Ses Ai Corporation (NYSE:SES)

Item 1.01  Entry into a Material Definitive Agreement.

On May 13, 2016, Synthesis Energy Systems, Inc. (the “Company”) entered into an At The Market Offering Agreement with T.R. Winston & Company, LLC (the “Agreement”) to create an at-the-market equity program under which it may sell up to $20,000,000 in shares of its common stock (the “Shares”) from time to time through T.R. Winston & Company, LLC, as sales agent (the “Agent”). Under the Agreement, the Agent will be entitled to a commission at a fixed commission rate of 4% of the gross sales price of Shares sold under the Agreement.

Sales of the Shares, if any, under the Agreement may be made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions, including on the NASDAQ Global Market, at market prices or as otherwise agreed with the Agent. The Company has no obligation to sell any of the Shares, and may at any time suspend offers under the Agreement or terminate the Agreement. The Company has no immediate plans to execute any sales.

The Shares will be issued pursuant to the Company’s previously filed and effective Registration Statement on Form S-3 (File No. 333-210786). On May 13, 2016, the Company filed a Prospectus Supplement relating to the offering with the Securities and Exchange Commission.

This Report shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration of qualification under the securities laws of any such state.

The Agreement is filed as Exhibit 10.1 to this Report. The description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement filed herewith as an exhibit to this Report. Legal opinions related to the Shares are included in Exhibit 5.1.

CALCULATION OF REGISTRATION FEE

HOUSTON, April 05, 2016 (GLOBE NEWSWIRE) -- Synthesis Energy Systems, Inc. (SES) (SYMX), the global leader of full-range feedstock flexibility in advanced energy gasification technology, producing clean and economical syngas to replace expensive imported natural gas and LNG based energy, reported a progress update related to its Tianwo-SES Clean Energy Technologies Company Joint Venture in China. The largest of the three previously announced natural gas replacement projects licensed by Tianwo-SES and under construction for Aluminum Corporation of China Limited (ACH) (2600.HK) (601600.SS), and the final project of this order, has entered the commissioning phase. Members of SES’s Zao Zhuang New Gas Company Joint Venture are onsite at the facility, located in Henan Province, to support the commissioning and startup. Initial syngas production from two of Henan’s four SES Gasification Technology (SGT) systems was achieved in March.

“We are pleased to enter the commissioning of the final Aluminum Corporation of China syngas facility, at Henan Province, which completes the expansion of SES’s installed base from five to 12 commercial gasification systems in China. The other two facilities continue to deliver strong performance,” said DeLome Fair, SES President and CEO. “I congratulate our Tianwo-SES and SES teams on the latest milestone achievement at Henan which continues to illustrate the fast-track construction of these cleaner coal-to-gas industrial fuel projects that boast superior environmental performance and lower cost.”

The Aluminum Corporation of China facilities, located adjacent to existing aluminum production plants, are designed to manufacture clean, lower-cost syngas from SGT, to replace expensive imported natural gas. The SGT feedstock is locally sourced coal. The Henan facility, with four systems, was designed for a syngas capacity of 120,000 Nm3/hr. The first plant, in Zibo City, Shandong Province, with two systems and a syngas capacity of 80,000 Nm3/hr., came online in June 2015 and has successfully completed a 90-day continuous full-load operation test run. Tianwo-SES has reported daily cost savings at Zibo City of approximately $50,000, due to the syngas generation replacing the need to purchase high-cost natural gas. Commissioning of the single-system plant in Xing County, Shanxi Province, commenced in January 2016.

Total construction order commitments of approximately 650 million Yuan (approximately $100 million) for the three projects were announced in December 2014 between Aluminum Corporation of China, China's largest alumina and primary aluminum producer, and Innovative Coal Chemical Design Institute (Shanghai) Co., Ltd. (ICCDI). ICCDI is the general contractor supplying all the engineering, construction and balance of plant equipment for the three projects. The total order value for these projects to Tianwo-SES for technology and equipment supply from ICCDI, a subsidiary of Suzhou Tianwo Technology Co., Ltd. (Thvow) (Shenzhen listing code:002564), is expected to be 140.3 million Yuan (approximately $21.6 million). Tianwo-SES Clean Energy Technologies Co., Ltd. (Tianwo-SES) is SES's joint venture with Thvow.

