Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. ECOTALITY, INC. (1301206) 10-Q published on May 15, 2013 at 4:17 pm
Reporting Period: Mar 30, 2013
For the three months ended March 31, 2012 the two-class method was used and the net earnings were allocated between common and preferred holders to compute the dilutive effect of the preferred shares. The Company's 5.05% Convertible Note (see Note 10), represents potentially dilutive shares, however, the conversion price of the note was higher at March 31, 2012 than the average share price, thus the note was determined to be anti-dilutive. The Company's outstanding stock options with a strike price lower than the average share price were evaluated for dilutive effect, but the proceeds from the strike price, when taken together with the unamortized future compensation amount, yielded a price higher than the average share price, making them anti-dilutive. Outstanding warrants with a strike price lower than the average share price have been included as a dilutive factor.
On November 27, 2012, the Company was informed that the Wage and Hour Division of the U.S. Department of Labor (“DOL”) is investigating the Company to determine its compliance with the Davis Bacon Contract Act, the Fair Labor Standards Act and other Federal Labor laws and regulations. In connection with this investigation, the Company received requests for employment and labor related information and records regarding compliance with employee wage, hour and other conditions and practices of employment. Indications are that the DOL believes the Company has misclassified certain employees under the Fair Labor Standards Act and failed to classify and pay certain other individuals prevailing wages under the Davis Bacon Contract Act. The DOL has indicated that if it is conclusively determined that the Company violated certain of these labor laws and regulations, it will be required to make the appropriate payments of back wages and other amounts to employees and contractors, and the Company may be subject to fines or penalties. As of December 31, 2012, the Company determined that while it is reasonably possible that the total amounts to be paid with respect to this matter could range up to $917.0 thousand, management’s best estimate of the probable cost was $223.0 thousand. Accordingly, the Company established a $223.0 thousand accrual as of December 31, 2012, which was recorded as a component of general and administrative expenses during the fourth quarter of 2012. As of March 31, 2013, the Company revised its previous estimates based on new information. As of March 31, 2013, the Company determined that while it is reasonably possible that the total amounts to be paid with respect to this matter could range up to $1.1 million, management’s best estimate of the probable cost was $597.0 thousand, resulting in an additional $374.0 thousand charge to general and administrative expenses in the first quarter of 2013. The Company continues to cooperate with the DOL in the investigation and has recently begun to discuss with the DOL what wages, fines or penalties may be appropriate in this matter. It is not possible at this time to determine the nature of fines, penalties or further liabilities the Company may incur in connection with this matter.
We have a long history in clean and renewable energy technologies and have various standing contractual relationships as a vehicle tester and consultant for the DOE, national research laboratories, vehicle OEMs, 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 specific expertise in the areas of EV systems, recharging stations, energy demand management systems, utility communication systems, advanced battery technologies, fast charging technologies, and hydrogen production, storage and dispensing systems. We have been the testing partner for the DOE’s Advanced Vehicle Testing Activity (AVTA) program since 1998 and have worked with the DOE, vehicle manufacturers and industry stakeholders to develop test procedures used to conduct baseline, accelerated, fleet, and battery performance evaluations. In September 2011, we were awarded an additional $26.4 million contract to conduct the DOE’s Advanced Vehicle Testing and Evaluation (AVTE) program. The award expands our scope of work following the DOE’s AVTA program, encompassing a five-year term to conduct ongoing vehicle evaluations for the DOE.
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We have industry leading experience in many facets of electric and alternative vehicle strategy development. Utilizing that experience, we have developed our EV Micro-Climate planning process, a detailed planning and consulting program designed for municipal planning organizations and utilities to provide a deployment blueprint and action plan for a comprehensive EV charge infrastructure for a given market area. Our EV Micro-Climate planning 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 review of regulatory issues, public awareness and marketing programs to support the various value chains associated with the EV Micro-Climate process. Additionally we have developed fleet analysis and utility consulting services that can be strategically uncoupled or used in conjunction with the Micro-Climate planning process to provide more comprehensive services to our customers.
The EV Micro-Climate process has been undertaken and refined in the original markets of the EV Project and has been implemented for an entire country in Europe, as well as many major utilities, including BC Hydro in British Columbia, and cities outside of the EV Project, such as Houston, Texas.
On November 27, 2012, we were informed that the Wage and Hour Division of the U.S. Department of Labor (“DOL”) is investigating the Company to determine its compliance with the Davis Bacon Contract Act, the Fair Labor Standards Act and other Federal Labor laws and regulations. In connection with such investigation, we received requests for employment and labor related information and records regarding compliance with employee wage, hour and other conditions and practices of employment. Indications are that the DOL believes we have misclassified certain employees under the Fair Labor Standards Act and failed to classify and pay certain other individuals prevailing wages under the Davis Bacon Contract Act. The DOL has indicated that if it is conclusively determined that we violated certain of these labor laws and regulations, we will be required to make the appropriate payments of back wages and other amounts to employees and contractors, and we may be subject to fines or penalties. As of December 31, 2012, we determined that while it is reasonably possible that the total amounts to be paid with respect to this matter could range up to $917.0 thousand, management’s best estimate of the probable cost was $223.0 thousand. Accordingly, we established a $223.0 thousand accrual as of December 31, 2012, which was recorded as a component of general and administrative expenses during the fourth quarter of 2012. As of March 31, 2013, we revised our previous estimates based on new information. As of March 31, 2013, we determined that while it is reasonably possible that the total amounts to be paid with respect to this matter could range up to $1.1 million, management’s best estimate of the probable cost was $597.0 thousand, resulting in an additional $374.0 thousand charge to general and administrative expenses in the first quarter of 2013. We continue to cooperate with the DOL in the investigation and have recently begun to discuss with the DOL what wages, fines or penalties may be appropriate in this matter. It is not possible at this time to determine the nature of fines, penalties or further liabilities we may incur in connection with this matter.