DRS/A

As confidentially submitted to the Securities and Exchange Commission on September 3, 2021.
This draft registration statement has not been publicly filed with the Securities and Exchange Commission and all information herein remains strictly confidential.

Registration No. 333-    ​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FLEXENERGY GREEN SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3629	86-1384045
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

112 Corporate Drive
Portsmouth, NH 03801
(603) 430-7000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Mark Schnepel
Chief Executive Officer
FlexEnergy Green Solutions, Inc.
112 Corporate Drive
Portsmouth, NH 03801
(603) 430-7000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Garett Sleichter, Esq.
Rutan & Tucker, LLP
18575 Jamboree Road
Suite 900
Irvine, CA 92612
Phone (714) 641-5100
Fax (714) 546-9035 Michael A. Hedge, Esq.
K&L Gates LLP
1 Park Plaza
Twelfth Floor
Irvine, CA 92614
Phone (949) 253-0900
Fax (949) 253-0902

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)		Amount of Registration Fee
Common Stock	​	$	​	$
Underwriters’ Warrants	​	$	​	$
Total	​	$	​	$

(1)

Includes the aggregate offering price of common stock that may be sold if the option to purchase additional shares of our common stock granted by the registrant to the underwriters is exercised. See “Underwriting.”

(2)

Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not the solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated September   , 2021

PRELIMINARY PROSPECTUS

            Shares of Common Stock

FlexEnergy Green Solutions, Inc.

We are offering        shares of our common stock, par value $0.0001 per share in this offering. Prior to this offering, there has been no public market for our securities. We estimate that the initial public offering price per share will be between $       and $      . We have applied to list our common stock on The Nasdaq Capital Market (“Nasdaq”) under the symbol “FLXE”.

The offering is being underwritten on a firm commitment basis. The selling stockholder named herein has granted the underwriters an option to buy up to an additional        shares of common stock from them to cover over-allotments. The underwriters may exercise this option at any time and from time to time during the 30-day period from the date of this prospectus. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder.

​	No Exercise of Over- Allotment					Full Exercise of Over- Allotment
​	Per Share			Total		Per Share			Total
Initial public offering price	​	$		​	$	​	$		​	$
Underwriting discounts and commissions(1)	​	$		​	$	​	$		​	$
Proceeds to us, before expenses	​	$		​	$	​	$		​	$
Proceeds to the selling stockholder, before expenses	​	$		​	$	​	$		​	$

(1)

In addition, we have agreed to reimburse the underwriters for certain expenses. See “Underwriting” on page        of this prospectus for additional information.

We have agreed to issue warrants exercisable within three years after the effective date of this prospectus representing 2.5% of the securities issued in this offering to Roth Capital Partners. The warrants will be exercisable at a per share exercise price equal to 120% of the initial public offering price. See “Underwriting — Underwriters’ Warrants.”

We are an “emerging growth company” and a “smaller reporting company” as defined under federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”

After the completion of this offering, we will be a “controlled company” within the meaning of Nasdaq corporate governance standards. See “Prospectus Summary — Implications of Being a Controlled Company.”

Investing in our common stock involves a high degree of risk. See the section captioned “Risk Factors” beginning on page 13 of this prospectus for a discussion of information that should be considered in connection with an investment in our common stock.

Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to the purchasers on or about            , 2021.

Sole Book-Running Manager

Roth Capital Partners

The date of this prospectus is            , 2021

TABLE OF CONTENTS

​	Page
Prospectus Summary	​	1
The Offering	​	8
Summary Historical Combined Consolidated Financial Data	​	10
Risk Factors	​	13
Special Note Regarding Forward-Looking Statements	​	35
Use of Proceeds	​	37
Dividend Policy	​	38
Capitalization	​	39
Dilution	​	40
Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	42
Business	​	58
Management	​	67
Executive and Director Compensation	​	71
Certain Relationships and Related Party Transactions	​	76
Principal and Selling Stockholders	​	79
Description of Capital Stock	​	80
Shares Eligible for Future Sale	​	83
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock	​	85
Underwriting	​	89
Legal Matters	​	98
Experts	​	98
Where You Can Find Additional Information	​	98
Index to Combined Consolidated Financial Statements	​	F-1

Until            , 2021, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

We have not, and the underwriters have not, authorized anyone to provide you with different information, and we and the underwriters take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

For Investors Outside of the United States

We have not, and the underwriters have not, done anything that would permit this offering or possession of distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the U.S. Persons who come into possession of this prospectus and any free writing prospectus we may authorize for use in connection with this offering in jurisdictions outside the U.S. are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

Basis of Presentation

The financial information provided in this prospectus consists of the consolidated and combined financial information of FlexEnergy, Inc. (“FEI”), and Flex Leasing Power & Service LLC (“FLPS”).

i

FlexEnergy Green Solutions, Inc. (“FGS”) was formed on December 31, 2020 as a Delaware corporation, and will become a wholly-owned subsidiary of FlexEnergy Power Solutions, LLC (“FPS”) upon completion of the Contribution Transaction described below, FGS has not, to date, conducted any activities other than those incident to its formation and the preparation of the registration statement of which this prospectus is a part. At or prior to the closing of this offering, FPS will contribute its equity interests in FEI and FLPS to FGS, and FEI and FLPS will become wholly owned subsidiaries of FGS. We refer to these contributions collectively as the “Contribution Transaction.” In addition, on August 16, 2021, FPS entered into a Simple Agreement for Future Equity (“SAFE”) with RNS Flex, LLC (RNS”) and TRF Platform Holdings, LLC (“TRF”) whereby, for an aggregate investment of $2,000,000 (but with a call right in favor of FPS for up to an additional $1,000,000) (the aggregate amount so invested being referred to as the “Invested Amount”), RNS and TRF received the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, a cash payment from the net proceeds received by FPS equal to 125% of the Invested Amount (the “Cash Payment”) or (ii) if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the Invested Amount minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering (the “SAFE Transaction”). See “Certain Relationships and Related Party Transactions  —  SAFE Transaction.”

FGS will be the financial reporting entity following this offering. Other than the balance sheets as of December 31, 2020 and June 30, 2021, financial information of FGS has not been included in this prospectus as since its formation on December 31, 2020 it has not entered into any business transactions or activities, has no capitalization, and had no assets or liabilities during the periods presented in this prospectus.

Trademarks, Trade Names and Service Marks

“FlexEnergy Green Solutions, Inc.” and other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of FGS or one of its subsidiaries (after completion of the Contribution Transaction). Other trademarks, service marks or trade names appearing in this prospectus are the property of their owners. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this prospectus.

Market, Industry and Other Data

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on reports from various sources. Because this information involves a number of assumptions and limitations, you are cautioned not to give undue weight to such information. Information based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section captioned “Risk Factors” and elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”

ii

PROSPECTUS SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our combined consolidated financial statements and the related notes included elsewhere in this prospectus before making an investment decision. Unless the context otherwise requires, the terms “FlexEnergy,” “the Company,” “we,” “us” and “our” refer to (i) upon completion of this offering, FGS and, unless otherwise stated, all of its subsidiaries, and (ii) prior to the completion of this offering, FEI and FLPS and, unless otherwise stated, all of their consolidated subsidiaries.

Our Company

We are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower our customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. We do this through two different types of highly engineered products. First, our Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of our operations and revenues. Flex Turbines provide our customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. Second, we offer heat recovery products that are integral to promising emerging power technologies, such as high efficiency fuel cells for power generation that can be fueled by hydrogen or natural gas. These Flex Heat Recovery products are in the early stages of commercialization, and presently constitute a small but increasingly growing and important portion of our operations and revenues as the future of energy generation emerges.

We focus on providing proven technology and support that enables reliable, efficient and economic green energy solutions. Our business consists of leasing and service of our Flex Turbines supported by a vertically integrated OEM, together with direct sales of our Flex Turbine and Flex Heat Recovery systems. As of June 30, 2021, we have amassed over 8.4 million hours of field runtime on our turbine fleet with over 122 megawatts (“MW”) shipped, of which 49 MW make up our lease fleet. This balance of core competencies in turbine power and heat recovery with current cash flow generation helps fund growth of our technology suite and expansion of applications into new and existing markets. The primary applications of our technology include: converting waste gas to useful energy, improving traditional processes and enabling emerging clean technology. We are actively expanding into other key markets for which our products are well suited, and we are confident in generating opportunities in additional geographic markets and product extensions into different applications.

Our combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we had an accumulated deficit of approximately $136.15 million. Management expects to continue to incur operating losses and negative cash flows from operations through the remainder of 2021. We are dependent upon the receipt of additional capital investments and other financings to fund our ongoing operations and may need to raise additional capital in order to continue to fund operations. We believe we will be able to obtain additional capital through equity financings or other arrangements to fund operations; however, there can be no assurance that such additional financing, if available, can be obtained on acceptable terms. If we are unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. See “Risk Factors — Risk Factors Relating to our Business and Industry — Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.”

1

Primary Applications

The primary applications of our technology include:

•

Converting Waste Gas to Useful Energy:   The Flex Turbine can run on waste fuels such as methane from landfills and carbon dioxide (“CO2”) heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 3,000 BTUs to produce reliable, distributed electricity.

•

Improving Traditional Processes:   Flex Heat Recovery systems utilize our proprietary highly efficient, high temperature, high pressure heat exchanger technology. These products have a smaller footprint than competing systems due to their design efficiency, making them ideal for space constrained applications. They are currently being evaluated by potential customers for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects. The Flex Turbine can be installed in Commercial and Industrial (“C&I”) applications to generate power and heat and/or cooling to reduce facility operating costs. Flex Turbines can simultaneously provide backup power capability to improve resiliency and keep operations running through utility power outages. Moreover, Flex Turbines are capable of generating power on industrial fuels that might otherwise be wasted, further improving C&I operating margins.

•

Enabling Emerging Clean Technology:   Efficient use of thermal energy is the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation technologies, for green hydrogen production, and for certain heat as energy storage applications. Our Flex Heat Recovery products enable these green technologies to be more cost competitive with conventional forms of energy production.

Products

•

Turbine Solutions:   Flex Turbines provide scalable, modular on-site power to both off-grid and grid dependent environments.

•

Heat Recovery Solutions:   Flex Heat Recovery systems have been used in a broad array of applications, from the extension of the range of turbine powered destroyers in the British Navy, to large scale fuel cell applications for power generation, to being prototyped into key components in the oncoming hydrogen economy, such as solid oxide fuel cells.

Our Market Opportunity

We believe that the world is looking for cleaner, reliable electrical power alternatives both to replace existing sources and to provide electrical power where electricity is not available or reliable. Additionally, we believe the adoption of new emerging technologies and fuels will expand our opportunities to grow.

In 2019, approximately 4.0 billion megawatt-hours (“MWh”) were generated from utility-scale facilities, comprising 38% natural gas, 23% coal, 20% nuclear and 17% renewables. Natural gas is one of the most abundant and available sources of clean energy as market trends such as the electrification of vehicles and the phasing out of coal-fired plants becomes more commonplace.

Power generation from fossil fuels and the associated release of CO2 as a byproduct has been shown to be a contributing factor to global climate change. The world continues to rely on technology advances combined with best practices to reduce greenhouse gas emissions.

The following trends have increased onsite, lesser emissions power demand from customers in a growing number of markets, and we expect them to continue to do so:

•

Continued growth in electricity demand, including for transportation

•

Decarbonization efforts to mitigate climate change peril, including carbon taxes

2

•

Natural gas as replacement for coal and oil-fired equipment and processes

•

Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

•

Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

•

A drive for energy efficiency causing many industries to look for ways to eliminate wasted energy consumption

We believe that these trends will expand the market opportunity for Flex Turbine solutions and Flex Heat Recovery systems.

Our Growth Strategy

Our chief objective is to be a primary provider of clean, affordable and reliable energy. In order to accomplish this, we intend to:

•

Accelerate growth in underpenetrated markets and expand our geographic footprint.   We believe the total market opportunity for modular, onsite power remains significantly under-penetrated in the U.S. The flexibility and reach of our leasing model, coupled with our scalable turbine packages, allow us to increase market penetration and enter new markets quickly and efficiently. We plan to strengthen our existing relationships and identify new sub-sectors to accelerate our growth. We will seek to enter new markets and geographies over time, both in the U.S. and internationally, where climate, demand for clean energy and regulatory policies position turbine power generation as an economically compelling alternative to centralized electric utilities.

•

Continued deployment of our turbine fleet and heat recovery solutions to our customers.   We believe that integrated energy systems enhance the reliability, resiliency and predictability of turbine-generated electricity in certain markets, increasing the overall value proposition to customers. We expect demand for the Flex Turbine with on-board hot water heat exchanger, our combined heat and power (“CHP”) solution, to increase over time. We also expect continued requests by our customers to integrate our energy systems with existing energy storage (e.g. photovoltaic battery cells) to provide additional resiliency.

•

Broaden and enhance service offerings.   We provide ongoing monitoring and service as a standard component of our leasing agreements. We believe there is significant market demand for long-term protection plans for customers who have chosen to finance or purchase systems rather than lease them, and we will strive to capture a significant share of this market. We plan to expand our green energy product and service offerings to provide further cost savings to our customers and optimize the performance of existing traditional processes.

•

Increase Inventory to Shorten Delivery Times.   Flex Turbines currently are built upon order with a six or more month lead time from order to completion. By investing in additional inventory levels and building certain sub-assemblies in advance, we believe we can substantially shorten the time to delivery and thereby improve our appeal to customers searching for prompt energy solutions.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks include, but are not limited to, the following:

•

If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration. In times of market surplus, our rental prices are subject to enhanced market pressure.

3

•

The volatility in the price of oil affects the growth rate of new oil wells coming online. This commodity price volatility may adversely affect the demand for our products and services and negatively impact our results of operations.

•

Our products involve a lengthy sales cycle, and we may not anticipate sales levels appropriately, which could adversely affect our results of operations.

•

We have limited operating history with our line of heat recovery products and, as a result, if our estimates of product efficacy, maintenance and repair costs or useful life are inaccurate our business and financial results could be harmed.

•

The majority of turbines we sell or lease currently run with natural gas as the primary input fuel. As a fossil-fuel based solution, natural gas power generation products are subject to a heightened risk of regulation and to changes in our customers’ energy procurement policies.

•

We currently rely on a limited number of suppliers for certain parts and equipment to build our products, and we may not be able to find replacements or immediately transition to alternative suppliers, which could adversely affect our business, financial condition and results of operation.

•

Our credit facility subjects FLPS and its subsidiaries to financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under the credit facility. In addition, any default could result in foreclosure.

•

Our substantial indebtedness could limit our opportunities for growth.

•

The distributed generation market is highly competitive. Competing solutions for distributed energy include renewables such as solar, wind and storage, gas-fired reciprocating engines, fuel cells and other gas turbines, any or all which might be perceived as superior to our technology, for economic, ecological or other reasons.

•

We anticipate that some portion of our future products and performance will rely on the adoption and availability of hydrogen gas as a fuel source and an insufficient supply of hydrogen could negatively affect our sales growth.

•

We anticipate engineering our products to run on fuel blends with a greater percentage of hydrogen. However, if we are unsuccessful or if there is an insufficient supply of hydrogen, our sales growth could be adversely affected.

•

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

•

Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.

•

We have identified material weaknesses in our internal control over financial reporting and our information technology environment. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our combined consolidated financial statements. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, investors may lose confidence in our ability to provide reliable and timely financial reports and the value of our common stock may decline.

•

At many of our customers’ oil production sites, we utilize the abundant associated gas that is otherwise flared as our primary input fuel. Should midstream infrastructure be put into place that allows the associated gas to be processed and transported to end markets, it would curtail our volume of input fuel for onsite power generation and adversely affect our costs or ability to meet the customer’s power generation demand.

•

Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.

4

•

FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price.

Corporate History, Contribution Transaction and SAFE Transaction

On April 2, 2008, FlexEnergy, LLC was initially formed in Delaware in connection with a contribution of certain thermal oxidizer technology assets. Assets related to the thermal oxidizer technology were later contributed to a wholly owned subsidiary, Flex Power Generation, Inc., and all of the outstanding shares of Flex Power Generation, Inc. were distributed to the stockholders of FEI as a special dividend on November 13, 2012.

On December 31, 2010, (i) FEI was converted from FlexEnergy, LLC, (ii) FlexEnergy Energy Systems, Inc. (“FEES”) was incorporated as a wholly owned subsidiary of FEI, and (iii) FEES purchased from Ingersoll Rand Energy Systems Corporation certain assets relating to the development, manufacture, sale and service of turbines.

On January 8, 2014, FEI, FlexEnergy Holdings, LLC and FlexEnergy Merger Sub, Inc. entered into an Agreement and Plan of Merger whereby (i) each then outstanding share of stock and stock option of FEI was converted into a corresponding ownership unit and ownership unit option of FlexEnergy Holdings, LLC, and (ii) FlexEnergy Holdings, LLC became the sole stockholder of FEI at that time.

On December 31, 2015, FPS was formed in Delaware in connection with the contributions of all of the outstanding shares of stock of FEI and all of the outstanding membership interests of FLPS. As a result of the associated transactions, FEI and FLPS became wholly owned subsidiaries of FPS.

On December 31, 2020, FGS was formed in Delaware. On or prior to the closing of this offering FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS, which will result in FEI and FLPS becoming wholly owned subsidiaries of FGS. The diagram below shows our corporate structure after completion of the Contribution Transaction and the SAFE Transaction.

Following the completion of the Contribution Transaction and the SAFE Transaction, and assuming no exercise of the underwriters’ over-allotment exercise, the number of shares of common stock of FGS owned by FPS, RNS and TRF and thus outstanding prior to this offering will be        shares of common stock, assuming an offering price of $       per share of common stock, which is the midpoint of the range on the front cover of this prospectus. However, the precise number of shares of common stock owned by FPS, RNS and TRF as a result of the Contribution Transaction and the SAFE Transaction will differ if the actual initial offering price per share differs from this assumed price in order to preserve the value due to each holder. For example, if the initial offering price of common stock in this offering is (i) $       per share, which is the low point of the price range indicated on the front cover of this prospectus, we would issue        shares of common stock to FPS, and (ii) $       per share, which is the high point of the price range indicated on the front cover of this prospectus, we would issue        shares of common stock to FPS,      of which would be transferred to RNS and TRF in the SAFE Transaction. The following diagram assumes no exercise of the underwriters’ over-allotment option.

5

Corporate Information

Our principal executive offices are located at 112 Corporate Drive, Portsmouth, NH 03801. Our telephone number is (603) 430-7000. The address of our website is www.flexenergy.com. The information on or that can be accessed through our website is not incorporated by reference into this prospectus, and you should not consider any such information as part of this prospectus or in deciding whether to purchase our common stock.

6

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the year following the fifth anniversary of the consummation of this offering, (2) the last day of the year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeded $700,000,000 as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

•

we are presenting herein only two years of audited combined consolidated financial statements and related management’s discussion and analysis of financial condition and results of operations;

•

we will avail ourselves of the exemption from the requirement to obtain an attestation report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (“Sarbanes Oxley”);

•

we will provide less extensive disclosure about our executive compensation arrangements; and

•

we will not be required to hold stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We are also a smaller reporting company as defined under federal securities laws. We may continue to be a smaller reporting company so long as either (i) the market value of our stock held by non-affiliates is less than $250,000,000 or (ii) our annual revenue was less than $100,000,000 during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700,000,000. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as we remain a smaller reporting company, we are permitted to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.

As a result, the information that we provide to our stockholders may be different than the information you might receive from other public reporting companies in which you hold equity interests.

Implications of Being a Controlled Company

After the Contribution Transaction and prior to the completion of this offering, FPS will own 100% of our common stock and, after completion of this offering, FPS will own approximately       % of our common stock (or       % if the underwriter exercises in full its option to purchase additional shares of our common stock from FPS). As a result, we will be a “controlled company” within the meaning of Nasdaq corporate governance standards because more than 50% of our voting common stock is owned by FPS. For further information on the implications of this distinction, see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.”

7

THE OFFERING

Common stock we are offering

       shares

Common stock to be outstanding immediately after this offering

       shares

Underwriters’ over-allotment option

The selling stockholder has granted the representative of the underwriters a 30 day option to purchase up to            additional shares of our common stock at a public offering price of $       per share.

