8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 21, 2011

ZBB Energy Corporation

      (Exact name of registrant as specified in charter)

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)

Registrant’s telephone number, including area code:                                                                                                     (262) 253-9800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

On January 24, 2011, ZBB Energy Corporation (the “Company”) filed an initial Current Report on Form 8-K with the Securities and Exchange Commission reporting the acquisition (the “Acquisition”) of substantially all of the net assets of Tier Electronics LLC (“TIER”).  In connection with the Acquisition, TIER changed its name to TE Holdings Group, LLC.  Through the Acquisition, the Company acquired substantially all of the net assets of TIER used in connection with TIER’s business of developing, manufacturing, marketing and selling power electronics products for and to original equipment manufacturers in various industries.  This report is being filed to amend the original filing to include the financial statements and pro forma financial information required by Item 9.01 of Form 8-K.

Item 9.01.Financial Statements and Exhibits.

(a)           Financial Statements of Business Acquired.

The following financial statements are filed with this Form 8-K as exhibit 99.1 and are incorporated herein by reference:

·   Balance sheets of TIER as of December 31, 2010 and December 31, 2009; and

·   Statements of operations, changes in member’s (deficit) equity and cash flows of TIER for the year ended December 31, 2010 and the eight month period ended December 31, 2009.

·   Notes to financial statements.

(b)           Pro Forma Condensed Consolidated Financial Information.

The following pro forma condensed consolidated financial statements are filed with this Form 8-K as exhibit 99.2 and are incorporated herein by reference:

·   Unaudited pro forma condensed consolidated statements of operations of the Company and TIER for the year ended June 30, 2010 and the six months ended December 31, 2010, as if the Acquisition occurred July 1, 2009.

·   Unaudited pro forma condensed consolidated balance sheet of the Company and TIER as of December 31, 2010, as if the Acquisition occurred December 31, 2010.

·   Notes to unaudited condensed pro forma consolidated statements of operations and balance sheet.

The unaudited pro forma consolidated financial information is presented for informational purposes only. The pro forma data is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the Acquisition as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future financial position or operating results of the consolidated company.

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(c)           Exhibits.

The exhibits required to be filed as a part of this Current Report on Form 8-K are listed in the Exhibit Index attached hereto and incorporated herein by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ZBB Energy Corporation
Dated: April 4, 2011	By:	/s/ Eric C. Apfelbach
	Name:	Eric C. Apfelbach
	Title:	President and CEO

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EXHIBIT INDEX

Exhibit No.	Exhibit Description
10.1	Asset Purchase Agreement by and among ZBB Energy Corporation, DCDC Acquisition Company LLC, Tier Electronics LLC and Jeffrey Reichard dated January 21, 2011 (previously filed)
10.2	Registration Rights Agreement between ZBB Energy Corporation and Tier Electronics LLC dated January 21, 2011 (previously filed)
10.3	Employment Agreement between ZBB Energy Corporation and Jeffrey Reichard dated January 21, 2011 (previously filed)
10.4	Form of Nonstatutory Option Agreements issued on January 21, 2011 to Jeff Reichard, Joanne Reichard and Nathan Jobe (previously filed)
10.5	$1,350,000 Non-negotiable Promissory Note issued on January 21, 2011 to Tier Electronics LLC (previously filed)
23	Consent of Baker Tilly Virchow Krause, LLP
99.1	Financial statements of TE Holdings Group, LLC (formerly known as Tier Electronics LLC) as of December 31, 2010 and December 31, 2009 and the  related statements of operations, member’s (deficit equity) and cash flows for the year ended December 31, 2010 and the eight month period ended December 31, 2009 and the Independent Auditors’ Report
99.2	Unaudited condensed pro forma consolidated balance sheet of the Company and TIER as of December 31, 2010, as if the Acquisition occurred December 31, 2010. Unaudited condensed pro forma consolidated statements of operations of the Company and TIER for the year ended June 30, 2010 and the six months ended December 31, 2010, as if the Acquisition occurred July 1, 2009

EX-23

Exhibit 23

CONSENT OF INDEPENDENT AUDITOR

We consent to the incorporation by reference in Registration Statements No. 333-156941 and 333-171957 on Form S-3 and Registration Statements No. 333-150268 and 333-171954 on Form S-8 of ZBB Energy Corporation of our report dated April 4, 2011, relating to the financial statements of TE Holdings Group, LLC (formerly known as Tier Electronics LLC), which appears in this Current Report on Form 8-K/A of ZBB Energy Corporation dated April 4, 2011.

