EnSync, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 16, 2016

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Exhibit 99.1
                                                          

EnSync Reports Second Quarter 2016
Results

Management to Host Conference Call at 4:30p.m. EST (3:30 p.m. CST)

MILWAUKEE, WI – (February 16, 2016) – EnSync, Inc. (NYSE MKT: ESNC), dba EnSync Energy Systems, a leading developer of innovative energy management systems for the utility, commercial, industrial and multi-tenant building markets, today announced second quarter 2016 results, ended December 31, 2015.
Key Projects Status
The Company made significant progress on many of its key projects during, and subsequent to the end of the second quarter of fiscal year 2016, including:
· University of the Nations: Phase I is complete and supplying power to the University.  Phase II will be complete by early March.
· Century West:  The project is on schedule to be commissioned by May.
· OATI:  The Agile Hybrid batteries have shipped and installation and commissioning will be complete by May.
· Cayman Islands:  Our equipment has shipped to the Cayman Islands and the installation and commissioning will be complete by May.
Other Key Recent Developments and Accomplishments
· Production Release and Technology Transfer from EnSync to Meineng Energy:  Fourteen Agile Flow Batteries were shipped from Meineng Energy to EnSync customers since the beginning of Q2.  Thirteen Matrix Energy Management Systems have either been shipped from Meineng Energy to EnSync, or are in process of assembly and test in China.  Meineng is now qualified to build and test our advanced Matrix systems and modules.
· Matrix ETL Listing to UL 1741:  Our Matrix Energy Management platform is now listed by ETL to UL1741 specification.
· Hawaii "Smart Inverter" Compliance Achieved:  Our inverters are among the first to achieve this designation.
· Installed Base Performance:  The V3-Series Installed Base Upgrade Program is complete. All candidate systems have been upgraded, with significant improvement to performance.  The program has been finished under budget.

· Hybrid Storage System Success:  We achieved the milestone of 1.0MWh of Hybrid Flow-Li Ion batteries shipped for C&I / Microgrid applications less than a year from announcement.  EnSync remains the premier supplier of hybridized commercial energy storage solutions.

Management Discussion
Brad Hansen, president and chief executive officer of EnSync, commented, "I am pleased with the progress we are making and the accomplishments during, and subsequent to the end of the quarter.  The capabilities of our differentiated technology and systems solutions allow our customers to prioritize their electricity use from the grid, renewables and storage, synchronizing each of these sources in real time and leveraging their respective values.  These capabilities will be a driving factor in moving the economy from a focus on coal-generated power to one utilizing renewable energy sources. These solutions, coupled with our expertise and credibility for economic modeling, system design and project development are a competitive differentiator in the PV + Storage systems market."
Mr. Hansen continued, "The University of the Nations project is on schedule and Phase I is performing well.  Five other contracted power purchase agreement (PPA) projects are in varying degrees of construction and commissioning.  Our near term efforts have transitioned from closing PPA contracts to marketing our existing projects.  In December, we hired Fred Vaske as Vice President of Structured Finance to drive the development of an investor base and in turn, sell these projects.  Fred brings a great deal of knowledge from his 20 years of project financing experience including major players in renewable energy, such as SunPower, Recurrent Energy, HanWa Q-Cells and Scatec Solar."
Fred Vaske, Vice President of Structured Finance for EnSync,  added, "There is a great deal of interest in the EnSync PPA projects from both banks and corporate investors that have previously been investors in solar projects.  They have recognized that there are new and variable services attributable to solar + storage installations that are lacking with solar only projects.  Investors also recognize, based on regulatory and policy changes such as what recently occurred in Nevada's retroactive application of net metering reductions, that storage offers a degree of insurance against unanticipated change. Investors will also be very pleased with EnSync's industry leading control, communications and monitoring of the value generated by the project over the contract life."