Use of proceeds

We estimate that the net proceeds from the sale of the common stock in this offering will be approximately $      , based upon the initial public offering price of $       per share (which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of common stock by the selling stockholder.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock and to facilitate future access to the public equity markets for us and our stockholders. We currently intend to use the net proceeds from this offering for next generation product development, to expand our fleet to support our Energy-as-a-Service (“EaaS”) model, to expand our sales force, to pay down outstanding borrowings under our credit facility, for working capital and other general corporate purposes. We may use a portion of the net proceeds to acquire complementary businesses or technologies. However, we do not have agreements or commitments for any acquisitions at this time. See “Use of Proceeds” for additional information.

Dividend policy

We currently do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on the terms of our financing arrangements, our financial condition, results of operations, capital requirements, general business conditions, contractual restrictions and other factors that our board of directors considers relevant. See “Dividend Policy” for additional information.

Risk factors

See “Risk Factors” beginning on page 13 and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed trading symbol

We have applied to Nasdaq to list our common stock under the symbol “FLXE”.

Lock-up

We and our directors, officers and principal stockholder have agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock or securities convertible into common stock for a period of 180 days after the date of this prospectus. See “Underwriting” for additional information.

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The total number of shares of our common stock that will be outstanding after this offering excludes        shares of common stock reserved for future grant or issuance under our proposed 2021 Incentive Award Plan (“2021 Plan”), which will become effective in connection with the completion of this offering.

Except as otherwise indicated, all information in this prospectus assumes:

•

the completion of the Contribution Transaction;

•

no exercise by the underwriters of their over-allotment option to purchase additional shares; and

We estimate that we will issue             shares of our common stock in the Contribution Transaction based upon an initial public offering price of $       per share (which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus). A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) the number of shares of our common stock we estimate that we will issue in the Contribution Transaction by            . Assuming that the initial public offering price remains the same, an increase (or decrease) in the number of shares offered by us in this offering would not increase (or decrease) the number of shares we will issue in the Contribution Transaction.

9

SUMMARY HISTORICAL COMBINED CONSOLIDATED FINANCIAL DATA

FGS was formed in December 2020 and does not have historical financial data. The historical financial data presented in this prospectus is the historical combined consolidated financial data of FEI and FLPS, our wholly-owned subsidiaries upon completion of the Contribution Transaction. The summary historical financial data for the years ended December 31, 2020 and 2019 are derived from the audited combined consolidated financial statements of FEI and FLPS for those periods, which are included elsewhere in this prospectus. The summary historical financial data as of June 30, 2021 and for the six months ended June 30, 2021 and 2020 are derived from the unaudited condensed combined financial statements of FEI and FLPS for those periods, which are included elsewhere in this prospectus.

You should read this data together with the combined consolidated financial statements of FEI and FLPS and related notes, as well as the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results.

​	Years Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
​	​	​	​	​	​	​	(unaudited)
Statement of Operations and Comprehensive Loss Data:	​	​	​	​	​	​	​	​	​	​	​	​
Revenue	​	​	​	​	​	​	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	2,213	​	​	2,824	​	​	1,601	​	​	1,120
Manufactured product	​	​	3,276	​	​	5,716	​	​	1,276	​	​	1,658
Total revenue	​	$	23,327	​	$	25,373	​	$	10,149	​	$	12,802
Cost of revenue	​	​	​	​	​	​	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	4,884	​	$	5,442	​	$	2,967	​	$	2,562
Turbine service on sold product	​	​	1,691	​	​	2,797	​	​	1,107	​	​	961
Manufactured product	​	​	5,789	​	​	9,531	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	5,007	​	​	4,713	​	​	2,167	​	​	2,766
Total cost of revenue	​	$	17,371	​	$	22,483	​	$	8,771	​	$	9,747
Operating expenses	​	​	​	​	​	​	​	​	​	​	​	​
Selling, general and administrative	​	$	11,826	​	$	12,400	​	$	6,759	​	$	5,957
Research and development	​	​	120	​	​	237	​	​	67	​	​	75
Total operating expenses	​	$	11,946	​	$	12,637	​	$	6,826	​	$	6,032
Operating loss	​	$	(5,990)	​	$	(9,747)	​	$	(5,448)	​	$	(2,977)
Other income (expense)	​	​	​	​	​	​	​	​	​	​	​	​
Interest expense	​	$	(1,114)	​	$	(992)	​	$	(539)	​	$	(665)
Other income (expense), net	​	​	31	​	​	(159)	​	​	2,534	​	​	52
Total other income (expense), net	​	$	(1,083)	​	$	(1,151)	​	$	1,995	​	$	(613)
Loss before income taxes	​	$	(7,073)	​	$	(10,898)	​	$	(3,453)	​	$	(3,590)
Income tax expense	​	​	(31)	​	​	(7)	​	​	(178)	​	​	(4)
Net loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss), net of tax	​	​	​	​	​	​	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	443	​	$	185	​	$	209	​	$	(213)
Total other comprehensive gain (loss), net of tax	​	$	443	​	$	185	​	$	209	​	$	(213)
Comprehensive loss	​	$	(6,661)	​	$	(10,720)	​	$	(3,422)	​	$	(3,807)
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

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​	As of June 30, 2021 (unaudited)
(in thousands)	Actual			As Adjusted(1)
Balance Sheet Data	​	​	​	​	​
Cash	​	$	667	​	$
Working capital(2)	​	$	6,711	​	$
Total assets	​	$	50,207	​	$
Line of credit	​	$	22,963	​	$
Total liabilities	​	$	31,825	​	$
Total stockholder’s equity	​	$	18,382	​	$

(1)

On an as adjusted basis to give effect to the issuance and sale of        shares of our common stock in this offering at an assumed initial public offering price of $       per share (which is the midpoint of the price range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and assuming no exercise of the underwriters’ over-allotment option.

(2)

Working capital is defined as total current assets minus total current liabilities.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with generally accepted accounting principles (“GAAP”), we believe “EBITDA” and “Adjusted EBITDA”, non-GAAP measures, are useful in evaluating our operating performance. We use these financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding facility relocation expenses, equity-based compensation, restructuring costs and forgiveness of the PPP loans, which are unusual or non-cash charges and thus not indicative of our historical business and results of operations or of our outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

EBITDA and Adjusted EBITDA

We believe EBITDA and Adjusted EBITDA are key performance measures used by our management to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We calculate EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

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The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable GAAP measure, net income (loss), for each of the years ended December 31, 2020 and 2019 and for the six months ended June 30, 2021 and 2020:

​	Year Ended December 31,						Six Months Ended June 30, (unaudited)
(in thousands)	2020			2019			2021			2020
Net Loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Depreciation and amortization	​	​	7,073	​	​	6,194	​	​	3,665	​	​	3,436
Interest expense, net	​	​	1,114	​	​	992	​	​	539	​	​	665
Provision for income taxes	​	​	31	​	​	7	​	​	178	​	​	4
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
One-time non-operating facility relocation expenses(1)	​	​	25	​	​	185	​	​	301	​	​	—
Restructuring charges	​	​	—	​	​	—	​	​	101	​	​	—
PPP loan forgiveness	​	​	—	​	​	—	​	​	(2,378)	​	​	—
Equity-based compensation	​	​	70	​	​	70	​	​	36	​	​	35
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

(1)

Represents non-recurring out of pocket expenses incurred in moving our heat recovery-focused facility.

Some of the limitations of EBITDA and Adjusted EBITDA include (i) these non-GAAP measures do not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and EBITDA and Adjusted EBITDA do not reflect these capital expenditures. Our non-GAAP measures may not be comparable to similarly titled measures of other companies because they may not calculate them in the same manner as we calculate, the measure, limiting its usefulness as a comparative measure. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. EBITDA and Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted our non-GAAP measures alongside other financial performance measures, including our net loss and other GAAP results.

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RISK FACTORS

The following section discusses material risks and uncertainties that could adversely affect our business and financial condition. Investing in our common stock involves substantial risks. You should carefully consider the following risk factors, as well as all of the other information contained in this prospectus, including “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” and the combined consolidated financial statements and related notes thereto included elsewhere in this prospectus, before deciding to invest in our common stock. Additional risks and uncertainties that we are unaware of may also become important factors that adversely affect our business. The occurrence of any of the following risks, or additional risks that we are unaware of, could adversely affect our business, strategies, prospects, financial condition, results of operations and cash flows. In that case, the market price of our common stock could decline, and you could lose all or part of your investment.

Risk Factors Relating to our Business and Industry

If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration.

Our success, and our ability to increase revenues and operate profitably, depends in part on our ability to retain and keep existing customers engaged so that they continue to purchase or lease equipment from us, and to acquire new customers cost-effectively. We intend to continue to expand our customer base as part of our growth strategy. If we fail to retain existing customers and to attract and retain new customers, our business, financial condition and results of operations could be adversely affected. Our two largest customers accounted for approximately 18% and 17% of total revenue for the six months ended June 30, 2021. Our two largest customers accounted for approximately 24% and 13% of total revenue for the six months ended June 30, 2020. In 2020, our three largest customers generated 23%, 14% and 10%, respectively, of our total revenue, and in 2019, our largest customer generated approximately 28% of our total revenue. Two customers accounted for 33% and 15%, respectively of our accounts receivable balance as of June 30, 2021. Two customers accounted for 15% and 14%, respectively, of our accounts receivable balance as of December 31, 2020. One customer accounted for 32% of our accounts receivable balance as of December 31, 2019. Accordingly, we are subject to customer concentration risk in the form of non-renewal of terminating lease contracts, which can be brought on by financial distress, aggressive pricing offers from our competitors, or merger and acquisition activity that is beyond our control. If one of our largest customers elects not to renew or extend existing lease contracts or insists upon price concessions, we could realize a substantial loss of lease revenue from a single customer until the point where we can identify new opportunities to redeploy these available turbine units elsewhere, which could adversely affect our business, financial condition and results of operations. In certain instances we face the financial burden of de-installation, transportation and cost of redeployment.

The volatility in the price of oil affects the growth rate of new oil wells coming online. This commodity price volatility may adversely affect the demand for our products and services and negatively impact our results of operations.

The majority of our turbines since inception have been deployed in the oil and gas (“O&G”) sector to oil production sites requiring onsite power generation. Our addressable market in this sector is largely defined by the existing oil wells in production, along with new oil wells coming online. During the prolonged low price environment in 2016-2017, and more recently the sharp price decline beginning in a second low price environment between March 2020 and January 2021, we experienced reduced demand from our customer base for power generation equipment, resulting in a reduction in sales of new turbine units, and a decrease in our total lease deployment count. Significant decreases in the price of oil typically result in a reduction of the number of new wells coming online in a given time period, which in turn decreases and/or defers the need for incremental power generation equipment over that time.

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Our products involve a lengthy sales cycle, and we may not anticipate sales levels appropriately, which could adversely affect our results of operations.

A portion of our revenue and associated production volume in a given quarter and year comes from turbines we sell outright to our customers as a capital purchase. The sale of our turbine products typically involves a significant commitment of capital by customers, which can result in typical delays associated with large capital expenditures. Delays for placing purchase orders can come from a number of sources, including an extensive review of all competing sources of self-generation, the need to procure outside financing, and delays and uncertainties imposed from the local utilities regarding interconnect permitting requirements. For these and other reasons, the sales cycle associated with our products can be lengthy and subject to a number of significant risks over which we have little or no control. We plan our production and inventory levels based on internal forecasts of customer demand, which is highly unpredictable and can fluctuate substantially. If sales in any period fall significantly below anticipated levels, our financial condition, results of operations and cash flow would suffer.

We have limited operating history with our line of heat recovery products and, as a result, if our estimates of product efficacy, maintenance and repair costs or useful life are inaccurate our business and financial results could be harmed.

Although our heat recovery technology has historically been an important element of our turbines, the external sale of our heat recovery products independently from our turbines began in 2017 and therefore we do not have a long operating history with these products. As a result, we do not have sufficient historical data to prove efficacy and maintenance and repair costs over a long period of use and any estimates regarding long-term product life or repair and replacement costs may prove to be incorrect. If incorrect, we may incur additional design and product development costs to achieve desired product performance.

Additionally, we have sold heat exchangers to only a limited number of customers. In order for our heat recovery products to achieve broader market acceptance, we will need to further develop these products, produce them in large quantities cost effectively, and market and sell them in greater quantities. If we are unsuccessful, our profitability will be adversely affected.

The majority of turbines we sell or lease currently run with natural gas as the primary input fuel. As a fossil-fuel based solution, natural gas power generation products are subject to a heightened risk of regulation and to changes in our customers’ energy procurement policies.

The production of CO2 has been shown to be a contributing factor to global climate change. Our turbines running on natural gas do produce CO2. As such, we may be negatively impacted by CO2 related changes in applicable laws, regulations, ordinances, rules, or the requirements of the incentive programs on which we and our customers currently rely. Changes (or a failure to recognize the benefit of our technology as one means to maintain reliable and resilient electric service with a lower greenhouse gas emission profile) in any of the laws, regulations, ordinances, or rules that apply to our installations and new technology could make it illegal or more costly for us or our customers to install and operate our gas turbines on particular sites, thereby negatively affecting our ability to deliver cost savings to customers, or we could be prohibited from completing new installations or continuing to operate existing projects. Certain municipalities in California have already banned the use of distributed generation products that utilize fossil fuel. Additionally, our customers’ and potential customers’ energy procurement policies may prohibit or limit their willingness to procure gas turbines. Our business prospects may be negatively impacted if we are prevented from completing new installations or our installations become more costly as a result of laws, regulations, ordinances, or rules applicable to our gas turbines, or by our customers’ and potential customers’ energy procurement policies.

We currently rely on a limited number of suppliers for certain parts and equipment to build our products and we may not be able to find replacements or immediately transition to alternative suppliers, which could adversely affect our business, financial condition and results of operation.

We currently rely on a limited number of suppliers, and in some instances, a single supplier, for certain equipment and components to build our products. If demand for the equipment or components necessary

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to build our products increases or our suppliers face financial distress or bankruptcy, they may not be able to provide the equipment or components on schedule or at current prices. For example, steel is the principal raw material used in manufacturing our systems. The price of steel has historically fluctuated on a cyclical basis and has often depended on a variety of factors which we have no control over. If our suppliers are unable to provide the raw materials and components needed to build our products on schedule or at current prices, we may need to seek other suppliers, which may adversely affect our revenues or increase our costs.

In order to reduce manufacturing lead times and ensure adequate component supply, we enter into agreements with certain suppliers that allow them to procure inventories based upon certain criteria. Due to the complexity of some of our components, we may not timely find alternate suppliers, if at all. If we fail to accurately anticipate customer demand, an oversupply of parts could result in excess or obsolete inventories, which could adversely affect our business. Additionally, if we fail to correctly anticipate our internal supply requirements, an undersupply of parts could limit our production capacity. Our inability to meet volume commitments with suppliers could affect the availability or pricing of our parts and components. A reduction or interruption in supply, a significant increase in price of one or more components or a decrease in demand of products could adversely affect our business and operations and could adversely affect our customer relationships. Financial problems of suppliers on whom we rely could limit our supply of components or increase our costs.

In addition, suppliers may de-prioritize our orders if another larger customer places orders with them. Due to our volume of purchases, we typically are unable to take advantage of any bulk volume pricing. Also, we cannot guarantee that any of the parts or components that we purchase will be of adequate quality or that the prices we pay for the parts or components will not increase. Inadequate quality of products from suppliers could interrupt our ability to supply quality products to our customers in a timely manner. Additionally, defects in materials or products supplied by our suppliers that are not identified before our products are placed in service by our customers could result in higher warranty costs and damage to our reputation. We also outsource certain of our components internationally, which may subject us to delays in delivery because of regulations associated with the import/export process, delays in transportation or regional instability.

We have cash payments due under FEI incentive plans on January 1, 2023 and January 1, 2026, which might require us to use funds that we would otherwise use for other purposes, such as operations, growth or distribution.

Our subsidiary, FEI, has a 2013 Equity Incentive Plan (the “2013 Plan”) that provides cash payment awards. The payments under the 2013 Plan have been frozen and there will be no further grants made under the 2013 Plan. Under the 2013 Plan, an aggregate payout of $0.6 million is due to the participants on the earlier of January 1, 2023 or a Change of Control (as defined in the 2013 Plan). FEI also has a 2016 Target Incentive Plan (the “2016 Plan”) that provides for fixed potential cash payouts totaling $3.2 million. The payments under the 2016 Plan are only due to the participants if a Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan) occurs on or before the earlier of January 1, 2026 or a Termination Transaction (as defined in the 2016 Plan). If payments are due under the 2016 Plan, they must be paid within 60 days after the Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan). At the time these payments come due, we may have more pressing needs for this cash, such as working capital, debt reduction or investment in growth and expansion. Use of this cash to make these payouts at inopportune times could impede our growth and stress our cash position, adversely affecting our results of operations. Our obligations to pay the amounts may also reduce the proceeds otherwise payable to our stockholders in the event of or following a Change of Control (as defined in the 2013 Plan) or a Change in Control (as defined in the 2016 Plan).

We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our financial results.

During times of significant oil price shocks or sustainably low oil prices, some of our leasing customers face significant financial hardship whereby it becomes increasingly difficult to stay current with the monthly operating payments for the provision of our services. Likewise, our C&I customers have varying levels of financial strength. In cases where C&I customers opt to make the capital invested into a self-generation

15

project, the required investment can be substantial relative to the business’ operations and revenue base, and in many cases it requires outside financing to be secured. This can result in delays and nonperformance in our customers’ ability to make the agreed scheduled progress payment against the executed purchase order, production build and delivery of our gas turbines going towards the self-generation project.

Further, our heat recovery modules are custom designed to meet the specific operating requirements and specific performance goals of our customers. With this customization comes inherent risk of designing a solution specific to a given customer since there is very little secondhand value in the finished product should the customer be unable to pay on time or in full. The typical production cycle between purchase and completion and delivery of a module can be six to eighteen months, with defined payment milestones. Should a customer face financial hardship over the course of this long build cycle, we may incur financial losses should milestone payments not be made on time or loss of revenue should the customer not be able to make full payment and take delivery of the finished heat exchanger module.

Our credit procedures and policies may not be adequate to fully reduce customer credit risk. If we are unable to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration in their creditworthiness, any resulting increase in nonpayment or nonperformance by them and our inability to re-market or otherwise use our equipment could adversely affect our financial results.

Variations in the spread between available fuel for self-power generation and otherwise available electricity prices, may adversely affect our revenue, profitability, cash flows and growth.

Our economic value proposition to our C&I customers is premised on the financial savings they would achieve by self-generating a portion of the electricity and heat that they would otherwise receive from their utilities. This value proposition is subject to risk in at least three ways:

First, our turbine products typically run on natural gas as the input fuel. Unless our units are run on available, waste gas or some alternative fuel source (e.g. propane or hydrogen), an increase in the price of natural gas will produce less cost savings for our customers. Therefore, the economic value of our power generation products depends largely on the spread between natural gas fuel and electricity prices or other alternative distributed generation solutions. While electricity rates have historically increased steadily every year in most states in the U.S., declining electric utility rates would adversely affect the savings produced by self-generation by increasing the payback period for customers who invest the upfront capital in their onsite generation plant. Similarly, increased prices or greater variability in the price of natural gas could adversely affect the predicted cost savings of a self-generation project and, due in part to the unpredictable nature of the cost savings, could cause our customers to forego the investment into producing their own onsite energy.

Second, electric utilities could offer rate reductions to its C&I customers, in response to the competition from distributed energy solutions, including from us. If electric utilities offer price concessions that result in lower or more predictable utility bills over time, C&I customers may find that the cost savings generated by our products may be less than the cost savings generated by these price concessions.

Third, we compete with alternative distributed generation solutions, including gas-fueled engines, gas-fueled fuel cells and renewable sources of energy such as wind and solar power. If the cost of alternative distributed generation solutions decline in the future, particularly for baseload distributed energy solutions such as the pairing of intermittent solar power and battery storage solutions, then the potential cost savings produced by these alternative distributed generation solutions could be greater than the potential cost savings products by our products.

Utility companies may resist the adoption of distributed generation and could impose customer fees or interconnection requirements on our customers that could make our products less desirable.

Electric utilities may impose measures that make it more difficult for its customers to decrease their reliance on the utility by self-generating a portion of its energy. The vast majority of our customers who utilize our gas turbines for self-generation for a portion of their baseload power still rely on the utility for

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additional power supply in a given month. The local electric utility may impose “departing load,” “standby,” or other charges, including power factor charges, on our customers in connection with their acquisition of our gas turbines, the amounts of which are outside of our control and which may have a material impact on the economic benefit of our gas turbines to our customers.

