10-Q 1 f10q0313_carcharging.htm QUARTERLY REPORT f10q0313_carcharging.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
(Mark One) 
x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2013
or
 
o      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
  For the transition period from ______ to  ______.
 
Commission File Number: 33-1155965
 
CAR CHARGING GROUP, INC.

 (Exact name of registrant as specified in charter)
 
Nevada
 
  03-0608147
(State or other jurisdiction of incorporation or organization)
 
(I.R.S Employee Identification No.)

1691 Michigan Avenue, Sixth Floor
Miami Beach, FL  33139

 (Address of principal executive offices) (Zip Code)
 
(305) 521-0200

 (Registrant’s telephone number, including area code)
  
N/A

 (Former name or former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” 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 smaller reporting company)
 Smaller Reporting Company x
   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
 
As of May 17, 2013: 51,108,698 shares of common stock, $0.001 par value were issued and outstanding.
 
 
 

 
 
CAR CHARGING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
FORM 10-Q
March 31, 2013
 
INDEX
 
PART I - FINANCIAL INFORMATION
 
Item 1.
Financial Statements  
1
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations  
2
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
7
Item 4.
Control and Procedures
7
 
PART II-- OTHER INFORMATION
 
     
 Item 1.
Legal Proceedings
8
 Item 1A.
Risk Factors
8
 Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
8
 Item 3.
Defaults Upon Senior Securities
10
 Item 4.
Mine Safety Disclosures
10
 Item 5.
Other Information
10
 Item 6.
Exhibits
10
   
 
SIGNATURES
11
 
 
 

 
 
PART I- FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
CAR CHARGING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
March 31, 2013
 
Index to Financial Statements
 
FINANCIAL STATEMENTS
Page #
   
Condensed Consolidated Balance Sheets as of March 31, 2013 (Unaudited) and December 31, 2012
F-1
   
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012 and for the Period from September 3, 2009 (Inception) through March 31, 2013 (Unaudited)
F-2
   
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Period from September 3, 2009 (Inception) through March 31, 2013 (Unaudited)
F-3
   
Condensed Consolidated Statements of Cash flows for the Three Months Ended March 31, 2013 and 2012 and for the Period from September 3, 2009 (Inception) through March 31, 2013 (Unaudited)
F-4
   
Notes to the Condensed Consolidated Financial Statements (Unaudited)
F-5
 
 
1

 
 
CAR CHARGING GROUP, INC.
(A Development Stage Company)
Condensed Consolidated Balance Sheets
 
   
MARCH 31,
   
DECEMBER 31,
 
   
2013
   
2012
 
   
(UNAUDITED)
       
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
 
$
1,020,189
   
$
13,416
 
Advanced commissions
   
319,250
     
300,750
 
Prepaid expenses and other current assets
   
792,091
     
357,312
 
Total current assets
   
2,131,530
     
671,478
 
                 
FIXED ASSETS
               
EV charging stations, net of accumulated depreciation of $614,579 and $363,918, respectively
   
2,181,431
     
960,234
 
Automobiles, net of accumulated depreciation of $21,027 and $15,292 respectively
   
93,666,
     
99,400
 
Office and computer equipment, net of accumulated depreciation of $50,399 and $26,604, respectively
   
45,746
     
36,717
 
Total fixed assets, net
   
2,320,843
     
1,096,351
 
                 
DEPOSITS
   
42,265
     
42,265
 
                 
INTANGIBLE ASSETS
   
1,460,094
     
-
 
                 
GOODWILL
   
1,271,871
     
-
 
                 
OTHER ASSETS
   
439,580
     
232,727
 
                 
TOTAL ASSETS
 
$
7,666,183
   
$
2,042,821
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
 
$
1,237,720
   
$
547,874
 
Accrued interest- related party
   
-
     
5
 
Convertible note payable-related party, net of discount of $0 and $4,918
   
-
     
82
 
Convertible note, net of discount of $8,791 and $168,567 respectively
   
141,209 
     
 122,433
 
Warrants payable
   
135,000
      -  
Current portion of deferred revenue
   
85,236
     
19,996
 
Current portion of deferred rent
   
10,647
     
9,731
 
Current portion of note payable
   
483,402
     
12,105
 
Total current liabilities
   
2,093,214
     
712,226
 
                 
DEFERRED REVENUE
   
747,038
     
34,747
 
                 
DEFERRED RENT
   
17,630
     
20,445
 
                 
NOTE PAYABLE
   
41,717
     
44,836
 
                 
TOTAL LIABILITIES
   
2,899,599
     
812,254
 
                 
STOCKHOLDERS' EQUITY
               
                 
Series A Convertible Preferred Stock,  $0.001 par value; 10,000,000 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively
   
10,000
     
10,000
 
                 
Series B Convertible Preferred Stock,  $0.001 par value; 1,000,000  issued and outstanding at March 31, 2013 and December 31, 2012, respectively
   
1,000
     
1,000
 
                 
Common Stock, 500,000,000 shares authorized at $0.001 par value; 49,419,424 and 42,434,705 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively
   
