ECOtality, the operator of the Blink charging network (Nasdaq: ECTY), has suspended trading and filed an 8-K report that details serious trouble for the company. Here’s the bad news:
Although the Company is currently exploring options for a restructuring or sale of the entire business and/or assets, [it] may need to file a petition commencing a case under the United States Bankruptcy Code as part of any such process or otherwise in the very near future.
The report lists several reasons for the crisis: failure to attain enough sales to support operations as cash flows from the EV Project declined; inability to release a scheduled new product offering in its Minit Charger industrial line; failure to obtain additional financing; and uncertainty regarding the resolution of an overheating problem with some of its previously-installed chargers.
This is a dire development for the entire EV scene, not only because ECOtality’s network is one of the largest, but because the company is the manager of the EV Project, a DOE-supported mission to assemble a database about charging behavior for the industry to use as a guide to future planning. The EV Project was launched in October 2009, and is scheduled to wind up at the end of 2013.
The DOE announced that it is “suspending all payments under the EV Project while it investigates the situation and determines whether the award should continue.”
The company has assured its customers that “we will continue to operate the Blink Network and maintain our Blink chargers until further notice.”