Quarterly report pursuant to sections 13 or 15(d)

Beam Acquisition

v2.4.0.6
Beam Acquisition
 3 Months Ended
Mar. 31, 2013
Beam Acquisition [Abstract]  
BEAM ACQUISITION
3          BEAM ACQUSITION
 
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 and was paid on April 15, 2013 (the “Maturity Date”).
 
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.
 
Pending the finalization of a third party valuation, the following table summarizes the preliminary fair value of assets acquired and liabilities assumed at the closing date:
 
   
February 26, 2013
  
Cash
  
$
69
  
Fixed assets, net
    
489,155
  
Amortizable intangible assets
    
1,467,000
  
Current liabilities
    
(631,945
)
 Net identifiable assets
    
1,324,279
  
Goodwill
    
1,271,871
  
Total consideration given
  
$
2,596,150
  
 
Acquisition related costs consisting of commission expense of $18,000 and legal fees of $18,850 are reflected as compensation and general and administrative expenses, respectively on the statement of operations for the three months ended March 31, 2013.
 
The fair value of intangible assets pending finalization of a third party valuation at March 31, 2013 consist of the following:
 
   
March 31, 2013
  
Provider agreements for locations awaiting installation of EV charging stations
   $ 829,000  
Awarded government grants for installation of EV charging stations
     638,000  
    $ 1,467,000  
Less: Accumulated amortization
     (6,906 )
Balance at March 31, 2013
   $ 1,460,094  
 
The Exchange Agreement provided for an anti-dilution benefit to former members of Beam whereby until such time as a former member sells or disposes of all of his Company common shares of stock, any Triggering Event, as defined by the Agreement, whereby the issue price of the Company stock is below $1.58 shall cause the Company to issue a warrant to each former member to purchase an additional number of Company common shares of at the Triggering Event price so as to preserve such Beam Member’s pre-Triggering Event percentage ownership in the Company.  From an historical perspective, the Company has raised capital through the issuance of stock and issued stock, options and warrants for services and compensation on a frequent basis since inception at various prices, differing vesting periods and differing expiration dates.  The Company has recorded warrants payable of $135,000 representing the fair value of the warrants that would have been issued based on the Triggering Events occurring during the period of February 26, 2013 through March 31, 2013.  The Company can not estimate how long the former members will hold their stock, what market conditions will be when stock is sold and or when stock, options or warrants will be issued and under what terms of issuance.  It is for those reasons, that the Company can not estimate the amount of additional contingent consideration associated with the anti-dilution benefit.  The Company will continue to record warrants payable during the next nine months based on the occurrence of Triggering Events during said period.
 
The amount of revenue and net loss attributable to Beam for the periods of February 26, 2013 through March 31, 2013, the combined January 1, 2013 through March 31, 2013, had the acquisition closed as of January 1, 2013, and for the period of January 1, 2012 through March 31, 2012, had the acquisition closed as of January 1, 2012 is shown below:
 
For the period February 26, 2013 through March 31, 2013:
 
   
Car Charging
 Group, Inc.
    
 Beam
    
 Combined
  
Revenue
   $ 14,542     $ 1,033     $ 15,575  
Net Loss
   $ 2,194,751     $
28,310
     $
2,223,061
  
 
For the period of January 1, 2013 through March 31, 2013:
 
   
Car Charging
 Group, Inc.
    
 Beam
    
 Combined
  
Revenue
   $ 14,542     $
1,733
     $
16,275
  
Net Loss
   $ 2,194,751     $
65,221
     $
2,259,972
  
 
For the period of January 1, 2012 through March 31, 2012:
 
   
Car Charging
 Group, Inc.
    
Beam
    
Combined
  
Revenue
  
$
2,605
    
$
844
    
$
3,449
  
Net Loss
  
$
1,532,806
    
$
67,570
    
$
1,600,376