Ecotality 10Q 2009 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2009

Or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-50983

ECOTALITY, INC.

(Exact name of registrant as specified in its charter)

Nevada	68-0515422
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6821 E Thomas Road, Scottsdale, Arizona	85251
(Address of principal executive offices)	(Zip Code)

(480) 219-5005

(Registrant’s telephone number, including area code)

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 registrant 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 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. (Check One):

large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(Do not check of a smaller reporting

company)

Smaller reporting company þ

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of November 16, 2009

315,077,990

ECOtality, Inc.

Table of Contents


PART I - FINANCIAL INFORMATION	3

Financial Statements:

Unaudited Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Operations	3

Condensed Consolidated Balance Sheet	4

Condensed Consolidated Statements of Cash Flows	5

Notes to Condensed Consolidated Financial Statements	6

Management’s Discussion and Analysis of Financial Condition and Results of Operation	27

Quantitative and Qualitative Disclosures about Market Risk	39

Controls and Procedures	39

PART II - OTHER INFORMATION	40

Legal Proceedings	40

Risk Factors	40

Unregistered Sales of Equity Securities	40

Defaults Upon Senior Securities	41

Submission of Matters to a Vote of Security Holders	41

Exhibits and Reports on Form 8-K	42

SIGNATURES	43

PART1. FINANCIAL INFORMATION

ECOtality, Inc.

Condensed Consolidated Statement of Operations

Unaudited

	For the 3 Months Ended September 30,						For the 9 Months Ended September 30,
	2009			2008			2009			2008

Revenue	$	1,900,002		$	2,900,819		$	6,117,286		$	8,654,868
Cost of goods sold		1,018,388			1,871,940			3,232,310			5,156,240

Gross profit		881,614			1,028,879			2,884,976			3,498,628

Expenses:
Depreciation		102,224			203,665			352,531			469,669
General and administrative expenses		11,291,586			1,534,492			14,177,947			5,431,071
Research and development		602			138,143			12,763			285,777

Total expenses		11,394,410			1,876,300			14,543,241			6,186,517

Operating loss		(10,512,798	)		(847,421	)		(11,658,265	)		(2,687,889	)

Other income:
Interest income		-			616			-			9,778
Other Income - Working Capital True Up		-			375,877			-			375,877
Total other income		-			376,493			-			385,655

Other expenses:
Interest expense		5,172,128			1,109,666			8,660,823			2,175,279
(Gain) / Loss on Disposal of Assets		(4,424	)		(16,165	)		(14,184	)		(11,271	)
Total other expenses		5,167,704			1,093,501			8,646,639			2,164,008

Loss from operations before income taxes		(15,680,502	)		(1,564,429	)		(20,304,903	)		(4,466,242	)

Provision for income taxes		-			-			-			-

Net (loss)	$	(15,680,502	)	$	(1,564,429	)	$	(20,304,903	)	$	(4,466,242	)

Weighted average number of common shares outstanding - basic and fully diluted		210,677,799			124,732,194			174,643,951			124,711,559

Net (loss) per share-basic and fully diluted	$	(0.07	)	$	(0.01	)	$	(0.12	)	$	(0.04	)

The accompanying notes are an integral part of these financial statements

ECOtality, Inc.

Condensed Consolidated Balance Sheets

	September 30, 2009			December 31, 2008
	(Unaudited)			(Audited)
Assets

Current assets:

Cash	$	903,640		$	327,332
Certificates of deposit		-			28,044
Receivables, net of allowance for bad debt of $92,494 and $69,176 as of 09/30/09 and 12/31/08 respectively		1,089,066			1,963,073
Inventory, net of allowance for obsolescence of $183,487 and $167,487 as of 09/30/09 and 12/31/08 respectively		951,053			1,149,881
Prepaid expenses and other current assets		397,556			229,931
Total current assets		3,341,315			3,698,263

Fixed assets, net accumulated depreciation of $4,482,786 and $4,283,866 as of 09/30/09 and 12/31/08 respectively		1,670,180			1,632,315

Goodwill		3,495,878			3,495,878

Total assets	$	8,507,372		$	8,826,457

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	751,745		$	1,510,277
Accrued liabilities		10,338,768			848,789
Accrued Interest		466,107			1,281,115
Liability for purchase price		235,253			2,115,253
Note Payable - related party		-			450,000
Current portion of LT Debt, net of discount of $931,261 and $1,530,101 as of 09/30/09 and 12/31/08 respectively		6,794,992			3,411,540
Total current liabilities		18,586,865			9,616,975

Total LT Debt, net of discount of $0 and $548,735 as of 09/30/09 and 12/31/08 respectively		1,145,972			1,971,849

Stockholders’ equity:
Preferred stock, $0.001 par value, 200,000,000 shares
authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 1,300,000,000 shares
authorized, 270,396,362 and 129,422,861 shares issued
and outstanding as of 09/30/09 and 12/31/08, respectively		270,397			129,423
Common stock owed but not issued 1,000,000 shares at 09/30/09 and 75,000 at 12/31/08		1,000			75
Additional paid-in capital		49,805,121			33,485,763
Unamortized Financing Charges		(4,605,619	)		-
Retained deficit		(56,642,527	)		(36,337,624	)
Accumulated Foreign Currency Translation Adjustments		(53,837	)		(40,006	)
Total stockholders' equity		(11,225,465	)		(2,762,368	)

Total liabilities and stockholders' equity	$	8,507,372		$	8,826,457

The accompanying notes are an integral part of these financial statements

Consolidated Statement of Cash Flows

Unaudited

	For the 9 Months Ended September 30,
	2009			2008
Cash flows from operating activities
Net Income (loss)	$	(20,304,903	)	$	(4,466,242	)
Adjustments to reconcile:
Stock and options issued for services and compensation		499,738			147,601
Depreciation		352,531			469,669
Amortization of stock issued for services		117,206			217,989
Amortization of discount on notes payable		1,147,574			1,207,623
Amortization of financing costs		6,908,432			-
Gain on disposal of assets		(14,184	)		(11,271	)
Changes in operating assets and liabilities:
Certificate of deposit		28,044			1,197,784
Accounts Receivable		874,007			(164,613	)
Inventory		198,828			210,729
Prepaid expenses and other		(167,625	)		(1,027,672	)
Accounts Payable		(749,018	)		173,402
Accrued Liabilities		9,585,236			1,934,639
Net cash provided (used) by operating activities		(1,524,135	)		(110,361	)

Cash flows from investing activities
Purchase of fixed assets		(402,365	)		(250,469	)
Proceeds from sales of fixed assets		16,639			54,357
Net cash (used) by investing activities		(385,726	)		(196,114	)

Cash flows from financing activities
Proceeds from notes payable		-			300,000
Payments on notes payable		-			(57,723	)
Borrowings on notes payable		2,500,000
Net cash provided (used) by financing activities		2,500,000			242,275

Effects of exchange rate changes		(13,831	)		(32,877	)

Net increase (decrease) in cash		576,308			(97,078	)
Cash – beginning		327,332			677,318
Cash – ending	$	903,640		$	580,239

Supplemental disclosures:
Interest paid	$	-		$	124,270
Income Taxes paid	$	-		$	-
Non-cash transactions:
Stock and options issued for services	$	499,738		$	70,126
Shares of stock issued		3,250,000			250,000
Number of options issued		-			-
Stock issued for acquisition	$	1,880,000		$	-
Shares of stock issued		31,333,333			-

Amortization of stock issued for services	$	117,206		$	182,826

Amortization of discount on notes payable	$	1,147,574		$	825,097

Note Payable converted for common stock	$	1,090,000		$	100,000
Shares of stock issued		18,166,666			333,333

The accompanying notes are an integral part of these financial statements

ECOTALITY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – History and organization of the company

The Company was organized April 21, 1999 (Date of Inception) under the laws of the State of Nevada as Alchemy Enterprises, Ltd. The Company was initially authorized to issue 25,000 shares of its no par value common stock.

On October 29, 2002, the Company amended its articles of incorporation to increase its authorized capital to 25,000,000 shares with a par value of $0.001. On January 26, 2005, the Company amended its articles of incorporation again, increasing authorized capital to 100,000,000 shares of common stock with a par value of $0.001. On March 1, 2006, the Company amended its articles of incorporation, increasing authorized capital to 300,000,000 shares of common stock, each with a par value of $0.001, and 200,000,000 shares of preferred stock, each with a par value of $0.001.

On November 26, 2006, the Company amended its articles of incorporation to change its name from Alchemy Enterprises, Ltd. to ECOtality, Inc to better reflect its renewable energy strategy.

The former business of the Company was to market a private-label biodegradable product line. During the year ended December 31, 2006, the board of directors changed the Company’s focus toward developing an electric power cell technology.

On October 1, 2007, the Company purchased certain assets of Innergy Power Corporation and its wholly owned subsidiary, Portable Energy De Mexico, S.A. DE C.V. Innergy Power Corporation designs and manufactures standard and custom solar-power and integrated solar-battery solutions for government, industrial and consumer applications. See note 3 for further information.

On November 6, 2007 the Company acquired all the outstanding capital stock of Electric Transportation Engineering Corporation, as well as its affiliated company The Clarity Group (collectively referred to as eTec). eTec designs fast-charge systems for material handling and airport ground support applications. eTec also tests and develops plug-in hybrids, advanced battery systems and hydrogen ICE conversions. See note 4 for further information.

On August 26, 2009 the common shareholders of the company authorized an increase to the number of shares of common stock from 300,000,000 to 1,300,000,000 and authorized the Board of Directors to conduct a reverse split of the common shares in the range of 1: 50 to 1:100.

The consolidated financial statements as of December 31, 2008 and September 30, 2009 include the accounts of ECOtality, Innergy Power Corporation, ECOtality Stores, Inc (DBA Fuel Cell Store) eTec, and Minit-Charger. All significant inter-company balances and transactions have been eliminated. ECOtality and its subsidiaries will collectively be referred herein as the “Company”.

Note 2 – Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $15,680,502 for the three months ended September 30, 2009 and $20,304,903 for the nine months ended September 30, 2009. The Company has working capital of ($15,245,550) as of September 30, 2009 and has accumulated a retained deficit of $56,642,527 since its date of inception.

These conditions give rise to doubt about the Company’s ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability. Progress has been made in this regard as follows:

On October 31, 2009, Ecotality, Inc. (“Ecotality” or the “Company”) signed a Securities Exchange Agreement with all holders of its convertible debentures and holders of certain warrants to convert all outstanding amounts ($9,111,170) under these debentures and all related warrants into an aggregate of 9,270,804 shares of Series A Convertible Preferred Stock. Also on October 31,2009 the Company signed a Securities Purchase Agreement and a Registration Rights Agreement with certain accredited investors (the “Investors”) pursuant to which the Investors agreed to purchase shares of the Common Stock at a pre-Reverse Split purchase price of $0.12 per share. The funds from the private placement will be utilized as working capital to support the initial requirements of the contract signed with the Department of Energy on September 30, 2009.

Terms of the private placement include:

1.	A minimum aggregate purchase of $15,500,000 of Common Stock by the Investors.

2.	Each Investor will receive a Warrant to purchase the equivalent number of shares of Common Stock that it purchases under to the Securities Purchase Agreement. The exercise price of the Warrants will be equal to $0.15 per share (pre-Reverse Split). The Company may call the Warrants if the closing price of shares of the Common Stock is at least $0.45 per share (pre-Reverse Split) for 20 consecutive trading days, subject to certain conditions, including the existence of an effective registration statement for the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) and minimum volume provisions. The Company may not affect any exercise of the Warrants in an amount that would result in any Investor or its affiliates beneficially owning more than 9.99% of the outstanding Common Stock upon such an exercise. The Warrants will have a five-year term during which they can be exercised and shall contain a cashless exercise provision which shall apply if there is not an effective registration statement covering the resale of the shares issuable upon exercise.

3.	The Company shall file a shelf registration statement for the resale of the shares of Common Stock purchased under the Securities Purchase Agreement and the Warrant Shares on Form S-3 or another appropriate form (the “Registration Statement”). Such Registration Statement shall be filed as soon as practicable, but in any event within 45 days of the closing date of the Securities Purchase Agreement.

4.	The Investors have agree not to exercise “short sales” for a period of 9-months after the date of the Securities Purchase Agreement.

The Company will initiate the process to effect the Reverse Split prior to the closing, and the Company will submit its application to be listed on The NASDAQ Stock Market as soon as possible thereafter. The Company is obligated to consummate the Reverse Split within 30 days of the date of the Securities Purchase Agreement.

Note 3 – Summary of Significant Accounting Policies

Use of estimates

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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates have been used by management in conjunction with the measurement of the valuation allowance relating to deferred tax assets and future cash flows associated with long-lived assets. Actual results could differ from those estimates.

Cash and cash equivalents

For financial statement presentation purposes, the Company considers short-term, highly liquid investments with original maturities of three months or less to be cash and cash equivalents.

Interest income is credited to cash balances as earned. For the quarter ended September 30, 2009 and 2008 interest income was $0 and $616 respectively. For the nine months ended September 30, 2009 and 2008 interest income was $0 and $9,778 respectively.

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits and accounts receivable. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits. At September 30, 2009 and 2008, the Company had approximately $400,000 and $100,000 in excess of FDIC insured limits, respectively.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. Accounts receivable at September 30, 2009 was $1,089,066 At September 30, 2009 we had two customers that represented in excess of 10% of our receivable balance. The first, Palco Telecom Service Inc., had a balance of $150,740. The second, The United States Department of Energy had a balance of $120,830. The Company has not experienced material losses in the past from these or any other significant customers and continues to monitor its exposures to minimize potential credit losses. The allowance for doubtful accounts was $92,494 and $35,028 as of September 30, 2009 and 2008, respectively.

Impairment of long-lived assets and intangible assets

The Company follows the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” and SFAS No. 142, “Goodwill and other intangible assets”, which addresses financial accounting and reporting for acquired goodwill and other intangible assets. Management regularly reviews property, equipment, intangibles and other long-lived assets for possible impairment by performing the necessary testing for recoverability of the asset and measuring its fair value. This review occurs quarterly, or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, then management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Management believes that the accounting estimate related to impairment of its property and equipment, is a “critical accounting estimate” because: (1) it is highly susceptible to change from period to period because it requires management to estimate fair value, which is based on assumptions about cash flows and discount rates; and (2) the impact that recognizing an impairment would have on the assets reported on our balance sheet, as well as net income, could be material. Management’s assumptions about cash flows and discount rates require significant judgment because actual revenues and expenses have fluctuated in the past and are expected to continue to do so. During the three months ended September 30, 2009 and 2008 the Company had impairment expense of $0 and $0, respectively. During the nine months ended September 30, 2009 and 2008 impairment expense was $0 and $0 respectively.

Revenue recognition

The Company’s revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104 and Accounting Research Bulletin (ARB) 45. Revenue is recognized when a formal arrangement exists, the price is fixed or determinable, all obligations have been performed pursuant to the terms of the formal arrangement and collectability is reasonably assured.

Sales related to long-term contracts for services (such as engineering, product development and testing) extending over several years are accounted for under the percentage-of-completion method of accounting under the American Institute of Certified Public Accountants’ Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts . Sales and earnings under these contracts are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method based on budgeted milestones or tasks as designated per each contract. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable.

For all other sales of product or services the Company recognizes revenues based on the terms of the customer agreement. The customer agreement takes the form of either a contract or a customer purchase order and each provides information with respect to the product or service being sold and the sales price. If the customer agreement does not have specific delivery or customer acceptance terms, revenue is recognized at the time of shipment of the product to the customer.

Management periodically reviews all product returns and evaluates the need for establishing either a reserve for product returns or a product warranty liability. As of September 30, 2009 and 2008, management has concluded that no reserve is required for product returns.

Warranty Liability

The Company warrants a limited number of Minit-Charger products against defects for periods up to 33 months. The estimate of warranty liability is based on historical product data and anticipated future costs. Should actual failure rates differ significantly from our estimates, we record the impact of these unforeseen costs or cost reductions in subsequent periods and update our assumptions and forecasting models accordingly. As of September 30, 2009 and 2008 the warranty reserve was $70,853 and $182,093 respectively. Management has concluded this warranty reserve to be adequate for future expenses relating to the warranty.

Inventory

Inventory is valued at the lower of cost, determined on a first-in, first-out basis, or market. Inventory includes material, labor, and factory overhead required in the production of our products. Inventory obsolescence is examined on a regular basis. The allowance for obsolescence was $183,487 and $73,000 as of September 30, 2009 and September 2008 respectively.

Advertising costs

The Company expenses all costs of advertising as incurred. Advertising costs of $4,308 and $4,518 were included in general and administrative expenses for the quarter ended September 30, 2009 and 2008 respectively. For the nine months ended September 30, 2009 and 2008 advertising costs included in general and administrative expenses were $25,606 and $22,072 respectively.

