Wisconsin
|
001-33540
|
39-1987014
|
||
(State or other jurisdiction
of incorporation)
|
(Commission
file number)
|
(IRS Employer
Identification Number)
|
N93 W14475 Whittaker Way, Menomonee Falls, Wisconsin
|
|
53051
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Item |
2.02
|
Results of Operations and Financial Condition. |
Item | 9.01. | Financial Statements and Exhibits. |
|
EnSync, Inc.
|
|
|
Dated: September 8, 2016
|
By: /s/ James F. Schott
|
|
Name: James F. Schott
|
Title: Chief Financial Officer |
Exhibit No. | Exhibit Description |
99 | Press release, dated September 8, 2016, issued by EnSync, Inc., furnished herewith |
· | Subsequent to the end of the quarter on July 29th, the Company announced a significant milestone with the sale of multiple power purchase agreements (PPAs) comprising Tranche 1 to American Electric Power subsidiary, AEP OnSite Partners; |
· | Completed the sale of the seventh PPA project from Tranche 1 in September 2016, leaving one project remaining from the initial tranche; |
· | During the fourth quarter, the Company completed final system shipment of the Cayman Technology Center project, and recognized revenue on 90% of the system; |
· | Completed successful assembly, test and shipment to Korea of the 500 kWh fully integrated utility energy storage system for Lotte Chemical, manufactured and sourced by our Meineng Energy joint venture; |
· | Signed two additional PPA projects in Hawaii as part of the second tranche. Tranche 2 now consists of four PPA projects, with the Company PPA project backlog total being worth an estimated value of more than $5.0M at the time of project sale; |
· | Successfully demonstrated our Supply Response on Demand capability at the Intersolar North America Conference in San Francisco in July, a major step forward in enabling the “Internet of Energy”; |
· | Continued focus on operational efficiencies has resulted in a reduction in engineering development, selling, general and administrative costs from $4.3 million in the second quarter of Fiscal 2016 to less than $3.5 million in the fourth quarter. |
EnSync, Inc.
|
||||||||||||||||
Consolidated Statements of Operations
|
||||||||||||||||
Three months ended June 30,
|
Year ended June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Revenues
|
||||||||||||||||
Product sales
|
$
|
1,179,865
|
$
|
41,000
|
$
|
1,730,851
|
$
|
992,162
|
||||||||
Engineering and development
|
104,783
|
272,178
|
369,172
|
771,348
|
||||||||||||
Total revenues
|
1,284,648
|
313,178
|
2,100,023
|
1,763,510
|
||||||||||||
Costs and expenses
|
||||||||||||||||
Cost of product sales
|
3,092,140
|
58,774
|
3,486,542
|
841,928
|
||||||||||||
Cost of engineering and development
|
225,342
|
64,904
|
583,137
|
267,127
|
||||||||||||
Advanced engineering and development
|
1,144,786
|
1,996,130
|
6,234,083
|
6,420,191
|
||||||||||||
Selling, general, and administrative
|
2,310,779
|
1,555,866
|
9,038,602
|
7,146,649
|
||||||||||||
Depreciation and amortization
|
202,685
|
169,090
|
772,332
|
644,790
|
||||||||||||
Total costs and expenses
|
6,975,732
|
3,844,764
|
20,114,696
|
15,320,685
|
||||||||||||
Loss from operations
|
(5,691,084
|
)
|
(3,531,586
|
)
|
(18,014,673
|
)
|
(13,557,175
|
)
|
||||||||
Other income (expense)
|
||||||||||||||||
Equity in loss of investee company
|
(72,473
|
)
|
22,583
|
(242,902
|
)
|
(495,119
|
)
|
|||||||||
Gain on investment in investee company
|
-
|
-
|
-
|
1,257,407
|
||||||||||||
Interest income
|
12,793
|
6,318
|
46,438
|
25,108
|
||||||||||||
Interest expense
|
(12,131
|
)
|
(48,962
|
)
|
(51,825
|
)
|
(128,009
|
)
|
||||||||
Other income (expense)
|
(76,437
|
)
|
(3,261
|
)
|
-
|
(277
|
)
|
|||||||||
Total other income (expense)
|
(148,248
|
)
|
(23,322
|
)
|
(248,289
|
)
|
659,110
|
|||||||||
Loss before expense (benefit) for income taxes
|
(5,839,332
|
)
|
(3,554,908
|
)
|
(18,262,962
|
)
|
(12,898,065
|
)
|
||||||||
Expense (benefit) for income taxes
|
-
|
(86,455
|
)
|
(468
|
)
|
(86,455
|
)
|
|||||||||
Net loss
|
(5,839,332
|
)
|
(3,468,453
|
)
|
(18,262,494
|
)
|
(12,811,610
|
)
|
||||||||
Net loss attributable to noncontrolling interest
|
108,847
|
44,451
|
386,436
|
407,672
|
||||||||||||
Gain attributable to noncontrolling interest
|
-
|
-
|
-
|
(481,870
|
)
|
|||||||||||
Net loss attributable to EnSync, Inc.