/s/ Baker Tilly Virchow Krause, LLP

Milwaukee, Wisconsin

April 4, 2011

EX-99.1

Exhibit 99.1

TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Menomonee Falls, Wisconsin

FINANCIAL STATEMENTS

Including Independent Auditors’ Report

December 31, 2010 and 2009

TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Table of Contents

December 31, 2010 and 2009

Independent Auditors’ Report	1
Balance Sheets	2
Statements of Operations	3
Statements of Changes in Member's (Deficit) Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6 - 11

Independent Auditors’ Report

To the Sole Member of

TE Holdings Group, LLC

We have audited the accompanying balance sheets of TE Holdings Group, LLC (the “Company”), formerly known as Tier Electronics LLC, as of December 31, 2010 and 2009, and the related statements of operations, member’s (deficit) equity and cash flows for the year and the eight month period then ended.  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 audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  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 audits provide 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 TE Holdings Group, LLC as of December 31, 2010 and 2009, and the results of its operations and cash flows for the year and the eight month period then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 8 to the financial statements, the Company sold substantially all of its net assets and changed its name on January 21, 2011.

/s/ Baker Tilly Virchow Krause, LLP

Milwaukee, Wisconsin

April 4, 2011

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TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Balance Sheets

December 31, 2010 and 2009

	2010			2009
Assets
Current assets:
Cash and cash equivalents	$	66,863		$	55,585
Accounts receivable - net		250,986			72,348
Inventories		584,589			382,624
Prepaid and other current assets		6,106			4,933
Total current assets		908,544			515,490
Property and equipment - net		49,753			55,318
Total assets	$	958,297		$	570,808
Liabilities and Member's (Deficit) Equity
Current liabilities:
Bank line of credit facility	$	120,088		$	30,000
Current maturities of note payable		57,189			-
Accounts payable		143,982			17,423
Accrued expenses		72,775			59,206
Deferred revenues		617,864			150,595
Accrued compensation and benefits		36,514			20,661
Total current liabilities		1,048,412			277,885
Note payable, less current maturities		4,901			-
Total liabilities		1,053,313			277,885
Member's (deficit) equity		(95,016	)		292,923
Total member's (deficit) equity		(95,016	)		292,923
Total liabilities and member's (deficit) equity	$	958,297		$	570,808

See accompanying notes to financial statements

2

TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Statements of Operations

Year Ended December 31, 2010 and Eight Month Period Ended December 31, 2009

	2010			2009 (Eight Months)
Net Revenues	$	1,574,750		$	670,277
Costs and Expenses
Cost of product sales		1,248,625			522,582
Advanced engineering, research and development		254,190			160,184
Selling, general, and administrative		276,396			147,934
Depreciation		22,946			13,514
Total Costs and Expenses		1,802,157			844,214
Loss from Operations		(227,407	)		(173,937	)
Interest Expense		(8,845	)		-
Loss Before Provision for Income Taxes		(236,252	)		(173,937	)
Income Taxes		-			-
Net Loss	$	(236,252	)	$	(173,937	)

See accompanying notes to financial statements

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TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Statements of Changes in Member's (Deficit) Equity

Year Ended December 31, 2010 and Eight Month Period Ended December 31, 2009

	Total Member's (Deficit) Equity
Balance, May 1, 2009	$	511,860
Distributions		(45,000	)
Net loss (eight months)		(173,937	)
Balance, December 31, 2009		292,923
Distributions		(151,687	)
Net loss		(236,252	)
Balance, December 31, 2010	$	(95,016	)

See accompanying notes to financial statements

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TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Statements of Cash Flows

