UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Amendment Number
3 to





[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the Fiscal Year Ended December 31, 2006[  ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the Transition Period from __________ toCommission File Number 000-50983ECOTALITY, INC.(Name of small business issuer in its charter)Nevada68-0515422(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)6821 E. Thomas Road
`Scottsdale, AZ``85251`(Address of principal executive offices)(Zip code)Issuers telephone number: (480) 219-5005Securities Registered Pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredNoneNoneSecurities Registered Pursuant to Section 12(g) of the Act:Common(Title of class)(Title of class)












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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.  [X] Yes [  ] No



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). [  ]



The issuer's revenue for its most recent fiscal year was
$0.



The
Company's common stock is listed on the Over-the-Counter Bulletin Board under
the stock ticker symbol "ETLY."  The aggregate market value of the voting and
non-voting common equity held by non-affiliates based upon a price per share of
$0.87, which was the closing price on April 12, 2007, is $54,323,639.



The number
of shares outstanding of each of the issuer's classes of common equity, as of
April 12, 2007 was 106,999,906.



DOCUMENTS INCORPORATED BY REFERENCE



If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").  The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).



None.



Transitional Small Business Disclosure Format (Check one): Yes [  ] No [X]



FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA18EXECUTIVE COMPENSATION40CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS42EXHIBITS44SIGNATURES45






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FORWARD LOOKING STATEMENTS



This Annual Report contains forward-looking statements about our business, financial condition and prospects that reflect our 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 assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, ETLY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 its 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 Report, words such as,  "believes,"  "expects," "intends,"  "plans,"  "anticipates,"  "estimates"and similar expressions are intended to identify and qualify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.



MANAGEMENTS DISCUSSION AND PLAN OF OPERATIONS.



Forward-Looking Statements



The statements contained in all parts of this document that are not historical facts are, or may be deemed to be, "forward-looking statements" within the meaning of  Section 27A of  the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements include, but are not limited to, those relating to the following: the Company's ability to secure necessary financing; plans for opening one or more restaurant units (including the scope, timing, impact and effects thereof); expected growth; future operating expenses; future margins; fluctuations in interest rates; ability to continue to grow and  implement growth, and regarding future growth, cash needs, operations, business plans and financial results and any other statements that are not historical facts.



When used in this document, the words "anticipate," "estimate," "expect," "may," "plans," "project," and similar expressions are intended to be among the statements that identify forward-looking statements.  Ecotality, Inc.s results may differ significantly from the results discussed in the forward-looking statements.  Such statements involve risks and uncertainties, including, but not limited to, those relating to costs, delays and difficulties related to the Companys dependence on its ability to attract and retain skilled managers and other personnel; the intense competition within the restaurant industry; the uncertainty of the Company's ability to manage and continue its growth and implement its business strategy; its vulnerability to general economic conditions; accuracy of accounting and other estimates; the Company's future financial and operating results, cash needs and demand for services; and the Company's ability to maintain and comply with permits and licenses; as well as other risk factors described in this Annual Report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected.



Overview of the Business



On February 15, 2007, we entered into a Settlement Agreement with Howard Foote, Elliott Winfield and Universal Power Vehicles Corporation to settle and resolve all known disputes and uncertainties between them related to all agreements and contracts entered in heretofore concerning the fuel cell intellectual property and technology.  In accordance with the Settlement, the Parties confirm the assignment, transfer and conveyance of all right, title and interest in and to the electric power cell and reactor technology being developed by us.  In consideration, we paid to the Parties cash in the amount of $600,000.  Additionally, the Parties received 1,500,000 shares of our common stock.



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In connection with the Settlement, an officer and director of Ecotality entered into an escrow agreement with the Parties, which cancels and supersedes separate prior escrow agreements entered into with each of Foote and Winfield, individually, on February 15, 2006.  The 2006 Escrow provided for the potential issuance of an aggregate of 40,000,082 shares of our common stock to the Parties, upon the achievement of certain performance standards, as set forth in said 2006 Escrow.  The 2007 Escrow provides for: (1) the immediate release of 1,500,000 shares of our common stock held per the 2006 Escrow to the Parties; (2) the immediate release from escrow and return to Harold Sciotto of 32,500,000 shares of our common stock; and (3) the immediate release to Ecotality of 6,000,000 shares of our common stock from escrow for cancellation.



We are a development stage company seeking to design and license a cost efficient electric power cell for use in motorized vehicles and industrial equipment.  A power or fuel cell is an electrochemical device that combines hydrogen and oxygen to produce electric power without combustion.  On June 12, 2006, we entered into a License Agreement with California Institute of Technology, which operates 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.



Under our agreement with JPL, we have hired it to engineer a magnesium-based system that produces a hybrid power source creating hydrogen fuel and electricity on demand, for which we expect to pay JPL a total of $1,350,000.  We believe that available hydrogen fuel cell technology methods are bulky, unreliable, expensive or energy inefficient.  We are seeking to build and improve upon existing hydrogen fuel cell technologies and combine it with our system to achieve safe, clean and reusable power.  A cost efficient EPC and storage system may make future electric propulsion devices as practical as the current generation of gasoline-powered systems.  If we are successful in commercially developing our EPC, we intend to sublicense the technology under our exclusive license agreement with CalTech for a broad range of applications including various types of motorized vehicles and industrial equipment.  We hope to derive revenue from technology sublicense fees, fuel licensing fees and fees for the design and technical support of refueling stations and royalty fees.



On March 19, 2007, we received a memorandum from the National Aeronautics and Space Administrations Jet Propulsion Laboratory reporting that significant performance advancements have been made with regard to the HydratusTM, an on-demand hydrogen storage and delivery system fueled by magnesium and water, JPL has been developing on our behalf.  In summary, the JPL memo states that, in laboratory tests of the modified HydratusTM, the following has occurred:



1.

Hydrogen-fuel storage capacity, by weight for the entire system, has increased from 4.7% to between 8% and 9%, depending on operating mode, allowing the modified HydratusTM to meet the Department of Energy’s 2010 goal of 6% hydrogen storage capacity.



2.

A drop in operating temperature of the modified HydratusTM of 300-400 degrees Centigrade will allow the use of less expensive materials in system construction.



3.

The amount of heat generated by the modified HydratusTM has decreased significantly by approximately 80% is expected to result in reduced system complexity, in terms of cost and size.  Additionally, because less energy is generated, and subsequently wasted during operation, the regeneration efficiency of the reaction products is increased by approximately 400%.



4





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As a result of the technical, performance and cost advancements, JPL has recommended all future research and development efforts be shifted to focus on the modified HydratusTM and all associated systems and processes.  JPL and Ecotality have agreed to develop and test a 7kW prototype, which JPL believes is suitable to power various commercial applications, as well as can be scaled for future systems.  Additionally, JPL and Ecotality plan to design and test a full-size 65kW HydratusTM suitable for application in a bus.  We believe the modified 65kW HydratusTM will be implemented in a proof of concept vehicle in the second half of 2007.



Results of Operations



In the year ended December 31, 2006, we did not generate any revenues related to our current business.  Our focus is currently on research and development of the EPC technology.  We do not have any marketable products or services that we could sell to generate revenues.  Our management cannot predict when, if at all, we will begin to generate revenues.