Research and development costs

Research and development costs are charged to expense when incurred. For the quarter ended September 30, 2009 and 2008, research and development costs were $602 and $138,143, respectively. For the nine months ended September 30, 2009 and 2008 research and development was 12,763 and 285,777 respectively.

Contingencies

The Company is not currently a party to any pending or threatened legal proceedings. Based on information currently available, management is not aware of any matters that would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable approximate their fair values based on their short-term nature. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2009 and 2008. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.

Loss per Common Share

Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128), “Earnings Per Share”. We present basic loss per share (“EPS”) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share has been computed assuming the conversion of the convertible long-term debt and the elimination of the related interest expense, and the exercise of stock warrants. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. For the quarter ended September 30, 2009 and 2008 and for the nine months ended September 30, 2009 and 2008 the assumed conversion of convertible long-term debt and the exercise of stock warrants are anti-dilutive due to the Company’s net loss and were excluded in determining diluted loss per share.

Foreign Currency Translation

In 2008 and 2009, a Company subsidiary, PEP Mexico operated outside the United States and their local currency is their functional currency. The functional currency is translated into U.S. dollars for balance sheet accounts using the period end rates in effect as of the balance sheet date and the average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders' equity, within other comprehensive loss, net of tax where applicable.

In 2008, a Company subsidiary, eTec, conducted a portion of their business in Canadian Dollars. Because their functional currency is US dollars, the impact of the translation was taken directly to the income statement and included in General and Administrative expense.

Stock-Based Compensation

The Company records stock-based compensation in accordance with SFAS No. 123R “Share Based Payments”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” using the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable

Property and Equipment

Property and equipment are recorded at historical cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

Equipment	5-7 years
Buildings	39 years

Income Taxes

The Company has adopted the provisions of SFAS No. 109, “Accounting for Income Taxes" which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. A valuation allowance is provided for those deferred tax assets for which the related benefits will likely not be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company adopted FASB Interpretation Number. 48, Accounting for Uncertainty in Income Taxes, as of January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the companies’ financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. As a result, the Company applies a more-likely-than-not recognition threshold for all tax uncertainties. FIN 48 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As a result of implementing FIN 48, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a fifty percent likelihood of being sustained upon examination, therefore the implementation of this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next twelve months. As of September 30, 2009 and 2008 respectively, no income tax expense has been incurred.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception. For the foreseeable future, the Company intends to retain any earnings to finance the development and expansion of its business and it does not anticipate paying any cash dividends on its common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including the Company’s financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the board of directors considers relevant.

Segment reporting

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” requires disclosures related to components of a company for which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker in deciding the allocation of resources and assessing performance. Upon completion of FuelCellStores.com, Innergy Power Corporation, Electric Transportation Engineering Corporation (eTec) and eTec’s Minit-Charger business acquisitions from June through December 2007, the Company identified its segments based on the way management expects to organize the Company to assess performance and make operating decisions regarding the allocation of resources. In accordance with the criteria in SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information,” the Company has concluded it has three reportable segments for the quarter ended June 30, 2009; ECOtality Stores segment, Innergy Power segment and eTec segment. The ECOtality Stores segment is the online marketplace for fuel cell-related products and technologies with online distribution sites in the U.S., Japan, Russia, Italy and Portugal. The Innergy Power segment is comprised of the sale of solar batteries and other solar and battery powered devices to end-users. The eTec segment relates to sale of fast-charge systems for material handling and airport ground support applications to the testing and development of plug-in hybrids, advanced battery systems and hydrogen ICE conversions and consulting revenues. This segment also includes the Minit-Charger business which relates to the research, development and testing of advanced transportation and energy systems with a focus on alternative-fuel, hybrid and electric vehicles and infrastructures. eTec holds exclusive patent rights to the eTec SuperCharge™ and Minit-Charger systems - battery fast charge systems that allow for faster charging with less heat generation and longer battery life than conventional chargers. The Company has aggregated these subsidiaries into three reportable segments: Fuel Cell Store, eTec and Innergy.

The accounting policies for the segments are the same as those described in the summary of significant accounting policies in Note 3 of this Form 10-Q. Management continues to assess how it evaluates segment performance, and utilizes income (loss) from operations, excluding share-based compensation (benefits), depreciation and intangibles amortization and income taxes. For the quarter ended September 30, 2009 and September 30, 2008, inter-segment sales were $0 and $0 respectively. For the nine months ended September 30, 2009 and 2008 inter-segment sales were $28,723 and $0 respectively. All inter-segment sales have been eliminated during the consolidation process.

Recent Accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133”. SFAS No. 161 is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS No. 161 applies to all derivate instruments within the scope of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. It also applies to non-derivative hedging instruments and all hedged items designated and qualifying as hedges under SFAS No. 133. SFAS No. 161 is effective prospectively for financial statements issued for fiscal years beginning after 15 November 2008, with early application encouraged. The adoption of SFAS No. 161 did not have an impact on the Company’s condensed financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with GAAP for nongovernmental entities. Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”. SAS No. 69 has been criticized because it is directed to the auditor rather than the entity. SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity, not its auditor, which is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”. The Company does not expect SFAS No. 162 to have a material effect on its condensed financial statements.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60”. SFAS No. 163 provides enhanced guidance on the recognition and measurement to be used to account for premium revenue and claim liabilities and related disclosures and is limited to financial guarantee insurance (and reinsurance) contracts, issued by enterprises included within the scope of FASB Statement No. 60, “Accounting and Reporting by Insurance Enterprises”. SFAS No. 163 also requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. SFAS No. 163 is effective for financial statements issued for fiscal years and interim periods beginning after 15 December 2008, with early application not permitted. The adoption of SFAS No. 163 did not have an impact on the Company’s condensed financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No. 165 is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date–that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. SFAS No. 165 is effective for financial statements issued for fiscal years and interim periods ending after 15 June 2009. The adoption of this statement did not have a material impact on its interim condensed financial statements

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of FASB Statement” (“SFAS 166”). SFAS No. 166 is intended to establish standards of financial reporting for the transfer of assets and transferred assets to improve the relevance, representational faithfulness, and comparability. SFAS No. 166 was established to clarify derecognition of assets under FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. SFAS No. 166 is effective for financial statements issued for fiscal years and interim periods beginning after 15 November 2009. The Company has determined that the adoption of SFAS No. 166 will have no impact will have on its condensed financial statements.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”. SFAS No. 167 is intended to establish general standards of financial reporting for companies with variable interest entities. It requires timely and useful disclosure of information related to the Company’s involvement with variable interest entities. This disclosure should alert all users to the effects on specific provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”, related to the changes to the special-purpose entity proposal in FASB Statement No. 166, “Accounting for Transfers of Financial Assets”, and the treatment of specific provisions of Interpretation 46(R). SFAS No. 167 is effective for financial statements issued for fiscal years and interim periods beginning after 15 November 2009. The Company has determined that the adoption of SFAS No. 167 will have no impact will have on its condensed financial statements.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principle – a replacement of FASB statement No. 162”. SFAS No. 168 replaces the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles as stated with FASB Accounting Standards Codification becoming the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial statements issued for fiscal years and interim periods beginning after 15 September 2009. The Company does not expect this adoption will have a material impact on the Company’s interim condensed financial statements.

Reclassifications

Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

Year end

The Company has adopted December 31 as its fiscal year end.

Note 4 – Acquisitions, Goodwill, and Goodwill Impairment

FuelCellStore.com acquisition

On June 11, 2007, the Company acquired the assets of the FuelCellStore.com, a small web based seller of educational fuel cell products. The FuelCellStore.com product line includes demonstration kits, educational materials, fuel cell systems and component parts. It also offers consulting services on establishing educational programs for all levels of educational institutions. FuelCellStore.com now operates as a wholly owned subsidiary named ECOtality Stores, Inc. The acquisition has been accounted for under the purchase accounting method pursuant to SFAS 141. Our consolidated financial statements for the year ended December 31, 2008, the quarter ended and the nine months ended September 30, 2009 and 2008 include the financial results of ECOtality Stores, Inc. subsequent to the date of the acquisition.

The fair value of the transaction was $539,000. The company paid $350,000 in cash and issued 300,000 shares of common stock, which was valued at $189,000 based on the closing market price on the date of the agreement.

The aggregate purchase price was allocated to the assets acquired on their preliminary estimated fair values at the date of the acquisition. The preliminary estimate of the excess of purchase price over the fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. In accordance with U.S. generally accepted accounting principles, we have up to twelve months from closing of the acquisition to finalize the valuation. The following table summarizes the preliminary estimate of fair value of assets as part of the acquisition with ECOtality Stores, Inc.:

	2007
Tangible assets acquired, net of liabilities assumed	$	212,218
Goodwill		326,782
	$	539,000

In accordance with SFAS No. 144, “Accounting for the impairment or disposal of long lived assets”, the Company reviewed the goodwill for impairment performing the necessary testing for recoverability of the asset and measuring its fair value. This testing revealed current, historic, and future (projected) cash flow losses as well as a determination of fair value less than the carrying value. As a result of this testing, the full amount of goodwill ($326,782) was impaired during the year ended December 31, 2007.

ECOTALITY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Innergy Power Corporation acquisition

On October 1, 2007, the Company acquired certain assets of the Innergy Power Corporation and its wholly owned subsidiary, Portable Energy De Mexico, S.A. DE C.V. Innergy Power Corporation designs and manufactures standard and custom solar-power and integrated solar-battery solutions for government, industrial and consumer applications. The acquisition has been accounted for under the purchase accounting method pursuant to SFAS 141 .. Our consolidated financial statements for the year ended December 31, 2008, the quarter ended and the nine months ended September 30, 2009 and 2008 include the financial results of Innergy Power Corporation and its subsidiary subsequent to the date of the acquisition.

The fair market value of the transaction was $3,000,000. The Company issued 3,000,000 shares of the Company’s common stock for the acquisition. The Company guaranteed to the sellers that the shares would be worth $1 each ($3,000,000) during the 30-day period commencing 11 months from the closing date. If the shares were not worth $3,000,000, the company would be required to either (a) issue additional shares such that the total shares are worth $3,000,000 at that time or, (b) issue a total of 4,000,000 new shares, or (c) pay cash to the seller such that the aggregate value of the 3,000,000 shares plus the cash given would equal $3,000,000.

The purchase price obligation was settled in full on October 17, 2008 with the issuance of 4,000,000 shares of Ecotality’s $0.001 par value common stock.

The aggregate purchase price was allocated to the assets acquired and liabilities assumed on their preliminary estimated fair values at the date of the acquisition. The preliminary estimate of the excess of purchase price over the fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. In accordance with U.S. generally accepted accounting principles, we have up to twelve months from closing of the acquisition to finalize the valuation. The purchase price allocation is preliminary, pending finalization of our valuation of certain liabilities assumed. The following table summarizes the preliminary estimate of fair value of assets as part of the acquisition of Innergy Power Corporation:

	2007
Tangible assets acquired, net of liabilities assumed	$	505,435
Goodwill		2,494,565
	$	3,000,000

In accordance with SFAS No. 144, “Accounting for the impairment or disposal of long lived assets”, the Company reviewed the goodwill for impairment performing the necessary testing for recoverability of the asset and measuring its fair value. This testing revealed current, historic, and future (projected) cash flow losses as well as a determination of fair value less than the carrying value. As a result of this testing, the full amount of goodwill ($2,494,565) was impaired during the year ended December 31, 2007.

eTec acquisition

On November 6, 2007, the Company acquired all the outstanding capital stock of Electric Transportation Engineering Corporation, as well as its affiliated company The Clarity Group (collectively referred to as eTec). eTec designs fast-charge systems for material handling and airport ground support applications. eTec also tests and develops plug-in hybrids, advanced battery systems and hydrogen ICE conversions. The acquisition has been accounted for under the purchase accounting method pursuant to SFAS 141. Our consolidated financial statements for the year ended December 31, 2008 and the quarter ended September 30, 2009 include the financial results of eTec subsequent to the date of the acquisition.

The fair market value of the transaction was $5,437,193. The Company paid $2,500,000 in cash, issued a $500,000 note payable, and issued 6,500,000 shares of the company’s common stock for the acquisition, which was valued at $1,820,000 based on the closing market price on the date of the agreement. The total value of the transaction also included $217,193 in direct acquisition costs and the subsequent Net Working Capital Adjustment discussed below.

The $500,000 was initially payable in monthly installments of $50,000 beginning December of 2007. Payment of the balance of the note payable remaining at September 30, 2009 was $235,253 and payment of this amount has been deferred by the Sellers until December 31, 2009.

Included in the purchase agreement was a Net Working Capital Adjustment which called for an adjustment to the purchase price to be made via a post-Closing payment from the Sellers to the Buyers or the Buyers to the Seller to the extent that the actual Net Working Capital as of the Closing Date was more or less than the agreed Net Working Capital Target. A reconciliation of actual vs. target net working capital was presented by the Sellers in August 2008 and a True-Up Payment of $400,000 from the Buyers to the Sellers was agreed to in full satisfaction of this purchase agreement requirement. The resulting note payable represents an adjustment of the purchase price, and as such has been recorded as an increase to Goodwill of $400,000.

The balance of the note payable attributable to the Working Capital True was $400,000 as of September 30, 2009. This payment has been deferred by the Sellers until December 31, 2009.

ECOTALITY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2007
Tangible assets acquired, net of liabilities assumed	$	1,941,315
Goodwill		3,495,878
	$	5,437,193

In accordance with SFAS No. 144, “Accounting for the impairment or disposal of long lived assets”, the Company reviewed the goodwill for impairment performing the necessary testing for recoverability of the asset and measuring its fair value. This testing revealed current, historic, and future (projected) positive cash flows supporting the full amount of goodwill. As a result of this testing in 2007 no impairment was taken in the year ended December 31, 2007. This testing yielded similar results in both the quarter and the nine months ending September 30, 2009 supporting the carrying value, resulting in $0 impairment for those periods.

Minit-Charger acquisition

On December 6, 2007 the Company acquired through eTec the Minit-Charger business of Edison Enterprises. Minit-Charger makes products that enable fast charging of lift trucks using revolutionary technologies. The acquisition has been accounted for under the purchase accounting method pursuant to SFAS 141. Our consolidated financial statements for the year ended December 31, 2008, the quarter ended and the nine months ended September 30, 2009 and 2008 include the financial results of Minit-Charger subsequent to the date of the acquisition.

The fair market value of the transaction was $3,000,000. The company paid $1,000,000 in cash and issued 2,000,000 shares of the company’s common stock for the acquisition. The company guaranteed to the sellers that the shares would be worth $1 each ($2,000,000) by the tenth day following the first anniversary date of the transaction. If the shares are not worth $2,000,000, the company would be required to either issue additional shares such that the total shares are worth $2,000,000 at that time or pay cash to the seller so that the aggregate value of the 2,000,000 shares plus the cash given would equal $2,000,000.

The fair value of the common stock given, based on the closing price of the Company’s common stock on December 31, 2007, was $370,000. A liability for the balance of $1,630,000 based on the December 31 closing price was recorded as a current liability for purchase price on the consolidated balance sheet as of December 31, 2007. The liability was adjusted to reflect the actual obligation due of $1,880,000 on the December 31, 2008 balance sheet. This liability was reflected at $0 for the September 30, 2009 balance sheet as the purchase price obligation was settled in full on January 30, 2009 with the issuance of 31,333,333 shares of Ecotality’s $0.001 par value common stock.

Included in the purchase agreement with Edison was a Net Working Capital Adjustment which called for an adjustment to the purchase price to be made via a post-Closing payment from the Sellers to the Buyers or the Buyers to the Seller to the extent that the actual Net Working Capital as of the Closing Date was more or less than the agreed Net Working Capital Target. A reconciliation of actual vs. target net working capital was presented to the Sellers in April 2008. Based on this reconciliation and additional documentation and updates from both parties a true up payment of $390,174 was received in December 2008 in full satisfaction of this obligation. This True Up represents an adjustment of the purchase price. All goodwill associated with the MinitCharger acquisition was impaired and written down to $0 in year ended December 31, 2007. The remaining book value of the acquired assets was approximately $180K at the time to the true up payment and a full allocation requiring considerable effort would have resulted in an immaterial adjustment to our financials. For this reason the amount of $390,174 was recorded as other income in our eTec business segment for the year ended December 31, 2008.

	2007
Tangible assets acquired, net of liabilities assumed	$	1,719,934
Goodwill		1,280,066
	$	3,000,000

In accordance with SFAS No. 144, “Accounting for the impairment or disposal of long lived assets”, the Company reviewed the goodwill for impairment performing the necessary testing for recoverability of the asset and measuring its fair value. This testing revealed current, historic, and future (projected) cash flow losses as well as a determination of fair value less than the carrying value. As a result of this testing, the full amount of goodwill ($1,280,066) was impaired during the year ended December 31, 2007.