Year Ended December 31, 2010 and Eight Month Period Ended December 31, 2009

	2010			2009 (Eight Months)
Cash flows from operating activities
Net loss	$	(236,252	)	$	(173,937	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		22,946			13,514
Provision for doubtful accounts		32,571			27,202
(Increase) decrease in operating assets:
Accounts receivable		(211,209	)		19,172
Inventories		(201,965	)		(14,688	)
Prepaids and other current assets		(1,173	)		(4,933	)
Increase in operating liabilities:
Accounts payable		126,559			17,423
Accrued expenses		13,569			59,207
Deferred revenues		467,269			115,772
Accrued compensation and benefits		15,853			20,661
Net cash provided by operating activities		28,168			79,393
Cash flows from investing activities
Expenditures for property and equipment		(17,381	)		(8,808	)
Net cash used in investing activities		(17,381	)		(8,808	)
Cash flows from financing activities
Net borrowings under bank line of credit facility		90,088			30,000
Proceeds from issuance of note payable		85,000			-
Principal payments on note payable		(22,910	)		-
Distributions to member		(151,687	)		(45,000	)
Net cash provided by (used in) financing activities		491			(15,000	)
Net increase in cash and cash equivalents		11,278			55,585
Cash and cash equivalents - beginning of period		55,585			-
Cash and cash equivalents - end of period	$	66,863		$	55,585
Supplemental Cash Flow Information
Cash paid for interest	$	8,845		$	-

See accompanying notes to financial statements

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TE HOLDINGS GROUP, LLC

(FORMERLY KNOWN AS TIER ELECTRONICS LLC)

Notes to Financial Statements

December 31, 2010 and 2009

NOTE 1 — NATURE OF ORGANIZATION

TE Holdings Group, LLC, formerly known as Tier Electronics LLC, (the “Company”) is in the business of developing, manufacturing, marketing and selling power electronics products for and to original equipment manufacturers in various industries.  The Company is headquartered in Menomonee Falls, Wisconsin, USA.

The Company has developed a portfolio of intelligent power management platforms that directly integrate multiple renewable and conventional onsite generation sources with storage technology. The Company also offers advanced systems to directly connect wind and solar equipment to the grid and systems that can form various levels of micro-grids.  The Company participates in the energy efficiency markets through its hybrid vehicle control systems, and power quality markets with its line of regulation solutions.

As discussed in Note 8, on January 21, 2011, substantially all of the net assets of Company were acquired by DCDC Acquisition Company LLC, a wholly-owned subsidiary of ZBB Energy Corporation.

NOTE 2 — PERIODS OF PRESENTATION AND CHANGE IN YEAR END

On April 30, 2009, the Company’s sole member acquired the remaining 80% ownership interest in the Company from Diversified Technology, Inc.  Prior to that date, the Company’s sole member owned 20% of the Company.  Financial records for periods prior to May 1, 2009 have not been made available to current Company management.  On May 1, 2009, the Company changed its year end from June 30 to December 31. These financial statements include the operating results of the Company for the year ended December 31, 2010 and the eight month period ended December 31, 2009.

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of six months or less to be cash equivalents.  The Company maintains its cash on deposit at a financial institution.  At times such balances may exceed federally insurable limits.  The Company has not experienced any losses in such deposits.

Accounts Receivable and Significant Customers

Accounts receivable are stated net of an allowance for doubtful accounts of $28,000 and $10,000 as of December 31, 2010 and 2009, respectively. The allowance is determined based on historical collection experience and a review of the current status of accounts receivable. Accounts outstanding significantly longer then the payment terms are considered past due. The Company writes off accounts receivable when they become uncollectible. The Company does not accrue interest on past due accounts.

6

The Company sells to various customers.  Three customers individually accounted for approximately 39%, 11% and 10% of net revenues for the year ended December 31, 2010.  Included in accounts receivable as of December 31, 2010 was $150,724, $0 and $0 from these customers.  One customer individually accounted for approximately 51% of net revenues for the eight month period ended December 31, 2009.  This customer did not have any outstanding accounts receivable as of December 31, 2009.  No other customers accounted for more than 10% of the Company’s net revenues during the reporting periods.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market and consist of raw materials and work in progress.  The Company evaluates the recoverability of its inventories annually. The Company estimates the recoverable cost of such inventory by product type while considering factors such as its age, historic and current demand trends, the physical condition of the inventory as well as assumptions regarding future demand. The Company’s ability to recover its cost for slow moving or obsolete inventory can be affected by such factors as general market conditions, future customer demand and relationships with suppliers.