|
(5,730,485
|
)
|
(3,424,002
|
)
|
(17,876,058
|
)
|
(12,885,808
|
)
|
||||||||
Preferred stock dividend
|
(73,605
|
)
|
(74,655
|
)
|
(291,995
|
)
|
(266,356
|
)
|
||||||||
Net loss attributable to common shareholders
|
$
|
(5,804,090
|
)
|
$
|
(3,498,657
|
)
|
$
|
(18,168,053
|
)
|
$
|
(13,152,164
|
)
|
||||
Net loss per share
|
||||||||||||||||
Basic and diluted
|
$
|
(0.12
|
)
|
$
|
(0.09
|
)
|
$
|
(0.39
|
)
|
$
|
(0.36
|
)
|
||||
Weighted average shares - basic and diluted
|
47,682,008
|
39,101,209
|
47,156,928
|
36,944,116
|
EnSync, Inc.
|
||||||||
Consolidated Balance Sheets
|
||||||||
June 30, 2016
|
June 30, 2015
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
17,189,089
|
$
|
10,757,461
|
||||
Restricted cash on deposit
|
-
|
60,193
|
||||||
Accounts receivable, net
|
172,633
|
113,093
|
||||||
Inventories, net
|
1,869,942
|
1,198,117
|
||||||
Prepaid expenses and other current assets
|
600,591
|
441,537
|
||||||
Deferred financing costs
|
-
|
545,825
|
||||||
Customer intangible assets
|
76,293
|
-
|
||||||
Note receivable
|
171,140
|
159,107
|
||||||
Deferred PPA project costs
|
5,690,307
|
-
|
||||||
Deferred customer project costs
|
419,765
|
-
|
||||||
Project assets
|
1,190,853
|
-
|
||||||
Total current assets
|
27,380,613
|
13,275,333
|
||||||
Long-term assets:
|
||||||||
Property, plant and equipment, net
|
3,889,106
|
4,164,912
|
||||||
Investment in investee company
|
2,165,626
|
2,408,528
|
||||||
Goodwill
|
809,363
|
803,079
|
||||||
Right of use assets-operating leases
|
27,264
|
85,656
|
||||||
Total assets
|
$
|
34,271,972
|
$
|
20,737,508
|
||||
Liabilities and Equity
|
||||||||
Current liabilities:
|
||||||||
Current maturities of long-term debt
|
$
|
332,707
|
$
|
324,626
|
||||
Accounts payable
|
569,226
|
1,056,744
|
||||||
Accrued expenses
|
501,031
|
1,214,822
|
||||||
Customer deposits
|
201,352
|
1,177,155
|
||||||
Accrued compensation and benefits
|
257,087
|
235,351
|
||||||
Total current liabilities
|
1,861,403
|
4,008,698
|
||||||
Long-term liabilities:
|
||||||||
Long-term debt, net of current maturities
|
1,057,720
|
1,053,581
|
||||||
Deferred revenue
|
13,290,000
|
-
|
||||||
Other long-term liabilities
|
25,789
|
-
|
||||||
Total liabilities
|
16,234,912
|
5,062,279
|
||||||
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 $5,317,800 and $5,635,866 as of June 30, 2016 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 $12,719,260 and $0 as of June 30, 2016 and June 30, 2015, respectively
|
280
|
-
|
||||||
Common stock ($0.01 par value); 300,000,000 and 150,000,000 authorized,
|
||||||||
47,752,821 and 39,129,334 shares issued and outstanding as of June 30, 2016 and June 30, 2015, respectively
|
1,185,843
|
1,099,608
|
||||||
Additional paid-in capital
|
137,585,233
|
117,104,936
|
||||||
Accumulated deficit
|
(120,550,108
|
)
|
(102,674,049
|
)
|
||||
Accumulated other comprehensive loss
|
(1,585,583
|
)
|
(1,589,486
|
)
|
||||
Total EnSync, Inc. equity
|
16,635,688
|
13,941,035
|
||||||
Noncontrolling interest
|
1,401,372
|
1,734,194
|
||||||
Total equity
|
18,037,060
|
15,675,229
|
||||||
Total liabilities and equity
|
$
|
34,271,972
|
$
|
20,737,508
|
EnSync, Inc.