Total operating expenses during the year ended December 31, 2006 were $14,055,877, of which $8,222,572 is attributable to licenses and permits.  Of this amount, $8,217,391 (or approximately 99%) is attributable to the June 12, 2006 License Agreement, for which we issued 5,869,565 shares of our common stock to CalTech.  The material components of total operating expenses consisted of $1,930,209 in general and administrative expenses and $1,088,104 in research and development costs specifically related to the EPC technology. Approximately 92% of our general and administrative expenses can be attributed to four major categories; (1) professional fees in the amount of $760,917 for services performed to  obtain the necessary capital and other resources necessary to develop the technology, (2) $439,501 on public and investor relations, advertising and marketing , (3) $360,148 on website design, development, installation and operations, and (4) $206,649 in legal fees.  Approximately 87%, or $949,200, of the research and development expenses was paid to NASA in accordance with the task plan identified above.  Since our focus is research, development and the commercialization of technology, we expect to incur additional research and development costs for the foreseeable future.  In addition, during the year ended December 31, 2006 we paid $2,795,006 in executive compensation, as well as incurred $20,166 in depreciation expense related to our computer equipment and bus purchased from Hydrogenics.  Since our inception through December 31, 2006, we have purchased computer equipment for cost of $21,075 and a bus for $775,000, both of which, net of depreciation expense, is currently valued at $777,813.



Without having realized operating revenues, our operating loss for the year period ended December 31, 2006 was $14,055,877.  We expect to continue to incur ongoing operating losses for the foreseeable future, because the Technology acquired in the Technology Contribution Agreement is still in the research and development stage.  As a result, we do not currently have any revenue generating potential and will not until we are able to demonstrate the commercial ability of our Technology effectively, of which there can be no assurance.



Since our inception, we realized total other income of $14,907, consisting solely of interest income.



Additionally, we incurred interest expense in the amount of $456,796 during the year ended December 31, 2006, of which $50,056 is attributed to a private offering of securities conducted on February 9, 2006, whereby we raised $750,000 in bridge loan financing from three non-affiliated individuals.  The notes were due on August 9, 2006, bearing an interest rate of 10.5% calculated annually and contain no prepayment penalty.  The maturity date of the notes was subsequently extended to October 9, 2006.  The notes were repaid on September 29, 2006.  In addition during the period July 7, 2006 through September 27, 2006 we obtained additional bridge loans in varying amounts from two stockholders with a due date of December 29, 2006.  Interest expense in the amount of $391,740 has been recorded for the bridge loans and warrants issued in conjunction with these loans.



After taking other income and expenses into account, our net loss was $14,497,768
during the year ended December 31, 2006 and $14,578,445 from our inception to December 31, 2006.



As of December 31, 2006, we had $5,047,968 of cash on hand and held certificates of deposit in the amount of $2,014,767. We believe this cash and the funds derived from our private placement of our common stock described below should be sufficient to continue our operations as a development stage company for the next twelve to eighteen months.  If we expect to continue to pursue our business plan and develop our EPC Technology, we may need to raise additional capital by issuing common stock or debt securities in exchange for cash



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Liquidity and Capital Resources



The availability of capital resources is a limiting factor to our continuing research and development efforts as a renewable energy company.



On April 10, 2006, we entered into a letter of intent with Brookstreet Capital, an investment banking firm, to act as a placement agent in connection with a private placement of our unregistered common stock, pursuant to Regulation D, Rule 506, offered solely to accredited investors.  The private placement was conducted on a best efforts basis and there was no assurance that any or all of the securities offered thereby would be sold.  As of October 31, 2006, we sold 34,499,920 shares of our $0.001 par value common stock.  The aggregate gross proceeds received in this private placement was $12,074,935.



The warrants issued in conjunction with the private placement will generate approximately $2,414,888 in cash should all 6,899,982 warrants be exercised at $.35 per share.



The proceeds generated from the private placement should allow us to continue our EPC research and development program per our overall business plan.  However, there can be no assurance that these capital resources will result in profitable operations through the sale of commercial products and licenses.



Managements Plan of Operation



As described in Liquidity and Capital Resources, above, we raised gross proceeds of $12,074,935 in a private placement.  The warrants underlying the common shares issued in connection with this private placement may generate up to an additional $2,414,888 in capital over the next four (4) years beginning fiscal year 2007.  As of January 1, 2007 we had available to us approximately $7,062,735 to meet our operating requirements.  In planning for fiscal year 2007, to achieve our research and development goals we developed an overall operating budget of $3,650,000, including $2,100,000 for research and development projects.  In addition, we identified the following other major costs: (1) $717,000 for officer and employee compensation, (2) $425,000 for advertising, marketing, website and new media operations, and (3) $260,000 for professional and legal fees.  These identified categories and costs are generally consistent with our expenses incurred during the year ended December 31, 2006.  We do not anticipate the purchase or sale of any major capital equipment, nor do we anticipate adding a significant number of employees.



Our efforts during fiscal year 2007 will be directed at achieving our research and development objectives, and represent at least 60% of our operating plan.  While we have established a budget for how we will spend our research and development funds, we may have to spend more dollars than planned.  However, given available funds and our plan for fiscal 2007, we anticipate that we have adequate capital resources complete our objectives for the year.



Working Capital



Net working capital is an important measure of our ability to finance our operations.  Given that our net working capital at December 31, 2006 was positive, and that our private placement efforts have been successful to date, we believe we have adequate working capital to maintain our research and development efforts during 2007 as a minimum.  We may need to obtain additional financing prior to having profitable commercial operations.



Commitments and Long Term Liabilities



On January 19, 2007 we purchased a small (1750 square feet) stand alone office building at a cost of $575,615.  We paid $287,959 in cash, recorded a tax credit in the amount of $516 and signed a 5 year promisory note (no prepayment penalties) at 6.75% per annum interest with the buildings current owner for the balance of the purchase price.



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.



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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The following documents (pages F-1 to F-8) form part of the report on the Financial Statements



PAGEIndependent Registered Public Accounting Firm ReportsF-1Balance SheetsF-3Statements of OperationsF-4Statement of Stockholders Equity (Deficit)F-5Statements of Cash FlowsF-7FootnotesF-8




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Ecotality, Inc.

(a Development Stage Company)



Balance Sheets

as of

December 31, 2006 and 2005



and



Statements of Operations,

Stockholders Equity, and

Cash Flows

For the years ended

December 31, 2006 and 2005,

and

for the period

April 21, 1999 (Date of Inception)

through

December 31, 2006





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TABLE OF CONTENTS









PAGEIndependent Registered Public Accounting Firm Report 20061Independent Registered Public Accounting Firm Report 20052Balance Sheets3Statements of Operations4Statement of Changes in Stockholders Equity5Statements of Cash Flows7Footnotes8






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WEAVER & MARTIN





To the Board of Directors and Stockholders

Ecotality, Inc.

(Formerly Alchemy Enterprises, Ltd.)

Scottsdale, AZ



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



We have audited the accompanying balance sheets of Ecotality, Inc. (formerly Alchemy Enterprises, Ltd.) (the Company), as of December 31, 2006 and the related statements of operations, stockholders equity, and cash flows for the year then ended.  Ecotality, Inc.s management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with the standards of Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  Our audit of the financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ecotality, Inc. (formerly Alchemy Enterprises, Ltd.) as of December 31, 2006, and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.