Property and Equipment

Property and equipment are stated at cost and depreciation is provided for using primarily the straight-line method over the estimated useful lives of the respective assets.  Major expenditures for property and equipment and significant renewals are capitalized.  Maintenance, repairs, and minor renewals are expensed as incurred.  When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and any resulting gains or losses are included in operations.  Depreciation is provided for on a straight line basis over estimated useful lives of the respective assets.  The estimated useful lives are as follows:

	Estimated Useful Lives
Manufacturing equipment	3 - 7 years
Office equipment	3 - 7 years
Vehicle	5 years
Leasehold improvements	7 - 20 years

Impairment of Long-Lived Assets

The Company evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.  The Company evaluates the recoverability of property and equipment and intangible assets annually or more frequently if events or circumstances indicate that an asset might be impaired.  If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.  Management determines fair value using discounted future cash flow analysis or other accepted valuation techniques.  Management believes that there has not been any impairment of the Company's long-lived assets as of December 31, 2010 and 2009.

7

Warranty Obligations

The Company typically warrants its products for twelve months after installation or eighteen months after date of shipment, whichever first occurs.  Warranty costs are included in cost of goods sold.  While the Company actively engages in monitoring and improving its product technologies, there is only a limited product history and relatively short time frame available to test and evaluate the rate of product failure.  Should actual product failure rates differ from the Company’s estimates, revisions are made to the estimated rate of product failures and resulting changes to the warranty obligation.  In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise.  Changes to the product warranty obligations during the year ended December 31, 2010 and eight month period ended December 31, 2009 are as follows:

	2010			2009
Balance, beginning of period	$	40,251		$	-
Provision for warranties		38,586			40,251
Claims		(13,034	)		-
Balance, end of period	$	65,803		$	40,251

Revenue Recognition

Revenues are recognized when persuasive evidence of a contractual arrangement exists, delivery has occurred or services have been rendered, the seller’s price to buyer is fixed and determinable, and collectability is reasonably assured. The portion of revenue related to installation and final acceptance, is deferred until such installation and final customer acceptance are completed. The portion of revenue related to engineering and development is recognized ratably upon delivery of the goods pertaining to the underlying contractual arrangement. The Company charges shipping and handling fees when products are shipped or delivered to a customer, and includes such amounts in net revenues. The Company reports its revenues net of estimated returns and allowances.

Shipping Costs

Shipping and handling costs charged to customers have been included in net revenues.  Shipping and handling costs incurred by the Company have been included in cost of goods sold.

Advanced Engineering, Research and Development Expenses

The Company expenses advanced engineering, research and development costs as incurred. These costs consist primarily of labor, overhead, and materials to build prototype units, materials for testing, develop manufacturing processes and include consulting fees and other costs.

Income Taxes

Effective May 1, 2009, the Company’s member elected to treat the Company as an S corporation for federal and state income tax purposes under the Subchapter S provisions of the Internal Revenue Code.  Under such provisions, the Company is generally not subject to federal and state income taxes.  The tax basis income or loss of the Company is reported on the personal income tax returns of its member, and generally no provision for income taxes is included in the financial statements of the Company while the S corporation status is maintained. The Company periodically distributes funds to its member to cover income taxes on the tax basis income of the Company.

8

The Company accounts for uncertain tax positions under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ ASC”) 740-10, Income Taxes. As of December 31, 2010 and 2009, the Company had no uncertain tax positions.  The Company's policy is to record interest and penalties related to income tax liabilities as income tax expense.  The Company files U.S. Federal and Wisconsin income tax returns.  The Company's U.S. federal income tax returns for the years 2007 and prior, and the Company's Wisconsin income tax returns for the years 2006 and prior are no longer subject to examination by tax authorities.  The Company’s income tax returns are not currently under examination by any tax authority.

Fair Value Information

The carrying amounts of cash and cash equivalents, accounts receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenues approximate fair value due to the short-term nature of these instruments. The carrying amounts of the bank line of credit facility and note payable approximates fair value based on the nature of the terms of the underlying debt agreements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncement

In April 2010, the FASB issued ASC 2010-17, Revenue Recognition - Milestone Method (Topic 605): Milestone Method of Revenue Recognition.  This pronouncement codifies the consensus reached in EITF Issue No. 08-9, “Milestone Method of Revenue Recognition.” The amendments to the pronouncement provide guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. Consideration that is contingent on achievement of a milestone in its entirety may be recognized as revenue in the period in which the milestone is achieved only if the milestone is judged to meet certain criteria to be considered substantive. Milestones should be considered substantive in their entirety and may not be bifurcated. An arrangement may contain both substantive and nonsubstantive milestones, and each milestone should be evaluated individually to determine if it is substantive. The Company adopted ASC 2010-17 effective  January 1, 2010.  The adoption had no impact on the Company’s financial statements.

