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EX-5.1 - ECOTALITY, INC.v226651_ex5-1.htm
EX-1.1 - ECOTALITY, INC.v226651_ex1-1.htm
EX-23.2 - ECOTALITY, INC.v226651_ex23-2.htm
EX-23.1 - ECOTALITY, INC.v226651_ex23-1.htm

As filed with the Securities and Exchange Commission on June 22, 2011

Registration No. 333-174088

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2
TO
FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

ECOTALITY, INC.

(Exact name of registrant as specified in its charter)

   
Nevada   3621   68-0515422
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

Four Embarcadero Center, Suite 3720
San Francisco, California 94111
(415) 992-3000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Jonathan R. Read, Chief Executive Officer
ECOtality, Inc.
Four Embarcadero Center, Suite 3720
San Francisco, California 94111
(415) 992-3000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 Copies to: 

 
Samuel C. Dibble, Esq.
Farella Braun + Martel LLP
235 Montgomery Street
San Francisco, California 94104
Telephone: (415) 954-4400
Facsimile: (415) 954-4480
  Ellen S. Bancroft, Esq.
Joo Ryung Kang, Esq.
Dorsey & Whitney LLP
38 Technology Drive, Suite 100
Irvine, California 92618
Telephone: (949) 932-3600
Facsimile: (949) 932-3601

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filed,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer o   Accelerated filer o
Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company x
 

 


 
 

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CALCULATION OF REGISTRATION FEE

   
Title of Each Class of
Securities to be Registered
  Proposed Maximum
Offering Price(1)(2)
  Amount of
Registration Fee(3)
Common Stock, par value $0.001 per share   $ 24,437,500     $ 2,838  

(1) Includes the offering price attributable to shares that the underwriters have the option to purchase solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(3) Previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


 
 

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The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold until the registration statement becomes effective. This preliminary prospectus is not an offer to sell and it is not soliciting an offer to buy the securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 22, 2011

PROSPECTUS

[GRAPHIC MISSING]

ECOtality, Inc.

8,500,000 Shares of Common Stock

We are offering 8,500,000 shares of common stock, par value $0.001 per share.

Our common stock is listed on the Nasdaq Capital Market under the symbol “ECTY.” On June 21, 2011, the closing sales price of our common stock was $2.80 per share.

You should carefully consider the risks associated with investing in our common stock. Before making an investment in our common stock, please read the “Risk Factors” section of this prospectus, which begins on page 6.

     
  Price to Public   Underwriting Discounts and Commissions(1)   Proceeds, Before Expenses, to ECOtality, Inc.
Per Share   $       $     $  
Total   $       $     $  

(1) See “Underwriting” beginning on page 75 for additional information regarding compensation payable to the underwriters by us.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense.

We have granted the underwriters an option to purchase up to an additional 1,275,000 shares of our common stock at the public offering price, less the underwriting discounts and commissions, within 30 days from the date of this prospectus to cover over-allotments, if any.

The underwriters expect to deliver the shares of common stock to purchasers on or about ______, 2011.

Roth Capital Partners

 
ThinkEquity LLC   Craig-Hallum Capital Group

The date of this prospectus is ______, 2011.


 
 


 
 

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TABLE OF CONTENTS

 
  Page
Prospectus Summary     1  
Risk Factors     6  
Cautionary Note Regarding Forward-Looking Statements     15  
Use of Proceeds     17  
Market For Common Equity and Related Stockholder Matters     18  
Dividend Policy     18  
Capitalization     19  
Dilution     20  
Selected Consolidated Financial Data     21  
Management’s Discussion and Analysis of Financial Condition and Results of Operations     22  
Business     38  
Management     55  
Executive Compensation     60  
Certain Relationships and Related Transactions     67  
Security Ownership of Management and Principal Stockholders     68  
Description of Securities     72  
Underwriting     75  
Legal Matters     79  
Experts     79  
Where You Can Find More Information     79  
Index to Consolidated Financial Statements     F-1  


 

You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell or seeking offers to buy shares of our common stock in jurisdictions where the offer or sale is not permitted, and any offers or sales are subject to certain selling restrictions and investor qualifications in certain jurisdictions, including but not limited to the United Kingdom and Switzerland. See “Underwriting — Selling Restrictions” for additional information regarding such restrictions and qualifications.

The information contained in this prospectus is accurate only as of the date of this prospectus, and the information contained in any document incorporated or deemed to be incorporated by reference is accurate only as of the date of such document. Our business, financial condition, results of operations and prospects may have changed since that date. You should read carefully this prospectus together with the additional information described under the heading “Where You Can Find More Information” before making your investment decision.

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PROSPECTUS SUMMARY

This summary highlights certain information described in greater detail elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including “Risk Factors,” together with the additional information described under the heading “Where You Can Find More Information.”

ECOtality

ECOtality is a leader in advanced electric vehicle (“EV”) charging and storage systems with 20 years of experience in designing, manufacturing, testing and commercializing these technologies. Leveraging that experience, we are currently building the largest EV smart charging network in the U.S. Our cloud-based smart charging network, branded as the Blink Network, is initially supporting the adoption of EVs in 18 major U.S. metropolitan markets. Through innovation and strategic partnerships, with companies such as ABB Inc. (“ABB”) and Cisco, we are establishing and monetizing the Blink Network, which is expected to reach 14,000 chargers across the U.S. by year-end. Initial commercial customers hosting our chargers include Best Buy, BP/ARCO, Cracker Barrel, Fred Meyer/Kroger, and Macy’s. In January 2011, we entered into a strategic partnership with ABB, a global leader in power and automation technologies. Under this partnership, ABB Technology Ventures Ltd, an affiliate of ABB, committed $10 million of capital, and ABB entered into a North American manufacturing and sales distribution agreement with us.

With concerns mounting over the cost of, and the U.S.’s growing dependence on, foreign sources of oil, in combination with recent advances in EV technologies, we believe the market for EVs and EV supply equipment (“EVSE”) will grow substantially over the next decade. To help jump-start the industry, we have been awarded several government grants to support and manage the build out of the largest EV charging infrastructure in U.S. history. As a leader in the EVSE industry, we are managing a $100.2 million(1) cost reimbursable contract from the U.S. Department of Energy (“DOE”), known as “The EV Project.” This project spans across six U.S. states and the District of Columbia to include 18 major metropolitan areas and is designed to support the deployment of 5,700 Nissan LEAF and 2,600 Chevy Volt EVs. As the sole project manager of The EV Project, we believe we are uniquely positioned to capture significant share of the domestic market for EV charging solutions.

Our primary product offerings are the Blink line of EVSE or “charging stations” for on-road vehicular applications, which include our Blink Level 2 residential and commercial chargers and DC Fast Charger. Our product offerings also include the Minit-Charger line of advanced fast-charge systems for off-road industrial applications. We also offer testing and consulting services to utilities and government agencies worldwide, including the Advanced Vehicle Testing Activities for the DOE and the EV Micro-Climate Program for utilities and government agencies.

Through May 31, 2011, we have installed 1,280 Level 2 residential chargers and have plans to install 1,000 or more chargers per month through the remainder of 2011. With approximately 14,000 Blink chargers planned to be installed by the end of 2011, through The EV Project and our initial commercial sales channels, we believe the Blink Network will be the largest EV smart charging infrastructure network in the world and will become a well recognized and trusted brand within the U.S. and international EV industry.

Industry

Based on the announced planned introductions of EVs, and the initial success of the LEAF and Volt, we expect strong and sustained demand for our Blink Network system beyond that contracted under The EV Project. With the recent attention surrounding the introduction of EVs, a variety of industry estimates are available regarding the rate of adoption of EVs and, subsequently, EVSE. Recent analysis by Pike Research estimates that more than 3.1 million EVs, including plug-in hybrid EVs (“PHEVs”), will be sold across the globe between 2010 and 2015, with nearly 300,000 EVs sold in the U.S. in 2015 alone. The DOE forecasts that EV production will grow to 170,000 units in 2012 and over 355,000 units in 2015. To support these EVs,

(1) The EV Project cost reimbursable contract amount of $100.2 million includes $86.4 million awarded under the initial grant in September 2009 and $13.8 million awarded via a subsequent grant in June 2010. See “Business — The EV Project and Supporting Grants” for more information.

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Pike Research estimates that roughly 1.2 EVSE is needed for every EV, with between 45% (in 2011) and 33% (in 2015) of these chargers in non-residential locations, with broad industry consensus that the vast majority of charging will be done at the vehicle owner’s place of residence. Based on this analysis and Pike Research’s estimate of approximately one million EVSE sold in North America from 2011 to 2015, Pike Research is forecasting that the EVSE market could exceed $400 million in 2015, with the global market approaching $2 billion in sales annually.

Competitive Strengths

We believe the following business strengths position us well to remain a market leader and grow our business:

Sole Project Manager of the Largest EVSE Deployment in U.S. History.  We are overseeing the three-year EV Project infrastructure rollout. Upon completion of The EV Project, we expect to have the largest EV charging station footprint in the U.S. with over 14,000 combined residential and commercial charging stations. Connecting these charging stations to the grid, EV owners and commercial retailers will be our cloud-based Blink Network, which will serve as a long-term source of recurring revenue. Additionally, if successful, this project should provide us with an extremely valuable marketing tool to support future EVSE infrastructure projects both domestically and internationally.
Blink Network.  The Blink Network of charging stations will provide all EV drivers the freedom to travel wherever they choose and charge at commercial locations conveniently identified along the way. The Blink Network is a cloud-based operating system that provides device management and provisioning, location pricing customization, transaction processing, payment gateways, historical data collection, content management, and reservation capabilities. In addition, Blink charging stations will integrate with utility smart grid services, including home area networks, home energy management systems, and load management and demand response programs. We will generate revenue within the Blink Network through membership and charger usage fees, advertising, and utility-based programs.
Strategic Partnerships.  We have established several key strategic partnerships to support product development, manufacturing, and deployment of our Blink Network. On the product development and manufacturing side, we have forged a partnership with global electronics and automation leader ABB that will allow ECOtality to benefit from ABB’s global value chains, streamline sourcing and production capabilities and allow for Blink charging systems to be powered by ABB’s industry leading power electronics. Technology partnerships are also in place with Cisco for the integration of Blink Level 2 residential chargers with Cisco’s home energy management systems and with Sprint Nextel for wireless machine-to-machine communications.
Smart Charging Stations.  We believe our Level 2 and DC Fast Charger EV charging solutions are at the forefront of smart-charging technologies and have set a new standard within the industry. Each of our chargers also incorporates web-based information delivery and smart phone charger station location, GPS navigation, charge status, and completion/interruption notification. Furthermore, our DC chargers are optimized to fast charge on-road batteries of all chemistries, while controlling battery temperature and avoiding the negative effects of overcharging. All chargers are outfitted with advanced data collection capabilities, which provide comprehensive performance evaluation of a battery’s state-of-health and state-of-charge and automatically adjust its charging rates to increase and maximize battery life. We have also incorporated touch screen color displays in all Blink chargers to enable easy data input, while allowing opportunities for advertising revenue or marketing. Our DC Fast Charger can also be equipped with a 42-inch LCD for advertising, marketing or other media content.
Advanced Transportation Research and Development, Engineering and Testing.  We have various standing contractual relationships as a vehicle tester and consultant for the DOE, national research laboratories, national energy storage consortiums, and electric utilities. We currently hold the

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exclusive contract for the DOE’s Advanced Vehicle Testing Activity program. As of December 31, 2010, we have conducted more than 10 million miles of vehicle testing on more than 200 advanced fuel vehicles.
Broad Government Support.  In addition to the $100.2 million DOE grant under The EV Project, we have been awarded several additional contracts that further the goals of The EV Project. We are working in six states and the District of Columbia and with 18 major metropolitan areas across the U.S.

Strategy

Our objective is to leverage our EV charging infrastructure to further establish our leadership position and drive revenues through equipment sales, subscription programs and usage fees, media advertising models and interfaces with utilities. Key elements of our growth strategy include:

Equipment Sales.  We anticipate that a majority of our revenue will be derived from the sale of Blink chargers to residential and commercial customers. We plan to offer our Blink Level 2 residential charger through both brick-and-mortar and online retail outlets. We have also reached agreement with our partner ABB to use its sales distribution channels to offer our Blinkcharging stations as part of a complete EV solution to ABB’s network of North American commercial and utility customers. Over time, we expect to explore opportunities to sell our products through other dealers, distributors and utilities.
Network Subscription and Usage Fees.  We plan to generate recurring revenue within the Blink Network through a variety of membership plans and usage fees. Blink members and non-members will be able to charge EVs and pay using radio frequency identification (“RFID”) cards or fobs, smartphone applications, and mobile phone and credit cards. Blink users can choose between paying by the hour (Level 2) or minute (DC Fast Charger) at prices that are often substantially less than the per-mile cost of using gasoline.
Media and Advertising.  Our Level 2 commercial and DC Fast Chargers are being installed in a variety of retail, parking, and fueling station locations. All chargers are equipped with color, touch screen monitors, with our DC Fast Chargers capable of holding a flat-panel color monitor up to 42 inches. We plan to offer a variety of media and advertising opportunities to charger hosts and third party advertisers through our Blink commercial chargers as well as explore other advertising opportunities within the Blink Network.
Utility Interface.  Our smart chargers are equipped with an embedded micro-processor, an internal electric meter to monitor energy usage, and feature various communications capabilities. By utilizing our color touch screens and real time communications capabilities, our Blink chargers provide a platform for utilities to communicate with customers and are programmable for time of use activities, providing usage data to utilities for load management.

Corporate Information

Our principal executive offices are located at Four Embarcadero Center, Suite 3720, San Francisco, CA 94111, and our telephone number is (415) 992-3000. Our website address is www.ecotality.com. The information contained therein or connected thereto shall not be deemed to be incorporated into this prospectus or the registration statement of which this prospectus forms a part.

In November 2006, we changed our corporate name from Alchemy Enterprises, Ltd. to ECOtality, Inc. On May 19, 2010, our common stock commenced trading on the Nasdaq Capital Market.

Throughout this prospectus, we refer to various trademarks, service marks and trade names that we use in our business. Blink and Minit-Charger are some of our registered trademarks. EV Micro-Climate is one of our trademarks. We also have a number of other registered trademarks, service marks and pending applications relating to our products. Other trademarks and service marks appearing in this prospectus are the property of their respective holders.

In this prospectus, the terms “ECOtality,” “we,” “us,” “our” and the “Company” refer to ECOtality, Inc. and its consolidated subsidiaries.

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The Offering

Issuer    
    ECOtality, Inc.
Common stock offered by us    
    8,500,000 shares of common stock.
Common stock to be outstanding after the offering    
    22,224,959 shares of common stock (23,499,959 shares of common stock if the underwriters’ over-allotment option is exercised in full).
Offering price    
    $2.50 per share.
Use of proceeds    
    We estimate the net proceeds from this offering will be approximately $19.2 million, or approximately $22.2 million if the underwriters exercise their over-allotment option in full, based on an assumed public offering price of $2.50 per share, after deducting underwriting discounts and commissions and estimated offering expenses. We intend to use the net proceeds of this offering to provide the working capital for our DOE Contract, to develop and expand our Blink infrastructure and network, and for general working capital purposes. See “Use of Proceeds.”
Risk factors    
    See “Risk Factors” beginning on page 6 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Nasdaq Capital Market symbol    
    ECTY

The above information regarding the shares of common stock to be outstanding after the offering is based on 13,724,959 shares of common stock outstanding as of March 31, 2011 and excludes the following:

1,217,498 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011, and an additional 8,829,677 shares of common stock reserved for future issuance under our 2007 Equity Incentive Plan (the “2007 Plan”) as of March 31, 2011;
4,563,802 shares of common stock issuable upon the exercise of all warrants outstanding as of March 31, 2011; and
6,329,650 shares of common stock issuable upon the conversion of all of the Company’s Series A Convertible Preferred Stock outstanding as of March 31, 2011.

One of our existing stockholders, ABB Technology Ventures Ltd (“ABBTV”), has indicated an interest in purchasing from the underwriters in the offering approximately $4.0 million of our common stock, or 1,615,000 shares of our common stock assuming a public offering price per share of $2.50. Unless otherwise indicated, all information in this prospectus assumes:

no exercise of the underwriters’ over-allotment option to purchase up to an additional 1,275,000 shares of common stock;
no exercise of any of the Company’s outstanding options or warrants;
no conversion of any shares of the Company’s Series A Convertible Preferred Stock into common stock; and
the purchase by ABBTV of 1,615,000 shares of our common stock in the offering.

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Summary Consolidated Financial Data

The following tables set forth our summary consolidated financial data for the periods presented and should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Consolidated Financial Data” and our consolidated financial statements and related notes appearing elsewhere in this prospectus. The summary consolidated financial data for the years ended December 31, 2010 and 2009 was derived from our audited consolidated financial statements included elsewhere in this prospectus. We have also included data from our unaudited consolidated financial statements for the three months ended March 31, 2011 and 2010. Our historical results presented below are not necessarily indicative of the financial results that may be achieved in any future period.

       
  Years Ended
December 31,
  Three Months
Ended March 31,
(Unaudited)
     2010   2009   2011   2010
     (in thousands, except share and per share data)
Consolidated Statement of Operations Data:
                                   
Revenues   $ 13,737     $ 8,602     $ 4,336     $ 2,700  
Cost of goods sold     13,182       4,960       5,327       2,391  
Gross profit     555       3,642       (991 )      309  
Operating expenses     17,206       17,290       5,770       2,394  
Loss from operations     (16,651 )      (13,648 )      (6,761 )      (2,085 ) 
Other income (expense), net     209       (15,860 )      (11 )      (314 ) 
Net loss   $ (16,442 )    $ (29,508 )    $ (6,772 )    $ (2,399 ) 
Net loss per common share – basic and diluted   $ (1.78 )    $ (8.16 )    $ (0.51 )    $ (0.29 ) 
Weighted average common shares
outstanding – basic and diluted
    9,253,754       3,614,045       13,380,746       8,296,608  

   
  March 31, 2011
(Unaudited)
     Actual   As Adjusted(1)
     (in thousands)
Consolidated Balance Sheet Data:
                 
Cash and cash equivalents   $ 6,739     $ 25,928  
Working capital     7,624       26,813  
Total assets     24,628       43,817  
Total liabilities     9,232       9,232  
Accumulated deficit     (89,059 )      (89,059 ) 
Total stockholders’ equity     15,396       34,585  

(1) Reflects our sale of 8,500,000 shares of common stock offered by this prospectus at the assumed public offering price of $2.50 per share, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us.

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RISK FACTORS

Risks Relating to Our Business

A large percentage of our revenues will depend on our grants from the DOE, the loss of which would materially adversely affect our business, results of operations, and financial condition.

On September 30, 2009, our wholly-owned subsidiary, Electric Transportation Engineering Corporation, d.b.a. ECOtality North America (“ECOtality North America”), signed a contract with the DOE for a cost-reimbursable contract worth at least $99.8 million, of which $13.4 million was sub-funded to federal research and development centers. On June 17, 2010, ECOtality North America was awarded a $15.0 million extension to the original cost-reimbursable contract, of which $1.2 million was sub-funded to federal research and development centers (such contract, as extended, the “DOE Contract”). The contract term ends on April 30, 2013. The DOE Contract will net approximately $100.2 million in revenue to us, which we expect to account for a substantial portion of our revenues in the immediate future. As a condition of the DOE Contract, we are required to meet certain obligations, including, but not limited to, producing and delivering products on a timely basis in accordance with required standards, and properly accounting for and billing our products. Conversely, if during the contract period, EV manufacturers do not deliver the desired number of EVs, we may not be able to achieve the desired revenue stream anticipated from the contract. In addition, we are subject to periodic compliance audits in connection with the DOE Contract. If we are unable to properly perform our obligations under the DOE Contract, or if any compliance audits result in material deficiencies, the DOE could terminate the DOE Contract, which would have a material adverse effect on our business, financial condition and results of operations.

ECOtality North America may not continue to receive DOE funding or any other government funding, which currently comprises a large portion of our consolidated revenue.

We expect to derive a substantial majority of our revenue during 2011 and 2012 from DOE-related activity, including pursuant to the DOE Contract. Government funding of projects related to renewable energy, energy, and transportation is subject to cuts or cancellation without notice. We cannot assure you that current levels of government funding for our products and services will continue. Therefore, the future of these revenue streams is uncertain and out of our control. If any of our current projects with the DOE are cut or cancelled, or future projects are reduced from those currently planned, our business, financial condition and results of operations could be materially and adversely affected.

To complete the DOE Contract, we will require additional working capital, which may not be available on terms favorable to us or at all.

