inc. (formerly New Image Concepts, Inc.) was created as a result of a merger (Reverse Merger) on December 7, 2009, with Car Charging, Inc. New Image Concepts Inc. was a development stage entity with the intention of providing personal consultation services to the general public. Car Charging Inc. was formed on September 8, 2009 to develop a market to service electric vehicle charging. We are establishing a comprehensive network of EV charging stations that delivers easy, convenient access to drivers wherever they live, work and play. The charging stations are installed, maintained and owned by the Company and they are provided at no cost to the business/property owner “partner.” The use of the stations is not anticipated in any significant volume until sometime after the fourth quarter of 2013, when it is anticipated automobile manufacturers are scheduled to mass produce and sell electric vehicles to the public.

To date, the Company’s operations have been devoted primarily to raising capital for operations, entering into contracts with property owner/operators (the “Provider Agreements) and administrative functions. The Company has grown through internal development and selected acquisitions. During 2012, the Company installed 157 charging units at 113 locations pursuant to the terms of its Provider Agreements. The ability of the Company to achieve its business objectives, however, is contingent upon its success in raising additional capital until adequate revenues are realized from operations. Therefore, no substantial revenue or profit is anticipated in the near or foreseeable future.

During 2011, the Company increased its funding by $2,499,999 through additional private sales of its common stock.

During 2012, the Company raised $2,382,303 in capital, net of issuance costs, through private sales of common stock and its Series B Convertible Preferred Stock and issued $296,000 of convertible notes.

By December 31, 2012, the Company had entered into contracts to provide charging services on third party premises, “Provider Agreements”, with 58 entities and completed installation of 263 charging units (“EV Devices”).

The Company generally acquires charging stations from Coulomb Technologies Inc., but consistent with its policy and business plan, continuously reviews the availability of acquiring EV Devices from other manufacturers.

The Company’s business plan anticipates that significant capital will be needed during 2013 and 2014 to continue building our network of charging stations throughout the United States and the integration of our new acquisitions during the first quarter of 2013. Accordingly, the amount of new capital needed will vary depending on several significant factors that include quantity of electric vehicle sales, gasoline prices, success of the Company’s Provider Agreement program, vigorously seeking governmental grants, rebates, subsidies and equipment manufacturer incentives, cost of EV's and the Company’s continued acceptance by the capital markets.

Pursuant to our business plan, to stimulate growth, control cash-flow and minimize costs, the Company has implemented a policy of both acquiring leads to property owners for Provider Agreements through independent contractors and the utilization of in-house personnel in pursuit of Provider Agreements. Company executives accordingly, are employed to close and maintain Provider Agreements and relationships, in addition to those who coordinate installations and operations of EV charging stations.

Wherever possible, the Company has adopted a policy of issuing warrants and stock to avoid cash compensation expenses and encourage stock sales (subscriptions). These warrant transactions can result in significant non-cash compensation charges and other non-cash charges that are generally reflected in the consolidated financial statements as “non cash compensation”, “general and administrative” “compensation” or as “change in fair value” in the statements of operations and cash flow.

The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

In March 2011, agreements between the Company and the note holders to fix the conversion rate stated in the convertible notes effectively removed the embedded derivative from the convertible notes. Accordingly, as future conversions were no longer subject to reset, the derivative liability related to the notes was adjusted to $0 and the Company recognized a gain on the change in value of the derivative liability of $2,701,894 upon execution.

In October 2011, the Company executed an agreement with the warrant holders which eliminated the reset feature of these warrants. As a result, the derivative liability associated with the reset is no longer present and the Company recognized a gain on the change in value of derivative liability of $786,721.

We did not issue any instruments with embedded derivatives during 2012.

Recent Financings

Sale of Preferred Stock

On February 6, 2012, we entered into a stock purchase agreement to sell 1,000,000 shares of Series B Convertible Preferred stock at per share price of $1.00, resulting in gross proceeds to us of $1,000,000, before deducting offering expenses. Simultaneously with the issuance of the original 1,000,000 Series B Convertible Preferred shares, the purchaser was entitled to receive two percent (2%) of the issued and outstanding common stock of CarCharging Limited (a subsidiary formed September 2012) in exchange for consulting services for developing business relationships and obtaining charging station locations in Romania.

2012 Private Placements

On February 27, 2012, we entered into a stock purchase agreement for 500,000 shares of common stock in exchange for proceeds of $500,000.

