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ECOtality In Hot Water With DOE; More Trouble To Come?
Philippe Crowe August 14, 2013
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Electric vehicle charging company ECOtality is going through rough times.
Monday, August 12, ECOtality announced that the U.S. Department of Energy (DOE) has suspended all payments to ECOtality, has ordered the company to cease incurring new costs under its prior arrangement with DOE, and had ordered it to notify all of ECOtality’s vendors of the DOE’s action.
Zeldes Haeggquist & Eck, LLP, a shareholder and consumer rights litigation firm, said it has commenced an investigation into ECOtality, Inc. to determine whether ECOtality and the Company’s Officers and Directors have violated the federal securities laws or breached their fiduciary duties owed to the Company and its shareholders.
ECOtality is a San Francisco, California-based company which manufactures and sells charging systems for electric vehicles pursuant to an agreement with the DOE.
According to the litigation firm, the company reported quarter after quarter of “record” sales and claimed it was successfully diversifying its business model away from the heavily-subsidized sales business through the DOE; following this, the Company’s stock price spiraled, allowing it to stave off a delisting by the NASDAQ and to conduct an $8.2 million private placement to raise capital.
Then, on August 12, 2013, the Company disclosed that the DOE had suspended all payments to ECOtality..
ECOtality also disclosed that it was unable to correct design and manufacturing defects in its charging systems, likely requiring a recall of all connector plugs on the 12,000 charging stations it has installed to date; that it was unable to meet its 2H 2013 release date for a new industrial charging device it had promised to release; and that as a result, it had hired a restructuring adviser to evaluate options including filing a bankruptcy “in the very near future.”
Meanwhile, on its website, ECOtality published a message to its Blink users stating: “We wanted you to know that the needs of our drivers are paramount to us and despite the challenges we currently face, we will continue to operate the Blink Network and maintain our Blink chargers until further notice. We urge you to visit a Blink charger today and show that you support the growth of a public charging infrastructure.”
End of June, IKEA and ECOtality, Inc. extended their partnership with plans to add 24 Blink EV charging stations across eight more locations in the United States.
The company has received more than $40 million of a $115 million U.S. Department of Energy grant to install 14,000 stations, but has so far managed to put in place less than half that total; furthermore the company is also under investigation by the U.S. Securities and Exchange Commissions, regarding possible insider trading and has already received several subpoenas.
Adding to this the fact controversy surrounds both ECOtality and its Blink network and it is easy to understand why a firm like Zeldes Haeggquist & Eck, LLP is one of surely a few investigating, including the DOE itself.
Posted in Components, News, Power, Plugs and People, Related Technologies
Tagged as blink, ecotality, ev chargers, U.S. Department of Energy, Zeldes Haeggquist & Eck LLP
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