The DOE Contract is cost-reimbursable, however it requires a significant amount of upfront expenditures that are not fully reimbursed until later in the contract term. As a result, profit margins related to the DOE Contract will be low and we do not expect the DOE Contract to provide significant profits. Additionally, we will require additional working capital to be able to complete the DOE Contract. Such additional capital may not be available on a timely basis, on acceptable terms or at all. If we are unable to obtain additional working capital to fulfill the DOE Contract on acceptable terms, we may be unable to fulfill our obligations pursuant to the DOE Contract, which could have a material adverse effect on our business, financial condition and results of operations.

We have a history of losses which may continue and may negatively impact our ability to achieve our business objectives.

We incurred net losses of approximately $16.4 million and $29.5 million for the years ended December 31, 2010 and 2009, respectively. We may not achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. Our future revenues and profits, if any, will depend upon various factors, including but not limited to, the following:

our ability to successfully perform and complete the DOE Contract and related contracts;
our ability to successfully develop, market, manufacture and distribute our charging stations and chargers;

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our ability to resolve any technical issues in the development and production of our products and address any technological changes in the EV industry;
the rate of consumer adoption of EVs in general and the success of the automobile models that use our technologies;
our access to additional capital and our future capital requirements;
our ability to comply with evolving government standards related to the EV and automobile industry;
the timing of payments and reimbursements from the DOE, which directly impacts our cash flow requirements;
governmental agendas and changing funding priorities, budget issues and constraints;
delays in government funding or the approval thereof; and
general market and economic conditions.

We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

Our future growth is dependent upon consumers’ willingness to purchase and use electric vehicles.

Our growth is highly dependent upon the purchase and use by consumers of, and we are subject to an elevated risk of any reduced demand for, alternative fuel vehicles in general and EVs in particular. If the market for EVs does not gain broad market acceptance or develops more slowly than we expect, our business, prospects, financial condition and operating results will be harmed. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements, long development cycles for EV original equipment manufacturers and changing consumer demands and behaviors. Factors that may influence the purchase and use of alternative fuel vehicles, and specifically EVs, include:

perceptions about EV quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs;
perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology, including vehicle electronics and regenerative braking systems, such as the possible perception that Toyota’s recent vehicle recalls may be attributable to these systems;
the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use;
the decline of an EV’s range resulting from deterioration over time in the battery’s ability to hold a charge;
concerns about electric grid capacity and reliability, which could derail efforts to promote EVs as a practical solution to vehicles that require gasoline;
the availability of other alternative fuel vehicles, including PHEVs;
improvements in the fuel economy of the internal combustion engine;
the availability of service for EVs;
consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive;
the environmental consciousness of consumers;
volatility in the cost of oil and gasoline;
consumers’ perceptions of the dependency of the U.S. on oil from unstable or hostile countries and the impact of international conflicts;
government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

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access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV;
the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles; and
perceptions about and the actual cost of alternative fuel.

The influence of any of the factors described above may cause current or potential customers not to purchase EVs and could impact the widespread consumer adoption of EVs, which would materially adversely affect our business, operating results, financial condition and prospects.

If we are unable to keep up with advances in electric vehicle technology, we may suffer a decline in our competitive position.

We may be unable to keep up with changes in EV technology and evolving industry standards and, as a result, may suffer a decline in our competitive position. Any failure to keep up with advances in EV technology or to conform to new industry standards would result in a decline in our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in EV technology and we may not have sufficient capital resources to address all such changes. As technologies change, we plan to upgrade or adapt our charging stations in order to continue to provide EVs with the latest technology, in particular battery cell technology. However, our charging stations may not compete effectively with other providers if we are not able to source and integrate the latest technology into our charging stations. For example, if a competitor was able to produce a charging station that fully charges EV batteries in less time, our products will be less desirable, which would materially adversely affect our business, operating results, financial condition and prospects.

We face competition from large established renewable and alternative energy development companies which are also seeking to develop alternative energy power sources. Such competition could reduce our revenue or force us to reduce our prices, which would reduce our potential profitability.

The industry in which we operate is highly competitive. Numerous companies, including many companies that have significantly greater financial, technical, marketing, sales, manufacturing, distribution and other resources than we do, are seeking to develop products and technologies that will compete with our products and technologies (including Minit-Charger and our Blink charging stations). Our primary competitors in the EV infrastructure market include Better Place, Coulomb Technologies, AeroVironment, Inc., Aker Wade Power Technologies, LLC, Car Charging Group, Delta-Q Technologies, Elektromotive (UK), Bosch, General Electric, Siemens and Schneider Electric. Our primary competitors in the industrial fast-charge market include AeroVironment, Inc., Aker Wade Power Technologies, LLC, Power Designers, LLC, C&D Technologies, Inc., and other suppliers of battery charging equipment and infrastructure, designers of battery charging rooms and battery manufacturers and dealers.

Our competitors may be able to provide customers with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past contract performance, geographic presence and price. Furthermore, many of our competitors may be able to utilize their substantially greater resources and economies of scale to develop competing products and technologies, divert sales away from us by winning broader contracts or hire away our employees by offering more lucrative compensation packages. In the event that the market for EV charging systems expands, we expect that competition will intensify as additional competitors enter the market and current competitors expand their product lines. In order to secure contracts successfully when competing with larger, well-financed companies, we may be forced to agree to contractual terms that provide for lower aggregate payments to us over the life of the contract, which could adversely affect our margins. Our failure to compete effectively with respect to any of these or other factors could have a material adverse effect on our business, prospects, financial condition or operating results.

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We may not be able to protect our patents and intellectual property, and we could incur substantial costs defending against claims that our products infringe on the proprietary or other rights of third parties.

Some of our intellectual property may not be covered by any patent or patent application. Moreover, we do not know whether any of our pending patent applications will be issued or, if they are issued, whether they will be sufficiently broad to protect our technology and processes. Even if all of our patent applications are issued and are sufficiently broad, our patents may be challenged or invalidated. We could incur substantial costs in prosecuting or defending patent infringement suits or otherwise protecting our intellectual property rights, regardless of the merits of any such suits. While we have attempted to safeguard and maintain our proprietary rights, we do not know whether we have been or will be completely successful in doing so. Moreover, patent applications filed in foreign countries may be subject to laws, rules and procedures that are substantially different from those of the U.S., and any resulting foreign patents may be difficult and expensive to enforce.

Our competitors may independently develop or patent technologies or processes that are substantially equivalent or superior to ours. If we are found to be infringing on third party patents, we could be required to pay substantial royalties and/or damages, and we do not know whether we will be able to obtain licenses to use such patents on acceptable terms, or at all. Failure to obtain needed licenses could delay or prevent the development, manufacture or sale of our products, and could necessitate the expenditure of significant resources to develop or acquire non-infringing intellectual property.

Asserting, defending and maintaining our intellectual property rights could be difficult and costly and failure to do so may diminish our ability to compete effectively and may harm our operating results. We may need to pursue lawsuits or legal action in the future to enforce our intellectual property rights, to protect our trade secrets and domain names and to determine the validity and scope of the proprietary rights of others. If third parties prepare and file applications for trademarks used or registered by us, we may oppose those applications and be required to participate in proceedings to determine the priority of rights to the trademark. Similarly, competitors may have filed applications for patents, may have received patents and may obtain additional patents and proprietary rights relating to products or technology that block or compete with ours. We may have to participate in interference proceedings to determine the priority of invention and the right to a patent for the technology. In addition, we may be involved in other litigation matters, investigations and disputes from time to time, arising in the normal course of business. Litigation, investigations, disputes and interference proceedings, whether they are related to intellectual property or other aspects of our business, even if they are successful, are frequently expensive to pursue and time consuming, could result in a diversion of our management’s attention and could result in judgments or penalties that have a material adverse effect on our financial condition and results of operations.

The underlying technology of Minit-Charger or our Blink chargers may not remain commercially viable, and this could affect the revenue and potential profit of ECOtality North America.

Competitors may develop competing technology in fast charging, conditioning and monitoring batteries for transportation and industrial applications which could be a superior technology and/or be produced at a lower cost than our technology. If this occurs and we are unable to modify our technology to provide greater results or at a lower price, we could lose our technology advantage, which would adversely impact or eliminate our revenue and profitability in our transportation and industrial charging segments.

Material weaknesses in our internal controls could have a material adverse effect on our business, financial condition and operating results and stockholders could lose confidence in our financial reporting.

Management concluded that our internal controls over financial reporting were ineffective due to material weaknesses for the fiscal year ended December 31, 2010. The areas in which material weaknesses were identified include accounts payable cutoff, stock-based compensation and external use software capitalization. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we are unable to correct these material weaknesses, we may not be able to provide reliable financial reports or prevent fraud, and our operating results could be harmed. Further, we may incur significant expenses in correcting these weaknesses and maintaining effective internal controls.

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Pursuant to the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act, smaller reporting companies, like us, are exempt from the requirement that management’s report be subject to an audit by an independent registered public accounting firm, although we may be required to do so in the future. Failure to achieve and maintain an effective internal control environment, regardless of whether we are required to maintain such controls, could also cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our stock price. We have not obtained an independent audit of our internal controls and, as a result, we may have other deficiencies or weaknesses in addition to the weaknesses described above. Further, at such time as we are required to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may incur significant expenses in having our internal controls audited and in implementing any changes which are required.

The demand for hydrogen testing and educational materials, and small-scale applications for fuel cell products may not continue, and this could affect the prospects for the Fuel Cell Store.

We face competition in the provision of fuel cell products and educational materials from a number of companies. Additionally, the hydrogen industry is evolving; demand is unpredictable and follows outside forces such as school funding programs and government funding which are out of our control. If demand for these products and materials decreases, our business, financial condition and results of operations could be materially and adversely affected.

An increase in interest rates or a dramatic tightening of corporate credit markets could make it difficult for end-users to finance the cost of a conversion to renewable energy products and systems, and could reduce or eliminate the demand for our products.

Many of our end-users depend on debt financing to fund the initial capital expenditure required to purchase and install renewable energy products and systems. As a result, an increase in interest rates or further tightening in the credit markets could make it difficult for our end-users to secure the financing necessary to purchase and install renewable energy products and systems on favorable terms, or at all, and thus lower demand for our products and reduce our net sales. In addition, we believe that a significant percentage of our end-users install renewable energy products as an investment, funding the initial capital expenditure through a combination of equity and debt. An increase in interest rates could lower an investor’s return on investment in a renewable energy products and systems and make alternative investments more attractive relative to an investment in renewable energy products.

Problems with product quality or performance may cause us to incur warranty expenses, damage our market reputation and prevent us from maintaining or increasing our market share.

Our products are sold with various materials and workmanship warranties for technical defects and a 10-year and 25-year warranty against declines of more than 10% and 20% of their initial rated power, respectively. As a result, we bear the risk of extensive warranty claims long after we have sold our products and recognized net sales. As of March 31, 2011, our accrued warranty expense was approximately $0.3 million.

Because of the limited operating history of our products, we have been required to make assumptions regarding the durability and reliability of our products. Our assumptions could prove to be materially different from the actual performance of our products, causing us to incur substantial expense to repair or replace defective products in the future. Any widespread product failures may damage our market reputation and cause our sales to decline and require us to repair or replace the defective products, which could have a material adverse effect on our financial condition and results of operations.

We depend on a limited number of third-party suppliers for key raw materials and components and their failure to perform could cause manufacturing delays and impair our ability to deliver our products to customers in the required quality and quantities and at a price that is profitable to us.

Our failure to obtain raw materials and components that meet our quality, quantity and cost requirements in a timely manner could interrupt or impair our ability to manufacture our products or increase our manufacturing cost. Most of our key raw materials are either sole-sourced or sourced by a limited number of

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third-party suppliers. As a result, the failure of any of our suppliers to perform could disrupt our supply chain and impair our operations. In addition, many of our suppliers are small companies that may be unable to supply our increasing demand for raw materials as we implement our planned rapid expansion. We may be unable to identify new suppliers or qualify their products for use on our production lines in a timely manner and on commercially reasonable terms, if at all, which could have a material adverse impact on our financial condition and results of operations. In addition, the March 2011 earthquake and tsunami in Japan have disrupted the manufacturing of, and may delay the delivery of, the Nissan LEAF and Chevrolet Volt. If Nissan and General Motors, respectively, do not deliver the desired number of EVs, we may not be able to achieve full cost reimbursement under the DOE Contract, which could have a material adverse effect on our financial condition and results of operations.

Our international operations subject us to a number of risks, including unfavorable political, regulatory, labor and tax conditions in foreign countries.

We have operations outside the U.S. and expect to continue to have operations outside the U.S. in the near future. Currently, we have manufacturing operations in Mexico and established a subsidiary in Australia. In addition, we have signed agreements to establish joint ventures in the People’s Republic of China, although they have not yet been formed. As a result, we will be subject to the legal, political, social and regulatory requirements and economic conditions of many jurisdictions. Risks inherent to international operations, include, but are not limited to, the following:

difficulty in enforcing agreements in foreign legal systems;
foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs, or adopt other restrictions on foreign trade and investment, including currency exchange controls;
fluctuations in exchange rates may affect product demand and may adversely affect our profitability in U.S. dollars to the extent the price of our solar modules, cost of raw materials and labor and equipment is denominated in a foreign currency;
inability to obtain, maintain, or enforce intellectual property rights;
risk of nationalization of private enterprises;
changes in general economic and political conditions in the countries in which we operate;
unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to environmental protection, export duties and quotas;
difficulty with staffing and managing widespread operations; and
trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our solar modules and make us less competitive in some countries.

Our future success depends on our ability to retain our key employees.

We are dependent on the services of Jonathan Read, our Chief Executive Officer, H. Ravi Brar, our Chief Financial Officer, Barry Baer, our Secretary and Assistant Treasurer, Donald Karner, President of our ECOtality North America subsidiary and Kevin Morrow, Executive Vice President of our ECOtality North America subsidiary. The loss of Messrs. Read, Brar, Baer, Karner or Morrow could have a material adverse effect on us and our ability to achieve our business objectives. We may not be able to retain or replace these key employees. Several of our current key employees, including Messrs. Read, Brar, Baer, Karner and Morrow, are subject to employment conditions or arrangements that contain post-employment non-competition provisions. However, these arrangements permit the employees to terminate their employment with us upon little or no notice, and the enforceability of such non-competition provisions could be limited in certain circumstances. Failure to maintain our management team could prove disruptive to our daily operations, require a disproportionate amount of resources and management attention and could have a material adverse effect on our business, financial condition and results of operations.

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We have limited insurance coverage and may incur losses resulting from product liability claims, business interruptions, or natural disasters.

We are exposed to risks associated with product liability claims in the event that the use of our products results in personal injury or property damage. Our recharging systems, batteries, solar modules are electricity-producing devices, and it is possible that users could be injured or killed by our products due to product malfunctions, defects, improper installation or other causes. Our commercial shipment of products began in 1999 and, due to our limited historical experience, we are unable to predict whether product liability claims will be brought against us in the future or the effect of any resulting adverse publicity on our business. Moreover, we may not have adequate resources and insurance to satisfy a judgment in the event of a successful claim against us. The successful assertion of product liability claims against us could result in potentially significant monetary damages and require us to make significant payments. Any business disruption could result in substantial costs and diversion of resources.

Risks Relating to Our Common Stock

Our common stock has historically been thinly traded, so the price of our common stock could be volatile and could decline following the offering at a time when you want to sell your holdings.

Our common stock is traded on the Nasdaq Capital Market under the symbol ECTY. Our common stock has historically been thinly traded and the price of our common stock may be volatile. Between April 1, 2010 and March 31, 2011, our stock has traded as low as $2.45 and as high as $6.30 per share. In addition, as of March 31, 2011, our average trading volume during the last three months has been approximately 52,606 shares per day. As a result, numerous factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly. These factors include:

expiration of lock-up agreements;
our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;
changes in financial estimates by us or by any securities analysts who might cover our stock;
speculation about our business in the press or the investment community;
significant developments relating to our relationships with our customers, suppliers or the DOE;
stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the electric transportation industry;
demand for our products;
investor perceptions of the electric transportation industry in general and the Company in particular;
the operating and stock performance of comparable companies;
general economic conditions and trends;
major catastrophic events;
announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;
changes in accounting standards, policies, guidance, interpretation or principles;
failure to comply with Nasdaq rules;
sales of our common stock, including sales by our directors, officers or significant stockholders; and
additions or departures of key personnel.

Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs to us and divert our management’s attention and resources.

Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies. These market fluctuations may adversely affect the price of our common stock and other interests in the Company at a time when you want to sell your interest in us.

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A sale or perceived sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Sales of a substantial number of shares of our common stock or the perception that these sales could occur, may depress the trading price of our common stock. These sales could also impair our ability to raise additional capital through a sale of our equity securities on terms we deem favorable or at all. Our Articles of Incorporation authorize us to issue 1,300,000,000 shares of common stock. As of March 31, 2011, we had 13,724,959 shares of common stock issued and outstanding, shares of Series A Convertible Preferred Stock outstanding that may be converted into 6,329,650 shares of common stock and 5,781,300 shares of common stock issuable upon the exercise of outstanding warrants and options. All of the shares issuable upon conversion of the Series A Convertible Preferred Stock and exercise of the warrants may be sold without restriction assuming the continuing effectiveness of the registration statement that was deemed effective by the SEC on June 24, 2010.

Although certain holders of the Series A Convertible Preferred Stock and warrants may not convert their Series A Convertible Preferred Stock or exercise their warrants if such conversion or exercise would cause them to own more than 9.99% (or, in some cases, 19.99%) of our outstanding common stock, these restrictions do not prevent them from converting and/or exercising their holdings after they have sold shares.

The number of shares of common stock eligible for sale in the public market is limited by restrictions under federal securities law and may also be restricted under any agreements entered into with any underwriters who may participate in this offering.

We may continue to issue our stock and, subject to any restrictions in our debt instruments, if any, we may issue the stock of our subsidiaries to raise capital. Issuances of our stock or the stock of a subsidiary could dilute the interest of our existing stockholders and may reduce the trading price of our common stock. In addition, the shares issued upon conversion of the Series A Convertible Preferred Stock and/or exercise of the outstanding warrants could have the effect of further diluting the proportionate equity interest and voting power of holders of our common stock, including investors in this offering.

We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future. Any return on investment may be limited to the value of our common stock.

No cash dividends have been paid on our common stock. We expect that any income received from operations will be used to fund our future operations and growth. We do not expect to pay cash dividends on our common stock in the near future. Payment of dividends would depend upon our profitability at the time, cash available for those dividends, and other factors as our Board of Directors may consider relevant. As a result, any return on your investment in our common stock may be limited to the amount of appreciation in the share price thereof, if any.

Our directors, executive officers and affiliates will continue to exert significant control over our future direction, which could reduce the price and likelihood of a change of control transaction.

As of March 31, 2011 members of our Board of Directors and our executive officers, together with our affiliates, owned approximately 66.54% of our outstanding common stock, determined in accordance with the SEC’s rules for calculating beneficial ownership. Accordingly, these stockholders, if they act together, may be able to control all matters requiring the approval of our stockholders, including the election of directors and approval of significant corporate transactions. In addition, these stockholders can exert significant influence over our business and operations and may have interests that are adverse to the interests of our other stockholders. This concentration of ownership, which could result in a continued concentration of representation on our Board of Directors, may also delay, prevent or deter a change in control and could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our business or assets.

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There is a reduced probability of a change of control or acquisition of us due to the possible issuance of preferred stock. This reduced probability could deprive our investors of the opportunity to otherwise sell our stock in an acquisition of us by others.

Our Articles of Incorporation authorize our Board of Directors to issue up to 200,000,000 shares of preferred stock, of which 6,329,650 shares were outstanding as of March 31, 2011, in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or designation of such series, without further vote or action by stockholders. As a result of the existence of “blank check” preferred stock, potential acquirers of the Company may find it more difficult to, or be discouraged from, attempting to effect an acquisition transaction with, or a change of control of, the Company, thereby possibly depriving holders of our securities of certain opportunities to sell or otherwise dispose of such securities at above-market prices pursuant to such transactions.

Certain provisions of our corporate governing documents and Nevada law could discourage, delay, or prevent a merger or acquisition at a premium price.

Certain provisions of our organizational documents and Nevada law could discourage potential acquisition proposals, delay or prevent a change in control of our Company, or limit the price that investors may be willing to pay in the future for shares of our common stock. For example, our Articles of Incorporation and Bylaws permit us to issue, without any further vote or action by the stockholders, up to 200,000,000 shares of preferred stock in one or more series and, with respect to each series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional, and other special rights, if any, and any qualifications, limitations, or restrictions of the shares of the series. In addition, our Articles of Incorporation permit our Board of Directors to adopt amendments to our Bylaws.

Our failure to maintain the listing requirements of the Nasdaq Capital Market could result in a de-listing of our common stock.