In some instances, an interconnect permit is required at the outset of the project installation. Based on the varying requirements of the local utilities around interconnection, the associated cost and timing can be unpredictable and in some cases unviable for the self-generation project to move forward into operation.

The distributed generation market is highly competitive. Competing solutions for distributed energy include renewables such as solar, wind and storage, gas-fired reciprocating engines, fuel cells and other gas turbines, any or all which might be perceived as superior to our technology, for economic, ecological or other reasons.

Within our O&G addressable market, we face competition from other technologies that can provide remote, onsite power in what is typically an off-grid application. The most direct competition to our oilfield leasing solution are regional rental businesses that own and operate a fleet of diesel and gas reciprocating engines. Competing rental companies include Gravity, Baseline, Mesa, Moser and Aggreko. The OEM equipment providers of these engines are large, well established companies such as Caterpillar, Cummins, MAN and Doosan. While we believe we have a differentiating and superior technology in our proprietary turbine technology for various remote oilfield power applications, competing rental companies in partnership with their large engine OEM providers have extensive manufacturing, field service and financial resources that creates intense competition in the form of large available supply capacity and highly competitive pricing to our customer base.

Within our CHP addressable market for the C&I sector, we face intense competition from a wide variety of distributed generation sources that can allow businesses to self-generate a portion of their energy demand. These competing solutions include diesel and gas-fueled reciprocating engines, fuel cells and other small-scale gas turbines. They also include intermittent renewable energy such as solar and wind power, which traditionally cannot provide 24/7 baseload power to commercial and industrial customers. However, the adoption of battery storage technology paired with intermittent renewables could emerge as a viable and proven baseload self-generation solution in the future and could thus become direct competition to our baseload energy solution. Our competitors include several well-known companies that have substantially greater resources than we do and have established manufacturing and global field service organizations.

Our failure to adequately protect our intellectual property rights could impair our ability to compete effectively or defend ourselves from litigation, which could harm our business, financial condition, and results of operations.

Our success depends, in part, on our ability to protect our intellectual property. We rely primarily on patent, trademark, and trade secret laws, as well as confidentiality and non-disclosure agreements, and other contractual protections, to protect our technologies and proprietary know-how, all of which offer only limited protection. The steps we have taken to protect our intellectual property rights may not be adequate to prevent the misappropriation, infringement, or other violation of our proprietary information or intellectual property rights, and our ability to prevent misappropriation, infringement, or other violation is uncertain, particularly in countries outside of the U.S.

We have nine issued U.S. patents (expiring generally between 2021 and 2037), 15 patents issued in foreign countries (expiring generally between 2024 and 2037), and two patent applications in process, with one patent application pending in the U.S. and one patent application pending internationally. There can be no assurance that any of these patent applications will issue as granted patents, and even if they do issue, the patent claims may be insufficient to prevent third parties from utilizing our technologies. We cannot assure you that the scope of the rights granted to us will be meaningful or provide us with any commercial advantage. The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies. Further, our foreign patent protection is less comprehensive than our U.S. patent protection and may not protect our intellectual property rights in some countries where our products are sold or may be sold in the future. Many U.S.-based companies have

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encountered substantial third-party intellectual property infringement in foreign countries. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. We have ceased using certain of our patents that we no longer view as being useful.

We believe that the success of our business depends more on proprietary technology, information and processes, and know-how than on our patents or trademarks. Much of our proprietary information and technology related to manufacturing processes is not patented and may not be patentable. As such, we generally rely on trade secret protection with respect to our processes and software. While we believe our technology is difficult to reverse engineer, we cannot assure you that our competitors will not be able to do so.

In addition, we also rely on contractual protections with our customers, suppliers, distributors, employees, and consultants, and we implement security measures designed to protect our trade secrets and know-how. However, we cannot assure you that we have entered into these agreements with every such party, that these contractual protections and security measures will not be breached, that we will have adequate remedies for a breach, or that our customers, suppliers, distributors, employees, or consultants will not assert rights to intellectual property or damages arising out of these contracts.

We may in the future need to initiate infringement claims or litigation in order to try to protect or enforce our intellectual property rights. Litigation, whether we are a plaintiff or a defendant, can be expensive and time-consuming and may divert the efforts of our management and other personnel, which could harm our business, whether or not the litigation results in a determination favorable to us. Litigation also puts our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Further, any enforcement of our patents or other intellectual property may provoke third parties to assert counterclaims against us. If we are unable to meaningfully protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, financial condition, results of operations, reputation, and competitive position could be harmed.

Our products are exposed to operating conditions that may require us to repair and replace critical components ahead of their scheduled replacement cycle, which adds cost that we must cover under the terms of our purchase warranties, service care contracts and leasing contracts.

As our fleet of rental equipment ages, the cost of maintaining that equipment, if not replaced within a certain period of time, generally increases. Determining the optimal age for our rental fleet equipment is subjective and requires considerable estimates by management. We have made estimates regarding the relationship between the age of our rental fleet equipment, and the maintenance and repair costs, and the market value of used equipment. Our future operating results could be adversely affected because our maintenance and repair costs may be higher than estimated and market values of used equipment may fluctuate.

In addition, our products are exposed to operating conditions that may require us to repair and replace critical components ahead of scheduled replacement times, which increases our operating costs. We are required by our service care contracts, leasing contracts, and product warranty to repair and replace these components if they are covered by the terms of the applicable contract or warranty and we incur the full costs of repair or replacement. While we have improved our products with each successive generation and while our service care and leasing contracts have restrictions on misuse of our products, there is no guarantee that these maintenance and repair costs will consistently be at or below budgeted amounts.

Our turbine products use inherently dangerous, flammable fuels, and operate at high temperatures and speeds, each of which could subject our business to product liability claims.

Our business exposes us to potential product liability claims that are inherent in products that operate at high temperatures and/or speeds or use hydrogen. Our products utilize fuels such as natural gas. The fuels we use are combustible and may be toxic. In addition, our turbine products operate at high voltage, temperatures, speeds, and pressure and also use corrosive material, which could expose us to potential liability claims. Although we have incorporated a robust design and redundant safety features in our turbine products, we cannot guarantee that there will not be accidents. Any accidents involving our products or

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other hydrogen-using products could materially impede widespread market acceptance and demand for our products. In addition, we might be held responsible for damages beyond the scope of our insurance coverage. We also cannot ensure you that we will be able to maintain adequate insurance coverage on acceptable terms.

We anticipate engineering our products to run on fuel blends with a greater percentage of hydrogen. However, if we are unsuccessful or if there is an insufficient supply of hydrogen, our sales growth could be adversely affected.

We believe our turbines can currently run on a fuel blend comprising up to 30% hydrogen, and we plan to engineer our turbines to accept fuel blends containing higher percentages of hydrogen, including accepting only hydrogen. As such, we are currently dependent upon, and in the future expect to be more dependent upon, the availability of cost-effective hydrogen fuel blends for the profitable commercialization of our products and services. If these fuels are not readily available or if their prices are such that energy produced by our products costs more than energy provided by other sources, then our products could be less attractive to potential users and our products’ value proposition could be negatively affected. There may be an insufficient supply of hydrogen for this market that could negatively affect our sales and deployment of our products and services. In addition, while we believe we have the engineering capabilities to succeed in developing and manufacturing turbines that can accept only hydrogen as a fuel source, we are unable to adequately forecast the timing and cost requirements in order to sell these products to our customers. We may also ultimately be unable to develop and manufacture products that are suitable for customers. There can be no assurances that we achieve market acceptance of these products, or that products and technologies developed by others will not render our products or technologies obsolete or uncompetitive.

Our field service operations are subject to environmental and occupational health and safety laws and regulations, as well as safety requirements outlined in customer MSAs, that may expose us to material costs and liabilities.

Many of our oilfield customers require us to execute their Master Service Agreement (“MSA”) before entering into any leasing or service care contracts. These MSAs and other agreements typically require that we follow strict safety protocol while conducting onsite operations, maintain sufficient insurance levels, and in some cases agree to a maximum amount of liquidated damages. In addition to the environmental and safety requirements of our customers, we must also adhere to federal, state and local environmental and safety measures across our field service operations. Environmental laws impose obligations and liability for the cleanup of properties affected by hazardous substance spills or releases. These liabilities can be imposed on the parties generating or disposing of such substances or the operator of the affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances. Accordingly, we may become liable, either contractually or by operation of law, for remediation costs even if a contaminated property is not currently owned or operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property.

We may not be in strict compliance with all federal, state and local environmental and occupational health and safety laws and regulations at all times. We are subject to potentially material civil or criminal fines or penalties if we fail to comply with any of these requirements. We have made and will continue to make capital and other expenditures in order to comply with these laws and regulations. However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future. It is possible that these requirements will change or that liabilities will arise in the future in a manner that could adversely affect our business, financial condition and results of operations.

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

We believe that our success and our ability to reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering, and sales personnel, including Mark Schnepel, our President and Chief Executive Officer, Wes Kimmel, our Chief Financial Officer, and Doug Baltzer, our Chief Commercial Officer. This executive management team has been primarily responsible for determining the strategic direction of our business and for executing its growth strategy and is integral to

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our brand, culture, product development and the reputation it enjoys with suppliers, distributors, customers and business partners. In particular, Mr. Schnepel’s involvement in the development and redesign of the turbine is a key component of our technological durability. In addition, Mr. Schnepel and Mr. Baltzer are the primary sales and marketing contacts for our customers.

We cannot assure you that we will be able to successfully attract and retain senior leadership necessary to grow our business. Furthermore, there is increasing competition for talented individuals in our field. Any such departure could be viewed in a negative light by investors and analysts, which may cause the price of our common stock to decline. The loss of the services of any of our key employees could disrupt our operations, delay the development and introduction of our products and services and negatively impact our business, relationship with key customers and suppliers, branding, creative strategies, prospects, and operating results, as we may not be able to find suitable individuals to replace them on a timely basis, if at all. We do not currently carry key-person life insurance for any of our management team.

Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.

The combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we had an accumulated deficit of approximately $136.1 million. Management expects to continue to incur operating losses and negative cash flows from operations for the remainder of 2021. We have financed our operations to date with proceeds from equity infusions from FPS and drawing down on our credit facility.

If we are unable to successfully complete this offering, we will need to create alternate financing or operational plans to continue as a going concern. There can be no assurance that such alternate financing, if available, can be obtained on acceptable terms. If we are unable to obtain such alternate financing, future operations would need to be scaled back or discontinued.

Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. The combined consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

As of June 30, 2021, we had significant U.S. federal and state net operating loss (“NOL”) carryforwards and U.S. federal and state research and development tax credit carryforwards. These net operating loss and U.S. federal tax credit carryforwards could expire unused and/or be unavailable to offset future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We performed a Section 382 analysis as of December 31, 2020 to determine if an ownership change has occurred. It has been preliminarily determined that ownership changes occurred under these rules, and an annual limitation on the use of pre-ownership change NOL carryforwards and certain other losses and/or credits has been applied. The preliminary analysis indicates $48.4 million of federal net operating loss carryforwards as of December 31, 2020 will expire unutilized. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control and which could further limit our ability to utilize NOL carryforwards.

On March 27, 2020, the CARES Act was signed into law as a result of the COVID-19 pandemic. The new legislation includes a number of income tax provisions applicable to individuals and businesses. In

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addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of the COVID-19 pandemic. Although, due to our historical net operating losses incurred in the U.S., the CARES Act did not have a material impact on our combined consolidated financial statements as of December 31, 2020 and June 30, 2021, we continue to examine the elements of the CARES Act and other changes in tax laws and regulations and the impact they may have on us in the future.

Our operating history is characterized by net losses. We anticipate further losses and we may never become profitable.

Since inception, we have incurred annual operating losses. We expect this trend to continue until we can sell a sufficient number of units and achieve a cost structure to become profitable. We have made, and expect to continue making, significant investments to further develop and expand our technology suite and broaden our product base. These investments may not result in increased revenue or growth on a timely basis or at all. Even if we do achieve profitability, we may be unable to increase our sales and sustain or increase our profitability in the future.

Our rental fleet is subject to residual value risk upon disposition.

The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold. The market value of used rental equipment depends on several factors, including:

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the market price for new equipment of a like kind;

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wear and tear on the equipment relative to its age;

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the time of year that it is sold (prices are generally higher during the construction season);

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worldwide and domestic demands for used equipment;

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the supply of used equipment on the market; and

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general economic conditions.

We include in operating income the difference between the sales price and the depreciated value of an item of equipment sold. We cannot assure you that used equipment selling prices will not decline. Any significant decline in the selling prices for used equipment could adversely affect our business, financial condition, results of operations or cash flows.

We have identified material weaknesses in our internal control over financial reporting and our information technology environment. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our combined consolidated financial statements. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, investors may lose confidence in our ability to provide reliable and timely financial reports and the value of our common stock may decline.

Pursuant to Section 404 of Sarbanes Oxley, we will in the future be required to include in our annual reports on Form 10-K our assessment of the effectiveness of our internal controls over financial reporting. This assessment will include disclosure of any material weaknesses identified by our management in our internal controls over financial reporting. We may in the future identify material weaknesses in our internal controls over financial reporting that we have not discovered to date. If we cannot adequately maintain the effectiveness of our internal controls over financial reporting, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC. Any such action could adversely affect our financial results and the market price of our securities.

As a private emerging growth company, we have not been required to document and test our internal controls over financial reporting nor was our management required to certify the effectiveness of internal controls and our auditors were not required to opine on the effectiveness of their internal control over

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financial reporting. Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort. Our accounting and finance department is small, with limited expertise in the areas of financial reporting and SEC requirements. Thus, we have a need for additional resources within the accounting and finance functions due to the requirement to produce timely financial information and to ensure the level of segregation of duties customary for a U.S. public company. We have identified material weaknesses in our internal financial and accounting controls and procedures, including an insufficient complement of resources with an appropriate level of accounting knowledge, experience and training commensurate with our structure and financial reporting requirements and ineffective information technology controls related to access security, segregation of duties and governance of financial systems. Furthermore, we do not have a formal risk assessment or fraud risk assessment and therefore, have not designed controls to mitigate risks to the business. We have assessed the deficiencies in controls and have concluded that we need to implement an enterprise resource planning information management system to provide for greater depth and breadth of functionality and effectively manage our business data, communications, supply chain, order entry and fulfillment, inventory and warehouse management, financial reporting and other business processes. Further, we have identified the need to implement additional information technology systems to ensure that an authorized user can only access privileges necessary to perform his or her assigned duties and prevent improper segregation of duties. The actions we have taken and plans we expect to pursue are subject to continued implementation, subject to the availability of qualified professionals. While we have plans to remediate these weaknesses, we cannot assure you that we will be able to do so.

Even after establishing internal controls, our management does not expect that our internal controls ever will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company will have been detected. Our failure to remediate the material weaknesses identified above or the identification of additional material weaknesses in the future, could adversely affect our ability to report financial information, including our filing of quarterly or annual reports with the SEC on a timely and accurate basis. Moreover, our failure to remediate the material weakness identified above or the identification of additional material weaknesses could prohibit us from producing timely and accurate financial statements, which may adversely affect our the market price of shares of our common stock and we may be unable to maintain compliance with Nasdaq listing requirements.

We need to implement an Enterprise Resource Planning (“ERP”) system. Significant additional costs, cost overruns and delays in connection with the implementation of an ERP system may adversely affect results of operations.

We do not have a current ERP system and we are in the process of implementing one company-wide. This is a lengthy and expensive process that will result in a diversion of resources from other operations. Any disruptions, delays or deficiencies in the design and/or implementation of the new ERP system, particularly any disruptions, delays or deficiencies that impact operations, could adversely affect our ability to run and manage our business effectively.

The implementation of an ERP system has involved and will continue to involve substantial expenditures on system hardware and software, as well as design, development and implementation activities. There can be no assurance that other cost overruns relating to the ERP system will not occur. Our business and results of operations may be adversely affected if we experience operating problems, additional costs, or cost overruns during the ERP implementation process.

At many of our customers’ oil production sites, we utilize the abundant associated gas that is otherwise flared as our primary input fuel. Should midstream infrastructure be put into place that allows the associated gas to be processed and transported to end markets, it would curtail our volume of input fuel for onsite power generation and adversely affect our costs or ability to meet the customer’s power generation demand.

The increased annual volumes of flaring recorded in the upstream O&G industry in recent years is in large part due to oil production – and the byproduct associated petroleum gas that comes from oil

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production – outpacing the ability to build the appropriate amount of midstream gas infrastructure required to gather, process and transport the associated petroleum gas to commercial markets. Should the substantial upfront investment be made to expand midstream gas infrastructure and in effect provide a greater outlet for the associated petroleum gas, it could curtail the supply of onsite fuel we use to power our customers’ operations and adversely affect our operating costs.

We focus geographically in areas of oil producing regions where grid power is unreliable, insufficient or absent altogether. The buildout and expansion of utility power over time may lead to certain customers opting to connect their production sites to utility power should it becomes available and sufficient to meet the onsite demand.

The demand for onsite power generation for oil production wells can be both temporary and long-term in nature. While often times we can provide power generation to a new wellsite more quickly than power can be made available to the wellsite from the local electricity grid, we face the threat of the utility grid expanding geographically over time to reach the wellsite power demand. Given the long-term nature of multi-well oil pads that can expect to produce oil for well over a decade, regional utilities may be incentivized to invest in transmission and distribution upgrades to their system in order to compete for the supply of power to these well sites.

Risk Factors Relating to Financing Matters

Our credit facility subjects FLPS and its subsidiaries to financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under the credit facility. In addition, any default could result in foreclosure.

On February 8, 2019, FLPS entered into a senior secured revolving credit facility with Texas Capital Bank, National Association (“TCB”). We subsequently amended and restated our original revolving credit facility by entering into a Third Amendment to Credit Agreement, dated December 22, 2020 (“Credit Facility”) to add Flex Leasing Power and Service ULC, a Canadian unlimited liability company, an indirect wholly-owned subsidiary of FLPS (“FLPS Canada” and together with FLPS, the “Borrowers”) as an additional borrower. The commitment amount is for $30.0 million and borrowing availability is based on a borrowing base calculation of eligible assets and other conditions. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Senior Secured Credit Facility.” As of June 30, 2021, borrowings outstanding under the Credit Facility amounted to $23.0 million.

The Credit Facility requires the Borrowers to make monthly interest payments. Should the Borrowers’ cash flow from operations be negatively impacted in a significant manner, they may not have sufficient cash available to cover interest payments, which would trigger an event of default unless otherwise cured. The Credit Facility matures on February 8, 2024 at which point the amount outstanding is due in full, unless the Borrowers refinance the Credit Facility prior to this date, which they may not be successful in executing. The Credit Facility is secured by a first priority lien on substantially all of the assets of the Borrowers, and guaranteed by FPS and Flex Power Co., a wholly-owned subsidiary of FLPS. If the Borrowers are unable to repay amounts outstanding under the Credit Facility, TCB could foreclose on the collateral granted thereunder to secure the indebtedness.

The Borrowers are subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. As of December 31, 2020 and as of March 31, 2021, the Borrowers’ leverage ratio was in excess of the maximum leverage ratio permitted under the Credit Facility. In connection with an exercise of the Borrowers’ equity cure right under the Credit Facility, TCB has waived any event of default with respect to this noncompliance. Should they fail to comply with the quarterly maintenance covenants, remedies would need to be implemented in order to avoid an event of default, including equity cure rights or a waiver by TCB, which we cannot guarantee will be granted. As of June 30, 2021, the Borrowers were in compliance with financial covenants. The Borrowers are also subject to certain negative covenants, including restrictions on their ability to incur additional indebtedness, create

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liens, pay dividends, make certain investments or material changes in their business, engage in transactions with affiliates, conduct asset sales or otherwise dispose of the Borrowers’ assets. These restrictions may limit their operational or financial flexibility and could lead to potential defaults under the Credit Facility, which could result in foreclosure. In anticipation of the Contribution Transaction and this offering, we are in the process of negotiating a modification to the Credit Facility. As part of this modification, we expect that FGS will become an additional guarantor with respect to the Credit Facility subject to the same obligations and restrictions applicable to FPS thereunder, but that FGS will not otherwise be subject to the covenants and restrictions applicable to the Borrowers.

