Exhibit 99.3

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

Monthly Operating Report

For the Period December 1, 2012 through December 31, 2012

I declare under penalty of perjury (28 U.S.C. Section 1746) that the information contained in this monthly operating report (including attached schedules) is true and correct to the best of my knowledge, information and belief.

Notes:

(1)         The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors’ federal tax identification numbers are: A123 Systems, Inc., (3876); A123 Securities Corporation (5388); and Grid Storage Holdings, LLC (N/A). The above captioned Debtors’ mailing address is c/o A123 Systems, Inc, 200 West Street, Waltham, MA 02451

The information contained herein is provided to fulfill the requirements of the Office of the United States Trustee. The financial statements provided here include consolidated results for A123 Systems, Inc (the “Company”) as the Company has several non-debtor subsidiaries.  All information contained herein is unaudited and subject to future adjustment.  The Company maintains its books and records on a business unit reporting level and those units do not in all cases correspond to legal entities. Certain assumptions have been made as noted herein.  In addition, the Company maintains certain liabilities on its balance sheet (such as benefits and tax related liabilities) that may relate to one or more of the Company’s subsidiaries and no conclusion as to the legal obligation is made by the presentation herein.

General Notes

Condensed Combined Debtor-in-Possession Financial Statements — The condensed combined financial statements and supplemental information contained herein are unaudited, preliminary, and may not comply with generally accepted accounting principles in the United States of America (“U.S. GAAP”) in all material respects. In addition, the financial statements and supplemental information contained herein represent the condensed combined financial information for Debtors only. Non-debtor subsidiaries are not included in the condensed combined income statement or condensed combined balance sheet.

American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”), which is applicable to companies in chapter 11, generally does not change the manner in which financial statements are prepared. It does require, however, that the financial statements for periods subsequent to the filing of the chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. The Debtors’ condensed combined financial statements contained herein have been prepared in accordance with the guidance in SOP 90-7. The unaudited condensed combined financial statements have been derived from the books and records of the Debtors. This information, however, has not been subject to procedures that would typically be applied to financial information presented in accordance with U.S. GAAP, and upon the application of such procedures, the Debtors believe that the financial information could be subject to changes, and these changes could be material. The information furnished in this report includes primarily normal recurring adjustments, but does not include all of the adjustments that would typically be made in accordance with U.S. GAAP.

The results of operations contained herein are not necessarily indicative of results which may be expected from any other period or for the full year and may not necessarily reflect the combined results of operations, financial position, and cash flows of the Debtors in the future.

Intercompany Transactions — Receivables and payables between the Debtors have been eliminated; however, intercompany transactions between the Debtors and non-debtor affiliates have not been eliminated in the financial statements contained herein. No conclusion as to the legal obligation related to these intercompany transactions is made by the presentation herein.

Liabilities Subject to Compromise — As a result of the chapter 11 filings, the payment of prepetition indebtedness is subject to compromise or other treatment under a plan of reorganization. The determination of how liabilities will ultimately be settled and treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. SOP 90-7 requires prepetition liabilities that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. The amounts currently classified as liabilities subject to compromise are preliminary and may be subject to future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

Monthly Operating Report

December 1, 2012 through December 31, 2012

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MOR-1

Debtors Combined Schedule of Operating Cash Flow

For the Period December 1, 2012 through December 31, 2012

(USD 000s)

Notes:

(1)         Cash balances do not tie exactly to balance sheet as these do not include unavailable funds, outstanding checks, de-minimis bank account balances and other timing related differences.

(2)         Disbursements reflect when the relevant disbursement accounts are funded via check or wire rather than when clearing the bank.

(3)         Payment on account of invoices related to material procured from non-debtor subsidiaries.

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MOR-1a

Schedule of Disbursements by Legal Entity

For the Period December 1, 2012 through December 31, 2012

(USD 000s)

Notes:

(1)         Disbursements includes payments to third party vendors, suppliers, employees, professionals, interest, disbursements in accordance with various 1st day motions and transfers of cash from the Debtors’ to the Non-Debtors all in accordance with the Approved Budget, as defined in DIP Loan Agreement.