If we fail to satisfy the continued listing requirements of the Nasdaq Capital Market, such as the corporate governance requirements, the minimum closing bid price requirement or remaining current in our reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Nasdaq may take steps to de-list our common stock. Such a de-listing would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We currently have research coverage by a single analyst. We may never obtain research coverage by other industry or financial analysts. If few analysts commence or provide coverage of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price and/or trading volume to decline, which could adversely affect your ability to sell our common stock at favorable prices or at all.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties. Forward-looking statements include statements regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in our industries, (d) our future financing plans and (e) our anticipated needs for working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.

Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in this prospectus, including, without limitation, the risks and other factors discussed in the section captioned “Risk Factors” beginning on page 6 in this prospectus. Some of these risks include:

the potential loss of our grants from the U.S. Department of Energy (“DOE”);
the possibility that the additional capital that we will require to complete our DOE Contracts will not be available to us on favorable terms or at all;
our history of losses, which may continue and may negatively impact our ability to achieve our business objectives;
the possibility that the public demand for electric vehicles will not significantly increase in the future;
our dependency on car manufacturers’ timely delivery of EVs in sufficient quantities during the DOE Contract period;
the possibility that the decreasing range of EVs on a single charge will decrease consumers’ willingness to purchase EVs;
our potential inability to keep up with advances in EV technology;
increasing competition in our industry from large established companies;
our inability to defend our intellectual property or the potential that we will incur substantial costs in defending our intellectual property;
the possibility that we will cease to receive funding from the DOE or any other government funding;
the possibility that the technology underlying our Super-Charge and Minit-Charger products will cease to remain commercially viable;
the possibility that the demand for hydrogen testing will not continue;
the effect of local and national economic, credit and capital market conditions on the economy in general, and on the particular industries in which we operate;
potential problems with the quality or performance of our products;
our dependence on third party suppliers and the possibility that such suppliers will be unable to timely deliver the products we need on terms favorable to us or at all;
unfavorable political, regulatory, labor and tax conditions in foreign countries, which could adversely impact our international operations;
our potential inability to retain key employees;

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our limited access to insurance coverage and the possibility that we may incur losses resulting from product liability claims, business interruptions, or natural disasters;
the interests of our directors, executive officers and affiliates, which exert significant control over our future direction and could reduce the sale value of the Company;
the fact that we have not and do not anticipate paying cash dividends on our common stock;
our ability to issue preferred stock, which may reduce the probability that we are acquired;
our high levels of outstanding preferred stock and warrants, which could depress the market price of our common stock;
the potential that the issuance of shares upon conversion of our preferred stock and exercise of our warrants could cause significant dilution to our common stockholders;
the limited market and volatility of our common stock;
the possibility that we could fail to remain current in our reporting obligations, which could result in the de-listing of our shares from the Nasdaq Capital Market;
the possibility that the sale or perceived sale of a substantial number of shares could cause the price of our common stock to decline;
the fact that we have material weaknesses in our internal controls in accordance with Section 404 of the Sarbanes-Oxley Act; and
the possibility that analysts could publish reports that adversely affect the price and volume of our common stock.

In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.

Each forward-looking statement contained in this prospectus reflects management’s view only as of the date on which it is made, and, except to the extent required by federal securities laws, we undertake no obligation to publicly update any forward-looking statements, whether as the result of new information, future events, or otherwise.

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USE OF PROCEEDS

We estimate the net proceeds to us from the sale of the common stock in this public offering will be approximately $19.2 million, or approximately $22.2 million if the underwriters’ over-allotment option is exercised in full, based on an assumed public offering price of $2.50 per share and after deducting the underwriting discount and our estimated offering expenses.

We intend to use the net proceeds from this public offering primarily for working capital related to the DOE Contract, which we anticipate will require $20-25 million for the remainder of 2011. We intend to use any remaining proceeds from this offering to expand our Blink infrastructure and for general corporate purposes.

The amounts and timing of our actual expenditures will depend on numerous factors. We may find it necessary or advisable to use portions of the net proceeds for other purposes, and we will have broad discretion in the application and allocation of the net proceeds from this offering. Additionally, we may use a portion of the net proceeds of this offering to finance acquisitions of, or investments in, competitive and complementary businesses or products as a part of our growth strategy. However, we currently have no plans or commitments with respect to any such acquisitions or investments. Any additional net proceeds received from the exercise of the over-allotment option will be used for working capital and general corporate purposes.

Pending use of the net proceeds from this offering, we intend to invest the net proceeds in short-term, investment-grade securities. We cannot predict whether the proceeds invested will yield a favorable return.

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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock has been listed on the Nasdaq Capital Market under the symbol “ECTY” since May 19, 2010. Prior to that, our common stock was quoted on the OTC Bulletin Board under the symbol “ETLY” until November 24, 2009, when the trading symbol for our common stock was changed to “ETLE.” The high and low sales prices on the Nasdaq Capital Market, and the high and low bid prices on the OTC Bulletin Board, of our common stock for the quarterly periods indicated are set forth below. These bid prices do not reflect retail mark-up, markdown or commissions and may not necessarily represent actual transactions. All share prices below have been adjusted to reflect the 1-for-60 reverse stock split of our common stock, which was effective as of November 24, 2009.

   
  High   Low
2011
                 
Quarter Ended March 31, 2011   $ 4.03     $ 2.81  
2010
                 
Quarter Ended December 31, 2010     4.91       3.23  
Quarter Ended September 30, 2010     5.11       2.45  
Quarter Ended June 30, 2010     6.30       4.00  
Quarter Ended March 31, 2010     5.52       4.06  
2009
                 
Quarter Ended December 31, 2009     11.70       5.13  
Quarter Ended September 30, 2009     19.26       5.10  
Quarter Ended June 30, 2009     8.70       1.98  
Quarter Ended March 31, 2009     2.34       1.80  

On March 31, 2011, the closing sale price of our common stock as reported by the Nasdaq Capital Market was $3.16 per share.

Holders

As of March 31, 2011 we had 13,724,959 shares of common stock issued and outstanding held of record by 358 stockholders.

DIVIDEND POLICY

We have not declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and the results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the Board of Directors considers relevant.

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CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2011:

on an actual basis; and
on an as adjusted basis to reflect the estimated proceeds we will receive from the sale of 8,500,000 shares of our common stock by us in this offering at the assumed public offering price of $2.50 per share, after deducting the estimated underwriting discounts and commissions, and the estimated offering expenses payable by us.

You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

   
  As of March 31, 2011
     Actual   As Adjusted
     (Unaudited, in thousands, except share and per share data)
Stockholders’ equity:
                 
Preferred Stock, $0.001 par value; 200,000,000 shares authorized,
6,329,650 shares issued and outstanding actual
  $ 6     $ 6  
Common stock, $0.001 par value; 1,300,000,000 shares authorized, 13,724,959 shares issued and outstanding actual and
22,224,959 shares as adjusted(1)
    14       22  
Additional paid-in capital     104,501       123,682  
Accumulated deficit     (89,059 )      (89,059 ) 
Accumulated foreign currency translation adjustments     (66 )      (66 ) 
Total stockholders’ equity     15,396       34,585  
Total capitalization   $ 15,396     $ 34,585  

(1) Does not include (a) an aggregate of 1,217,498 shares of common stock reserved for issuance upon exercise of stock options outstanding as of March 31, 2011, (b) 8,829,677 additional shares of our common stock reserved for future issuance under the 2007 Plan as of March 31, 2011, (c) 4,563,802 shares of common stock reserved for issuance upon exercise of all warrants outstanding as of March 31, 2011, (d) 6,329,650 shares of common stock issuable upon the conversion of all of the Company’s Series A Convertible Preferred Stock outstanding as of March 31, 2011, and (e) 1,275,000 shares of common stock issuable upon exercise of the underwriters’ over-allotment option.

This table should be read with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.

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DILUTION

Purchasers of our common stock in this offering will suffer immediate dilution to the extent of the difference between the public offering price per share and the net tangible book value per share of our common stock immediately after completion of this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the existing stockholders for the presently outstanding stock.

As of March 31, 2011, our net tangible book value was approximately $11.5 million, or $0.84 per share, based on 13,724,959 shares outstanding. Our net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets and dividing this amount by the number of shares of our common stock outstanding on March 31, 2011.

Dilution per share to new investors in this offering represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of our common stock after giving effect to this offering. After giving effect to the sale of 8,500,000 shares of our common stock in this offering and deducting the underwriting discounts and commissions and our estimated offering expenses, our net tangible book value as of March 31, 2011 would have been $1.38 per share of our common stock. This amount represents an immediate increase in net tangible book value of $0.54 per share to our existing stockholders and an immediate dilution in net tangible book value of $1.12 per share to purchasers of common stock in this offering. The following table illustrates this per share dilution:

   
Assumed public offering price per share of common stock            $ 2.50  
Historical net tangible book value per share as of March 31, 2011     0.84           
Increase in net tangible book value per share after this offering     0.54        
Net tangible book value per share as of March 31, 2011 after giving effect to this offering           1.38  
Dilution per share to new investors in this offering         $ 1.12  

This table assumes no exercise of the underwriters’ over-allotment option to purchase up to 1,275,000 additional shares of common stock from us. If the underwriters exercise this option in full, the net tangible book value after giving effect to this offering will increase to approximately $1.43 per share, representing an increase to existing stockholders of approximately $0.59 per share, and there will be an immediate dilution of approximately $1.07 per share to new investors.

The above number of shares of our common stock outstanding, as of March 31, 2011, excludes:

1,217,498 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011;
8,829,677 shares of common stock reserved for future issuance under our 2007 Plan as of March 31, 2011;
4,563,802 shares of common stock issuable upon the exercise of all warrants outstanding as of March 31, 2011; and
6,329,650 shares of common stock issuable upon the conversion of all of the Company’s Series A Convertible Preferred Stock outstanding as of March 31, 2011.

To the extent that stock options or warrants excluded from the table above are exercised, there may be further dilution to new investors if the exercise prices of such options or warrants are less than the offering price. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible securities, the issuance of these securities could result in further dilution to our stockholders.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth our consolidated financial data for the periods presented and should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus. The selected consolidated financial data for the years ended December 31, 2010 and 2009 was derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated statement of operations data for the three months ended March 31, 2011 and 2010, and the consolidated balance sheet data as of March 31, 2011 are derived from our unaudited consolidated financial statements that are included elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements, and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the financial information set forth in those statements. Our historical results presented below are not necessarily indicative of the financial results that may be achieved in any future period.

       
  Years Ended December 31,
(Audited)
  Three Months Ended March 31,
(Unaudited)
     2010   2009   2011   2010
     (in thousands, except for share and per share data)
Consolidated Statement of Operations:
                                   
Revenue   $ 13,737     $ 8,602     $ 4,336     $ 2,700  
Cost of revenue     13,182       4,960       5,327       2,391  
Gross profit     555       3,642       (991 )      309  
Operating expenses:
                                   
General and administrative     16,408       16,807       3,778       2,239  
Research and development     259       19       114       13  
Depreciation     539       464       94       142  
Warrant expense                 1,784        
Total operating expenses     17,206       17,290       5,770       2,394  
Loss from operations     (16,651 )      (13,648 )      (6,761 )      (2,085 ) 
Other income (expense):
                                   
Interest income     40       6       3       15  
Interest expense     (16 )      (15,915 )      (16 )      (329 ) 
Gain (loss) on disposal of assets     (133 )      49              
Other income     318             2        
Total other income (expense)     209       (15,860 )      (11,205 )      (314 ) 
Net loss   $ (16,442 )    $ (29,508 )    $ (6,772 )    $ (2,399 ) 
Net loss per share of common stock, basic and diluted   $ (1.78 )    $ (8.16 )    $ (0.51 )    $ (0.29 ) 
Weighted average number of common shares outstanding, basic and diluted     9,253,754       3,614,045       13,380,746       8,296,608  

     
  March 31, 2011
(Unaudited)
  December 31,
(Audited)
     2010   2009
     (in thousands)
Consolidated Balance Sheet Data:
                          
Cash and cash equivalents   $ 6,739     $ 3,845     $ 11,825  
Restricted cash     594       1,174        
Working capital     7,624       4,182       12,447  
Total assets     24,628       16,792       19,626  
Convertible preferred stock     6       6       9  
Total stockholders’ equity     15,396       10,953       17,528  

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The statements contained in all parts of this document that are not historical facts are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those relating to the following: our ability to secure necessary financing; expected growth; future operating expenses; future margins; fluctuations in interest rates; ability to continue to grow and implement growth, and regarding future growth, cash needs, operations, business plans and financial results and any other statements that are not historical facts.

When used in this document, the words “anticipate,” “estimate,” “expect,” “may,” “plans,” “project,” and similar expressions are intended to be among the statements that identify forward-looking statements. Our results may differ significantly from the results discussed in the forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, those relating to costs, delays and difficulties related to our dependence on our ability to attract and retain skilled managers and other personnel; the intense competition within our industry; the uncertainty of our ability to manage and continue our growth and implement our business strategy; our vulnerability to general economic conditions; accuracy of accounting and other estimates; our future financial and operating results, cash needs and demand for services; and our ability to maintain and comply with permits and licenses; as well as other risk factors described in this Registration Statement. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected.

Overview

We are a leader in advanced EV charging and storage systems with 20 years of experience in designing, manufacturing, testing and commercializing these technologies. Leveraging that experience, we are currently building the largest EV smart charging network in the U.S. Our cloud-based smart charging network, branded as the Blink Network, is initially supporting the adoption of EVs in 18 major U.S. metropolitan markets. Through innovation and strategic partnerships, with companies such as ABB and Cisco, we are establishing and monetizing the Blink Network, which is expected to reach 14,000 chargers across the U.S. by year-end. Initial commercial customers hosting our chargers include Best Buy, BP/ARCO, Cracker Barrel, Fred Meyer/Kroger, and Macy’s.

We were incorporated in the State of Nevada in 1999 under the name Alchemy Enterprises, Ltd. to market biodegradable products. In November 2006, we changed our name to ECOtality, Inc. to better reflect our renewable energy strategy. Our primary operating segments consist of ECOtality North America, Innergy Power Corporation (“Innergy”) and ECOtality Stores (d.b.a. Fuel Cell Store). We acquired Fuel Cell Store, Innergy and ECOtality North America in 2007. We have a wholly owned subsidiary in Mexico, Portable Energy de Mexico S.A. de C.V., that provides manufacturing and assembly service. We also have a wholly owned subsidiary in Australia, ECOtality Australia Pty Ltd., that markets and distributes our Blink and Minit-Charger equipment in Australia and Southeast Asia. On May 19, 2010, our common stock commenced trading on the Nasdaq Capital Market.

Innergy is based in San Diego, California and provides us the ability to further expand our production, manufacturing and assembly capabilities for Innergy’s solar products and energy storage devices, as well as products of our other subsidiaries, including ECOtality North America’s Blink and Minit-Charger products. Innergy also provides us the ability to expand our offering of solar products and solutions into current and developing commercial markets, and provides strong manufacturing and assembly operations to assist other aspects of our business.

Fuel Cell Store is our wholly owned subsidiary. Fuel Cell Store (www.fuelcellstore.com) is an e-commerce marketplace that offers consumers a wide array of fuel cell products from around the globe. Based in San Diego, California, Fuel Cell Store develops, manufactures, and sells a diverse and comprehensive range of fuel cell products that includes fuel cell stacks, systems, component parts and

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educational materials. Fuel Cell Store is a leading market place for fuel cell stack, component, and hydrogen storage manufacturers to unite with consumers and is an attractive source for hydrogen and fuel cell industry activity and direction.

On August 5, 2009, ECOtality North America was selected by the DOE for a cost reimbursable contract of approximately $100.2 million to undertake the largest deployment of EVs and charging infrastructure in U.S. history, known as “The EV Project.” On September 30, 2009, ECOtality North America accepted the original contract of approximately $99.8 million, of which $13.4 million was sub-funded to federally funded research and development centers. On June 17, 2010, ECOtality North America was awarded an additional $15.0 million contract extension from the DOE, of which $1.2 million was sub-funded to federally funded research and development centers, to expand the market footprint of The EV Project and include the Chevrolet Volt. We believe that leading the world’s largest EV infrastructure project gives us unparalleled and distinct competitive advantages that will support our global business development initiatives.

Through The EV Project, we are developing, installing, and managing up to 14,000 charging stations in 18 U.S. cities across six states and the District of Columbia in support of the initial launch of over 5,700 Nissan LEAF battery EVs (“BEVs”) and 2,600 Chevrolet Volt PHEVs. The goal of The EV Project is to develop, implement and study techniques for optimizing the deployment of charging infrastructure to support widespread market acceptance of EVs in the U.S. and internationally, as well as identify commercially viable business models to create a sustainable EV charging industry. Through The EV Project, we have begun to deploy our Blink charging stations in the following major metropolitan areas: Phoenix (AZ), Tucson (AZ), Los Angeles (CA), San Diego (CA), San Francisco (CA), Dallas (TX), Fort Worth (TX), Houston (TX), Seattle (WA), Portland (OR), Eugene (OR), Salem (OR), Corvallis (OR), Nashville (TN), Knoxville (TN), Memphis (TN), Chattanooga (TN) and Washington, DC.

On August 31, 2009, ECOtality North America was awarded $8.0 million from the California Energy Commission (the “CEC”) to support the deployment of charge infrastructure and EVs in California as part of the CEC “American Recovery and Reinvestment Act of 2009 Cost Share: Alternative and Renewable Fuel and Vehicle Technology Program.”

In November 2010, ECOtality Australia was awarded part of the Victorian Electric Vehicle Trial from the Victoria Department of Transportation. This trial will deploy our Blink residential, commercial, and DC Fast Chargers in the State of Victoria for testing and data collection. The trial is expected to continue for three years from its inception and will expand the Blink product line outside the borders of the U.S.

In January 2011, we entered a strategic partnership with ABB, a global leader in power and automation technologies. In connection with this partnership, ABB Technology Ventures Ltd, an affiliate of ABB, committed $10.0 million of capital, and ABB entered into a North American manufacturing and sales distribution agreement with us.

Since inception through March 31, 2011, we had recognized $8.2 million in revenue. As of March 31, 2011, we had an accumulated deficit of $89.1 million. We experienced net losses of $29.5 million for the year ended December 31, 2009, $16.4 million for the year ended December 31, 2010 and $6.8 million for the three months ended March 31, 2011.

Results of Operations

Since 2008, we have been transforming ourselves from being a development stage company to a growth oriented renewable energy company with a focus toward EV infrastructure. In 2009, we took steps to strengthen our financial viability by eliminating our debt structure, obtaining working capital, establishing strong partnerships and securing federal stimulus contracts. On September 30, 2009, we signed a cost reimbursement contract with the DOE that gave us the ability to transform our company and we have grown our revenues from $8.6 million in 2009 to $13.7 million in 2010. As of March 31, 2011, we have an accumulated deficit of $89.1 million.

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Three Months Ended March 31, 2011 Compared With Three Months Ended March 31, 2010

The following table sets forth our results of operations for the three months ended March 31, 2011 and 2010 (in thousands, except percentages):

       
  Three Months Ended March 31,   Dollar
Increase/
(Decrease)
  Percentage Increase/
(Decrease)
     2011   2010
Revenue   $ 4,336     $ 2,700     $ 1,636       61 % 
Cost of revenue     5,327       2,392       2,936       123  
Gross profit     (991 )      309       (1,300 )      (421 ) 
Operating expenses:
                                   
General and administrative     5,562       2,240       3,322       148  
Research and development     114       13       101       791  
Depreciation     93       142       (48 )      (34 ) 
Total operating expenses     5,770       2,394       3,376       141  
Loss from operations     (6,761 )      (2,085 )      (4,675 )      224  
Other income (expense):
                                   
Interest income     3       15       (13 )      (83 ) 
Interest expense     (16 )      (329 )      313       (95 ) 
Other income     2             2       100  
Total other income (expense)     (11 )      (314 )      302       (96 ) 
Net loss   $ (6,772 )    $ (2,399 )    $ (4,373 )      182 % 

Revenue and Cost of Revenue

We recognized revenue of $4.3 million for the three months ended March 31, 2011 compared to $2.7 million for the three months ended March 31, 2010. The increase in revenue of $1.6 million or 61% in 2011 is primarily related to the revenue earned on work performed under the DOE Contract, which was $2.2 million in the three months ended March 31, 2011 compared to $0.7 million for the same period in 2010. Revenue also increased in 2011 due to the increase in our other lines of business including sales of industrial chargers. We anticipate the majority of our revenue in 2011 will be derived from the DOE Contract based on deliveries of chargers.