On October 25, 2011 and November 14, 2012, we entered into definitive agreements with investors to sell in a private placement an aggregate of 525,000 shares of our common stock and warrants to purchase 525,000 shares of our common stock at a purchase price of $1.00 per unit, resulting in gross proceeds to us of $525,000. The warrants are exercisable at an exercise price of $2.25 per share and expire three years from the date of issuance.

Convertible Notes

On September 14, 2012, the Company issued an unsecured $65,000 convertible note payable, which bears interest at 12% per anum and is due with accrued interest on March 14, 2013. The note is convertible, at the discretion of the holder into the Company’s common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. In conjunction with the issuance of the note, the Company issued a warrant to purchase 65,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrant expires on September 14, 2014.

In October 2012 we issued convertible notes in the aggregate amount of $150,000 secured by all of our assets due April 2013 with interest at 12% per anum. The note is convertible, at the discretion of the holders into our common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. . In conjunction with the issuance of the notes, we issued warrants to purchase 150,000 shares of our common stock at an exercise price of $1.00 per share. The warrants expire in October 2015.

In December 2012, we issued unsecured convertible notes in the amount of $76,000, due June 2013, with interest at 12% per anum. The note is convertible, at the discretion of the holders into our common stock at the fixed rate of $1.00 per principal value for any unpaid principal and accrued interest thereon until the note is paid in full. In conjunction with the issuance of the note, we issued warrants to purchase 76,000 shares of our common stock at an exercise price of $1.00 per share. The warrants expire on December 2014.

Results of Operations

Comparison of the years ended December 31, 2012 and December 31, 2011

Revenues

We have generated revenues of $16,743 from service fees related to installed EV Charging Stations for the year ended December 31, 2012 as compared to $2,799 in service fees for the year ended December 31, 2011. While the Company’s primary strategy is to earn revenue through the installation and maintenance of EV Charging Stations, the Company will sell EV Charging Stations on occasions when the opportunity presents itself. During the year ended December 31, 2012, we sold 69 EV charging stations to a customer for a total price of $235,726 and at a gross profit of $41,670. During the year ended December 31, 2011, we sold seven EV charging stations to a customer for a total price of $59,490 and at a loss of $1,340. Additionally, we received a grant and a rebate totaling $59,988 to defray the cost of equipment and installation of 13 charging stations during 2012 from two governmental entities. The rebate and grant are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. As a result we amortized $5,595 into revenue during the year ended December 31, 2012. We intend to vigorously seek additional grants, rebates, subsidies and equipment manufacturer incentives as a cost effective means of reducing our capital investment in the purchase and installation of charging stations. We did not derive any revenue from grants or rebates in 2011.

Operating Expenses

Operating expenses selling, marketing and advertising, payroll, administrative, finance and professional expenses. Certain expenses incurred in the year ended December 31, 2011 have been reclassified to conform with the 2012 presentation.

Compensation expense increased by $1,618,037 from $760,276 for the year ended December 31, 2011 to $2,378,313 for the year ended December 31, 2012. The increase was attributable to higher payroll costs as a result of hiring a Chief Operating Officer and controller, the hiring of additional employees to support the growth in the number of EV charging installations and higher non-cash compensation costs as a result of the issuance of warrants, share of common stock and options to employees.

Other operating expenses increased by $116,780 from $430,573 for the year ended December 31, 2011 to $547,343 for the year ended December 31, 2012. The increase was attributable to an increase in travel expenses as a result of the increase in the number of EV charging station installations offset by a decrease in rent expense due to the accrued sublease liability from which the landlord of the building released us from liability.

General and administrative expenses decreased by $577,001 from $2,898,198 for the year ended December 31, 2011 to $2,321,197 for the year ended December 31, 2012. The decrease was primarily as a result of a decrease in non-cash outside consulting expenses during the year ended December 31, 2012.

Operating Loss

Our operating loss for the year ended December 31, 2012 increased by $1,088,086 from $4,088,805 for the year ended December 31, 2011 to $5,176,891 for the year ended December 31, 2012. The increase was attributable to an increase in compensation and other operating expenses offset by a decrease in general and administrative expenses and an increase in gross profit.