Mr. Hansen concluded, "Recent developments validate our strategy. The President signed the budget bill, which extends the solar/storage investment tax credit an unprecedented five years, providing a strong foundation for future growth.  The Supreme Court endorsed FERC jurisdiction over demand side management. This ruling will become important as we introduce our capability to perform supply response on-demand applications for commercial buildings. Additionally, state commissions continue to make changes in Net Metering programs and rate structures that enhance the value of storage in self-generation systems.  Finally, we've put together a great executive team, with the right products and a robust strategy to address these developing opportunities."
Financial Results
Total revenue for three months ended December 31, 2015 was $382,261 compared to $300,654 for the three months ended December 31, 2014.  Total costs and expenses were $4,889,717 compared to $3,575,886.  Loss from operations was $4,507,456 compared to $3,275,232. Net loss attributable to common shareholders was $4,515,762 compared to $3,446,642.  Loss per share was ($0.10) compared to ($0.09).
Current backlog for components, systems and engineering services is approximately $2.5 million.  Additionally, the Company has acquired PPA contracts valued at approximately $11.2 million.
Financial Position
The Company ended the second quarter of fiscal 2016 with total assets of $44.8 million, including $28.1 million in cash.   As of December 31, 2015, we have cumulative project costs of $5.8 million related to PPA contracts.  We plan to recover substantially all of these costs before the end of our fiscal year as we sell or finance these projects.
Conference call – Today, February 16, 2016 – 4:30p.m. EST (3:30 p.m. CST)
Date: Tuesday, February 16, 2016
Time: 4:30 p.m. EST (3:30 p.m. CST)
Domestic participant dial in #: 888-471-3843
Participant passcode #: 9519944
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. A replay of the call will be available later on the same day via the investor relations section of the company's web site at www.ensync.com until April 16, 2016.
Domestic replay #: 888-203-1112
Replay passcode #: 9519944



About EnSync Energy Systems
EnSync, Inc. (NYSE MKT: ESNC), dba EnSync Energy Systems, is enabling the future of electricity with advanced energy management systems critical to a global economy becoming increasingly reliant upon the expansion of renewable energy. Whether part of the grid power transmission and distribution network, or behind the meter in commercial, industrial and multi-tenant buildings, EnSync technology brings differentiated power control and energy storage solutions to electricity-challenged environments. Our technologies also serve as the system level intelligence in microgrid applications, by seamlessly integrating multiple generation and storage assets to deliver power in remote and community level environments not served by the grid, or areas electing to use the grid secondary to microgrid assets. In 2015, EnSync incorporated power purchase agreements (PPAs) into its portfolio of offerings, enabling electricity savings for customers and providing a stable financial yield for investors. EnSync is a global corporation, with a joint venture in AnHui, China at Meineng Energy, as well as a strategic partnership with Solar Power, Inc. (SPI). For more information, visit: www.ensync.com.
Safe Harbor Statement
Certain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.



 
                                 EnSync, Inc.
        
                              Condensed Consolidated Balance Sheets
        
         
   
(Unaudited)
      
   
December 31, 2015
    
June 30, 2015
  
Assets
        
Current assets:
        
    Cash and cash equivalents
  
$
28,171,129
    
$
10,757,461
  
    Restricted cash on deposit
    
60,223
      
60,193
  
    Accounts receivable, net
    
85,708
      
113,093
  
    Inventories, net
    
2,673,598
      
1,198,117
  
    Prepaid expenses and other current assets
    
596,498
      
441,537
  
    Deferred financing costs
    
-
      
545,825
  
    Customer intangible assets
    
154,875
      
-
  
    Note receivable
    
165,156
      
159,107
  
    Deferred project costs
    
159,978
      
-
  
    Project assets
    
5,790,256
      
-
  
        Total current assets
    
37,857,421
      
13,275,333
  
Long-term assets:
                
    Property, plant and equipment, net
    
3,794,418
      
4,164,912
  
    Investment in investee company
    
2,339,931
      
2,408,528
  
Goodwill
    
803,079
      
803,079
  
        Total assets
  
$
44,794,849
    
$
20,651,852
  
                 
Liabilities and Equity
                
Current liabilities:
                
    Current maturities of bank loans and notes payable
  
$
328,744
    
$
324,626
  
    Accounts payable
    
1,411,045
      
1,056,744
  
    Accrued expenses
    
415,291
      
1,129,166
  
    Customer deposits
    
1,064,797
      
1,177,155
  
    Accrued compensation and benefits
    
273,088
      
235,351
  
        Total current liabilities
    
3,492,965
      
3,923,042
  
Long-term liabilities:
                