|
||||||||
Consolidated Statements of Cash Flows
|
||||||||
Year ended June 30,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(18,262,494
|
)
|
$
|
(12,811,610
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation of property, plant and equipment
|
679,303
|
644,790
|
||||||
Amortization of customer intangible assets
|
93,029
|
-
|
||||||
Stock-based compensation, net
|
1,274,616
|
1,263,529
|
||||||
Impairment of PPA project costs
|
1,890,357
|
-
|
||||||
Equity in loss of investee company
|
242,902
|
495,119
|
||||||
Gain on investment in investee company
|
-
|
(1,257,407
|
)
|
|||||
Interest accreted on note receivable
|
(12,033
|
)
|
(9,107
|
)
|
||||
Changes in assets and liabilities
|
||||||||
Accounts receivable
|
(59,540
|
)
|
937,931
|
|||||
Inventories
|
(671,825
|
)
|
154,853
|
|||||
Prepaids and other current assets
|
(154,470
|
)
|
(145,723
|
)
|
||||
Refundable income taxes
|
-
|
91,191
|
||||||
Deferred PPA project costs
|
(7,580,664
|
)
|
-
|
|||||
Deferred customer project costs
|
(419,765
|
)
|
-
|
|||||
Project assets
|
(1,003,631
|
)
|
-
|
|||||
Accounts payable
|
(487,518
|
)
|
467,102
|
|||||
Accrued expenses
|
(749,667
|
)
|
(1,473,945
|
)
|
||||
Customer deposits
|
(975,803
|
)
|
436,010
|
|||||
Accrued compensation and benefits
|
21,736
|
40,170
|
||||||
Deferred revenue
|
13,290,000
|
-
|
||||||
Net cash used in operating activities
|
(12,885,467
|
)
|
(11,167,097
|
)
|
||||
Cash flows from investing activities
|
||||||||
Cash paid for business combination
|
(225,829
|
)
|
-
|
|||||
Change in restricted cash
|
60,193
|
9,708
|
||||||
Expenditures for property and equipment
|
(406,917
|
)
|
(427,499
|
)
|
||||
Issuance of note receivable
|
-
|
(150,000
|
)
|
|||||
Net cash used in investing activities
|
(572,553
|
)
|
(567,791
|
)
|
||||
Cash flows from financing activities
|
||||||||
Payment of financing costs
|
(261,982
|
)
|
(545,825
|
)
|
||||
Repayments of long term debt
|
(319,607
|
)
|
(1,018,062
|
)
|
||||
Proceeds from equipment financing
|
331,827
|
-
|
||||||
Payments for finance leases
|
(13,521
|
)
|
-
|
|||||
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
|
53,614
|
13,756
|
||||||
Net cash provided by financing activities
|
19,890,331
|
12,139,606
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(683
|
)
|
(7,978
|
)
|
||||
Net increase in cash and cash equivalents
|
6,431,628
|
396,740
|
||||||
Cash and cash equivalents - beginning of year
|
10,757,461
|
10,360,721
|
||||||
Cash and cash equivalents - end of year
|
$
|
17,189,089
|
$
|
10,757,461
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
47,568
|
$
|
114,236
|
||||
Supplemental noncash information:
|
||||||||
Right of use asset obtained in exchange for new operating lease
|
$
|
41,048
|
$
|
-
|
||||
Asset retirement obligation
|
18,527
|
-
|
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