/s/ Weaver & Martin, LLC





Weaver & Martin, LLC

Kansas City, Missouri

March 23, 2007





Certified Public Accountants & Consultants

411 Valentine, Suite 300

Kansas City, Missouri 64111

Phone: (816) 756-5525

Fax: (816) 756-2252







F1





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Beckstead and Watts, LLP

Certified Public Accountants

2425 W Horizon Ridge Parkway

Henderson, NV 89052

702.257.1984  (tel)

702.362.0540 (fax)





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





We have audited the accompanying balance sheet of Ecotality, Inc. (formerly Alchemy Enterprises, Ltd.) (the Company) (a Development Stage Company), as of December 31, 2005, and the related statements of operations, stockholders equity, and cash flows for the year then ended, and for the period from April 21, 1999 (Date of Inception) to December 31, 2005.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with the standards of Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ecotality, Inc. (formerly Alchemy Enterprises, Ltd.) (a Development Stage Company) as of December 31, 2005, and the results of its operations and cash flows for the years then ended, and for the period April 21, 1999 (Date of Inception) to December 31, 2005, in conformity with U.S. generally accepted accounting principles.



The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has had limited operations and have not commenced planned principal operations.  This raises substantial doubt about its ability to continue as a going concern.  Managements plans in regard to these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Beckstead and Watts, LLP





February 3, 2005









F2





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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Restated
Balance Sheets



December 31,2006
	2005(RESTATED)AssetsCurrent assets:Cash$5,047,968
	$5,878Certificates of deposit2,014,767
	-Inventory
	-
	
	2,453Prepaid expenses
	88,885
	
	-Total current assets
	
	7,151,620
	
	
	8,331Fixed assets, net
	
	777,813
	
	
	1,904$
	7,929,433
	
	$
	10,235Liabilities and Stockholders EquityCurrent liabilities:Accounts payable$594,075
	$-Payroll liability12,404
	-Total current liabilities
	
	606,479
	
	
	-Stockholders equity:Preferred stock, $0.001 par value, 200,000,000 sharesauthorized, no shares issued and outstanding
	-
	
	-Common stock, $0.001 par value, 300,000,000 sharesauthorized, 112,999,906 and 64,058,974 shares issuedand outstanding as of 12/31/06 and 12/31/05, respectively113,000
	64,059Additional paid-in capital
	21,788,399
	
	26,853(Deficit) accumulated during development stage(14,578,445)
	(80,677)Total stockholders' equity
	
	7,322,954
	
	
	10,235$
	7,929,433
	
	$
	10,235






The accompanying notes are an integral part of these financial statements.









F3





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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Restated Statements of Operations



For the years endedApril 21, 1999December 31,(Inception) to2006
	2005
	December 31, 2006(RESTATED)
	
	(RESTATED)Revenue$-$851$851Cost of goods sold
	-
	506
	506Gross profit
	
	-
	
	345
	
	345Expenses:Depreciation
	20,166
	788
	21,087Executive compensation2,795,006
	-2,795,006Licenses and permits
	8,222,572
	-
	8,222,572General and administrative expenses
	($2,795,006 excluded because it is
	presented as separate line item above)1,930,02914,9412,010,132Research and development
	
	1,088,104
	
	-
	
	1,088,104Total expenses
	14,055,877
	15,729
	14,136,901Operating loss
	(14,055,877)
	(15,383)
	(14,136,556)Other income:Interest income
	
	14,905
	
	-
	
	14,907Total other income
	14,905
	-
	14,907Other expenses:Interest expense456,796-456,796Total other expenses
	
	456,796
	
	-
	
	456,796Loss from operations before income taxes$
	(14,497,768)$
	(15,383)$
	(14,578,445)Provision for income taxes
	
	-
	
	-
	
	-Net (loss)
	$
	(14,497,768)
	$
	(15,384)
	$
	(14,578,445)Weighted average number ofcommon shares outstanding - basic and fully diluted
	
	82,866,709
	
	64,058,973Net (loss) per share-basic and fully diluted
	$
	(0.18)
	$
	(0.00)








The accompanying notes are an integral part of these financial statements.









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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Restated Statement of Stockholders Equity



(Deficit)AccumulatedTotalAdditionalDuringStockholdersCommon StockPaid-inDevelopmentEquitySharesAmountCapitalStageFounders sharesissued for services35,294,200$   35,294$   -$   (34,294)$   1,000Net (loss)April 21, 1999(Inception) toDecember 31, 1999
	
	
	(1,000)(1,000)Balance, December 31, 199935,294,20035,294-(35,294)-Net (loss)For the year endedDecember 31, 2000
	
	
	--Balance, December 31, 200035,294,20035,294-(35,294)-Net (loss)For the year endedDecember 31, 2001
	
	
	--Balance, December 31, 200135,294,20035,294-(35,294)-Shares issued for cash7,058,8407,059-(2,059)5,000Net (loss)For the year endedDecember 31, 2002
	
	
	(4,467)(4,467)Balance, December 31, 200242,353,04042,353-(41,820)533Shares issued for cash7,058,8407,059-(2,059)5,000Net (loss)For the year endedDecember 31, 2003
	
	
	(4,370)(4,370)Balance, December 31, 200349,411,88049,412-(48,249)1,163Shares issued for cash14,647,09414,64726,853
	41,500Net (loss)For the year endedDecember 31, 2004
	
	
	(17,044)(17,044)Balance, December 31, 200464,058,97464,05926,853(65,293)25,619Net (loss)For the year endedDecember 31, 2005
	
	
	(15,384)(15,384)Balance, December 31, 200564,058,97464,05926,853(80,677)10,235




The accompanying notes are an integral part of these financial statements.



F5



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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Restated Statement of Stockholders Equity (continued)





Shares issued for services7,500,0187,5002,467,506
	2,475,006Warrants issued with note payable
	
	382,656
	382,656Shares issued for cashfrom exercise of warrants1,071,4291,071373,929
	375,000Shares issued for licenses5,869,5655,8708,211,521
	8,217,391Shares issued for cashnet of offering costs34,499,92034,50010,325,934
	10,360,434Net (loss)For the year endedDecember 31, 2006
	
	
	(14,497,768)(14,497,768)Balance, December 31, 2006112,999,906$  113,000$  21,788,399$  (14,578,445)$  7,322,954




















The accompanying notes are an integral part of these financial statements.









