The Company is the recipient of various governmental grants, rebates and marketing incentives. Reimbursements of periodic expenses are recognized as income when the related expense is incurred. Government grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the recognition of the related depreciation expense of the related asset over their useful lives.

 

The Company entered into a joint marketing agreement with Nissan North America (“Nissan”) for which among other matters requires the Company to build, own, operate and maintain a network of 48 fast chargers throughout the United States and create an auto dealer network promotion and referral program so as to facilitate sales of electric vehicles to their potential customers. Payments received under the agreement on March 29, 2013 of $782,880 were deferred and are being recognized ratably over the life of the chargers as they are installed. The Company identified the obligation to install and maintain the chargers and the obligation to create a referral and promotion program as separate elements under the agreement but determined that they did not qualify as separate units of accounting for purposes of recognizing revenue. The multiple deliverables are not separate units of accounting because Nissan North America has not delineated specific amounts of the revenue to particular elements of the agreement and the Company is unable to estimate the fair value or the selling price of the respective deliverables. The Company has installed seven units as of September 30, 2014 and is required to create an auto dealer network promotion and referral program and to install the remainder of the network by December 31, 2014, as extended. Additionally, the Company sold five fast chargers during the quarter ended September 30, 2014 for which Nissan North America has reduced the Company’s commitment to own, operate and maintain a network of 43 fast chargers resulting in the recognition of $81,550 of deferred revenue during the quarter ended September 30, 2014. No revenue was recognized during the three months ended and the nine months ended September 30, 2013. The Company also received an additional $50,000 during the quarter ended March 31, 2014 to augment the units installed under the grant. For the three months ended nine months ended September 30, 2014, $8,835 and $12,232 had been recognized as revenue and the $50,000 was offset against the costs incurred to augment the units installed under the grant recorded in general and administrative expenses. On April 2, 2015, Nissan advised the Company that as a result of its material default of the Joint Marketing Agreement (“Agreement”), Nissan was terminating the Agreement and would take possession of the 31 uninstalled fast chargers currently held at a third party facility. Included in the Other Assets as of September 30, 2014 are 31 Nissan fast chargers valued at $512,089. Included in deferred revenue as of September 30, 2014 is $505,610 received from Nissan pertaining to these 31 fast chargers in conjunction with the Joint Marketing Agreement.

 

As of the acquisition date of Beam, Beam had a contract with the New York State Energy and Resource Development Authority (“NYSERDA”) for the installation of 28 electric vehicle charging stations in New York State. As of September 30, 2014, all 28 of these stations have been installed and the unamortized portion of the deferred revenue pertaining to these stations as of September 30, 2014 of $214,395 is being amortized over the charging stations’ remaining useful lives. $35,274 and $105,823 was recognized as revenue during the quarter ended and nine months ended September 30, 2014. The Company owns the 28 charging stations.

 

Another subsidiary of the Company also had a contract with NYSERDA for the installation of 30 electric vehicle charging stations in New York State. As of September 30, 2014, all 30 of these stations have been installed and the unamortized portion of the deferred revenue pertaining to these stations as of September 30, 2014 of $104,254 is being amortized over the charging stations’ remaining useful lives. $12,441 and $38,962 was recognized as revenue during the quarter ended and nine months ended September 30, 2014. The Company owns the 30 charging stations.

 

In conjunction with the Blink Asset Purchase Agreement (“Blink APA”) of the Blink Network assets pursuant to an auction approved by the United States Bankruptcy Court of the District of Arizona from ECOtality, the Company was assigned a grant with the California Energy Commission (“CEC”), subject to novation with the California Energy Commission (“CEC”), for the installation of electric charging stations in designated areas in California. ECOtality had completed some of the work, prior to its filing for bankruptcy, in accordance with the terms of the grant. Pursuant to the terms of the grant, all project billings to the CEC were subject to a 10% retainage to be released upon completion of all deliverables under the agreement. As of December 31, 2013, the Company was in negotiations, the outcome uncertain at the time, with the CEC to assume the remainder of the ECOtality agreement, under which satisfaction of all remaining deliverables would result in payment of all retainage. The Company assumed the grant in February 2014, however due to the uncertainty of CEC’s satisfaction of all remaining deliverables, the Company recorded the fair value of this amount at $0 at the time of the Blink APA. During the period of February 27, 2014 through May 15, 2014, the Company completed its contractual obligation to CEC by installing 22 electric vehicle charging stations. In June 2014, CEC paid the Company $763,698 representing $529,990 for amounts due as of December 31, 2013 and $233,708 for the recent 22 installations. The deferred revenue recognized during the three months and nine months ended September 30, 2014 was $40,002 and $522,065, respectively and the deferred revenue balance at September 30, 2014 was $241,633 to be recognized over the remaining economic useful lives of the charging stations. The Company owns the electric charging stations installed under this grant.

 

The Company had a contract with the NV Energy Commission to receive $45,000 and to install nine electric vehicle charging stations in the state of Nevada. As of September 30, 2014, all nine stations had been installed and the unamortized portion of the deferred revenue pertaining to these stations as of September 30, 2014 was $36,376 which is being recognized over the charging stations remaining economic useful life. Deferred revenue of $3,750 and $8,624 was recognized as revenue during the quarter ended and nine months ended September 30, 2014. The Company owns the nine charging stations.

 

Deferred revenue as of September 30, 2014 consisted of the following:

 

		September 30, 2014			December 31, 2013
Nissan		$	678,904		$	765,890
NYSERDA			318,649			72,288
CEC			241,633
NV Energy Commission			36,376			—
Other			47,820			36,677
			1,323,382			874,855
Less: non-current portion			(696,739)			(678,392)
Current portion		$	626,643		$	196,463

 

It is anticipated that deferred revenue as of September 30, 2014 will be recognized over the next four years as follows:

 

2015		$	626,643
2016			433,012
2017			231,107
2018			32,620
Total		$	1,323,382

 

Grant, rebate and incentive revenue recognized during the three months and nine months ended September 30, 2014 and 2013 was $207,276, $48,303, $865,918 and $86,052, respectively.