The Borrowers are also subject to routine asset appraisal that factors into the borrowing base calculation of the Credit Facility. Should the Borrowers’ outstanding indebtedness exceed the borrowing base at any point in time, the amount of indebtedness in excess of the borrowing base will become due immediately, and the Borrowers may not have sufficient liquidity to make required repayment at that time.

Our substantial indebtedness could limit our opportunities for growth.

We have a significant amount of indebtedness outstanding. As of June 30, 2021, we had total outstanding indebtedness of approximately $23.2 million, consisting of $23.0 million outstanding under the Credit Facility with TCB and $0.2 million in capital lease obligations. As of June 30, 2021, there was borrowing availability under the Credit Facility of approximately $2.9 million.

Our substantial indebtedness could have important consequences. For example, it could:

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increase our vulnerability to general adverse economic, industry and competitive conditions;

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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

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place us at a competitive disadvantage compared to our competitors that have less debt; and

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limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes.

We expect to use cash flow from operations and borrowings under the Credit Facility to meet our current and future financial obligations, including funding our operations, debt service and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, which could result in our inability to repay indebtedness, or to fund other liquidity needs. If we do not have enough capital, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, including the Credit Facility, on or before maturity. We cannot make any assurances that we will be able to accomplish any of these alternatives on terms acceptable to us, or at all. In addition, the terms of existing or future indebtedness, including the Credit Facility, may limit our ability to pursue any of these alternatives.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the Credit Facility are at variable rates of interest and expose us to interest rate risk. As such, our results of operations are sensitive to movements in interest rates. There are many economic factors outside our control that have in the past and may, in the future, impact rates of interest including publicly announced indices that underlie the interest obligations related to a certain portion of our debt. Currently, a portion of our outstanding borrowings under the Credit Facility are borrowed at LIBOR plus an applicable margin and it is unclear how increased regulatory oversight and changes in the method for

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determining LIBOR may affect our results of operations or financial conditions. LIBOR is an interest rate benchmark used as a reference rate for a wide range of financial transactions, including derivatives and loans. In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop compelling banks to submit LIBOR rates after 2021. On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors. While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021. At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR, whether LIBOR rates will cease to be published or supported before or after 2021 or whether any additional reforms to LIBOR may be enacted. At this time, we cannot predict the future impact of a departure from LIBOR as a reference rate. The expected discontinuation of LIBOR may require us to amend the Credit Facility. Also, factors that impact interest rates include governmental monetary policies, inflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our results of operations would be adversely impacted.

The agreement governing FPS’ Series B Preferred Units restricts our business and our ability to engage in certain corporate and financial transactions or in other businesses.

Under the terms of FPS’ Series B Preferred Unit issuance, FPS has agreed to certain covenants that our board believes restricts our ability to do business and enter into certain financial transactions, including restricting FPS’ and our ability to incur, guarantee or otherwise permit to exist any indebtedness for borrowed money that is senior in right of payment to the Series B Preferred Units other than senior indebtedness in an amount not to exceed $50.0 million. As of June 30, 2021, the amount of senior indebtedness (as defined therein) totaled approximately $48.5 million, thus limiting the amount of availability to approximately $1.5 million of additional senior indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Series B and B-1 Preferred Equity at FlexEnergy Power Solutions, LLC.”

Risk Factors Relating to Ownership of Our Common Stock

Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.

Since December 2015, FPS has entered into multiple funding rounds with the holders (the “FPS Noteholders”) of senior secured promissory notes issued by FPS (the “Notes”). As part of the Contribution Transaction, FPS will pledge its shares of FGS in favor of the FPS Noteholders and we will agree not to grant any further security interests in our or our subsidiaries’ assets, except for certain permitted encumbrances similar in nature to those permitted under the Credit Facility, without the prior written consent of FPS.

As of June 30, 2021, the total amount outstanding under the Notes was $25.5 million. All Notes are due and payable in full on October 31, 2022, unless extended or refinanced prior to this date, which FPS may not be successful in executing. If the Notes are not extended, refinanced or repaid prior to October 31, 2022, FPS may be forced to sell sufficient shares of our common stock to pay the amount outstanding under the Notes, which could cause the trading price of our common stock to decline significantly and possibly below the offering price. Similarly, if FPS is unable to repay the amount outstanding under the Notes, the FPS Noteholders could foreclose on and sell sufficient shares of our common stock to pay the amount outstanding under the Notes, which could cause the trading price of our common stock to decline significantly and possibly below the offering price.

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FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price.

FPS’ Series B Units may be called for redemption by the holders at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B Units is $37.2 million as of June 30, 2021. FPS’ Series B-1 Units may be called for redemption by the holders at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B-1 Units is $18.0 million as of June 30, 2021. Following a redemption notice, FPS must use commercially reasonable efforts, as soon as is reasonably possible, to redeem the Series B or Series B-1 Units, as applicable. If the holders of FPS’ Series B or Series B-1 Units exercise their redemption rights, FPS may be required to sell sufficient shares of our common stock (after the expiration of the lock-up period described in “Shares Eligible for Future Sale” and subject to Rule 144) to pay the redemption price. If not redeemed within 180 days, the Series B accrual rate of 12% and Series B-1 accrual rate of 8%, as applicable, incrementally increase by up to an additional 3%. If FPS sells substantial amounts of our common stock (for example, if all or large numbers of the Series B and Series B-1 Units are called for redemption) the trading price of our common stock could decline significantly and could decline below the offering price.

After this offering, voting control with respect to our company will remain concentrated in the hands of FPS. FPS will continue to be able to exercise significant influence on us.

Following the completion of the offering, FPS is expected to hold       % of our total outstanding common stock, or       % if the over-allotment option is exercised in full. As such, FPS will have significant control over the election of the members of our board of directors and thereby may significantly influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, the incurrence or modification of debt, amendments to our amended and restated certificate of incorporation (“Certificate of Incorporation”) and our amended and restated bylaws (“Bylaws”), and the entering into of extraordinary transactions, and FPS’s interests may not in all cases be aligned with those of other stockholders.

In the event of a conflict between our interests and the interests of FPS, we have adopted policies and procedures, specifically a Code of Ethics and Business Conduct and, included in our Audit Committee Charter, a Related Party Transactions Policy, to identify, review, consider and approve these conflicts of interest. In general, if an affiliate of a director, executive officer or significant stockholder, including FPS, intends to engage in a transaction involving our company, that director, executive officer or significant stockholder must report the transaction for consideration and approval by our audit committee. However, there are no assurances that our efforts and policies to eliminate the potential impacts of conflicts of interest will be effective.

This concentrated control will limit your ability to influence corporate matters for the foreseeable future and potentially in perpetuity. This concentrated control could also discourage a potential investor from acquiring our common stock and might harm the market price of our common stock. We cannot predict whether this concentrated control will result in a lower or more volatile market price of our common stock or in adverse publicity or other adverse consequences.

We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.

Following the completion of this offering, FPS will continue to own in excess of 50% of the voting power of our outstanding share capital. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under the rules of Nasdaq, a company of which more than 50% of the outstanding voting power is held by an individual, group or another company is a “controlled company” and is exempt from certain stock exchange corporate governance requirements, including:

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the requirement that a majority of the board of directors consists of independent directors;

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the requirement that a listed company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

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•

the requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

•

the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee.

We currently have a board composed entirely of independent directors (for all purposes other than audit committee independence requirements) and thus our nominating and corporate governance and compensation committees are composed entirely of independent directors. If we decide to avail ourselves of any of the controlled company exemptions, you would not have the same protections afforded to stockholders of companies that are subject to all of the stock exchange corporate governance requirements.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.

Provisions in our Certificate of Incorporation and Bylaws, as well as provision of the DGCL, may have the effect of delaying or preventing a change of control or changes in our management. Our Certificate of Incorporation and Bylaws include provisions that:

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authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;

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once FPS no longer holds at least 50% of the voting power of the Company, require that any action to be taken by our stockholders be effectuated at a duly called annual or special meeting and not by written consent;

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specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, or our Chief Executive Officer;

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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

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prohibit cumulative voting in the election of directors;

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provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and

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once FPS no longer holds at least 50% of the voting power of the Company, require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our Bylaws and certain provisions of our Certificate of Incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. Any delay or prevention of a change of control transaction or changes in our management could cause our stock price to decline.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of Sarbanes Oxley; (ii) comply with any new requirements if adopted by the PCAOB requiring mandatory audit

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firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosures regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation. In addition, since we are an emerging growth company that is a newly public company, we will not be required to provide management’s assessment of the effectiveness of our system of internal control over financial reporting until we are required to file our Form 10-K.

We may remain an emerging growth company until December 31, 2026, although we will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal year, have more than $700.0 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

As a “smaller reporting company,” certain reduced disclosure and other requirements will be available to us after we are no longer an emerging growth company.

We are also a “smaller reporting company” pursuant to the Exchange Act. Some of the reduced disclosure and other requirements available to us as a result of the JOBS Act may continue to be available to us after we are no longer an emerging growth company pursuant to the JOBS Act but remain a “smaller reporting company” pursuant to the Exchange Act. As a “smaller reporting company” we are not required to: (i) have an auditor report regarding our internal controls of financial reporting pursuant to Section 404(b) of Sarbanes Oxley; (ii) present more than two years audited financial statements in our registration statement and annual reports on Form 10-K and present selected financial data in such registration statements and annual reports; (iii) make risk factor disclosures in our annual reports of Form 10-K; and (iv) make certain otherwise required disclosures in our annual reports on Form 10-K and quarterly reports on Form 10-Q.

We have not been managed as a public company, and our current resources may not be sufficient to fulfill our public company obligations.

As a privately held company, we had not been required to comply with a number of corporate governance and financial reporting practices and policies required for a public company listed on a national stock exchange. As a public, listed company, we will incur significant legal, accounting and other expenses that we were not required to incur in the recent past, particularly after we are no longer an “emerging growth company,” as defined under the JOBS Act. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and the rules and regulations promulgated and to be promulgated thereunder, as well as under Sarbanes Oxley, the JOBS Act, and the rules and regulations of the SEC and Nasdaq have created uncertainty for public companies and increased the costs and the time that our board of directors and management will need to devote to complying with these rules and regulations. We expect these rules and regulations to increase our legal and financial compliance costs and lead to a diversion of management time and attention from revenue-generating activities.

Furthermore, the need to establish the corporate infrastructure necessary for a public, listed company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal control over financial reporting, accounting systems disclosure controls and procedures, auditing functions and other procedures related to public reporting in order to meet our reporting obligations as a public company.

Nasdaq may delist our common stock from trading on its exchange, which could adversely affect the market liquidity of our common stock, limit investors’ ability to make transactions in our common stock and adversely affect our ability to raise additional funds.

We cannot assure you that our common stock will continue to be listed on Nasdaq after this offering. In order to continue listing our common stock on Nasdaq, we must maintain certain financial, distribution

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and share price levels. Generally, following our initial public offering, we must maintain a minimum amount in stockholders’ equity (generally $2.5 million) and a minimum number of holders of our common stock (generally 300 public holders).

If Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we and our stockholders could face significant material adverse consequences, including:

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a limited availability of market quotations for our securities;

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reduced liquidity for our securities;

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a determination that our common stock is “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock;

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a limited amount of news and analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

We have no present intention to pay dividends on our common stock in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of our common stock, as applicable, appreciates.

We have never declared or paid any cash dividends on our common stock and we have no present intention to pay dividends in the foreseeable future. Any recommendation by our board of directors to pay dividends will depend on many factors, including our financial condition (including losses carried forward), results of operations, legal requirements and other factors. If the price of our common stock declines before we pay dividends, you will incur a loss on your investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends.

Further, although the Credit Facility does not prohibit us from declaring or paying dividends, the Credit Facility does prohibit FLPS from making further distributions to us unless certain conditions are met (see Note 11 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus). FLPS is currently our primary source of positive operating cash flow. As such, if the conditions are not met and FLPS is prohibited from making further distributions to us, then any cash available at FLPS cannot be passed along to you in the form of dividends.

Future sales of common stock by us, FPS, RNS or TRF could depress the market price of our common stock.

If we, FPS, RNS or TRF issues, sells, or indicates an intent to issue or sell, substantial amounts of common stock in the public market after the 180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline significantly and could decline below the offering price. Upon completion of this offering, all of the outstanding shares of common stock other than those sold in this offering are subject to the 180-day contractual lock-up referred to above. The representatives of the underwriters may permit us, FPS, RNS or TRF to issue or sell shares prior to the expiration of the lock-up agreements. See “Underwriting.”

After the lock-up agreements pertaining to this offering expire,             additional shares will be eligible for sale in the public market, all of which shares are or will be held by FPS, RNS or TRF and will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). In addition, shares reserved for future issuance under our equity incentive plan will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations.

After expiration of the 180-day lock-up period and upon our eligibility to use Form S-3 for secondary offerings, FPS, RNS or TRF may request that shares of our common stock issued to them in the Contribution Agreement or transferred to them in the SAFE Transaction be registered for public resale. If FPS, RNS or

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TRF sells a significant number of shares of our common stock through such a resale registration, the price of our common stock could be adversely affected.

Following this offering, we intend to file one or more registration statements with the SEC covering shares available for future issuance under our equity incentive plan. Upon effectiveness of those registration statements, any shares subsequently issued under the plan will be eligible for sale in the public market, except to the extent that they are restricted by the lock-up agreements referred to above and subject to compliance with Rule 144 in the case of our affiliates. Sales of a large number of the shares issued under the plan in the public market could adversely affect the market price of our common stock.

See “Shares Eligible for Future Sale” for a more detailed description of sales that may occur in the future. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline substantially.

Our Certificate of Incorporation includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders.

Our Certificate of Incorporation includes a forum selection clause. Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring any: (i) derivative action or proceeding brought on our behalf; (ii) action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”) or our Certificate of Incorporation or Bylaws; or (iv) action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following the determination), (B) that is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under federal securities laws, including the Securities Act. We note however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. This forum selection clause may discourage claims or limit stockholders’ ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to bring a claim. While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition. Notwithstanding the foregoing, the forum selection clause will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the U.S. shall be the sole and exclusive forum.

As a new investor, you will experience immediate and substantial dilution in the book value of the shares that you purchase in this offering.

The public offering price is substantially higher than the as adjusted net tangible book value per share of our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchased our common stock in this offering at the public offering price of $       per share, you would experience an immediate dilution of $       per share, the difference between the price per share you pay for our common stock and our as adjusted net tangible book value per share as of June 30, 2021, after giving effect to the issuance by us of             shares of our common stock

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in this offering, which does not include the underwriters’ option to purchase additional shares from us. This dilution is due in large part to the fact that our earlier investors paid substantially less than the offering price when they purchased their shares. You will experience additional dilution if we issue additional shares below the public offering price. For a further description of the dilution that you will experience immediately after this offering, see “Dilution.”

We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.

We will incur significant legal, accounting, insurance and other expenses as a result of being a public company. Dodd-Frank and Sarbanes Oxley, as well as related rules implemented by the SEC, have required changes in corporate governance practices of public companies. In addition, rules that the SEC is implementing or is required to implement pursuant to Dodd-Frank are expected to require additional change. We expect that compliance with these and other similar laws, rules and regulations, including compliance with Section 404 of Sarbanes Oxley, will substantially increase our expenses, including legal and accounting costs, and make some activities more time-consuming and costly. We also expect these laws, rules and regulations to make it more expensive for us to obtain director and officer liability insurance, and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage, which may make it more difficult for us to attract and retain qualified persons to serve on the board of directors or as officers. Although the JOBS Act may, for a limited period of time, somewhat lessen the cost of complying with these additional regulatory and other requirements, we nonetheless expect a substantial increase in legal, accounting, insurance and certain other expenses in the future, which will negatively impact our results of operations and financial condition.

General Risk Factors

The ongoing effects of the COVID-19 pandemic could adversely affect our business, financial condition, results of operations, or cash flows.

In March 2020, we began to monitor the global effects of “COVID-19,” an infectious disease caused by Severe Acute Respiratory Syndrome Coronavirus 2 (“SARS CoV-2”) that was first detected in December 2019. The World Health Organization characterized COVID-19 as a pandemic on March 11, 2020. Thereafter, most U.S. states imposed “stay-at-home” orders on their populations to slow the spread of COVID-19. Governments, public institutions, and other organizations in countries and localities throughout the world have taken and are continuing to take certain emergency measures to combat the spread of COVID-19, including implementation of restrictions on travel and orders that restrict the operations of institutions such as schools and businesses.

In addition, due to domestic and international governmental orders restricting certain activities in response to COVID-19, we have experienced, and may in the future experience, COVID-19 related delays from certain vendors and suppliers, which, in turn, has caused delays in the build out of our leasing fleet and could cause delays in the manufacturing and installation of our products and adversely impact our cash flows and results of operations including revenue. To date, we have been able to offset any delays, but in the future, it may not be possible to find replacement products or supplies, and ongoing delays could affect our business and growth. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential impacts on our business, the alternative energy industry or the global economy as a whole. However, these effects could adversely impact our business, financial condition, results of operations, or cash flows.

Expanding operations internationally could expose us to risks.

Although we currently operate primarily in the U.S., we will seek to expand our business internationally. Our primary focus around international expansion involves identifying key oil producing regions where we can scale an installed base of turbine fleet, either in the form of leasing units or selling and servicing an installed base in collaboration with a local channel partner. Managing any international expansion will

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require additional resources. Any expansion internationally could subject our business to risks associated with international operations, including:

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conformity with applicable business customs, including translation into foreign languages and associated expenses;

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lack of availability of government incentives and subsidies;

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challenges in arranging, and availability of, financing for our customers;

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difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, and legal and compliance costs associated with international operations;

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installation challenges that we have not encountered before, which may require the development of a unique model for each country;

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compliance with multiple, potentially conflicting and changing governmental laws, regulations, and permitting processes including environmental, banking, employment, tax, privacy, and data protection laws and regulations such as the EU Data Privacy Directive;

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compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act;

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difficulties in collecting payments in foreign currencies and associated foreign currency exposure; restrictions on repatriation of earnings;

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compliance with potentially conflicting and changing laws of taxing jurisdictions where we conduct business and compliance with applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of these tax laws, and potentially adverse tax consequences due to changes in these tax laws; and

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regional economic and political conditions.

As a result of these risks, any potential future international expansion efforts that we may undertake may not be successful.

We are subject to cyber security risks. If a cyber security incident occurs, we could suffer information theft, data corruption, operational disruption and our business and results of operations could be harmed.

Our customers, and our industry generally, have become more dependent on digital and connected technologies to conduct business. We depend on digital and connected technologies to monitor our turbines, perform many of our services and to process and record financial and operating data, among other things. We also expect to increase our dependence on these technologies as we expand our EaaS offerings. Ensuring the secure and reliable processing, maintenance and transmission of this data is important to our operations and our customers. As cyber security incidents (including deliberate attacks) have increased in number, scope, and sophistication, energy assets (and related networks) may become the targets of more incidents. Our technologies, systems and networks, and those of our customers, vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the loss or destruction of proprietary and other information, or other disruption of business operations. In addition, while we depend on certain business partners to store certain information regarding our customers and employees, these third parties may be a target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, or misuse of sensitive information. Our recourse against these business partners, if any, may be limited. In addition, we, our customers, vendors, and/or business partners may be unable to detect certain breaches (such as unauthorized surveillance) for an extended period of time. Our systems and controls for protecting against cyber security risks, and those used by our business partners, may be insufficient. The loss, misuse, destruction, unauthorized release, gathering, or monitoring of sensitive information result in significant financial losses, loss of customers and business opportunities, reputation damage, litigation (including any damages awarded), regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise adversely affect our

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business, financial condition or results of operations. We will likely be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber security incidents. The reliability and capacity of our systems is critical to our operations. Any difficulties in implementing or integrating new systems or enhancing current systems, or any material disruption in our information technology systems or systems could have an adverse effect on our business and results of operations.

There has been no prior active market for our common stock and an active and liquid market for our common stock may fail to develop, which could harm the market price of our common stock.

Prior to this offering, there has been no active public market for our common stock. Although we have applied to list our common stock on Nasdaq, an active trading market for our common stock may never develop or be sustained following this offering. The initial public offering price of our common stock will be based and determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our common stock after this offering. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the initial public offering price or at the time that they would like to sell.

The market price of our equity securities may be volatile, and purchasers of our common stock could incur substantial losses.