HOUSTON, Jan. 19, 2016 (GLOBE NEWSWIRE) -- Synthesis Energy Systems, Inc. (SES) (SYMX), a global energy and gasification technology company whose advanced SES Gasification Technology (SGT) can produce clean, low-cost syngas for power generation, industrial fuel gas, chemicals and transportation fuels, replacing expensive natural gas, LNG and crude oil based energy, reports a progress update related to the first of three previously announced industrial syngas gasification facilities for Aluminum Corporation of China Limited (CHALCO) (ACH) (2600.HK) (601600.SS). The project located in Zibo City, Shandong Province, China and licensed to CHALCO through SES�s Tianwo-SES Joint Venture has completed a planned 90-day continuous full-load operation test run successfully supplying stable and reliable industrial syngas to the CHALCO aluminum manufacturing facility. Tianwo-SES provided the SGT technology design and proprietary gasification equipment to the project for the two SGT systems now in operation.

�We commend our Tianwo-SES team�s continued progress in achieving excellent operational results from the two SES SGT gasification systems at Zibo City. Tianwo-SES and its construction partner, the Innovative Coal Chemical Design Institute, have achieved impressive project implementation milestones at all three CHALCO projects based on the speed of design, construction, commissioning, and now with the first project�s stable operation at full capacity. This 90-day continuous full-load operation milestone was a necessary step for the final turnover of the facility to CHALCO from ICCDI,� said DeLome Fair, Senior Vice President of SES and President of SES Technologies, LLC. �Our onsite ZZ team along with our U.S.-based technical staff have closely monitored the performance of our technology through the entire period. We are very pleased with the excellent gasification performance, syngas quality and high conversion efficiency at the facility. The low-cost, clean syngas produced by our SGT gasification systems can provide cost savings at this one facility alone of approximately $50,000 per day, versus expensive natural gas.�

A team of SES�s technical and operating staff from SES�s Zao Zhuang Joint Venture Plant (ZZ) provided the onsite technical and operating guidance to Tianwo-SES for the Zibo City project beginning at the commissioning phase in summer 2015. While this latest milestone marked the completion of a long full-load test run, the Zibo City project has produced syngas used by CHALCO since August, 2015.

Ms. Fair continued: �Additionally, the second CHALCO facility, the Huaxin plant in Xing County, Shanxi Province, is progressing well in its commission and startup phase. Further, construction by ICCDI on the third and largest CHALCO project, in Henan Province, is proceeding on track. Some of the early commission work, such as refractory curing of the four gasifiers, has been completed, and the Henan project is expected to enter into full commissioning this quarter.�

SES�s technical and operating team from ZZ continues to work closely with the Tianwo-SES China JV and ICCDI to support the startup and final acceptance of all three licensed projects with a combined total seven SGT systems. When the three coal-to-gas turnkey projects for CHALCO enter commercial operation, the installed base for SGT will expand from five to 12 gasification systems in operation in China.

�Our ability to build low-cost, high performance gasification plants to manufacture clean, economical syngas for industrial fuel to replace expensive imported natural gas is gaining traction in China. Tianwo-SES reports a growing pipeline of similar natural-gas replacement projects due to the key attributes of our technology, which we believe is the future of coal gasification,� added Ms. Fair.

