EnSync Energy Acquires DCfusion LLC

03 Mar 2017

EnSync Energy Systems, a leading developer of innovative distributed energy resource (DER) systems and internet of energy (IOE) control platforms for the utility, commercial, industrial and multi-tenant building markets, announces the acquisition of DCfusion LLC, a highly regarded leader in direct current (DC) system engineering design, consulting and policy.

The United States' electrical grid is a vast just‐in‐time network that requires constant load balancing, and relies on a synchronic operating methodology that does not lend itself well to intermittent activity, such as renewable energy generation.  As an increasingly electricity consuming world shifts to a portfolio comprised of more renewables, the need for DC based and hybrid DC-AC system design becomes increasingly critical for numerous reasons, including:

1) Renewable energy sources are largely DC, relatively small in scale as opposed to conventional generation, and often widely distributed, which makes coupling them into the current "synchronous" system via AC increasingly disruptive, difficult, more expensive and less reliable than coupling DC systems

2) Energy storage is natively DC, inherently requiring the need for AC based systems to convert power back and forth between AC and DC, as opposed to much simpler DC to DC conversions, which are accomplished with DC based DER systems

3) Electricity trade is much simpler using DC than AC, as direct transactional management of power flow in an electrical system, using semiconductor-based power electronics, is greatly simplified if the power flow is direct current and can be actively articulated with solid-state devices

4) Resiliency is better achieved with DC because the very nature of AC systems generally being reactive, as opposed to actively controlled, creates latency issues that can be detrimental in critical applications requiring resiliency.

In summary, direct current power systems offer numerous benefits in terms of reliability, price, performance and higher level of power articulation.

The acquisition of DCfusion brings decades of customer applied DC system design and consulting experience to complement EnSync Energy's application engineering.  DCfusion also brings a unique and substantial pipeline of potential projects in vertical markets that rely on the consultative expertise of the founders, and the authoritative voice of policies, programs and standards shaping the DC-centric technical and market landscape.

Mr. Tim Martinson, DCfusion Co-Founder and Principle, brings years of experience in developing and deploying value-based engineered systems for Fortune 100 global power and control OEMs across the country. Mr. Martinson is presently responsible for business development, working closely with industry leaders to drive engagements and facilitate collaboration among OEMs, architects, design-build firms, academia and government to deliver innovative microgrid applications.

Mr. David Geary, PE, DCfusion Co-Founder and Principle, for his entire career has delivered innovation and leadership to numerous electrical engineering projects in a variety of markets, including government, and private infrastructure engineering, design, construction and operations. Mr. Geary is regarded as a pioneer and leading expert in the evolution of DC power distribution for telecom and data centers, as well as microgrids integrating renewable energy and energy storage. 

The Principles of DCfusion are actively involved in influencing worldwide standards and codes, are frequent speakers at industry events, and hold chair and committee positions within numerous organizations, including The EMerge Alliance, NFPA/NEC, INTELEC, SCTE, IEEE and IEC.

DCfusion brings expertise and trusted relationships in vertical markets and applications that are well aligned with EnSync Energy's capabilities and technology, such as data centers, cable and telecom, off-grid communities, critical infrastructure resiliency, and big box architecture.

The essential terms of the asset-based acquisition include for EnSync Energy to provide for each of the two principles to receive inducement stock options and employment agreements, as well as the opportunity to earn a total combined twenty-percent equity in DCfusion based on performance.  No cash is required to complete the transaction.  DCfusion will operate as a subsidiary of EnSync, Inc., similar to our Holu Energy subsidiary, and the acquisition is expected to be accretive to EnSync Energy within the calendar year.

"EnSync Energy has extensive experience in DER system design and integration, and DCfusion's ability to aggressively drive differentiated capabilities to target markets furthers EnSync Energy's value chain expertise, and opens up a consulting services revenue stream for the company," said Brad Hansen, President and CEO of EnSync Energy Systems.  

As an inducement to join the Company, and as part of their compensation packages, each of Mr. Geary and Mr. Martinson was issued inducement stock options to purchase a total of 90,000 shares of Company common stock with an exercise price of $0.56 per share, which was the closing price of the Company's common stock on the NYSE MKT on February 28, , 2017.  The options will vest and become exercisable in full on February 28, 2020.

EnSync Energy | http://www.ensync.com