The market price for our common stock may be volatile. The stock market in general and the market for green energy in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price originally paid for the security. The market price for our common stock may be influenced by many factors, including:

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actual or anticipated fluctuations in our financial condition and operating results;

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actual or anticipated changes in our growth rate relative to our competitors;

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competition from existing products or new products that may emerge;

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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments;

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failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

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issuance of new or updated research or reports by securities analysts;

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fluctuations in the valuation of companies perceived by investors to be comparable to us;

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share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

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additions or departures of key management or scientific personnel;

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disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

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changes in laws or regulations applicable to our products;

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changes to electric utility policies;

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announcement or expectation of additional debt or equity financing efforts;

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sales of our common stock by us, our insiders or our other stockholders; and

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general economic and market conditions.

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These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their common stock and may otherwise negatively affect the liquidity of our common stock.

If securities or industry analysts do not publish research or publish inaccurate research or unfavorable research about our business, the price of our common stock and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If no or few securities or industry analysts cover our company, the trading price for our common stock would be negatively impacted. If one or more of the analysts who covers us downgrades our common stock or publishes incorrect or unfavorable research about our business, the price of our common stock would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades our common stock, demand for our common stock could decrease, which could cause the price of our common stock or trading volume to decline.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and expectations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “could”, “intends”, “target”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “potential”, “opportunity”, “confident” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

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our future financial performance and results of operations;

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our growth plans;

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our business plan and our ability to manage our growth effectively;

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the effects of competition in our market and our ability to compete effectively;

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our plans to use the proceeds from this offering;

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estimates of our expenses, future revenues, capital requirements, our needs for additional capital and our ability to obtain additional capital;

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our ability to attract and retain qualified directors, employees and key personnel;

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future acquisitions of or investments in complementary companies;

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the effects of trends on, and fluctuations in, our results of operations;

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research and development activities;

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sales expectations;

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sources for components and parts;

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federal, state and local government regulations;

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industry and economic conditions applicable to us;

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the efficiency, reliability and environmental advantages of our products and their need for maintenance;

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market advantage;

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customer satisfaction;

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the value of using our products;

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our ability to achieve economies of scale;

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anticipation of product supply requirements;

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listing requirements;

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our turbine and heat exchanger technologies;

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the utilization of our products;

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the introduction of new technology;

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our production capacity;

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international markets;

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•

protection of intellectual property;

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cybersecurity threats;

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the adequacy of our facilities;

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dividends;

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business strategy;

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capital expenditures;

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liquidity;

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amortization expense of intangibles;

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cost of warranties;

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equity-based compensation;

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recently issued accounting standards;

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market risk;

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interest rate sensitivity;

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the Jobs Act; and

•

the effects of the COVID-19 pandemic.

We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results or revised expectations, except as required by law.

36

USE OF PROCEEDS

We estimate that our net proceeds from the sale of our common stock in this offering will be approximately $       million, assuming an initial public offering price of $       per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds of the sale of shares of common stock by the selling stockholder if the underwriters exercise their option to purchase additional shares.

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) the net proceeds to us from this offering by approximately $      , assuming that the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us in this offering, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $      , assuming the assumed initial public offering price per share remains the same and after deducting estimated underwriting discounts and commission.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock, and facilitate future access to the public equity markets. We intend to use approximately $      million of the net proceeds from this offering to expand our fleet of equipment for lease, approximately $      million to expand into new C&I markets and for product improvements, approximately $      million for heat exchanger product development and to expand our sales force, approximately $      million for hydrogen development, and approximatively $      to pay down outstanding borrowings under our Credit Facility. We intend to use the remainder of the net proceeds from this offering, if any, for working capital and general corporate purposes. We may also use a portion of the net proceeds from this offering to acquire, license, or invest in products, technologies or businesses that are complementary to our business. However, we currently have no agreements or commitments to complete any such transaction.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with complete certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the actual amounts that we will spend on the uses set forth above.

Our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of those net proceeds. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending the uses described above, we plan to invest the net proceeds from this offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit, or direct or guaranteed obligations of the U.S. government.

37

DIVIDEND POLICY

We do not anticipate declaring or paying any cash dividends on our capital stock in the foreseeable future. Any future determination to declare and pay cash dividends, if any, will be made at the discretion of our board of directors and will depend on a variety of factors, including applicable laws, our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, general business or financial market conditions, and other factors our board of directors may deem relevant. In addition, our ability to pay cash dividends is indirectly restricted by the terms of the agreements governing the Credit Facility, which prohibits our subsidiary, FLPS, from making distributions to us. See “Risk Factors –  Risk Factors Relating to our Business and Industry – We have no present intention to pay dividends on our common stock in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of our common stock, as applicable, appreciates.” Our ability to pay cash dividends on our capital stock in the future may also be limited by the terms of any preferred securities we may issue or agreements governing any additional indebtedness we may incur.

38

CAPITALIZATION

The following table sets forth our cash and capitalization as of June 30, 2021:

•

on an actual basis; and

•

on an as adjusted basis to give effect to the issuance and sale of             shares of common stock in this offering at an assumed initial public offering price of $      per share (which is the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming no exercise of the underwriters’ over-allotment option.

The as adjusted information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this information in conjunction with our combined consolidated financial statements and the related notes included elsewhere in this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial information contained in this prospectus.

​	As of June 30, 2021
​	Actual			As Adjusted
Cash	​	$	667	​	$
Line of credit	​	​	22,963	​	​	​
Notes payable, net of current portion	​	​	—	​	​	​
Capital leases, net of current portion	​	​	126	​	​	​
Preferred stock, par value $0.001 per share; no shares authorized, issued and outstanding, actual; 5,000,000 shares authorized, no shares issued or outstanding, as adjusted	​	​	—	​	​	​
Common stock, par value $0.001 per share 100,000,000 shares authorized,          shares issued and outstanding, actual; 100,000,000 shares authorized,          shares issued and outstanding, as adjusted	​	​	—	​	​	​
Net parent investment	​	​	153,776	​	​	​
Additional paid-in capital	​	​	—	​	​	​
Accumulated deficit	​	​	(136,146)	​	​	​
Accumulated other comprehensive income	​	​	752	​	​	​
Total stockholder’s equity	​	$	18,382	​	$
Total capitalization	​	$	41,471	​	$	​

Each $1.00 increase or decrease in the assumed initial public offering price of $      per share (which is the midpoint of the price range set forth on the cover page of this prospectus) would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $      , assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each 1,000,000 share increase or decrease in the number of shares offered in this offering would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $      , assuming that the price per share for the offering remains at $      (which is the midpoint of the price range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The information in the table above excludes shares of our common stock that will become available for future issuance under our 2021 Incentive Award Plan, which will become effective in connection with the completion of this offering.

39

DILUTION

If you invest in our common stock in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the net tangible book value per share of our common stock after this offering.

Our historical net tangible book value as of June 30, 2021 was $0.00, or $0.00 per share of our common stock. Historical net tangible book value represents the amount of total tangible assets less total liabilities, and historical net tangible book value per share represents net tangible book value divided by the number of shares of our common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction.

Our pro forma net tangible book value as of June 30, 2021 was $18.13 million, or $       per share of our common stock. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities, after giving effect to the Contribution Transaction. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares of our common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction.

After giving further effect to the sale of             shares of common stock in this offering at an assumed initial public offering price of $       per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been approximately $      , or $       per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $       per share to the existing stockholder and an immediate dilution of $       per share to new investors. The following table illustrates this per share dilution:

Assumed initial public offering price per share	​	​	$
Historical net tangible book value per share as of June 30, 2021	$	0.00	​
Pro forma increase in net tangible book value per share as of June 30, 2021	$		​
Pro forma net tangible book value per share as of June 30, 2021	$		​
Increase in pro forma net tangible book value per share attributable to investors purchasing shares in this offering	$		​
Pro forma as adjusted net tangible book value per share after this offering	$		​
Dilution per share to investors in this offering	​	​	$

A $1.00 increase (decrease) in the assumed initial public offering price of common stock of $       per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease), our as adjusted net tangible book value per share after this offering by $      , and would increase (decrease) dilution per share to new investors in this offering by $      , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us would increase (decrease) our as adjusted net tangible book value per share after this offering by approximately $       per share and decrease (increase) the dilution to new investors by approximately $       per share, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

The following table shows, as of June 30, 2021, after giving effect to the Contribution Transaction, the number of shares of common stock purchased from us, the total consideration paid to us and the price paid per share by the existing stockholder and by new investors purchasing common stock in this offering at an assumed initial public offering price of $       per share, before deducting the underwriting discount and estimated offering expenses payable by us, and assuming no exercise of the underwriters’ over-allotment option (in thousands, except per share amounts and percentages):

40

​

Shares Purchased

Total Consideration

Average Price Per Share

​

Number

Percent

Amount

Percent

Existing stockholder

​

​

​

%

​

$

​

%

​

$

New investors

​

​

​

%

​

​

​

​

%

​

​

​

Total

​

​

100%

​

$

​

100%

​

$

​

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $      , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $      , assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would (decrease) increase the number of shares of our common stock issued to FPS but would not increase the total consideration paid by it in the Contribution Transaction. Assuming that the initial public offering price remains the same, an increase (or decrease) in the number of shares offered by us in this offering would not increase (or decrease) the number of shares we will issue to FPS in the Contribution Transaction.

The above table and discussion includes             shares of common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction, and excludes, as of June 30, 2021,             shares of common stock reserved for future grant or issuance under our 2021 Plan, which will become effective in connection with the completion of this offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our combined consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors.”

Our Predecessors and FlexEnergy Green Solutions Inc.

FGS was formed in December 2020 and does not have historical financial data. The historical financial data discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are those of FEI and FLPS and their consolidated subsidiaries. After the completion of the Contribution Transaction, FEI and FLPS will be wholly-owned subsidiaries of FGS.

Basis of Presentation

The combined consolidated financial statements include the consolidated accounts of FEI, the accounts of its wholly-owned subsidiaries FEES and FlexEnergy Support Services, Inc., the consolidated accounts of FLPS, and the accounts of its wholly-owned subsidiary Flex Power Co. Flex Power Co. includes the accounts of its wholly-owned subsidiary FLPS Canada. Our combined consolidated financial statements have been prepared in accordance with U.S. GAAP.

Overview

We provide turbine power generation and heat recovery products to C&I customers focused on improving their performance, increasing energy efficiency, and reducing their carbon footprint. We believe we are the premier manufacturer and project operator of 300 kW to 1.3 MW, ultra-clean, highly reliable gas turbines and custom-fit heat recovery products. We were founded in December of 2010 upon the acquisition of our small gas turbine product from Ingersoll Rand Energy Systems, which was developed beginning in 1996 and commercialized in the 2000’s. Key personnel including a leading team of turbine engineers joined our business, along with the acquisition of manufacturing operations and intellectual property. Beginning in 2012, we launched our lease offering and began building out our field service operations, focusing on offering our turbine product for power generation in the North American oilfield market. Beginning in 2017, we began selling our industrial heat recovery products. With our established leasing and field service infrastructure paired with original equipment manufacturing, engineering expertise and proprietary technology, we believe we have a differentiated, vertically integrated business model that is unique to the distributed power industry.

Our product offering includes 333 kW and 1.3MW gas turbine units and customized heat recovery products. Our clean, reliable gas turbines convert waste gas into useful energy and reduce CO2 and NOx emissions. As of June 30, 2021, our turbine products have approximately 8.4 million run hours of operations including 4.8 million run hours within our lease fleet, with industry-leading uptime performance. Our heat recovery products enable improved heat transfer to minimize energy waste and consumption.

We have delivered approximately 122 MW of installed capacity of our Flex Turbine product into the market through both direct sales and leasing our turbine fleet which we own and operate for the life of the asset. Our lease fleet currently comprises approximately 49 MW of installed capacity, which has accumulated since inception in 2012 at a compounded annualized growth rate of 37%.

Our Primary Applications

We believe we are in a strong position to grow our business amid the transition towards more sustainable, lower carbon sources of energy. We believe this energy transition will include:

•

Long-term, sustainable growth in electric demand

•

Efforts for industries and individual companies to reduce carbon emissions and air pollution

42

•

Energy efficiency playing a major role in decarbonization efforts

•

Ongoing secular shift to distributed power generation

We have proven solutions that are well supported by the above trends. Primary applications of our proven solutions include:

Converting Waste Gas to Useful Energy:

•

The Flex Turbine can run on waste fuels such as methane from landfills and CO2 heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 3,000 BTUs to produce reliable, distributed electricity.

•

Our current and future customer base under this vertical are predominantly represented by North American independent oil producers, global supermajors and midstream gas companies who desire our turbine products.

Improving Traditional Processes:

•

Flex Heat Recovery products incorporate the most effective high temperature, high pressure heat exchanger technology. They have a smaller footprint than competing systems due to their design efficiency, making them ideal for space constrained applications. They are currently being evaluated for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects.

•

Our current and future customer base under this vertical are predominantly represented by the companies in U.S. C&I sector who desire our turbine products as well as original manufacturers who produce fuel cells, internal combustion engines, and gas turbines and who desire our heat recovery products.

Enabling Emerging Clean Technology:

•

Efficient use of thermal energy is the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation, traditional fuel cell technology for power, green hydrogen production, and certain heat as energy storage applications, like molten salt. Our Flex Heat Recovery products enable these green technologies to be more cost competitive with conventional forms of energy production.

•

Our current and future customer base under this vertical are predominantly represented by manufacturers of fuel cells, internal combustion engines and gas turbines who desire our heat recovery products.

Our Customer Base and Demand for our Products

We believe the current and future demand for our products will be underpinned by sustainable, growing demand from our Converting Waste Gas to Useful Energy vertical and augmented by emerging demand for our heat recovery products to improve industrial processes and enable new clean technologies.

The majority of demand for our product to date has come from oil producers who require highly reliable onsite power solutions at their well sites that often do not have reliable access to utility power. Our Flex Turbine’s unique ability to run on a wide range of unprocessed field gas that is often otherwise burned off by flaring - along with very low maintenance, high up-time performance and cyclic load handling - has driven customers to our power generation solution. As further described below, our zero capex leasing solution and direct field service support are paramount to our success of winning and retaining new business. We expect our growth in this market vertical will be driven primarily by the following:

•

Sustained drilling of new oil wells in our core North American market

•

Expansion of our proven solution to very large international flare gas to power project opportunities

43

•

Heightened efforts for oil producers to seek solutions to reduce carbon emissions across their operations, including a concerted focus on significantly reducing levels of upstream flaring.

In addition, we serve and expect additional demand from the C&I sector for our Flex Turbines. While overall revenue from our Flex Heat Recovery products comprised less than 10% of total revenue for the year-ended December 31, 2020 and for the six months ended June 30, 2021, we expect to grow revenue from these products as we believe customers will demand heat recovery products that improve traditional processes and help enable emerging clean technology.

Revenue Generation under our EaaS Business Model

Under our EaaS business model, we have accumulated an asset base that represents a modern fleet of long-lived power generation assets. Since 2012, we have offered customers the option of purchasing our manufactured product or entering into an equipment leasing contract. We have experienced strong annualized revenue growth of leasing our turbines, predominantly to North American oil producers who largely prefer to lease or rent power generation equipment for wellsite power as opposed to purchasing generation equipment within their annual capital budgets. We believe this zero-capex solution for our customer base extends beyond our O&G vertical and into the C&I sector where customers are not only increasingly self-generating their own power but, we believe, also want a power solution that replicates a consistent monthly utility bill. At the same time, we also believe our EaaS leasing solution is beneficial to our stakeholders because we own and operate our bespoke generation asset in a manner that generates attractive life cycle returns on our underlying capital investment. Because we own, operate and directly maintain our asset at customer sites, we have gained a tremendous amount of field learning knowledge. In coordination between our field service, manufacturing and engineering teams, this field learning and operating data retention has translated into both exceptional uptime to our customers as well as solutions that can significantly extend the life of our turbine asset base. Included in a customer’s monthly lease rate is also the service of the unit from our trained service technicians.

In addition to our EaaS offering, we have customers who prefer to make a capital investment in their power generation asset through direct purchases of our manufactured products. This includes both our gas turbine products and our heat recovery products. Many of our customers, particularly those in the U.S., enter into a long-term service agreement in addition to purchasing equipment, while other customers instead prefer to have their purchased equipment serviced on a time-and-materials basis. Together the long-term service agreements, the time and materials that we charge our third-party customers and commissioning services make up our service revenue.

Costs of Conducting Our Business

The principal costs associated with operating our business are:

•

Cost of revenues (excluding turbine fleet depreciation)

•

Depreciation associated with our rental fleet

•

Selling, general and administrative expenses

•

Interest expense

Cost of revenues (excluding turbine fleet depreciation) include:

•

Cost of Turbine Leasing Fleet, which includes the direct cost of field service personnel and consumable spare parts allocated to maintaining our leasing turbines

•

Cost of Turbine Service on Sold Product, which includes the direct cost of field service personnel and consumable spare parts allocated to maintaining our aftermarket service arrangements of customer purchased turbines; and

•

Cost of Manufactured Product, which includes the cost of manufacturing the equipment sold, including material and manufacturing labor and overhead. Since acquiring the manufacturing

44

operations in 2010, our available throughput volume has exceeded our actual volume of turbine production on an annual basis. In recent years we have taken measures to reduce our production and associated costs down to a more suitable level that we believe fulfills the measured demand coming from our turbine leasing fleet and third-party customers. We have begun to realize further cost reductions in the first half of 2021 by consolidating our two production facilities to a single facility. This facility will be the single point of production for both the continued growth of our turbine installed base as well as what we believe will be emerging demand for our heat recovery products in future years.

Our depreciation expense consists of the depreciation expense related to our own turbine assets. These assets are depreciated over a 10 year period.

Our selling, general and administrative expenses primarily consist of salaries expense, marketing expense and professional services, including legal expenses.

Interest expense primarily represents monthly interest paid under our asset-back financing arrangement as further described below in “Liquidity and Capital Resources.”

How We Evaluate our Operations

We use a variety of qualitative, operational and financial metrics to assess our performance. Among other measures, management considers (i) the size of our turbine leasing fleet (ii) revenue, (iii) EBITDA and (iv) Adjusted EBITDA.

Size of our lease fleet

We believe the continued growth of our turbine leasing fleet is an important indicator of current and future financial performance, given the proven and sustainable revenue stream as well as the opportunity to realize cost efficiencies within our cost of turbine leasing with additional growth of the underlying asset base. We measure the size of our lease fleet in the form of total megawatts based on the combined installed capacity our turbine units as well as the number of turbine units in the fleet.

Revenue

We analyze our revenue by comparing actual quarterly and annual revenue to our internal projections for a given period and to prior periods to assess our performance.

EBITDA and Adjusted EBITDA

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

Factors Impacting Comparability of Our Financial Results

Public Company Expenses

Upon completion of this offering, we expect to incur direct, incremental general and administrative (“G&A”) expenses as a result of being a publicly traded company, including, but not limited to, costs associated with hiring new personnel, implementation of compensation programs that are competitive with our public company peer group, annual and quarterly reports to stockholders, tax return preparation, independent auditor fees, investor relations activities, registrar and transfer agent fees, additional legal fees, incremental director and officer liability insurance costs and incremental independent director compensation. These direct, incremental G&A expenses are not included in our historical results of operations.

45

We Will Incur Additional Taxes as a Result of being “C” Corporation

Prior to the completion of the Contribution Transaction, the results of operations of the business (comprised of the businesses of FEI and FLPS) were consolidated into the financial statements of FPS, a limited liability company taxed as a partnership. Upon completion of the Contribution Transaction, the operations of the business will be conducted under FGS, a “C” corporation for tax purposes. Thus, once we have become profitable and have fully utilized all net operating loss carry forwards available to us, we anticipate significant increases in income tax expenses for periods after the completion of the Contribution Transaction. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Income Taxes.”

Effect of COVID-19

Demand and pricing in the oil and gas markets fell significantly due to the COVID-19 pandemic and an increase in global oil supply driven by disagreements with respect to oil pricing between Russia and members of OPEC. The effects of the COVID-19 pandemic continued to drive reduced demand leading to volatility in prices during 2020 and the first six months of 2021. This commodity price volatility adversely affected demand for our products and services and negatively impacted our results of operations during 2020 and the first six months of 2021.

Going Concern

The combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we have an accumulated deficit of approximately $136.15 million. Management expects to continue to incur operating losses and negative cash flows. We have financed our operations to date with proceeds from equity infusions from FPS and from debt financings.