Other Income (Expense)

Other income (expense) decreased by $3,061,449 from income of $2,948,730 for the year ended December 31, 2011 to other expense of $112,719 for the year ended December 31, 2012. The decrease was attributable to a one-time gain of $3,488,615 from the change in fair value of a derivative liability offset by a loss on exchange of warrants for shares of common stock of $485,000; both in 2011 offset by the amortization of debt discount of $103,442 associated with convertible notes issued in 2012.

Net Loss

Our net loss for the year ended December 31, 2012 increased by $4,149,535 to $5,289,610 as compared to a net loss of $1,140,075 for the year ended December 31, 2011. The increase was attributable to a net increase in operating expenses of $1,146,816, an increase in other expenses of $3,061,449 offset by an increase in gross profit of $58,730.

Period from September 3, 2009 (date of inception) through December 31, 2012

Our cumulative net loss since inception, $18,940,427, including non-cash charges of $11,740,357 (which includes the fair value of warrants, options and common stock issued for services and compensation) primarily consisting of consulting, professional fees and public relations fees is attributable to the fact that we have not derived significant revenues from our operations to offset our business development expenses. Although auto manufacturers have initiated EV sales in the United States and that year over year increases in the number of Plug-in Electric Vehicles sold from 2012 to 2013 should lead to production of greater revenues, manufacture and demand of electric vehicles that will require utilization of the Company’s services, the demand is not anticipated to be widespread until after the fourth quarter of 2013; this gives the Company adequate time to develop its distribution plan and additional capital sources.

Liquidity and Capital Resources

During 2012, we have financed our activities from sales of our capital stock and from loans from unrelated and related parties. A significant portion of the funds raised from the sale of capital stock has been used to cover working capital needs such as personnel, office expenses and various consulting and professional fees.

For the years ended December 31, 2012 and 2011, we used cash of $2,312,346 and $2,000,493 for operations, respectively, and $6,180,559 since inception. Such cash use and accumulated losses have resulted primarily from costs related to various personnel, consulting and professional fees. During the year ended December 31, 2012, cash used for investing activities consisted of $751,648 for purchases of electric vehicle charging stations, an automobile, domain names and office equipment as compared with $466,515 for the year ended December 31, 2011. Cash provided by financing activities for the year ended December 31, 2012 was $2,670,551 of which $1,482,303 was from the sale of shares of our common stock, net of issuance costs, and $900,000 from the sale of shares of our preferred stock, net of issuance costs and $296,000 from the issuance of convertible notes as compared to $2,499,999 provided by net proceeds from the sale of shares of our common stock for the year ended December 31, 2011. The net decrease in cash during the year ended December 31, 2012 was $393,443 as compared with a net increase of $32,991 for the year ended December 31, 2011.

Since inception, we have used cash for investing activities of $1,409,621 for the purchase of EV charging stations, office and computer equipment, an automobile and other assets. We have received cash provided by financing activities of notes payable of $396,000, and $7,215,348, net of issuance costs, primarily from sales of shares of our common and Series B Convertible Preferred stock.

At December 31, 2012, the Company had $13,416 in cash resources to meet current obligations. Although there can be no assurance, management believes that the Company has sufficient resources to fund the Company’s operations through at least December 31, 2013.

Subsequent Events

Beam Acquisition

On February 26, 2013, the Company, entered into an equity exchange agreement (the “Exchange Agreement”) by and among the Company, Beam Acquisition LLC, a Nevada limited liability company and wholly-owned subsidiary of the Company (“Beam Acquisition”), Beam Charging LLC, a New York limited liability company (“Beam”), and Manhattan Charging LLC, a New York limited liability company (“Manhattan Charging”), Eric L’Esperance (“L’Esperance”), and Andrew Shapiro (“Shapiro” and together with Manhattan Charging, L’Esperance and the individual members of Manhattan Charging LLC, the “Beam Members”). The Company had previously entered into an agreement, dated December 31, 2012, (the “Initial Agreement”) with Beam Acquisition and Manhattan Charging, pursuant to which Beam Acquisition acquired all of the outstanding membership interests in Beam in exchange for 1,265,822 restricted shares (the “Exchange Shares”) of the Company’s common stock, par value $0.001 (the “Common Stock”). In the Exchange Agreement, the Company, through Beam Acquisition, further identified the specific terms under which it acquired all of the outstanding membership interests of Beam and Beam became a wholly owned subsidiary of Beam Acquisition (the “Equity Exchange”).