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Subsequent Events

Management has evaluated the impact of all subsequent events through April 4, 2011, the date the financial statements were available to be issued, and determined that all subsequent events have been appropriately recognized and disclosed in the accompanying financial statements.

NOTE 4 - INVENTORIES

Inventories consisted of the following as of December 31, 2010 and December 31, 2009:

	2010		2009
Raw materials	$	246,636	$	149,292
Work in progress		337,953		233,332
Total inventories	$	584,589	$	382,624

NOTE 5– PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2010 and 2009:

	2010			2009
Equipment		207,862			207,862
Furniture and fixtures		35,949			35,949
Vehicle		8,755			8,755
Leasehold improvements		42,160			24,779
Total, at cost		294,726			277,345
Less, accumulated depreciation		(244,973	)		(222,027	)
Property and Equipment - Net	$	49,753		$	55,318

NOTE 6 – BANK LINE OF CREDIT FACILITY AND NOTE PAYABLE

As of December 31, 2010, the Company had the ability to borrow, subject to certain terms and conditions, up to $150,000 under the terms of a line of credit facility with a bank which expires on October 19, 2011.  Outstanding borrowings on the facility amount to $120,088 and $30,000 as of December 31, 2010 and 2009, respectively.  Borrowings on the line of credit facility require monthly interest payments at the 30-day London Interbank Offered Rate (“LIBOR”), plus 6.50%, reset monthly, subject to an interest rate floor of 6.50%.  Prior to October 14, 2010, the interest rate in effect was 30-day LIBOR, plus 5.50%, reset monthly, subject to an interest rate floor of 6.50%.  The interest rate on the borrowings outstanding on this line of credit facility was 6.76% and 6.50% as of December 31, 2010 and 2009, respectively.

On August 10, 2010, the Company borrowed $85,000 under a term note with a bank.  The note is payable in monthly installments of $4,964 through December 31, 2011, with any unpaid principal and interest due on January 31, 2012. Interest accrues at 30-day LIBOR plus 6.00%, subject to an interest rate floor of 6.50%.  The interest rate on the note was 6.50% as of December 31, 2010.

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Borrowings against the bank line of credit facility and term note are collateralized by substantially all assets of the Company, a guarantee by the sole member of the Company and the personal residence of the sole member of the Company.

Aggregate annual principal payments required under the bank term note for years subsequent to December 31, 2010 are as follows:

2011	$	57,189
2012		4,901
	$	62,090

The line of credit facility and term note were paid off on January 21, 2011 in connection with the sale of the Company’s net assets.

NOTE 7 – COMMITMENTS

The Company leases its production and office facility from the sole member of the Company, under a month to month lease.  The current rental is $7,000 per month.  Rent expense was $84,000 and $56,000 for the year and eight month period ended December 31, 2010 and 2009, respectively. The Company also pays real estate taxes, utilities, and maintenance expenses.  This lease was terminated on January 21, 2011 in connection with the sale of the Company’s net assets.

NOTE 8 – SALE OF NET ASSETS AND NAME CHANGE

On January 21, 2011, the Company sold substantially all of its net assets to DCDC Acquisition Company LLC, a wholly-owned subsidiary of ZBB Energy Corporation (“ZBB”), for approximately $2,515,000.  The name of the Company was changed to TE Holdings Group, LLC.  The name of DCDC Acquisition Company LLC was changed to Tier Electronics LLC at closing.  The purchase price consisted of a promissory note for $1,350,000, 800,000 shares of ZBB common stock with a fair value of $920,000 as of the January 21, 2011 closing date, the assumption of substantially all of the liabilities of the Company and approximately $62,000 of cash paid to a third party on behalf of the Company and the Company’s sole member.  The promissory note bears interest at a rate of 8.00%, payable monthly.  The principal balance of the note is payable in three annual installments of $450,000 beginning on January 21, 2012.  The promissory note is collateralized by the member interest of Tier Electronics LLC held by ZBB.