Cost of revenue primarily consists of labor, materials, facilities and equipment related to the manufacturing of chargers and development of the Blink Network. Cost of revenue was $5.3 million for the three months ended March 31, 2011 compared to $2.4 million for the three months ended March 31, 2010. The increase of $2.9 million, or 123%, was primarily due to the ramp up of activity and associated costs incurred under the DOE Contract in 2011.

Gross margin percentage for the three months ended March 31, 2011 was (23)% compared to 11% for the three months ended March 31, 2010. The decrease in the gross margin is reflective of the costs incurred in 2011 under the DOE Contract where we were reimbursed for approximately 46% of our costs. The DOE Contract revenues in the first quarter of 2011 were much higher than for the same period in 2010, and thus the relative impact of the contract in 2010 was limited.

Operating Expenses

Total operating expenses were $5.8 million for the three months ended March 31, 2011 compared to $2.4 million for the three months ended March 31, 2010. The largest component of our operating expenses is general and administrative expenses, which were $5.6 million or 96% of total operating expenses for the three months ended March 31, 2011, compared with $2.2 million or 94% for the three months ended March 31, 2010. Total operating expenses included a one-time, non-cash expense of $1.8 million relating to the issuance of warrants to Shenzhen Goch as described below.

General and administrative expenses primarily consist of payroll, facilities, legal fees, professional fees and marketing costs. General and administrative expenses increased by $3.3 million or 148% for the three months ended March 31, 2011 compared to the same period in the prior year.

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Legal fees were $0.5 million for the three months ended March 31, 2011 compared with $0.2 million for the three months ended March 31, 2010. The increase in 2011 was primarily related to costs associated with the SEC formal Private Order of Investigation. All such expenses are currently being expensed with the expectation of insurance reimbursement in 2011 from our Directors and Officers insurance carrier.

Professional fees were $0.3 million for the three months ended March 31, 2011 compared with $0.1 million for three months ended March 31, 2010. The $0.2 million increase is attributable to increased expenses to support our outreach to state and local governments in the interest of furthering green energy initiatives.

Accounting fees were $0.2 million for the three months ended March 31, 2011 compared with $0.06 million for the three months ended March 31, 2010. This increase is attributable to higher audit and review fees.

Executive and Director’s compensation was $0.27 million in the three months ended March 31, 2011 compared with $0.24 million prior year. All other compensation was $1.5 million compared to $0.8 million for the three months ended March 31, 2010. The increase in all other compensation is directly attributable to the increase in work force (up 30 percent from prior year) required to service the DOE Contract.

Our marketing, investor and public relations expenses were $0.2 million for the three months ended March 31, 2011 compared with $0.1 million for the three months ended March 31, 2010. The increased spending in 2011 was primarily related to ongoing branding identification efforts to establish our base brand from which all our on-road (electric vehicle related) products will extend and to promoting our line of electric vehicle products.

All other general and administrative expenses totaled $2.7 million for the three months ended March 31, 2011 compared to $0.7 million for the three months ended March 31, 2010. The increase in all other general and administrative expenses was primarily driven by $1.8 million of non-cash expense for 477,777 warrants issued to Shenzhen Goch in return for a release of supplier non-exclusivity rights to facilitate the $10 million investment by ABB Technology Ventures Ltd in January 2011, as well as increased resources to support the effective execution of our business plan and the fulfillment of our DOE Contract obligations.

Research and development expenses primarily consist of engineering costs that totaled $0.1 million for the three months ended March 31, 2011 compared to $0.01 million for the three months ended March 31, 2010. This increase was due to our focus on research and development activities related to our Blink technologies. We expect our research and development expenses to remain at this level as we continue to expand our research and development activities but expect to fund these costs in whole or in part by partnering with government and industry through research and development cost share contracts.

Depreciation expense was approximately $0.09 million for the three months ended March 31, 2011 and 2010. We expect this expense to increase as we purchase more property and equipment in support of the growth of our operations.

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Year Ended December 31, 2010 Compared With Year Ended December 31, 2009

The following table sets forth our results of operations for the years ended December 31, 2010 and 2009 (in thousands, except percentages):

       
  Years Ended December 31,   Dollar
Increase/
(Decrease)
  Percentage Increase/
(Decrease)
     2010   2009
Revenue   $ 13,737     $ 8,602     $ 5,135       60 % 
Cost of revenue     13,182       4,960       8,222       166  
Gross profit     555       3,642       (3,087 )      (85 ) 
Operating expenses:
                                   
General and administrative     16,408       16,807       (399 )      (2 ) 
Research and development     259       19       240       1,263  
Depreciation     539       464       75       16  
Total operating expenses     17,206       17,290       (84 )       
Loss from operations     (16,651 )      (13,648 )      3,003       22  
Other income (expense):
                                   
Interest income     40       6       34       567  
Interest expense     (16 )      (15,915 )      (15,899 )      (100 ) 
Gain (loss) on disposal of assets     (133 )      49       (182 )      (371 ) 
Other income     318             318       100  
Total other income (expense)     209       (15,860 )      16,069       101  
Net loss   $ (16,442 )    $ (29,508 )    $ (13,066 )      (44 )% 

Revenue and Cost of Revenue

We recognized revenue of $13.7 million for the year ended December 31, 2010 compared to $8.6 million for the year ended December 31, 2009. The increase in revenue of $5.1 million or 60% in 2010 is primarily related to the revenue earned on the initial work performed under the DOE Contract, which was $5.8 million in 2010 compared to $0.2 million in 2009. Revenue also increased in 2010 due to the increase in our other lines of business including sales of industrial chargers. We anticipate the majority of our revenue in 2011 will be derived from the DOE Contract based on deliveries of chargers.

Cost of revenue primarily consists of labor, materials, facilities and equipment related to the manufacturing of chargers and development of the Blink Network. Cost of revenue was $13.2 million for the year ended December 31, 2010 compared to $5.0 million for the year ended December 31, 2009. The increase of $8.2 million, or 166%, was primarily due to a full year of costs incurred under the DOE Contract in 2010 and only a partial year in 2009. We did not commence services under the DOE Contract until the fourth quarter in 2009.

Gross margin percentage for the year ended December 31, 2010 was 4% compared to 42% for the year ended December 31, 2009. The decrease in the gross margin is reflective of the costs incurred in 2010 under the DOE Contract where we were reimbursed for approximately 46% of our costs. The DOE Contract commenced in the fourth quarter of 2009, and thus the impact of the contract in 2009 was limited.

Operating Expenses

Total operating expenses were $17.2 million for the year ended December 31, 2010 compared to $17.3 million for the year ended December 31, 2009. The largest component of our operating expenses is general and administrative expenses, which were $16.4 million or 95% of total operating expenses for the year ended December 31, 2010 compared with $16.8 million or 97% for the year ended December 31, 2009.

General and administrative expenses primarily consist of payroll, facilities, legal fees, professional fees and marketing and advertising costs. General and administrative expenses decreased by $0.4 million or 2% for the year ended December 31, 2010 compared to the prior year. General and administrative expenses in 2009 included stock-based compensation of $8.1 million for stock grants issued upon achievement of milestones in 2009 related to the initial DOE Contract. Stock-based compensation in 2010 was approximately $4.9 million related to stock grants and option issuances tied to employment contracts.

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Offsetting the decrease in stock-based compensation were increases in legal fees, professional fees, and marketing and advertising costs. Legal fees were $1.5 million for the year ended December 31, 2010 compared with $0.8 million for the year ended December 31, 2009. While legal fees in both years have been substantial, each of these figures were driven by different business requirements. In 2009, much of our legal fees were attributable to restructuring our debt and subsequently eliminating it at the end of 2009. In 2010, our legal fees were related to efforts around registering shares for the investors who supported us in our recent capital raise as well as continuing to establish and protect our intellectual property (“IP”) including the expansion of these IP protections into targeted international markets. In addition, we have incurred legal fees related to the SEC formal Private Order of Investigation and such expenses are currently being expensed with the expectation of insurance reimbursement in 2011 from our Directors and Officers insurance carrier.

Professional fees were $0.7 million for the year ended December 31, 2010 compared with $0.3 million for year ended December 31, 2009. The $0.4 million increase is attributable to the costs to be listed on Nasdaq, services from an outside consulting firm to advise the Compensation Committee of the Board of Directors on the appropriate compensation plans for employees and outside directors and costs related to information technology, which included other outsourced human resource activities to support our growing employee base as well as costs to facilitate communications between our new and existing office locations.

Our marketing, advertising and investor and public relations expenses were $0.6 million for the year ended December 31, 2010 compared with $0.3 million for the year ended December 31, 2009. The increased spending in 2010 was primarily related to outsourced branding identification efforts to establish our base brand from which all our on-road (electric vehicle related) products will extend and to promoting our line of electric vehicle products.

All other general and administrative expenses totaled $9.5 million for the year ended December 31, 2010 compared to $4.9 million for the year ended December 31, 2009. The increase in all other general and administrative expenses was primarily driven by increased resources to support the effective execution of our business plan and the fulfillment of our DOE Contract obligations.

Research and development expenses primarily consist of engineering costs that totaled $0.3 million for the year ended December 31, 2010 compared to $19,000 for the year ended December 31, 2009. The increase of $0.2 million was due to our focus on research and development activities related to our Blink technologies. We expect our research and development expenses to remain at this level as we continue to expand our research and development activities but expect to fund these costs in whole or in part by partnering with government and industry through research and development cost share contracts.

Depreciation expense was approximately $0.5 million for the years ended December 31, 2010 and 2009. We expect this expense to increase as we purchase more property and equipment in support of the growth of our operations.

Non-Operating Income and Expense

For the year ended December 31, 2010, we earned interest income in the amount of $40,000 compared with $6,000 for the year ended December 31, 2009. The decrease in interest income is due to the decrease in our cash and cash equivalents balance in 2010 as funds were used for operating activities.

Interest expense was $16,000 for the year ended December 31, 2010 compared to $15.9 million for the year ended December 31, 2009. The higher amount for 2009 is attributable to fees and financing charges related to our waivers on the convertible debentures we issued in November and December of 2007 as well as the costs of the final debt restructuring and elimination of our debenture debt.

Loss on disposal of assets was $0.1 million for the year ended December 31, 2010 compared to a gain of $49,000 for the year ended December 31, 2009. The gain in 2009 was primarily related to the sale of vehicles previously utilized for testing and evaluation as part of our consulting activities. The loss in 2010 is primarily related to the disposal of the hydrogen bus that is no longer operational for use in the business.

Other income of $0.3 million for the year ended December 31, 2010 was attributable to the release of accruals set up in 2009 for estimated costs related to our prior registration statement filings.

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Segment Information

Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker in deciding the allocation of resources and assessing performance. We are the parent company of Fuel Cell Store and ECOtality North America. Innergy Power Corporation, a division of ECOtality, is a leader in the design and manufacture of thin sealed rechargeable lead batteries and high quality flat-panel multi-crystalline solar modules. Fuel Cell Store is the leading online marketplace for fuel cell-related products and technologies with online distribution sites in the U.S., Japan, Russia, Italy and Portugal. ECOtality North America is a leader in the research, development and testing of advanced transportation and energy systems with a focus on alternative-fuel, hybrid and electric vehicles and infrastructures. ECOtality North America also holds exclusive patent rights to the Super Charge and Minit-Charger systems – battery fast charge systems that allow for faster charging with less heat generation and longer battery life than conventional chargers. We report these subsidiaries as three reportable segments: Fuel Cell Store, ECOtality North America and Innergy.

The accounting policies for the segments are the same as those described in the summary of significant accounting policies in Note 2 of our consolidated financial statements included in this prospectus.

Summarized financial information concerning our reportable segments for the year ended December 31, 2010 is as follows (in thousands):

       
  Year Ended December 31, 2010
     ECOtality North America   Innergy   Fuel Cell Store   Total
Revenue   $ 11,707     $ 1,159     $ 871     $ 13,737  
Depreciation and amortization     411       4       3       418  
Operating income (loss)     (9,362 )      (112 )      208       (9,266 ) 
Gain (loss) on disposal of assets     (6 )                  (6 ) 
Segment income before corporate overhead allocation     (9,368 )      (112 )      208       (9,272 ) 
Corporate overhead allocation     (5,817 )      (699 )      (533 )      (7,049 ) 
Segment loss     (15,185 )      (811 )      (325 )      (16,321 ) 
Not included in segment loss:
                                   
Depreciation on corporate assets                       120  
Reported net income after tax                       (16,442 ) 
Capital expenditures     2,237                   2,237  
Total segment assets – excluding intercompany receivables     10,946       406       258       11,610  
Other items not included in segment assets:
                                   
Other corporate assets                       5,182  
Total reported assets                       16,792  

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Summarized financial information concerning our reportable segments for the year ended December 31, 2009 is as follows (in thousands):

       
  Year Ended December 31, 2009
     ECOtality North America   Innergy   Fuel Cell Store   Total
Revenue   $ 5,702     $ 2,111     $ 788     $ 8,601  
Depreciation and amortization     320       7       4       331  
Operating income (loss)     (2,077 )      646       148       (1,283 ) 
Interest expense     (1 )                  (1 ) 
Gain (loss) on disposal of assets     48                   48  
Segment income before corporate overhead allocation     (2,030 )      646       148       (1,236 ) 
Corporate overhead allocation     (18,654 )      (6,906 )      (2,579 )      (28,139 ) 
Segment loss     (20,684 )      (6,260 )      (2,431 )      (29,375 ) 
Not included in segment loss:
                                   
Depreciation on corporate assets                       133  
Reported net income after tax                       (29,508 ) 
Capital expenditures     772             6       778  
Total segment assets – excluding intercompany receivables     6,373       714       187       7,274  
Other items not included in segment assets:
                                   
Other corporate assets                       12,352  
Total reported assets                       19,626  

Summarized financial information concerning our reportable segments for the three months ended March 31, 2011 is as follows (in thousands):

       
  Three Months Ended March 31, 2011
     ECOtality North America   Innergy   Fuel Cell Store   Total
Revenue   $ 3,695     $ 467     $ 174     $ 4,336  
Depreciation and amortization     81       1             82  
Operating income (loss)     (3,279 )      142       41       (3,096 ) 
Gain (loss) on disposal of assets     (11 )                  (11 ) 
Segment income before corporate overhead allocation     (3,290 )      142       41       (3,107 ) 
Corporate overhead allocation     (3,113 )      (394 )      (146 )      (3,653 ) 
Segment loss     (6,403 )      (252 )      (105 )      (6,760 ) 
Not included in segment loss:
                                   
Depreciation on corporate assets                       11  
Reported net income after tax                       (6,772 ) 
Capital expenditures     1,268                   1,268  
Total segment assets – excluding intercompany receivables     15,743       592       263       16,598  
Other items not included in segment assets:
                                   
Other corporate assets                       8,030  
Total reported assets                       24,628  

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Summarized financial information concerning our reportable segments for the three months ended March 31, 2010 is as follows (in thousands):

       
  Three Months Ended March 31, 2010
     ECOtality North America   Innergy   Fuel Cell Store   Total
Revenue   $ 2,149     $ 347     $ 204     $ 2,700  
Depreciation and amortization     105       1       1       107  
Operating income (loss)     (989 )      50       47       (892 ) 
Gain (loss) on disposal of assets                        
Segment income before corporate overhead allocation     (989 )      50       47       (892 ) 
Corporate overhead allocation     (1,172 )      (190 )      (111 )      (1,473 ) 
Segment loss     (2,161 )      (139 )      (64 )      (2,364 ) 
Not included in segment loss:
                                   
Depreciation on corporate assets                       37  
Reported net income after tax                       (2,399 ) 
Capital expenditures     221                   221  
Total segment assets – excluding intercompany receivables     6,814       567       255       7,636  
Other items not included in segment assets:
                                   
Other corporate assets                       15,513  
Total reported assets                       23,149  

ECOtality North America is the segment that includes the operating results related to our DOE Contract. The changes in operating results by segment are consistent with the fluctuations noted in the results of operations year over year, as the majority of the increase activity is related to activities under the DOE Contract.

Liquidity and Capital Resources

As of March 31, 2011, we had $6.7 million of cash and cash equivalents compared to $3.8 million as of December 31, 2010. The $2.9 million decrease in cash is directly attributable to the use of our funds in the expansion of our business as we incurred costs to produce and install electric chargers in support of the DOE Contract requirements. As of March 31, 2011 we had $0.6 million of restricted cash which serves as the collateral for letters of credit and accordingly, is not available for our use in current operations.

Our primary uses of cash from operating activities have been for personnel-related expenditures and costs related to the DOE Contract. We have experienced negative cash flows from operations as we continue to expand our business. Our cash flows from operating activities will continue to be affected principally by our working capital requirements and the extent to which we increase spending on the design and development of our products and the related contracts we enter into during a period.

We utilized cash for operating activities in the amount of $10.5 million during the year ended December 31, 2010 compared to $4.2 million during the year ended December 31, 2009. The use of cash reflected a net loss of $16.4 million in 2010 and $29.5 million in 2009, which was partially offset by non-cash stock-based compensation of $4.8 million in 2010 and $10.1 million in 2009. The stock-based compensation related to awards made primarily to retain key employees. The $11.5 million for the amortization of financing costs in 2009 was due to the restructuring and elimination of our debenture debt.

We utilized cash for operating activities in the amount of $5.7 million during the three months ended March 31, 2011 compared to $1.7 million during the three months ended March 31, 2010. The use of cash reflected a net loss of $6.8 million in 2011 and $2.4 million in 2010. The 2011 amount was partially offset by non-cash warrant expense of $1.8 million.

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Net cash used in investing activities was $2.5 million for the year ended December 31, 2010 compared to $0.7 million for the year ended December 31, 2009. The purchase of property and equipment of $2.2 million in 2010 and $0.8 million in 2009 was primarily for items to be utilized in support of the DOE cost reimbursement contract. In addition, in 2010 we capitalized $0.4 million in intangible assets for trademarks and patents costs.

Net cash used in investing activities was $0.8 million for the three months ended March 31, 2011 compared to $0.2 million for the three months ended March 31, 2010. The purchase of property and equipment of $1.3 million in 2011 and $0.2 million in 2010 was primarily for items to be utilized in support of the DOE cost reimbursement contract.

Net cash generated by financing activities was $5.0 million in 2010 compared to $16.3 million in 2009. The cash generated in 2010 and 2009 is related to the receipt of $20.5 million in investment capital received in November 2009 and January 2010. Financing activities from January 1, 2009 through December 31, 2010 have been a critical factor in enabling us to transform ourselves to become a leader in the renewable energy sector.

Net cash generated by financing activities was $9.3 million in the three months ended March 31, 2011 compared to $5 million in the three months ended March 31, 2010. The cash generated in the three months ended March 31, 2011 is related to the $10 million in investment capital received in January 2011. The $5 million generated in the three months ended March 31, 2010 reflects the final receipt of funds related to the $20.5 million in investment capital committed in November 2009. Financing activities commencing in 2009 and continuing to the present have been a critical factor in enabling us to transform ourselves to become a leader in the renewable energy sector.

Given what we believed to be a competitive edge in the fast charger market, as well as having efficient plant operating capacity in Mexico, we believed our strengths in the alternative energy field would allow us to achieve our planned objectives, and to generate adequate levels of working capital as we grew our company. These assumptions, however, did not capture the magnitude nor the speed of the 2008 economic down turn and its subsequent impact in the alternative energy field. These external forces restricting growth and access to capital simultaneously resulted in our financing options being very limited and expensive. To bridge this period of restricted capital options required the establishment of a line of credit and relief from debt service requirements as we continued to pursue our objectives of raising working capital through equity or other sources.

During 2009, we sought equity capital while working with our debt holders for additional time to generate needed working capital and to preclude paying interest and redemption of principal. We were successful in this effort and in a series of transactions during 2009 obtained working capital and converted our debt to equity.

On May 15, 2009, we and the holders of our debentures issued in November and December 2007 entered into an Amendment to Debentures and Warrants, Agreement and Waiver (the “May 2009 Amendment”) restructuring the Company’s equity as well as establishing an inducement for additional working capital. The May 2009 Amendment, which was effective as of May 1, 2009, provided for $2.0 million in new capital as well as additional capital (up to $500,000) to be invested by the November and December 2007 debenture holders.

On July 2, 2009, we completed two amendments to the May 2009 Amendment and issued $2.5 million in 8% Secured Convertible Debentures that were important to the Company’s future and tied together the series of November and December 2007 debenture documents and related amendments.

On October 31, 2009, we signed a Securities Exchange Agreement with all holders of our convertible debentures and holders of certain warrants to convert all outstanding amounts, totaling $9.1 million, under these debentures and all related warrants into an aggregate of 8,597,299 shares of Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock has no redemption or preferential dividend rights, but may be converted into shares of the Company’s common stock.