4

MOR-1b
Schedule of Professional Fees and Expenses Paid
For the Period December 1, 2012 through December 31, 2012

5

Debtors Statement with respect to Bank Account Reconciliations, Bank Statements

and Cash Disbursements Journal
For the Period December 1, 2012 through December 31, 2012

Bank Account Reconciliations & Cash Disbursements Journals

The Debtors affirm that bank reconciliations are prepared for all open and active bank accounts on a monthly basis.  The Debtors affirm that within its financial accounting systems, check registers and/or disbursements journals are maintained for each disbursement account.

Bank statements

The Debtors affirm that bank statements for all open and active bank accounts are retained by the Debtors.

Closed Bank Accounts

The Debtors affirm that the bank account(s) were closed during the current reporting period.

·                  None

Opened Bank Accounts

The Debtors affirm that the bank account(s) were opened during the current reporting period.

·                  None

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MOR-2

Debtors Condensed Combined Statements of Operations

For the Period October 16, 2012 through December 31, 2012, and

December 1, 2012 through December 31, 2012

(USD 000s -Unaudited)

See Notes to Debtors Condensed Combined Statements of Operations on the following pages:

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MOR-2

Notes to Debtors Condensed Combined Statements of Operations
For the Period October 16, 2012 through December 31, 2012, and
December 1, 2012 through December 31, 2012
(USD 000s -Unaudited)

1.   Interest expense is comprised of the following:

Note that interest on unsecured debt will only be allowed in the event the ultimate proceeds from asset sales any other estate recoveries exceeds the amount of total unsecured debt and all other secured and administrative claims are paid in full.

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MOR-2

Notes to Debtors Condensed Combined Statements of Operations (con’t)
For the Period October 16, 2012 through December 31, 2012, and
December 1, 2012 through December 31, 2012
(USD 000s -Unaudited)

2.   The periodic mark-to-market adjustments for derivative liabilities for the reporting period are comprised of the following:

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MOR-3
Debtors Condensed Combined Balance Sheets

As of the Petition Date and December 31, 2012
(USD 000s- Unaudited)

See Notes to Debtors Condensed Combined Balance Sheets on the following page

10

MOR-3
Notes to Debtors Condensed Combined Balance Sheets

As of the Petition Date and December 31, 2012
(USD 000s - Unaudited)

1.              Debt is comprised of the following:

2.              Liabilities subject to compromise consist of the following:

3.              The Company updated its investment in Subsidiaries at 10/15/2012 that resulted in a reduction of $11,948 with a corresponding change to Shareholders Equity.

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Declaration Regarding the Status of Post Petition Taxes of the Debtors

As of December 31, 2012

COMMONWEALTH OF MASSACHUSETTS,

MIDDLESEX COUNTY

Richard E. Johnson hereby declares and states:

1. I am Chief Accounting Officer & Controller for A123 Systems, Inc., a corporation organized under the laws of the State of Delaware and the Debtor in the above-captioned chapter 11 cases (the “Debtors”).  I am familiar with the Debtors’ day-to-day operations, business affairs and books and records.

2. All statements in this Declaration are based on my personal knowledge, my review of the relevant documents, my discussions with other employees of the Debtors, or my opinion based upon my experience and knowledge of the Debtors’ operations and financial condition. If I were called upon to testify, I could and would testify to each of the facts set forth herein based on such personal knowledge, review of documents or opinion. I am authorized to submit this Declaration on behalf of the Debtors.

3. To the best of my knowledge, the Debtors have filed all necessary federal, state and local tax returns and made all required post petition tax payments in connection therewith on a timely basis or have promptly remediated any late filings or payments that may have occurred due to unintentional oversights. (1)

(1) The Debtors use ADP for the remittance of all payroll taxes.

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MOR-4

Combined Debtors Summary of Unpaid Post Petition Accounts Payable

December 31, 2012

(USD 000s - Unaudited)

Notes:

(1)         Days since date of invoice.

(2)         Represents goods/services received by the Debtors’ for which an invoice has not yet been received or entered into the Debtors’ financial accounting system.

13

MOR-5

Combined Debtors Accounts Receivable and Aging

December 31, 2012

(USD 000s - Unaudited)

14

MOR-6
Debtor Questionnaire
For the Period January 1, 2012 through October 31, 2012

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