Note 5 – Fixed assets

Fixed assets as of September 30, 2009 and December 31, 2008 consisted of the following:

	At September 30			At December 31,
	2009			2008
Equipment	$	3,144,201		$	3,143,273
Buildings		609,787			575,615
Vehicles		1,808,713			1,600,849
Furniture and fixtures		47,410			47,409
Leasehold improvements		470,380			470,380
Computer Software		72,476			78,655
		6,152,966			5,916,181
Less: accumulated depreciation		(4,482,786	)		(4,283,866	)
		1,670,180			1,632,315

Depreciation expense totaled $102,224 and $203,665, for the quarters ended September 30, 2009 and 2008 respectively. For the nine months ended September 30, 2009 and 2008 depreciation expense was $352,531 and 469,669 respectively.

Note 6 – Notes payable

On January 16, 2007, the Company purchased an office building for an aggregate price of $575,615. $287,959 in cash was paid and the remaining balance of $287,500 was structured as an interest-only loan. The loan bears an interest rate of 6.75% calculated annually, with monthly interest-only payments due beginning on February 16, 2007. The entire principal balance is due on or before January 16, 2012 and is recorded as a long-term note payable on the consolidated financial statements.

During 2007, the Company incurred a $500,000 note payable to the previous owners of eTec through the acquisition of eTec. The loan is payable in ten monthly installments of $50,000 each. See note 4 for details. As of September 30, 2009, $ 235,253 was owed and recorded as an accrued liability for purchase price on the consolidated financial statements.

During 2007, the Company acquired a note payable in the acquisition of eTec. The note related to a vehicle that was also acquired in the acquisition. As of September 30, 2008 the vehicle had been sold and the related note payable was paid in full.

NOVEMBER AND DECEMBER 2007 DEBENTURES & SUBSEQUENT AMENDMENTS

In November and December of 2007, the Company received gross proceeds of $5,000,000 in exchange for a note payable of $5,882,356 as part of a private offering of 8% Secured Convertible Debentures (the “Debentures”). The debentures were convertible into common stock at $0.30 per share. Debenture principal payments were due beginning in May and June of 2008 (1/24th of the outstanding amount is due each month thereafter). In connection with these debentures, the Company issued debenture holders warrants (“the Warrants”) to purchase up to 9,803,925 shares of the Company’s common stock with an exercise price of $0.32. The warrants were exercisable immediately upon issue. The Warrants were to expire five years from the date of issue. The aggregate fair value of the Warrants equaled $2,272,942 based on the Black-Scholes pricing model using the following assumptions: 3.39%-3.99% risk free rate, 162.69% volatility, and strike price of $0.32, market price of $0.22-$0.32, no yield, and an expected life of 912 days. The gross proceeds received were bifurcated between the note payable and the warrants issued and a discount of $3,876,256 was recorded. The discount is being amortized over the loan term of two and one half years. As of December 31, 2008, a total of $1,797,419 had been amortized and recorded as interest expense and $2,078,836 remained as the unamortized discount. At September 30, 2009 a total of $2,944,995 had been amortized and a balance of $931,261 remains in unamortized discount. See note 8 for additional discussion regarding the issuance of warrants.

AUGUST 2008 AMENDMENT TO THE DEBENTURES

On August 29, 2008 the Company signed an Amendment to the Debenture agreements deferring the payments indicated above. The purpose of the agreement was to provide the Company time to fund its working capital requirements internally through organic growth as well as to obtain both short and long term funding through equity financing and other sources of capital.

AUGUST 2008 WAIVER PROVISIONS:

The waiver, deferment agreement aligned with the Company’s short term working capital plan and was to provide time to achieve company objectives in this regard. In exchange for the Amendment to the Debentures, the Company agreed to:

Waiver of interest payments due between May-December 2008

Deferment of monthly redemptions for the period May-December 2008.

Increase to the outstanding principal amount plus accrued interest though December 31, 2008 for the debentures by 120% as of the effective date of the agreement.

Reset of the common stock conversion rate from $0.30 to $0.15.

	E.	Commencement of principal payments starting January 1, 2009 with no change to the redemption period (May 2010)

	F.	Commencement of interest payments @ 8% per year April 1, 2009 (first payment due).

	G.	Inclusion of make whole provisions to reset common stock warrant conversion prices to the value used to “true-up” both the Innergy Power Company and Minit-Charger (Edison ) acquisitions when both “true-ups” are completed. For both of these acquisitions the Sellers were issued shares which the Company guaranteed would be worth $1.00 per share for the thirty days prior to the anniversary date of the purchase. This guarantee requires the issuance of additional shares or payment in cash for the difference in the share price on the respective anniversary dates. In the case of Innergy, the number of required “true up” shares was capped at 4,000,000.
	H.	Inclusion of further make whole provisions to issue additional warrants adequate to maintain the pro rata debenture ownership % when fully diluted as per schedule 13 in the waiver agreement.
	I.	Compliance with covenants per quarterly public reports issued for the periods ending June 30, September 30, and December 31, 2008 for the following:

	1.	Net cash used
	2.	Current ratio adjusted for non-cash liabilities
	3.	Corporate Headquarters accounts payable amount

IMPACT OF THE AUGUST 2008 WAIVER PROVISIONS ON THE FINANCIAL STATEMENTS:

During the fiscal year ended December 31, 2008 the impact to the financial statements for the provisions of the waiver noted above were estimated, and the portion attributable to the year ended December 31, 2008 was initially capitalized as prepaid financing charges (see details in #1 through #3 below) and then subsequently expensed over the waiver period ending December 31, 2008.

The increase to principal of $1,559,859 (see letter “C” above) was added to the long term note, $1,157,315 was capitalized in prepaid financing charges and the portion of the increase attributable to the nine month period ending September 30, 2008 of $402,544, less previously accrued interest (now incorporated in the principal) of $191,438 was charged to interest expense. The capitalized remainder of $1,157,315 was charged to interest expense in the year ended December 31, 2008.

The estimated change in value of the original 9,803,925 debenture warrants related to the pending reset of the exercise price (see letter “G” above) was calculated by using the Volume Weighted Average Price (VWAP) for the most recent 30 days prior to September 30, 2008 of $0.08 as the estimated new exercise price following the reset and the warrants were valued first at their current exercise price then at the estimated new price using the Black Scholes Model using the following assumptions: Strike Price $0.32 (old) and $0.08 (new), Stock Price $0.10 (price on date of agreement), time 780 days for November Warrants and 795 for December Warrants, Volatility 146.39%, Risk Free Interest Rate 3.83%. The increase in value calculated totaled $207,941. Of the total, $154,279 was capitalized as prepaid financing costs and was amortized over the waiver period ending December 31, 2008.

The estimated number of additional warrants required to be issued to true up to the original aggregate exercise price for the November and December Warrants (see letter “G” above) following the reset of the exercise price was calculated using the difference between the current aggregate exercise price of $3,137,256 (9,803,925 total warrants at original exercise price $0.32), and the new aggregate exercise price of $784,314 following the reset of the exercise price to $0.08. This difference totaled $2,352,942 requiring the issuance of an estimated 29,411,775 warrants (at $0.08) to maintain the previous aggregate exercise price. The new warrants were valued at $1,438,235 using the Black Scholes Model with the following assumptions: Strike Price $0.08, Stock Price $0.07 (price at September 30, 2008), time 753 days, Volatility 146.39%, Risk Free Rate 3.83%. Of the total, $1,067,077 was capitalized as prepaid financing costs and was amortized over the waiver period ending December 31, 2008.

IMPACT OF OCTOBER 2008 TRUE-UP (REQUIRED BY THE AUGUST 2008 WAIVER) TO THE FINANCIAL STATEMENTS

On October 17, 2008, a purchase price true up with Innergy was completed, whereby we satisfied our purchase price obligation to Innergy in the form of a share issuance (please see Note 4 for details). This share issuance triggered the make whole provision in the debenture waiver (letter “G” above) which required us to immediately reset their warrant exercise price of $0.15 to $0.06, as well as to change their debt conversion rate from the previous $0.15 to $0.06. This true up also required the issuance of new warrants to allow the denture holders to maintain their previous aggregate exercise price following the update. The calculations for this change to our debenture debt is outlined below. All related charges were immediately charged to interest expense.

	1.	The estimated change in value of the restated debenture warrants related to the reset of the exercise price (see letter “G” above) was calculated by using the stock price employed for the Innergy true up calculation of $0.06 as the new exercise price following the reset and the warrants were valued first at their current exercise price then at the estimated new price using the Black Scholes Model using the following assumptions: Strike Price $0.08 (old) and $0.06 (new), Stock Price $0.10 (price on date of agreement), time 780 days for November Warrants and 795 for December Warrants, Volatility 146.39%, Risk Free Interest Rate 3.83%. The increase in value calculated totaled $35,001 and was charged to interest expense.

	2.	The estimated number of additional warrants required to be issued to true up to the previous aggregate exercise price for the November and December Warrants (see letter “G” above) following the reset of the exercise price was calculated using the difference between the previous aggregate exercise price of $0.08 and the new aggregate exercise price following the reset to $0.06. This change required the issuance of an additional 8,351,491 warrants to maintain the previous aggregate exercise price. The change in value of the old vs. the new increased number of warrants was ($445,061) using the Black Scholes Model with the following assumptions: Strike Price $0.06, Stock Price $0.04 (price at December 31, 2008), time 753 days, Volatility 146.39%, Risk Free Rate 3.83%. The reduction in value (due to the lower stock price) was charged to interest expense.

MARCH 2009 AMENDMENT TO THE DEBENTURES

On March 5, 2009 we entered in to an Agreement entitled “Amendment to Debentures and Warrants, Agreement and Waiver” (the “Agreement”) restructuring our equity with the institutional debt holders of the our Original Issue Discount 8% Senior Secured Convertible Debentures, dated November 6, 2007 (the “November 2007 Debentures”) (aggregate principal amount equal to $4,117,649) and with our debt holder of our Original Issue Discount 8% Secured Convertible Debentures, dated December 6, 2007 (the “December 2007 Debenture”) (aggregate principle amount equal to $1,764,707). The November and December 2007 Debentures are held by Enable Growth Partners LP (“EGP”), Enable Opportunity Partners LP (“EOP”), Pierce Diversified Strategy Master Fund LLC, Ena (“Pierce”), and BridgePointe Master Find Ltd (“BridgePointe”)(individually referred to as “Holder” and collectively as the “Holders”). The Agreement’s effective date is January 1, 2009.

MARCH 2009 WAIVER PROVISIONS:

In exchange for signing an Amendment to Debentures and Warrants, Agreement and Waiver which defers interest payments due for the first quarter 2009 until May 1, 2009 and payment of monthly principal redemptions until May 1, 2009, we agreed to the following:

Adjust the conversion price of the November 2007 Debentures and December 2007 Debenture s to $.06.

The Holders collectively shall maintain an equity position in the Company, in fully diluted shares, of 50.4 %. Should the Holders’ equity position collectively become less than the 50.4%, the Company shall issue warrants to each Holder, pro-ratably to bring Holders’ equity position back to 50.4%.

Additional covenants related to not exceeding $2,000,000 accounts payable amount or payment of other liabilities while the debentures are outstanding.

The right to recommend for placement on the Company 's Board of Directors, a nominee by either BridgePointe or BridgePointe’s investment manager Roswell Capital Partners LLC. Such a recommendation shall meet the Company’s requirements as set forth in the Company’s Bylaws and all applicable federal and state law. The nominee shall serve until such time as the Company has redeemed the debentures.

All outstanding Warrants (defined in the Securities Purchase Agreements dated November 6, 2007 and December 6, 2007 ), and all Warrants issued to Holders as consideration for the current or prior Amendments to the November 2007 Debentures and the December 2007 Debentures shall be amended t o have an exercise price of $0.06 (to the extent that such exercise price was previously above $0.06), and the expiration dates shall be extended to May 1, 2014.

Use best efforts to obtain stockholder approval of an increase in the authorized number of shares of common stock of the Company. The proposal shall increase the number of authorized common shares from 300,000,000 to 500,000,000.

In addition, the Securities Agreement, dated November 6, 2007 and all UCC-1 filings made as required thereof, shall be amended to include each of the Company’s current and future Patents and Trademarks. In addition the Company shall file notice of the Assignment for Security of the Company’s current and any future Patents and Trademarks with the United States Patent and Trademark Office and other foreign countries as appropriate.

IMPACT OF THE MARCH 2009 WAIVER PROVISIONS ON THE FINANCIAL STATEMENTS:

There was no financial impact of the March 2009 waiver as the warrants mentioned were reset to $0.06 at the time of the October 2008 true up.

MAY 2009 AMENDMENT TO THE DEBENTURES

Despite the current tenuous economic situation, the financial opportunities specifically in the Stimulus projects related to electric transportation, were deemed material to the Company’s future, thus on May 15, 2009, the Company and the Debenture Holders entered into an agreement entitled “Amendment to Debentures and Warrants, Agreement and Waiver” (the “Agreement”) restructuring the Company’s equity as well as establishing an inducement for additional working capital for the Company. The Agreement’s effective date was May 1, 2009.

MAY 2009 WAIVER PROVISIONS:

The Company agreed to the following:

Defer payment of interest until November 1, 2009. Interest to be paid monthly from that date. Interest accrued though September 30, 2009 will be added to principal.

Commence redemption of principal on January 1, 2010 in 10 equal payments.

Consent to obtaining additional working capital for specified uses not to exceed $2,500,000 in the same form and rights of debentures pari pasu in seniority both as to security interest priority and right of payment with the debenture held by the existing holders.

Segregation of payment of the Karner bridge note, reaffirmed Karner and Morrow employment agreements, identifies specific contract carve outs should the Company fail to achieve certain target objectives, and provide for a bonus should the target be achieved.

Maintain the conversion price of the November 2007 Debentures and December 2007 Debentures at $.06.

Additional covenants related to not exceeding $2,500,000 accounts payable amount or payment of other liabilities while the debentures are outstanding. Other covenants include maintaining minimum cash flow amounts. Allowing for inspection of financial records, and achieving Stimulus contract target objectives.

The right to recommend for placement on the Company's Board of Directors, two (2) nominees by either BridgePointe or BridgePointe’s investment manager Roswell Capital Partners LLC or other debenture holders. Such a recommendation will meet the Company’s requirements as set forth in the Company’s Bylaws and all applicable federal and state law. The nominees may serve until such time as the Company has redeemed the debentures.

The existing Holders collectively will maintain an equity position in the Company, in fully diluted shares, of 80%. Should the existing holders Holders’ equity position collectively become less than the 80%, the Company will issue warrants to each existing Holder, pro-ratably to bring Holders’ equity position back to 80%. However, there are provisions (when additional capital is raised (not to exceed $2,500,000)) to bring the fully diluted position to 70% for the existing Holders as well as those Holders of new capital debentures. There are provisions to further reduce the debenture holders to 65% should management achieve certain specified performance targets.

	9.	All outstanding Warrants (defined in the Securities Purchase Agreements dated November 6, 2007 and December 6, 2007), and all Warrants issued to Holders as consideration for the current or prior Amendments to the November 2007 Debentures and the December 2007 Debentures will be amended to have an exercise price of $0.01 (to the extent that such exercise price was previously above $0.06), and the termination dates for the makeup warrants will be five (5) years from date of issuance.

	10.	Use best efforts to obtain stockholder approval of an increase in the authorized number of shares of common stock of the Company. The proposal shall increase the number of authorized common shares from 300,000,000 to 1,300,000,000.

	11.	Agreed to specific provisions relating to disclosure of material nonpublic information by debenture holder board members, or at other times when complying with the provisions of the debenture waive agreement..

IMPACT OF THE MAY 2009 WAIVER PROVISIONS ON THE FINANCIAL STATEMENTS:

In the quarter ended June 30, 2009, the financial impact of the May waiver was calculated and is being amortized as noted below, over the waiver period of May 15, 2009 through December 31, 2009.

1.	The change in value of the restated debenture warrants related to the reset of the exercise price (see #9 above) was calculated using the Black Scholes Model using the following assumptions: Strike Price $0.06 (old) and $0.01 (new), Stock Price $0.11 (price on date of agreement), time 162.34 days Volatility 162.34%, Risk Free Interest Rate 3.10%. The increase in value calculated totaled $887,843. This amount was added to additional paid in capital, and a contra-equity account for “Unamortized Financing Charges” was established as the offset. The portion of the Unamortized Financing Charges” that was charged to interest expense through September 30, 2009 was $532,706 The remaining $355,137 will be expensed over the remainder of the waiver period (October through December 2009).

