POWIN ENERGY CORPORATION (OTCMKTS:PWON) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03

Effective June 28, 2017, the Company issued its Promissory Note to Joseph Lu, the Company’s CEO and a director, (“Lu Note #2”) in the principal amount in the principal amount of $1,000,000 in consideration of a loan to the Company in the same amount. The Note will accrue interest in the amount of 6% per annum based on a 365-day year. The entire principal and accrued interest is due January 27, 2018. The Note calls for monthly payments of $5,000 representing interest accrued for the previous month. The Note is secured by a security interest in the assets of PPA Grand Johanna, LLC, a subsidiary of the Company (“Johanna Security Interest”), and a security interest in the assets of the Company’s subsidiary Powin Energy B.C. Ltd. The Johanna Security Interest is subordinated to financing in the amount of $2,000,000 from Wolf Creek Capital LLC to the Company dated March 16, 2017 which financing was previously reported in the Company’s report on Form 8-K filed March 30, 2017. In the event of default in the repayment of amounts owing on the Lu Note #2, Mr. Lu may exercise any one of the following remedies:

(a)Retain Lu Note #2 will which carry default interest in the amount of 20% per annum until paid in full; or

(b)Convert the amount owing into 10% of the then current common stock of the Company issued and outstanding; or

(c)Convert the then outstanding balance owing into (i) common stock of the Company at a price per share equal to 80% of the 30-day volume weighted average price; or (ii) exchange the Lu Note #2 for a 30% equity ownership interest in Powin Energy B.C. Ltd.; or

(d)Exercise rights under the Johanna Security Interest and the Energy B.C. Security Interest.

Proceeds from the foregoing notes will be used for general working capital purposes.

About POWIN ENERGY CORPORATION (OTCMKTS:PWON)

Powin Energy Corp, formerly Powin Corporation, is a contract manufacturer. It provides manufacturing coordination, design and logistics services for companies to outsource its manufacturing needs. Its segments include Contract manufacturing, Manufacturing, Energy and Powin Mexico. The contract manufacturing segment provides for the coordination and distribution of products manufactured in China, assists in the design and handles the logistics and coordination of product manufacturing. The manufacturing segment manufactures various truck parts and components primarily for freightliner trucks, a division of Daimler Trucks North America. The energy segment operates through Powin Energy Corporation, which utilizes patent-pending energy storage technology for scalable grid-level and commercial energy storage systems, Electric Vehicle (EV) charging stations and transportation applications. The Powin Mexico segment is engaged in manufacturing gun safes and heavy truck parts.