Quarterly report pursuant to Section 13 or 15(d)

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

v2.4.1.9
ASSETS AND LIABILITIES HELD FOR TRANSFER TO TRUST MORTGAGE - 350 GREEN
 9 Months Ended
Sep. 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 had 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 September 30, 2014 and as of December 31, 2013.
 
 
 
September 30,
2014
 
December
31,
2013
 
Cash
 
$
114
 
$
2,189
 
Accounts receivable
 
 
—
 
 
11,459
 
Fixed assets, net of accumulated depreciation of $0 and $685,543, respectively
 
 
—
 
 
1,482,766
 
Intercompany receivable
 
 
119,903
 
 
—
 
Goodwill
 
 
—
 
 
3,299,379
 
Total assets
 
$
120,017
 
$
4,795,793
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
(4,164,662)
 
$
(4,343,140)
 
Accrued expenses
 
 
(339,828)
 
 
(331,112)
 
Intercompany payable
 
 
—
 
 
(353,381)
 
Notes payable
 
 
—
 
 
(40,000)
 
Deferred revenue
 
 
—
 
 
(15,630)
 
Total liabilities
 
 
(4,504,490)
 
 
(5,083,263)
 
Net liabilities
 
$
(4,384,473)
 
$
(287,470)
 
 
Accrued expenses as of September 30, 2014 and December 31, 2013 consisted of the following
 
 
 
September 30, 2014
 
December 31, 2013
 
Accrued taxes
 
$
240,132
 
$
240,571
 
Accrued host fees
 
 
89,318
 
 
77,841
 
Accrued network fees
 
 
10,378
 
 
—
 
Accrued interest
 
 
—
 
 
2,700
 
Accrued legal expenses
 
 
—
 
 
10,000
 
Total
 
$
339,828
 
$
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. In July 2014, the Company had paid the note and accrued interest in full.
 
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 nine months ended September 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 September 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 of $860,836 consisting of the following:
 
Secured debt to fund the operations and activities of the trustee since formation of the Trust Mortgage from Car Charging, Inc.
 
$
200,000
 
Secured claims held by Car Charging Inc. prior to the formation of the Trust Mortgage against 350 Green
 
 
293,049
 
Related party debt-issuance of note payable (1)
 
 
314,598
 
Cash
 
 
53,189
 
Total consideration given
 
 
860,836
 
Net book value of assets acquired
 
 
909,263
 
Intercompany loss on sale of assets- eliminated in consolidation
 
$
48,427
 
 
(1) In July 2014, $31,760 was paid 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 and (c) cash of $53,189. 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 September 30, 2014.
 
On September 30, 2014, the Company had assigned its 100% membership interest in 350 Green to Green 350 Mortgage Trust LLC, an independent third party, of which the trustee of 350 Green is a member, for $100. Green 350 Mortgage Trust accepted the assignment so that if necessary, it could undertake an assignment for the benefit of creditors of 350 Green or if necessary, commence a bankruptcy action. The Company entered into an agreement on September 8, 2014, among the trustee of 350 Green, an attorney, 350 Green and the Company whereby the Company would pay the legal fees incurred in connection with an action brought by 350 Green against a third party. In the event 350 Green prevailed in its action, the charging stations restored to 350 Green would become the property of the Company to the extent of the amount of the legal fees incurred by the Company. In the event 350 Green did not prevail in its action, the Company would have the right to offset the amounts expended against the secured note payable. The matter has been heard however no ruling has been received as of June 16, 2015.
 
The Company has determined that it is the primary beneficiary of 350 Green due to the subordinated financing arrangements as well as being the primary beneficiary in the outcome of the action against JNS, and as such, 350 Green’s assets, liabilities and results of operations are included in our condensed consolidated financial statements.
 
The amounts included in the condensed consolidated statement of operations pertaining to 350 Green for the three and nine months ended September 30, 2014, respectively, are as follows:
 
 
 
For the Three Months Ended
September 30, 2014
 
For the Nine Months Ended
September 30, 2014
 
Revenues
 
$
—
 
$
26,908
 
Cost of revenues-depreciation
 
 
—
 
 
(502,466)
 
Cost of revenues-other
 
 
13,287
 
 
(15,255)
 
Total cost of revenues
 
 
13,287
 
 
(517,721)
 
Gross profit (loss)
 
 
13,287
 
 
(490,813)
 
Operating expenses
 
 
(244,167)
 
 
(265,767)
 
Gain (Loss) on sale of fixed assets
 
 
53,189
 
 
(48,427)
 
Impairment of goodwill
 
 
—
 
 
(3,299,379)
 
Operating income (loss)
 
 
(177,691)
 
 
(4,104,386)
 
Other income
 
 
7,643
 
 
7,383
 
Net (loss)
 
$
(170,048)
 
$
(4,097,003)