49,419
     
42,435
 
Additional paid-in capital
   
25,869,653
     
20,117,559
 
Deficit accumulated during development stage
   
(21,163,488
)
   
(18,940,427
)
TOTAL STOCKHOLDERS' EQUITY
   
4,766,584
     
1,230,567
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
7,666,183
   
$
2,042,821
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
F-1

 
 
CAR CHARGING GROUP, INC
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(UNAUDITED)
 
               
For the Period
 
               
From
 
   
For the Three
   
For the Three
   
September 3, 2009
 
   
Months Ended
   
Months Ended
   
(Inception) to
 
   
March 31, 2013
   
March 31, 2012
   
March 31, 2013
 
Revenues
                 
Service fees
 
$
10,576
   
$
2,605
   
$
30,118
 
Grant revenue
   
4,999
     
-
     
10,594
 
Sales
   
-
     
-
     
295,216
 
TOTAL REVENUE
   
15,575
     
2,605
     
335,928
 
                         
Costs
                       
Cost of services
   
4,409
     
408
     
10,662
 
Cost of sales
   
-
     
-
     
254,886
 
TOTAL COST OF REVENUE
   
4,409
     
408
     
265,548
 
                         
Gross profit (loss)
   
11,166
     
2,197
     
70,380
 
                         
Operating expenses
                       
Compensation
   
1,018,053
     
528,779
     
12,241,806
 
Other operating expenses
   
132,850
     
124,808
     
1,411,526
 
General and administrative
   
860,525
     
881,383
     
6,914,130
 
TOTAL OPERATING EXPENSES
   
2,011,428
     
1,534,970
     
20,567,462
 
                         
Loss from operations
   
(2,000,262
)
   
(1,532,773
)
   
(20,497,082
)
                         
Other income (expense)
                       
Interest expense, net
   
(10,250
)
   
(33
)
   
(74,248
)
Loss on exchange of warrants for common stock
   
-
     
-
     
(485,000
)
Amortization of discount on convertible debt
   
(117,992)
             
(257,818)
 
Loss on settlement of accounts payable for common stock
   
(47,856)
             
(47,856)
 
Loss on payment convertible notes payable
   
(46,701)
             
(46,701)
 
Gain on change in fair value of derivative liability
   
-
     
-
     
245,217
 
Total other income (loss)
   
(222,799
)
   
(33)
     
(666,406
)
                         
Income (loss) before income taxes
   
(2,223,061
)
   
(1,532,806)
     
(21,163,488
)
                         
Income tax provision
   
-
     
-
     
-
 
                         
Net income (loss)
 
$
(2,223,061
)
 
$
(1,532,806)
   
$
(21,163,488
)
                         
Net loss per share - basic and diluted
 
$
(0.05
)
 
$
(0.04)
         
Weighted average number of common shares outstanding – basic & diluted
   
45,575,562
     
38,245,679
         
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
F-2

 
CAR CHARGING GROUP, INC.
(A Development Stage Company)
Condensed Consolidated Statements of Stockholders' Equity (Deficit)
 
                                         
Deficit Accumulated
         
Total
 
   
Preferred
- A
   
Preferred
-A
 
 Preferred
-B
   
 Preferred
-B
 
Common
   
Common
   
Additional
Paid-in
   
during the Development
   
Stock Subscriptions
   
Stockholders
Equity
 
   
Shares
   
Amount
 
 Shares
   
 Amount
 
Shares
   
Amount
   
Capital
   
Stage
   
Receivable
   
(Deficit)
 
                                                         
Balance at September 3, 2009 (Inception)
   
-
   
$
-
 
  -
   
  -
 
$
1,000,000
   
$
50,000
   
$
(50,000
)
 
$
-
   
$
-
   
$
-
 
                                                                         
Reverse acquisition adjustment
   
10,000,000
     
10,000
             
395,150
     
19,758
     
(70,515
)
                   
(40,757
)
                                                                         
Sale of common (net of derivative liability of warrants $586,535)
                           
61,333
     
3,067
     
295,398
                     
298,465
 
                                                                         
Effect of 1:50 reverse split
                                   
(71,369
)
   
71,369
                     
-
 
                                                                         
Net loss
                                                   
(6,801,183
)
               
                                                                         
Balance at December 31, 2009
   
10,000,000
   
$
10,000
 
  -
   
  -
 
$
1,456,483
   
$
1,456
   
$
246,252
   
$
(6,801,183
)
 
$
-
   
$
(6,543,475
)
                                                                         
Common stock issued for debt to founders
                           
92,000
     
4,600
                             
4,600
 
                                                                         
Common stock issued for services
                           
21,167
     
1,058
     
432,441
                     
433,499
 
                                                                         
Common stock issued for conversion of convertible notes (net of derivative liability for conversion feature of $552,872)
                           
120,000
     
6,000
     
561,872
                     
567,872
 
                                                                         
Sale of common stock with warrants attached (net of derivative liability on 3,833 warrants of $75,839)
                           
3,834
     
191
     
(18,531
)
                   