We will need to raise additional capital in order to continue to fund operations. We believe we will be able to obtain additional capital through equity financings or other arrangements to fund operations; however, there can be no assurance that such additional financing, if available, can be obtained on acceptable terms. If we are unable to obtain such additional financing, future operations would need to be scaled back or discontinued.

Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. The combined consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Results of Operations

Comparison of the Years Ended December 31, 2020 and 2019

The following table sets forth our results of operations for the years ended December 31, 2020 and 2019.

46

​	Years Ended December 31,
(in thousands)	2020			2019
​	(FEI and FLPS)
Statement of Operations and Comprehensive Loss Data:	​	​	​	​	​	​
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833
Turbine service on sold product	​	​	2,213	​	​	2,824
Manufactured product	​	​	3,276	​	​	5,716
Total revenue	​	$	23,327	​	$	25,373
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	4,884	​	$	5,442
Turbine service on sold product	​	​	1,691	​	​	2,797
Manufactured product	​	​	5,789	​	​	9,531
Depreciation of fleet turbines	​	​	5,007	​	​	4,713
Total cost of revenue	​	$	17,371	​	$	22,483
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	$	11,826	​	$	12,400
Research and development	​	​	120	​	​	237
Total operating expenses	​	$	11,946	​	$	12,637
Operating loss	​	$	(5,990)	​	$	(9,747)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	$	(1,114)	​	$	(992)
Other (expense) income, net	​	​	31	​	​	(159)
Total other income (expense), net	​	$	(1,083)	​	$	(1,151)
Loss before income taxes	​	$	(7,073)	​	$	(10,898)
Income tax provision	​	​	(31)	​	​	(7)
Net loss	​	$	(7,104)	​	$	(10,905)
Other comprehensive gain, net of tax	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	443	​	$	185
Total other comprehensive gain, net of tax	​	$	443	​	$	185
Comprehensive loss	​	$	(6,661)	​	$	(10,720)
EBITDA	​	$	1,114	​	$	(3,712)
Adjusted EBITDA	​	$	1,209	​	$	(3,457)

Size of our lease fleet

Our lease fleet has increased by 4 MW of installed capacity, or 8%, to 49 MW at December 31, 2020 compared to 45 MW of installed capacity at December 31, 2019. This increase was due to the additions of newbuild turbine assets that were manufactured and made field-ready during 2020.

Revenue

Turbine Leasing Fleet.   Our turbine leasing fleet revenue increased $1.01 million, or 6%, to $17.84 million for the year ended December 31, 2020 compared to $16.83 million for the year ended December 31, 2019. This increase was primarily due to strong demand and a 12% increase in average annual deployments for turbines under leasing contracts across our customer base.

Turbine Service on Sold Product.   Our turbine service on sold product revenue decreased $0.61 million, or 22%, to $2.21 million for the year ended December 31, 2020 compared to $2.82 million for the

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year ended December 31, 2019. This decrease was primarily due to customers of sold manufactured product deferring or cancelling anticipated major component overhauls performed on a time and materials basis amid economic uncertainty and travel restrictions throughout the majority of 2020. Such time and materials revenue decreased $0.68 million, or 47%, to $0.75 million for the year ended December 31, 2020 compared to $1.43 million for the year ended December 31, 2019.

Manufactured Product.   Our manufactured product revenue decreased $2.44 million, or 43%, to $3.28 million for the year ended December 31, 2020 compared to $5.72 million for the year ended December 31, 2019. This decrease was primarily due to the fact that we de-expedited the production of new turbines under executed purchase orders, both to address the needs of our customers and to decrease our production levels given disruptions within our supply chain amid larger economic uncertainty.

Cost of Revenues

Turbine Leasing Fleet.   Our cost of turbine leasing fleet decreased $0.56 million, or 10%, to $4.88 million for the year ended December 31, 2020 compared to $5.44 million for the year ended December 31, 2019. This decrease was primarily due to proactive measures across our field operations to reduce cost such as travel, overtime and spare parts purchases.

Turbine Service on Sold Product.   Our cost of turbine service on sold product decreased $1.11 million, or 40%, to $1.69 million for the year ended December 31, 2020 compared to $2.80 million for the year ended December 31, 2019. This decrease was primarily due to customers of sold manufactured product deferring or cancelling anticipated major component overhauls performed on a time and materials basis amid economic uncertainty and travel restrictions throughout the majority of 2020.

Manufactured Product.   Our cost of manufactured product decreased $3.74 million, or 39%, to $5.79 million for the year ended December 31, 2020 compared to $9.53 million for the year ended December 31, 2019. This decrease was primarily due to the corresponding reduction in product sales caused by the fact that we de-expedited the production of new turbine under executed purchase orders, both to address the needs of our customers and also decrease our production levels given disruptions within our supply chain amid larger economic uncertainty. The annual cost of our direct manufacturing labor and overhead decreased $1.50 million, or 26%, to $4.23 million for the year ended December 31, 2020 compared to $5.73 million for the year ended December 31, 2019.

Depreciation of Fleet Turbines.   Our cost of depreciation of fleet turbines increased $0.29 million, or 6%, to $5.00 million for the year ended December 31, 2020 compared to $4.71 million for the year ended December 31, 2019. This increase was primarily due to the increase in the size of our fleet.

Operating Expenses

Selling, General and Administrative Expenses.   Selling, general and administrative expenses (“SG&A”) decreased $0.57 million, or 5%, to $11.83 million for the year ended December 31, 2020 compared to $12.40 million for the year ended December 31, 2019. This decrease was primarily due to a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic.

We expect SG&A expenses to increase considerably in future periods as a result of being a public company. Please see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.”

Research and Development.   Research and development expenses decreased $0.12 million, or 49%, to $0.12 million for the year ended December 31, 2020 compared to $0.24 million for the year ended December 31, 2019. This decrease was primarily due to the suspension of research and development spending beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic.

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Other income (expense)

Interest Expense.   Interest expense increased $0.12 million, or 12%, to $1.11 million for the year ended December 31, 2020 compared to $0.99 million for the year ended December 31, 2019. This increase was primarily due to higher average balances on our line of credit during the year ended December 31, 2020.

Other Income (Expense).   Other income increased $0.19 million to $0.03 million for the year ended December 31, 2020 compared to $(0.16) million for the year ended December 31, 2019. This increase was primarily due to expenses incurred for facility relocation in 2019 that were not incurred in 2020.

Income Tax Provision

Prior to the closing of this offering, the results of operations of the business (comprised of the businesses of FEI and FLPS) were consolidated into the financial statements of FPS, a limited liability company taxed as a partnership. After the closing of this offering, the operations of the business will be conducted under FGS, a “C” corporation for tax purposes. Thus, once we have become profitable and have fully utilized all NOL carryforwards available to us, we anticipate significant increases in income tax expenses for periods after the closing of this offering.

At December 31, 2020, we had federal, state and foreign NOL carryforwards of $106.85 million, $78.22 million and $0.22 million, respectively, which will expire, if unused, beginning in 2031, 2026 and 2035, respectively; provided that federal NOLs generated post-Tax Cuts and Jobs Act (“the Tax Act”) for the tax years ended December 31, 2018 and thereafter ($29.48 million at December 31, 2020) do not expire.

Our NOL utilization could be limited under Internal Revenue Code Section 382 due to certain ownership changes that have occurred and that may occur in the future. Our preliminary analysis indicates that $48.40 million of our NOLs will expire unutilized. See “Risk Factors – Risk Factors Relating to our Business and Industry – We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.” and Note 10 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus.

Net Loss

Net loss decreased $3.81 million, or 35%, to $7.10 million for the year ended December 31, 2020 compared to $10.91 million for the year ended December 31, 2019, primarily due to the decreases in cost of revenue discussed above.

Foreign Currency Translation Adjustments

Foreign currency translation adjustments increased $0.26 million, or 139%, to $0.44 million for the year ended December 31, 2020 compared to $0.19 million for the year ended December 31, 2019.

Comprehensive Loss

Comprehensive loss decreased $4.06 million, or 38%, to $6.66 million for the year ended December 31, 2020 compared to $10.72 million for the year ended December 31, 2019, primarily due to the decreases in cost of revenue discussed above.

Adjusted EBITDA

Adjusted EBITDA increased $4.67 million to $1.21 million for the year ended December 31, 2020 compared to $(3.46) million for the year ended December 31, 2019. The increase was primarily due to an increase in Flex Turbine lease fleet revenue coupled with decreases in cost of revenue and operating expenses resulting from a series of cost reduction measures implemented to preserve our liquidity amid the greater economic uncertainty resulting from the COVID-19 pandemic.

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Comparison of the Six Months Ended June 30, 2021 and 2020

​	Six Months Ended June 30,
(in thousands)	2021			2020
​	(unaudited)
Statement of Operations and Comprehensive Loss Data:	​			​
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	1,601	​	​	1,120
Manufactured product	​	​	1,276	​	​	1,658
Total revenue	​	$	10,149	​	$	12,802
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	2,967	​	$	2,562
Turbine service on sold product	​	​	1,107	​	​	961
Manufactured product	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	2,167	​	​	2,766
Total cost of revenue	​	$	8,771	​	$	9,747
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	$	6,759	​	$	5,957
Research and development	​	​	67	​	​	75
Total operating expenses	​	$	6,826	​	$	6,032
Operating loss	​	$	(5,448)	​	$	(2,977)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	$	(539)	​	$	(665)
Other (expense) income, net	​	​	2,534	​	​	52
Total other income (expense), net	​	$	1,995	​	$	(613)
Loss before income taxes	​	$	(3,453)	​	$	(3,590)
Income tax provision	​	​	(178)	​	​	(4)
Net loss	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss), net of tax	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	209	​	$	(213)
Total other comprehensive gain (loss), net of tax	​	$	209	​	$	(213)
Comprehensive loss	​	$	(3,422)	​	$	(3,807)
EBITDA	​	$	751	​	$	511
Adjusted EBITDA .	​	$	(1,189)	​	$	546

Size of our lease fleet

Our lease fleet has increased by 1 MW of installed capacity, or 3%, to 49 MW at June 30, 2021 compared to 48 MW of installed capacity at June 30, 2020. This increase was due to the additions of newbuild turbine assets that were manufactured and made field-ready during the second half of 2020 and the first half of 2021.

Revenue

Turbine Leasing Fleet.   Our turbine leasing fleet revenue decreased $2.75 million, or 27%, to $7.27 million for the six months ended June 30, 2021 compared to $10.02 million for the six months ended

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June 30, 2020. This decrease was primarily due to a 23% decrease in average monthly deployments for turbines under leasing contracts across our customer base, following a record high level of average monthly deployments set in the first half of 2020.

Turbine Service on Sold Product.   Our turbine service on sold product revenue increased $0.48 million, or 43%, to $1.60 million for the six months ended June 30, 2021 compared to $1.12 million for the six months ended June 30, 2020. This increase was primarily due to customers of sold manufactured product resuming anticipated major component overhauls performed on a time and materials basis amid increased economic certainty and an ease on travel restrictions. Such time and materials revenue increased $0.38 million, or 87%, to $0.83 million for the six months ended June 30, 2021 compared to $0.45 million for the six months ended June 30, 2020.

Manufactured Product.   Our manufactured product revenue decreased $0.38 million, or 23%, to $1.28 million for the six months ended June 30, 2021 compared to $1.66 million for the six months ended June 30, 2020. This decrease was primarily due to moving production facilities during the first three months of 2021, during which time the manufacture of turbines was significantly curtailed.

Cost of Revenues

Turbine Leasing Fleet.   Our cost of turbine leasing fleet increased $0.41 million, or 16%, to $2.97 million for the six months ended June 30, 2021 compared to $2.56 million for the six months ended June 30, 2020. This increase was primarily due to an increased level of travel, overtime and spare parts purchasing resulting from resuming more normalized field operations versus the restrictions put into place during the first half of 2020 amid the COVID-19 outbreak.

Turbine Service on Sold Product.   Our cost of turbine service on sold product increased $0.15 million, or 15%, to $1.11 million for the six months ended June 30, 2021 compared to $0.96 million for the six months ended June 30, 2020. This increase was primarily due to customers of sold manufactured product resuming anticipated major component overhauls performed on a time and materials basis amid increased economic uncertainty and an ease on travel restrictions.

Manufactured Product.   Our cost of manufactured product decreased $0.93 million, or 27%, to $2.53 million for the six months ended June 30, 2021 compared to $3.46 million for the six months ended June 30, 2020. This decrease was primarily due to the realization of lower operating cost in the form of rent, utilities and other expenses associated with the consolidation of our operating facilities into one central location and where all turbines, heat recovery products and aftermarket refurbishment takes place. The cost of our direct manufacturing labor and overhead decreased $0.70 million, or 30%, to $1.66 million for the six months ended June 30, 2021 compared to $2.36 million for the six months ended June 30, 2020.

Depreciation of Fleet Turbines.   Our cost of depreciation of fleet turbines decreased $0.60 million, or 22%, to $2.17 million for the six months ended June 30, 2021 compared to $2.77 million for the six months ended June 30, 2020. This decrease was primarily due to a 23% decrease in average monthly deployments for turbines under leasing contracts across our customer base, following a record high level of average monthly deployments set in the first half of 2020.

Operating Expenses

Selling, General and Administrative Expenses.   SG&A expenses increased $0.80 million, or 13%, to $6.76 million for the six months ended June 30, 2021 compared to $5.96 million for the six months ended June 30, 2020. This increase was primarily due to increased depreciation recorded as operating expenses for units not currently deployed and a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic. During 2021, these cost reduction measures were lifted.

We expect SG&A expenses to increase considerably in future periods as a result of being a public company. Please see “Risk Factors — Risk Factors Relating to Ownership of Our Common Stock — We will

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incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.”

Research and Development.   Research and development expenses decreased $0.01 million, or 11%, to $0.07 million for the six months ended June 30, 2021 compared to $0.08 million for the six months ended June 30, 2020.

Other income (expense)

Interest Expense.   Interest expense decreased $0.13 million, or 19%, to $0.54 million for the six months ended June 30, 2021 compared to $0.67 million for the six months ended June 30, 2020. This decrease was primarily due to lower average balances on our line of credit during the six months ended June 30, 2021.

Other Income (Expense).   Other income increased $2.48 million to $2.53 million for the six months ended June 30, 2021 compared to $0.05 million for the six months ended June 30, 2020. This increase was primarily due to the forgiveness of the PPP loans during the second quarter of 2021, which resulted in a gain on forgiveness of debt of $2.38 million.

Net Loss

Net loss increased $0.04 million, or 1%, to $3.63 million for the six months ended June 30, 2021 compared to $3.59 million for the six months ended June 30, 2020, primarily due to a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic, and a decline in turbine leasing revenue, partially offset by $2.38 million of other income related to forgiveness of the PPP loan described above. During 2021, these cost reduction measures were lifted.

Foreign Currency Translation Adjustments

Foreign currency translation gain (loss) adjustments increased $0.42 million, or 198%, to $0.21 million for the six months ended June 30, 2021 compared to $(0.21) million for the six months ended June 30, 2020.

Comprehensive Loss

Comprehensive loss decreased $0.39 million, or 10%, to $3.42 million for the six months ended June 30, 2021 compared to $3.81 million for the six months ended June 30, 2020, for the reasons set forth in “Net Loss” above, partially offset by positive foreign currency translation adjustments.

Adjusted EBITDA

Adjusted EBITDA decreased $1.74 million to $(1.19) million for the six months ended June 30, 2021 compared to $0.55 million for the six months ended June 30, 2020. The decrease was primarily due to the forgiveness of the PPP loans during the second quarter of 2021, which had reduced our net loss, a decline in turbine leasing revenue, and an increase in costs due to the restoration of cost reduction measures that were implemented as a result of the COVID-19 pandemic.

Comparison of Non-GAAP Financial Measures

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

We believe that our presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure

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most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income or loss presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss for each of the periods indicated.

​	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
Net Loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Depreciation and amortization	​	​	7,073	​	​	6,194	​	​	3,665	​	​	3,436
Interest expense, net	​	​	1,114	​	​	992	​	​	539	​	​	665
Income tax provision	​	​	31	​	​	7	​	​	178	​	​	4
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
One-time facility relocation expenses(1)	​	​	25	​	​	185	​	​	301	​	​	0
Equity-based compensation	​	​	70	​	​	70	​	​	36	​	​	35
PPP loan forgiveness	​	​	0	​	​	0	​	​	(2,378)	​	​	0
Restructuring charge	​	​	0	​	​	0	​	​	101	​	​	0
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

(1)

Represents non-recurring out of pocket expenses incurred in moving our heat recovery-focused facility.

Some of the limitations of EBITDA and Adjusted EBITDA include (i) these non-GAAP measures do not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and EBITDA and Adjusted EBITDA do not reflect these capital expenditures. Our non-GAAP measures may not be comparable to similarly titled measures of other companies because they may not calculate them in the same manner as we calculate, the measure, limiting its usefulness as a comparative measure. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. EBITDA and Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted our non-GAAP measures alongside other financial performance measures, including our net loss and other GAAP results.

Liquidity and Capital Resources

Overview

Since the acquisition of the turbine product and manufacturing operations from Ingersoll Rand in December of 2010 and the subsequent inception of the leasing operations in 2012, our business has been funded by a combination of cash from the FPS Noteholders via the Notes (whereby FPS contributed the cash received from the Notes to FEI and FLPS as capital), the Credit Facility, the PPP loans and, effective August 16, 2021, proceeds from the SAFE Transaction (which were also contributed by FPS to FEI and FLPS as capital). The primary uses of this capital have been to invest in the growth of our turbine leasing fleet, support manufacturing operations and engineering efforts including turbine and heat exchanger product development.

As further described below, since the equity contribution of FLPS and FEI to the newly formed parent FPS on January 1, 2016, the Notes were funded over the years 2016, 2017 and 2018 to support the expansion of the leasing business into new geographies and manufacturing operations. As of June 30, 2021, the

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amount outstanding under the Notes payable by FPS totaled approximately $25.51 million, including $19.79 million of principal and $5.72 million of accrued interest. In 2019, with what we believed to be an appropriate level of scale of our turbine lease fleet, we closed on the Credit Facility to support the continued growth of the fleet. As of June 30, 2021, total borrowings under the Credit Facility totaled approximately $22.96 million. See “Risk Factors – Risk Factors Relating to our Business and Industry – Our substantial indebtedness could limit our opportunities for growth.”

A key underpinning of our business plan has been to scale the fleet of our long-lived turbine assets to the level where the associated revenue streams of leasing and service fully cover our operating activities. Furthermore, depending on market conditions we can flexibly scale up or down our manufacturing operations, including newbuild leasing turbines, and not have any direct impact to our ability to generate revenue off our existing installed base. We successfully executed this strategy during the year ended December 31, 2020, realizing an increase year-over-year in revenue attributed to our installed base – namely the combination of revenue from turbine leasing fleet and turbine service on sold product – while significantly reducing operating costs, primarily in our production operations, and significantly reducing outgoing cash flow expenditures on new turbine inventory amid the challenging macroeconomic environment. We have maintained this modest level of turbine production in 2021, and for the remainder of fiscal year 2021, our production plans are set at a fixed level of fulfilling executed orders for third party customers in our target C&I markets of New York City, Southern California and South Korea. Absent a surge in top-line leasing demand or new sources of funding, we currently anticipate returning to a moderately increased level of newbuild turbine production for the full fiscal year 2022 representing a combination of (i) additional third party orders from C&I customers and (ii) additional turbines into our own lease fleet, which we expect to execute with our current sources of liquidity.

As described in “Use of Proceeds”, we intend to invest newly raised equity capital into the further growth of our turbine leasing fleet, development new turbine products that enlarges our applicable market reach and expand our heat exchanger offering.

As of June 30, 2021, total available liquidity was $4.06 million, including $0.67 million of balance sheet cash and $3.39 million of available commitments under the Credit Facility and the Notes.