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On October 31, 2009, we signed a Securities Purchase Agreement and a Registration Rights Agreement with accredited investors pursuant to which the investors agreed to purchase $20.5 million of our common stock at a purchase price of $7.20 per share. The funds from the private placement were utilized as working capital to support the initial requirements of the contract signed with the DOE on September 30, 2009.

During 2010, we invested significant time and effort seeking additional working capital to complete the requirements associated with the initial phases of the DOE cost reimbursement contract. These efforts culminated in the $10.0 million equity investment and manufacturing agreements that were completed in January 2011.

Management’s Plan of Operation and for Working Capital

The majority of our operational focus in 2010 was centered around the design and development of hardware, software and network infrastructure necessary for the creation of the Blink Network. In 2011 and 2012, we plan to focus on operationalizing the network by installing thousands of EVSE at our customers’ and partners’ residential and commercial locations in conjunction with the launch of the Nissan LEAF and the Chevy Volt. The vast majority of the installations in 2011 will go towards satisfying the demand of the EV Project. However, we are also ramping up a sales and field operations organization that will sell, install and service EVSE and an EVSE network after The EV Project’s completion. We expect the majority of installations in 2012 and beyond to come from these direct sales and partnership efforts. In order for the direct sales efforts to be successful, we must successfully partner with some or all of the following potential partners: major retail outlets, large corporate clients, small and medium enterprises, industrial supply companies, utilities, commercial, retail and office building owners, state and local governments and automobile manufacturers.

In addition, we will continue to revamp our industrial line of products and services as we maintain a focus on the slowly recovering warehouse and airport GSE markets. It will be critical for us to develop and launch our next generation of industrial products in the second half of 2011 with additional features and services, but at lower costs than our products selling price today in order to remain competitive.

Net working capital is an important measure of our ability to finance our operations. Our net working capital was $7.2 million at March 31, 2011. We anticipate a working capital requirement in the range of $20-25 million for the remainder of 2011 in order to complete the upfront activities associated with the DOE Contract. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including, among other things, market acceptance of our products, the cost of activities associated with the DOE Contract, and overall economic conditions. We currently expect to finance our operations by raising additional working capital during 2011. However, there can be no assurance that additional funding will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to adequately fund our operating needs or achieve profitability. If we are unable to raise additional capital to fund our operations, we will need to curtail planned activities to reduce costs. We estimate that we will need to initiate cost reduction actions during the third quarter of 2011 should adequate capital not be obtained. Doing so will likely have an unfavorable effect on our ability to execute our business plans.

Contractual Obligations

On June 12, 2006, the Company entered into a license agreement (the “License Agreement”) with the California Institute of Technology (“CalTech”) whereby the Company obtained certain exclusive and non-exclusive intellectual property licenses pertaining to the development of an electronic fuel cell technology, in exchange for 97,826 shares of common stock of the Company with a fair market value of $8.2 million. As partial consideration paid in connection with the License Agreement, the Company is obligated to pay an annual maintenance fee of $50,000 to CalTech, beginning on June 12, 2009, continuing until the expiration, revocation, invalidation or unenforceability of the last exclusively licensed patent rights or improvement patent rights.

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On January 19, 2007 we purchased a 1,735 square foot, stand-alone office building at a cost of $575,615. A total of $287,959 has been paid. The remaining balance of $287,500, net a tax credit of $156, is structured as an interest-only loan from a non-affiliated third-party, bears an interest rate of 6.75% calculated annually, with monthly payments in the amount of $1,617 due beginning on February 16, 2007. The entire principal balance is due on or before January 16, 2012.

As of December 31, 2010, the Company has sixteen leases in effect for operating space. Future obligations under these commitments are as follows for the years ending December 31: $690,932 for 2011, $643,805 for 2012, $335,158 for 2013, $219,372 for 2014 and $202,996 for 2015.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates. We do not hold or issue financial instruments for trading purposes.

We had cash and cash equivalents of $6.7 million as of March 31, 2011. Our cash and cash equivalents are held primarily in cash deposits and money market funds. We hold our cash and cash equivalents for working capital purposes. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of interest rates in the U.S. Due to the short-term nature of these instruments, a sudden change in market interest rates would not be expected to have a material impact on our financial condition or our results of operations.

We have long debt-term of $287,500 related to our purchase of an office building. Our obligation under the debt is fixed and is not subject to interest rate fluctuations.

Critical Accounting Policy and Estimates

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. of America. The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, recoverability of goodwill and intangible assets, stock-based compensation, inventory valuations, valuation of deferred tax assets, and contingencies and litigation. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

We derive our revenue from sales of services and products and government grants related to clean energy technologies. We recognize revenue when a formal arrangement exists, the price is fixed or determinable, all obligations have been performed pursuant to the terms of the formal arrangement, and collectability is reasonably assured.

We have entered into agreements, including grant agreements, with various government entities, under which we are obligated to deliver services such as development of the infrastructure for deployment of EVs, including gathering and completing the related data analyses. Under these agreements, the government entity makes payments to us based on expenditures incurred in the delivery of the services. We recognize revenue as

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the related services are performed, based upon the actual efforts incurred relative to the amount of total effort expected to be incurred by us in the performance under each agreement. Amounts related to capital expenditures are recognized over the term of the agreement as the related capital assets are used in the delivery of our services. Revenue is recognized provided that the conditions under which the government payments were made have been met, and we have only perfunctory obligations outstanding. In certain agreements, the government retains a financial interest in capital assets with a fair value of $5,000 or greater at the end of the agreement, which the Company may either buy out upon termination of the agreement, offer to the government to buy out the Company’s interest in the assets or sell the assets in the market and remit to the government the portion of the selling price equal to its financial interest. In these agreements, the government’s estimated financial interest is included in deferred revenues, and the assets are depreciated to the estimated disposal value at the termination of the agreement.

Revenue from service agreements with other customers, such as consulting services, is recognized as the services are performed. All costs of services are expensed as incurred. Revenue from sales of products is recognized when products are delivered and the title and risk of loss pass to the customer. If the arrangement requires customer acceptance, revenue is recognized when acceptance occurs. Our products are sold without a right of return.

Intangible Assets

Intangible assets on our consolidated balance sheet consist of capitalized costs to develop trademarks, including attorney fees, registration fees, design costs and the costs of securing the trademark, and legal costs to establish new patents.

We capitalized legal costs to establish new patents or trademarks and amortize the cost over the life of the intangible or its economic use, if deemed to be shorter. We periodically review our finite-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset is impaired or the estimated useful lives are no longer appropriate. If indicators of impairment exist and the undiscounted projected cash flows associated with such assets are less than the carrying amount of the asset, an impairment loss is recorded to write the asset down to their estimated fair values. Fair value is estimated based on discounted future cash flows.

Goodwill

Goodwill and other purchased intangible assets have been recorded as a result of our acquisitions of FuelCellStore.com in June 2007, Innergy Power Corporation in October 2007, ECOtality North America in November 2007, and Minit-Charger in December 2007. The goodwill is not deductible for tax purposes.

Goodwill is not amortized but instead is subject to an annual impairment test, or more frequently if events or changes in circumstances indicate that they may be impaired. We evaluate goodwill on an annual basis on October 1 of each fiscal year. The test for goodwill impairment is a two-step process. The first step compares the fair value of each reporting unit with its respective carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and, therefore, the second step of the impairment test is unnecessary. The second step, used to measure the amount of impairment loss, compares the implied fair value of each reporting unit’s goodwill with the respective carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. There were no impairment charges through December 31, 2010.

Stock-Based Compensation

We account for stock-based compensation arrangements with employees using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based payments including stock options. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. We use the Black-Scholes pricing model to estimate the fair value of options granted that are expensed on a straight-line basis over the vesting period.

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We account for stock options issued to nonemployees based on the estimated fair value of the awards using the Black-Scholes pricing model. The measurement of stock-based compensation is subject to adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in our consolidated statements of operations during the period the related services are rendered.

The Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards. These assumptions include the expected term, risk-free interest rate, expected volatility, and expected dividend. Our expected term represents the estimated time from the date of the grant until the date of exercise and is primarily based on the simplified method which calculates the expected term as the average of the time-to-vesting and the contractual life of the award. Our expected volatility is determined based on daily historical price observations for our shares over the expected term or as close to that term as possible subject only to the limitation of our trading history. Our risk-free interest rate is the market yield currently available on U.S. Treasury securities with maturities approximately equal to the option’s expected term. Our expected dividend yield was assumed to be zero as we have not paid, and do not anticipate paying, cash dividends on our shares of common stock.

We estimate our forfeiture rate based on an analysis of employee turnover and historical forfeitures, and will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover and other factors. Quarterly changes in the estimated forfeiture rate can have a significant effect on reported stock-based compensation expense, as the cumulative effect of adjusting the rate for all expense amortization is recognized in the period the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the consolidated financial statements. If a revised forfeiture rate is lower than the previously estimated forfeiture rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the consolidated financial statements.

We will continue to use judgment in evaluating the expected term, volatility and forfeiture rate related to our own stock-based compensation on a prospective basis and incorporating these factors into the Black-Scholes option pricing model. Each of these inputs is subjective and generally requires significant management and director judgment to determine. If, in the future, we determine that another method for calculating the fair value of our stock options is more reasonable, or if another method for calculating these input assumptions is prescribed by authoritative guidance, and, therefore, should be used to estimate expected volatility or expected term, the fair value calculated for our employee stock options could change significantly.

Inventory Valuation

Inventory is stated at the lower of cost, determined on a first-in, first-out basis, or market value. We record inventory write-downs for potentially excess inventory based on forecasted demand, economic trends and technological obsolescence of our products. If future demand or market conditions are less favorable than our projections, future inventory write-downs could be required and would be reflected in costs of goods sold in the period the revision is made. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. If actual demand and market conditions are less favorable than anticipated, additional inventory adjustments could be required in future periods.

Income Taxes

We follow the provisions of Accounting Standards Codification (“ASC”) Subtopic 740-10 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

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Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Due to certain significant changes in ownership in prior years, some of the net operating losses are subject to limitation under Internal Revenue Code Sections 382.

Segment Reporting

Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker in deciding the allocation of resources and assessing performance. We are the parent company of Fuel Cell Store and ECOtality North America. Innergy Power Corporation, a division of ECOtality, is a leader in the design and manufacture of thin sealed rechargeable lead batteries and high quality flat-panel multi-crystalline solar modules. Fuel Cell Store is the leading online marketplace for fuel cell-related products and technologies with online distribution sites in the U.S., Japan, Russia, Italy and Portugal. ECOtality North America is a leader in the research, development and testing of advanced transportation and energy systems with a focus on alternative-fuel, hybrid and electric vehicles and infrastructures. ECOtality North America also holds exclusive patent rights to the Super Charge and Minit-Charger systems – battery fast charge systems that allow for faster charging with less heat generation and longer battery life than conventional chargers. We report these subsidiaries as three reportable segments: Fuel Cell Store, ECOtality North America and Innergy.

The accounting policies for the segments are the same as those described in the summary of significant accounting policies in Note 2 of our financial statements included in this prospectus.

Recent Accounting Pronouncements

In December 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-17 Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (“ASU 2009-17”). ASU 2009-17 amends the guidance on variable interest entities in ASC Topic 810 — Consolidation related to the consolidation of variable interest entities. It requires reporting entities to evaluate former qualifying special purpose entities for consolidation, changes the approach to determining a variable interest entity’s (“VIE”) primary beneficiary from a quantitative assessment to a qualitative assessment designed to identify a controlling financial interest, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a VIE. It also clarifies, but does not significantly change, the characteristics that identify a VIE. This ASU requires additional year-end and interim disclosures for public and nonpublic companies that are similar to the disclosures required by ASC paragraphs 810-10-50-8 through 50-19 and 860-10-50-3 through 50-9. ASU 2009-17 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. On January 1, 2010, the Company adopted ASU 2009-17. The adoption of ASU 2009-17 did not have a material impact on the Company’s consolidated financial statements.

In January 2010 the FASB issued ASU 2010-06—Fair Value Measurement and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). ASU 2010-06 amends certain disclosure requirements of Subtopic 820-10 and provides additional disclosures for transfers in and out of Levels I and II and for activity in Level III. This ASU also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques. The final amendments to the ASC will be effective for annual or interim reporting periods beginning after December 15, 2009, except for the requirement to provide the Level 3 activity for purchases, sales, issuances, and settlements on a gross basis. That requirement will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. ASU 2010-06 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. The Company adopted ASU 2010-06 as of January 1, 2010 with respect to the provisions required to be adopted as of January 1, 2010. The adoption of these provisions of ASU 2010-06 did not have a material impact on the Company’s consolidated financial statements. The Company adopted ASU 2010-06 as of

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January 1, 2011 with respect to the provisions required to be adopted for fiscal years beginning after December 15, 2010. The adoption of these provisions of ASU 2010-06 did not have a material impact on the Company’s consolidated financial statements.

In October 2009 the FASB issued ASU No. 2009-13 — Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 amends ASC Subtopic 650-25 to eliminate the requirement that all undelivered elements have vendor specific objective evidence (“VSOE”) or third party evidence (“TPE”) before an entity can recognize the portion of an overall arrangement fee that is attributable to items that already have been delivered. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or undelivered elements in a multiple-element arrangement, entities will be required to estimate the selling prices of those elements. The overall guidance will require entities to disclose more information about their multiple-element revenue arrangements. The ASU is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. If a company elects early adoption and the period of adoption is not the beginning of its fiscal year, the requirements must be applied retrospectively to the beginning of qualitative and quantitative disclosures about the impact of the changes. The Company adopted this guidance on January 1, 2011 on a prospective basis. The adoption of ASU 2009-13 did not have a material impact on the Company’s consolidated financial statements.

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BUSINESS

Overview

We are a leader in advanced electric vehicle (“EV”) charging and storage systems with 20 years of experience in designing, manufacturing, testing and commercializing these technologies. Leveraging that experience, we are currently building the largest EV smart charging network in the U.S. Our cloud-based smart charging network, branded as the Blink Network, is initially supporting the adoption of EVs in 18 major U.S. metropolitan markets. Through innovation and strategic partnerships with companies, such as ABB and Cisco, we are establishing and monetizing the Blink Network, which is expected to reach 14,000 chargers across the U.S. by year-end. Initial commercial customers hosting our chargers include Best Buy, BP/ARCO, Cracker Barrel, Fred Meyer/Kroger, and Macy’s. In January 2011, we entered a strategic partnership with ABB, a global leader in power and automation technologies. Under this partnership, ABB Technology Ventures Ltd committed $10 million of capital, and ABB entered into a North American manufacturing and sales distribution agreement with us.

As a leader in the EV supply equipment (“EVSE”) industry, we have been awarded several government grants to support and manage the build out of an EV charging infrastructure, including a $100.2 million(1) cost reimbursable contract from the U.S. Department of Energy (“DOE”), to lead, support and manage the largest deployment of EVs and charging infrastructure in U.S. history. This initiative — “The EV Project” — spans across six U.S. states and the District of Columbia to include 18 major metropolitan areas. As the sole project manager of The EV Project, we believe we are uniquely positioned to capture significant share of the domestic market for EV charging solutions.

Our primary product offerings are the Blink line of EVSE or “charging stations” for on-road vehicular applications, which include our Blink Level 2 residential and commercial chargers and DC Fast Charger. Our product offerings also include the Minit-Charger line of advanced fast-charge systems for off-road industrial applications. We also offer testing and consulting services to utilities and government agencies worldwide, including the Advanced Vehicle Testing Activities for the DOE and the EV Micro-Climate Program for utilities and government agencies.

With many forecasts suggesting fossil fuel prices will remain historically high, coupled with continued innovation from leading car manufacturers and sustained government support for technologies that promote domestic energy consumption, we believe the market for EVs will grow substantially over the next decade. Toward this end, the U.S. government has stated its goal of having one million EVs on the road by 2015, supported by $2.4 billion in direct federal grants, along with billions in tax credits for EV and EVSE purchases and loan guarantees. As an early mover, we believe we are uniquely positioned to benefit from these trends in the EV industry.

Through May 31, 2011, we have installed 1,280 Level 2 residential chargers and have plans to install 1,000 or more chargers per month through the remainder of 2011. With approximately 14,000 Blink chargers planned to be installed by the end of 2011 through The EV Project and our initial commercial sales channels, we believe the Blink Network will be the largest EV smart charging infrastructure network in the world and will become a well recognized and trusted brand within the U.S. and international EV industry.

Competitive Strengths

We believe that the following competitive strengths should position us to become a leading global provider of EV charging solutions:

Project Manager of the Largest EVSE Deployment in U.S. History.  As sole project manager of the largest EV infrastructure initiative in U.S. history, we are overseeing the three-year infrastructure rollout of The EV Project. We believe our unique position within The EV Project has and will provide us several near- and long-term advantages relative to our competition. Supported in large part through The EV Project grants, we have developed three advanced and feature rich EVSE

(1) The EV Project cost reimbursable contract amount of $100.2 million includes $86.4 million awarded under the initial grant in September 2009 and $13.8 million awarded via a subsequent grant in June 2010. See “Business — The EV Project and Supporting Grants” for more information.

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systems that will provide us opportunities to generate recurring revenue through a variety of revenue models. Upon completion of The EV Project, we expect to have the largest EV charging station footprint in the U.S. with over 14,000 combined residential and commercial charging stations deployed, as well as the largest network connecting the charging stations to the grid, EVs and commercial retailers. Lastly, we expect The EV Project to provide us significant international attention and serve as a signature infrastructure achievement unmatched by our competition. This project, if successful, should provide us an extremely valuable marketing tool to support future EVSE infrastructure projects both domestically and internationally.
Blink Network.  The Blink Network of charging stations will provide all EV drivers the freedom to travel wherever they choose and charge at commercial locations conveniently identified along the way. All Blink EVSE feature real time communications capabilities, and are designed to be networked into the Blink Network Operations Center to provide system administrators the ability to remotely monitor, control and communicate with all Blink EVSE. The Blink Network is a cloud-based operating system that provides device management and provisioning, location pricing customization, transaction processing, payment gateways, historical data collection, content management, reservation capabilities, and integration with utility smart grid services including home area network and home energy management system, and load management and demand response programs. EV drivers will be able to pay for charging their EV at any Blink station through a variety of options including interoperable RFID cards or fobs, smartphone applications, and mobile phone and credit card-based payment options. Consumers may also yield even greater advantages of the Blink Network, such as discounted charging rates, reservation systems, and enhanced Blink Network capabilities by becoming Blink Network members. Additionally, the recently announced Blink Mobile Application for smartphones and mobile devices will enable users to find Blink charger locations, utilize GPS navigation, and receive charge status notifications. The Blink Mobile Application is scheduled for release by the summer of 2011.
Strategic Partnerships.  Based on our position as an innovator and market leader, we have established several key strategic partnerships to support product development, manufacturing, and deployment of our Blink Network. With regard to product development and manufacturing, we have forged important relationships with global power and automation technology firm, ABB, and auto and consumer product designer and manufacturer, Roush Enterprises. Our partnership with ABB will allow us to benefit from ABB’s global value chains, streamline sourcing and production capabilities and allow for Blink charging systems to be powered by ABB’s industry leading power electronics. Technology partnerships are also in place with Cisco for the integration of Blink Level 2 residential chargers with Cisco’s home energy management systems and with Sprint Nextel for wireless machine-to-machine communications. We also have agreements with Best Buy, BP/ARCO, Cracker Barrel, Fred Meyer (Kroger) and Macy’s to install commercial EVSE at select locations.
Smart Charging Stations.  We believe our Level 2 and DC Fast Charger EV charging solutions are at the forefront of smart-charging technologies and have set a new standard within the industry. Our chargers provide intelligent user-friendly features to easily and safely charge EVs. Level 2 residential advanced charger features include binary wall mount design for ease of installation and physical layout, a touch screen providing charger status, statistics and history, programmable start/stop and synchronization with utility peak rates, ability to locate stations away from home, internal electric meter and wireless IEEE 802.11g, CDMA, AMI, and LAN capabilities. In addition to many of the above features, our Level 2 commercial charger provides specified advertising space, selective height adjustment for ADA compliance and 360-degree beacon light for easy identification. Our DC Fast Charger adds a 42-inch LCD display for optional media and advertising, AMI interface and smart meter capability for demand response and energy management, and smart RFID payment technology. Each of our chargers also incorporates web-based information delivery and smart phone charger station location, GPS navigation, charge status, and completion/interruption notification. Furthermore, our DC chargers are optimized to fast charge on-road batteries of all chemistries, while controlling battery temperature and avoiding the negative effects of overcharging. All chargers are outfitted with advanced data collection capabilities, which provide comprehensive performance

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evaluation of a battery’s state-of-health and state-of-charge and automatically adjust its charging rates to increase and maximize battery life.
Advanced Transportation Research and Development, Engineering and Testing.  We have a long history in clean and renewable technologies and have various standing contractual relationships as a vehicle tester and consultant for the DOE, national research laboratories, national energy storage consortiums, and electric utilities. We provide services in energy storage, monitoring, system design and fabrication, product and vehicle testing, and product development. We have considerable expertise in the areas of EV systems, recharging stations, energy demand management systems, utility communication systems, advanced battery technologies, fast charging technologies, hydrogen production, storage and dispensing systems. We currently hold the exclusive contract for the DOE’s Advanced Vehicle Testing Activity program. As of December 31, 2010, we have conducted more than 10 million miles of vehicle testing on more than 200 advanced fuel vehicles.
Broad Government Support.  In addition to the $100.2 million DOE cost reimbursable contracts under The EV Project, we have been awarded several additional contracts that further the goals of The EV Project. We are working in six states and the District of Columbia and with 18 major metropolitan areas across the U.S. We view these relationships as strategically important as we continue to expand our business in these areas and market our services to additional regions of the country.