Total construction order commitments of approximately 650 million Yuan (approximately $98.7 million) for the three projects were announced in December 2014 between Aluminum Corporation of China, China's largest alumina and primary aluminum producer, and Innovative Coal Chemical Design Institute (Shanghai) Co., Ltd. (ICCDI). ICCDI is the general contractor supplying all the engineering, construction and balance of plant equipment for the three projects. The total order value for these projects to Tianwo-SES for technology and equipment supply from ICCDI, a subsidiary of Suzhou Thvow Technology Co., Ltd. (STT) (Shenzhen listing code:002564), is expected to be approximately 140.3 million Yuan (approximately $21.3 million). Tianwo-SES Clean Energy Technologies Co., Ltd. (Tianwo-SES) is SES's joint venture with STT.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On November 16, 2015, the Company received a notification from the NASDAQ Stock Market (the “NASDAQ”) indicating that the minimum bid price of the Company’s common stock has been below $1.00 per share for 30 consecutive business days and as a result, the Company is not in compliance with the minimum bid price requirement for continued listing. The NASDAQ notice has no immediate effect on the listing or trading of the Company’s common stock.

Under NASDAQ Listing Rule 5810(c)(3)(A), the Company has a grace period of 180 calendar days, or until May 16, 2016, in which to regain compliance with the minimum bid price rule. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this grace period.

If the Company does not regain compliance before May 16, 2016, the NASDAQ stated that it will provide the Company with written notice that its securities are subject to delisting. At that time, the Company may appeal the NASDAQ’s determination to a NASDAQ Listing Qualifications Panel, which would stay any further delisting action by the NASDAQ pending a final decision by the panel. Alternatively, the Company may be eligible for an additional grace period if it meets the initial listing standards, with the exception of bid price, for the NASDAQ Capital Market, and the Company successfully applies for a transfer of its securities to that market. Such a transfer would provide the Company with an additional 180 calendar day period to regain compliance with the minimum bid requirement.

The Company actively monitors the price of its common stock and will consider all available options to regain compliance with the continued listing standards of the NASDAQ.

First Quarter 2016 Financial Results

• The Company reported $3.4 million of revenue for the three months ended September 30, 2015, versus $4.2 million of revenue for the three months ended September 30, 2014.
• The net loss attributable to stockholders for the first quarter of fiscal 2016 was $4.6 million, or $0.05 per share, versus a loss of $4.5 million, or $0.06 per share, for the prior year's first quarter.

"The key driver of the first quarter of our 2016 fiscal year was identifying potential additional projects in the emerging natural gas replacement market in China, and supporting our Tianwo-SES JV which is reporting 50 million Yuan (approximately $8.0 million) in revenues as of June 30, 2015 related to equipment sales. The Tianwo-SES JV is supporting the startup and acceptance of the new Zibo City project and its two other licensed projects now in commissioning and under construction for the Aluminum Corporation of China. Also in the quarter, we extended the exclusivity period and commenced the Feasibility Study Report phase for our Dengfeng Power 160MW iGas cleaner coal power project, and expanded our relationship with Midrex Technologies into a global strategic alliance in order to advance the integrated design and strengthen the combined Midrex MXCOL^(R) DRI and SES Gasification Technology commercial offering required for winning orders," said Robert W. Rigdon, SES President and CEO. "We have been carefully managing our ZZ JV which continued to be affected by weaker than normal methanol prices. We are moving forward with our ZZ joint venture partner, Rui Feng/Saikong, working to obtain the government approvals to strategically repurpose and expand the ZZ facility to produce acetic and propionic acid."

"Looking ahead, the initial Aluminum Corporation of China facility in Zibo City, which has been operating in single- and dual-train mode for the majority of the past quarter, is expected to be handed over to CHALCO by the project EPC firm, ICCDI, once it has completed its final acceptance. The ICCDI project team reports that Shanxi has entered its commissioning phase, and construction on the third and largest project, in Henan Province, is targeted by ICCDI to enter commission early next year," continued Mr. Rigdon. "We continue to focus our efforts on securing the next order related to the natural gas replacement market. To help speed this up we recently brought back former SES manager, Khee Yoong Lee, to push our commercial efforts and grow SES's natural gas replacement and cleaner coal power generation businesses in China. We believe using our lower-cost, clean syngas to replace expensive, imported natural gas represents a near-term significant growth market segment in China that enables Growth With Blue Skies.