Cash Flows

The following table sets forth a summary of our cash flows for the years ended December 31, 2020 and 2019 and the six months ended June 30, 2021 and 2020:

​	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
Net cash provided by (used in) operating activities	​	$	(6,275)	​	$	(14,848)	​	$	2,318	​	$	(5,547)
Net cash (used in) investing activities	​	​	(1,077)	​	​	(3,231)	​	​	(501)	​	​	(411)
Net cash provided by (used in) financing activities	​	​	6,889	​	​	18,823	​	​	(2,805)	​	​	7,390
Foreign currency translation adjustments	​	​	165	​	​	81	​	​	(47)	​	​	2
Net increase (decrease) in cash	​	$	(298)	​	$	825	​	$	(1,035)	​	$	1,434

Operating Activities

For the year ended December 31, 2020, $6.28 million of cash was used in operating activities, compared to $14.85 million for the year ended December 31, 2019, a net cash flow increase of $8.57 million. The increase in operating cash flow was primarily attributable to the 35% decrease in net loss to $(7.10) million for the year ended December 31, 2020 compared to $(10.91) million for the year ended December 31, 2019, along with a reduction in inventory spending for newbuild leasing fleet turbines during the year ended December 31, 2020 based on uncertain demand for additional turbine fleet capacity as well as the de-expedition of our production operations.

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For the six months ended June 30, 2021, net cash provided by (used in) operating activities was $2.32 million, compared to $(5.55) million for the six months ended June 30, 2020, a net cash flow increase of $7.87 million. The increase in operating cash flow was primarily attributable to favorable changes in deferred revenue and inventories in addition to a significantly lower volume of inventory purchases as a result of our plant relocation project during the first half of 2021.

Investing Activities

For the year ended December 31, 2020, $1.08 million of cash was used in investing activities, compared to $3.23 million for the year ended December 31, 2019, a net cash flow increase of $2.15 million. The increase in investing cash flow was primarily attributable to a reduction in discretionary purchases of new property and equipment.

For the six months ended June 30, 2021, $0.50 million of cash was used in investing activities, compared to $0.41 million for the six months ended June 30, 2020, a net cash flow decrease of $0.09 million. The decrease in investing cash flow was primarily attributable to a slight increase in discretionary purchases of new property and equipment.

Financing Activities

For the year ended December 31, 2020, cash provided by financing activities was $6.89 million, compared to $18.82 million for the year ended December 31, 2019, a net cash flow decrease of $11.93 million. The decrease in financing cash flow was primarily attributable to a significant reduction in credit line advances in fiscal year 2020 in response to the greater economic uncertainty brought on by the COVID-19 pandemic.

For the six months ended June 30, 2021, cash provided by (used in) financing activities was $(2.81) million, compared to $7.40 million for the six months ended June 30, 2020, a net cash flow decrease of $10.20 million. The decrease in financing cash flow was primarily attributable to $2.35 million in proceeds from the PPP loans received in the first half of 2020 and to paydowns made in the first half of 2021 on our Credit Facility.

Foreign Currency Translation Adjustments

For the year ended December 31, 2020, the effects of foreign currency translation adjustments to cash totaled $0.17 million, compared to $0.08 million for the year ended December 31, 2019, a net cash flow increase of $0.09 million.

For the six months ended June 30, 2021, the effects of foreign currency translation adjustments to cash totaled $(0.05) million, compared to $0.00 million for the six months ended June 30, 2020, a net cash flow decrease of $0.05 million.

Senior Secured Credit Facility

On February 8, 2019, FLPS entered into the Credit Facility with TCB, which was subsequently amended and restated on December 22, 2020 to add FLPS Canada as a borrower. The initial commitment amount is for $30.00 million and availability under the Credit Facility is based on a borrowing base calculation of eligible assets and other conditions. The Credit Facility is backed by a first priority lien of substantially all of the assets of FLPS, and the maturity date of the Credit Facility is February 8, 2024. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans.

The Borrowers are subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The Borrowers are in compliance with the Credit Facility’s financial covenants as of June 30, 2021.

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The Borrowers are also subject to certain negative covenants, including restrictions on their ability to incur additional indebtedness, create liens, pay dividends, make certain investments or material changes in their business, engage in transactions with affiliates, conduct asset sales or otherwise dispose of the Borrowers’ assets. In anticipation of the Contribution Transaction and this offering, we are in the process of negotiating a modification to the Credit Facility. As part of this modification, we expect that FGS will become an additional guarantor with respect to the Credit Facility subject to the same obligations and restrictions applicable to FPS thereunder, but that FGS will not otherwise be subject to the covenants and restrictions applicable to the Borrowers.

Between January 2020 and June 2021, FLPS entered into a series of amendments to the Credit Facility whereby (i) the borrowing base was amended to include certain non-turbine field equipment, (ii) certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified, (iii) FLPS ULC was added as an additional borrower under the Credit Facility, (iv) annualized EBITDA used to calculate the quarterly financial covenants was increased, (v) the availability under the revolving credit facility was reduced by $3.50 million, and (vi) the due date of the FLPS financial statements to be delivered to TCB was modified.

As of June 30, 2021, borrowings outstanding under the Credit Facility totaled approximately $22.96 million and availability based on the borrowing base totaled approximately $2.94 million. This amount includes $10.00 million of permitted distributions funded in 2019 that was used to redeem a portion of the outstanding Notes. Additional uses of capital for borrowings under the Credit Facility have been for working capital purposes, including the investment into the production of new-build turbine leasing units.

Paycheck Protection Program Loans

On April 14, 2020, FLPS entered into a Promissory Note with TCB pursuant to which TCB made a loan to FLPS under the PPP offered by the SBA in a principal amount of approximately $0.99 million pursuant to the CARES Act. On May 7, 2021, this loan was forgiven by the SBA. On May 6, 2020, FEES entered into a Promissory Note with BofA as the lender pursuant to which BofA made a loan to FEES under the PPP offered by the SBA in a principal amount of approximately $1.36 million pursuant to the CARES Act. On June 17, 2021, this loan was forgiven by the SBA.

The proceeds from the PPP loans were to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits and paid leaves, rent, utilities and interest on certain other outstanding debt.

Notes at FlexEnergy Power Solutions, LLC

Between December 2015 and July 2021, FPS issued the Notes to the FPS Noteholders who together, along with their affiliates, account for a majority of FPS’ voting securities and representation of its board of directors. The cash received from the Notes was contributed as capital to FEI and FLPS. The Notes have a maturity date of October 31, 2022.

Under the terms of the Credit Facility, FPS funded permitted payments in fiscal year 2019 of $10.00 million with all proceeds used to redeem a portion of the Notes totaling approximately $7.76 million of principal and $2.24 million of accrued interest. A portion of this $10.00 million was re-contributed when FPS issued an additional $7.80 million and $0.80 million in Notes in years 2019 and 2020, respectively for working capital purposes. FPS issued an additional $1.50 million in Notes during the six months ended 2021 for working capital purposes.

SAFE Transaction

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment, or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a

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result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds of the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

Series B and B-1 Preferred Equity at FlexEnergy Power Solutions, LLC

Under the terms of FPS’ Series B Preferred Unit issuance, FPS has agreed to certain covenants that restrict FPS’ and our ability to materially change our business and enter into certain enumerated financial transactions. Under the terms governing the Series B Units, FPS shall not permit to exist any indebtedness for borrowed money that is senior in right of payment to the Series B Preferred Units other than senior indebtedness (as defined therein) in an amount not to exceed $50.00 million. As defined therein, senior indebtedness does not include any amounts outstanding under our PPP loans, but does include the aggregate amount outstanding under the Notes. As of June 30, 2021, the amount of senior indebtedness as defined therein totaled $48.50 million, thus limiting the amount of availability to $1.50 million of additional senior indebtedness. The boards of FPS and FGS view this covenant as limiting our ability to raise additional indebtedness that is senior in priority to the Series B Preferred Units.

Critical Accounting Estimates

While our significant accounting policies are described in more detail in the notes to our combined consolidated financial statements appearing elsewhere in this prospectus, we believe the following accounting policies used in the preparation of our combined consolidated financial statements require the most significant judgments and estimates.

Revenue Recognition

Our revenue consists of lease revenue and the sales of products, parts, accessories and service. Lease revenue consists mainly of lease agreements which provide for monthly lease payments. These lease agreements are classified as operating-type leases and the revenue generated from the monthly lease payments is recognized over the rental term.

All our revenue relates to contracts with customers. Our accounting contracts are from purchase orders or purchase orders combined with purchase agreements. Our revenue is recognized on a point-in-time basis and over time. For the sale of new turbines and heat exchanger products, we satisfy our performance obligations based on the contractual terms with our customers. For our leasing, commissioning and maintenance services, we have performance obligations that are satisfied over time. See Note 4 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus for additional information related to revenue policies.

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BUSINESS

Our Company

We are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower our customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. We do this through two different types of highly engineered products. First, our Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the majority of our operations and revenues. Flex Turbines provide our customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. Second, we offer heat recovery products that are integral to promising emerging power technologies, such as high efficiency fuel cells for power generation that can be fueled by hydrogen or natural gas. Our Flex Heat Recovery products are in the early stages of commercialization, and presently constitute a small but increasingly growing and important portion of our operations and revenues as the future of energy generation emerges.

Our focus is on providing proven technology and support that enables reliable, efficient and economic green energy solutions. Our business consists of leasing and service of our Flex Turbines supported by a vertically integrated OEM with some direct-sales of manufactured products. As of June 30, 2021, we have amassed over 8.4 million hours of field runtime on our turbine fleet with over 122 MW shipped, of which 49 MW make up our lease fleet. This balance of core competencies in turbine power and heat recovery with current cash flow generation helps fund growth of our technology suite and expansion of applications into new and existing markets. The primary applications of our technology include: converting waste gas to useful energy, improving traditional processes and enabling emerging clean technology. We are actively expanding into other key markets for which our products are well suited, and we are confident in generating opportunities in additional geographic markets and product extensions into different applications.

We serve a diverse range of customers in the global O&G, transportation, power, and C&I end markets. Our primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

On December 31, 2010, as part of a spin-out transaction, we purchased from Dresser-Rand (now Ingersoll Rand) certain assets in order to finish the development of a 4th generation 333 kW turbine and to commercialize the turbine offering. From 1996 through 2010, Ingersoll Rand invested over $250 million to develop a downsized replica of its 2 MW KG2 turbine (first launched as a 250 kW model) as a way to penetrate the small-scale industrial remote power market.

In 2013, we initiated a business transformation in response to the O&G industry’s downturn by creating FLPS, and transitioned from an original equipment manufacturer (“OEM”) sales model to an EaaS model. O&G production requires substantial amounts of electrical power to run subsurface pumps and other equipment. Much of the recent development of O&G in the U.S. is remote and not served by the country’s electrical grid. Flex Turbines are a well-suited source of the needed power for O&G production because they operate more than 99% of the time in extreme conditions, require little maintenance and can run on untreated field gas, which is otherwise typically flared as waste. While customers valued the enhanced uptime and environmental benefits of using waste gas instead of flaring it, the consequences of the O&G industry downturn made companies more hesitant to use scarce capital resources to purchase electrical generating equipment like Flex Turbines. Instead, energy companies were resorting to renting diesel generators for power production despite the resulting added pollution and lower operating time.

This led us to determine that our customers would more easily enjoy the benefits of our product offering if they could access clean electricity-on-demand as a service. With FLPS’ leasing options, customers can lease capacity or purchase the amount of power they actually used, with no up-front capital expenditure. Through this EaaS program, we deploy Flex Turbines for electricity-on-demand, which in the case of our O&G customers is powered exclusively by the available on-site field gas, which would otherwise be flared. The

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cost of our lease service option remains less than most customers typically pay for diesel fuel alone (not to mention the cost of renting the generators).

For the six months ended June 30, 2021, our two largest customers generated 18% and 17%, respectively of total revenue. In 2020, our three largest customers generated 23%, 14% and 10%, respectively, of our total revenue, and in 2019, our largest customer generated approximately 28% of our total revenue. Two customers accounted for 33% and 15%, respectively, of our accounts receivable balance as June 30, 2021. Two customers accounted for 15% and 14%, respectively, of our accounts receivable balance as of December 31, 2020. One customer accounted for 32% of our accounts receivable balance as of December 31, 2019. Accordingly, we are subject to customer concentration risk in the form of non-renewal or termination of lease contracts. For additional information, see “Risk Factors – Risk Factors Relating to our Business and Industry – If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration.”

Since the inception of FLPS, leasing has provided customers with higher uptimes in production and eliminated more than 985,000 tons of CO2. This turnkey, clean power solution makes it easier for customers to adopt our clean energy solution. We are adaptive to individual site issues and differences, supplying modular accessories such as fuel skids, switchgears, filters and other non-turbine apparatuses to projects based on their needs. The EaaS solution allows for broader exposure to markets that need to lower electricity costs, increase efficiency, decrease pollution and access on-demand, 24/7 base load power generation.

Each of our gas turbines consists primarily of a turbine engine, gear box, combustor and recuperator (collectively, a “Flex Turbine”). We refer to all of our deployable Flex Turbines together as our “turbine fleet.” Our 162 unit, 48.85 MW turbine fleet accelerates an independence from the energy grid in 10 MW and under applications including the following selling points:

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Flexible:   Wide fuel tolerance using natural gases, oilfield flare gases, biogas, etc.

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Rugged and Resilient:   Generally runs 24/7 in harsh environments and weather

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Sustainable:   California Air Resources Board certified clean emission standards

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Scalable:   Modularity and mobility to match changing power needs

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Adaptable:   Standalone microgrids and integration with storage and renewables

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Reliable:   Proven performance of high up-time, low maintenance long-lived assets (high uptime, 99%+)

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Cogeneration:   CHP increases efficiency and savings, meeting California’s strict Air Quality Management District standards

Competitive Environmental Advantages vs. Industry Standard/Alternatives.   Flex Turbine power generation provides scalable, modular, on-site power to both off-grid environments and grid dependent environments. Diesel generators remain the industry standard in most remote, off-grid applications that are often home to extreme conditions (weather, temperature, etc.). Diesel, however, is more carbon intensive relative to natural gas, emitting on average 161 pounds of CO2 per million BTU (“mmbtu”) in comparison to 117 pounds of CO2 per mmbtu, respectively. Not only can natural gas turbines reduce emissions by approximately 30%, but because of its fuel flexibility, many times the Flex Turbine eliminates 100% of the diesel pollution by converting the gas that would otherwise have been flared into power.

Customer Service and Customization.   As an organization we are highly customer-centric. We have a service organization in place that responds 24/7 to support our customers. Our engineers act as consultants to our customers to meet their needs. We size our solution to each job by linking our Flex Turbines together in custom site configurations for each customer application. Our sense of urgency, especially in the leasing business, enables us to maintain very high uptimes. Our Flex Heat Recovery solutions do not try to force a customer’s application to conform to our design. Rather, our design is easily fitted to a customer’s specific

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application. We are a well-equipped manufacturing organization. Because we do not out-source manufacturing, we can make modifications to meet customer needs and produce service parts more quickly.

Flex Heat Recovery Solutions.   The technologies developed in our Flex Heat Recovery business supply critical components to the Flex Turbine. Namely, the Flex Recuperator is a proprietary high temperature and high-pressure heat exchanger that recovers waste heat in industrial processes into the energy cycle, thus significantly improving operating efficiency and reducing carbon emissions. Because our heat recovery technology was so effective in the Flex Turbine, we began investigating other markets in which the technology could be used to harvest wasted heat energy in high pressure and high temperature applications. Flex Heat Recovery products have been used in a broad array of applications, from the extension of the range of turbine powered destroyers in the British Navy, and in large scale fuel cell applications for power generation, to being prototyped into key components in the oncoming hydrogen economy, such as solid oxide fuel cells. Flex Heat Recovery products that we have developed include:

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Plate-Fin: Modular, counter flow (high efficiency), low pressure drop, high flow, high temperature designs;

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Fin-Tube: High efficiency counter flow, compact (1/4 size of a typical Shell & Tube), high pressure, 100% welded construction, high temperature, low pressure drop designs; and

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Chevron: Highly configurable and scalable, low pressure drop, high temperature, primary surface design is material efficient (no expensive fin) designs.

Competitive Advantage of Flex Heat Recovery Solutions Technology

Power Generation – Improve efficiency and reduce CO2 emissions

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Various gas turbines – Up to 28-50% increase in fuel efficiency and lower emissions

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Nuclear power – Air to air heat exchangers to enhance reactor safety

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Biogas to energy projects – Enables thermal storage and power generation from low grade biogases

Fuel Cells – Improve efficiency and reduce CO2 emissions

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Molten carbonate fuel cells – Up to 30% increase in fuel efficiency and reduced emissions

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Solid oxide fuel cells – Up to 30% increase in fuel efficiency and reduced emissions

Energy Efficiency Projects

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Air preheating from waste heat energy for industrial processes – Reduces fuel and energy costs by recycling waste heat

Emissions Reduction Projects

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Exhaust heat reduction for treatment – Reduces cost of emissions control

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Carbon capture – Enables emissions reduction technologies that generate a return on investment

Automotive

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Combustion-based range extender for electric vehicles – Up to 28-50% increase in fuel efficiency and lower emissions

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Split cycle reciprocating engines – Up to 20% increase in fuel efficiency of diesel engines and corresponding emissions reduction

Our Industry

Natural gas is a compelling fuel for power production, as global economies seek cleaner alternatives to coal-fired and oil-fired power plants to fill the gap in demand not currently met by renewable energy sources.

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In 2019, approximately 4.0 billion MWh were generated from utility-scale facilities, comprising 38% natural gas, 23% coal, 20% nuclear and 17% renewables.

The production of CO2 has been shown to be a contributing factor to global climate change. However, while the current generation of our gas turbines running on natural gas does produce some CO2, the amount produced by Flex Turbines is only a fraction of that produced by other forms of U.S. combustion power generation. Regardless, we may occasionally be negatively impacted by CO2-related changes in applicable laws, regulations, ordinances, rules, or the requirements of the incentive programs on which we and our customers currently rely.

Today approximately 70% of the world’s electricity is consumed by 10 countries and 850 million people. Approximately 11% of the world’s population currently lack access to electricity, according to the International Energy Agency’s 2019 World Energy Outlook. According to the IEA, as economic development worldwide spurs demand for electricity, approximately 10.0 million MWh of incremental power is expected to be needed by 2040. Further, we believe that many countries around the world, keenly focused on economics as well as the environment, will increasingly look to natural gas to displace environmentally dirtier fuels such as heavy fuel oil (HFO), automotive diesel oil (ADO), and coal that are used to generate power, particularly if natural gas is cheaper than these fuels.

The same can be said for the U.S. as its consumers continue to rely heavily on the grid for access to electricity, with the assumption that a given demand region is within close proximity to utility facilities. Furthermore, the reliability of electric utilities according to EIA’s System Average Interruption Duration Index (SAIDI), or the total time an average customer experiences non-momentary interruptions lasting longer than five minutes, has ranged between 3 and 8 hours per customer since 2013. In 2018, U.S. electricity customers averaged power outages of 5.8 hours per customer.

We believe the power industry’s future will be shaped by the mega-trends that favor the development of highly reliable, low pollution, distributed power systems and alternative energy sources that should drive demand for highly efficient Flex Turbines, Flex Heat Recovery solutions and other components of our technology suite. We believe our product offerings will be further instrumental in mega-trends such as:

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Continued growth in electricity demand, including for transportation

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Decarbonization efforts to mitigate climate change peril, including carbon taxes

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Natural gas as replacement for coal and oil-fired equipment and processes

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Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

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Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

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A drive for energy efficiency causing every industry to look for ways to eliminate wasted energy consumption

Primary Applications

Converting Waste Gas to Useful Energy

The Flex Turbine can produce reliable, distributed electricity by running on waste fuels such as methane from landfills and CO2 heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 3,000 BTUs.

Improving Traditional Processes

Flex Heat Recovery solutions are most effective in high temperature, high pressure environments. These systems have a smaller footprint due to their design efficiency, making them ideal for retrofitting

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existing facilities. They are currently being evaluated by potential customers for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects.

Enabling Clean Technology

We see efficient use of thermal energy as the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation, traditional fuel cell technology for power, green hydrogen production, and certain heat as energy storage applications, like molten salt. We have sold Flex Heat Recovery production or prototype systems for each of these energy alternatives. In addition, components of the Flex Turbine have been integrated with renewable energy projects that provide heat from external sources to power the turbine and produce energy.

Our Market Opportunity

We believe that the world is looking for cleaner, reliable electrical power alternatives both to replace existing sources and to provide electrical power where electricity is not available or reliable. Additionally, we believe the adoption of new emerging technologies and fuels will expand our opportunities to grow.

In 2019, approximately 4.0 billion MWh were generated from utility-scale facilities, comprising 38% natural gas, 23% coal, 20% nuclear and 17% renewables. Natural gas is one of the most abundant and available sources of clean energy as market trends such as the electrification of vehicles and the phasing out of coal-fired plants becomes more commonplace.