(18,340
)
                                                                         
Common stock issued for cash
                           
103,333
     
5,167
     
1,385,380
                     
1,390,547
 
                                                                         
Warrants issued for services
                                           
6,995,084
                     
6,995,084
 
                                                                         
Effect of 1:50 reverse split
                                   
(16,675
)
   
16,675
                     
-
 
                                                                         
Net loss 2010
                                                   
(5,709,559
)
           
(5,709,559
)
                                                                         
Balance at December 31, 2010
   
10,000,000
   
$
10,000
 
  -
   
 -
 
$
1,796,817
   
$
1,797
   
$
9,619,173
   
$
(12,510,742
)
 
$
-
   
$
(2,879,772
)
                                                                         
Common stock issued for conversion of convertible notes and accrued interest
                           
32,708,544
     
32,709
     
52,982
                     
85,691
 
                                                                         
Common stock issued in exchange for extinguishment of warrants
                           
565,000
     
565
     
484,435
                     
485,000
 
                                                                         
Common stock issued for settlement of accounts payable
                           
17,482
     
17
     
24,983
                     
25,000
 
                                                                         
Common stock issued in connection with debt issuance
                           
5,000
     
5
     
5,995
                     
6,000
 
                                                                         
Common stock issued for services
                           
458,238
     
458
     
701,042
                     
701,500
 
                                                                         
Sales of common stock
                           
1,833,333
     
1,833
     
3,497,166
             
(999,000
)
   
2,499,999
 
                                                                         
Warrants issued for services
                                           
1,171,320
                     
1,171,320
 
                                                                         
Net loss 2011
                                                   
(1,140,075
)
           
(1,140,075
)
                                                                         
Balance at December 31, 2011
   
10,000,000
   
$
10,000
 
  -
   
 -
 
$
37,384,414
   
$
37,384
   
$
15,557,096
   
$
(13,650,817
)
 
$
(999,000
)
 
$
954,663
 
                                                                         
Sale of common stock
                           
2,075,000
     
2,075
     
481,228
             
999,000
     
1,482,303
 
                                                                         
Issuance of Preferred Shares
               
   1,000,000
   
1,000
                   
899,000
                     
900,000
 
                                                                         
Common stock issued for conversion of convertible notes and accrued interest
                           
1,529,036
     
1,529
     
2,294
                     
3,823
 
                                                                         
Common stock issued for compensation and services
                           
1,171,255
     
1,172
     
1,595141
                     
1,596,313
 
                                                                         
Common stock issued for director compensation
                           
275,000
     
275
     
461,975
                     
462,250
 
                                                                         
Warrants issued for compensation and services
                                           
843,899
                     
843,899
 
                                                                         
Warrants issued with convertible debt
                                           
276,926
                     
276,926
 
                                                                         
Net loss
                                                   
(5,289,610
)
           
(5,289,610
)
                                                                         
Balance at December 31, 2012
   
10,000,000
   
$
10,000
 
   1,000,000
 
$
 1,000
   
42,434,705
   
$
42,435
   
$
20,117,559
   
$
(18,940,427
)
 
$
-
   
$
1,230,567
 
                                                                         
Sale of common stock
                           
4,790,000
     
4,790
     
247,408
                     
252,198
 
                                                                         
Issuance of warrants in conjunction with sale of common stock
                                           
1,705,871
                     
1,705,871
 
                                                                         
Common stock issued for compensation and services
                           
765,261
     
765
     
1,050,581
                     
1,051,346
 
                                                                         
Common stock issued for director compensation
                           
50,000
     
50
     
74,450
                     
74,500
 
                                                                         
Common stock issued for software development
                           
113,636
     
114
     
149,886
                     
150,000
 
Warrants issued for compensation and services
                                           
525,163
                     
525,163
 
                                                                         
Common stock issued for acquisition
                           
1,265,822
     
1,265
     
1,998,735
                     
2,000,000
 
                                                                         
Net loss
                                                   
(2,223,061
)
           
(2,223,061
)
                                                                         
Balance at March 31, 2013
   
10,000,000
   
$
10,000
 
   1,000,000
 
$
 1,000
   
49,419,424
   
$
49,419
   
$
25,869,653
   
$
(21,163,488
)
 
$
-
   
$
4,766,584
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
F-3

 
 
CAR CHARGING GROUP, INC.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
 
               
For the
Period from
 
               
September 3, 2009
 
   
For the Three Months Ended
   
(Inception) to
 
   
March 31,
   
March 31,
   
March 31,
 
   
2013
   
2012
   
2013
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net Income (loss)
 
$
(2,223,061
)
 
$
(1,532,806)
   
$
(21,163,488
)
Adjustments to reconcile net income (loss) to net cash  (used in) operating activities:
                       