2.	The number of additional warrants to be issued to support the requirement of an 80% equity position as described in #8 above was calculated as follows: Total Debenture warrants outstanding prior to the waiver = 52,287,599 + shares available on debenture conversion 122,767,526 = 175,055,125 Total Fully Diluted Debenture Holder Ownership Pre-Waiver. Total Company Fully Diluted Shares at May 15, 2009 of 860,870,856 was used as the base on which to calculate the 80% ownership target of 688,696,685 shares. To determine the warrants to be issued the 80% target figure of 688,696,685 less total Debenture Holder Ownership of 175,055,125 resulted in 513,641,559 (additional warrants to be issued). To value the new warrants we used the market cap at the date of the issuance calculated as shares outstanding at May 15, 2009 of 161,906,194 multiplied by the closing share price of $0.11 = $17,809,681. To get the portion of the market cap attributable to the new warrants (vs. those already held by the debenture holders ) we divided the # of new warrants (513,641,559) by the total 80% ownership target number of shares for the debenture holders (686,696,685) to get (75%). The 75% was multiplied by 80% total ownership %, and the resulting 60% was then multiplied by the total market cap to get the portion of the market cap attributable to the new issuance of $10,626,208. This amount was added to additional paid in capital, and a contra-equity account for “Unamortized Financing Charges” was used as the offset.

The portion of the Unamortized Financing Charges that was charged to interest expense through September 30, 2009 was $6,375,725. The remaining $4,605,619 will be expensed over the remainder of the waiver period (October through December 2009).

JUNE 2009 Amendment to the MAY Amendment to the Debentures

In addition the debenture holders and the Company signed a First Amendment to Amendment to Debentures and Warrants, Agreement and Waiver dated June 30, 2009. This amendment modified the May 15, 2009 Amendment by:

Increasing approval authority for specified transactions for the November and December 2007 and July 2009 Debenture Holders to 85% from 75% of outstanding principal amount.

Clarifying whom has Board of Director member rights

Clarifying the June 30, 2009 warrant true-up calculation, per the May 15, 2009 Amendment.

Impact of the provisions of the June Amendment to the financial statements:

There was no impact to the financial statements related to the June amendment to the May 15, 2009 amendment.

The current portion of the debentures is recorded, net of a $931,261 discount, is $6,794,992 at September 30, 2009. The long-term portion of the debentures is $858,472 as of September 30, 2009.

Included in accrued interest is $466,107 of accrued interest relating to the debentures at September 30, 2009.

On August 29, 2008, Mr. Donald Karner, a director of the Company, and Kathryn Forbes agreed to provide the Company a line of credit for up to $650,000. This Line was secured by a second position on receivables (junior to previously issued debentures). During the year ended December 31, 2008, $450,000 was advanced by Mr. Karner and Ms. Forbes. Further advances above $450,000 were contingent on the Company securing additional financing as agreed by October 26, 2008. This line carried a loan fee of $45,000 payable when the line expires. The line was originally scheduled to expire December 15, 2008, but was extended to October 1, 2009 by the Lenders. In consideration of the extension, an interest fee of $50,000 was paid to the Lenders in December 2008. The fee of $45,000 was expensed in full as of December 31, 2008. The balance of the note payable in the amount of $450,000 was paid at July 7, 2009.

On January 30, 2009 a purchase price true up with Edison was completed, whereby we satisfied our purchase price obligation to Edison in the form of a share issuance (please see Note 4 for details). This share issuance triggered the make whole provision in the debenture waiver (letter “G” above) which required the issuance of new warrants to allow the debenture holders to maintain their previous aggregate exercise price following the update. This calculation resulted in the issuance of an additional 4,720,408 warrants (at $0.06) to maintain the previous aggregate exercise price. The change in value of the old vs. the new increased number of warrants was $124,147 using the Black Scholes Model consistent with the Innergy true up. The cost of the increased warrants of $124,147 was charged to interest expense in the quarter ended March 31, 2009.

JULY 2009 New Debenture Issuance

To support ECOtality’s expansion and current working capital needs, the Company also received effective July 2, 2009 a direct investment of $2,5000,000 in 8% Secured Convertible Debentures due October 1, 2010, of which Shenzhen Goch Investment Ltd was issued $2,000,000 in debentures, Enable Growth Partners (current debenture holder) was issued $250,000 in debentures, and BridgePointe Master Fund (current debenture holder) was issued $250,000 in debentures. The debentures have an exercise price or $0.06 per share of Ecotality common stock.

The July 2009 Debentures:	a.	Are consistent with the initial debentures issued in November and December 2007 except this series is secured, convertible rather than original issue discount debentures.
	b.	Update the original Security Purchase Agreements, Securities Agreements, Registration Rights Agreements, Subsidiary Guarantees, and related disclosure schedules.
	c.	Provide for issuance of warrants to Shenzhen Goch Investment Ltd for their capital investment and adjusting the warrants held by Enable and BridgePointe subject to the June 30, 2009 true up as defined in the May 15, 2009 Amendment.
	d.	Restate the agreement to increase the number of the Company’s authorized common shares from 300,000,000 to 1,300,000,000.
	e.	Restate the covenants established in the May 15, 2009 Amendment and the Karner “carve-out” should certain “Stimulus” contract targets not be achieved. In accordance with the terms of the May 15 Amendment, the Company and Karner agreed that if Karner continues to remain a full-time employee, and The Company (with Karner’s assistance) fail to secure executed Stimulus Contracts (as defined in the May 15 Amendment) having an aggregate total contract value of $20,000,000 or more during the period from May 15, 2009 through October 1, 2009, then The Company must, on or prior to October 9, 2009, transfer ownership of all stock and assets of The Clarity Group, Inc. to Karner. (NOTE - on September 30,2009 contracts totaling in excess of $20 million so this carve out provision is no longer valid).

Interest expense totaled $5,172,128 and $1,109,666 for the quarter ended September 30, 2009 and 2008 respectively. For the nine months ended September 30, 2009 and 2008 interest expense was $8,660,823 and $2,175,279 respectively ..

Note 7 – Stockholders’ equity

During the year ended December 31, 2007, the Company issued a total of 790,000 shares of common stock to consultants for services. The stock was valued at the current market price at the date of issue for a total of $400,400. This amount was recorded as a prepaid expense for services to be amortized over the periods of the related agreements. During the year ended December 31, 2007, $284,375 has been amortized and $116,025 remains in prepaid expenses. During the year ended December 31, 2008, $116,025 was amortized and $0 remained in prepaid expenses at December 31, 2008.

During the year ended December 31, 2007, the Company signed an employment agreement with the CEO of the Company. The Company agreed to issue a total of 1,000,000 options for shares of common stock currently and issue another 1,000,000 options to him one year from the date of the agreement. The options issued in 2007 have a term of ten years and a strike price of $0.30. The aggregate fair value of the Warrants equals $281,300 based on the Black-Scholes pricing model using the following assumptions: 3.95% risk free rate, 162.69% volatility, strike price of $0.30, market price of $0.32, no yield, and an expected life of 5 years. This amount was recorded as unamortized cost of stock issued for services to be amortized over the two-year period of the agreement. During the year ended December 31, 2007, $23,442 was amortized into expense and $257,858 remained in unamortized cost of stock issued for services. $140,650 was amortized in 2008, and the remaining $117,208 was expensed in the six months ending June 30, 2009. The options issued in 2008 were treated as earned equally over the two-year term of the agreement so that 83,334 of these options were earned and expensed as of December 31, 2007. Those options were valued using the Black-Scholes pricing model using the same assumptions and valued at $14,442. The balance of the options were valued at $55,168 using the Black Scholes pricing model and were expensed as earned in the year ending December 31, 2008.

During the year ended December 31, 2008, a debenture holder, BridgePointe, elected to convert a portion of their principal to shares at the conversion rate in affect at that time of $0.30 per share. $100,000 of principal was converted to 333,332 shares

During the year ended December 31, 2008 the Company entered into contracts with employees that called for the issuance of 300,000 shares of the Company’s $0.001 common stock. These shares were valued at $19,750. This amount was expensed to compensation in the year ended December 31, 2008.

On August 8, 2008 the Company entered into a contract for services with vendor that called for the issuance of 390,000 shares of the Company’s $0.001 common stock. These shares were valued at $54,900 and were expensed over the life of the contract. At December 31, 2008 $22,750 had been expensed leaving a balance of $31,850 in prepaid services. In the nine months ended September 30, 2009 the remaining $31,850 was expensed leaving a balance of $0 in prepaid services at September 30,2009.

On October 1, 2007, the Company acquired certain assets of the Innergy Power Corporation and its wholly owned subsidiary, Portable Energy De Mexico, S.A. DE C.V. The fair market value of the transaction was $3,000,000. The Company issued 3,000,000 shares of the Company’s common stock for the acquisition. The Company guaranteed to the sellers that the shares would be worth $1 each ($3,000,000) during the 30-day period commencing 11 months from the closing date. If the shares were not worth $3,000,000, the company would be required to either (a) issue additional shares such that the total shares are worth $3,000,000 at that time or, (b) issue a total of 4,000,000 new shares, or (c) pay cash to the seller such that the aggregate value of the 3,000,000 shares plus the cash given would equal $3,000,000. On October 17, 2008, 4,000,000 shares were issued to Innergy Power Corporation in full satisfaction of our purchase obligation to them.

There were 129,422,861 shares of common stock issued and outstanding at December 31, 2008.

On December 6, 2007 the Company acquired through eTec the Minit-Charger business of Edison Enterprises. The fair market value of the transaction was $3,000,000. The company paid $1,000,000 in cash and issued 2,000,000 shares of the company’s common stock for the acquisition. The company guaranteed to the sellers that the shares would be worth $1 each ($2,000,000) by the tenth day following the first anniversary date of the transaction. If the shares are not worth $2,000,000, the company would be required to either issue additional shares such that the total shares are worth $2,000,000 at that time or pay cash to the seller so that the aggregate value of the 2,000,000 shares plus the cash given would equal $2,000,000. This purchase price obligation was settled in full on January 30, 2009 with the issuance of 31,333,333 shares of Ecotality’s $0.001 par value common stock.

In March 2009 the Company issued 1,075,000 shares of the Company’s $0.001 common stock in satisfaction of payables owed to two service vendors.

On April 13, 2009 75,000 shares of common stock were issued to an employee in accordance with an employment agreement.

On June 1, 2009, 45,370 shares of common stock were issued to BridgePointe Master Fund Ltd in satisfaction of a cashless exercise of 50,000 warrants.

For the period July 1 through September 30, 2009, 88,178,132 shares of the Company's $0.001 par value common stock were issued for the cashless exercise by our debenture holders of 93,976,001 warrants with an exercise price of $0.01 as follows: Enable Growth exercised 43,350,000 warrants in exchange for 40,888,329 shares, Enable Opportunity exercised 5,100,000 warrants in exchange for 4,810,391 shares, Pierce Diversified Master Fund exercised 2,550,000 warrants in exchange for 2,405,196 shares, BridgePointe Master Fund exercised 40,884,760 warrants in exchange for 38,074,216 shares and Glenwood Capital, LLC (recipient of assigned warrants) exercised 2,091,241 warrants in exchange for 2,000,000 shares.

For the period July 1 through September 30, 2009, 18,166,666 shares on the Company's $0.001 par value common stock were issued for conversion of debenture debt in the amount of $1,090,000 at a rate of $0.06 as follows: Pierce Diversified Master Fund converted $42,000 in debt for 700,000 shares, Enable Growth converted $714,000 in debt for 11,900,000 shares, Enable Opportunity converted $84,000 in debt for 1,400,000 shares and BridgePointe Master Fund converted $250,000 in debt for 4,166,666 shares.

For the period July 1 through September 30, 1,100,00 shares of the Company's $0.001 par value common stock were issued to employees per employment agreements .. These shares were valued at their respective grant dates as follows: 1,100,000 shares at $0.11 for a total of $121,000 which was expensed to compensation in the three months ended September 30, 2009.

A one year contract was signed on August 1, 2009 with a consultant calling for the issuance of 2,000,000 shares of the Company's $0.001 par value common stock in return for services to be provided over the life to the contract. The rights to the shares vested on the signing date of August 1, 2009 and were issuable in two tranches: 1 million shares within thirty days of the contract signing and the second one million shares after 180 days. The first tranche of 1,000,000 shares was issued on August 31, 2009. These shares were valued at the share price on the vesting date of $0.13 for a total of $260,000 which was recorded in prepaid expense to be amortized over the 1 year contract period. For the three months ended September 30, 2009, $43,333 was expensed to consulting and $216,667 remained in prepaid services at September 30, 2009.

A six month contract was signed on September 18, 2009 with a consultant calling for the issuance of 1, 200,000 five year warrants to purchase shares of the Company's $.001 par value common stock at an exercise price of $0.01. These warrants to be issued (vested) ratably over the contract period and to be issued in tranches of 200,000 at the end of each 30 day service period (first service period September 15 - November 15, 2009). The warrants earned during the period of 09/15/09 - 09/30/09 were valued at $0.1885 using the Black Scholes model with a strike price of $0.01, Stock Price $0.19 (at September 30, 2009), time 900 days, volatility 256.34% and risk free rate of 2.31%. The warrants earned and expensed in the three month period ending September 30, 2009 were 100,000 warrants at $0.1885 for total expense of $18,850.

A one year contract was signed on September 28, 2009 with a consultant calling for the issuance of 500,000 five year warrants to purchase shares of the Company's $.001 par value common stock at an exercise price of $0.01. These warrants are to be issued at the end of the contract period and are to be vested ratably over the contract period. The warrants earned during the period of 09/28/09 - 09/30/09 were valued at $0.1885 using the Black Scholes model with a strike price of $0.01, Stock Price $0.19 (at September 30, 2009), time 900 days, volatility 256.34% and risk free rate of 2.31%. The warrants earned and expensed in the three month period ending September 30, 2009 were 25,000 warrants at $0.1885 for total expense of $4,713.

The First Management Incentive Target as defined in our May 15, 2009 Debenture Waiver Agreement was defined as the signing of a contract valued at $20,000 000 or more on or before October 1, 2009. This target was reached on September 30,2009 with the signing of our contract with the Department of Energy. Upon reaching this target the Company became obligated issue a number of warrants (“First Management Penny Warrants”) to Jonathan Read, President and Chief Executive Officer of the Company, equal to 5% of the fully diluted number of shares of common stock of the Company as of the applicable Target Date (defined as the signing date or October 1st, whichever occurred earlier), having an exercise price of $0.01, which warrants were to be in the same form as the Warrants of the Existing Holders (as amended). This obligation was accrued on September 30, 2009 as follows: The number of warrants to be issued was calculated using the fully diluted number of shares on the target date of September 30, 2009 of 859,948,007 multiplied by 5% to get 42,997,400 as the number of warrants to be issued. These warrants were valued using the Black Scholes valuation model with the following factors: Strike Price $0.01, Stock Price (at September 30, 2009) $0.19, time 900 days, volatility 255.63% and risk free rate of 2.31% to yield a value per warrant of $0.1885. The total award = $0.1885 x 42,997,400 = $8,105,010. These warrants have been accrued and expensed to compensation in the three months ended September 30, 2009, but have not been issued as of the date of this filing. This award has been subsequently modified in the Third Amendment to the Amendment to Debentures and Warrants Agreement and Waiver signed on October 31, 2009. The modifications in the Third amendment call for the replacement of the original award with the issuance of a fixed number (40,410,312 shares or rights to acquire shares) of any of the following or a combination thereof: common stock, preferred shares or options to acquire shares at fair market value on the date of grant. In accordance with the guidance in 718-20-35-(3-8) of the FASB Accounting Standards Codification (Compensation - Stock Compensation), we have accrued based on the value of the original award. The modification of the award in October will be treated as an exchange of the original award for a new award. Once the award is firmly defined, any incremental compensation cost for the new award will be recorded.

There were 270,396,362 shares of common stock issued and outstanding at September 30, 2009.

There was no preferred stock issued or outstanding as of September 30, 2009.

Note 8 – Options and Warrants

As of December 31, 2007, there were 19,075,462 options and warrants outstanding.

The November and December debenture warrants issued in year ending December 31, 2007 were covered by the 2008 Debenture Waiver documents and as such were subject to the reset provisions outlined in Note 6 (A-I). In October 2008 these warrants were reset to an exercise price of $0.08 and additional “make whole” warrants were issued to allow the denture holders to true up to the previous aggregate exercise price (original number of warrants extended at previous higher exercise price vs. the lower true up price triggered by the Innergy true up make whole provision.). This reset led to the issuance of an additional 29,411,775 warrants attributable to the November and December Warrants with an exercise price of $0.08.

The November and December debenture warrants were reset a second time in October 2008 from $0.08 to $0.06 due to the Innergy True Up outlined in Note 6 and an additional 8,351,492 new warrants with an exercise price of $0.06 were issued.

At December 31, 2008, there were 57,838,729 options and warrants outstanding.

A third reset of the November and December debenture warrants occurred in January 2009 due to the Edison True up outlined in Note 6. This reset led to the issuance of an additional 4,720,408 warrants attributable to the November and December Warrants with an exercise price of $0.06.

As of March 31, 2009 there were 62,559,137 options and warrants outstanding.

On May 15, 2009 the November and December debentures were amended as outlined in Note 6. As a result, the existing warrants were reset from $0.06 to $0.01 exercise price and an additional 513,641,559 true up warrants were also issued to provide for an 80% equity position agreed to as part of this amendment.

