Ener-Core, Inc. (ENCR)

[Pasta]

ENER-CORE: PIK Note Execution Signals Market Acknowledgement Of Model Shift And Potentially Disruptive Tech

By Dallas Salazar  - December 9, 2016

Ener-Core (OTCQB:ENCR) - which licenses its proprietary, patent-protected"Power Oxidizer"technology - has been in transition from a manufacturing model to a licensing model dating back ~36 months. During this transition period the enterprise has been under constant pressure: financial pressure, capital market vehicle pressure, and even activist pressure. This is despite having made substantial developmental progress along the way; at least dating back the last few years. Further, at times during this transition period it appeared that Ener-Core was a serious going concern risk.

However, in late November-2016 Ener-Core executed a Payment-in-Kind (aka "PIK") fundraising event which, to me, pulled forward the urgency in evaluation of the investment thesis at the enterprise. The PIK note execution meant many things to me, to which I detail within this initiation, but most importantly the PIK note stabilized the Ener-Core balance sheet. It also, in parallel, provided a degree of visibility into continuing operations that has not often been afforded to the enterprise; more a function of proving out a new, potentially disruptive technology than poor management. In the context of other multi-year strategic initiative completions, I believe Ener-Core to have reached a real AND symbolic inflection point. I believe now, post-PIK note raise, Ener-Core should be considered for capital deployment.