Strategy

We intend to leverage our EV charging technology, market leading position gained through The EV Project and strategic relationships to build and commercialize a sustainable EVSE and Blink Network that supports the broader acceptance of EVs both domestically and internationally. We intend to leverage our EV charging infrastructure to further establish our leadership position and drive revenues through equipment sales, subscription programs and usage fees, media advertising models and interface with utilities as outlined below.

Equipment Sales.  We anticipate that a majority of our revenue will be derived from the sale of Blink chargers to residential and commercial customers. We plan to offer our Blink Level 2 residential charger through both brick-and-mortar and online retail outlets. Installation of both commercial and residential Level 2 chargers are carried out by third parties, including a network of approximately 30 certified contractors that are currently part of the Blink Certified Contractor Network. Our Blink Level 2 commercial charger and Blink DC Fast Charger are sold through our inside sales force and installed by our authorized installation partners. We have also reached agreement with our partner ABB to use its sales distribution channels to offer our Blink charging stations as part of a complete EV solution to ABB’s network of North American commercial and utility customers. Over time, we expect to explore opportunities to sell our products through other dealers, distributors and utilities.
Network Subscription and Usage Fees.  We plan to offer users of our Blink Network a variety of membership and usage fees. EV drivers are able to charge at any Blink station through a variety of options including interoperable RFID cards or fobs, smartphone applications, and mobile phone and credit card-based payment options. Blink users can choose between paying by the hour (Level 2) or minute (DC Fast Charger) at prices that are often substantially less than the per-mile cost of using gasoline. Consumers may also yield even greater advantages of the Blink Network, such as discounted charging rates, reservation systems, and enhanced Blink Network capabilities by becoming Blink Network members.
Media and Advertising.  Our Level 2 commercial and DC Fast Chargers are being installed in a variety of retail, parking, and fueling station locations, and may be equipped with flat-panel color monitors measuring up to 42 inches diagonally. We plan to offer a variety of media and advertising opportunities to charger hosts and third party advertisers through our Blink commercial chargers as well as explore other advertising opportunities within the Blink Network.

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Utility Interface.  Our smart chargers are equipped with an embedded micro-processor, an internal electric meter to monitor energy usage, and feature various communications capabilities. By utilizing our color touch screens and real time communications capabilities, our Blink chargers provide a platform for utilities to communicate with customers and are programmable for time of use activities, providing usage data to utilities for load management. Our Blink chargers can be controlled remotely by the Blink Network for integration in demand response programs.

Industry

Electric Vehicles

Historically, the residential and commercial EVSE industry has been driven by a niche EV market where only a limited number of EVs were available. More recently, with the launch of EVs by major original equipment manufacturers (“OEMs”) and growing government support, the EVSE market is maturing at an accelerated pace and attracting the attention of major international players, representing all stages of the EV value chain. As the EV market develops, our residential and commercial EVSE and EV Micro-Climate businesses will remain highly dependent upon the success and broad adoption of EVs. Historically, a combination of factors, including those described below, has contributed to the inability of EVs to attract consumer attention. However, we expect a thriving EV and EVSE market to evolve based on a variety of positive industry trends.

 
Historical Challenges to Growth of EV   Current Environment: Opportunities for Market Growth
Low price of oil relative to total cost of an EV   Average gasoline prices (all types) have risen 84% over the past 24 months as of April 18, 2011, with average prices up steadily over the past decade U.S.
Energy Information Administration expects regular-grade gasoline retail prices, which averaged $2.76 per gallon last summer, will average $3.86 per gallon during the 2011 driving season
Limited choice and higher vehicle price point relative to comparable ICE models, driven by the high cost and relatively low performance of batteries   Hybrid electric vehicles were introduced in the U.S. in 1999 and made up 2.5% of U.S. light-duty vehicle sales in 2010
In December 2010, two EV models were launched in the U.S. by major OEMs
Planned launches for up to 40 EV models (including PHEVs) by over 20 OEMs over the next several years, beginning in 2010
Negligible consumer awareness/concern surrounding the environmental and sociopolitical issues regarding ICEs and their fuel source   Unrest in the Middle-East and rising oil prices have increased public spotlight on U.S. dependence on foreign oil
Limited government support and incentives aimed to entice consumers and drive demand   U.S. government goal of one million EVs on the road by 2015, supported by $2.4 billion in federal grants (including over $100 million for The EV Project), along with billions in loan guarantees
Federal and State tax incentives for EV and EVSE purchases
Lack of a robust charging infrastructure   ECOtality, among others, installing more than 14,000 smart chargers across the U.S. by the end of 2011

Against this backdrop, the 21st century ushered in the broad electrification of vehicles, beginning with the success of the Toyota Prius hybrid electric vehicle, or HEV. Introduced in the U.S. in 2000, the Prius went from a curiosity with approximately 5,500 vehicles sold that year, to an industry standard with nearly 140,000 vehicles sold in the U.S. in 2010. We believe the growth in HEV adoption has been driven by four key trends (i) the steady rise in oil prices, (ii) broad acceptance of hybrid technology, (iii) steady reduction in the price of hybrid vehicles relative to their ICE counterparts, and (iv) broad government support. We expect these same trends to support the acceptance and broad adoption of EVs over the near and long term.

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Data from the U.S. Energy Information Agency and hybridcars.com shows a strong correlation between the rise in oil prices and sales of HEVs as shown in the chart below. Despite overall sales weakness for automobiles in recent years, HEVs have grown to represent 2.5% of U.S. auto sales in 2010 and major OEMs have introduced several dozen new HEV models. With Brent crude prices increasing to prices above $100/barrel, the reality of $4/gallon gasoline, and some longer range forecasts calling for steady price escalation (above historical norms), we believe more customers are likely to consider HEVs and EVs. In fact, for the first quarter of calendar 2011, ending March 31, U.S. HEV unit sales increased approximately 34% when compared with the same period of 2010 and the average price per gallon for gasoline increased by approximately 20%. This compares with light-duty vehicle sales year-over-year increase of 20% during the same three-month period.

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Source: Energy Information Administration and DOE

In parallel with the growing penetration of HEVs over the past decade, several OEMs began more advanced EV development programs, culminating in the December 2010 launch of the Nissan LEAF and Chevy Volt EVs. Early indications are that the initial wave of EVs has been very well received, with each vehicle winning global awards and demand for each exceeding supply. For instance, Nissan announced on April 20, 2011 that approximately 340,000 individuals have registered on the Nissan LEAF website as interested potential buyers. Additionally, the Chairman of Nissan Americas stated publicly that, “Nissan LEAF deliveries are about to grow from the few hundreds, to the many thousands, and all current customer orders will be fulfilled by the end of this summer.” Nissan had previously announced that it stopped taking reservations in September 2010 after hitting the 20,000 mark, although the reservation process reopened on May 1, 2011. In the case of the Chevy Volt, GM has announced several production increases over the past few months, with recent indications that the company is exploring ways to increase 2012 production to over 100,000 vehicles. While production of the LEAF remains more limited, Nissan will be able to produce well over 250,000 units of the vehicle by late 2013. As of March 31, 2011, nearly 500 Nissan LEAFs and over 1,000 Chevy Volts had been delivered to customers in the U.S.

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In addition to these mass-produced EVs, industry announcements have been made regarding planned introductions of at least 40 EVs through 2013, as outlined below.

Announced EVs

     
2010   2011   2012   2013
Chery s18 EV   BMW Active E EV   Fisker Nina PHEV   Ford Sedan PHEV
Chevy Volt PHEV   Citroen C-Zero   Chrysler 200c EV   Volkswagen Sedan EV
Nissan LEAF EV   Coda Automotive EV   Chrysler Town & Country PHEV   Volkswagen E-UP EV
Reva Sedan EV   Fisker Karma PHEV   Fiat 500 BEV EV   Volkswagen Golf PHEV
Tesla Roadster EV   Ford Focus EV   Ford Escape PHEV   Volkswagen Jetta PHEV
Think City EV   GM Crossover SUV PHEV   Ford Focus PHEV   BMW MegaCity i3 EV
Subaru Stella EV   Mercedes BlueZero PHEV   Gelly EK-1 EV   Audi “E-Up” EV
     Mini-E EV   Hyundai i10          
     Opel Ampera PHEV   Hyundai PHEV          
     Peugeot Ion EV   SAIC EV          
     Pininfariana Blue Car EV   SAIC PHEV          
     Renault Fluence ZE EV   Tesla Model S EV          
     Renault Kangoo ZE EV   Volvo V-70 PHEV          
     Smart EV   VW Golf VII PHEV          
     Toyota Prius PHEV          
     Mitsubishi i-MiEV          

Source: Pike Research (Electric Vehicle Charging Equipment, 2Q 2010); company and published reports

While the recent model announcements demonstrate a substantial shift toward EVs by the auto industry, the ultimate success of EVs is dependent upon them being accessible to the broader market. At price points of approximately $25,300 and $32,800 (after a $7,500 government rebate), respectively, the LEAF and Volt are viewed by many as being approachable by a fairly broad customer base. The introductory LEAF price, in particular, represents a price point that many thought were unattainable, in large part due to the price of lithium-ion battery packs, which had been over $1,000/kWh (the LEAF battery is 24 kWh and the Volt 16 kWh) prior to the mass production of the LEAF/Volt and the planned introductions by other OEMs of EVs. However, prices have recently decreased dramatically, with more cost reductions expected as volumes and competition continues to increase. Ultimately, we believe this will help to drive further demand for EVs as prices decline and/or battery ranges increase.

Although consumer demand, based in part on rising gasoline prices and growing environmental awareness, has helped drive OEMs to HEVs and EVs, governments are also playing a critical role. The U.S. government has stated its goal of having one million EVs on the road by 2015, supported by $2.4 billion in federal stimulus funding. Beyond grants for advanced battery manufacturing and efforts like The EV Project, the U.S. government is also providing tax credits for the purchase of EVs (up to $7,500 for a EV), as are many states. Additionally, the U.S. government offers a tax credit of 30% of the cost of EVSE, up to $1,000 for individuals and $30,000 for businesses, with many states offering tax refunds as well. Additionally, the U.S. government has provided billions of dollars in loan guarantees to support the development of innovative, advanced vehicle technologies. Lastly, we believe automakers are moving toward HEVs/EVs as a means of addressing new federal corporate average fuel economy, or CAFE, standards. According to the U.S. Environmental Protection Agency, the CAFE standards have held steady at 27.5 mpg since model year 1990, but the standards are scheduled to rise to 34.1 mpg by 2016 for the average passenger vehicle and light-duty truck.

Beyond the U.S., China and European countries are also making substantial investments in support of EVs. China, which in 2009 passed the U.S. as the largest light-duty vehicle market globally, has recently introduced aggressive incentives to stimulate purchases of EV and support EVSE installations. Although the

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growth in China’s auto market has slowed somewhat over the past year, it still stands to remain the largest end market for autos for the foreseeable future. Moreover, many industry experts predict that China will represent the largest EV market by mid-decade, with JD Power and Associates recently predicting that one-half of all BEV sales in 2015 will be into China. The EU is also developing plans to support future growth in EV sales and EVSE infrastructure, with member states looking to coordinate infrastructure standards, which is crucial to the success of what could be a complicated mix of competing standards. Several countries are also putting incentives in place for both vehicle purchases and EVSE infrastructure, including Denmark, France, Germany, Israel, Portugal, Spain and UK.

Electric Vehicle Supply Equipment

Based on the announced planned introductions of EVs, and the initial success of the LEAF and Volt, we expect strong and sustained demand for our Blink Network system, beyond that contracted under The EV Project. When we assess the size of the EVSE market, we begin by looking at the expected number of EVs on the road that require charge infrastructure. Industry estimates of the number of charging stations needed per EV range between one-to-two per vehicle, with significant variability driven by vehicle type and customer range anxiety. For example, we expect a larger number of EVSE will be needed to support battery EVs versus plug-in EVs and that in the early stages of customer adoption a larger number of publicly available stations will be required due to customer anxiety about the range of vehicles.

With the recent attention surrounding the introduction of EVs, a variety of industry estimates are available regarding the rate of adoption of EVs and, subsequently, EVSE. Recent analysis by Pike Research estimates that more than 3.1 million EVs will be sold across the globe between 2010 and 2015, with nearly 300,000 EVs sold in the U.S. in 2015 alone. The DOE forecasts that EV production will grow to 170,000 units in 2012 and over 355,000 units in 2015. To support these EVs, Pike Research estimates that roughly 1.2 EVSE is needed for every EV, with between 45% (in 2011) and 33% (in 2015) of these chargers in non-residential locations, with broad industry consensus that the vast majority of charging will be done at the vehicle owner’s place of residence. Pike Research estimates approximately one million EVSE will be sold in North America from 2011 to 2015 and the EVSE market will exceed $400 million in 2015, with approximately $2 billion in sales globally.

Products and Services

Electric Vehicle and Battery Charging Solutions

Our flagship on-road product line consists of Blink charging stations, which are available for both residential and commercial applications including both Level 2 and DC Fast Charger systems that are connected through the Blink Network. In addition, ECOtality North America offers the Minit-Charger brand of charging systems for off-road industrial applications, including material handling operations and airport eGSE.

Blink Chargers

The Blink product family consists of a Level 2 wall-mount unit referred to as the Blink Residential Charger, a commercial stand-alone Level 2 charger, known as the Blink Level 2 Pedestal Charger and the Blink DC Fast Charger. Blink Level 2 chargers deliver a full charge in two to eight hours and the Blink DC Fast Charger provides a full charge in less than 30 minutes (depending on battery size). All Blink charging stations can be programmed to charge the car when electricity rates are the lowest, can be linked to participating utilities for monitoring and billing, and can be controlled remotely through smart phone and web applications.

   
Residential Chargers   Commercial Chargers   Industrial Chargers
Blink Level 2 – Wall Mount   Blink Level 2 Wall Mount   Minit-Charger – Fast Charge
     Blink Level 2 Pole Mount
     Blink Level 2 Pedestal
     Blink DC Fast Charger     

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Real-time communication capabilities and an internal meter are included in all Blink chargers to support energy usage data evaluation and Advanced Metering Infrastructure (“AMI”) interfaces that can allow for remote load control capabilities to enable automated or cloud-based demand response and energy management services. All Blink charging stations are fully interactive with color touch screens and are connected through the Blink Network, a cloud-based operating platform that provides virtual control and data about EVs, charging, and Blink charging stations. The Blink Network provides membership options that may feature exclusive benefits such as discounted charging fees, reservation capabilities, convenient payment methods, and enhanced functionality.

Residential Chargers.  Blink residential charging stations are safe to use in indoor or outdoor installations, at a consumer’s home, garage or carport, and are available in both hardwired and plug-in models. The sales channels for these chargers will be EV dealers, utilities and direct sales.
Commercial Level 2 Chargers.  Blink Commercial Level 2 pedestal charger’s design is convenient for commercial installations, and will be installed at locations where consumers normally travel—movie theaters, shopping malls, coffee shops, restaurants and retailers—and will charge an EV while consumers are going about their normal activities. The sales channels for these chargers will be direct sales by our national account team and ABB’s sales distribution channels.
Commercial DC Fast Charger.  Blink DC Fast Chargers feature a dual port design that utilizes the CHAdeMO standard for DC fast charging, which is currently used on most fast-charge-capable EVs worldwide. Two color touch-screen interfaces provide information on charge status, statistics and cost, convenient payment options and billing information, and connects to the Blink Network web portal for further information delivery. Businesses will be able to take advantage of advertising opportunities available through the Blink Network. The DC Fast Chargers feature an optional 42-inch LCD display, and Blink Network media content can be tailored to specific markets or broadcast nationally across Blink Network chargers.

Blink EVSE Specifications

         
Product   Input Voltage   Output Voltage   Input Current (Amps)   Charge Time
(24 kWh)
  Standards/Certifications
Level 2   208-240 VAC +/- 10%   208-240 VAC+/- 10%   12, 16, 24, 30   4-6 hours   SAE J1772
NEC article 625 EV
UL & ULc 2594
DC Fast Charger   208/380/400/480/575 VAC 3-Phase   200-450 VDC   200 @ 208 VAC
89 @ 480 VAC
74 @ 575 VAC
  <30 minutes   CHAdeMO
NEC article 625 EV
UL Certification (Pending)

Industrial Systems

ECOtality North America offers the Minit-Charger brand of fast-charging systems for off-road industrial applications, including material handling operations and airport eGSE. Eliminating the need for petroleum-based fuels commonly used in material handling vehicles, Minit-Charger is a clean system that emits no harmful emissions. The Minit-Charger system recharges batteries four- to six-times faster than conventional chargers, that enables battery life that is equal to or longer than those using traditional charging methods.

The Minit-Charger product line of battery fast-charging systems is Underwriters Laboratories (“UL”) certified. The Minit-Charger patented advanced algorithm technology provides a lighter, compact and more cost-effective fast-charging system. Our “FC” and “SC” Minit-Charger systems feature a high-frequency, single-connector charger designed for medium and heavy duty applications. These chargers feature a light and compact design that allows for the system to be pole or wall mounted in order to save valuable floor space and allows better cable management. The chargers also feature advanced data collection capabilities, including the patented Minit-Trak fleet and system data management system, which provides comprehensive performance evaluation of a battery’s state-of-health and state-of-charge and automatically adjusts its charging rates to increase and maximize battery life.

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Testing and Engineering Consulting Services

ECOtality North America has over two decades of experience in clean and renewable technologies. We have various standing contractual relationships as a test contractor and/or consulting engineer for projects with the DOE, several national research laboratories, national energy storage consortiums, and large electric utilities where we provide services in energy storage, monitoring, systems design and fabrication, product and vehicle testing, and product development. Currently, ECOtality North America holds the exclusive contract for DOE’s Advanced Vehicle Testing Activity program, which provides baseline performance testing and battery analysis and has conducted more than 10 million miles of vehicle testing on more than 200 advanced fuel vehicles.

EV Micro-Climate.  Utilizing our extensive EV experience, we have developed our EV Micro-Climate process, a detailed planning and consulting program designed for municipal planning organizations and utilities to provide a turnkey blueprint and action plan for the implementation of a comprehensive EV infrastructure system for a given market area. Our EV Micro-Climate program is an integrated turnkey consulting service that supports near- and long-term planning for the adoption of EVs. The implementation of the EV Micro-Climate process includes physical charge infrastructure installations at residential, commercial and public locations, as well as comprehensive regulatory, public awareness and marketing programs to support the various value chains associated with the EV Micro-Climate process.

This EV Micro-Climate process has been undertaken and refined in each major market of The EV Project and has been implemented for an entire country in Europe, as well as been instituted by many major utilities, including BC Hydro in British Columbia, and cities outside of The EV Project, such as Houston, Texas. In August 2010, we announced a partnership with the Clinton Climate Initiative to initiate the EV Micro-Climate process in many of the C40 cities to help jump-start each region in becoming EV ready and meeting the C40 EV goals. The C40 is a group of international cities committed to tackling climate change and reducing greenhouse gas emissions through a range of energy efficiency and clean energy programs.

Other Products

After Market Solar Solutions and Rechargeable Batteries.  One of our divisions, Innergy Power Corporation (“Innergy”), develops, manufactures, assembles and sells specialty solar products, advanced battery systems, and hydrogen and fuel cell systems, including the patented ThinLine sealed lead rechargeable batteries and fiberglass reinforced panel solar modules. Innergy’s product line is focused on solar energy products for off-grid power in a broad range of applications for emergency preparedness and recreation. Applications include logistics tracking, asset management systems, off-grid lighting, mobile communications, mobile computing, recreational vehicles, signaling devices and surveillance cameras.
Fuel Cell Products.  We also develop, manufacture, and sell a diverse and broad range of fuel cell products including fuel cell stacks, systems, component parts and educational materials. We are a leading marketplace for fuel cell stack, component, and hydrogen storage manufacturers to connect with consumers and are a source for hydrogen and fuel cell industry activity and direction. In addition to our primary e-commerce retail operations at www.fuelcellstore.com, we also offer consulting services for high schools, colleges and leading research institutes, and conduct workshops, conferences and corporate events to introduce and advance the public understanding of hydrogen and fuel cell technologies.