As part of the Equity Exchange, the Company made a payment of $500,000 to Manhattan Charging, of which an aggregate amount of $461,150 was issued in the form of promissory notes (the “Promissory Notes”). The Promissory Notes accrue interest at a rate of 6% per annum on the aggregate principal amount, payable on April 15, 2013 (the “Maturity Date”). As a security for the Promissory Notes, the Company entered into a security agreement granting the Beam Members a first priority security interest in all the assets of Beam (the “Security Agreement”) and a pledge and security agreement granting the Beam Members a first priority security interest in all of the equity interest in Beam (the “Pledge and Security Agreement”). In connection with the event of default under the Promissory Notes, the Company entered into an escrow agreement (the “Escrow Agreement”) by and among the Company, Beam Acquisition, Beam, the Beam Members, the Law Office of Samuel A. Tversky P.C. (“Tversky”), and the Bernstein Law Firm (“Bernstein” each of Tversky and Bernstein an “Escrow Agent”). Pursuant to the terms of the Escrow Agreement, each of the Beam Members delivered to Bernstein an executed cancellation letter in connection with the transactions contemplated by the Exchange Agreement (the “Cancellation Letters”); Beam Acquisition delivered to Tversky a fully executed assignment of all ownership interest in Beam (the “Assignment of Beam Membership Interest”); and the Company, Beam Acquisition, and Beam delivered to Tversky an executed confession of judgment, to be held in escrow pursuant to the terms of the Escrow Agreement.

In conjunction with the Equity Exchange, the Company entered into an Assignment of Promissory Note (the “Note Assignment”) with certain assignors (the “Assignors”), pursuant to which the Assignors sold to the Company two certain secured promissory notes (the “Notes”) totaling an aggregate principal amount of $130,000. In connection with the Note Assignment, the Company entered into an Amendment to Promissory Note (the “Note Amendment”). Pursuant to the Note Amendment, the Notes held by the Company accrue interest at a rate of 8% per annum on the aggregate principal amount, payable on February 26, 2016. The Notes are secured by a lien on and continuing security interest in all of the Beam assets as described in the Note Amendment.

Synapse Acquisition

On April 3, 2013 (the “Closing Date”), the Company, entered into an equity exchange agreement (the “Exchange Agreement”) by and among the Company, EV Pass, LLC, a New York limited liability company (“EV Pass”) and Synapse Sustainability Trust, Inc., a New York non-profit corporation (“Synapse”) pursuant to which the Company acquired from Synapse (i) all of the outstanding membership interests in EV Pass; (ii) the right to operate, maintain and receive revenue from 68 charging stations located throughout Central New York State (“CNY”) in exchange for 671,141 shares (the “Exchange Shares”) of the Company’s common stock, par value $0.001 (the “Common Stock”); and (iii) title to the registered trademark “EV Pass” (the “Equity Exchange”).

As part of the Equity Exchange, the Company made a payment of $100,000 to Synapse, of which $25,000 was paid on the Closing Date and $75,000 was issued in the form of a promissory note (the “Promissory Note”). The Promissory Note does not bear interest and is payable in three installment payments of $25,000 on each subsequent three month anniversary of the Closing Date.

On the Closing Date, the parties also executed (i) a Revenue Sharing Agreement wherein the Company agreed to pay Synapse 3.6% of the net revenues earned from all current and future charging units installed at any of the 68 CNY locations and (ii) a Bleed-Out Agreement pursuant to which Synapse agreed to limit its total daily trading of the Common Stock to no more than 5% of the total daily trading volume of the Company’s shares.

Financing

On March 22, 2013, the Company completed a financing, under a private offering by entering into a Subscription Agreement (the “Subscription Agreement”) with certain investors (the “Investors”) for total gross proceeds to the Company of $2,495,000. Pursuant to the Subscription Agreement, the Company issued (i) an aggregate of 4,590,000 of our Common Stock (the “Financing Shares”) at a purchase price of $0.50 per share, and (ii) warrants (the “Warrants”) to purchase 4,590,000 shares of the Company’s Common Stock (the “Warrant Shares”) at an exercise price of $2.25 per share