Depreciation and amortization
   
133,381
     
31,088
     
551,866
 
Amortization of discount on convertible notes payable
   
117,992
     
-
     
291,599
 
Loss on common stock issued in exchange for extinguishment of warrants
   
-
     
-
     
485,000
 
Gain on change in fair value of derivative liability
   
-
       
-
   
(245,217
)
Common stock issued for services and incentive fees
   
461,392
     
450,000
     
11,357,850
 
Warrants and options issued for services and incentive fees
   
525,163
     
240,037
     
1,369,062
 
Loss on settlement of accounts payable for stock
   
47,856
     
-
     
47,856
 
Loss on repayment of convertible notes payable
   
46,701
     
-
     
46,701
 
Changes in operating assets and liabilities:
                       
Inventory
   
-
     
-
     
(72,768
)
Advanced commissions
   
(18,500
)
   
(38,000)
     
(319,250
)
Deposits
     
-
   
(6,908)
     
(33,957
)
Prepaid expenses and other current assets
   
51,152
     
(170,963
)
   
16,051
 
Other assets
   
34,016
     
(12,063
)
   
(5,280)
 
Accounts payable and accrued expenses
   
276,579
     
2,961
     
849,488
 
Deferred rent
   
(1,899)
     
-
     
28,277
 
Deferred revenue
   
777,531
     
-
     
832,274
 
Accrued interest-related party
   
(5
)
   
(40
)
   
4,480
 
Net Cash Provided/(Used) by Operating Activities
   
228,298
     
(1,036,694
)
   
(5,991,556
)
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Purchase of office and computer equipment
     
-
   
(8,291
)
   
(63,321
)
Purchase of automobile
     
-
   
50,000
     
(50,000
)
Purchase of electric charging stations, net
   
(859,547
)
   
(141,207
)
   
(2,116,552
)
Cash paid for acquisition
   
(171,075
)
   
-
     
(171,075)
 
Net Cash Used in Investing Activities
   
(1,030,622
)
   
(199,498
)
   
(2,400,948
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Proceeds from issuance of notes payable
   
-
     
-
     
396,000
 
Proceeds from sale of preferred stock
   
-
     
1,000,000
     
900,000
 
Sale of common stock, net of issuance costs
   
1,958,069
     
500,000
     
8,273,417
 
Payment of convertible notes payable
   
(146,000)
     
-
     
(146,000)
 
Payment of notes payable
   
(2,972
)
   
-
     
(10,724
)
Net Cash Provided by Financing Activities
   
1,809,097
     
1,500,000
     
9,412,693
 
                         
NET INCREASE  IN CASH
   
1,006,773
     
263,808
     
1,020,189
 
                         
CASH AT THE BEGINNING OF PERIOD
   
13,416
     
406,859
     
-
 
CASH AT END OF PERIOD
 
$
1,020,189
   
$
670,667
   
$
1,020,189
 
                         
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
                       
Cash Paid For:
                       
Interest expenses
 
$
3,310
   
$
-
   
$
5,345
 
Income taxes
 
$
-
   
$
-
   
$
-
 
                         
NONCASH INVESTING AND FINANCING ACTIVITIES
                       
Common stock issued for debt and accrued interest
 
$
-
   
$
3,823
   
$
577,695
 
Beneficial conversion feature of notes payable and related warrants issued
 
$
-
   
$
-
   
$
276,926
 
Inventory reclassified to electric car charging stations
 
$
-
   
$
-
   
$
72,768
 
Issuance of warrants in consideration of equity investment
 
$
-
    $   -    
$
273,697
 
Debt and accrued interest converted to common stock
 
$
-
   
$
-
   
$
100,691
 
Common stock issued for settlement of accounts payable
 
$
85,390
   
$
-
   
$
110,390
 
Note payable for purchase of automobile
 
$
-
   
$
57,050
   
$
64,693
 
Purchase of software development for common stock
 
$
150,000
    $   -    
$
150,000
 
Issuance of common stock for acquisition
 
$
2,000,000
    $   -    
$
2,000,000
 
Issuance of note payable for acquisition
 
$
461,150
    $   -    
$
461,150
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
F-4

 
 
CAR CHARGING GROUP, INC.
September 30, 2012
(A Development Stage Company) 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
1.        ORGANIZATION
 
Car Charging Group Inc. (“CCGI”) was incorporated on October 3, 2006 under the laws of the State of Nevada as New Image Concepts, Inc.  On November 20, 2009, New Image Concepts, Inc. changed its name to Car Charging Group, Inc.
 
Car Charging, Inc., was incorporated as a Delaware corporation on September 3, 2009.  Car Charging Inc. was created to develop electric charging service facilities for the electric vehicle (EV) automobile market.  Pursuant to its business plan, Car Charging Inc. (or its affiliates) acquires and installs EV charging stations, and shares servicing fees received from customers that use the charging stations with the property owner(s), on a property by property basis.   Additionally, the Company sells hardware to others.  Car Charging, Inc., therefore, enters into individual arrangements for this purpose with various property owners, which may include cities, counties, garage operators, hospitals, multi-family properties, shopping-malls and facility owner/operators.
 
During February, 2011, the Shareholders and Board of Directors authorized a decrease of our  issued and outstanding common stock, in the form of a reverse stock-split, on a one-for-fifty (1:50) basis (the “Reverse Stock-Split”).  There was no change to the authorized amount of shares or to the par value. All share and per share amounts included in the consolidated financial statements have been adjusted to reflect the effects of the Reverse Stock-Split.
 