On June1, 2009 BridgePointe Master Fund exercised 50,000 of their warrants.

As of June 30, 2009 there were 576,150,697 options and warrants outstanding.

In conjunction with the new July 2 debentures discussed more fully in Note 6, the November and December 2007 debenture holders surrendered 43,242,181 warrants in compliance with the June 30th True Up requirement contained in the May 15, 2009 debenture waiver.

	Number			Weighted-Average
	Of Shares			Exercise Price
Outstanding at December 31, 2006		8,799,982		$	0.57
Granted		11,753,925		$	0.31
Exercised		(1,478,445	)	$	0.35
Cancelled		0		$	0.00
Outstanding at December 31,2007		19,075,462		$	0.42
Granted		38,763,267		$	0.06
Exercised		0		$	0.00
Cancelled		0		$	0.00
Outstanding at December 31, 2008		57,838,729		$	0.14
Granted		518,361,968		$	0.01
Exercised		94,026,001		$	0.01
Cancelled		43,242,181		$	0.01
Outstanding at September 30, 2009		438,932,515		$	0.02

	STOCK WARRANTS OUTSTANDING
			Weighted-
			Average		Weighted-
	Number of		Remaining		Average
Range of	Shares		Contractual		Exercise
Exercise Prices	Outstanding		Life in Years		Price
$0.35		5,421,537		2.08	$	0.35
$1.24 - $1.42		1,900,000		1.8	$	1.36
$0.01		428,660,976		4.69	$	0.01
$0.28		1,000,000		8.08	$	0.28
$0.19		950,000		8.25	$	0.19
$0.04		1,000,000		9.08	$	0.04
		438,932,513		4.67	$	0.02

	STOCK WARRANTS EXERCISABLE
	Number of		Weighted-
Range of	Shares		Average
Exercise Prices	Exercisable		Exercise Price
$0.35		5,421,537	$	0.35
$1.24 - $1.42		1,900,000	$	1.36
$0.01		428,660,976	$	0.01
$0.28		1,000,000	$	0.28
$0.19		950,000	$	0.19
$0.04		1,000,000	$	0.04
		438,932,513	$	0.02

ECOTALITY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 9– Commitments and contingencies

As of September 30, 2009, the Company has five leases in effect for operating space. Future obligations under these commitments are $76,724 for 2009, $279,208 for 2010, $237,699 for 2011, $242,759 for 2012 and $64,006 for 2013.

In June of 2006, the Company entered into a License Agreement with California Institute of Technology, whereby the Company obtained certain exclusive and non-exclusive intellectual property licenses pertaining to the development of an electronic fuel cell technology. The License Agreement carries an annual maintenance fee of $50,000, with the first payment due on or about June 12, 2009 which has been accrued through the quarter ended September 30, 2009. The License Agreement carries a perpetual term, subject to default, infringement, expiration, revocation or unenforceability of the License Agreement and the licenses granted thereby.

Note 10 – Segment Reporting

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” requires disclosures related to components of a company for which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker in deciding the allocation of resources and assessing performance. Upon completion of FuelCellStores.com, Innergy Power Corporation, Electric Transportation Engineering Corporation (eTec) and eTec’s Minit-Charger business acquisitions from June through December 2007, the Company identified its segments based on the way management expects to organize the Company to assess performance and make operating decisions regarding the allocation of resources. In accordance with the criteria in SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information,” the Company has concluded it has three reportable segments for the quarter and nine months ended September 30 2009; ECOtality Stores segment, Innergy Power segment and eTec segment. The ECOtality Stores segment is the online marketplace for fuel cell-related products and technologies with online distribution sites in the U.S., Japan, Russia, Italy and Portugal .. The Innergy Power segment is comprised of the sale of solar batteries and other solar and battery powered devices to end-users. The eTec segment relates to sale of fast-charge systems for material handling and airport ground support applications to the testing and development of plug-in hybrids, advanced battery systems and hydrogen ICE conversions and consulting revenues. This segment also includes the Minit-Charger business which relates to the research, development and testing of advanced transportation and energy systems with a focus on alternative-fuel, hybrid and electric vehicles and infrastructures. eTec holds exclusive patent rights to the eTec SuperCharge™ and Minit-Charger systems - battery fast charge systems that allow for faster charging with less heat generation and longer battery life than conventional chargers. The Company has aggregated these subsidiaries into three reportable segments: ECOtality/Fuel Cell Store, eTec and Innergy.

The accounting policies for the segments are the same as those described in the summary of significant accounting policies in Note 3 of this Form 10-Q Management continues to assess how it evaluates segment performance, and currently utilize income (loss) from operations, excluding share-based compensation (benefits), depreciation and intangibles amortization and income taxes. For the nine months ended September 30, 2009 and 2008 inter-segment sales were $28,723 and $0. All inter-segment sales have been eliminated in the consolidation process.

ECOTALITY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summarized financial information concerning the Company’ s reportable segments for the quarter ended September 30, 2009 and September30, 2008 and for the nine months ended September 30, 2009 and 2008 respectively are as follows:

THREE MONTHS ENDED SEPTEMBER 30, 2009

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	1,202,325		$	448,983		$	248,693		$	1,900,002
Depreciation and amortization	$	66,727		$	1,475		$	891		$	69,093
Operating income (loss)	$	(1,213,816	)	$	107,554		$	49,528		$	(1,056,734	)
Interest Income (expense)	$	(13	)	$	-		$	-		$	(13	)
Gain / (Loss) on disposal of assets	$	4,424		$	-		$	-		$	4,424
Other Income (expense)	$	-		$	-		$	-		$	-
Segment Income before Corporate Overhead Allocation	$	(1,209,405	)	$	107,554		$	49,528		$	(1,052,323	)
Corporate Overhead Allocation	$	9,235,780		$	3,448,908		$	1,910,360		$	14,595,048
Segment Income / (Loss)	$	(10,445,185	)	$	(3,341,354	)	$	(1,860,832	)	$	(15,647,370	)

Not Included in segment income:
Depreciation on Corporate Assets										$	33,132
Reported Net income after tax										$	(15,680,502	)
Capital Expenditures	$	298,113		$	-		$	-		$	298,113

Total segment assets - excluding intercompany receivables	$	2,536,734		$	502,877		$	195,933		$	3,235,544
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	1,775,953
Total Reported Assets										$	8,507,372

THREE MONTHS ENDED SEPTEMBER 30, 2008

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	2,131,669		$	533,317		$	235,833		$	2,900,819
Depreciation and amortization	$	168,267		$	1,097		$	1,187		$	170,551
Operating income (loss)	$	(36,631	)	$	(75,575	)	$	56,016		$	(56,190	)
Interest Income (expense)	$	(843	)	$	84		$	-		$	(759	)
Gain / (Loss) on disposal of assets	$	16,165		$	-		$	-		$	16,165
Other Income - Working Capital True Up	$	375,877		$	-		$	-		$	375,877
Segment Income before Corporate Overhead Allocation	$	354,568		$	(75,491	)	$	56,016		$	335,093
Corporate Overhead Allocation	$	1,371,531		$	343,140		$	151,737		$	1,866,408
Segment Income / (Loss)	$	(1,016,963	)	$	(418,631	)	$	(95,721	)	$	(1,531,315	)

Not Included in segment income:
Depreciation on Corporate Assets										$	33,114
Reported Net income after tax										$	(1,564,430	)
Capital Expenditures	$	76,023		$	6,193		$	-		$	82,216

Total segment assets - excluding intercompany receivables	$	4,324,668		$	658,435		$	177,604		$	5,160,707
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	3,871,570
Total Reported Assets										$	12,528,155

NINE MONTHS ENDED SEPTEMBER 30, 2009

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	3,997,884		$	1,499,805		$	619,596		$	6,117,286
Depreciation and amortization	$	246,082		$	4,401		$	2,671		$	253,154
Operating income (loss)	$	(1,407,135	)	$	372,624		$	110,872		$	(923,639	)
Interest Income (expense)	$	(13	)	$	-		$	-		$	(13	)
Gain / (Loss) on disposal of assets	$	14,184		$	-		$	-		$	14,184
Other Income (expense)	$	-		$	-		$	-		$	-
Segment Income before Corporate Overhead Allocation	$	(1,392,964	)	$	372,624		$	110,872		$	(909,468	)
Corporate Overhead Allocation	$	12,134,063		$	4,836,686		$	2,325,312		$	19,296,060
Segment Income / (Loss)	$	(13,527,027	)	$	(4,464,062	)	$	(2,214,440	)	$	(20,205,528	)

Not Included in segment income:
Depreciation on Corporate Assets										$	99,378
Reported Net income after tax										$	(20,304,903	)
Capital Expenditures	$	411,995		$	-		$	-		$	411,995

Total segment assets - excluding intercompany receivables	$	2,536,734		$	502,877		$	195,933		$	3,235,544
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	1,775,953
Total Reported Assets										$	8,507,372

NINE MONTHS ENDED SEPTEMBER 30, 2008

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	6,086,676		$	1,920,162		$	648,029		$	8,654,868
Depreciation and amortization	$	359,676		$	5,196		$	2,670		$	367,542
Operating income (loss)	$	46,382		$	46,538		$	44,930		$	137,850
Interest Income	$	2,914		$	519		$	-		$	3,433
Gain / (Loss) on disposal of assets	$	18,219		$	-		$	-		$	18,219
Other Income - Working Capital True Up	$	375,877		$	-		$	-		$	375,877
Segment Income before Corporate Overhead Allocation	$	443,392		$	47,057		$	44,930		$	535,379
Corporate Overhead Allocation	$	3,456,303		$	1,074,177		$	369,014		$	4,899,494
Segment Income / (Loss)	$	(3,012,911	)	$	(1,027,120	)	$	(324,084	)	$	(4,364,115	)

Not Included in segment income:
Depreciation on Corporate Assets										$	102,127
Reported Net income after tax										$	(4,466,242	)
Capital Expenditures	$	242,139		$	9,025		$	-		$	251,164

Total segment assets - excluding intercompany receivables	$	4,324,668		$	658,435		$	177,604		$	5,160,707
Other items Not included in Segment Assets:
Goodwill	$	-		$	-		$	-		$	3,495,878
Other Corporate Assets	$	-		$	-		$	-		$	3,871,570
Total Reported Assets										$	12,528,155

NOTE 11 – Related Party Transactions

On August 29, 2008, Mr. Donald Karner, a director of the Company, and Kathryn Forbes agreed to provide the Company a line of credit for up to $650,000. This Line is secured by a second position on receivables (junior to previously issued debentures). During the 9 months ended September 30, 2008, $300,000 was advanced by Mr. Karner and Ms. Forbes. This line carried a loan fee of $45,000 payable when the line expired on December 15, 2008. No other interest payments or fees were required under the agreement. The fee of $45,000 was expensed over the life of the Line. Imputed interest of $1,425 and financing charges of $6,962 were expensed in the 9 month period ending September 30, 2008. The balance of the note payable of $450,000 was paid July 9, 2009.

Note 12 – Subsequent Events

Management has evaluated all events and transactions that have occurred subsequent to the balance sheet date and has determined that all material events which have occurred as of November 19, 2009, that would be deemed significant or require recognition or additional disclosure have been disclosed below:

Brookstreet Broker Warrants

As described in footnote 8, the Company issued warrants to several brokers at Brookstreet Capital in conjunction with a private offering conducted during the period July-October 2006. The warrants prepared by independent legal counsel were not well written in terms of anti-dilution provisions and it was believed that no adjustment to the number of warrants or their exercise price was required unless all common stock holders were adjusted accordingly. However, on October 23, 2009 it was determined that an adjustment should be made for these warrants.

On October 23, 2009 we determined that the Brookstreet warrant holders should be permitted to exercise their warrants at a price of $ .01 per share in a cashless exercise and receive shares of the Company's $.001 par value common stock with the restricted legend removed. In addition each warrant holder was also eligible to receive one new warrant ($.01 exercise price) for every five (5) of their original warrants exercised. These new warrants would be subject to the provisions of Rule 144. Substantially all the affected 5,421,537 warrants have been exercised as of the date of this filing.

Securities Exchange Agreement

On October 31, 2009, Ecotality, Inc. (“Ecotality” or the “Company”) signed a Securities Exchange Agreement with all holders of its convertible debentures and holders of certain warrants to convert all outstanding amounts ($9,111,170) under these debentures and all related warrants into an aggregate of 9,270,804 shares of Series A Convertible Preferred Stock (while not impacted by the current common stock split discussed herein, it could be subject to adjustment for future forward and reverse stock splits, stock dividends, recapitalizations and the like). The Series A Convertible Preferred Stock has no redemption or preferential dividend rights, but may be converted into shares of the Company’s common stock (the “Common Stock”). At the date of this filing the Series A Convertible Preferred Stock is convertible at a1:60 ratio. Following the reverse split of common shares (see below) the preferred shares will be convertible at a 1:1 ratio.

Concurrent with the signing of the Securities Exchange Agreement, the Ecotality Board of Directors approved a 1:60 reverse stock split (the “Reverse Split”) of its common stock and authorized Company management to affect the Reverse Split after providing the required notice to the Financial Industry Regulatory Authority (FINRA). The Reverse Stock split was approved by shareholders at the August 26, 2009 Annual Shareholder Meeting. In addition, the Board authorized Company management to submit an application to be listed on The NASDAQ Stock Market after affecting the Reverse Split. There can be no assurance that the Company can meet the listing requirements of the NASDAQ Stock Market.

The descriptions of the terms and conditions of the Securities Exchange Agreement and the terms of the Series A Convertible Preferred Stock are qualified in their entirety by the full text of the Securities Exchange Agreement and Certificate of Designation, which are attached as Exhibits hereto and incorporated herein by reference. The issuance of the securities in the transaction described above will be effected without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(2) thereof or Rule 506 of Regulation D thereunder based on the status of each investor as an accredited investor as defined under the Securities Act, and such transaction will be effected without using any form of general advertising or general solicitation as such terms are used in Regulation D.

Securities Purchase Agreement

On October 31, 2009, Ecotality signed a Securities Purchase Agreement and a Registration Rights Agreement with certain accredited investors (the “Investors”) pursuant to which the Investors agreed to purchase shares of the Common Stock at a pre-Reverse Split purchase price of $0.12 per share. The funds from the private placement will be utilized as working capital to support the initial requirements of the contract signed with the Department of Energy on September 30, 2009.

Terms of the private placement include:

A minimum aggregate purchase of $15,500,000 of Common Stock by the Investors.

Each Investor will receive a Warrant to purchase the equivalent number of shares of Common Stock that it purchases under to the Securities Purchase Agreement. The exercise price of the Warrants will be equal to $0.15 per share (pre-Reverse Split). The Company may call the Warrants if the closing price of shares of the Common Stock is at least $0.45 per share (pre-Reverse Split) for 20 consecutive trading days, subject to certain conditions, including the existence of an effective registration statement for the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) and minimum volume provisions. The Company may not affect any exercise of the Warrants in an amount that would result in any Investor or its affiliates beneficially owning more than 9.99% of the outstanding Common Stock upon such an exercise. The Warrants will have a five-year term during which they can be exercised and shall contain a cashless exercise provision which shall apply if there is not an effective registration statement covering the resale of the shares issuable upon exercise.


	3.	The Company shall file a shelf registration statement for the resale of the shares of Common Stock purchased under the Securities Purchase Agreement and the Warrant Shares on Form S-3 or another appropriate form (the “Registration Statement”). Such Registration Statement shall be filed as soon as practicable, but in any event within 45 days of the closing date of the Securities Purchase Agreement.

The Investors have agree not to exercise “short sales” for a period of 9-months after the date of the Securities Purchase Agreement.

In the period from October 1, 2009 through November 16th, the following equity issuances were recorded:

38,899,997 shares of the Company's $0.001 par value common stock were issued for the cashless exercise by our debenture holders of 41,373,371 warrants with an exercise price of $0.01 as follows: Enable Growth exercised 14,871,192 warrants in exchange for 13,939,997 shares, Enable Opportunity exercised 1,749,552 warrants in exchange for 1,640,000 shares, Pierce Diversified Master Fund exercised 874,776 warrants in exchange for 820,000 shares and BridgePointe Master Fund exercised 23,877,851 warrants in exchange for 22,500,000 shares.

5,777,969 shares of the Company's $0.001 par value common stock were issued for the cashless exercise by various Brookstreet Warrant holders of 6,202,363 warrants with an exercise price of $0.01.

3,662 shares of the Company's $0.001 par value common stock were issued to an employee in accordance with an employment agreement.

Third Amendment to the Amendment to Debentures and Warrants Agreement and Waiver

Concurrent with, or prior to the closing of the transactions under the Securities Exchange Agreement, and Securities Purchase Agreement, the Company entered into a Third Amendment to the Amendment to Debentures and Warrants, Agreement and Waiver dated May 15, 2009 with the debenture holders .. This amendment modified the issuances to be made on the satisfaction of the first, second and third Management Incentive Targets as defined in the May 15, 2009 Waiver Agreement (sections 30 (a-c).)