    Bank loans and notes payable, net of current maturities
    
888,451
      
1,053,581
  
    Deferred revenue
    
13,290,000
      
-
  
        Total liabilities
    
17,671,416
      
4,976,623
  
                 
Commitments and contingencies (Note 15)
                
                 
Equity
                
    Series B redeemable convertible preferred stock ($0.01 par value,
          
      $1,000 face value) 3,000 shares authorized and issued, 2,300 and 2,575 shares outstanding, preference in liquidation of $5,172,385 and $5,635,866 as of December 31, 2015 and June 30, 2015, respectively
    
23
      
26
  
      Series C convertible preferred stock ($0.01 par value, $1,000 face value),
          
      28,048 and 0 shares authorized, issued, and outstanding, preference in liquidation of $21,951,048 and $0 as of December 31, 2015 and June 30, 2015, respectively
    
280
      
-
  
    Common stock ($0.01 par value); 300,000,000 and 150,000,000 authorized,
          
    47,608,821 and 39,129,334 shares issued and outstanding as of December 31, 2015 and June 30, 2015, respectively
    
1,184,403
      
1,099,608
  
    Additional paid-in capital
    
136,775,596
      
117,104,936
  
    Accumulated deficit
    
(110,877,163
)
    
(102,674,049
)
    Accumulated other comprehensive loss
    
(1,589,759
)
    
(1,589,486
)
       Total EnSync, Inc. equity
    
25,493,380
      
13,941,035
  
    Noncontrolling interest
    
1,630,053
      
1,734,194
  
       Total equity
    
27,123,433
      
15,675,229
  
       Total liabilities and equity
  
$
44,794,849
    
$
20,651,852
  
                 
See accompanying notes to condensed consolidated financial statements.
          
 
 
 
 
                                                                                EnSync, Inc.
                                                                              Condensed Consolidated Statements of Operations
                                                                              (Unaudited)
   		          
               
               
                 
   
Three months ended December 31,
    
Six months ended December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Revenues
                
    Product sales
  
$
335,694
    
$
114,177
    
$
486,230
    
$
663,518
  
    Engineering and development
    
46,567
      
186,477
      
169,007
      
201,997
  
        Total Revenues
    
382,261
      
300,654
      
655,237
      
865,515
  
                                 
Costs and Expenses
                                
    Cost of product sales
    
323,289
      
171,683
      
304,608
      
507,646
  
    Cost of engineering and development
    
82,020
      
59,982
      
136,167
      
169,145
  
    Advanced engineering and development
    
2,015,364
      
1,480,813
      
3,691,652
      
2,778,396
  
    Selling, general, and administrative
    
2,287,978
      
1,704,234
      
4,514,952
      
3,763,787
  
    Depreciation and amortization
    
181,066
      
159,174
      
359,656
      
313,690
  
        Total Costs and Expenses
    
4,889,717
      
3,575,886
      
9,007,035
      
7,532,664
  
                                 
Loss from Operations
    
(4,507,456
)
    
(3,275,232
)
    
(8,351,798
)
    
(6,667,149
)
                                 
Other Income (Expense)
                                
    Equity in loss of investee company
    
(20,889
)
    
(225,471
)
    
(68,597
)
    
(307,973
)
    Gain on investment in investee company
    
-
      
-
      
-
      
1,257,407
  
    Interest income
    
14,094
      
7,879
      
18,710
      
11,490
  
    Interest expense
    
(12,517
)
    
(26,270
)
    
(27,647
)
    
(53,850
)
    Other income
    
-
      
-
      
76,437
      
-
  
        Total Other Income (Expense)
    
(19,312
)
    
(243,862
)
    
(1,097
)
    
907,074
  
                                 
Loss before benefit for Income Taxes
    
(4,526,768
)
    
(3,519,094
)
    
(8,352,895
)
    
(5,760,075
)
                                 
Benefit for Income Taxes
    
(640
)
    
-
      
(640
)
    
-
  
    Net loss
    
(4,526,128
)
    
(3,519,094
)
    
(8,352,255
)
    
(5,760,075
)
    Net loss attributable to noncontrolling interest
    
80,424
      
143,508
      
149,141
      
226,010
  
    Gain attributable to noncontrolling interest
    
-
      
-
      
-
      
(481,870
)
Net Loss Attributable to EnSync, Inc.
    