F6



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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Restated Statements of Cash Flows



April 21, 1999For the years ended(Inception) toDecember 31,December 31,2006
	2005
	2006Cash flows from operating activities(RESTATED)(RESTATED)Net (loss)
	$  (14,497,768)
	$         (15,384)
	$  (14,578,445)Adjustments to reconcile net (loss) tonet cash (used) by operating activities:Shares issued for executive compensation
	2,475,006
	-
	2,475,006Shares issued for services--1,000Shares issued for licenses
	8,217,391
	-
	8,217,391Depreciation20,16678821,087Warrants issued with notes payable
	382,656
	-
	382,656Stock split adjustments--38,412Changes in operating assets and liabilities:(Increase) decrease in inventory
	2,453
	(2,453)
	-(Increase) in prepaid expenses(88,885)-(88,885)Increase in accounts payable
	594,075
	-
	594,075Increase in payroll liabilities12,404-12,404Net cash (used) by operating activities
	
	(2,882,502)
	
	(17,049)
	
	(2,925,299)Cash flows from investing activitiesPurchase of fixed assets
	(796,075)
	(836)
	(798,900)Purchase of certificates of deposit(2,014,767)-(2,014,767)Net cash (used) by investing activities
	
	(2,810,842)
	
	(836)
	
	(2,813,667)Cash flows from financing activitiesProceeds from note payable
	1,425,000
	-
	1,425,000Repayments of notes payable(1,425,000)-(1,425,000)Issuances of common stock
	10,735,434
	-
	10,786,934Net cash provided by financing activities
	
	10,735,434
	
	-
	
	10,786,934Net increase (decrease) in cash
	5,042,090
	(17,885)
	5,047,968Cash  beginning
	5,878
	23,763
	-Cash  ending
	$      5,047,968
	$             5,878
	$        5,047,968Supplemental disclosures:Interest paid
	$           59,140
	$                     -
	$             59,140Income taxes paid
	
	$                     -
	
	$                     -
	
	$                       -Non-cash transactions:Shares issued for executive compensation
	$      2,475,006
	$                     -
	$        2,475,006Number of shares issued for executive compensation
	
	7,500,018
	
	-
	
	7,500,018Shares issued for services
	$                     -
	$                     -
	$               1,000Number of shares issued for services
	
	-
	
	-
	
	35,294,200Shares issued for licenses
	$      8,217,391
	$                     -
	$        8,217,391Number of shares issued for licenses
	
	5,869,565
	
	-
	
	5,869,565Amortization of warrants issued for financing costs
	$         382,656
	$                     -
	$           382,656Number of shares issued for services
	2,971,429
	-
	2,971,429




The accompanying notes are an integral part of these financial statements.



F7



16





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



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 has limited operations and in accordance with Statement of Financial Accounting Standards No. 7 (SFAS #7), Accounting and Reporting by Development Stage Enterprises, the Company is considered a development stage company.  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.  Subsequently, 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.



The former business of the Company was to market a private-label bio-degradable 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.



Note 2  Accounting policies and procedures



Use of estimates

The 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.



Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of December 31, 2006 and 2005.



Revenue recognition

The Companys revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. 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 collectibility is reasonably assured.  The Company recognizes revenues on product sales, 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 provide 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 December 31, 2006, management has concluded that neither a reserve for product returns nor a warranty liability is required.





F8



17





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 2  Accounting policies and procedures (continued)



Advertising costs

The Company expenses all costs of advertising as incurred.  There were advertising costs of $439,501 and $0 included in selling, general and administrative expenses for the years ended December 31, 2006 and 2005, respectively.



Impairment of long-lived assets

On January 1, 2002, the Company adopted the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and reporting for the disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. The adoption of this statement did not have a material effect on the Companys results of operations or financial condition.



Management regularly reviews property, equipment and other long-lived assets for possible impairment. 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 (undiscounted and without interest charges) 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.



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.  Depreciation expense is recorded within selling, general and administrative expense.  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:



Computer Equipment3 yearsVehicles5 years




Loss per share

The Company presents 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. Diluted EPS is computed by adding to the weighted average shares the dilutive effect if stock warrants were exercised into common stock.  For the years ended December 31, 2006 and 2005, the denominator in the diluted EPS computation is the same as the denominator for basic EPS due to the anti-dilutive effect of the stock warrants on the Companys net loss.



Research and development costs

Research and development costs are charged to expense when incurred.



F9



18





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 2  Accounting policies and procedures (continued)



Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2006 and 2005.  The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.  Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.



Income Taxes

The Company follows Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes (SFAS No. 109) for recording the provision for income taxes.  Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled.  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.  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.



General and administrative expenses

The significant components of general and administrative expenses consist of meals and entertainment expenses, legal and professional fees, outside services, office supplies, postage, and travel expenses.



Segment reporting

The Company follows Statement of Financial Accounting Standards No. 131, Disclosures About Segments of an Enterprise and Related Information. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.



Dividends

The Company has not yet adopted any policy regarding payment of dividends.  No dividends have been paid or declared since inception.



Stock based compensation

In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company in the first interim or annual reporting period beginning after December 15, 2005. The Company has adopted this standard will and expects to have a material impact on its financial statements assuming employee stock options or awards are granted in the future.



F10



19





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 2  Accounting policies and procedures (continued)



Recent pronouncements

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154 (SFAS No. 154), Accounting Changes and Error Corrections.  SFAS 154 requires retrospective application to prior-period financial statements of changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change.  SFAS 154 also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The adoption of SFAS 154 is expected to have a material impact on the Companys financial statements and disclosures based on the restatement of the second quarter of 2006.



In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("SFAS No. 157"), which establishes a formal framework for measuring fair value under GAAP. SFAS 157 defines and codifies the many definitions of fair value included among various other authoritative literature, clarifies and, in some instances, expands on the guidance for implementing fair value measurements, and increases the level of disclosure required for fair value measurements.



Although SFAS No. 157 applies to and amends the provisions of existing FASB and AICPA pronouncements, it does not, of itself, require any new fair value measurements, nor does it establish valuation standards. SFAS No. 157 applies to all other accounting pronouncements requiring or permitting fair value measurements, except for: SFAS No. 123(R), share-based payment and related pronouncements, the practicability exceptions to fair value determinations allowed by various other authoritative pronouncements, and AICPA Statements of Position 97-2 and 98-9 that deal with software revenue recognition. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.



Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits.  Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000.  At December 31, 2006 and 2005, the Company had approximately $6,962,735 and $0 in excess of FDIC insured limits, respectively.



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.









F11



20





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 3  Income taxes



For the year ended December 31, 2006, the Company incurred net operating losses and accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2006, the Company had approximately $4,000,000 of federal and state net operating losses. The net operating loss carryforwards, if not utilized will begin to expire in 2009.



The components of the Companys deferred tax asset are as follows:



As of
`December 31,`As of
`December 31,`20062005Deferred tax assets:Net operating loss carryforwards$1,400,000$14,370Total deferred tax assets
	1,400,000
	14,370




As of December 31, 2006, Management believes it is more likely than not that the deferred tax asset will not be fully realized and has therefore provided a valuation allowance in the amount of $1,400,000 to offset the deferred tax asset of the same amount.  As of December 31, 2006, the total deferred tax assets, net of the valuation allowance was $0.



Note 4  Fixed assets



Fixed assets as of December 31, 2006 consisted of the following:



Computer equipment$23,900Vehicles775,000Accumulated depreciation
	(21,087)$777,813




Depreciation expense for the years ended December 31, 2006 and 2005 was $20,166 and $788, respectively.



Note 5  Debt and interest expense



On February 9, 2006, the Company conducted a private offering of debt securities, whereby it raised $750,000 in bridge loan financing from three non-affiliated individuals.  The notes were due August 9, 2006, bear an interest rate of 10.5% calculated annually and contain no prepayment penalty.  The maturity date of the notes was subsequently extended to October 9, 2006.  The notes were repaid on September 29, 2006 including interest of $50,056.