Changes in the Board of Directors

On October 30, 2009, Mr. Harold Sciotto resigned as a member of the Board of Directors of Ecotality. Mr. Sciotto will remain as Secretary/Treasurer of Ecotality per his employment agreement. There were no disagreements with Mr. Sciotto on any matter relating to the Company's operations, policies or practices.

On October 30, 2009, Mr. Jerry Lin resigned as a member of the Board of Directors of Ecotality. Mr. Lin will remain as Chairman of Ecotality's Technology Committee. There were no disagreements with Mr. Lin on any matter relating to the Company's operations, policies or practices.

On October 30, 2009 Mr. Carlton M Johnson was named to fill one of the Company's existing vacant positions as a member of the Board of Directors.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. The discussion should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements about our business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, Alchemy’s actual results may differ materially from those indicated by the forward-looking statements.

The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.

There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as, “believes,” “expects,” “intends,” “plans,” ”anticipates,” “estimates” and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.

GENERAL

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. The discussion should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto, contained elsewhere in this Form 10-Q.

Business Development and Summary

We were incorporated in Nevada in 1999. We are a leader in clean electric transportation and storage technologies. Through innovation, acquisitions, and strategic partnerships, we accelerate the market applicability of advanced electric technologies to replace carbon-based fuels. We are a leader in providing electric vehicle infrastructure products and solutions that are used in on-road grid-connected vehicles (including plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV)), material handling and airport electric ground support applications. Through our main operating subsidiary, Electric Transportation Engineering Corporation (eTec), our primary product offering is the Minit-Charger line of advanced battery fast-charge systems that are designed for various motive applications. In addition to our electric transportation focus, we are also involved in the development, manufacture, assembly and sale of specialty solar products, advanced battery systems, and hydrogen and fuel cell systems. Our subsidiaries and primary operating segments consist of Electric Transportation Engineering Corporation (eTec), Innergy Power Corporation (Innergy), and ECOtality Stores (dba Fuel Cell Store). In addition we have a wholly owned subsidiary in Mexico providing manufacturing services for us.

We operate with a commercial “electro-centric” strategy, targeting only products and companies involved in the creation, storage, and/or delivery of clean or renewable electric power. This strategy has resulted in the development and acquisition of various operating companies.. While focused on electric transportation infrastructure, we have developed a diversified technology portfolio that is linked through the ability to deliver comprehensive electro-centric energy alternatives and solutions. By establishing a technologically diverse multi-product base we are able to mitigate the uncertainty of clean technology demands and regulatory changes. Our current primary focus is to facilitate and execute the development and implementation of electric vehicle charging infrastructure in anticipation of mass commercialization of plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) in the 2010 to 2012 timeframe.

Electric Transportation Engineering Corporation (eTec)

Electric Transportation Engineering Corporation (eTec) was incorporated in Arizona in 1996 to support the development and installation of battery charging infrastructures for electric vehicles. As our primary operating subsidiary, eTec is a recognized leader in the research, development and testing of advanced transportation and energy systems, and is the exclusive provider of the Minit-Charger line of battery fast-charge systems and technologies. Specializing in alternative-fuel, hybrid and electric vehicles and infrastructures, eTec offers consulting, technical support and field services and is committed to developing and commercially advancing clean electric technologies with clear market advantages.

eTec’s primary product line consists of the Minit-Charger line of battery fast-charge systems. The Minit-Charger brand is the result of a consolidation of the two leading fast-charging technologies: eTec SuperCharge™ and Edison Minit-Charger . Prior to rebranding all eTec fast-charge systems under the Minit-Charger brand, eTec held exclusive patent rights to the flagship product line, eTec SuperCharge™ - battery fast-charge systems that allow for rapid charging while generating less heat and promoting longer battery life than conventional chargers. The eTec SuperCharge technology was licensed to eTec from Norvic Traction in 1999. The eTec SuperCharge system was specifically designed for airport ground support equipment, neighborhood and on-road electric vehicle, and marine and transit system operations. Since the acquisition of the technology, eTec has made considerable engineering and product advancements and is currently a leader in providing these clean electric fast-charging technologies to airports throughout North America.

In 2007, we acquired the Minit-Charger business of Edison Source, a division of Edison International . The core Minit-Charger technology allows for material handling equipment to convert to electric power systems that can be charged quickly, conveniently and efficiently, thereby eliminating the need for propane or diesel-powered equipment or for backup batteries and costly change-out operations required with traditional straight-line charging.. eTec’s Minit-Charger line of battery fast charge systems has a large customer base that consists of Fortune 500 companies and other corporate entities throughout North America.

In March of 2008, all eTec fast-charging products, including the eTec SuperCharge product line, were consolidated under the eTec Minit-Charger brand. By unifying the underlying fast-charging technologies under a single engineering, manufacturing and sales entity ( eTec Minit-Charger ), we are better able to streamline our operations and sales and marketing efforts. The complete portfolio of eTec Minit-Charger products provides eTec with a leadership position in current fast charging markets and well positions us to capitalize on the rapidly growing clean technology sector for electric vehicle infrastructure technologies. We believe Minit-Charger is the most superior fast-charge technology on the market as it is a smart charging system that can charge batteries (of almost all chemistries) as fast as possible, while best controlling the battery temperature and avoiding the devastating effects of overcharging.

eTec has a comparatively long history in clean and renewable technologies and has various standing contractual relationships as a test contractor and/or primary and consulting engineer for projects with the United States Department of Energy (DoE), several national research laboratories, national energy storage consortiums, and large electric utilities where they provide services in energy storage, monitoring, systems design and fabrication, product and vehicle testing, and product development. Their work has been in the areas of electric vehicle systems, recharging stations, energy demand management systems, utility communication systems, advanced battery technologies, fast charging technologies, hydrogen creation, storage and dispensing systems, and coal gasification programs. Currently, eTec is holds the exclusive contract for the DoE’s Advanced Vehicle Testing Activity (AVTA) program and has conducted more than 6 million miles of vehicle testing on more than 200 advanced fuel vehicles.

eTec was acquired as an expansion platform for its core expertise in battery technologies, fast charging systems, energy distribution infrastructure, and advanced vehicle technologies and testing, which includes electric vehicle (EV), hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV) and hydrogen vehicle technologies. We believe that eTec will expand its core technologies through new product development, joint ventures, acquisitions and organic growth. As eTec has unparalleled experience with electric vehicle infrastructure, we believe our experience with electric vehicles infrastructure, our knowledge of the vehicle and battery systems, as well as our industry leading fast-charging technology provides us with a distinct competitive advantage to be leading provider of electric vehicle infrastructure services and installation.

eTec has been involved in every North American EV initiative to date and is a leading provider of solutions for electric vehicles and its supporting infrastructure. Currently, eTec has installed more than 5,100 charging stations for motive applications, and has installed more chargers for on-road applications than any other company in North America

On August 5, 2009 eTec was selected by the U.S. Department of Energy for a grant of approximately $95 million to undertake the largest deployment of electric vehicles (EVs) and charging infrastructure in U.S. history. eTec, as the lead applicant for the proposal, partnered with Nissan North America to deploy EVs and the charging infrastructure to support them. The Project takes advantage of the early availability of the Nissan LEAF, a zero-emission electric vehicle, to develop, implement and study techniques for optimizing the effectiveness of charging infrastructure that will support widespread EV deployment. The Project will install electric vehicle charging infrastructure and deploy up to a total of 4,700 Nissan battery electric vehicles in strategic markets in five states: Arizona, California, Oregon, Tennessee, and Washington.

The Project will collect and analyze data to characterize vehicle use in diverse topographic and climatic conditions, evaluate the effectiveness of charge infrastructure, and conduct trials of various revenue systems for commercial and public charge infrastructure. With the goal of developing mature charging environments, the Project proposes to deploy charging infrastructure in major population areas that include Phoenix (AZ), Tucson (AZ), San Diego (CA), Portland (OR), Eugene (OR), Salem (OR), Corvallis (OR), Seattle (WA), Nashville (TN), Knoxville (TN) and Chattanooga (TN). To support the Nissan EV, the Project will install approximately 11,000 Level 2 (220V) charging systems and 250 Level 3 (fast-charge) systems.

Innergy Power Systems

Founded in 1989, Innergy Power Systems is based in San Diego, California with a manufacturing facility in Tijuana, Mexico . Innergy is the only North American manufacturer of both renewable energy solar modules and thin-sealed rechargeable batteries, as its solar photovoltaic (PV) product line addresses the burgeoning worldwide demand for solar energy products and off-grid power. Innergy’s fiberglass reinforced panel (FRP) solar modules are designed to meet a broad range of applications for emergency preparedness and recreation, where quality, durability, rugged construction and light weight are important in the outdoor environment. Applications include logistics tracking, asset management systems, off-grid lighting, mobile communications, mobile computing, recreational vehicles, signaling devices and surveillance cameras.

Innergy and our wholly owned subsidiary providing manufacturing services, Portable Energy De Mexico, S.A. DE C.V., provides us the ability to further expand our production, manufacturing and assembly capabilities for Innergy’s solar products and energy storage devices, as well as products of our other subsidiaries, including eTec’s Minit-Charger products. Innergy provides us the ability to expand our offering of solar products and solutions into current and developing commercial markets, as well as provides strong manufacturing and assembly operations to assist other aspects of our business. While we expect solar to become a major future energy source, Innergy’s battery systems that support the growing electric vehicle market is quickly expanding and we expect the combination of solar solutions and new battery sales to contribute to our long and short-term earnings and revenue growth. Innergy is actively pursuing growth opportunities through product line expansion, joint ventures, acquisitions, and manufacturing contracts.

ECOtality Stores (dba Fuel Cell Store)

ECOtality Stores (dba Fuel Cell Store) is our wholly owned subsidiary and operates as our online retail division. Fuel Cell Store (www.fuelcellstore.com) is an e-commerce marketplace that offers consumers the widest array of fuel cell products from around the globe. Based in San Diego, California and with active international operations in Japan, Russia, Italy, and Portugal , Fuel Cell Store develops, manufacturers, and sells a diverse and comprehensive range of fuel cell products that includes fuel cell stacks, systems, component parts and educational materials. In addition to primary retail operations, Fuel Cell Store also offers consulting services for high schools, colleges, and leading research institutes and is available to host workshops, conferences and corporate events. Fuel Cell Store is the leading market place for fuel cell stack, component, and hydrogen storage manufacturers to unite with consumers and is an attractive source for hydrogen and fuel cell industry activity and direction.

Hydrality™

Hydrality™ is a complex reactor system that stores and delivers hydrogen on-demand using magnesium compounds and water. The EPC/Hydrality technology, which was initially developed in conjunction with NASA’s Jet Propulsion Laboratory (JPL) and subsequently advanced by Arizona State University , Green Mountain Engineering and Airboss Aerospace, Inc. continues to have strong promise for a variety of commercial applications. While we initially sought to design and license a cost efficient Hydrality system for use in motorized vehicles and industrial equipment, we have identified several additional and promising applications for Hydrality that include stationary applications for remote power, back-up power systems, and large scale industrial and utility use.

Organizational History

We were incorporated in Nevada in 1999 under the name Alchemy Enterprises, Ltd. to market biodegradable products. On November 14, 2006, we changed our name to “ECOtality, Inc.” to better reflect our renewable energy strategy.

On June 12, 2006, we entered into a License Agreement with California Institute of Technology (CalTech), which operates Jet Propulsion Laboratory (JPL), whereby we acquired certain exclusive licensed patent and/or patent applications rights and improvement patent rights related to research performed under the JPL Task Plan No. 82-10777, entitled “Mechanically-Fed Metal-Air Fuel Cell As A High Energy Power Source” (“Task Plan”), as well as a nonexclusive licensed technology rights developed as a result of the Task Plan. As partial consideration paid in connection with the License Agreement, we issued 5,869,565 shares of our common stock to CalTech with a fair market value of $1.40 per share, based upon the closing price of our common stock on June 12, 2006, for a total aggregate value of $8,217,391. Furthermore, we are obligated to pay an annual maintenance fee of $50,000 to CalTech, beginning on June 12, 2009, continuing until the expiration, revocation, invalidation or unenforceability of the last exclusively licensed patent rights or improvement patent rights. The License Agreement carries a perpetual term, subject to default, infringement, expiration, revocation or unenforceability of the License Agreement and the licenses granted thereby.

On June 11, 2007, we bought the assets of the Fuel Cell Store (www.FuelCellStore.com), a small web-based seller of educational fuel cell products. The Fuel Cell Store product line includes demonstration kits, educational materials, fuel cell systems and component parts. It also offers consulting services for establishing educational programs for all levels of educational institutions. Since Fuel Cell Store was significantly smaller than we are, we were not required to provide audited financial statements for it. We operate the Fuel Cell Store through our wholly-owned subsidiary, ECOtality Stores, Inc. While revenue producing activities, facilities and employees has initially remained the same, we have changed the distribution system through inventory control procedures, and expanded the customer base through increased emphasis on marketing. We sell Fuel Cell Store products through our own ECOtality Store’s website ( www.fuelcellstore.com ).

On October 1, 2007 we closed on the purchase of certain assets of Innergy Power Corporation and its wholly owned subsidiary, Portable Energy De Mexico, S.A. DE C.V., pursuant to an agreement that we entered into on September, 18, 2007. Innergy designs and manufactures standard and custom solar-power and integrated solar-battery solutions for government, industrial and consumer applications. The purchase price for the assets was 3,000,000 shares of our common stock. We guaranteed to the sellers that the shares of our common stock issued in the transaction would be worth $3,000,000 during the 30 day period commencing 11 months from the closing date or we would be required to either issue additional shares such that the total shares are worth $3,000,000 at that time or pay the seller the difference in cash. On October 17, 2008, 4,000,000 shares were issued to Innergy Power Corporation in full satisfaction of our purchase obligation to them.

On November 6, 2007 we signed an agreement to acquire all of the outstanding stock of the Clarity Group, Inc. and its affiliate, Electric Transportation Engineering Corporation (eTec), through a stock purchase agreement. eTec provides technical support and field services for all aspects of electric vehicle infrastructure. eTec operates as our wholly owned subsidiary and there have been no changes to the eTec’s management team.

In December 2007, we entered into and completed various stock and asset purchase agreements with Electric Transportation Engineering Corporation (“eTec”), Edison Source (“Vendor”), Edison Enterprises (“Edison”) and 0810009 B.C. Unlimited Liability Company (“0810009”) to purchase certain technology and assets related to the manufacture and selling of a “fast charge” battery charging system to be used in commercial and industrial market places.

Electric Transportation Engineering Corporation (eTec)

On November 6, 2007, we signed a stock purchase agreement with two non-affiliated individuals whereby we purchased all of the issued and outstanding capital stock of Electric Transportation Engineering Corporation, as well as its affiliated company Clarity Group, Inc. (both of which are collectively referred to as “eTec”). eTec provides technical support and field services for all aspects of electric vehicle infrastructure. eTec will operate as our subsidiary and there will be no changes to the company’s management team.

The aggregate purchase price for the outstanding capital stock of eTec is $3,000,000 in cash and 6,500,000 shares of our common stock of the $3,000,000 in cash to be paid to eTec, $2,500,000 was paid upon closing of the stock purchase agreement and $500,000 will be paid in 10 equal monthly installments, beginning December 1, 2007. The 6,500,000 shares were issued in the following manner: 6,500,000 were issued upon the close of the stock purchase agreement, 3,250,000 were released on date of signing, and 3,250,000were released on the first anniversary of the closing of the stock purchase agreement from the Company corporate secretary. The shares bear a restrictive legend and are not subject to piggy-back registration rights.

Edison Minit-Charger

The aggregate purchase price was $1,000,000 in cash and 2,000,000 shares of our common stock. The company guaranteed to the sellers that the shares would be worth $1 each ($2,000,000) by the tenth day following the first anniversary date of the transaction. If the shares were not worth $2,000,000, the company would be required to either issue additional shares such that the total shares are worth $2,000,000 at that time or pay cash to the seller so that the aggregate value of the 2,000,000 shares plus the cash given would equal $2,000,000. This purchase price obligation was settled in full on January 30, 2009 with the issuance of 31,333,333 shares of Ecotality’s $0.001 par value common stock.

Our Hydrality System

We have been developing Hydrality™, a system that stores and delivers hydrogen on-demand using magnesium compounds and water. When used in conjunction with existing fuel cell technology, Hydrality emits only pure water and produces no harmful emissions.

While we initially sought to design and license a cost efficient Hydrality system for use in motorized vehicles and industrial equipment, we have identified several additional promising applications for Hydrality that include stationary application for remote power, back-up power systems, and large-scale industrial and utility use as we have described above in our description of our business.

