Vehicle-Charging Company Warns About Prospects
SAN FRANCISCO (AP) — Ecotality Inc., which makes charging systems for electric vehicles, said Monday that it could be forced into a sale or bankruptcy filing "in the very near future" after disappointing sales and suspension of payments from the federal government.
The company said that it hired a restructuring adviser to evaluate options including new financing or a possible sale.
San Francisco-based Ecotality made the comments in a filing with the Securities and Exchange Commission.
Its stock plunged $1.17, or 80 percent, to 29 cents in afternoon trading.
Ecotality makes charging and power-storage systems for electric vehicles under the Blink and Minit Charger brands. It also does testing for government agencies, auto makers and utilities.
The company listed several setbacks in recent months, including its inability to sell enough commercial electric vehicle equipment to sustain operations in the second half of the year.
Ecotality also will miss the scheduled release later this year of a new Minit Charger product for industrial customers because of "unacceptable performance" during testing, and it hasn't been able to line up financing. The company said it learned Thursday that financing from an existing provider wouldn't be approved.
Last week, the company told the U.S. Department of Energy that if it couldn't find new financing, it might not be able to meet its obligations to the agency's electric vehicle program. The department responded by notifying Ecotality that it would suspend payments and ordered the company not to incur any new costs, it said.
The company ran afoul of the U.S. Department of Labor over payments to workers and contractors. Ecotality agreed to pay $855,000 to cover back wages and damages.
And Ecotality said some of its charging systems have caused overheating and even melting of a connector plug when charging a vehicle. The company was unsure how that situation will be resolved, but it said some manufacturers have said they are considering advising customers to avoid Ecotality's systems if the company doesn't replace all connector plugs on about 12,000 stations.
The company said it hired FTI Consulting to find new sources of financing, cost-cutting steps, staffing needs and to help with the possible sale of the company or its assets.