"Additionally to accelerate global growth opportunities, we continue to engage in active dialogs with global energy companies who are interested in partnering our SES Technologies company. Finally, earlier today, we were very pleased to announce our global business and market development alliance with the China Coal Research Institute. This agreement unites SES Gasification Technology with the backbone force in China's coal industry, CCRI's parent, China Coal Technology & Engineering Group Corporation. After significant due diligence of our technology by CCRI and CCTEG, we achieved this endorsement as the exclusive gasification technology to be promoted globally by CCRI and positioned to benefit China's One Belt, One Road 'Going Out' Strategy in the new Silk Road emerging economies. Together we have identified initial projects in Mongolia, Eastern Europe and Indonesia as the first target projects along the Silk Road, and an additional project in South America," concluded Mr. Rigdon.

Item 1.01 Entry Into a Material Contract

On September 22, 2015, Synthesis Energy Systems (Zao Zhuang) New Gas Company Ltd., a Chinese joint venture of Synthesis Energy Systems, Inc. (the “ZZ Joint Venture”), refinanced its working capital loan agreement with Zaozhuang Bank Co., Ltd. Key terms of the refinanced working capital loan are as follows:

 · Principal amount of the loan continues to be 20 million yuan, or approximately $3.1 million;

 · Term of the loan now expires on August 22, 2016;

 · Interest is now payable monthly at an annual rate of 10%;

 · Shandong Weijiao Group Xuecheng Energy Company Ltd., the Company’s joint venture partner, continues to be the guarantor of the loan;

 · Certain assets of the ZZ Joint Venture, including land use rights and the administration building, continues to be pledged as collateral for the loan; and

 · Loan is subject to customary events of default which, should one or more of them occur and be continuing, would permit Zaozhuang Bank Co., Ltd. to declare all amounts owing under the agreement to be due and payable immediately.

On September 28, 2015, the Company issued a press release announcing the refinancing. A copy of the press release is filed herewith as Exhibit 99.1.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The text set forth in Item 1.01 regarding the terms and conditions of the refinanced working capital loan for the ZZ Joint Venture is incorporated into this Item 2.03 by reference.

SYNTHESIS ENERGY SYSTEMS, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

Management Discussion and Analysis

Revenue. Total revenue was $15.5 million for the year ended June 30, 2015 compared to $17.5 million for the year ended June 30, 2014.

Our ZZ Joint Venture began producing and selling methanol in November 2013 and sold over 49,706 metric tons of methanol during the year ended June 30, 2015 generating approximately $15.2 million of revenue compared to 35,682 metric tons of methanol sold and generated approximately $13.3 million of revenue during the year ended June 30, 2014. Pursuant to the ZZ Cooperation Agreement, prior payments of approximately $1.8 million from Xuejiao were applied to settling the prior payments due under the syngas purchase and sale agreement. As a result, the ZZ Joint Venture recognized these related party advances as product sales of approximately $1.5 million, net of value-added taxes during the year ended June 30, 2014.

Related party consulting and equipment sales revenue was $0.4 million for the year ended June 30, 2015, which resulted from technical consulting and engineering services provided to our TIANWO-SES Joint Venture, compared to $2.6 million of related party consulting and equipment sales for the year ended June 30, 2014, which resulted from sales of gasifiers and gasifier related equipments to the Yima Joint Ventures.

HOUSTON, Sept. 14, 2015 (GLOBE NEWSWIRE) -- Synthesis Energy Systems, Inc. (SES) (SYMX), a global energy and gasification technology company enabling clean, high-value energy and chemical products from multiple feedstocks, reports a progress update from Suzhou Thvow Technology Co., Ltd. (THVOW) (Shenzhen listing code:002564) regarding the first of three previously announced natural gas replacement projects under construction for Aluminum Corporation of China Limited (CHALCO) (ACH) (2600.HK) (601600.SS), located in Zibo City, Shandong Province. THVOW has reported that the Zibo City project, which entered its commissioning phase in June 2015, has achieved an important milestone with the first of the two gasification systems having successfully completed 72 hours of continuous full-load testing. Once all testing work has been completed and the project turned over to CHALCO, the Zibo Project would become the largest domestic Chinese gasification project of its type.