Merger
 
On December 7, 2009, CCGI entered into a Share Exchange Agreement (the “Agreement”) among CCGI and Car Charging, Inc. (“CCI”)
 
Pursuant to the terms of the Agreement, CCGI agreed to issue an aggregate of 10,000,000 restricted shares of CCGI's common stock and 10,000,000 shares of its Series A Convertible Preferred Stock to the CCI Shareholders in exchange for all of the issued and outstanding shares of CCI.
 
The merger was accounted for as a reverse acquisition and recapitalization. CCI is the acquirer for accounting purposes and CCGI is the issuer. Accordingly, CCGI’s historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. Operations prior to the merger are those of CCI.  From inception on September 3, 2009 until the merger date, December 7, 2009, CCI had minimal operations with no revenues. Earnings per share for the period prior to the merger are restated to reflect the equivalent number of shares outstanding.
 
The consolidated financial statements consist of CCGI and its wholly-owned subsidiaries, and the statement of financial condition, as of March 31, 2013 and the statements of operations and cash flows for the period of February 26, 2013 through March 31, 2013 of Beam Charging LLC acquired on February 26, 2013, collectively referred to herein as the “Company” or “Car Charging.” All intercompany transactions and balances have been eliminated in consolidation.
 
2.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
BASIS OF PRESENTATION
 
The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Interim results are not necessarily indicative of the results for the full year.  These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K as filed with the SEC on April 16, 2013.
 
DEVELOPMENT STAGE COMPANY
 
The Company is a development stage company as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-10 “Development Stage Entities.”  The Company is still devoting substantially all of its efforts on establishing the business and developing revenue generating opportunities through its planned principal operations. In the latter half of 2011, the Company’s principal sales operations began, however the Company did not recognize significant revenues during the period.  All losses accumulated since inceptions have been considered as part of the Company’s development stage activities.
 
USE OF ESTIMATES
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reporting period.  Accordingly, actual results could differ from those estimates.
 
 
F-5

 
 
LIQUIDITY
 
Historically, the Company has been dependent on debt and equity raised from individual investors to sustain its operations.  The Company’s product has not been placed in enough locations nor have a sufficient number of plug-in electric vehicles been sold that utilize public charging stations to generate significant revenue.  The Company has incurred losses and used cash for operating activities.  As of March 31, 2013, the Company had an accumulated deficit of $21,163,488.   These conditions raise substantial doubt about its ability to continue as a going concern.  Management plans include seeking additional equity investments, sale of energy tax credits, and institution of a cost reduction plan.  The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
PRINCIPLES OF CONSOLIDATION
 
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All significant intercompany transactions have been eliminated in consolidation.
 
CASH AND CASH EQUIVALENTS
 
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents in both the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows.  The Company has cash on deposit in several financial institutions which, at times, may be in excess of FDIC insurance limits.  Management has deemed this a normal business risk.
 
EV CHARGING STATIONS

EV charging stations represent the depreciable cost of charging devices that have been installed on the premises of participating owner/operator properties.  They are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over an estimated useful life of three years. Upon sale, replacement or retirement, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the Condensed Consolidated Statements of Operations.  All purchases of EV charging stations from inception to March 31, 2013 have been from a single vendor.  The Company believes that there are other vendors in the marketplace that could supply the Company with comparable EV charging stations at comparable prices and terms.  The Company held approximately $1,065,000 and $218,000 in EV charging stations that were not placed in service as of March 31, 2013 and December 31, 2012, respectively.  The Company will begin depreciating this equipment when installation is substantially complete. Depreciation for the three months ended March 31, 2013 and 2012 and for the period from September 3, 2009 (inception) through March 31, 2013 was $114,608, $28,468 and $478,826, respectively.
  
In December 2010, management determined that EV charging stations that were previously recorded as inventory would be used for future installations and reclassified $72,768 in inventory to EV charging stations.  While the Company’s primary strategy is to earn revenue through the installation of EV charging stations, the Company will sell EV charging stations on occasion when the opportunity presents itself.
 
OFFICE AND COMPUTER EQUIPMENT
 
Office and computer equipment are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over an estimated useful life of five years. Upon sale or retirement of furniture and fixtures, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the Condensed Consolidated Statements of Operations. Depreciation for the three months ended March 31, 2013 and 2012 and for the period from September 3, 2009 (inception) through March 31, 2013 was $3,868, $2,620 and $30,472, respectively.

AUTOMOBILES
 
Automobiles are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over an estimated useful life of five years. Upon sale or retirement of automobiles, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the Condensed Consolidated Statements of Operations.  The Company’s electrically-charged enabled automobile was placed in service in May 2012.  Depreciation for the three months ended March 31, 2013 and 2012 and for the period from September 3, 2009 (inception) through March 31, 2013 was $5,734, $0, and $21,027 respectively.

