ECOtality May Seek Bankruptcy Protection - Quick Facts

(RTTNews) - ECOtality Inc. (ECTY), a clean electric transportation and storage technologies company, announced that, although the company is currently exploring options for a restructuring or sale of the entire business and/or assets of the company, 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 company stated that its board has retained FTI Consulting, as a restructuring advisor, reporting directly to the Board. FTI's primary responsibilities will be to evaluate capital structure alternatives and identify additional sources of financing, execute profitability improvement alternatives, undertake cost cutting measures, develop and execute plans to improve liquidity against existing assets, identify ongoing personnel requirements and appropriate retention or incentive plans, and facilitate the possible sale of the Company or its assets. FTI's engagement agreement is yet to be finalized.

The company noted that it has experienced certain material adverse developments that in the aggregate significantly impact its ability to meet its ongoing obligations and to fund anticipated operating losses.

The company added that it has been unable to obtain additional financing. The firm said it actively pursued a number of options to secure additional capital. However, the company learned on August 8, 2013 that financing that was being pursued from an existing investor would not be forthcoming. The company stated that it continues its efforts to obtain additional capital but there can be no assurances that such financing will occur on reasonable terms, or at all.

The company also said it has been notified by the U.S. Department of Energy or "DOE" that the DOE is suspending payments to the company in connection with the electric vehicle or EV Project. In an abundance of caution on August 8, 2013, the Company notified the DOE that, even though the company continues to aggressively pursue certain options for additional financing and is exploring other alternatives, in the event additional financing is not obtained, the Company may not be able to fulfill its operational obligations, including under the EV Project.

In response, the DOE had sent a letter to the Company stating that it is suspending all payments under the EV Project while it investigates the situation and determines whether the award should continue.