The test results confirmed that the performance of the first of two SES Gasification Technology (SGT) gasification systems installed in the Zibo Project meets the required design requirements. During the continuous full-load test, the SGT gasifier system produced 110% of the required design syngas capacity, reaching 43,000 NCM (normal cubic meters) per hour of clean syngas. Additionally, the energy content of the syngas also exceeded the design requirements by 10%.

"The SES technical team has been working closely with our Tianwo-SES JV partner and our China JV partner's ICCDI design institute to help achieve this operating milestone. During this commissioning phase, the project has been routinely supplying the Shandong CHALCO branch with syngas for more than a month as the teams complete commissioning and refine the operation of the gasification systems," stated DeLome Fair, President SES Technologies, LLC. "Our SES Gasification Technology has very broad flexibility regarding the range of coal feedstocks it can gasify and this, combined with very high gasification efficiency, lower water consumption and lower construction cost than comparable technologies, has the potential to bring significant value to projects using our technology.

"This first CHALCO project at Zibo City is making another important step in demonstrating these key attributes of our technology which we believe is the future of coal gasification," added Ms. Fair.

Total construction order commitments of approximately 650 million Yuan ($102 million) for the three projects were announced in December 2014 between Aluminum Corporation of China, China's largest alumina and primary aluminum producer, and Innovative Coal Chemical Design Institute (Shanghai) Co., Ltd. (ICCDI). ICCDI is the general contractor supplying all the engineering, construction and balance of plant equipment for the three projects. The total order value for these projects to Tianwo-SES for technology and equipment supply from ICCDI, a subsidiary of Suzhou Thvow Technology Co., Ltd. (STT) (Shenzhen listing code:002564), is expected to be approximately 140.3 million Yuan ($22 million). Tianwo-SES Clean Energy Technologies Co., Ltd. (Tianwo-SES) is SES's joint venture with STT.

Item 1.01  Entry into a Material Definitive Agreement.

Share Purchase and Investment Agreement
 
Effective June 26, 2015, Synthesis Energy Systems Inc. – British Virgin Islands (“SES BVI”), an indirect subsidiary of Synthesis Energy Systems, Inc. (the “Company”), entered into a Share Purchase and Investment Agreement (the “SPA”) with Rui Feng Enterprises Limited (“Rui Feng”), a subsidiary of Shadong Saikong Automatic Equipment Company Ltd. (“Saikong”), whereby Rui Feng will acquire a controlling interest in Synthesis Energy Systems Investments Inc., a subsidiary of SES BVI which owns 98.05% of SES (Zao Zhuang) New Gas Co. Ltd., the Chinese joint venture which owns the ZaoZhuang plant of SES (“SES-ZZ”). Pursuant to the SPA, SES BVI will sell an approximately 60% equity interest to Rui Feng in exchange for $10,000,000. This amount shall be paid in four installments, with the first installment of approximately $1.6 million paid on June 26, 2015, and Rui Feng shall receive equity in SESI proportionate to its installment payments. After the four installment payments have been made, if Rui Feng invests an additional amount of 40MM RMB equivalent in U.S. dollars for the construction of an expansion to the SES-ZZ plant, Rui Feng will receive an additional approximately 14% of the equity in SESI, for a total of 75%.
 
After each installment payment, Rui Feng shall be entitled to appoint one director on the board of SESI, such that after the four installments are paid, the board shall consist of seven directors, with four appointed by Rui Feng with the balance appointed by SES BVI. Rui Feng shall also be entitled to appoint directors of SES-ZZ as the installment payments are made, such that when all installment payments are made, Rui Feng will have three directors, SESI shall have two directors and the Chinese joint venture partner shall have one director on the SES-ZZ board.

Operation and Management Agreement

In connection with entering into the SPA, SES-ZZ, Saikong, SESI and Rui Feng entered into a Operation and Management Agreement (the “OMA”), pursuant to which Rui Feng is entitled to appoint a general manager and the technical team for overall operation and management of the SES-ZZ plant. Notwithstanding this, SESI shall be entitled to appoint a chief engineer and the chief financial officer for the plant. The OMA further details the operational and management responsibilities of the various personnel.