IMPAIRMENT OF LONG-LIVED ASSETS
 
The Company has adopted paragraph 360-10-35-17 of the FASB ASC for its long-lived assets.  The Company’s long-lived assets, which include EV charging stations, office and computer equipment, automobile, domain names, and security deposits, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
 
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.  Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  The Company determined that there were no impairments of long-lived assets as of March 31, 2013 or December 31, 2012.
 
 
F-6

 
 
DISCOUNT ON DEBT
 
The Company allocated the proceeds received from convertible debt instruments between the underlying debt instruments and has recorded the conversion feature as a liability in accordance with paragraph 815-15-25-1 of the FASB ASC. The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision have been recorded at their fair value within the terms of paragraph 815-15-25-1 of the FASB ASC as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The conversion liability is marked to market each reporting period with the resulting gains or losses shown on the Condensed Consolidated Statements of Operations.  The conversion feature associated with the convertible debt outstanding as of March 31, 2013 and December 31, 2012 does not contain a reset provision and is amortized over the term of the convertible debt.
 
DERIVATIVE INSTRUMENTS
 
The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB ASC and paragraph 815-40-25 of the FASB ASC. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Condensed Consolidated Statements of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.
 
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. 
 
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
U.S. GAAP for fair value measurements establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
 
The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s notes and convertible notes payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at March 31, 2013 and December 31, 2012.
 
The Company revalues its derivative liability at every reporting period and recognizes gains or losses in the Condensed Consolidated Statement of Operations that are attributable to the change in the fair value of the derivative liability.  The Company has no other assets or liabilities measured at fair value on a recurring basis.
 
REVENUE RECOGNITION
 
The Company applies paragraph 605-10-S99-1 of the FASB ASC for revenue recognition.  The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.  Accordingly, when a customer completes use of a charging station, the service can be deemed rendered and revenue may be recognized.
 
Governmental grants and rebates pertaining to revenues and expenses are recognized as income when the related revenue and/or expense are recorded.  Government grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the related depreciation expense of the related asset over their useful lives.  The Company received a grant and a rebate totaling $59,988 to defray the cost of equipment and installation of 13 charging stations during 2012 from two governmental entities. The rebate and grant are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives. As a result the Company amortized $4,999 into revenue during the three months ended March 31, 2013.

The Company entered into joint marketing agreement with Nissan North America for which among other matters requires the Company to build, own, operate and maintain a network of 48 fast chargers throughout the United States and create an auto dealer network promotion and referral program so as to facilitate sales of electric vehicles to their potential customers. Revenue received from the agreement on March 29, 2013, $782,880 is deferred and recognized ratably over the life of the chargers, due to inseparable elements.  The multiple deliverables are not separate units of accounting because they are not sold separately nor has Nissan North America delineated specific amounts of the revenue to particular elements of the agreement.  The Company is required to install the network by December 31, 2013.

 
F-7

 
 
STOCK-BASED COMPENSATION FOR OBTAINING EMPLOYEE SERVICES
 
The Company accounts for equity instruments issued to employees and directors pursuant to paragraphs 718-10-30-6 of the FASB ASC, whereby all transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more readily measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.
 
The Company’s policy is to recognize compensation cost for awards with service conditions and when applicable a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.
 
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES
 
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”).  Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.

ADVERTISING
 
The Company expenses non-direct advertising as incurred.  Total advertising expense for the three months s ended March 31, 2013 and 2012, and for the period from September 3, 2009 (inception) through March 31, 2013 was $0, $0, and $12,124, respectively.
 
INCOME TAXES
 
The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Condensed Consolidated Statements of Operations in the period that includes the enactment date.
 
The Company adopted section 740-10-25 of the FASB ASC (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.  Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
 
 
F-8

 
 
NET LOSS PER COMMON SHARE
 
Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC.  Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.  Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.
 
The following table shows the weighted-average number of potentially outstanding dilutive shares excluded from the diluted net loss per share calculation for the three months ended March 31, 2013 and 2012, as they were anti-dilutive (after giving effect to the Reverse Stock-Split):
 
   
Three Months Ended March 31,
 
   
2013
   
2012
 
Convertible Notes
   
251,989
     
-
 
                 
Preferred Stock
   
25,000,000
     
25,000,000
 
                 
Options
   
3,370,000
     
-
 
                 
Warrants
   
13,237,301
     
11,933,169
 
Total Potential Dilutive Shares
   
41,859,290
     
36,933,169
 
 
COMMITMENTS AND CONTINGENCIES
 
The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

CASH FLOWS REPORTING

The Company adopted paragraph 230-10-45-24 of the FASB ASC for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect Method”) as defined by paragraph 230-10-45-25 of the FASB ASC to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

SUBSEQUENT EVENTS
 
The Company follows the guidance in Section 855-10-50 of the FASB ASC for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB ASC, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, management has not determined whether implementation of such proposed standards would be material to the condensed consolidated financial statements.
 
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.
 