Warrants

The Warrants are exercisable for an aggregate of 4,590,000 shares of the Company’s Common Stock. The Warrants are exercisable for a period of three years from the original issue date. The exercise price with respect to the Warrants is $2.25 per share. The exercise price for the Warrants is subject to adjustment upon certain events, such as merger, combinations, dividends, reclassifications or other corporate change and dilutive issuances.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies

a. Basis of presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

b. Development stage company

The Company is a development stage company as defined by ASC 915-10 “Development Stage Entities.” The Company is still devoting substantially all of its efforts on establishing the business and developing revenue generating opportunities through its planned principal operations. In the latter half of 2011, the Company’s principal sales operations began however the Company did not recognize significant revenues during the period. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

c. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

d. Discount on debt

The Company allocated the proceeds received from convertible debt instruments between the underlying debt instruments and has recorded the conversion feature as a liability in accordance with paragraph 815-15-25-1 of the FASB Accounting Standards Codification. The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision have been recorded at their fair value within the terms of paragraph 815-15-25-1 of the FASB Accounting Standards Codification as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The conversion liability is marked to market each reporting period with the resulting gains or losses shown on the Statement of Operations.

e. Derivative instruments

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

f. Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at December 31, 2012.

The Company has no other assets or liabilities measured at fair value on a recurring basis.

g. Revenue recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

h. Stock-based compensation for obtaining employee services

The Company accounts for equity instruments issued to employees and directors pursuant to paragraphs 718-10-30-6 of the FASB Accounting Standards Codification, whereby all transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more readily measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probably that performance will occur.

The Company’s policy is to recognize compensation cost for awards with service conditions and when applicable a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.

i. Equity instruments issued to parties other than employees for acquiring goods or services

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”). Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.

Recently Issued Accounting Pronouncements

There have been no accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2012 that are expected to have a material impact on the Company’s financial position, results of operations or cash flows. Accounting pronouncements that became effective during the year ended December 31, 2012 did not have a material impact on disclosures or on the Company’s financial position, results of operations or cash flows.

A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not required to provide the information required by this Item because we are a smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Car Charging Group, Inc. and Subsidiaries

(A development stage company)

We have audited the accompanying consolidated balance sheets of Car Charging Group, Inc. and Subsidiaries, a development stage company, (the "Company") as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2012 and for the period from inception (September 3, 2009) to December 31, 2012. Car Charging Group, Inc and Subsidiaries' management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. The consolidated financial statements for the period from inception (September 3, 2009) to December 31, 2009, were audited by other auditors and our opinion, in so far as it relates to cumulative amounts included for such prior periods, is based solely on the report of other such auditors.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Car Charging Group, Inc. and Subsidiaries as of December 31, 2012 and 2011 and the results of its operations and its cash flows for each of the years in the two-year period then ended, and for the period from inception (September 3, 2009) to December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company had an accumulated deficit at December 31, 2012, and had a net loss and net cashed used in operations for the period from September 3, 2009 (inception) through December 31, 2012. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

/s/ Goldstein Schechter Koch P.A.

Goldstein Schechter Koch P.A.

April 16, 2013

Coral Gables, Florida

F-1

CAR CHARGING GROUP, INC.
(A Development Stage Company)
Consolidated Balance Sheets

	DECEMBER 31,			DECEMBER 31,
	2012			2011
ASSETS
CURRENT ASSETS:

Cash and cash equivalents	$	13,416		$	406,859
Deposits and advanced commissions		300,750			178,694
Prepaid expenses and other current assets		357,312			157,258
Total current assets		671,478			742,811

OTHER ASSETS:
EV Charging stations, net of accumulated depreciation of $363,918 and $129,554, respectively		960,234			544,898
Automobile, net of accumulated depreciation of $15,292 and $0, respectively		99,400			--
Office and computer equipment, net of accumulated depreciation of $26,604 and $14,810, respectively		36,717			35,857
Total fixed assets, net		1,096,351			580,755

DEPOSITS		42,265			--

OTHER ASSETS		232,727			--
TOTAL ASSETS	$	2,042,821		$	1,323,566

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:

Accounts payable and accrued expenses	$	547,874		$	365,113
Accrued interest-related party		5			40
Convertible notes-related party, net of discount of $4,918 and $0, respectively		82			3,750
Convertible notes payable-net of discount of $168,567 and $0, respectively		122,433			--
Current portion of deferred revenue		19,996			--
Current portion of deferred rent		9,731			--
Current portion of notes payable		12,105			--
TOTAL CURRENT LIABILITIES		712,226			368,903