The OMA will become effective upon payment of the third installment under the SPA and will terminate upon Rui Feng obtaining majority ownership of SESI.

The foregoing descriptions of the Marketing are qualified in its entirety by reference to the full text of the SPA and OMA, copies of which the Company plans to file as an exhibit to its Annual Report on Form 10-K for the year ended June 30, 2015.

Item 7.01 Regulation FD Disclosure.

In accordance with General Instruction B.2. of Form 8-K, the information presented under this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Synthesis Energy Systems, Inc. (the “Company”) has updated its investor presentation, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. A copy of the investor presentation is also available on the Company’s website as www.synthesisenergy.com.

Item 8.01    Other Events.

Closing of Registered Direct Offering

On April 17, 2015, Synthesis Energy Systems, Inc. (the “Company”) closed its previously announced offering of 12,000,000 shares of our common stock, par value $0.01 per share (“Shares”).

As compensation for its services, the Company will pay to the Placement Agent a cash fee of $420,000 (representing an aggregate fee equal to 6% on the aggregate gross proceeds in this offering, but a fee of only 3% on the aggregate gross proceeds introduced by the lead investor in the offering). We have also agreed to reimburse certain expenses of the Placement Agent up to $25,000.

The net offering proceeds to the Company from the sale of the Shares, after deducting the placement agent’s fee and associated costs and expenses, is estimated to be $11.4 million.

On April 20, 2015, the Company issued a press release announcing the closing of the offering. A copy of the press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.

NASDAQ Compliance

The Company announced on April 15, 2015 that it has received notification from The NASDAQ Stock Market that it has regained compliance to maintain the listing of its common stock on the NASDAQ Global Market. A copy of the press release is filed as Exhibit 99.2 and incorporated herein by reference.

12,000,000

Shares of Common Stock

We are offering 12,000,000 shares of our common stock to investors pursuant to this prospectus supplement and the accompanying prospectus.

Our common stock is listed on the NASDAQ Global Market under the symbol “SYMX.” On April 13, 2015, the last reported sale price of our common stock on the NASDAQ Global Market was $1.10 per share.

T.R. Winston & Company, LLC ( the “Placement Agent”) acted as the exclusive placement agent on this transaction. The Placement Agent is not required to sell any specific number or dollar amount of securities. The Placement Agent has agreed to use its reasonable best efforts to sell the securities offered by this prospectus supplement. We have agreed to pay the Placement Agent the placement agent fees set forth in the table below.

Item 1.01 Entry into a Material Definitive Agreement.

 
On April 10, 2015, Synthesis Energy Systems, Inc. (the “Company”) entered into an engagement agreement with T.R. Winston & Company, LLC (the “Placement Agent”), relating to the offer and sale of shares of the Company’s securities (the “Offering”). On April 13, 2015, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with accredited investors (the “Purchasers”) for the purchase of 12,000,000 shares of its common stock, par value $0.01 per share (“Shares”).

The Offering will close on or about April 17, 2015, subject to customary closing conditions. As compensation for its services, the Company will pay to the Placement Agent a cash fee of $420,000 (representing an aggregate fee equal to 6% on the aggregate gross proceeds in this offering, but a fee of only 3% on the aggregate gross proceeds introduced by the lead investor in the offering). The Company has also agreed to reimburse certain expenses of the Placement Agent up to $25,000.

The net offering proceeds to the Company from the sale of the Shares, after deducting the placement agent’s fee and associated costs and expenses, is estimated to be $11.4 million.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On February 9, 2015, the Company received a notification from the NASDAQ Stock Market (the “NASDAQ”) indicating that the minimum bid price of the Company’s common stock has been below $1.00 per share for 30 consecutive business days and as a result, the Company is not in compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5450(a)(1). The NASDAQ notice has no immediate effect on the listing or trading of the Company’s common stock.

Under NASDAQ Listing Rule 5810(c)(3)(A), the Company has a grace period of 180 calendar days, or until August 10, 2015, in which to regain compliance with the minimum bid price rule. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this grace period.

