Quarterly report pursuant to Section 13 or 15(d)

ASSETS AND LIABILITIES HELD FOR TRANSFER TO TRUST MORTGAGE - 350 GREEN

v2.4.0.8
ASSETS AND LIABILITIES HELD FOR TRANSFER TO TRUST MORTGAGE - 350 GREEN
 6 Months Ended
Jun. 30, 2014
Business Combinations [Abstract]  
ASSETS AND LIABILITIES HELD FOR TRANSFER TO TRUST MORTGAGE - 350 GREEN
5.
ASSETS AND LIABILITIES HELD FOR TRANSFER TO TRUST MORTGAGE – 350 GREEN
 
 The Company has been continuously negotiating with the 350 Green creditors in an attempt to reduce 350 Green’s liabilities.  On April 17, 2014, the Company’s Board of Directors executed a resolution to form a Trust Mortgage relating to 350 Green.  A Trust Mortgage is a non-judicial vehicle for the reorganization and the debt restructuring or the sale or wind down of 350 Green and a liquidation of its assets under the control of a third party trustee. It is similar in intent to an Assignment for the Benefit of Creditors under applicable state law but unlike an Assignment or a liquidation under the United States Bankruptcy Code, the Trust Mortgage is not governed by statute except to the extent of Article 9 of the Uniform Commercial Code as it relates to the grant of a security interest by the Company to the Trustee.
 
The Trust Mortgage is a binding contract between 350 Green and the trustee, but not binding upon the creditors of 350 Green, to serve as fiduciary for the benefit of all creditors of 350 Green, whereby 350 Green confers upon the trustee the authority and power to manage the operations and assets of the business in a manner that will maximize recovery for 350 Green’s creditors.
 
The following table summarizes the assets and liabilities of 350 Green as of June 30, 2014 and as of December 31, 2013.
 
 
 
June 30, 
2014
 
December
31,
 2013
 
Cash
 
$
—
 
$
2,189
 
Accounts receivable
 
 
—
 
 
11,459
 
Fixed assets, net of accumulated depreciation of $0 and $685,543, respectively
 
 
—
 
 
1,482,766
 
Goodwill
 
 
—
 
 
3,299,379
 
Intercompany receivable
 
 
360,511
 
 
—
 
Total assets
 
$
360,511
 
$
4,795,793
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
(4,196,864)
 
$
(4,343,140)
 
Accrued expenses
 
 
(363,072)
 
 
(331,112)
 
Notes payable
 
 
(15,000)
 
 
(40,000)
 
Deferred revenue
 
 
—
 
 
(15,630)
 
Intercompany payable
 
 
—
 
 
(353,381)
 
Total liabilities
 
 
(4,574,936)
 
 
(5,083,263)
 
Net liabilities
 
$
(4,214,425)
 
$
(287,470)
 
  
Accrued expenses as of June 30, 2014 and December 31, 2013 consisted of the following
 
 
 
June 30, 2014
 
December 31, 2013
 
Accrued taxes
 
$
240,132
 
$
240,571
 
Accrued host fees
 
 
89,318
 
 
77,841
 
Accrued network fees
 
 
24,526
 
 
—
 
Accrued interest
 
 
9,096
 
 
2,700
 
Accrued legal expenses
 
 
—
 
 
10,000
 
Total
 
$
363,072
 
$
331,112
 
 
Note Payable
 
In conjunction with the acquisition of 350 Green, the Company also assumed a note payable to a law firm in the amount of $105,000 with interest at 5% per annum collateralized by 28 installed charging stations with payments of $10,500 per month to be paid in full as of December 31, 2013. As of June 30, 2014, 350 Green owed $15,000 on the note and accrued interest in the amount of $3,328.
 
On May 29, 2014, EVSE Management LLC (“EVSE”) a wholly owned subsidiary of the Company entered into a Management Services Agreement whereby EVSE would administer the contracts, including the servicing of the related charging stations, of 350 Green on behalf of the Trustee in consideration of the revenues derived from such charging stations until the sale of the charging stations or notice from the Company to terminate the Management Services Agreement. No revenues were earned by EVSE during the three months and six months ended June 30, 2014 from the charging stations noted above. In addition, 350 Green and the Trustee did not pay or incur any liability to CCGI or any of its subsidiaries during the period of April 17, 2014 through June 30, 2014. On June 27, 2014, EVSE entered into an Asset Purchase Agreement (“Agreement”) with the Trustee of the Trust Mortgage and 350 Green to purchase from 350 Green (a) charging stations associated with contracts, together with any and all other grants, credits, licenses, and rights associated with them, (b) uninstalled car charging stations that may be in the possession of 350 Green creditors, (c) 350 Green charging stations in various stages of installation and (d) other assets in consideration $807,647. The net book value of the assets on the date of purchase was $909,263. The loss of $101,616 on 350 Green’s books was eliminated in consolidation. The consideration was comprised of (a) a secured claim by EVSE and its affiliates, related parties in the amount of $493,049 comprised of secured debt to fund the activities and operations of the Trustee in the amount of $200,000 since formation of the Trust Mortgage and secured claims held by Car Charging Inc., prior to the formation of the Trust Mortgage against 350 Green in the amount of $293,049 and (b) related party debt in the amount of $314,598 of which $31,760 was paid in July 2014 and the remaining $283,138 payable in four equal installments on the four succeeding anniversary dates of the Agreement. Interest on the unpaid portion of the debt accrues at the rate of 100 basis points above the prime rate published by Bank of America on the date of the agreement and is payable with the last anniversary payment. The $200,000 paid to the Trustee is recorded as general and administrative expenses-professional fees as the Trustee incurred expenses of said amount as of June 30, 2014.
 
The amounts included in the condensed consolidated statement of operations pertaining to 350 Green for the six months ended June 30, 2014 are as follows:
  
Revenues
 
$
26,908
 
Cost of revenues-depreciation
 
 
502,466
 
Cost of revenues-other
 
 
28,542
 
Total cost of revenues
 
 
531,008
 
Gross loss
 
 
(504,100)
 
Operating expenses
 
 
21,600
 
Loss on sale of fixed assets
 
 
101,616
 
Impairment of Goodwill
 
 
3,299,379
 
Operating loss
 
 
(3,926,695)
 
Other expense
 
 
260
 
Net loss
 
$
(3,926,955)