The EV Project and Supporting Grants

We have been awarded a variety of government reimbursable cost contracts, representing over $100 million in potential revenue to support the build out of EV charging infrastructure in the U.S. Under these contracts, we are serving as the sole project manager for The EV Project, which is sponsored by the DOE. The goal of The EV Project is to develop, implement and study techniques for optimizing the deployment of charging infrastructure to support widespread market acceptance of EVs in the U.S. and internationally, as well as identify commercially viable business models to create a sustainable EV charging industry. The EV Project officially launched on October 1, 2009, and included participation by Nissan and over 40 government, utility and industry partners. When infrastructure installation is completed in the first quarter of 2012, we

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believe The EV Project will represent the world’s largest EV infrastructure project as well as the largest network connecting the charging stations to the grid, EVs and commercial retailers.

[GRAPHIC MISSING]

Charging Infrastructure Locations

Through The EV Project, we are installing and managing approximately 14,000 of our flagship Blink branded EVSE across the U.S., to include 8,300 Level 2 residential, 5,000-6,000 Level 2 commercial, and 300-400 DC Fast Charger ports. This EVSE network is designed to support the initial roll out of over 5,700 Nissan LEAF and 2,600 Chevrolet Volt EVs across six U.S. states and the District of Columbia and encompassing 18 major metropolitan areas.

We believe that leading the world’s largest EV infrastructure project gives us unparalleled and distinct competitive advantages that will support our global business development initiatives. Operationally, The EV Project enables ECOtality to further develop and install smart charging technologies with leading edge technology, and serves as a platform to drive revenue opportunities through the Blink Network and our commercial relationships with national retailers and partners throughout the EV value chain. Through The EV Project we are also piloting a variety of EV charging business models aimed at supporting a sustainable non-subsidized EV charging industry.

Under The EV Project and related grants, we have started deploying residential Blink charging stations in the following major metropolitan areas during the first quarter of 2011: Phoenix (AZ), Tucson (AZ), Los Angeles (CA), San Diego (CA), San Francisco (CA), Dallas (TX), Fort Worth (TX), Houston (TX), Seattle (WA), Portland (OR), Eugene (OR), Salem (OR), Corvallis (OR), Nashville (TN), Knoxville (TN), Memphis (TN), Chattanooga (TN) and Washington, DC. We expect to install the first Blink Level 2 commercial charger funded by The EV Project in the second quarter of 2011 and the first DC Fast Charger in the third quarter of 2011. The EV Project, including data collection, is scheduled to be completed in mid-2013.

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Set forth in the table below is information regarding our government contracts related to The EV Project as well as other recently awarded grants.

     
Funding Agency   Contract Amount   Award Date   Scope of Work
DOE   $99.8 million (includes $13.4 million for Idaho National Labs netting $86.4 million to ECOtality)   September 2009   Support 4,700 Nissan LEAF vehicle owners in AZ, CA, OR, TN and WA
DOE   $15.0 million (includes $1.2 million for Idaho National Labs netting $13.8 million to ECOtality)   June 2010   Support an additional 1,000 Nissan LEAF and 2,600 Chevy Volt owners and include Los Angeles and Washington, D.C.
State of Tennessee   $2.5 million   February 2011   Expansion of Memphis into The EV Project
California Energy Commission   $8.0 million   August 2009   Support the deployment of a charging infrastructure and EVs in the San Diego region
Bay Area Air Quality Management District   $2.9 million   February 2011   Oversee the installation of 2,750 home charging stations and 30 DC fast charging stations throughout the Bay Area
AVTA – DOE   $10.5 million   June 2005   Advanced Vehicle Testing including battery management and fast charging systems
Victorian Electric Vehicle Trial   $0.8 million   November 2010   Deploy Blink residential and commercial chargers in the state of Victoria, Australia for testing and data collection

* As of December 31, 2010, ECOtality has recognized $6.0 million in revenue related to The EV Project.

Strategic Relationships

To support product development, manufacturing and deployment of our Blink Network, we have entered into partnerships with established companies, including the following:

ABB.  ABB is a global power and automation technology group, with operations in approximately 100 countries and 116,500 employees. In January 2011, we secured a $10 million equity investment from ABBTV, which is an affiliate of ABB. In conjunction with the investment, we entered into a North American manufacturing agreement with ABB that establishes a collaborative and strategic supplier relationship for ABB power electronics and component parts in North America. We will also work with ABB to develop charging technologies for EVs and through its smart grids industry segment initiative, ABB will contribute its expertise from several projects in Europe involving integration of EV charging solutions. In addition, we have entered into an agreement with ABB to utilize their sales distribution channels to offer our Blink charging stations as part of a complete EV solution to ABB’s network of North American commercial and utility customers.
Cisco Systems, Inc.  Cisco is a global leader in networking systems and solutions with operations in over 165 countries and over 72,000 employees. As part of early EV trials with consumers, we have partnered with Cisco to integrate our Blink residential charging station with Cisco’s Home Energy Controller, a touch-screen device for managing home energy. Through Cisco’s home energy dashboard, Blink customers can access information about their EVs and optimize their charging and energy usage. The home energy management system is designed to work either with or without

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two-way smart meters and the controller and Blink charger will communicate using Wi-Fi while data can be sent back to the utility using a home Internet connection.
Roush Enterprises.  Roush is a family of companies, which designs, engineers, and manufactures products for the specialty and niche vehicle, medical device, and consumer product markets. Roush is currently manufacturing Blink Level 2 residential and commercial chargers for ECOtality at its plant in Lavonia, Michigan.
Sprint Nextel Corporation.  Sprint is a wireless and wireline communications provider serving nearly 50 million customers at the end of 2010. We will utilize the Sprint Command Center, across our nationwide system of residential, commercial, and public charging stations to control Machine-to-Machine (M2M) provisioning, billing, device and service management, and to run the Blink Network.

Customers

Historically, our customer base consisted of established commercial, industrial, institutional, governmental, and utility sector consumers, including Fortune 500 companies, colleges and universities, international research institutes, major electric utilities, the DOE, the U.S. Department of Transportation, major industry research consortiums, regional government organizations, vehicle manufacturers and OEMs. Our customers use our products in commercial, residential, and industrial settings as well as OEM applications.

As the adoption of EVs increases and with the introduction of the Blink line of EV smart charging stations, our customer base is expanding and includes EV consumers, automotive OEMs, international retailers, property management firms, major utilities, traditional fuel providers and other commercial entities such as EVSE purchasers and/or hosts, including the following:

Best Buy Company, Inc.  Best Buy is a multinational retailer of technology and entertainment products and services. Best Buy has agreed to install 36 Blink Level 2 commercial chargers at 12 of its Western U.S. stores as a pilot project under The EV Project. We are working to expand this into a full retail distribution relationship.
BP plc.  BP is a global energy company with 22,400 fuel service stations. BP Products North America, Inc. will install Blink DC Fast Chargers at 45 BP and ARCO locations around The EV Project’s major pilot markets.
Cracker Barrel Old Country Store, Inc.  Cracker Barrel is a chain of “Old Country Stores,” each combining a retail store and a restaurant with 601 company-owned locations in 42 states. Cracker Barrel has agreed to install a mix of Blink Level 2 commercial chargers and DC Fast Chargers at 24 Cracker Barrel locations within The EV Project’s pilot markets.
Fred Meyer.  Fred Meyer, a division of the Kroger Co., is a food retail chain based in Portland, Oregon, that offers one-stop shopping at its 131 multi-department stores in four western states. Fred Meyer has agreed to install our Blink Level 2 commercial chargers at select stores within The EV Project regions in Oregon and Washington.
Macy’s, Inc.  Macy’s is one of the nation’s premier retailers operating approximately 810 department stores and furniture galleries in 45 states, the District of Columbia, Guam and Puerto Rico. Macy’s has agreed to install our Blink Level 2 commercial charger at store locations in the San Diego metropolitan area.

Our customer base for our industrial battery charging products for material handling and airport ground support applications includes distribution centers, manufacturing facilities, ports, and airports.

Government Policy, Regulation and Industry Standards

Government Policy

Several states in the U.S. along with Canada and various countries in Europe and Asia have adopted a variety of government subsidies to allow new renewable sources of energy and technologies to compete with conventional fossil fuel based sources. Government contracts for research and development are often the

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precursors to the acceptance of government incentives for new clean technologies. We closely monitor government policy, incentives, and regulations impacting renewable and clean tech energy. ECOtality North America has a large portfolio of contracts with DOE as well as state and local agencies that are committed to allocating funding to support EV and charging infrastructure.

Government Regulation and Industry Standards

The energy industry is highly regulated. ECOtality is currently participating in a regulatory proceeding by the California Public Utilities Commission (“CPUC”) pertaining to EVs and charging infrastructure. In July 2010, the CPUC concluded that the legislature did not intend it to regulate providers of electric vehicle charging services as public utilities. A decision on the second phase of the proceeding was drafted on March 15, 2011 to further address policies to overcome barriers to the widespread use of EVs and develop a policy approach that makes optimal use of their regulatory authority to achieve these goals. This draft has now entered the comment phase of the proceeding.

ECOtality is also participating in a regulatory proceeding in Oregon related to the investigation of rate structures for EVs. This proceeding will address the nature of regulation of third party service providers for EV charging services as well as other issues related to the deployment of charging infrastructure in Oregon. Combined responses to staff opening comments and the Commissioners’ bench request were submitted on February 10, 2011. A proposed decision in this proceeding is anticipated in May 2011.

ECOtality North America’s portfolio of battery-charging and fast-charging systems are subject to regulation under Article 625 of the 1999 National Electric Code (“NEC”), which is a model code adopted by the National Fire Protection Association, that governs, among other things, the installation of charging systems.

Additionally, standards are being devised by the Society of Automotive Engineers (“SAE”) for the connection and communications standards between battery charging systems and grid-connected vehicles. A number of employees of ECOtality North America occupy leadership positions on the relevant SAE committees overseeing standards for Level 2 EVSE and DC fast charging systems and communication protocols. We expect all of our EVSE to comply with the necessary current SAE standards and specifications.

Our Blink residential and commercial chargers have been certified by UL under UL Subject 2594, which is specific to EVSE, for both plug-in and hardwired models. In addition, our Blink residential charger is compliant with the Federal Communications Commission Federal Code of Regulation Part 15C, pertaining to radio and frequency emitting devices. Our Blink DC Fast Charger systems are pending certification by UL.

Our Blink chargers comply with NEMA 3R rating. NEMA 3R enclosures are constructed for either indoor or outdoor use to provide a degree of protection to personnel against incidental contact with the enclosed equipment; to provide a degree of protection against falling dirt, rain, sleet, and snow; and to remain undamaged by the external formation of ice on the enclosure.

Sales and Marketing

The ECOtality brand has five major focuses for Sales and Marketing: (i) the ECOtality corporate brand; (ii) the Blink line of charging stations for on-road vehicular use; (iii) the Minit-Chargerline of charging stations for airport and industrial applications; (iv) the ECOtality segments such as ECOtality Stores; and (v) the Consulting and Professional Services practice with solutions such as the EV Micro-Climate. Product marketing is handled on a segment level, with cross-marketing efforts to be a key element of the corporate marketing program. Corporate marketing and overall brand management, investor relations and group representation are handled out of our corporate headquarters in San Francisco, California. Support teams are in place in a number of U.S. cities including Seattle, Portland, Oakland, Los Angeles, San Diego, Phoenix, Nashville, and Dallas.

With the introduction of the Blink product line, a majority of the sales and marketing efforts are currently focused on promoting the Blink Network and Blink charging stations. Marketing materials and advertising campaigns for general consumers and commercial businesses will promote the consumer product line of Blink EVSE and network.

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Our ECOtality North America subsidiary markets its solutions and services through three primary business lines: On-Road; Industrial; and Consulting. The On-Road business line, which includes all Blink branded products, markets and sells both EV charging hardware and networked solutions to optimize EV participation and usage. Additionally, via its Professional Services practice, we provide valuable consulting in a variety of related segments to include EV Micro-Climate, long range planning and deployment for cities and utilities and others as well as battery and advanced vehicle testing. We are currently marketing residential Blink EVSE through The EV Project and in coordination with Nissan and Chevrolet dealerships and websites. Commercial EVSE is being sold directly to regional, super-regional and national businesses as well as through strategic partners, resellers and distributors, to include ABB. We anticipate both residential and commercial sales of Blink EVSE to occur through online activities, automotive dealerships and traditional automotive and electronic retail channels both domestically and internationally.

Our Industrial business line markets and sells Minit-Charger and charging infrastructure for electric heavy duty, airport and industrial-type equipment. We sell and market our Industrial equipment through online sources, trade shows, industry events and a nationwide distribution network, which is organized in three regional sales and marketing areas.

Research and Development

We spent $259,157 and $18,793 on research and development (“R&D”) in the fiscal years ended December 31, 2010 and 2009, respectively. We devoted a large percentage of our 2010 R&D expenditures to the creation of the Blink Level 2 Chargers, Blink DC Fast Chargers and supporting internal software platforms and network. This expenditure was accomplished mostly in house with some hardware and other features undertaken by supplier companies and was supported in large part through The EV Project. In 2011, we expect to continue to devote a large percentage of our R&D expenditures to continue EVSE hardware and software development. Future R&D expenses could increase as we continue to advance Blink systems. ECOtality also continues to invest in R&D of Minit-Chargers, introducing new models for airport eGSE and expanding our portfolio of industrial fast-charge equipment and software solutions.

Manufacturing

The Blink Level 2 charging stations are currently manufactured and assembled in the U.S. by Roush Manufacturing. Fabrication and distribution are contracted to other entities under ECOtality’s direction. Through our wholly owned subsidiary Portable Energy de Mexico S.A. de C.V., in Tijuana, Mexico, we manufacture solar and battery products. We also have a high-value assembly operation in Phoenix, Arizona. Additionally, we have manufacturing agreements with third parties in Canada and China.

Competition

We believe that the principal competitive factors in the markets for our products and services include product performance, features, acquisition cost, lifetime operating cost, including maintenance and support, ease of use, integration with existing equipment, quality, reliability, customer support, brand and reputation.

Electric vehicle infrastructure refers to companies that provide EVSE and services that support grid-connected vehicles. From a product standpoint, this primarily includes the physical charging system hardware and integrated software requirements. Companies that have entered this market include AeroVironment, Inc., Aker Wade Power Technologies LLC, Better Place, Bosch, Coulomb Technologies, Delta-Q Technologies, Eaton Corp., Elektromotive (UK), General Electric, Schneider Electric, and Siemens.

ECOtality North America Minit-Charger products are designed for material handling applications, airport ground support equipment and industrial EVs. We believe that the principal competitive factors in the markets for our battery fast charging products and services include product performance, features, acquisition cost, lifetime operating cost, including maintenance and support, ease of use, integration with existing equipment, quality, reliability, customer support, brand and reputation.

The primary direct competitors to the Minit-Charger systems are other fast-charge suppliers, including AeroVironment, Inc., Aker Wade Power Technologies LLC, C&D Technologies, Inc., and Power Designers, LLC. Some of the major industrial battery suppliers have begun to align themselves with fast-charge suppliers, creating a potentially more significant source of competition. In addition, ECOtality North America

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Minit-Charger products compete against the traditional method of battery changing. Competitors in this area include suppliers of battery charging equipment and infrastructure, designers of battery changing rooms, battery manufacturers and dealers who may experience reduced sales volume because the Minit-Charger fast-charge system reduces or eliminates the need for extra batteries.

Intellectual Property

Our success depends, in part, on our ability to maintain and protect our proprietary technology and to conduct our business without infringing on the proprietary rights of others. We rely primarily on a combination of patents, trademarks and trade secrets, as well as employee and third party confidentiality agreements, to safeguard our intellectual property. As of December 31, 2010, in the U.S. we held four provisional patent applications, one non-provisional patent application, one design patent, and 18 issued patents, which will expire at various times between 2011 and 2026. We also hold patents and patent applications in Canada, Japan, the United Kingdom, France, Germany, Italy, Australia, and at the European Patent Office. Our patent applications and any future patent applications, might not result in a patent being issued with the scope of the claims we seek, or at all, and any patents we may receive may be challenged, invalidated, or declared unenforceable. We continually assess appropriate occasions for seeking patent protection for those aspects of our technology, designs, methodologies and processes that we believe provide significant competitive advantages. Our patents and patent applications generally relate to our hydrogen, battery charging, and thin-cell battery technologies.

In May 2006, CalTech filed a provisional patent application on hydrogen technology being developed between ECOtality and the Jet Propulsion Laboratory (“JPL”). CalTech is the assignee of JPL’s patent and technology rights. On May 7, 2007, a non-provisional patent application was filed with CalTech as assignee and ECOtality, Inc. as exclusive licensee of the technology for a Method and System for Storing and Generating Hydrogen. On June 12, 2006, ECOtality entered into a License Agreement with CalTech which related to electric power cell technology developed at JPL. As partial consideration paid in connection with the License Agreement ECOtality is obligated to pay an annual maintenance fee of $50,000 to CalTech, beginning on June 12, 2009, continuing until the expiration, revocation, invalidation or unenforceability of the last exclusively licensed patent rights or improvement patent rights.

With respect to, among other things, proprietary know-how that is not patentable and processes for which patents are difficult to enforce, we rely on trade secret protection and confidentiality agreements to safeguard our interests. We believe that many elements of our products and manufacturing process involve proprietary know-how, technology, or data that are not covered by patents or patent applications, including technical processes, equipment designs, algorithms and procedures. We have taken security measures to protect these elements. Our research and development personnel have entered into confidentiality and proprietary information agreements with us. These agreements address intellectual property protection issues and require our employees to assign to us all of the inventions, designs and technologies they develop during the course of employment with us. We also require our customers and business partners to enter into confidentiality agreements before we disclose any sensitive aspects of our solar cells, technology, or business plans.

Employees

As of March 31, 2011, we had 122 employees, including 33 in research and development, 36 in sales and marketing, and 53 in general and administration positions. None of our employees are represented by labor unions or covered by a collective bargaining agreement other than our employees in our wholly owned subsidiary in Mexico. As we expand domestically and internationally, however, we may encounter employees who desire union representation. We believe that relations with our employees are good.

Company Information

We were incorporated in the State of Nevada in 1999 under the name Alchemy Enterprises, Ltd. to market biodegradable products. In November 2006, we changed our name to ECOtality, Inc. to better reflect our renewable energy strategy. Our primary operating segments consist of ECOtality North America, Innergy and ECOtality Stores (d.b.a. Fuel Cell Store). We acquired ECOtality Stores, Innergy and ECOtality North America in 2007. We have a wholly owned subsidiary in Mexico, Portable Energy de Mexico S.A. de C.V., that provides manufacturing and assembly service. We also have a wholly owned subsidiary in Australia,

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ECOtality Australia Pty Ltd., that markets and distributes our Blink and Minit-Charger equipment in Australia and Southeast Asia. Our executive offices are located at Four Embarcadero Center, Suite 3720, San Francisco, CA 94111, and our telephone number at that location is (415) 992-3000.

Properties

Our properties generally consist of office and manufacturing facilities to support our operations. Our facilities are summarized in the following table:

       
Segment   ST/Country   TYPE   Ownership   Approximate
Square Feet
ECOtality Corporate   AZ   Office   Owned   1,735
ECOtality Corporate   CA   Office   Leased   3,475
ECOtality Corporate   AZ   Office   Leased   4,441
ECOtality North America   AZ   Office   Leased   15,000
ECOtality North America   AZ   Office   Leased   2,350
ECOtality North America   AZ   Office   Leased   7,500
ECOtality North America   AZ   Field Office   Leased   3,650
ECOtality North America   TN   Field Office   Leased   1,300
ECOtality North America   OR   Field Office   Leased   1,078
ECOtality North America   WA   Field Office   Leased   350
ECOtality North America   WA   Field Office   Leased   1,067
ECOtality North America   CA   Field Office   Leased   959
ECOtality North America   CA   Field Office   Leased   1,173
ECOtality North America   TX   Field Office   Leased   962
Innergy   MEXICO   Mfg   Leased   19,000
Innergy   CA   Office/Whse   Leased   9,667
ECOtality Australia   AUSTRALIA   Office   Leased   1,636

On March 1, 2010, a lease for a new corporate office location for the Company went into effect. This lease is for a term of 68 months for 4,441 rentable square feet in Tempe, AZ. The first eight months of rent were abated and all tenant improvements were funded by the landlord, CH Realty III.