If the federal capital gains tax rate exceeds 15% and/or the State of Wisconsin capital gains tax rate exceeds 5.425% at any time prior to the payment in full of the unpaid principal balance and accrued interest on the promissory note, then the principal amount of the promissory note (retroactive to the closing date) shall be increased by an amount equal to the product of (a) the aggregate amount of federal and state capital gain realized by the Company and its sole member, as applicable, in connection with the transactions contemplated by the asset purchase agreement, multiplied by (b) the difference between (i) the combined federal and State of Wisconsin capital gains tax rate as of the date of calculation, minus (ii) the combined federal and State of Wisconsin capital gains tax rate of 20.425% as of the date of the promissory  note.  Any adjustment to the principal amount of the promissory note shall be effected by increasing the amount of the last payment due under the Purchase Note without affecting the next regularly scheduled payment(s) under the promissory note.

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EX-99.2

Exhibit 99.2

ZBB Energy Corporation

Unaudited Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma condensed consolidated balance sheet as of December 31, 2010 and unaudited pro forma condensed statements of consolidated operations for the year ended June 30, 2010 and the six months ended December 31, 2010 have been prepared on a basis consistent with accounting principles generally accepted in the United States of America, referred to as U.S. GAAP, and applicable requirements of the Securities and Exchange Commission (“SEC”). The unaudited pro forma condensed combined financial statements are derived by applying pro forma adjustments to the combined historical financial statements of ZBB Energy Corporation (“ZBB” or “our”) and TE Holdings Group, LLC, formerly known as Tier Electronics LLC (or “TIER”).   The unaudited pro forma condensed consolidated statements of combined operations for the year ended June 30, 2010 and for the six months ended December 31, 2010 give effect to the acquisition of TIER as if such acquisition had occurred on July 1, 2009. The unaudited pro forma condensed combined balance sheet as of December 31, 2010 gives effect to the acquisition of TIER as if it occurred on December 31, 2010.

The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The pro forma adjustments were applied to the respective historical financial statements to reflect and account for the acquisition using the purchase method of accounting.

The unaudited pro forma condensed consolidated financial statements were prepared using the assumptions described in the related notes. The historical financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial statements do not include the realization of cost savings from operational efficiencies, revenue synergies or changes in operating strategies that may result from the acquisition. Therefore, the information presented in the accompanying unaudited pro forma condensed combined financial statements may differ materially from future results realized.

Amounts preliminarily allocated to assets acquired, including intangible assets, and liabilities assumed may change significantly. We continue to assess the estimated fair values of the assets acquired and liabilities assumed and such fair values are subject to revision as we receive finalized appraisals and complete other analyses. Accordingly, the purchase price allocation is preliminary and subject to revision.

The unaudited pro forma condensed consolidated financial statements are provided for informational purposes. They may not necessarily represent what ZBB’s consolidated results would have been had the transaction actually occurred as of the dates indicated, nor are they necessarily representative of ZBB’s future consolidated results of operations or financial position.

1

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with our (i) Annual Report on Form 10-K for the year ended June 30, 2010; (ii) our Quarterly Report on Form 10-Q for the three months ended December 31, 2010; and (iii) the historical financial statements of TIER as of December 31, 2010 and 2009 and for the year ended December 31, 2010 and the eight month period ended December 31, 2009 included elsewhere in this document.