(4,445,704
)
    
(3,375,586
)
    
(8,203,114
)
    
(6,015,935
)
Preferred Stock Dividend
    
(70,058
)
    
(71,056
)
    
(146,580
)
    
(118,865
)
Net Loss Attributable to Common Shareholders
  
$
(4,515,762
)
  
$
(3,446,642
)
  
$
(8,349,694
)
  
$
(6,134,800
)
                                 
Net loss per share
                                
    Basic and diluted
  
$
(0.10
)
  
$
(0.09
)
  
$
(0.18
)
  
$
(0.18
)
                                 
Weighted average shares-basic and diluted
    
47,348,603
      
39,051,379
      
46,673,751
      
34,835,949
  
                                 
See accompanying notes to condensed consolidated financial statements.
                          
 
 
 
EnSync, Inc.
        
Condensed Consolidated Statements of Cash Flows
        
(Unaudited)
        
   
Six months ended December 31,
  
   
2015
    
2014
  
Cash flows from operating activities
        
Net loss
  
$
(8,352,255
)
  
$
(5,760,075
)
Adjustments to reconcile net loss to net cash used in operating activities:
          
    Depreciation of property, plant and equipment
    
345,209
      
313,690
  
    Amortization of intangible asset
    
14,447
      
-
  
    Stock-based compensation, net
    
463,539
      
853,811
  
    Equity in loss of investee company
    
68,597
      
307,973
  
    Gain on investment in investee company
    
-
      
(1,257,407
)
    Interest accreted on note receivable
    
(6,049
)
    
(3,156
)
    Gain on bargain purchase
    
(76,437
)
    
-
  
Changes in assets and liabilities
                
    Accounts receivable
    
27,385
      
787,867
  
    Inventories
    
(1,475,481
)
    
(98,328
)
    Prepaids and other current assets
    
(154,961
)
    
49,385
  
    Refundable income taxes
    
-
      
10,908
  
    Deferred project costs
    
(159,978
)
    
-
  
    Project assets
    
(5,603,034
)
    
-
  
    Accounts payable
    
354,301
      
(122,582
) 
    Accrued expenses
    
(731,570
)
    
(556,073
)
    Customer deposits
    
(112,358
)
    
(286,050
)
    Accrued compensation and benefits
    
37,737
      
33,610
  
    Deferred revenue
    
13,290,000
      
-
  
Net cash used in operating activities
    
(2,070,908
)
    
(5,726,427
)
Cash flows from investing activities
                
    Cash paid for business combination
    
(225,829
)
    
-
  
    Change in restricted cash
    
(30
)
    
1,149
  
    Expenditures for property and equipment
    
(10,416
)
    
(303,280
)
    Issuance of note receivable
    
-
      
(150,000
)
Net cash used in investing activities
    
(236,275
)
    
(452,131
)
Cash flows from financing activities
                
    Payment of financing costs
    
(261,982
)
    
-
  
    Repayments of bank loans and notes payable
    
(161,012
)
    
(173,982
)
    Proceeds from issuance of preferred stock
    
13,300,000
      
-
  
    Proceeds from issuance of common stock
    
6,800,000
      
14,837,760
  
    Common stock issuance costs
    
-
      
(1,148,023
)
    Contributions of capital from noncontrolling interest
    
45,000
      
7,127
  
Net cash provided by financing activities
    
19,722,006
      
13,522,882
  
Effect of exchange rate changes on cash and cash equivalents
    
(1,155
)
    
5,340
  
Net increase in cash and cash equivalents
    
17,413,668
      
7,349,664
  
Cash and cash equivalents - beginning of period
    
10,757,461
      
10,360,721
  
                 
Cash and cash equivalents - end of period
  
$
28,171,129
    
$
17,710,385
  
                 
                 
Supplemental disclosures of cash flow information:
                
    Cash paid for interest
  
$
27,795
    
$
49,577
  
                 
See accompanying notes to condensed consolidated financial statements.
          
                 
 
 
 
Investor Relations Contact:
Three Part Advisors, LLC
Jeff Elliott
(972) 423-7070
Matt Selinger
(817) 310-8776
Phillip Kupper
(817) 778-8339


EnSync Media Contact:
Michelle Montague
 (262) 735-5676

EnSync, Inc. Reports