 
F-9

 
 
3          BEAM ACQUSITION

On February 26, 2013, the Company, entered into an equity exchange agreement (the “Exchange Agreement”) by and among the Company, Beam Acquisition LLC, a Nevada limited liability company and wholly-owned subsidiary of the Company (“Beam Acquisition”), Beam Charging LLC, a New York limited liability company (“Beam”), and Manhattan Charging LLC, a New York limited liability company (“Manhattan Charging”), Eric L’Esperance (“L’Esperance”), and Andrew Shapiro (“Shapiro” and together with Manhattan Charging, L’Esperance and the individual members of Manhattan Charging LLC, the “Beam Members”). The Company had previously entered into an agreement, dated December 31, 2012, (the “Initial Agreement”) with Beam Acquisition and Manhattan Charging, pursuant to which Beam Acquisition acquired all of the outstanding membership interests in Beam in exchange for 1,265,822 restricted shares (the “Exchange Shares”) of the Company’s common stock, par value $0.001 (the “Common Stock”). In the Exchange Agreement, the Company, through Beam Acquisition, further identified the specific terms under which it acquired all of the outstanding membership interests of Beam and Beam became a wholly owned subsidiary of Beam Acquisition (the “Equity Exchange”).
 
As part of the Equity Exchange, the Company made a payment of $500,000 to Manhattan Charging, of which an aggregate amount of $461,150 was issued in the form of promissory notes (the “Promissory Notes”). The Promissory Notes accrue interest at a rate of 6% per annum on the aggregate principal amount, payable and was paid on April 15, 2013 (the “Maturity Date”).
 
In conjunction with the Equity Exchange, the Company entered into an Assignment of Promissory Note (the “Note Assignment”) with certain assignors (the “Assignors”), pursuant to which the Assignors sold to the Company two certain secured promissory notes (the “Notes”) totaling an aggregate principal amount of $130,000. In connection with the Note Assignment, the Company entered into an Amendment to Promissory Note (the “Note Amendment”). Pursuant to the Note Amendment, the Notes held by the Company accrue interest at a rate of 8% per annum on the aggregate principal amount, payable on February 26, 2016. The Notes are secured by a lien on and continuing security interest in all of the Beam assets as described in the Note Amendment.
 
Pending the finalization of a third party valuation, the following table summarizes the preliminary fair value of assets acquired and liabilities assumed at the closing date:
 
   
February 26, 2013
 
Cash
 
$
69
 
Fixed assets, net
   
489,155
 
Amortizable intangible assets
   
1,467,000
 
Current liabilities
   
(631,945
)
 Net identifiable assets
   
1,324,279
 
Goodwill
   
1,271,871
 
Total consideration given
 
$
2,596,150
 
 
Acquisition related costs consisting of commission expense of $18,000 and legal fees of $18,850 are reflected as compensation and general and administrative expenses, respectively on the statement of operations for the three months ended March 31, 2013.
 
The fair value of intangible assets pending finalization of a third party valuation at March 31, 2013 consist of the following:

   
March 31, 2013
 
Provider agreements for locations awaiting installation of EV charging stations
  $ 829,000  
Awarded government grants for installation of EV charging stations
    638,000  
    $ 1,467,000  
Less: Accumulated amortization
    (6,906 )
Balance at March 31, 2013
  $ 1,460,094  
 
The Exchange Agreement provided for an anti-dilution benefit to former members of Beam whereby until such time as a former member sells or disposes of all of his Company common shares of stock, any Triggering Event, as defined by the Agreement, whereby the issue price of the Company stock is below $1.58 shall cause the Company to issue a warrant to each former member to purchase an additional number of Company common shares of at the Triggering Event price so as to preserve such Beam Member’s pre-Triggering Event percentage ownership in the Company.  From an historical perspective, the Company has raised capital through the issuance of stock and issued stock, options and warrants for services and compensation on a frequent basis since inception at various prices, differing vesting periods and differing expiration dates.  The Company has recorded warrants payable of $135,000 representing the fair value of the warrants that would have been issued based on the Triggering Events occurring during the period of February 26, 2013 through March 31, 2013.  The Company can not estimate how long the former members will hold their stock, what market conditions will be when stock is sold and or when stock, options or warrants will be issued and under what terms of issuance.  It is for those reasons, that the Company can not estimate the amount of additional contingent consideration associated with the anti-dilution benefit.  The Company will continue to record warrants payable during the next nine months based on the occurrence of Triggering Events during said period.

The amount of revenue and net loss attributable to Beam for the periods of February 26, 2013 through March 31, 2013, the combined January 1, 2013 through March 31, 2013, had the acquisition closed as of January 1, 2013, and for the period of January 1, 2012 through March 31, 2012, had the acquisition closed as of January 1, 2012 is shown below:
 
For the period February 26, 2013 through March 31, 2013:

   
Car Charging
 Group, Inc.
   
 Beam
   
 Combined
 
Revenue
  $ 14,542     $ 1,033     $ 15,575  
Net Loss
  $ 2,194,751     $
28,310
    $
2,223,061
 

For the period of January 1, 2013 through March 31, 2013:
 
   
Car Charging
 Group, Inc.
   