If the Company does not regain compliance before August 10, 2015, the NASDAQ stated that it will provide the Company with written notice that its securities are subject to delisting. At that time, the Company may appeal the NASDAQ’s determination to a NASDAQ Listing Qualifications Panel, which would stay any further delisting action by the NASDAQ pending a final decision by the panel. Alternatively, the Company may be eligible for an additional grace period if it meets the initial listing standards, with the exception of bid price, for the NASDAQ Capital Market, and the Company successfully applies for a transfer of its securities to that market. Such a transfer would provide the Company with an additional 180 calendar day period to regain compliance with the minimum bid requirement.

The Company actively monitors the price of its common stock and will consider all available options to regain compliance with the continued listing standards of the NASDAQ.

SYNTHESIS ENERGY SYSTEMS, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

Management Discussion and Analysis

Revenue. Total revenue was $3.9 million for the three months ended December 31, 2014 compared to $5.9 million for the three months ended December 31, 2013.

Our ZZ Joint Venture began producing and selling methanol in November 2013 and sold 12,268 tonnes of methanol and generated approximately $3.7 million of revenue during the three months ended December 31, 2014 compared with 10,127 tonnes of methanol sold and generated approximately $4.4 million of revenue during the three months ended December 31, 2013. The decrease in revenue was primarily due to a 30 % decrease in methanol prices during the three months ended December 31, 2014 when compared to the three months ended December 31, 2013. Pursuant to the ZZ Cooperation Agreement, prior payments of approximately $1.8 million from Xuejiao were applied to settling the prior payments due under the syngas purchase and sale agreement, as a result, the ZZ Joint Venture recognized these related party advances as product sales of approximately $1.5 million, net of value-added taxes, during the three months ended December 31, 2013.

Technology licensing and related services revenue was $0.2 million for the three months ended December 31, 2014, which resulted from technical consulting and engineering services provided to our TSEC Joint Venture. There was no technology licensing and related services revenue for the three months ended December 31, 2013.

HOUSTON, Dec. 18, 2014 (GLOBE NEWSWIRE) -- Synthesis Energy Systems, Inc. (SES) (SYMX) today announced that it has entered into an agreement, together with Jiangsu Tianwo-SES Clean Energy Technologies Ltd. (TSEC), its China joint venture with Suzhuo Tianwo Science and Technology Co. Ltd. (formerly known as Zhangjiagang Chemical Machinery Co., Ltd.) (Shenzhen listing code:002564), with Dengfeng Power Group Co., Ltd. (DFPG) for a distributed power generation program initially in Henan Province, China. The first phase of the program will be a pre-feasibility study for the first of several planned 160 MW distributed power plants designed to utilize two state-of-the-art SES XL3000 advanced fluidized bed gasification systems; gasification equipment provided by TSEC, and four GE model LM2500+G4 aero-derivative gas turbines and related power generation equipment. Upon the completion and successful results of the feasibility studies, and requisite government approvals, the first cleaner distributed power plant is expected to be built in Dengfeng. It is intended to serve as a model for additional cleaner coal distributed power generation projects in Dengfeng (up to 600 MW total), as well as elsewhere in Henan Province and in other regions of China. DFPG, an industrial conglomerate specializing in thermal power generation whose products include aluminum, other non-ferrous metals and cement, and who operates power generation plants and coal mines in Henan Province, is funding the program and will serve as the owner and operator of the first project.

"We are pleased to align with Dengfeng Power Group and its forward-looking Chairman, Liu Yingzhong, to lead the way to bring cleaner coal distributed power to China with the advanced capabilities of SES's technology, and to aid the Chinese government in achieving its cleaner energy development goals, all of which is consistent with our 'Growth With Blue Skies' initiative," said Robert Rigdon, SES President and CEO. "We will be moving forward immediately to complete the initial feasibility studies for what we believe may be the first of several distributed power plants. Also, we intend to work with our joint marketing partner, GE, for this China application to combine the SES technology with the LM2500+G4 aero-derivative gas turbines in combined cycle mode, which we expect will be similar to our K-Electric, Pakistan project currently in development."