DEFERRED REVENUE		34,747			--

DEFERRED RENT		20,445			--

NOTE PAYABLE		44,836			--

TOTAL LIABILITIES		812,254			368,903

STOCKHOLDERS' EQUITY:
Series A Convertible Preferred stock, par value $.001 per share; 10,000,000 shares issued and outstanding at December 31, 2012 and 2011, respectively		10,000			10,000
Series B Convertible Preferred stock, par value $0.001 per share; 1,000,000 and 0 shares issued and outstanding at December 31, 2012 and 2011, respectively		1,000			-
Common stock, par value $.001 per share; 500,000,000 shares authorized; 42,434,705 and 37,384,414 shares issued and outstanding at December 31, 2012 and 2011, respectively		42,435			37,384
Additional paid-in capital		20,117,559			15,557,096
Deficit accumulated during the development stage		(18,940,427	)		(13,650,817	)
Stock subscriptions receivable		--			(999,000)
TOTAL STOCKHOLDERS' EQUITY		1,230,567			954,663

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,042,821		$	1,323,566

The accompanying notes are an integral part of these financial statements.

F-2

CAR CHARGING GROUP, INC.
(A Development Stage Company)
Consolidated Statements of Operations

							For the
							Period from
							September 3,
	For the Year Ended						2009 (Inception)
	DECEMBER 31,			DECEMBER 31,			to December 31,
	2012			2011			2012

Revenue:
Service Fees	$	16,743		$	2,799		$	19,542
Grant and rebate revenue		5,595			-			5,595
Sales		235,726			59,490			295,216
TOTAL REVENUE		258,064			62,289			320,353

Costs:
Cost of Services		5,036			1,217			6,253
Cost of Sales		194,056			60,830			254,886
TOTAL COSTS		199,092			62,047			261,139

GROSS PROFIT		58,972			242			59,214

Operating expenses:
Compensation		2,367,313			760,276			11,223,753
Other Operating expenses		547,353			430,573			1,278,676
General and administrative		2,321,197			2,898,198			6,053,605
TOTAL OPERATING EXPENSES		5,235,863			4,089,047			18,556,034

LOSS FROM OPERATIONS		(5,176,891	)		(4,088,805	)		(18,496,820	)

Other income (expense):
Interest expense, net		(9,278	)		(18,500	)		(63,998	)
Amortization of discount on convertible debt		(103,441	)		(36,385	)		(139,826	)
Loss on exchange of warrants for stock		--			(485,000)			(485,000	)
Gain on change in fair value of derivative liability		--			3,488,615			245,217
TOTAL OTHER INCOME (EXPENSE)		(112,719	)		2,948,730			(443,607	)

Loss before income taxes		(5,289,610	)		(1,140,075	)		(18,940,427	)

Income tax provision		-			-			-

NET LOSS	$	(5,289,610	)	$	(1,140,075	)	$	(18,940,427	)

Net loss per common share - basic & diluted	$	(0.13	)	$	(0.05	)

Weighted average number of common shares outstanding - basic & diluted		40,332,688			23,898,637

The accompanying notes are an integral part of these financial statements.

F-3

CAR CHARGING GROUP, INC.

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

																Deficit Accumulated						Total
	Preferred - A		Preferred -A		Preferred -B		Preferred -B	Common		Common			Additional Paid-in			during the Development			Stock Subscriptions			Stockholders Equity
	Shares		Amount		Shares		Amount	Shares		Amount			Capital			Stage			Receivable			(Deficit)

Balance at September 3, 2009 (Inception)		-	$	-	-		-	$	1,000,000	$	50,000		$	(50,000	)	$	-		$	-		$	-

Reverse acquisition adjustment		10,000,000		10,000					395,150		19,758			(70,515	)								(40,757	)

Sale of common (net of derivative liability of warrants $586,535)									61,333		3,067			295,398									298,465

Effect of 1:50 reverse split											(71,369	)		71,369									-

Net loss																	(6,801,183	)

Balance at December 31, 2009		10,000,000	$	10,000	-		-	$	1,456,483	$	1,456		$	246,252		$	(6,801,183	)	$	-		$	(6,543,475	)

Common stock issued for debt to founders									92,000		4,600												4,600

Common stock issued for services									21,167		1,058			432,441									433,499

Common stock issued for conversion of convertible notes (net of derivative liability for conversion feature of $552,872)									120,000		6,000			561,872									567,872

Sale of common stock with warrants attached (net of derivative liability on 3,833 warrants of $75,839)									3,834		191			(18,531	)								(18,340	)