2

ZBB ENERGY CORPORATION AND TE HOLDINGS GROUP, LLC

Proforma Condensed Consolidated Balance Sheets

December 31, 2010

	ZBB			TIER			Proforma Adjustments				Proforma Consolidated
Assets
Current assets:
Cash and cash equivalents	$	611,489		$	66,863		$	(244,678	)	(A)	$	333,674
								(100,000	)	(B)
Accounts receivable		674			250,986							251,660
Inventories		772,390			584,589			214,302		(C)		1,349,620
								(221,661	)	(D)
Prepaid and other current assets		329,561			6,106							335,667
Total current assets		1,714,114			908,544			(352,037	)			2,270,621
Long-term assets:
Property, plant and equipment, net		3,727,706			49,753							3,777,459
Intangible assets								95,016		(E)		1,936,546
								(214,302	)	(C)
								62,500		(A)
								920,000		(F)
								1,350,000		(G)
								(276,668	)	(D)
Goodwill		803,079										803,079
Total assets	$	6,244,899		$	958,297		$	1,584,509			$	8,787,705
Liabilities and Shareholders' Equity
Current liabilities:
Bank loans and notes payable	$	355,154			177,277			(177,277	)	(A)		355,154
Accounts payable		1,012,542			143,982			(28,476	)	(D)		1,128,048
Accrued expenses		484,810			72,775							557,585
Deferred revenues		540,303			617,864			(276,668	)	(D)		881,499
Accrued compensation and benefits		228,120			36,514							264,634
Total current liabilities		2,620,929			1,048,412			(482,421	)			3,186,920
Long-term liabilities:
Bank loans and notes payable		3,241,615			4,901			1,350,000		(G)		4,591,615
								(4,901	)	(A)
Total liabilities	$	5,862,544		$	1,053,313		$	862,678			$	7,778,535
Shareholders' equity
Series A preferred stock		1,025,732										1,025,732
Common stock		213,932						8,000		(F)		221,932
Additional paid-in capital		52,531,869						912,000		(F)		53,443,869
Notes receivable - common stock		(1,024,070	)									(1,024,070	)
Treasury stock		(11,136	)									(11,136	)
Accumulated other comprehensive (loss)		(1,586,720	)									(1,586,720	)
Accumulated (deficit)		(50,767,252	)		(95,016	)		95,016		(E)		(51,060,437	)
								(100,000	)	(B)
								(193,185	)	(D)
Total shareholders' equity		382,355			(95,016	)		721,831				1,009,170
Total liabilities and shareholders' equity	$	6,244,899		$	958,297		$	1,584,509			$	8,787,705

See accompanying notes to proforma condensed consolidated financial statements

3

ZBB ENERGY CORPORATION AND TE HOLDINGS GROUP, LLC

Proforma Condensed Consolidated Statements of Operations

Year Ended June 30, 2010

	ZBB			TIER			Proforma Adjustments				Proforma Consolidated
Revenues
Product sales and revenues	$	967,455		$	1,206,789		$	-			$	2,174,244
Engineering and development revenues		578,525										578,525
Total Revenues		1,545,980			1,206,789			-				2,752,769
Costs and Expenses
Cost of product sales		899,287			849,532							1,748,819
Cost of engineering and development revenues		1,836,299										1,836,299
Advanced engineering and development		2,239,139			240,276			(45,983	)	(D)		2,433,432
Selling, general, and administrative		4,755,592			199,991			100,000		(B)		5,055,583
Depreciation and amortization		424,297			24,735			645,515		(H)		1,094,547
Impairment and other equipment charges		903,305										903,305
Settlement of supply contracts								193,185		(D)		193,185
Total Costs and Expenses		11,057,919			1,314,534			892,717				13,265,170
Loss from Operations		(9,511,939	)		(107,745	)		(892,717	)			(10,512,401	)
Other Income (Expense)
Interest income		60,193										60,193
Interest (expense)		(149,521	)		(2,513	)		(108,000	)	(I)		(260,034	)
Other income (expense)		(5,559	)									(5,559	)
Total Other Income (Expense)		(94,887	)		(2,513	)		(108,000	)			(205,400	)
Loss before provision for Income Taxes		(9,606,826	)		(110,258	)		(1,000,717	)			(10,717,801	)
Provision for Income Taxes		-			-			-				-
Net Loss	$	(9,606,826	)	$	(110,258	)	$	(1,000,717	)		$	(10,717,801	)
Net Loss per share-
Basic and diluted	$	(0.74	)				$	(0.04	)		$	(0.78	)
Weighted average shares-basic and diluted:
Basic		12,924,362						800,000				13,724,362
Diluted		12,924,362						800,000				13,724,362