"SES Gasification Technology is advantaged because of its efficient capability to produce synthesis gas from locally sourced, low-cost lower quality coals. When combined with GE's advanced turbines, this can provide us with an economic and cleaner means to expand our power production capability using cleaner coal IGCC power versus older coal burning technologies," said Liu Yingzhong, DFPG Chairman. "We are hopeful for a successful first project, which we can use as a showcase and then replicate many times here in Henan and in other parts of China."

SES's XL3000 robust design is capable of delivering greater economics by transforming virtually all global coal resources, including China's, India's and other Asian regions' vast indigenous supply of low-cost lignite, or brown coal, into valuable synthesis gas. The XL3000 gasification system is targeted to provide broad-ranging syngas delivery capability with efficiency and economy in performance to meet the needs of the wide range of the world's syngas projects. XL3000 features approximately 250% higher syngas capacity than previous SES designs with delivery pressures up to 55 bar pressure, driving lower specific capital costs per unit.

Advanced SES Gasification Technology produces clean syngas fuel that is well suited for GE's fuel-flexible, efficient LM2500+G4 aeroderivative gas turbines. GE's LM2500+G4 converts the synthesis gas into electricity, producing more reliable and cost-efficient power for smaller- to medium-scale projects. In April 2013, SES and GE combined forces to jointly market and seek initial customers for their gasification and aeroderivative gas turbine technologies for the distributed power market. Together, with regional collaborators, ISTROENERGO GROUP (IEG) and TUTEN, SES and GE are advancing the feasibility, engineering and financial evaluation of a similar turnkey 160 MW power plant offering for K-Electric, a large electric utility, in Karachi, Pakistan.

SES's clean energy technology and Growth With Blue Skies global initiative is increasingly sought after in China, and around the world. Power is one of several global vertical markets for SES's advanced technology which economically and cleanly converts virtually all grades of coal (including low rank, high ash and high moisture coals), biomass and industrial wastes into clean high-value energy end products, including distributed power, transportation fuels, industrial fuels, substitute natural gas (SNG), industrial chemicals, fertilizers and direct reduced iron (DRI) for steel making. Earlier this month, Aluminum Corporation of China (CHALCO) (ACH) (2600.HK) (601600.SS), China's largest alumina and primary aluminum producer, awarded SES's China TSEC joint venture partner an order for three industrial syngas supply plants, which will utilize seven SES gasification systems.

"We are pleased to add the Dengfeng Power Group projects to our China project pipeline. We believe the power vertical market can deliver significant growth in China and other industrializing regions around the world, where the generation of reliable, economic and cleaner electricity is a significant need for both residential and industrial users," said Rigdon.

Item 4.01 Changes in Registrant’s Certifying Accountants.

UHY LLP (“UHY”) served as the independent registered public accounting firm of Synthesis Energy Systems, Inc. (the “Company”) to audit the financial statements of the Company for the fiscal years ended June 30, 2014 and 2013. The Audit Committee of the Board of Directors selected UHY to serve as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2015. On December 1, 2014, UHY informed the Company that effective on that date, its Texas practice had been acquired by BDO USA, LLP (“BDO”). As a result of this transaction, UHY resigned as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2015.

Effective December 4, 2014, the Company engaged BDO as its independent registered public accounting firm for the Company’s fiscal year ended June 30, 2015. The decision to engage BDO as the Company’s independent registered public accounting firm was approved by Audit Committee of the Company’s Board of Directors.

UHY’s audit reports on the consolidated financial statements of the Company and subsidiaries as of June 30, 2014 and 2013 and for each of the years in the two year period ended June 30, 2014 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended June 30, 2014 and 2013 and the subsequent interim period through December 1, 2014, there were no disagreements with UHY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of UHY, would have caused UHY to make reference to the subject matter of the disagreement(s) in connection with its reports.

During the years ended June 30, 2014 and 2013 and the subsequent interim period through December 1, 2014, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.

UHY was provided a copy of the above disclosures and has furnished the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A letter from UHY is attached hereto as Exhibit 16.1.