On May 7, 2007, a non-provisional patent application was filed by Stinson Morrison Hecker LLP in the name of California Institute of Technology as assignee and us as exclusive licensee of the technology, for a Method and System for Storing and Generating Hydrogen, claiming priority from a provisional application filed by CalTech on May 8, 2006. The details of the patent application and invention are confidential until publication or issue. The patent application is generally directed towards the hydrogen reactor design currently under development.

The current technology, which is the subject of the pending patent application, is a method for generating hydrogen in an on-board vehicle reaction chamber to fuel a fuel cell or modified engine on demand. The information and diagrams in the Technology Contribution Agreement and JPL Task Plan involve a metal-air battery design. Based on the research of JPL into the metal-air battery design, the technology has migrated from a basic metal-air battery concept to a hydrogen reactor.

While we are now are in the process of investigating and analyzing third-generation reactor models , we anticipate this to be a long term project given the minimal amount of funds we are expending on this research and development effort. Laboratory-scale test reactors are being used to gather data for the purpose of characterizing the reactor and constructing analytical design models. It is anticipated that patent protection will be sought on one or more aspects or features of the third-generation reactor. However, it is not our stated intent to manufacture reactors. Rather, it is our intent to use the third-generation reactors to demonstrate the technology, and then license the technology and/or the reactor design to others for commercialization. The specifications of the commercial reactors have not yet been determined, and the designs will vary based on different customer application requirements.

Status of any announced new product or service

Throughout 2008, and during the first nine months of 2009, we have focused the Company on being the leading supplier of electric vehicle infrastructure. We have also continued to reiterate that although we initially sought to design and license a cost efficient Hydrality system for use in motorized vehicles and industrial equipment, we have identified several additional and promising applications for Hydrality that include stationary applications for remote power, back-up power systems, and large scale industrial and utility use.

On August 5, 2009 eTec was selected by the U.S. Department of Energy for a grant of approximately $95 million to undertake the largest deployment of electric vehicles (EVs) and charging infrastructure in U.S. history. eTec, as the lead applicant for the proposal, partnered with Nissan North America to deploy EVs and the charging infrastructure to support them. The Project takes advantage of the early availability of the Nissan LEAF, a zero-emission electric vehicle, to develop, implement and study techniques for optimizing the effectiveness of charging infrastructure that will support widespread EV deployment. The Project will install electric vehicle charging infrastructure and deploy up to total of 4,700 Nissan battery electric vehicles in strategic markets in five states: Arizona, California, Oregon, Tennessee, and Washington.

Stage of Commercialization of the Hydrality Technology

NASA’s Jet Propulsion Laboratory (JPL), under its agreement with us, has completed testing of the Hydrality technology on lab-scale models of the reactor resulting in announced results and improvements. Its research is ongoing on our behalf and will continue throughout the implementation stages of the technology. Additionally, we have entered into an agreement with Arizona State University (ASU) to evaluate potential regeneration technologies and determine cost and energy efficiencies for converting magnesium oxide, the main byproduct of Hydrality, back to its original form of magnesium.

Current transportation industry trends suggest that the commercial viability of hydrogen fuel cell vehicles remains on the distant horizon (about 10 years away) due to cost and efficiency problems with underlying fuel cell technologies. Being reactive and reflexive to these market trends, we have reduced the developmental costs of Hydrality for transportation applications to pursue additional applications with immediate commercial applicability in 2009. With the current shift in the transportation market towards plug-in hybrid vehicles (PHEV) and pure electric vehicles (EV), we will aggressively explore the use of eTec’s fast charging systems in PHEV and EV infrastructure applications. If and when fuel cell technologies begin to present a practical and economically viable solution for alternative electric propulsion systems, the Company will be prepared to capitalize upon the ongoing research and development efforts of Hydrality to modify the system for use in transportation applications.

As our research and development efforts have identified several new and promising applications for Hydrality that include stationary use, remote power, back-up power systems, and large scale industrial and utility use, we intend to refocus our research and development expenditures upon these areas that we determine to have immediate commercial applicability. While we will target our research and development efforts primarily on stationary and utility power applications, the research and testing for large-scale applications of our Hydrality system will be valuable in further advancing the technology for all applications, including those of transportation.

In October of 2007, we announced that we will participate in the Arizona Public Service (APS) Advanced Hydrogasification Project (AHP). APS, Arizona’s largest public utility company, has previously received $8.9 million in funding for this pilot project from the U.S. Department of Energy (DOE). The objective of this partnership is to investigate the use of Hydrality™ – an on-demand hydrogen production and storage technology – to support APS’ hydrogasification efforts to deliver “clean” electricity to the public. The Hydrality testing is currently estimated to commence in the middle of 2008. The AHP program is a collaborative project among APS and industry partners, including the Department of Energy’s National Energy Technology Laboratory (NETL), to develop an economical process of producing substitute natural gas (SNG) from coal without the release of carbon dioxide, a known greenhouse gas. The APS project will use hydrogen to react with coal in a high temperature and pressure reaction that ultimately produces methane that can be injected into existing natural gas pipelines. Specifically aimed at supporting the AHP hydrogasification efforts, the project will conduct testing to evaluate the process kinetics and reactor dynamics of our Hydrality process for large-scale hydrogen production and storage applications .

We believe the Hydrality technology has a promising future, but this future was not as eminent as it was two years ago. There have been dramatic changes in the hydrogen industry and an absence of expected interrelated product advancements (i.e. fuel cells). Thus we have determined that the extreme vagaries of the hydrogen technology industry, the immediate advancement of other renewable technologies to the commercial forefront, and the potentially long and expensive road to commerciality and profitability for any hydrogen technology necessitates us to prudently and significantly scale back all hydrogen expenditures, and proceed only on the basis of joint development projects or significantly subsidized development with potential .

Segment Information

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” requires disclosures related to components of a company for which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker in deciding the allocation of resources and assessing performance. Upon completion of FuelCellStores.com, Innergy Power Corporation, Electric Transportation Engineering Corporation (eTec) and eTec’s Minit-Charger business acquisitions from June through December 2007, we identified our segments based on the way we expect to organize our Company to assess performance and make operating decisions regarding the allocation of resources. In accordance with the criteria in SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information,” we have concluded we have three reportable segments for the year ended December 31, 2008; ECOtality/ECOtality Stores segment, Innergy Power segment and eTec segment. The ECOtality/ECOtality Stores segment is the online marketplace for fuel cell-related products and technologies with online distribution sites in the U.S., Japan, Russia, Italy and Portugal . The Innergy Power segment is comprised of the sale of solar batteries and other solar and battery powered devices to end-users. The eTec segment relates to sale of fast-charge systems for material handling and airport ground support applications to the testing and development of plug-in hybrids, advanced battery systems and hydrogen ICE conversions and consulting revenues. This segment also includes the Minit-Charger business which relates to the research, development and testing of advanced transportation and energy systems with a focus on alternative-fuel, hybrid and electric vehicles and infrastructures. eTec holds exclusive patent rights to the eTec SuperCharge™ and Minit-Charger systems - battery fast charge systems that allow for faster charging with less heat generation and longer battery life than conventional chargers. We have aggregated these subsidiaries into three reportable segments: ECOtality/Fuel Cell Store, eTec and Innergy.

The accounting policies for the segments are the same as those described in the summary of significant accounting policies in Note3 of this Form 10-Q. Management is continues to assess how it evaluates segment performance, and currently utilize income (loss) from operations, excluding share-based compensation (benefits), depreciation and intangibles amortization and income taxes. There were inter-segment sales during the quarter ended September, 2009 and they have been eliminated.

Summarized financial information concerning the Company’ s reportable segments for the quarter ended September 30, 2009 and September 30, 2008 and for the nine months ended September 30, 2009 and 2008 respectively are as follows:

THREE MONTHS ENDED SEPTEMBER 30, 2009

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	1,202,325		$	448,983		$	248,693		$	1,900,002
Depreciation and amortization	$	66,727		$	1,475		$	891		$	69,093
Operating income (loss)	$	(1,213,816	)	$	107,554		$	49,528		$	(1,056,734	)
Interest Income (expense)	$	(13	)	$	-		$	-		$	(13	)
Gain / (Loss) on disposal of assets	$	4,424		$	-		$	-		$	4,424
Other Income (expense)	$	-		$	-		$	-		$	-
Segment Income before Corporate Overhead Allocation	$	(1,209,405	)	$	107,554		$	49,528		$	(1,052,323	)
Corporate Overhead Allocation	$	9,235,780		$	3,448,908		$	1,910,360		$	14,595,048
Segment Income / (Loss)	$	(10,445,185	)	$	(3,341,354	)	$	(1,860,832	)	$	(15,647,370	)

Not Included in segment income:
Depreciation on Corporate Assets										$	33,132
Reported Net income after tax										$	(15,680,502	)
Capital Expenditures	$	298,113		$	-		$	-		$	298,113

Total segment assets - excluding intercompany receivables	$	2,536,734		$	502,877		$	195,933		$	3,235,544
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	1,775,953
Total Reported Assets										$	8,507,372

THREE MONTHS ENDED SEPTEMBER 30, 2008

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	2,131,669		$	533,317		$	235,833		$	2,900,819
Depreciation and amortization	$	168,267		$	1,097		$	1,187		$	170,551
Operating income (loss)	$	(36,631	)	$	(75,575	)	$	56,016		$	(56,190	)
Interest Income (expense)	$	(843	)	$	84		$	-		$	(759	)
Gain / (Loss) on disposal of assets	$	16,165		$	-		$	-		$	16,165
Other Income - Working Capital True Up	$	375,877		$	-		$	-		$	375,877
Segment Income before Corporate Overhead Allocation	$	354,568		$	(75,491	)	$	56,016		$	335,093
Corporate Overhead Allocation	$	1,371,531		$	343,140		$	151,737		$	1,866,408
Segment Income / (Loss)	$	(1,016,963	)	$	(418,631	)	$	(95,721	)	$	(1,531,315	)

Not Included in segment income:
Depreciation on Corporate Assets										$	33,114
Reported Net income after tax										$	(1,564,430	)
Capital Expenditures	$	76,023		$	6,193		$	-		$	82,216

Total segment assets - excluding intercompany receivables	$	4,324,668		$	658,435		$	177,604		$	5,160,707
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	3,871,570
Total Reported Assets										$	12,528,155

NINE MONTHS ENDED SEPTEMBER 30, 2009

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	3,997,884		$	1,499,805		$	619,596		$	6,117,286
Depreciation and amortization	$	246,082		$	4,401		$	2,671		$	253,154
Operating income (loss)	$	(1,407,135	)	$	372,624		$	110,872		$	(923,639	)
Interest Income (expense)	$	(13	)	$	-		$	-		$	(13	)
Gain / (Loss) on disposal of assets	$	14,184		$	-		$	-		$	14,184
Other Income (expense)	$	-		$	-		$	-		$	-
Segment Income before Corporate Overhead Allocation	$	(1,392,964	)	$	372,624		$	110,872		$	(909,468	)
Corporate Overhead Allocation	$	12,134,063		$	4,836,686		$	2,325,312		$	19,296,060
Segment Income / (Loss)	$	(13,527,027	)	$	(4,464,062	)	$	(2,214,440	)	$	(20,205,528	)

Not Included in segment income:
Depreciation on Corporate Assets										$	99,378
Reported Net income after tax										$	(20,304,903	)
Capital Expenditures	$	411,995		$	-		$	-		$	411,995

Total segment assets - excluding intercompany receivables	$	2,536,734		$	502,877		$	195,933		$	3,235,544
Other items Not included in Segment Assets:
Goodwill										$	3,495,878
Other Corporate Assets										$	1,775,953
Total Reported Assets										$	8,507,372

NINE MONTHS ENDED SEPTEMBER 30, 2008

	ETEC			INNERGY			FUEL CELL STORE			TOTAL
Total net operating revenues	$	6,086,676		$	1,920,162		$	648,029		$	8,654,868
Depreciation and amortization	$	359,676		$	5,196		$	2,670		$	367,542
Operating income (loss)	$	46,382		$	46,538		$	44,930		$	137,850
Interest Income	$	2,914		$	519		$	-		$	3,433
Gain / (Loss) on disposal of assets	$	18,219		$	-		$	-		$	18,219
Other Income - Working Capital True Up	$	375,877		$	-		$	-		$	375,877
Segment Income before Corporate Overhead Allocation	$	443,392		$	47,057		$	44,930		$	535,379
Corporate Overhead Allocation	$	3,456,303		$	1,074,177		$	369,014		$	4,899,494
Segment Income / (Loss)	$	(3,012,911	)	$	(1,027,120	)	$	(324,084	)	$	(4,364,115	)

Not Included in segment income:
Depreciation on Corporate Assets										$	102,127
Reported Net income after tax										$	(4,466,242	)
Capital Expenditures	$	242,139		$	9,025		$	-		$	251,164

Total segment assets - excluding intercompany receivables	$	4,324,668		$	658,435		$	177,604		$	5,160,707
Other items Not included in Segment Assets:
Goodwill	$	-		$	-		$	-		$	3,495,878
Other Corporate Assets	$	-		$	-		$	-		$	3,871,570
Total Reported Assets										$	12,528,155

Employees

As of September 30, 2009, we had 52 employees including 13 in manufacturing and the rest in research and development, sales and marketing, and general and administration positions. None of our employees are represented by labor unions or covered by a collective bargaining agreement other than our employees in Mexico. As we expand domestically and internationally, however, we may encounter employees who desire union representation. We believe that relations with our employees are good.

Results of Operations

QUARTER ENDED SEPTEMBER 30, 2009, COMPARED WITH QUARTER ENDED SEPTEMBER 30, 2008

CONSOLIDATED RESULTS

Since January 1, 2008 we have been transitioning ourselves from being a development stage company to a growth oriented renewable energy company with a focus toward electric vehicle infrastructure. Beginning January 2009 we initiated additional efforts to strengthen our financial viability including steps to reduce or eliminate our debt structure, obtain adequate working capital, establish strong partnerships and secure federal stimulus contracts. Thus, the variations reflected in our results of operations described below reflect these steps as well as this transformation and the impact of the global economic slowdown.

In the quarter ended September 30, 2009, we had revenues of $1,900,002 compared to the quarter ended September 30, 2008 of $2,900,819. This reduction in revenue is largely related to the effect of the slowing economy on our business particularly our industrial charger sales. Internally we saw a continued reduction in billable consulting hours due to the redeployment of resources required to prepare for the US Department of Energy Stimulus grant proposals awarded during the quarter ended September 30, 2009. The cost of goods sold percentage for the quarter ending September 30, 2009 was 54% leaving us with a gross profit of $881,614. Our gross margin of 46.4% was an improvement over the same period in 2008 of 35.5%.

Total operating expenses during the three months ended September 30, 2009 were $11,394,410 compared to $1,876,300 for the three months ended September 30, 2008. General and administrative expenses were $11,291,586 or 99% of total operating expenses for the three months ended September 30, 2009 compared with $1,534,492 or 82% for the three months ended September 30, 2008. Details around the changes in these expenses are described below:

Professional fees were $179,731 for the three months ended September 30, 2009 compared with $5,665 for the three months ended September 30, 2008. This increase reflects the additional spending undertaken to generate our proxy, hold our annual shareholder meeting and to facilitate our recent capital raise. New media, marketing, advertising and investor and public relations expenses were $28,423 for the three months ended September 30, 2009 compared with $93,968 for the three months ended September 30, 2008 with the decrease primarily attributable to utilizing internal corporate resources for these functions. Legal fees were $281,254 for the quarter ended September 30, 2009 compared with $62,349 for the quarter ended September 30, 2008. This increase in legal fees is also attributable to our recent capital raise and debt restructure. Accounting fees were $18,500 for the quarter ended September 30, 2009 compared with $25,925 for the quarter ended September 30, 2008. Executive compensation was $9,308,134 for the three months ended September 30, 2009 compared with $503,038 for the three months ended September, 2008. This significant increase in executive compensation reflects the awards to three executive staff members relating to the Company's success in signing on September 30, 2009, the ~$90 million dollar contract with the Department of Energy. These awards are described in the May 15, 2009 debenture waiver agreement and involve the issuance of equity in the amount of $8.1 million, and cash payments of $1 million dollars. Depreciation expense was $102,224 for the quarter ended September 30, 2009 compared to $203,665 for the quarter ended September 30, 2008. All other general and administrative spending totaled $1,475,543 for the three months ended September 30, 2009 compared to $1,122,547 for the three months ended September 30, 2008.

Expenses for research and development totaled $602 for the three months ended September 30, 2009 compared to $138,143 for the three months ended September 30, 2008. This steep reduction reflects our continued strategy on applications with short-term commercialization potential supported through joint projects and grants to help defray costs. Since one of our primary objectives continues to be the commercial advancement of clean electric technologies that reduce our dependence upon carbon based fuels, we have retained a strong focus on research and development activities, and expect to continue to incur additional research and development costs, although at a significantly reduced rate, for the foreseeable future, as reflected in the minimal amount expensed during the third quarter 2009.