In connection with the February 9, 2006 debt offering, the note holders were issued warrants to purchase shares of the Companys par value common stock.  Resultantly, a discount of $92 was attributed to the value of the notes, which amount is being amortized over a period of six months.  As of December 31, 2006, a total of $92 has been amortized and recorded as interest expense.  See note 7 for additional discussion regarding the issuance of warrants.



On July 7, 2006, the Company raised $275,000 in bridge loan financing from two shareholders.  The notes are due December 29, 2006, bear an interest rate of 10.5% calculated annually and contain no prepayment penalty.  The notes were repaid on October 2, 2006 including interest of $6,724.



In connection with the July 7, 2006 debt offering, the note holders were issued warrants to purchase shares of the Companys par value common stock.  Resultantly, a discount of $223,391 was attributed to the value of the notes, which amount is being amortized over a period of approximately six months.  As of December 31, 2006, a total of $223,391 has been amortized and recorded as interest expense.  See note 7 for additional discussion regarding the issuance of warrants.





F12



21





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 5  Debt and interest expense (continued)



On August 3, 2006, the Company raised $100,000 in bridge loan financing from two shareholders.  The notes are due December 29, 2006, bear an interest rate of 10.5% calculated annually and contain no prepayment penalty.  The notes were repaid on October 2, 2006 including interest of $1,668.



In connection with the August 3, 2006 debt offering, the note holders were issued warrants to purchase shares of the Companys par value common stock.  Resultantly, a discount of $79,079 was attributed to the value of the notes, which amount is being amortized over a period of approximately five months.  As of December 31, 2006, a total of $79,079 has been amortized and recorded as interest expense.  See note 7 for additional discussion regarding the issuance of warrants.



On September 9, 2006, the Company raised $100,000 in bridge loan financing from two shareholders.  The notes are due December 29, 2006, bear an interest rate of 10.5% calculated annually and contain no prepayment penalty.  The notes were repaid on October 2, 2006 including interest of $552.



In connection with the September 9, 2006 debt offering, the note holders were issued warrants to purchase shares of the Companys par value common stock.  Resultantly, a discount of $80,094 was attributed to the value of the notes, which amount is being amortized over a period of approximately four months.  As of December 31, 2006, a total of $80,094 has been amortized and recorded as interest expense.  See note 7 for additional discussion regarding the issuance of warrants.



On September 27, 2006, the Company raised $200,000 in bridge loan financing from two shareholders.  The notes are due December 29, 2006, are non-interest bearing and contain no prepayment penalty.  The notes were repaid on October 2, 2006.



Interest expense totaled $456,796 and $0 for the years ended December 31, 2006 and 2005, respectively.



Note 6  Stockholders equity



The Company is authorized to issue 300,000,000 shares of its $0.001 par value common stock and 200,000,000 shares of $0.001 par value preferred stock.



On October 29, 2002, the Company effected a 1000-for-1 forward stock split of its $0.001 par value common stock.  Subsequently, on March 1, 2006, the Company effected a 17.6471-for-1 forward stock split of its $0.001 par value common stock.  All share and per share amounts have been retroactively restated to reflect this split.



On May 1, 1999, the Company issued 35,294,200 shares of its no par value common stock as founders' shares to an officer and director in exchange for services rendered in the amount of $1,000, which has been recorded as general and administrative expense.



On August 13, 2002, the Company issued 7,058,840 shares of its $0.001 par value common stock to an unrelated third party in exchange for cash in the amount of $5,000.



On July 15, 2003, the Company issued 7,058,840 shares of its $0.001 par value common stock to an unrelated third party in exchange for cash in the amount of $5,000.







F13



22





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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 6  Stockholders equity (continued)



On May 17, 2004, the Company closed their Regulation D, Rule 504 offering, registered in Nevada, and issued a total of 14,647,094 shares of its $0.001 par value common stock in exchange for cash of $41,500.



On February 15, 2006, the Company issued 7,500,018 shares of its $0.001 par value common stock to an individual who is an officer and director as executive compensation valued at $2,475,006, calculated at the fair market value of $0.33,
on March 2, 2006 when the company began trading shares of stock.



On March 23, 2006, three warrant holders exercised their rights to purchase shares of par value common stock of the Company.  As a result, the Company issued an aggregate of 1,071,429 shares of common stock at a price per share of $0.35, for total cash proceeds of $375,000.  See note 7 for additional discussion on this issue.



On June 12, 2006, the Company entered into a License Agreement with California Institute of Technology, whereby the Company issued 5,869,565 shares of common stock at a fair market value of $1.40 per share, based on the quoted market price on the grant date, for licenses and permits carrying an aggregate value of $8,217,391.  See note 8 for additional discussion on this issue.



During the year ended December 31, 2006, the Company conducted a private placement of its common stock pursuant to Regulation D, Rule 506.  As of December 31, 2006, the Company issued 34,499,920 shares of its $0.001 par value common stock at a price per share of $0.35, for total gross proceeds of $12,074,935.  The total offering costs related to this issuance was $9,352,713.



Note 7  Warrants



As of January 1, 2006, there were no warrants outstanding.



On February 9, 2006, the Company issued warrants to purchase shares of the Companys par value common stock to three non-affiliated individuals in conjunction with bridge loan agreements.  The warrant holders were granted the right to purchase a total of 1,071,429 shares of common stock of the Company for an aggregate purchase price of $375,000 or $0.35 a share.  The aggregate fair value of such warrants totaled $92 based on the Black Schoeles Merton pricing model using the following estimates:  4 % risk free rate, 100 % volatility and expected life of the warrants of 6 months.  On March 23, 2006, all of these warrants were exercised for total gross proceeds of $375,000.



On July 7, 2006, the Company issued warrants to purchase shares of the Companys par value common stock to two shareholders in conjunction with bridge loan agreements.  The  warrant holders were granted the right to purchase a total of 1,100,000 shares of common stock of the Company for an a purchase price of $1,562,00 or $1.42 a share.  The aggregate fair value of such warrants totaled $223,391 based on the Black Schoeles Merton pricing model using the following estimates:  4% risk free rate, 100% volatility and expected life of 5 years.



On August 3, 2006, the Company issued warrants to purchase shares of the Companys par value common stock to two shareholders in conjunction with bridge loan agreements.  The warrant holders were granted the right to purchase a total of 400,000 shares of common stock of the Company for a purchase price of $496,000 or $1.24 a share.  The aggregate fair value of such warrants totaled $79,079 based on the Black Schoeles Merton pricing model using the following estimates:  4% risk free rate, 100% volatility and expected life of 5 years.







F14



23





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 7  Warrants (continued)



On September 6, 2006, the Company issued warrants to purchase shares of the Companys par value common stock to two shareholders in conjunction with bridge loan agreements.  The warrant holders were granted the right to purchase a total of 400,000 shares of common stock of the Company for a purchase price of $528,000 or $1.32 a share.  The aggregate fair value of such warrants totaled $80,094 based on the Black Schoeles Merton pricing model using the following estimates:  4% risk free rate, 100% volatility and expected life of 5 years.



On October 27, 2006 the Company issued warrants to purchase shares of the Company's par value common stock to the brokers of Brookstreet Securities Corporation as additional consideration for their acting as placement agent.  The warrant holders were granted the right to purchase a total of 6,899,982 shares of common stock of the Company for a purchase price of $2,414,994, or $0.35 per share.  The aggregate fair value of such warrants totaled $7,638,212 based on the Black Schoeles Merton pricing model using the following estimates:  4% risk free rate, 91% volatility and expected life of 5 years.  The Company netted the fair market value of the warrants against expenses related the offering of common stock conducted by Brookstreet Securities Corporation.



