The Company has sustained operating and cash flow losses since inception through the quarter ended September 30, 2014 forming a basis for performing an impairment test of its electric charger fixed asset group in accordance with ASC 360-10-Impairment and Disposal of Long Lived Assets. The asset group was determined to be on a state basis as the overwhelming majority of chargers were deployed in major metropolitan areas of heavily populated states that encouraged “green” public policy. Furthermore, the chargers in those areas had a symbiotic relationship to one another as they provided alternative charging sources within a concentrated area. The Company performed a recoverability test on these chargers and for the chargers which failed the test, measured and recorded an impairment charge as applicable. The key assumptions used in the estimates of projected cash flows utilized in both the test and measurement steps of the impairment analysis were projected revenues and related host payments. These forecasts were based on actual revenues for the eight months ended May 31, 2014 and take into account recent developments as well as the Company's plans and intentions. These inputs are considered level 3 in the fair value hierarchy (See Note 2). Based upon the results of the discounted cash flow analysis, the Company recorded an impairment charge on certain chargers of  $631,011 during the quarter ended September 30, 2014 representing the excess of net book value as of September 30, 2014 over the fair value of the related chargers.

On April 2, 2015, the Company was notified by a host to remove 304 level 2 charging stations from its various locations throughout the United States, installed by 350 Green prior to the Company’s acquisition of 350 Green and currently owned by EVSE. The customer alleged material breaches by 350 Green of the Charging Station License Agreement between the parties. As a result of the notification, the Company performed an impairment test on the related charging stations and concluded the stations were fully impaired resulting in an impairment charge of $333,974, the net book value of the charging stations as of September 30, 2014.

 

 

In conjunction with the acquisition of 350 Green in April 2013, the Company acquired $298,322 of charger deployments in progress at various locations throughout the United States. The stages of completion varied however none were of imminent deployment. During the quarter ended September 30, 2014, the Company’s management decided that it was not going to move forward in completing deployment of any of these locations as nothing had been done at these locations since acquisition and the site conditions was determined not to be feasible. Accordingly, the Company recorded an operating expense impairment charge of $298,322 during the quarter ended September 30, 2014 from abandonment of these assets.

 

 

In conjunction with the acquisition of assets the Blink Network on October 16, 2013, we acquired approximately 4,300 chargers. All of the chargers were funded under a grant from United States Department of Energy (“DOE”). The contracts entered into by Ecotality (the owner of the Blink Network) generally stipulated that title to the chargers rested with Ecotality until such time as the DOE grant terminated (originally scheduled as December 31, 2013). As described in Note 9- Accrued U.S, Department of Energy Fee, the Company sought to novate the DOE grant (“grant”) to step in the shoes of Ecotality and fulfill its obligations and receive any remaining funds available under the terms of the grant. In the meantime, the Company sought to convert the old Ecotality contracts with the hosts into new contracts with the Company and among other things, gain ownership of the chargers. On August 8, 2014, the Company was apprised by the DOE that it would not novate the grant. The Company undertook the task of determining which hosts did not convert their contracts. Upon completion of the task, the Company had determined that 2,813 Level 2 chargers with a net book value of $1,276,749 at September 30, 2014 and 38 DCFC’s with a net book value of $314,366 were owned by their respective hosts. The Company recorded charge to operating expenses of $1,591,115 of net book value at September 30, 2014 pertaining to chargers whose title was lost as result of the DOE grant not being novated during the quarter ended September 30, 2014.