In July 2010, the Company subleased 3,475 square feet of office space in San Francisco, CA. This office now serves as the Company’s principal executive offices. This sublease expires February 28, 2012.

We own an office building that previously served as our headquarters and is located in Scottsdale, Arizona. This building was purchased on January 16, 2007 for an aggregate price of $575,615. A total of $288,115 had been paid as of December 31, 2010. The remaining balance of $287,500, net a tax credit of $156, at December 31, 2010 is structured as an interest-only loan, bears interest at a rate of 6.75% calculated annually, with monthly payments in the amount of $1,617. The entire principal balance of the loan is due on or before January 16, 2012. The loan is secured by a deed of trust on the office building.

Our lease terms range from month-to-month through to 2015, with all terminating on or before December 31, 2015.

It is our belief that we are adequately insured regarding our leased and owned properties.

Legal Proceedings

On October 28, 2010, we and our ECOtality North America subsidiary, as well as certain individuals, received subpoenas from the SEC, pursuant to a formal Private Order of Investigation, in connection with a fact-finding inquiry as to trading in shares of our common stock from the period between August 1, 2008 and August 31, 2009. The SEC has informed us, and the terms of the subpoenas confirm, that the fact-finding inquiry should not be construed as a determination that violations of law have occurred. At a meeting held on November 1, 2010, our Board of Directors delegated to the Audit Committee the responsibility and authority to respond to the SEC subpoenas. We are cooperating fully with the SEC.

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On January 31, 2011, SIPCO, LLC filed a patent infringement suit against ECOtality and nine other defendants in the U.S. District Court for the Eastern District of Texas. SIPCO alleged that The ECOtality’s The EV Project, Blink Network, and EV Charging Stations infringe three SIPCO patents relating to wireless communications networks. SIPCO sought monetary damages and injunctive relief. The suit was dismissed without prejudice on May 31, 2011.

On April 15, 2011, we received a letter from Coulomb Technologies Inc. (“Coulomb”) alleging that we promised to make Coulomb the exclusive supplier for all of our public charging stations and asserting that we infringed Coulomb’s trademarks by including references to Coulomb in one of our websites. On May 3, 2011, we responded to Coulomb by denying its allegations and requesting that it retract these claims. Coulomb has since reasserted its claims and threatened to initiate litigation if the dispute is not resolved. ECOtality believes all of Coulomb’s allegations to be unfounded and intends to defend its position vigorously, if necessary.

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MANAGEMENT

The following table sets forth certain information regarding the executive officers and directors of the Company as of June 1, 2011:

   
Name   Age   Position(s)
Jonathan R. Read     53       Chief Executive Officer, President and Director  
H. Ravi Brar     42       Chief Financial Officer  
Barry S. Baer     67       Secretary and Assistant Treasurer  
Donald Karner     59       Chief Executive Officer — ECOtality North America  
Kevin Morrow     48       Executive Vice President — ECOtality North America  
Carlton Johnson     50       Director  
Dave Kuzma     65       Director  
Daryl Magana     42       Director  
Enrique Santacana     58       Director  
Jack Smith     42       Director  
Andrew Tang     39       Director  

Directors are elected to serve until the next annual meeting of stockholders or until their successors are elected and qualified. Officers are elected by the Board of Directors and serve until their successors are appointed by the Board of Directors. Biographical information regarding each officer and director, including the public company boards on which each director currently serves on or has served on since January 1, 2006 and the attributes and skills that the Board determined qualify each director to serve on the Board, are set forth below.

Jonathan R. Read, Chief Executive Officer, President and Director

Mr. Read has been our Chief Executive Officer, President and a director since February 2006. From 1976 to 1978, Mr. Read was a Regional Manager for Specialty Restaurant Corporation, which operates theme dinner houses throughout California. From 1979 to 1984, he was Managing Director for a group of international companies based in Malaysia, Indonesia and Singapore ranging from hospitality interests to manufacturing and real estate. From 1984 until he sold the company in 1989, he was the Chairman and Chief Executive Officer of Shakey’s International, a worldwide restaurant chain with operations in the U.S., Southeast Asia, Japan, South America, Mexico, Europe and the Caribbean. In 1986, Mr. Read founded Park Plaza International (Park Inn International and Park Plaza Worldwide) and served as Chairman and CEO from 1986 to 2003. He expanded Park Plaza from four hotels into a global hotel group. Mr. Read sold Park Plaza to Carlson Hospitality and Golden Wall Investments in 2003 and was an investor for his own accounts until he joined us in February 2006. Mr. Read was originally selected to serve as a director due to his deep familiarity with our business, his extensive entrepreneurial background and many years of senior management experience in a variety of sectors.

H. Ravi Brar, Chief Financial Officer

H. Ravi Brar joined the Company as Chief Financial Officer commencing on November 19, 2010. Mr. Brar most recently served as Executive Vice President and Chief Financial Officer at Exigen Services, Inc., a global software development outsourcing company based in Russia and China, from September 2007 to June 2010. Prior to that, from 1999 to July 2007, he held various executive positions at Pac-West Telecomm, Inc., including Chief Financial Officer and Chief Operating Officer. Before Pac-West, Mr. Brar spent eight years with the Xerox Corporation, most recently as Director of Business Development for China, Russia and India from 1998 to 1999 and in other finance, sales and operational roles from 1991 to 1997. Mr. Brar holds a B.S. in Managerial Economics from the University of California, Davis and an MBA from the Katz Graduate School of Business at the University of Pittsburgh.

Barry S. Baer, Former CFO, Secretary and Assistant Treasurer

Colonel Barry S. Baer served us as our Chief Financial Officer from December 2006 to November 2010 and as a director from February 12, 2009 until January 13, 2011 when he resigned from the Board. Colonel Baer remains with the Company as Secretary and Assistant Treasurer. He was the CFO at Obsidian

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Enterprises from February 2003 to March 2004, and at a number of manufacturing corporations including Max Katz Bag Company (March 2004 to the present), Apex Industries (August 2002 to December 2003) and Pharmaceutical Corporation of America (March 1993 to August 2002). From March 1992 to March 1993, he worked with the City of Indianapolis as its Director of Public Works. Between June 2005 and December 2008, Colonel Baer served as a member of the State of Indiana Unemployment Insurance Board.

Colonel Baer was a member of the U.S. Army from 1965 to 1992, when he retired as a Colonel. He received his certification as a Certified Public Accountant while serving on active duty in the Army. Colonel Baer’s military service includes Commander of an armored cavalry troop in Vietnam; Director of the Accounting Systems for the U.S. Army; Commander of the 18th Finance Group during Operation Desert Shield/Desert Storm in the first Gulf War; and Deputy Chief of Staff for Resource Management for the Army Material Command.

Colonel Baer earned a B.S. in Accounting and an MBA from the University of Colorado. He devotes approximately 40% of his time to other business interests.

Donald Karner, Chief Executive Officer — ECOtality North America

Donald Karner has been Chief Executive Officer of our ECOtality North America subsidiary since 1996. From 1988 to 1989, Mr. Karner served as the Chief Nuclear Officer for Arizona Public Service Company during the construction and commissioning of the 3800 MWe Palo Verde Nuclear Generating Station. During this period, Mr. Karner directed a staff of 3,000 and interfaced with and provided testimony for the multiple plant owners, the Nuclear Regulatory Commission, various State regulatory commissions and the financial community regarding plant matters. Mr. Karner earned a B.S. in Electrical Engineering from Arizona State University in 1973 and an M.S. in Nuclear Engineering from the University of Arizona in 1974.

Kevin Morrow, Executive Vice President — ECOtality North America

Kevin Morrow has been Executive Vice President of our ECOtality North America subsidiary since September 1996. From January 1987 to September 1996, Mr. Morrow worked for the Salt River Project (“SRP”) in Phoenix, Arizona. While at SRP, Mr. Morrow was responsible for overseeing their Electric Vehicle Program which included evaluating electric utility infrastructure impacts, evaluating and testing a fleet of electric vehicles utilizing fast charging methods and regular overnight charging, and managing SRP’s participation in the General Motors’ PrEView program conducted in Phoenix, Arizona that was the precursor to the market introduction of the GM EV1 electric vehicle. Mr. Morrow is a member of the SAE AGE-2 Air Cargo & Aircraft Ground Equipment & Systems Committee, the Electric Power Research Institute Non-Road Advisory Committee and was a former Steering Committee Member of the National Infrastructure Working Council. Mr. Morrow earned a B.S. in Electrical Engineering from Arizona State University.

Carlton Johnson, Director

Mr. Johnson has been a director since October 2009. Mr. Johnsonhas been in-house Legal Counsel of Roswell Capital since April 1996. His responsibilities include general corporate, securities law, business litigation and corporate governance. Mr. Johnson has been a member of the Alabama Bar since 1986, the Florida Bar since 1988, and the Georgia Bar since 1997. From 1993 to 1996 he served on the Florida Bar Young Lawyers Division Board of Governors. Mr. Johnson earned a B.A. in History/Political Science, with high honors, at Auburn University in 1982 and a J.D. from Samford University — Cumberland School of Law, with high honors in 1986. He has served on the Board of Directors for Peregrine Pharmaceuticals Inc. since 1999. He is the Chair of the Audit Committee and has served in various positions for Peregrine including assisting in business development and licensing, financing and general corporate governance. Since 2001, Mr. Johnson has also served on the Board of Directors of Patriot Scientific, Inc., where he is Chair of Patriot’s Compensation Committee and serves on the Audit Committee and the Executive Committee. Mr. Johnson was selected to serve as a director due to his extensive experience in law, finance and investment banking, which allows him to contribute broad legal, financial and strategic planning expertise to the Company.

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Daryl Magana, Director

Mr. Magana has been a director since December 2009. Mr. Magana is a Partner at Cybernaut Capital Management, a private equity firm with a focus on the China market. Mr. Magana joined Cybernaut in February of 2006 as Partner and Head of Global Operations. In 2002, Mr. Magana founded and was Chairman and CEO of the China based consulting and technology firm SRS2. In 1997, Mr. Magana founded Bidcom, one of the first application service providers. BidCom was recognized by Fortune magazine as one of its Top Ten Technology Companies in 1999. Mr. Magana is a respected technology expert and innovative web-pioneer featured in numerous conferences, major business publications, television and radio broadcasts and has served as guest lecturer at several universities including Harvard and Stanford. Mr. Magana attended the University of San Francisco. Mr. Magana was selected to serve as a director due primarily to his global experience in finance and investment banking, which allows him to contribute broad financial and strategic planning expertise, particularly with respect to international operations.

Jack Smith, Director

Mr. Smith has been a director since December 2009. Mr. Jack Smith invented and co-founded Hotmail and served as its Chief Technology Officer prior to it being acquired by Microsoft in 1997. After Hotmail’s acquisition, Mr. Smith focused on advanced infrastructure design as a general manager at Microsoft. Mr. Smith next served as co-founder and CEO of Akamba Corporation where he invented and marketed the first Web server accelerator card that boosted server performance by 300 percent. From 2001 until 2007, Mr. Smith seed funded, advised, and/or directed early stage tech startup companies. One such company was Ironport Systems, into which he invested and where he served on its board for seven years, prior to its acquisition by Cisco. Mr. Smith was named CEO of Proximex Corporation in 2007 and has successfully developed Proximex’s leadership margin in the physical security information management market. In December 2008, Mr. Smith co-founded Valley Inception, LLC which makes seed investments in early stage companies and provides marketing, public relations, and project management services in exchange for equity. His earlier background includes semiconductor design as an engineer and various technical positions at Apple Computer and FirePower Systems, a subsidiary of Canon Computer Systems. Mr. Smith was selected to serve as a director due to his extensive entrepreneurial background, his years of experience growing early stage technology companies and his experience as a public corporation director.

Dave Kuzma, Director

Mr. Kuzma has been a director since December 2009. Prior to retirement, Mr. Kuzma was President of Sempra Energy Resources and Chief Financial Officer/Treasurer of three Fortune 500 companies. Sempra is a diversified energy company involved in electric generation, oil and gas drilling, pipelines and gas processing. Prior to Sempra Energy, Mr. Kuzma was Chief Financial Officer and treasurer of Enova Corporation, which is the parent company of San Diego Gas & Electric (SDG&E) and several other U.S.-based subsidiaries, for which he also served as CFO/Treasurer. He also served as the Chief Financial Officer and Senior Vice President at Florida Progress Corporation. Mr. Kuzma began his career as an auditor for Price Waterhouse, after which he joined Consolidated Natural Gas Company of Pittsburgh. There he held the positions of Manager of Finance, Director of Internal Auditing, Assistant Treasurer, Finance Treasurer and Vice President and General Manager during his 20-year career with the company. Mr. Kuzma is a Certified Public Accountant. Mr. Kuzma was selected to serve as a director primarily due to his substantial financial and accounting experience, as well as his experience serving on the boards of other corporations.

Enrique Santacana, Director

Mr. Santacana has been a director since January 13, 2011. Mr. Santacana is currently the President and Chief Executive Officer of ABB Inc. and the Region Manager of ABB North America. Mr. Santacana joined ABB in 1977. Since then he has held a variety of management positions including Region Division Manager for Power Products in North America. Prior to that, he was Vice President and General Manager of the Medium Voltage Products business unit of ABB’s Power Technologies division in North America. A licensed professional engineer in North Carolina, Mr. Santacana is a member of the Institute of Electrical and Electronic Engineers and the National Society of Professional Engineers. Mr. Santacana earned a B.S. in Electrical Engineering from the University of Puerto Rico; an M.S. in Electric Power Engineering from Rensselaer Polytechnic Institute; and an MBA from Duke University. Mr. Santacana sits on the Board of

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Governors of the National Electrical Manufacturers Association where he is a member of the Executive Committee, and is also a member of the Business Roundtable where is a Vice Chair of their Sustainable Growth Initiative. He has also served on the U.S. Department of Energy’s Electricity Advisory Committee where he helped the Department of Energy meet requirements of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. Mr. Santacana was selected to serve as a director primarily based on his experience in the energy industry and his familiarity with the Department of Energy.

Andrew Tang, Director

Mr. Tang has been a director since January 13, 2011. Mr. Tang currently serves as Managing Director of ABBTV. Mr. Tang has over ten years of venture capital and investment banking experience. Prior to joining ABB, Mr. Tang was a Managing Director at DFJ DragonFund from 2006 to 2010. He was also a partner at Infineon Ventures, and has worked at Infineon Technologies and Credit Suisse First Boston. Mr. Tang earned a B.S. in Electrical Engineering from the University of Texas at Austin; an M.S. in Electrical Engineering from Massachusetts Institute of Technology; and an MBA from The Wharton School, University of Pennsylvania. Mr. Tang holds a U.S. patent and has been published in numerous technical journals in the advance materials field. Mr. Tang was selected to serve as a Director primarily based on his electrical engineering expertise and his years of experience in venture capital and investment banking, which allows him to contribute broad financial and strategic planning expertise.

Agreements for Board Representation

In connection with an exchange agreement dated October 31, 2009, we entered into a board representative agreement with BridgePointe Master Fund Ltd., Shenzhen Goch Investment Ltd. and Cybernaut Investments pursuant to which we granted each of those three investors the right to appoint one representative to our Board of Directors for 24 months. Pursuant to this agreement, Carlton Johnson was appointed as the investor nominee of BridgePointe Master Fund and Daryl Magana was appointed as the investor nominee of Cybernaut Investments. Jack Smith was appointed as the investor nominee of Shenzhen Goch Investment Ltd.

In connection with a Stock Purchase Agreement dated January 10, 2011, we granted ABBTV the right, initially, to nominate two directors to be elected to our Board of Directors. If, at any time after the closing, ABBTV ceases to beneficially own at least 15% (but continues to own at least 8%) of our issued and outstanding common stock, ABBTV will have the right to nominate only one director. If, at any time after the closing, ABBTV ceases to beneficially own at least 8% of our issued and outstanding common stock, ABBTV will not have a right to nominate any directors. ABBTV’s nominees, Mr. Santacana and Mr. Tang, were appointed to the Board in January 2011.

Role of the Board

The board has responsibility for establishing broad corporate policies and for the overall performance and direction of the Company, but is not involved in day-to-day operations. Members of the board keep informed of the Company’s business by participating in board and committee meetings, by reviewing analyses and reports sent to them regularly by management, and through discussions with the Company’s executive officers.

Family Relationships

There are no family relationships between any director or executive officer.

Board Committees and Independence

Audit Committee

Our Audit Committee currently consists of David Kuzma (Chair), Carlton Johnson and Daryl Magana. Our Board of Directors has determined that all of the members are “independent” as that term is defined under applicable SEC rules and under the current listing standards of the Nasdaq Capital Market. Mr. Kuzma is our audit committee financial expert.

Our Audit Committee’s responsibilities include: (i) reviewing the independence, qualifications, services, fees, and performance of the independent auditors, (ii) appointing, replacing and discharging the independent auditor, (iii) pre-approving the professional services provided by the independent auditor, (iv) reviewing the

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scope of the annual audit and reports and recommendations submitted by the independent auditor, and (v) reviewing our financial reporting and accounting policies, including any significant changes, with management and the independent auditor. Our Audit Committee also prepares the Audit Committee report that is required pursuant to the rules of the SEC.

Compensation Committee

Our Compensation Committee currently consists of David Kuzma (Chair), Andrew Tang and Daryl Magana. Our Board of Directors has determined that all of the members are “independent” under the current listing standards of the Nasdaq Capital Market.

Our Compensation Committee has responsibility for assisting the Board of Directors in, among other things, evaluating and making recommendations regarding the compensation of our executive officers and directors, assuring that the executive officers are compensated effectively in a manner consistent with our stated compensation strategy, producing an annual report on executive compensation in accordance with the rules and regulations promulgated by the SEC, periodically evaluating the terms and administration of our incentive plans and benefit programs and monitoring compliance with the legal prohibition on loans to our directors and executive officers.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee (“Nominating Committee”) currently consists of Carlton Johnson (Chair), David Kuzma and Daryl Magana. Our Board of Directors has determined that all of the members are “independent” under the current listing standards of the Nasdaq Capital Market.

The responsibilities of the Nominating Committee include: (i) recommending to the Board of Directors individuals qualified to serve as directors of the Company and on committees of the Board of Directors; (ii) advising the Board of Directors with respect to the composition, procedures and committees of the Board of Directors; (iii) reviewing the charters of each committee at least once every two years and develop appropriate recommendations for the Board of Directors; and (iv) considering any other corporate governance issues that may arise from time to time, and developing appropriate recommendations for the Board of Directors.

Independence

Under the current listing standards of the Nasdaq Capital Market, a majority of our Board of Directors must consist of independent directors. The Board of Directors has determined that each of the following directors is “independent” as that term is defined under applicable SEC rules and under the current listing standards of the Nasdaq Capital Market: Carlton Johnson, Dave Kuzma, Daryl Magana, Jack Smith, Enrique Santacana and Andrew Tang. In January 2011, Slade Mead resigned as a member of the Board and the Compensation Committee; Mr. Mead was “independent” as that term is defined under applicable SEC rules and under the current listing standards of the Nasdaq Capital Market. The Board of Directors has also determined that each of the members of our Audit Committee, Compensation Committee and Nominating Committee is an independent director under applicable SEC rules and under the current listing standards of the Nasdaq Capital Market.

Involvement in Certain Material Legal Proceedings

On October 28, 2010, we and our ECOtality North America subsidiary, as well as certain individuals, received subpoenas from the SEC pursuant to a formal Private Order of Investigation, in connection with a fact-finding inquiry as to trading in shares of our common stock from the period between August 1, 2008 and August 31, 2009. The SEC has informed us, and the terms of the subpoenas confirm, that the fact-finding inquiry should not be construed as a determination that violations of law have occurred. At a meeting held on November 1, 2010, our Board of Directors delegated to the Audit Committee the responsibility and authority to respond to the SEC subpoenas. We are cooperating fully with the SEC.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth, for the fiscal years ended December 31, 2010 and 2009, the cash compensation paid by the Company, as well as certain other compensation paid with respect to those years, to the Chief Executive Officer, the Chief Financial Officer, and to the extent applicable, each of the two other most highly compensated executive officers of the Company in all capacities in which they served. These persons are referred to as our “named executive officers” in this prospectus.

Summary Compensation Table

                 
                 
Name and Principal
Position
  Year   Salary
($)
  Bonus
($)
  Stock
Awards
($)(10)
  Option
Awards
($)(10)
  Non-Equity
Incentive Plan
Compensation
  Change in
Pension Value and
Nonqualified
Deferred
Compensation
Earnings
($)
  All Other
Compensation
($)
  Total
($)
Jonathan R. Read
CEO and President
    2010       320,295                   579,930 (8)                        900,225