Common stock issued for cash									103,333		5,167			1,385,380									1,390,547

Warrants issued for services														6,995,084									6,995,084

Effect of 1:50 reverse split											(16,675	)		16,675									-

Net loss 2010																	(5,709,559	)					(5,709,559	)

Balance at December 31, 2010		10,000,000	$	10,000	-		-	$	1,796,817	$	1,797		$	9,619,173		$	(12,510,742	)	$	-		$	(2,879,772	)

Common stock issued for conversion of convertible notes and accrued interest									32,708,544		32,709			52,982									85,691

Common stock issued in exchange for extinguishment of warrants									565,000		565			484,435									485,000

Common stock issued for settlement of accounts payable									17,482		17			24,983									25,000

Common stock issued in connection with debt issuance									5,000		5			5,995									6,000

Common stock issued for services									458,238		458			701,042									701,500

Sales of common stock									1,833,333		1,833			3,497,166						(999,000	)		2,499,999

Warrants issued for services														1,171,320									1,171,320

Net loss 2011																	(1,140,075	)					(1,140,075	)

Balance at December 31, 2011		10,000,000	$	10,000	-		-	$	37,384,414	$	37,384		$	15,557,096		$	(13,650,817	)	$	(999,000	)	$	954,663

Sale of common stock									2,075,000		2,075			481,228						999,000			1,482,303

Issuance of Preferred Shares					1,000,000		1,000							899,000									900,000

Common stock issued for conversion of convertible notes and accrued interest									1,529,036		1,529			2,294									3,823

Common stock issued for compensation and services									1,171,255		1,172			1,595,141									1,596,313

Common stock issued for director compensation									275,000		275			461,975									462,250

Warrants issued for compensation and services														843,899									843,899

Warrants issued with convertible debt														276,926									276,926

Net loss																	(5,289,610	)					(5, 289,610	)

Balance at December 31, 2012		10,000,000	$	10,000	1,000,000	$	1,000		42,434,705	$	42,435		$	20,117,559		$	(18,940,427	)	$	-		$	1,230,567

The accompanying notes are an integral part of these financial statements.

F-4


CAR CHARGING GROUP, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows

							For the
							Period from
							September 3, 2009
	For the Year Ended						(Inception) to
	December 31,			December 31,			December 31,
	2012			2011			2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(5,289,610	)	$	(1,140,075)		$	(18,940,427	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		268,499			133,371			418,485
Amortization of discount on convertible notes payable		103,441			36,365			173,607
Loss on common stock issued in exchange for extinguishment of warrants		-			485,000			485,000
Gain on change in fair value of derivative liability		-			(3,488,615	)		(245,217	)
Warrants issued for compensation and services		843,899			-			843,899
Common stock and warrants issued for services and incentive fees		1,565,625			1,872,820			10,896,458
Changes in operating assets and liabilities:
Inventory		-			-			(72,768	)
Advanced commissions		(128,500	)		(92,250	)		(300,750	)
Deposits		(35,821	)		(8,440	)		(33,957	)
Prepaid expenses and other current assets		92,403			(81,602	)		(67,203	)
Accounts payable and accrued expenses		182,834			285,681			572,910
Deferred rent		30,176			-			30,176
Deferred revenue		54,743			-			54,743
Accrued interest-related party		(35)			(2,748	)		4,485
Net Cash Used in Operating Activities		(2,312,346	)		(2,000,493	)		(6,180,559	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office and computer equipment		(12,653	)		(14,300	)		(63,321	)
Purchase of automobile		(50,000	)		-			(50,000	)
Purchase of electric charging stations, net		(649,700	)		(452,215	)		(1,257,005	)
Purchase of other assets		(39,295	)		-			(39,295	)
Net Cash Used in Investing Activities		(751,648	)		(466,515	)		(1,409,621	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		296,000			-			396,000
Proceeds from sale of preferred stock		900,000			-			900,000
Sale of common stock, net of issuance costs		1,482,303			2,499,999			6,315,348
Payment of notes payable		(7,752	)		-			(7,752	)
Net Cash Provided by Financing Activities		2,670,551			2,499,999			7,603,596

NET INCREASE (DECREASE) IN CASH		(393,443)			32,991			13,416

CASH AT THE BEGINNING OF PERIOD		406,859			373,868			-
CASH AT END OF PERIOD	$	13,416		$	406,859		$	13,416