NOTE 19 – SUBSEQUENT EVENTS

Termination of SPI Supply Agreement

On July 13, 2015, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with SPI Energy Co., Ltd. (“SPI”), (formerly known as Solar Power, Inc.), pursuant to which we sold SPI for an aggregate purchase price of $33,390,000 a total of (i) 8,000,000 shares of common stock (the “Purchased Common Shares”) and (ii) 28,048 shares of Series C Convertible Preferred Stock (the “Purchased Preferred Shares”). Pursuant to the Purchase Agreement, SPI was also issued a warrant to purchase 50,000,000 shares of Common Stock for an aggregate purchase price of $36,729,000 (the “Warrant”). We also entered into a supply agreement with SPI pursuant to which we agreed to sell and SPI agreed to purchase certain products and services offered by the Company from time to time, including certain energy management system solutions for solar projects (the “Supply Agreement”).

The Purchased Preferred Shares were sold for $1,000 per share and were potentially convertible at a conversion price of $0.6678 into a total of up to 42,000,600 shares of Common Stock based upon SPI’s satisfying its purchase obligations under the Supply Agreement. The Warrant represents the right to acquire 50,000,000 shares of Common Stock at an exercise price equal to $0.7346 but only becomes exercisable upon SPI’s fully satisfying its purchase obligations under the Supply Agreement. Due to SPI’s failure to meet its purchase obligations, on May 4, 2017 the Company terminated the Supply Agreement. As a result of the termination of the Supply Agreement, it is no longer possible for SPI to satisfy the conditions that would have enabled it to convert the Purchased Preferred Shares or exercise the Warrant.

As the result of the termination of the Supply Agreement, the deferred revenue that was recorded upon closing of the SPI transaction will be reversed and a corresponding amount of gain will be recorded reducing the Company’s accumulated deficit by the same amount and ultimately resulting in a $13,290,000 increase in stockholders’ equity. The following table sets forth total EnSync, Inc. equity as of March 31, 2017 on an actual basis and on a pro forma basis giving effect to the termination of the Supply Agreement.

Total EnSync, Inc. equity as of March 31, 2017	$	4,886,001
Pro forma increase in Total EnSync, Inc. equity	$	13,290,000
Pro forma Total EnSync, Inc. equity as of March 31, 2017	$	18,176,001

Sale of PPA Entity

On May 2, 2017, the Company entered into a Membership Interest Purchase Agreement with a leading US infrastructure investor. Pursuant to the Membership Interest Purchase Agreement, the Company will sell to the leading US infrastructure investor all of the issued and outstanding membership interest of a PPA entity for $2,550,000. Subject to the terms of the Membership Interest Purchase Agreement revenue will be recognized over the construction term of the project.