See accompanying notes to proforma condensed consolidated financial statements

4

ZBB ENERGY CORPORATION AND TE HOLDINGS GROUP, LLC

Proforma Condensed Consolidated Statements of Operations

Six Months Ended December 31, 2010

	ZBB			TIER			Proforma Adjustments				Proforma Consolidated
Revenues
Product sales and revenues	$	49,742		$	916,082		$	-			$	965,824
Engineering and development revenues		184,939										184,939
Total Revenues		234,681			916,082			-				1,150,763
Costs and Expenses
Cost of product sales		79,058			771,058							850,116
Cost of engineering and development revenues		-										-
Advanced engineering and development		1,425,855			134,051			(37,500	)	(D)		1,522,406
Selling, general, and administrative		2,356,989			178,520							2,535,509
Depreciation and amortization		171,261			10,643			322,758		(H)		504,662
Total Costs and Expenses		4,033,163			1,094,272			285,258				5,412,693
Loss from Operations		(3,798,482	)		(178,190	)		(285,258	)			(4,261,930	)
Other Income (Expense)
Interest income		4,210										4,210
Interest expense		(78,876	)		(6,332	)		(54,000	)	(I)		(139,208	)
Other income (expense)		573										573
Total Other Income (Expense)		(74,093	)		(6,332	)		(54,000	)			(134,425	)
Loss before provision for Income Taxes		(3,872,575	)		(184,522	)		(339,258	)			(4,396,355	)
Provision for Income Taxes		-			-			-				-
Net Loss	$	(3,872,575	)	$	(184,522	)	$	(339,258	)		$	(4,396,355	)
Net Loss per share-
Basic and diluted	$	(0.22	)				$	(0.02	)		$	(0.24	)
Weighted average shares-basic and diluted:
Basic		17,803,353						800,000				18,603,353
Diluted		17,803,353						800,000				18,603,353

See accompanying notes to proforma condensed consolidated financial statements

5

ZBB Energy Corporation

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1.    Basis of Presentation

On January 21, 2011, ZBB completed its acquisition of TIER for approximately $2,515,000.

The TIER acquisition will be accounted for in accordance with U.S. GAAP using the purchase method of accounting. Under this method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Any excess of the purchase price over the estimated fair value of the net assets acquired (including identifiable intangible assets) is to be allocated to goodwill.

This allocation of the purchase price is subject to finalization of ZBB’s analysis of the fair value of the assets acquired and liabilities assumed. The final allocation of the purchase price will result in additional adjustments to the recorded amounts of assets and liabilities and will also result in adjustments to depreciation and amortization, among other items. The adjustments arising out of the finalization of the purchase price allocation will not impact cash flows. However, such adjustments could result in material increases or decreases to the unaudited pro forma net loss amounts. Accordingly, the purchase price allocation in the unaudited pro forma condensed consolidated financial statements is preliminary and will be adjusted upon completion of the final valuation.

The U.S. GAAP historical TIER balance sheet and statement of operations included in the unaudited condensed consolidated pro forma financial statements were derived from TIER’s financial statements prepared in accordance with U.S. GAAP.

The estimated purchase price was calculated as follows:

Note payable	$	1,350,000
ZBB common stock, 800,000 shares at $1.15 per share		920,000
Cash		244,678
	$	2,514,678

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The preliminary allocation of the purchase price as of December 31, 2010 is summarized below:

Assets:
Cash	$	66,863
Accounts Receivable		250,986
Inventories		798,891
Prepaids and Other Assets		6,106
Property and Equipment		49,753
Liabilities:
Accounts Payable		(143,982	)
Accrued Expenses		(109,289	)
Deferred Revenues		(341,196	)
Amortizable intangible assets:
Non-Compete Agreement		300,000
License Agreement		278,000
Trade Secrets		1,358,546
	$	2,514,678

The Company expects to amortize the non-compete agreement, license agreement, and trade secrets over their expected weighted average useful life of approximately 3 years.

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2.     Pro Forma Adjustments

Pro forma condensed consolidated balance sheet adjustments

The pro forma condensed consolidated balance sheet reflects the following adjustments:

A. Reflects the use of cash to fund the purchase price.

B. Reflects the estimated acquisition transaction expenses.

C. Reflects the adjustment of the historical TIER inventories to estimated fair value.

D. To eliminate intercompany payments and deposits for non-recurring engineering services.

E. Reflects the elimination of the historical equity of TIER at December 31, 2010.

F. To reflect the issuance of 800,000 Shares of ZBB Energy Corporation Common stock at $1.15 per share.

G. To reflect the issuance of $1,350,000 note payable by the Company to the TIER.

Pro forma condensed consolidated statements of operations adjustments

The pro forma condensed consolidated statements of operations reflect the following adjustments:

H.  Reflects an estimate of amortization expense for the intangible assets.

I.  Adjustment reflects an increase in interest expense of $108,000 for the year ended June 30, 2010 and $54,000 for the six months ended December 31, 2010 associated with the note payable to partially fund the acquisition. The interest expense was calculated using an interest rate of 8% which reflects the fixed rate of interest under the note.

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