 Beam
   
 Combined
 
Revenue
  $ 14,542     $
1,733
    $
16,275
 
Net Loss
  $ 2,194,751     $
65,221
    $
2,259,972
 
 
 
F-10

 

For the period of January 1, 2012 through March 31, 2012:
 
   
Car Charging
 Group, Inc.
   
Beam
   
Combined
 
Revenue
 
$
2,605
   
$
844
   
$
3,449
 
Net Loss
 
$
1,532,806
   
$
67,570
   
$
1,600,376
 
 
4.         PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consist of the following at:
 
   
March 31,
2013
   
December 31,
2012
 
Prepaid consulting fees
 
$
565,308
   
$
181,849
 
Prepaid compensation
   
425,242
     
311,090
 
Receivable from 350Green LLC
   
45,175
     
34,475
 
Sundry prepaid expenses and other current assets
   
27,775
     
43,695
 
Subtotal
   
1,063,500
     
571,109
 
Less: non current portion
   
(271,409
)
   
(213,797
)
Prepaid and other current assets
 
$
792,091
   
$
357,312
 
 
On October 22, 2012, the Company entered into a one year agreement with a firm to provide consulting services which included business development and capital raising functions.  As consideration for such services, the firm received 150,000 shares of the Company’s common stock valued at $225,000 on the date of issuance.  As of March 31, 2013, the prepaid portion of those services was $126,370.

On December 6, 2012, the Company retained an individual to serve as chairman of the Company’s Board of Directors for three years.  As part of the chairman’s compensation, the Company issued to him 200,000 shares of the Company’s common stock valued at $316,000.  As of March 31, 2013, the prepaid portion of the compensation was $285,117.

On January 11, 2013, the Company retained an individual to serve on the Company’s Board of Directors for three years.  As part of the individual’s compensation, the Company issued to him 50,000 shares of the Company’s common stock valued at $74,500 under the 2013 Omnibus Plan.  As of March 31, 2013, the prepaid portion of the compensation was $69,125.

On January 14, 2013, the Company entered into a contract with a firm to provide strategic planning consulting services. The Company issued 250,000 shares of its common stock at $1.49 per share covering the year ended January 14, 2014.  As of March 31, 2013, the prepaid portion of those services was $294,938.

On February 19, 2013, the Company retained an individual to serve on the Company’s Board of Directors for three years subject to the Board of Directors approval.  As part of the agreement and the individual’s compensation, the Company was obligated to issue him 50,000 shares of the Company’s common stock valued at $71,000 under the 2013 Omnibus Plan.  As the Company’s Board of Directors did not approve his appointment to the Board of Directors until April 3, 2013 in conjunction with the Company’s acquisition of EV Pass LLC, the Company has recorded a prepaid asset and corresponding liability of $71,000 as of March 31, 2013.

On March 8, 2013, the Company entered into a contract with a firm to provide investor relations consulting services. The Company issued 150,000 shares of its common stock under the 2013 Omnibus Plan at $1.28 per share covering the six month period ended September 8, 2013.  As of March 31, 2013, the prepaid portion of those services was $144,000.

As part of its due diligence of 350Green LLC, the Company requested that the 350Green LLC retain the services of its independent registered accounting firm (“Auditor”) to perform an audit of 350Green LLC. The Company guaranteed the audit fee of the audit to the Auditor up to a maximum of $75,000.  As of March 31, 2013, the Company had recorded a receivable from 350GreenLLC of $45,175 and a corresponding payable to the Auditor in conjunction with the audit.  As of April 22, 2013, the Company closed on the transaction to acquire 350Green LLC and the audit is in progress.

5.         ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following at:
 
   
March 31,
2012
   
December 31,
2012
 
Accounts payable
 
$
888,565
   
$
370,675
 
Accrued wages
   
10,891
     
97,961
 
Accrued fees
   
327,313
     
72,038
 
Accrued interest expense
   
10,951
     
7,200
 
    Total
 
$
1,237,720
   
$
547,874
 
 
Accrued fees consist primarily of fees owed to consultants, commissions owed to consultants in connection with the sale of shares of the Company’s common stock during the three months ended March 31, 2013 and the value of 50,000 shares of the Company’s common stocks under the 2013 Omnibus Plan obligated to be issued an individual upon the execution of an offer to serve on the Company’s Board of Directors.  As the Company’s Board of Directors did not approve his appointment to the Board of Directors until April 3, 2013 in conjunction with the Company’s acquisition of EV Pass LLC, the Company has recorded a prepaid asset and corresponding liability of as of March 31, 2013.
 
 
F-11

 
 
6.         NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE
 
Convertible notes payable bear interest of 6% annually which were payable upon maturity on September 25, 2011. The notes have a conversion price of $.0025.

During June, 2010, $5,000 of these notes was converted to 40,000 common shares.

During July, 2010, $10,000 of these notes was converted to 80,000 common shares.

During January, 2011, $4,000 of these notes was converted to 32,000 common shares.

During March, 2011, $50,000 of these notes together with $4,441 of accrued interest were converted to 21,776,544 common shares.