Paragraph 5 (Registration Rights) of the Subscription Agreement for the private placement described above states that  If the Company fails to (i) file the Registration Statement with the SEC on or prior to 60 days after the Closing Date, (ii) obtain effectiveness of the Registration Statement by the SEC on or prior to 150 days after the Closing Date, or (iii) maintain effectiveness of the Registration Statement for 12 months after the date of effectiveness, the Company shall be obligated to issue to the undersigned additional Shares  The Registration Rights paragraph further holds that if we fail or fail to obtain or maintain the effectiveness of the registration statement, within 30 days following the determination date (date upon which we fail to meet the 60 or 150 day requirement)  we are to issue to the subscribers the number of shares equal 1% of the number of shares issued as a part of this subscription and do so on a weekly basis until such time as we are incompliance with the registration requirement.  Further, the number of shares issued as penalty shares in aggregate cannot exceed 10% of the number of shares originally subscribed..  As of December 31, 2006, the Company  has not incurred any penalties (compensatory or otherwise) and has not reserved any amounts for incurring any penalties in conjunction with this registration.



The following is a summary of the status of all of the Companys stock warrants as of December 31, 2006 and 2005 and changes during the years ended on those dates:



Number
`Of Shares`
	Weighted-Average
`Exercise Price`Outstanding at December 31, 20050
	$ 0.00Granted0$ 0.00Exercised0
	$ 0.00Cancelled0
	$ 0.00Outstanding at December 31, 20060
	$ 0.00Granted9,871,411$ 0.54Exercised(1,071,429)
	$ 0.35Cancelled0
	$ 0.00Outstanding at December 31, 20068,799,982
	$ 0.57Options exercisable at December 31, 20050$ 0.00Options exercisable at December 31, 2006
	8,799,982
	
	$ 0.57




The following tables summarize information about stock warrants outstanding and exercisable at December 31, 2006:



STOCK WARRANTS OUTSTANDINGRange of
`Exercise Prices`Number of
`Shares
Outstanding`Weighted-Average
`Remaining
Contractual
Life in Years`Weighted-
`Average
Exercise Price`$ 0.35
	6,899,982
	4.83
	$ 0.35$ 1.24$ 1.42
	1,900,000
	4.57
	$ 1.368,799,982
	4.77
	$ 1.36




STOCK WARRANTS EXERCISABLERange of
`Exercise Prices`Number of
`Shares
Exercisable`Weighted-
`Average
Exercise Price`$ 0.35
	6,899,982
	$ 0.35$ 1.24$ 1.42
	1,900,000
	$ 1.368,799,982
	$ 0.57




Note 8  Commitments and contingencies



On February 15, 2006, the Company entered into a Technology Contribution Agreement with two individuals to acquire the rights, titles and interests to the intellectual property for the development of an electric power cell.  In exchange for the rights to this intellectual property, the Company agreed to finance the development of the electric power cell system up to $1,350,000 and payoff $15,000 in interest costs for related debt.  To date, $750,000 has been recorded as research and development expense in relation to the technology and $15,000 as interest expense.







F15



24





---





Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 8  Commitments and contingencies (continued)



On February 15, 2006, the Company entered into a consulting agreement with Universal Power Vehicles Corporation for annual compensation of $200,000.  The term of the agreement is three years and may be extended upon agreement by both parties.  The Company prepaid one-half of the compensation upon execution of the agreement, with the remaining compensation to be paid monthly beginning August 15.  The Company fully amortized $100,000 as an expense in the year ended December 31, 2006.  The consulting agreement has subsequently been terminated, without penalty, and no additional payments will be made.



On February 15, 2006, the Company entered into an employment agreement with an individual who is an officer and director of the Company.  The compensation is $120,000 annually.  Additionally, the Company issued 7,500,018 (split-adjusted) shares of par value common stock to this individual as executive compensation valued at $2,475,006.  The term of the agreement is one year and is automatically renewed annually.



On February 16, 2006, the Company entered into an employment agreement with an individual who is an officer and director of the Company for annual compensation of $120,000.  The term of the agreement is one year and is automatically renewed annually.



On March 21, 2006, the Company entered into a lease agreement to rent office space at a rate of $547 per month and requires a refundable deposit of $500, which was paid by the Company during the period ended March 31, 2006.  On October 31, 2006, the Company added an addendum to the original lease agreement to rent additional office space at a rate of $547 per month and requires an additional refundable deposit of $500, which was paid by the Company during the period ended December 31, 2006.  The deposits are recorded in prepaid expenses.  The lease and addendum expire collectively on March 31, 2007.  The future minimum lease payments for 2007 are $3,282.



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, which amount has been recorded as licenses and permits expense.  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.



Note 9  Subsequent Events



On January 16, 2007, the Company purchased an office building for an aggregate price 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 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.



On February 15, 2007, the Company entered into a Settlement Agreement and Release to the Technology Contribution Agreement, originally entered into on February 15, 2006, to settle and resolve all known disputes and uncertainties between the Company and Howard Foote, Elliott Winfield and Universal Power Vehicles, Inc.  In accordance with the Settlement, the Parties confirm the assignment, transfer and conveyance of all right, title and interest in and to the Intellectual Property transferred in the Contribution Agreement.  In consideration, the Company agreed to pay to Foote, Winfield and UPV cash in the amount of $600,000.  Additionally, the Parties are to receive common stock in the aggregate amount of 1,500,000 shares of the Company, as per a separate escrow agreement between Foote, Winfield and an officer and director of the Company.
 The 1,500,000 shares were valued at $1,200,000 based on our market price on the
day of the transaction.





F16



25





---



Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 10  Restatement of financial statements



In connection with the preparation of our audited financial statements for the years ended December 31, 2006 and 2005, we determined that there were errors in accounting treatment and reported amounts in our previously filed financial statements.  As a result, we determined to restate our financial statements for the year ended December 31, 2006.  The restatements are included in this Annual Report on Form 10-KSB/A (Amendment No. 2).



These restated financial statements include adjustments related primarily to the following:



Stockholders Equity.  The Company has restated its December 31, 2006 financial statements to reflect the revaluation of compensation paid to an executive officer.  The resulting addition to executive compensation expense and reduction to additional paid-in capital totaled $2,453,756 for the year ended December 31, 2006.



The foregoing adjustments did not affect our previously reported cash and cash equivalents balances in prior periods. The following tables present the effect of the restatement adjustments by financial statement line item for the Balance Sheets, Statements of Operations, Statement of Stockholders Equity and Statements of Cash Flows.



