8.

ACCRUED EXPENSES

 

Accrued expenses consisted of the following at:

 

		September 30, 2014			December 31, 2013
Accrued consulting fees		$	842,624		$	985,122
Accrued warranty liability			554,866			514,000
Accrued taxes payable			289,272			187,146
Accrued public information penalty			72,667			—
Accrued wages			33,302			17,686
Accrued fees			279,970			125,000
Accrued host fees			604,814			278,573
Accrued interest expense- registration rights penalty			140,802			16,838
Accrued interest expense			33,875			2,699
Total		$	2,852,192		$	2,127,064

 

Consulting Fees

 

Accrued consulting fees represent contractual obligations to issue either shares of the Company’s common stock and or cash to consultants for services rendered. The Company is currently contesting whether the consultants performed in accordance with terms of their respective contracts and therefore has not issued the shares nor paid for the services.

 

 

Accrued taxes payable consist of accrued sales and use, personal property and other miscellaneous taxes.

 

Warranty

 

The Company provides a limited product warranty against defects in materials and workmanship for its Blink residential and commercial chargers, ranging in length from one to two years. The Company accrues for estimated warranty costs at the time of revenue recognition and records the expense of such accrued liabilities as a component of cost of sales. Estimated warranty costs are based on historical product data and anticipated future costs. Should actual failure rates differ significantly from estimates, the impact of these unforeseen costs would be recorded as a change in estimate in the period identified. The change in the carrying amount of accrued warranty liability, for the nine months ended September 30, 2014 is as follows:

 

Balance as of December 31, 2013		$	514,000
Additional warranty liability accrued			438,076
Warranty costs incurred			(397,210)
Balance at September 30, 2014		$	554,866

 

No warranty costs were incurred during the quarter ended September 30, 2013 nor the nine months ended September 30, 2013. Warranty expenses for the three and nine months ended September 30, 2014 were $0 and $438,076, respectively.

 

Accrued Public Information Fee

 

In accordance with the Stock Purchase Agreements (“SPA”) of October 11, 2013 and December 9, 2013, the Company was required to be compliant with Rule 144(c)(1) of the Securities and Exchange Commission, as defined, so as to enable investors to sell their holdings of Company shares in accordance with the SPA. In the event of the Company’s noncompliance with Rule 144(c)(1), the investors are entitled to receive a cash fee of one per cent of the aggregate subscription amount of the purchaser’s securities for every 30 day period that the Company is not in compliance. As of September 30, 2014, the Company has accrued $72,667 of fees. No fees have been paid as of June 16, 2015.

 

 

Accrued host fees represent amounts due to hosts for revenue share and electricity reimbursement in accordance with their respective agreements with the Company.

 

Fees

 

Accrued fees consist of professional, board of director, network fees and other miscellaneous fees.