ENER-CORE, Inc. (OTCMKTS:ENCR) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Amendment to Backstop Security Support Agreement

Effective as of April 27, 2017, Ener-Core, Inc. (the Company)
executed a First Amendment to Backstop Security Support Agreement
(the BSSA Amendment), with an individual investor (the
Guarantor). The Company previously disclosed the terms of the
Backstop Security Support Agreement, dated as of November 2,
2015, by and between the Company and the Guarantor (the BSSA), in
its Current Report on Form 8-K dated November 3, 2015. The BSSA
Amendment is intended to conform the terms of the BSSA and
related letter of credit (the Letter of Credit) to the terms of
the Commercial and Manufacturing License Agreement (as amended to
date, the CMLA), dated as of June 29, 2016, by and between the
Company and the Dresser-Rand Company (D-R). The BSSA Amendment
(i) reduces the security obligation underlying the Letter of
Credit from $2.1 million to $500,000, consistent with the current
terms of the CMLA, (ii) extends the term of the backstop security
to March 31, 2018, (iii) reduces the related fee payable under
the BSSA to 1% per month for the remainder of the term,
(iv)provides that, in consideration of the Guarantors agreement
to the BSSA Amendment, the Company will amend and restate the
warrant issued to the Guarantor in connection with the execution
of the BSSA to reduce the exercise price per share of common
stock of the Company, par value $0.0001 per share (the Common
Stock), to $3.00 and insert a beneficial ownership blocker
provision at 4.99% (as amended and restated, the Restated
Warrant), and (v) provides that, in further consideration of the
Guarantors agreement to the BSSA Amendment, the Company will
issue the Guarantor an additional warrant (the Warrant) to
purchase 41,000 shares of Common Stock at an exercise price of
$3.00 per share, subject to a 4.99% beneficial ownership blocker.

Warrants for Backstop Security Support Agreement

As described above, in connection with the execution of the BSSA
Amendment, the Company agreed to amend and restate the Restated
Warrant and issue the Warrant to the Guarantor. The Restated
Warrant and the Warrant will be exercisable immediately for cash
or by way of a cashless exercise. The Restated Warrant and
Warrant also provide that the exercise price thereof will be
adjusted upon the occurrence of certain events such as stock
dividends, stock splits and other similar events. The Restated
Warrant and Warrant include a blocker provision that prevents the
Company from effecting any exercise in the event that the holder,
together with certain affiliated parties, would beneficially own
in excess of 4.99% of the shares of Common Stock outstanding
immediately after giving effect to such exercise.

The Restated Warrant and Warrant were not registered under the
Securities Act of 1933, as amended (the Securities Act), or the
securities laws of any state, and were issued in reliance on the
exemption from registration under the Securities Act provided by
Section 4(a)(2) of the Securities Act and/or Rule 506 of
Regulation D promulgated thereunder (Regulation D). The shares of
Common Stock issuable to the Guarantor upon exercise of the
Restated Warrant and Warrant were not registered under the
Securities Act, or the securities laws of any state, and were
offered in reliance on the exemption from registration under the
Securities Act provided by Section 4(a)(2) of the Securities Act
and/or Rule 506 of Regulation D and may be sold upon exercise to
an available exemption, including Section 4(a)(2) and Section
3(a)(9) of the Securities Act. The Guarantor is an accredited
investor (as defined in Rule 501 of Regulation D under the
Securities Act) at the time of the BSSA Amendment.

Amendments to Senior Secured Notes

Effective as of April 27, 2017, the Company and certain investors
holding convertible senior secured promissory notes originally
issued on (i) April 22, 2015 and May 7, 2015, as amended and
restated on December 2, 2016, and (ii) December 2, 2016 and
December 20, 2016 (collectively, the Senior Notes) executed first
amendments to such Senior Notes (the Senior Notes Amendments) to
revise the definition of Backstop Agreement to include any
amendments, restatements, supplements or other modifications
thereof, as may be permitted thereunder. The Senior Notes
Amendments are binding upon all of the issued Senior Notes to the
terms thereof.

The form of BSSA Amendment is attached as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by
reference. The forms of Restated Warrant, Warrant and Senior
Notes Amendments are attached as Exhibits 4.1, 4.2 and 4.3,
respectively, to this Current Report on Form 8-K and are also
incorporated herein by reference. The foregoing descriptions of
these agreements and instruments do not purport to be complete
and are qualified in their entirety by reference to such
exhibits.

The disclosures under Item 1.01 with respect to the BSSA
Amendment and the Senior Notes Amendments are incorporated in
this Item 2.03 by reference.

As more fully described in Item 1.01 above, which disclosure
regarding the Restated Warrant and Warrant is incorporated by
reference herein, on April 27, 2017, the Company amended and
restated the Restated Warrant and issued the Warrant to the
Guarantor to the BSSA Amendment. The amendment and restatement of
the Restated Warrant and the issuance of the Warrant are, and
upon exercise of each of the Restated Warrant and/or Warrant on
its terms, the issuance and sale of the shares of Common Stock
issuable upon such exercise will be, exempt from registration to
an exemption afforded by Section 4(a)(2) of the Securities Act
and Rule 506(b) of Regulation D, based on representations of the
Guarantor that it is an accredited investor as that term is
defined in Rule 501 of Regulation D, who acquired the Restated
Warrant and Warrant for investment purposes for its own account
and not as nominee or agent, and not with a view to the resale or
distribution thereof, and that such Guarantor understands that
the Restated Warrant and Warrant may not be sold or otherwise
disposed of without registration under the Securities Act or an
applicable exemption therefrom.

(d) Exhibits.

About ENER-CORE, Inc. (OTCMKTS:ENCR)

Ener-Core, Inc. designs, develops, manufactures and has commercially deployed products based on technologies that generate base-load, clean power from polluting waste gases that are otherwise destroyed or vented into the atmosphere by a range of industries. The Company also designs its technologies to provide power generation solutions with reduced air emissions. Its Power Oxidation technology offers an alternative to traditional methods of destroying gaseous pollution, by simultaneously enabling industrial facilities. Its commercial products include Ener-Core Powerstation EC250 (EC250) and Ener-Core Powerstation EC333 (EC333), which combine its Power Oxidizer with an approximately 250 kilowatt (kW)and over 333 kW gas turbine, respectively. It is also engaged in developing a product, which is called the KG2-3GEF/PO (KG2 with Power Oxidizer (KG2/PO)). It has over two powerstations in operation at a landfill site in the Netherlands and at the University of California, Irvine.

ENER-CORE, Inc. (OTCMKTS:ENCR) Recent Trading Information

ENER-CORE, Inc. (OTCMKTS:ENCR) closed its last trading session down -0.12 at 1.50 with shares trading hands.