Balance Sheets as of December 31, 2006



As of December 31, 2006AsPreviouslyStated
	Adjustments
	As RestatedAssetsCurrent assets:Cash$5,047,968
	$-
	$5,047,968Certificates of deposit2,014,7672,014,767Inventory-
	
	
	-Prepaid expenses88,885-88,885Total current assets
	7,151,620
	
	-
	
	7,151,620Fixed assets, net777,813
	-
	777,813$7,929,433
	$-
	$7,929,433Liabilities and Stockholders EquityCurrent liabilities:Accounts payable$594,075
	$-
	$594,075Payroll liability12,404-12,404Total current liabilities
	606,479
	
	-
	
	606,479Stockholders equityPreferred stock, $0.001 par value, 200,000,000 sharesauthorized, no shares issued and outstanding-
	-
	-Common stock, $0.001 par value, 300,000,000 sharesauthorized, 112,999,906 and 64,058,974 shares issuedand outstanding as of 12/31/06 and 12/31/05, respectively113,000113,000Additional paid-in capital19,334,643
	2,453,756
	21,788,399(Deficit) accumulated during development stage(12,124,689)(2,453,756)(14,578,445)7,322,954
	
	-
	
	7,322,954$7,929,433
	$-
	$7,929,433




F17



26



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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 10 - Restatement of financial statements (Continued)



Statements of Operations for the year ended December 31, 2006 and for the period from April 21, 1999 (Inception) to December 31, 2006



For the year endedApril 21, 1999 (Inception) toDecember 31, 2006December 31, 2006AsAsPreviouslyPreviouslyStatedAdjustmentsAs RestatedStatedAdjustmentsAs RestatedRevenue$-$-$-$851$-$851Cost of goods sold---506-506Gross profit---345
	345Expenses:Depreciation20,166-20,16621,087-21,087Executive compensation341,2502,453,7562,795,006341,2502,453,7562,795,006Licenses and permits8,222,572-8,222,5728,222,572-8,222,572General and administrative expenses1,930,029-1,930,0292,010,132-2,010,132Research and Development1,088,104-1,088,1041,088,104-1,088,104Total expenses
	11,602,121
	2,453,756
	14,055,877
	11,683,145
	2,453,756
	14,136,901Operating Loss(11,602,121)(2,453,756)(14,055,877)(11,682,800)(2,453,756)(14,136,556)Other incomeInterest income14,905-14,90514,907-14,907Total other income
	14,905
	-
	14,905
	14,907
	-
	14,907Other expenses:Interest expense456,796-456,796456,796-456,796Total other expenses
	456,796
	-
	456,796
	456,796
	-
	456,796Loss from operations before income taxes(12,044,012)(2,453,756)(14,497,768)(12,124,689)(2,453,756)(14,578,445)Provision for income taxes---
	---Net (loss)$(8,610,979)$(2,453,756)$(14,497,768)
	$(12,124,689)$(2,453,756)$(14,578,445)Weighted average number ofcommon shares outstanding  basic and fully diluted82,866,709-82,866,709Net (loss) per share  basic and fully diluted$(0.15)$(0.13)$(0.18)




F18



27



---



Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 10  Restatement of financial statements (Continued)



Statement of Stockholders Equity



AsPreviouslyStatedAdjustmentsAs RestatedFor the year ended December 31, 2006Shares issued for servicesAdditional paid-in capital13,7502,453,7562,467,506Total stockholders equity21,2502,453,7562,475,006Net (loss) for the year ended December 31, 2006(Deficit) accumulated during development stage(12,044,012)(2,453,756)(14,497,768)Total stockholders equity(12,044,012)(2,453,756)(14,497,768)Balance, December 31, 2006Additional paid-in capital19,334,6432,453,75621,788,399(Deficit) accumulated during development stage(12,124,689)(2,453,756)(14,578,445)








F20





28





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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 10  Restatement of financial statements (Continued)



Statements of Cash Flows for the year ended December 31, 2006 and for the period from April 21, 1999 (Inception) to December 31, 2006



For the year endedApril 21, 1999 (Inception) toDecember 31, 2006December 31, 2006AsAsPreviouslyPreviouslyStatedAdjustmentsAs RestatedStatedAdjustmentsAs RestatedCash flows from operating activitiesNet (loss)$(12,044,012)$(2,453,756)$(14,497,768)$(12,124,689)$(2,453,756)$(14,578,445)Adjustments to reconcile net (loss) tonet cash (used) by operating activities:Shares issued for executive compensation21,2502,453,7562,475,00621,2502,453,75621,250Shares issued for services---1,000-1,000Shares issued for licenses8,217,391-8,217,3918,217,391-8,217,391Depreciation20,166-20,16621,087-21,087Warrants issued with notes payable382,656-382,656382,656-382,656Stock split adjustments--38,41238,412Changes in operating assets and liabilities:--(Increase) decrease in inventory2,453-2,453---(Increase) in prepaid expenses(88,885)-(88,885)(88,885)-(88,885)Increase in accounts payable594,075-594,075594,075-594,075Increase in payroll liabilities12,404-12,40412,404-12,404Net cash (used) by operating activities
	(2,882,502)
	-
	(2,882,502)
	(2,925,299)
	-
	(2,925,299)Cash flows from investing activitiesPurchase of fixed assets(796,075)-(796,075)(798,900)-(798,900)Purchase of certificates of deposit(2,014,767)(2,014,767)(2,014,767)(2,014,767)Net cash (used) by investing activities
	(2,810,842)
	-
	(2,810,842)
	(2,813,667)
	-
	(2,813,667)Cash flows from financing activitiesProceeds from notes payable1,425,000-1,425,0001,425,000-1,425,000Repayments of notes payable(1,425,000)(1,425,000)(1,425,000)(1,425,000)Issuances of common stock10,735,434-10,735,43410,786,934-10,786,934Net cash provided by financing activities
	10,735,434
	-
	10,735,434
	10,786,934
	-
	10,786,934Net (decrease) increase in cash5,042,090-5,042,0905,047,968-5,047,968Cash  beginning5,878-5,878---Cash  ending
	$5,047,968
	$-
	$5,047,968
	$5,047,968
	$-
	$5,047,968Supplemental disclosures:Interest paid$59,140$-$59,140$59,140$-$59,140Income taxes paid
	$-
	$-
	$-
	$-
	$-
	$-Non-cash transactions:Shares issued for executive compensation$21,2502,453,756$2,475,006$21,2502,453,756$2,475,006Number of shares issued for executive compensation7,500,0187,500,0187,500,0187,500,018Shares issued for services$-
	$-$1,000
	$1,000Number of shares issued for services--35,294,20035,294,200Shares issued for licenses$8,217,391
	$8,217,391$8,217,391
	$8,217,391Number of shares issued for licenses5,869,5655,869,5655,869,5655,869,565Amortization of warrants issued for financing costs$382,656
	$382,656$382,656
	$382,656Number of shares issued for services2,971,4292,971,4292,971,4292,971,429






F21



29





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Ecotality, Inc.

(formerly Alchemy Enterprises, Ltd.)

(a Development Stage Company)

Notes to Restated Financial Statements



Note 10  Restatement of financial statements (Continued)



As a result of the aforementioned restatement the related disclosures included in the notes to the consolidated financial statements have been revised.













































F22



30





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EXECUTIVE COMPENSATION



Summary Compensation Table



The following table sets forth, for the last two completed fiscal years ended December 31, 2006 and 2005, the cash compensation paid by the Company, as well as certain other compensation paid with respect to those years and months, to the Chief Executive Officer and, to the extent applicable, each of the three other most highly compensated executive officers of the Company in all capacities in which they served:



|Summary Compensation Table   
|-----------------------------
|                             
|                             
|Name and
`Principal Position`
|                             
|Jonathan R. Read             
|CEO and President            
|                             
|Harold W. Sciotto            
|Secretary and Treasurer      
|                             
|Howard A. Foote (2)          
|CTO                          
|                             
|Elliott Winfield (2)         



Notes:



1.