Our operating loss compared negatively with the same period prior year for a loss of $15,680,502 for the quarter ended September 30 2009 compared with a loss of $1,564,429 for the quarter ended September 30, 2008.

For the quarter ended September 30, 2009, we earned interest income in the amount of $0 compared with $616 for the quarter ended September 30, 2008.

Interest expense was $5,172,128 for the three months ended September 30, 2009 compared to $1,109,666 for the three months ended September 30, 2008. The significantly higher amount for 2009 was driven by the interest on the convertible debentures we issued in November and December of 2007and were required to amend given our inability to pay principal and interest during the period. We had a gain on disposal of assets of $4,424 in the three months ended September 30, 2009 compared to a gain on disposal of assets of $16,165 for the same period in 2008.

NINE MONTHS ENDED SEPTEMBER 30, 2009, COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2008

It is difficult to compare the nine months ended September 2009 results to the same period in 2008 as during the nine months ended September 30, 2008 was a period of transformation from being a development stage company to a growth oriented renewable energy company with four new acquisitions to integrate into a cohesive whole company. Further compounding any comparison to the nine months ended September 30, 2009 is the economic downturn experienced by the US and our company particularly within the industrial sales area. Thus, the variations reflected in our results of operations described below are based upon these factors.

In the nine months ended September 30, 2009, we had revenues of $6,117,286 compared to the nine months ended September 30, 2008 of $8,654,868. The cost of goods sold percentage for the nine months ending September 30, 2009 was 52.8% leaving us with a gross profit of $2,884,976. The decrease in revenues in 2009 as compared to 2008 is a reflection of the effect of the slowing economy on our business particularly our industrial charger sales. Internally we saw a continued reduction in billable consulting hours due to the redeployment of resources required to prepare the US Department of Energy Stimulus grant proposals awarded during the quarter ended September 30, 2009

Total operating expenses during the nine months ended September 30, 2009 were $14,543,241 compared to $6,186,517 for nine months ended September 30, 2008. General and administrative expenses were $14,177,947 for nine months ended September 30, 2009 compared with $5,431,071 for the nine months ended September 30, 2008. These expenses are described in detail below:

Professional fees were $207,536 for the nine months ended September 30, 2009 compared with $373,494 for the nine months ended September 30, 2008. New media, marketing, advertising and investor and public relations expenses of $49,722 for the nine months ended September 30, 2009 also shows significant reduction from prior year of $217,133 for the nine months ended September 30, 2008. This reduction was accomplished through utilizing Corporate resources for many of these activities in 2009. Legal fees were $497,735 for the nine months ended September 30, 2009 compared with $394,838 for the nine months ended September 30, 2008 and accounting fees were $131,822 for the nine months ended September 30, 2009 compared with $147,481 for the nine months ended September 30, 2008. Executive compensation was $9,702,937 for the nine months ended September 30, 2009 compared with $503,038 for the nine months ended September 30, 2008. This significant increase in executive compensation is attributable to the 3rd quarter executive awards as described in the quarter ended results presented above. Depreciation expense was $352,531 for the nine months ended September 30, 2009 compared to $469,669 for the nine months ended September 30, 2008. All other general and administrative spending was 3,588,196 for the nine months ended September 30, 2009 and 3,795,087 for the nine months ended September 30, 2008.

Expenses for research and development totaled $12,763 for the nine months ended September 30, 2009 compared to $285,777 for the nine months ended September 30, 2008. This reduction reflects our focused strategy on applications with short-term commercialization potential supported through joint projects and grants to help defray costs. Since a primary objective of the Company continues to be the commercial advancement of clean electric technologies that reduce our dependence upon carbon based fuels, we have retained a strong focus on research and development activities, and expect to continue to incur additional research and development costs, although at a significantly reduced rate, for the foreseeable future.

Our operating loss of $20,304,903 for the nine months ended September 30, 2009 compared with the loss of $4,466,242 for the nine months ended September 30, 2008 is directly attributable to increased interest expense accrued for the non-cash impact of the consideration given in return for waivers granted by our debenture holders as well as the executive compensation detailed above in the quarter ended September 30, 2009. The waivers are explained in detail in Note 6.

For the nine months ended September 30, 2009, we earned interest income in the amount of $0 compared with $9,778 for the nine months ended September 30, 2008.

Interest expense was $8,660,823 for the nine months ended September 30, 2009 compared to $2,175,279 for the nine months ended September 30, 2008. The significantly higher amount for 2009 was driven by the interest on the convertible debentures we issued in November and December of 2007 and the related non-cash consideration for waivers granted by our debenture holders in extended additional time to make required principal and interest payments.

Liquidity and Capital Resources

As of September 30, 2009, we had $903,640 of cash on hand and held certificates of deposit in the amount of $0 compared to quarter end 2008 balances of $327,332 of cash on hand and $28,044 in certificates of deposit.

We had a use of cash for operating activities in the nine months ended September 30, 2009 in the amount of $1,524,135 compared to a use of cash in the amount of $110,361 for 2008. In addition, cash used in investing activities was $385,726 for the nine months ended September 30, 2009 compared to a use of cash of $196,114 for 2008. The use in each year was for the purchase of fixed assets.

It is important to understand our complex financing activities since January 1, 2008 as we have endeavored to become a transformational leader in the renewable energy sector during a period characterized by a lack of capital markets in a down economy. These activities are described in detail below:

Given what we believed to be a competitive edge in the fast charger market, as well as having efficient plant operating capacity in Mexico, we were confident our strengths in the alternative energy field would allow us to achieve our planned objectives, and to generate adequate levels of working capital in the second half of 2008. These assumptions, however, did not adequately capture the magnitude nor the speed of the economic down turn and its subsequent impact in even the alternative energy field. These external forces restricting growth and access to capital simultaneously resulted in our financing options being very limited and expensive.

To bridge this period of restricted capital options required the establishment of a line of credit and relief from debt service requirements as we continued to pursue our objectives of raising working capital through equity or other sources. Following a period of negotiation with our debenture holders, we reached agreement to waive payment of principal and interest for the period May through December 31, 2008 to provide us the time needed to begin funding our requirements internally through planned organic growth and to seek other equity financing options. The consideration for this waiver/deferment was material to our fiscal operations but necessary to seeking our growth objectives.

These cash management efforts in the year ended December 31, 2008, while adequate for that period required additional measures, most notably a successful capital raise and organic growth of our operations to allow us to meet our obligations going forward. To that end, we have during the nine months ended September 30, 2009 continued to seek additional capital while working with our debt holders to preclude paying interest and redemption of principal redemption in exchange for additional time to generate needed working capital. We were successful in this endeavor subsequent to September 30, 2009 and have obtained additional working capital and converted our debt to equity.

To support ECOtality’s expansion and current working capital needs, the Company received effective July 2, 2009 a direct investment of $2,5000,000 in 8% Secured Convertible Debentures due October 1, 2010. The debentures issued:

Are consistent with the initial debentures issued in November and December 2007 except this series is secured, convertible rather than original issue discount debentures.

Update the original Security Purchase Agreements, Securities Agreements, Registration Rights Agreements, Subsidiary Guarantees, and related disclosure schedules.

Provide for issuance of warrants to Shenzhen Goch Investment Ltd for their capital investment and adjusting the warrants held by Enable and BridgePointe subject to the June 30, 2009 true up as defined in the May 15, 2009 Amendment.

Restate the agreement to increase the number of the Company’s authorized common shares from 300,000,000 to 1,300,000,000.

Restate the covenants established in the May 15, 2009 Amendment and the Karner “carve-out” should certain “Stimulus” contract targets not be achieved. In accordance with the terms of the May 15 Amendment, the Company and Karner agreed that if Karner continues to remain a full-time employee, and The Company (with Karner’s assistance) fail to secure executed Stimulus Contracts (as defined in the May 15 Amendment) having an aggregate total contract value of $20,000,000 or more during the period from May 15, 2009 through October 1, 2009, then The Company must, on or prior to October 9, 2009, transfer ownership of all stock and assets of The Clarity Group, Inc. to Karner.

Management’s Plan of Operation

Our overall plan of operation calls for sustained organic growth. We believed that the acquisitions we completed during 2007 would provide us with a base to support this objective and this growth was reflected in our budget and business plans for 2008. As described above, growth consistent with our plans did not occur in the third and fourth quarters of 2008, nor in the first nine months of 2009. Sales of consulting services and manufacturing revenues have remained at lower than anticipated levels.

However, with the signing of Securities Exchange Agreements with our debenture holders and Securities Purchase Agreements with current and new investors on October 31,2009 ,we have taken the following actions to significantly strengthen our financial viability:

Raise $20.5 million for working capital in equity financing from original investors/debt holders ($15 million) and new investors ($5.5 million).

This funding reflects faith in us by current and new investors and will result in positive shareholder equity on our balance sheet.

This private offering provides a satisfactory level of working capital to support initial requirements of DOE contract awarded to our subsidiary eTEC..

Convert $9.08 million of debt on balance sheet to equity (preferred shares).

Eliminates debt on balance sheet.

Preferred shares have lockup provisions (9 months), and no, dividends or redemption rights.

Convert debt holder warrants to equity (preferred shares).

Eliminates warrant dilutive “overhang”.

Preferred shares have lockup provisions (9 months), and no dividends or redemption rights.

Reduce existing dilution “blocker” held by debt holders from 65% to 0%.

Diminishes any control issues by any one share holder.

Eliminates potential dilution fears with current and future share holders.

Reverse split of common shares (1:60).

Appropriate documentation has been submitted to the state of Nevada and FINRA to effect the split.

Establishes reasonable number of shares in the publically traded market place.

Prepares us for being listed on a national stock exchange.

Working Capital

Net working capital is an important measure of our ability to finance our operations. Our net working capital at September 30, 2009 was negative by $15,245,550.

We do not have any off-balance sheet arrangements.

We anticipate the need to add significant numbers of full- or part- time employees over the next 12 months per the award of the Stimulus Department of Energy related contracts. We plan to outsource the research and development and production of our products when cost effective to do so.

Commitments and Long Term Liabilities

On June 12, 2006, the Company entered into a License Agreement with California Institute of Technology, whereby the Company obtained certain exclusive and non-exclusive intellectual property licenses pertaining to the development of an electronic fuel cell technology, in exchange for 5,869,565 shares of common stock of the Company with a fair market value of $8,217,391. The License Agreement carries an annual maintenance fee of $50,000, with the first payment due on or about June 12, 2009. The License Agreement carries a perpetual term, subject to default, infringement, expiration, revocation or unenforceability of the License Agreement and the licenses granted thereby.

On January 19, 2007 we purchased a small (1,750 square feet) stand alone office building at a cost of $575,615. A total of $287,959 has been paid and a tax credit has been recorded in the amount of $156. The remaining balance of $287,500 is structured as an interest-only loan from a non affiliated third-party, bears an interest rate of 6.75% calculated annually, with monthly payments in the amount of $1,617 due beginning on February 16, 2007. The entire principal balance is due on or before January 16, 2012.

Quantitative and Qualitative Disclosures about Market Risk

Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. We evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. As a result of this evaluation, we concluded that our disclosure controls and procedures were effective for the period ended September 30, 2009.

Changes in Internal Control

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgment inherent in the preparation of financial statements is reasonable.

Our management does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Management conducted its evaluation of the effectiveness of our internal controls over financial reporting based on the framework and criteria established in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organization’s of the Treadway Commission (COSO). Based on this evaluation, we concluded that our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) were effective for the quarter ended September 30, 2009.

PART II - OTHER INFORMATION

Legal Proceedings

None of our directors, officers, significant employees, or affiliates has been convicted in a criminal proceeding, exclusive of traffic violations.

None of our directors, officers, significant employees, or affiliates has been permanently or temporarily enjoined, barred, suspended, or otherwise limited from involvement in any type of business, securities or banking activities.

None of our directors, officers, significant employees, or affiliates of has been convicted of violating a federal or state securities or commodities law.

We are not a party to any pending legal proceedings.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008, which could materially affect our business, financial condition or future results. We caution the reader that these risk factors may not be exhaustive. We operate in a continually changing business environment and new risks emerge from time to time. Management cannot predict such new risk factors, nor can we assess the impact, if any, of such new risk factors on our business or to the extent to which any factor or combination of factors may impact our business. There have not been any material changes during the quarter ended September 30, 2009 from the risk factors disclosed in the above-mentioned Form 10-K for the year ended December 31, 2008.

Unregistered Sales of Equity Securities

Defaults upon Senior Securities

There were no defaults upon senior securities in the quarter ended September 30, 2009

Submission of Matters to a Vote of Security Holders

On August 26, 2009, Ecotality Inc. management met with the shareholders at its annual shareholders meeting.

Proxies representing more than 86 % of the approximately 161,906,194 shares of the Company’s outstanding common shares eligible to vote as of the record date of July 27, 2009 were received. Accordingly, a quorum was present.

The shareholders voted on the five proposals presented in our proxy statement mailed on July 31, 2009

Proposal 1

At the meeting the shareholders elected the five nominees: Jonathan R. Read, Harold W. Sciotto, Jerry Y. S. Lin, E. Slade Mead and Barry S Baer to hold office until the 2010 Annual Meeting of Stockholders and until their successors have been elected and qualified.

Proposal 2

The Shareholders ratified the selection of Weaver & Martin LLP, Kansas City, Missouri, as our independent auditors for the fiscal year ending December 31, 2009.

Proposal 3

The Shareholders approved the Ecotality Employee Equity Incentive Plan.

Proposal 4

The Shareholders approved an amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock from the 300,000,000 shares, par value $0.001 per share, presently authorized to 1,300,000,000 shares.

Proposal 5

The Shareholders approved discretionary authority for a reverse stock split in the range of one-for-fifty to one-for-one-hundred.

Exhibits and Reports on Form 8-K

Exhibit Number		Name and/or Identification of Exhibit
2		Plan of Purchase, Sale , Reorganization, arrangement, liquidation or succession
		a. Technology Contribution Agreement and Exhibits thereto (1)
		b. License Agreement with California Institute of Technology (2)

3		Articles of Incorporation & By-Laws
		a. Articles of Incorporation filed on April 21, 1999 (3)
		b. Amendment to Articles of Incorporation filed on November 27, 2006
		c. Amendment to Articles of Incorporation filed on November 27, 2006
		d. Restated Bylaws October 31, 2007(5)
		e. Amendment to Articles of Incorporation filed on January 3, 2008 (4)

10		Material Contracts
		a. Purchase Order with Hydrogenics Corporation (4)
		b. Settlement Agreement and Release (6)
16		Letter on change in certifying accountant (7)

31		Rule 13a-14(a)/15d-14(a) Certification

32		Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

99		Additional Exhibits
		a. Escrow Agreement(6)
		b. Letter from NASA/Jet Propulsion Laboratories (8)
2		Plan of Purchase, Sale , Reorganization, arrangement, liquidation or succession
		a. Technology Contribution Agreement and Exhibits thereto (1)

Notes:

(1)	Incorporated by reference herein to the Form SB-2, previously filed with the SEC on January 8, 2008.

(2)	Incorporated by reference herein to the Form SB-2, previously filed with the SEC on January 31, 2008.

(3)	Incorporated by reference herein to the Form SB-2, previously filed with the SEC on January 31, 2008.

(4)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on January 31, 2008.

(5)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on April 11, 2008.

(6)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on September 4, 2008.

(7)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on September 25, 2008.

(8)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on December 30, 2008.

(9)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on January 07, 2009.

(10)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on February 03, 2009.

(11)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on February 11, 2009.

(12)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on March 10, 2009.

(13)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on May 18, 2009.

(14)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on July 06, 2009.

(15)	Incorporated by reference herein to the Form 8-K/A previously filed with the SEC on July 09, 2009

(16)	Incorporated by reference herein to the Form 8-K, previously filed with the SEC on August 27, 2009.

(17)	Incorporated by reference herein to the Form 8-K previously filed with the SEC on September 2, 2009

(18)	Incorporated by reference herein to the Form 8-K (1 of 2), previously filed with the SEC November 4, 2009.

(19)	Incorporated by reference herein to the Form 8-K (2 of 2) previously filed with the SEC on November 4, 2009

(20)	Incorporated by reference herein to the Form 8-K (2 of 2) previously filed with the SEC on November 18, 2009

SIGNATURES

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

ECOTALITY, INC.

Signature	Title	Date

/s/ Jonathan R. Read	Chief Executive Officer,	November 19, 2009
Jonathan R. Read	President and Director

/s/ Barry S. Baer	Chief Financial Officer	November 19, 2009
Barry S. Baer	Principal Accounting Officer
	Director

/s/ Harold W. Sciotto	Secretary, Treasurer	November 19, 2009
Harold W. Sciotto

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Ecotality (ECTY) Inactive 10-Q2009 Q3 Quarterly report

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