Universal Power Vehicles was paid a total of $100,000 during the year ended December 31, 2006 for consulting services related to the development of our power cell technology.  UPV is owned and controlled by Howard A. Foote.



2.

Messrs. Foote and Winfield are no longer employed by us.



31





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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



In February 2006 we entered into a Technology Contribution Agreement with Howard Foote and Elliott Winfield which we refer to collectively as F&W, under which F&W contributed to us all of their right, title and interest in and to the EPC technology.  In exchange for the contribution of the EPC technology, we agreed to finance ongoing research and development of the technology up to $1,350,000.  The agreement was conditioned upon our ability to develop EPC technology that was determined to be commercially and technologically viable for mass production.  In the event we were unable to do so by February 2009 due to a lack of best efforts by F&W, abandonment of the project, or breach of employment agreements by F&W, then we could terminate the agreement and F&W would be responsible for reimbursing us for any funds expended by us, together with interest on the principal amount accrued at the rate of 15% per year.  In the event the agreement was terminated by us, the rights, patents and ownership of the intellectual property conveyed by F&W to us would revert to F&W and the shares returned to Mr. Sciotto, as described below.



In February 2006 an agreement was entered into by and between Harold Sciotto, our former President and majority stockholder, and Howard Foote under which Mr. Sciotto agreed to transfer ownership of 32,000,000 shares of our common stock to Mr. Foote.  The 32,000,000 shares were placed in an escrow account to be delivered to Mr. Foote: (i) upon delivery to us of an EPC system that is determined to be commercially and technologically viable for mass production, 16,000,000 shares of common stock shall be transferred to Mr. Foote and (ii) upon either (a) the acquisition of a hybrid transitbus company, or (b) our obtaining profitability, an additional 16,000,000 shares of common stock shall be transferred to Mr. Foote.  If at any time, until February 2009, we reasonably determine, in our sole discretion, that the EPC system is not commercially or technically viable, Mr. Sciotto may terminate the agreement, whereupon Mr. Foote must return any shares of common stock disbursed from the escrow account and the remaining portion of escrow stock remaining in the escrow account will be released to Mr. Sciotto.  Upon such termination of the agreement, all patent rights and the ownership of the intellectual property conveyed from Mr. Foote to us will revert to Mr. Foote. Simultaneously with the execution of the agreement, Mr. Sciotto entered into an identical agreement with Elliot Winfield pursuant to which 8,000,001 shares were placed in escrow to be delivered to Mr. Winfield, 4,000,001 and 4,000,000 shares, respectively.



On February 15, 2007, we entered into a Settlement Agreement and Release with Foote and Winfield and Universal Power Vehicles Corporation to settle and resolve all known disputes and uncertainties between them related to all agreements and contracts entered in heretofore concerning the fuel cell intellectual property and technology.  In accordance with the Settlement, Foote, Winfield and UPV confirm the assignment, transfer and conveyance of all right, title and interest in and to the electric power cell and reactor technology being developed by us.  Further to this, for a period of two years from the effective date of the Settlement, Foote, Winfield and UPV are prohibited, without our prior written consent, from directly or indirectly, participating in any business in competition with us or from engaging in any business activities that are the same or substantially similar to our business activities during the terms Foote, Winfield and UPV were employed by, or were affiliated with, us.  As consideration, we paid to Foote, Winfield and UPV cash in the aggregate amount of $600,000.  Additionally, Foote, Winfield and UPV received common stock in the aggregate amount of 1,500,000 shares.  In compliance with a condition of the Settlement described herein, Howard Foote resigned as a Director of Ecotality, effective February 15, 2007.



As described above on February 15, 2007, the
Company entered into a Settlement Agreement and Release to the Technology
Contribution Agreement, originally entered into on February 15, 2006, to settle
and resolve all known disputes and uncertainties between the Company and Howard
Foote, Elliott Winfield and Universal Power Vehicles, Inc.  In accordance with
the Settlement, the Parties confirm the assignment, transfer and conveyance of
all right, title and interest in and to the Intellectual Property transferred in
the Contribution Agreement.  In consideration, the Company agreed to pay to
Foote, Winfield and UPV cash in the amount of $600,000.  Additionally, the Parties received common stock in the aggregate amount of 1,500,000 shares of the Company, as per a separate escrow agreement between Foote, Winfield and and Mr. Harlod Sciotto, an officer and director of the Company. The shares were owned by Mr. Sciotto and not the company. The escrow also provided for: (1) the immediate release from escrow and return to Harold Sciotto of 32,500,000 shares of our common stock; and (2) the immediate release to Ecotality of 6,000,000 shares of our common stock from escrow for cancellation.  The 6,000,000 shares were cancelled immediately upon receipt at their par value amount of $6,000 and that paid in capital was reduced by that amount.  The value of the shares transferred was based upon market value ($1,200,000) at the time of the transaction and have been reflected as an expense in our financial statements with a corresponding credit to paid in capital in accordance with SEC bulletins topic 5:T.



32





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## EXHIBITS



Exhibit NumberName and/or Identification of Exhibit2Plan of Purchase, Sale, Reorganization, arrangement, liquidation or successiona.  Technology Contribution Agreement and Exhibits thereto (1)b.  License Agreement with California Institute of Technology (2)3Articles of Incorporation & By-Lawsa.  Articles of Incorporation filed on April 21, 1999 (3)b.  Amendment to Articles of Incorporation filed on November 27, 2006c.  Amendment to Articles of Incorporation filed on November 27, 2006d.  Amendment to Articles of Incorporation filed on November 27, 2006 (4)e.  Restated Bylaws (5)10Material Contractsa.   Purchase Order with Hydrogenics Corporation (4)b.  Settlement Agreement and Release (6)16Letter on change in certifying accountant (7)31Rule 13a-14(a)/15d-14(a) Certification32Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)99Additional
	Exhibitsa.Escrow Agreement (6)b.  Letter from NASA/Jet Propulsion Laboratories (8)




Notes:



1.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on February 21, 2006.

2.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on July 12, 2006.

3.

Incorporated by reference to the Registration Statement on Form 10SB12G, as amended, previously filed with the SEC on March 3, 2005.

4.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on December 4, 2006.

5.

Incorporated by reference herein to the Form SB-2, previously filed with the SEC on February 12, 2007.

6.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on February 21, 2007.

7.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on January 30, 2007.

8.

Incorporated by reference herein to the Form 8-K, previously filed with the SEC on March 27, 2007.





33





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SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.





ECOTALITY, INC.SignatureTitleDate/s/ Jonathan R. ReadChief Executive OfficerJuly 11, 2007Jonathan R. Read






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.SignatureTitleDate/s/ Jonathan R. ReadChief Executive Officer,July 11, 2007Jonathan R. ReadPresident and Director/s/ Harold W. SciottoSecretary, TreasurerJuly 11, 2007Harold W. Sciottoand Director/s/ Barry S. BaerChief Financial OfficerJuly 11, 2007Barry S. BaerPrincipal Accounting Officer/s/ Jerry Y. S. LinDirectorJuly 11, 2007Jerry Y. S. Lin


































34