Power generation from fossil fuels and the associated release of CO2 as a byproduct has been shown to be a contributing factor to global climate change. The world continues to rely on technology advances combined with best practices to reduce greenhouse gas emissions.

The following trends have increased onsite, lesser emissions power demand from customers in a growing number of markets, and we expect them to continue to do so:

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Continued growth in electricity demand, including for transportation

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Decarbonization efforts to mitigate climate change peril, including carbon taxes

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Natural gas as replacement for coal and oil-fired equipment and processes

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Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

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Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

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A drive for energy efficiency causing many industries to look for ways to eliminate wasted energy consumption

We believe that these trends will expand the market opportunity for Flex Turbine solutions and Flex Heat Recovery systems.

Our Growth Strategy

Our chief objective is to be a primary provider of clean, affordable and reliable energy. In order to accomplish this, we intend to:

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Accelerate growth in underpenetrated markets and expand our geographic footprint.   We believe the total market opportunity for modular, onsite power remains significantly under-penetrated in the U.S. The flexibility and reach of our leasing model, coupled with our scalable turbine packages, allow us to increase market penetration and enter new markets quickly and efficiently. We plan to strengthen our existing relationships and identify new sub-sectors to accelerate our

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growth. We will seek to enter new markets and geographies over time, both in the U.S. and internationally, where climate, demand for clean energy and regulatory policies position turbine power generation as an economically compelling alternative to centralized electric utilities.

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Continued deployment of our turbine fleet and heat recovery solutions to our customers.    We believe that integrated energy systems enhance the reliability, resiliency and predictability of turbine-generated electricity in certain markets, increasing the overall value proposition to customers. We expect demand for the Flex Turbine with on-board hot water heat exchanger, our combined heat and power (“CHP”) solution, to increase over time. We also expect continued requests by our customers to integrate our energy systems with existing energy storage (e.g. photovoltaic battery cells) to provide additional resiliency.

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Broaden and enhance service offerings.   We provide ongoing monitoring and service as a standard component of our leasing agreements. We believe there is significant market demand for long-term protection plans for customers who have chosen to finance or purchase systems rather than lease them, and we will strive to capture a significant share of this market. We plan to expand our green energy product and service offerings to provide further cost savings to our customers and optimize the performance of existing traditional processes.

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Increase Inventory to Shorten Delivery Times.   Flex Turbines currently are built upon order with a six or more month lead time from order to completion. By investing in additional inventory levels and building certain sub-assemblies in advance, we believe we can substantially shorten the time to delivery and thereby improve our appeal to customers searching for prompt energy solutions.

Competition

Our Flex Turbines broadly compete with existing technologies, including diesel generators, used in the generation of distributed power. Some of our competitors who produce distributed generation technology and products are large, well-capitalized companies with a global presence, significant brand recognition, economies of scale, and substantial product development, distribution, and marketing resources.

In remote locations, our Flex Turbines compete primarily with traditional internal combustion engine generators, such as those manufactured by Caterpillar, GE-Jenbacher, and Cummins, and provided by these companies as well as others such as Gravity, Moser, United Rentals, Aggreko and Baseline. These engine generators are a well-established technology and are often used as a lower-cost remote power or co-generation solution. These engines, however, have disadvantages that may outweigh the benefits, including relatively high emissions, high maintenance costs, higher levels of low frequency noise emissions, and require significant downtime for routine maintenance. In contrast, the Flex Turbine operating on natural gas, either pipeline or well gas, produces low levels of emissions, requires very limited routine maintenance, is sound-attenuated to 62 dba and has demonstrated a 99% uptime.

Where available, the cost of purchasing electricity from the electric utility grid is usually lower than acquiring the same amount of energy through a distributed generation technology. Utilities may charge customers using a distributed generation technology additional fees to connect to their grids, which distributed generation customers typically do when grid access is available. That said, where grid electricity is very expensive or where the utility grid is occasionally unreliable (particularly in remote or extreme environments), a distributed generation solution may be a viable and economic solution for many customers. In addition to the engine generator providers above, other turbine providers such as Capstone, OPRA and Siemens also provide solutions. Reasons why our Flex Turbine may be chosen include low emissions, a wide range of fuel acceptance, high reliability, low maintenance, and owned service response infrastructure. Additionally, we can provide additional economic value to our customers who repurpose or reuse wasted gas or heat for heating, cooling, dehumidification, and other uses with a heat recovery solution added to the Flex Turbine.

In the future, our Flex Turbines will likely compete with other distributed generation technologies, including solar-powered and wind powered microgrids, as well as emerging technologies like fuel cells. Solar and wind generation face the challenge of unreliable weather conditions and may require the use of

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storage technologies in order to mitigate the intermittent power generation. However, storage technology may not be sufficient to completely supplement the inconsistent power generated. Fuels cells and other emerging energy alternatives face the challenges of cost, performance and durability. Our Flex Turbine produces constant low emission electricity that is available 24/7 and has demonstrated 99% uptime performance.

We believe Flex Turbine competitive advantages include:

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Clean – low emissions, CARB approved

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Reliable – low maintenance (one 8-hour scheduled maintenance per year)

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Wide Fuel Tolerance – pipeline to well gas, propane, high H2S gas

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High Uptime – 99% uptime proven over 8 million operating hours

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Scalable – can operate individually or in parallel

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Valuable – high uptime maximizes customer revenue

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Zero Capex Leasing Solution – leasing model allows customers to limit capital expenditures

Flex Heat Recovery products compete against the products of other companies providing heat exchangers to the high temperature, high pressure heat transfer industry, including Alfa Laval, Mezzo Technologies, Munters and Sumitomo. Traditional heat exchanger companies fall into two broad categories: those that supply standard products and designs whereby customers fit a standard exchanger to their application and those that engineer specific one-off exchangers for specific customer applications. The standard product approach provides low costs with design inefficiencies such as size, shape and the custom approach provides optimal design at high cost. We have developed proprietary Flex Heat Recovery products that address both cost and configuration. Our solution provides a proprietary standard and scalable approach that also provides a customized solution for each customer’s application. This approach is especially important for developing technologies in the emerging hydrogen economy. These technologies include solid oxide fuel cells (SOFC) and molten carbonate fuel cells (MCFC). Existing and alternative energy technologies also benefit from custom heat exchanger solutions to drive peak efficiency. These applications include: internal combustion engines, large and small gas turbine recuperation, combine heat and power projects, and emissions reduction equipment. In each application, customers typically value compactness, thermal efficiency, and custom designs over price and lead-time.

Flex Heat Recovery solutions competitive advantages include:

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Very high temperature, high pressure capability

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Low pressure drop

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Highly efficient design

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Customizable to meet customer needs

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Scalable

Employees

As of July 31, 2021, we had 99 full-time employees. Of those, 8 employees are engaged in commercial functions (including sales and marketing), 60 employees are engaged in customer service, and 14 employees are engaged in engineering functions (including field support, production support and research and development). None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity

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incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards. For more information regarding our equity incentive plans, see “Executive Compensation – Equity Compensation.”

Intellectual Property

We believe that neither we nor our competitors can achieve a significant proprietary position on the basic technologies currently used in turbine systems. As such, we generally rely on trade secret protection with respect to our processes or software, such as our manufacturing processes, specific software applications related to our O&G customers, and with respect to core technology in our heat exchanger business. We also believe, however, that our technology, components and manufacturing processes are difficult to reverse engineer. As of June 30, 2021, we had nine issued U.S. patents (expiring generally between 2021 and 2037), 15 patents issued in other countries (expiring generally between 2024 and 2037), and two patent applications in process, with one patent application pending in the U.S. and one patent application pending internationally. As discussed above, Ingersoll Rand invested over $250 million from 1996 through 2010 on certain technology development and this investment has contributed to developing our intellectual property portfolio and trade secrets, in particular regarding our software applications related to our O&G customers, among other things. Our issued patents and pending patent applications generally relate to combustor, recuperator, core engine, heat exchanger, and gearbox technologies.

In general, our employees are party to agreements providing that all inventions, whether patented or not, made or conceived while being our employee, which are related to or result from work or research that we perform, will remain our sole and exclusive property. In addition, we also rely on contractual protections with our customers, suppliers, and distributors, in addition to our security measures, to protect our trade secrets and know-how.

We made the strategic decision to focus our patent portfolio on those patents that we believe will be beneficial to our business and, as a result, have ceased using certain patents that we believe will have no or limited use. Please see section captioned “Risk Factors – Risk Factors Relating to our Business and Industry – Our failure to adequately protect our intellectual property rights could impair our ability to compete effectively or defend ourselves from litigation, which could harm our business, financial condition, and results of operations” for further discussion regarding our intellectual property.

Engineering

Because the clean energy technology industry is characterized by its early state of adoption, our ability to compete successfully is heavily dependent upon our ability to ensure a continual and timely flow of competitive products, services, and technologies to the marketplace. We continue to engineer and develop new products and technologies and to enhance existing products in the areas of cost, size, weight, and in supporting service solutions in order to drive commercialization.

Facilities

We recently completed the relocation of our manufacturing and office space from a single facility in Portsmouth, New Hampshire where approximately 42 of our employees were located. We relocated our office space to our new corporate headquarters at 112 Corporate Drive, Portsmouth, New Hampshire, and our manufacturing capabilities have been relocated to our facility located in Dover, New Hampshire.

We also lease office space and service facilities in various locations described below. These facilities together comprise approximately 96,010 square feet of space. On December 23, 2020, we signed a new lease for 5,800 square feet of space for our new Portsmouth, New Hampshire corporate headquarters. The lease term begins in February 2021 and expires in June 2024. Our current lease for our Dover facility was entered into in January 2019 and expires in June 2027. In addition to our corporate headquarters, we lease office space located in Greenwood Village, Colorado. Our current lease for our Greenwood Village facility was entered into in May 2018 and expires in September 2023. We also have service facilities located in (i) Odessa, Texas; (ii) Alexander, North Dakota; and (iii) Grand Prairie, Alberta, Canada. Our current lease

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for our Odessa facility was entered into in August 2019 and expires in August 2024. Our current lease for our Alexander facility was entered into in May 2016 and is currently on a month to month basis. Our current lease for our Grand Prairie facility was entered into in January 2016 and expires in December 2021. We believe our facilities are adequate to support our business for at least the next twelve months.

Legal Proceedings

From time to time, we are involved in legal proceedings or subject to claims arising in the ordinary course of our business. Although the results of legal proceedings and claims cannot be predicted with certainty, we are not currently party to any legal proceedings the outcome of which, in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. In a situation where the outcome of a legal proceeding would be adverse to our interests, we anticipate that most payments we may be required to make in connection therewith would be adequately covered by our existing insurance policies.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information about our executive officers and directors, as of September   , 2021:

Name	Age	Position(s)
Executive Officers	​	​
Mark Schnepel	46	Chief Executive Officer
Wes Kimmel	38	Chief Financial Officer
Doug Baltzer	52	Chief Commercial Officer
Non-Employee Directors	​	​
Thomas Denison	60	Director
Patrick Connelly	45	Director
George Walker	64	Director

Executive Officers

Mark Schnepel has been the President of FEES since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Schnepel will assume the role of President and Chief Executive Officer of FGS. He brings more than 20 years of manufacturing and development experience in the turbo machinery industry. He first joined the Ingersoll Rand Energy Systems turbine business in 2000 and transitioned with us when we purchased that business in 2011. His responsibilities have included: product engineering, test engineering, lab operations, manufacturing operations, procurement, business development, and field service. Prior to Ingersoll-Rand and our company, Mr. Schnepel worked as a production engineer for the Tech-Ceram Corporation, a high-volume electronics package manufacturer. He is based in Portsmouth NH. Mr. Schnepel received a B.S. in Mechanical Engineering from Union College.

Doug Baltzer has been the President of FLPS since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Baltzer will assume the role of President and Chief Commercial Officer of FGS. He is responsible for our growth initiatives, business development and overall commercial management. Mr. Baltzer has over 27 years of experience in senior management positions. His roles have ranged from Regional Manager, National Director and President at companies including Northland Power Service, Aggreko, FEI and FLPS. Over the past 15 years, he has been involved in five start-up companies and has helped raise more than $75 million in venture capital to support each company’s growth goals. Mr. Baltzer received a B.S. in Business and Finance from Tabor College and an Executive M.B.A. from the University of Denver.

Wes Kimmel has been the Chief Financial Officer and Secretary of FEES since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Kimmel will assume the role of Chief Financial Officer, Treasurer and Secretary of FGS. Prior to joining us, he was Vice President of RNS Capital Partners, a private equity firm with a significant indirect equity stake in our company. While at RNS Capital Partners, Mr. Kimmel worked closely with our management on internal finance, fundraising, sales and marketing plans, and strategic initiatives. Prior to RNS Capital Partners, he was an associate at First Reserve Corporation, an energy-focused private equity firm, where he helped manage the firm’s investments in power generation and oilfield services. Prior to First Reserve Corporation, Mr. Kimmel worked in both the Mergers & Acquisitions group and Leveraged Finance group at Morgan Stanley. He graduated Phi Beta Kappa from Washington and Lee University with majors in Economics and American History.

Non-Employee Directors

George Walker is the Chairman of our board of directors and our lead independent director. From July 2014 until April 2020 he was the Chief Executive Officer of Cahill Services, LLC, a Houston-based

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provider of specialty rental services to customers in the O&G, refining, industrial, petrochemicals, utilities and related industries. Since March 2020, Mr. Walker has also served as the Chairman of the board of directors of Cahill Services, LLC. With more than 35 years of domestic and international expertise in the industrial service sector Mr. Walker is practiced in dealing with all aspects of commercial business development in both mature and developing markets. Mr. Walker retired from Aggreko LLC in July 2014 after 27 years, where he served as President of the North American region and Executive Director on the Main Board of Aggreko PLC. He had been a part of or led the acquisition of more than ten companies during his years at Aggreko. Mr. Walker received a Bachelor of Business Administration degree in Finance from the University of Texas.

Thomas Denison is a 30-year participant in the private equity energy business. He is currently and since 2010 has been the managing partner of RNS Capital Partners, a closely held, private equity firm with portfolio companies in technology, energy and service businesses. Prior to co-founding RNS Capital Partners, Mr. Denison served ten years as managing director and general counsel for First Reserve Corporation, an energy-focused private equity firm. Mr. Denison joined First Reserve Corporation after an 11-year career with Gibson, Dunn & Crutcher, LLP. He was a partner in the firm at the time of his departure. Mr. Denison holds a Bachelor of Science degree from the University of Denver in Business, and a Juris Doctorate from the University of Virginia School of Law.

Patrick Connelly is a Co-Managing Partner of Amberjack Capital Partners, a Houston based private equity firm that provides growth equity capital and strategic support to innovative companies serving the infrastructure, industrial and energy industries. Before joining Amberjack Capital Partners, Mr. Connelly invested in numerous oilfield service companies in the U.S. and Canada through his work as a Managing Director at SCF Partners, an energy focused private equity fund. Mr. Connelly’s career began as active duty infantry officer in the US Army, serving in leadership roles during multiple overseas assignments. Mr. Connelly received a Bachelor of Science degree from the U.S. Military Academy at West Point, a Master of Public Administration from Harvard’s Kennedy School of Government, and a Master of Business Administration from Harvard Business School.

Board Composition and Leadership Structure

Our board of directors is composed of three directors, all of whom are independent directors (other than for purposes of audit committee independence requirements). All of our independent directors are highly accomplished and experienced business leaders in their respective fields, who have demonstrated leadership in significant enterprises and are familiar with board processes. Each of our directors holds a one-year term of office until our next annual meeting of stockholders and serves until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal.

George Walker serves as our lead independent director. As lead independent director, George Walker presides over executive sessions of our independent directors, and perform such additional duties as our board of directors may otherwise determine and delegate. As a result, we believe that the lead independent director can help ensure the effective independent functioning of our board of directors in its oversight responsibilities.

Board Oversight of Risk

Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. The nominating and corporate governance committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly

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informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected the board of directors’ leadership structure.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, executive officers and employees that complies with the rules and regulations of Nasdaq. Upon the completion of this offering, a copy of the Code of Ethics will be available on our website at www.flexenergy.com and will be provided without charge upon request to us in writing at 112 Corporate Drive, Portsmouth, NH 03801. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Board Committees

The standing committees of our board of directors currently include an audit committee, a compensation committee, and a nominating and corporate governance committee. Each of the committees report to the board of directors as they deem appropriate and as the board of directors may request. The composition, duties and responsibilities of these committees are set forth below.

Audit Committee

Our audit committee consists of Messrs. Walker, Denison and Connelly. The board of directors has determined that Mr. Walker is independent under Nasdaq listing standards and Rule 10A-3(b)(1) under the Exchange Act. The chairperson of our audit committee is George Walker. The board of directors has determined that Patrick Connelly is an “audit committee financial expert” within the meaning of SEC regulations. Our board of directors has also determined that each member of the audit committee has the requisite financial expertise required under the applicable requirements of Nasdaq. In arriving at this determination, the board of directors has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

In accordance with Rule 10A-3(b)(1)(iv) under the Exchange Act, within 90 days from the effectiveness of the registration statement of which this prospectus is a part, the audit committee will consist of a majority of independent directors (for purposes of Rule 10A-3(b)(1)), and within one year from the effectiveness of the registration statement of which this prospectus is a part, the audit committee will consist solely of independent directors.

The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:

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selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

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helping to ensure the independence and performance of the independent registered public accounting firm;

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discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

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developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

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reviewing policies on risk assessment and risk management;

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reviewing related party transactions;

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•

obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and

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approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm.

Compensation Committee

The compensation committee consists of Messrs. Walker, Denison and Connelly. Our Board has determined each member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is George Walker. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of the compensation committee will include:

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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

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reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

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reviewing on an annual basis our executive compensation policies and plans;

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implementing and administering our incentive compensation equity-based remuneration plans;

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assisting management in complying with our proxy statement and annual report disclosure requirements;

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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

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if required, producing a report on executive compensation to be included in our annual proxy statement; and

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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Messrs. Walker, Denison and Connelly. Our board of directors has determined each member is independent under Nasdaq listing standards. The chairperson of our nominating and corporate governance committee is George Walker. Specific responsibilities of the compensation committee will include:

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making recommendations to our board of directors regarding candidates for directorships;

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making recommendations to our board of directors regarding the size and composition of our board of directors;

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overseeing our corporate governance policies and reporting; and

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making recommendations to our board of directors concerning governance matters.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, and paid to our principal executive officer and each of our named executive officers during fiscal years 2019 and 2020. These individuals are our named executive officers for 2019 and 2020:

Name and Principal Position	Fiscal Year		Salary(1) ($)		Bonus(2) ($)		Equity Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Mark Schnepel Chief Executive Officer	​	2020	​	253,005	​	55,000	​	—	​	—	​	—	​	308,005
	​	2019	​	262,948	​	30,000	​	—	​	—	​	—	​	292,948
Wes Kimmel Chief Financial Officer	​	2020	​	236,512	​	65,000	​	—	​	—	​	—	​	301,512
	​	2019	​	245,077	​	60,000	​	—	​	—	​	—	​	305,077
Doug Baltzer Chief Commercial Officer	​	2020	​	246,672	​	70,000	​	—	​	—	​	—	​	316,672
	​	2019	​	232,848	​	105,899	​	—	​	—	​	—	​	338,747

(1)

The amounts report for fiscal year 2020 represent salary actually paid during 2020. In direct response to the uncertainties arising from the COVID-19 pandemic on the Company’s operations, the base salaries for Mark Schnepel and Wes Kimmel were subject to temporary salary reductions during 2020. The base salaries that otherwise would have been payable to Mark Schnepel and Wes Kimmel were $262,141 and $245,082 respectively.

(2)

The amounts reported for fiscal year 2020 represent the discretionary bonus amounts earned and awarded to our named executive officers in 2020. Mark Schnepel received payment of $28,417 in 2020, while $26,583 was deferred and will be paid during 2021. Wes Kimmel received payment of $33,583 in 2020, while $31,417 was deferred and will be paid in 2021.

Equity Compensation

FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan

Our 2021 Incentive Award Plan (the “2021 Plan”) was adopted by our board of directors in                   2021 and approved by our stockholders in                   2021. The 2021 Plan allows the compensation committee to make equity-based incentive awards to our officers, employees, directors, and other key persons, including consultants.

Authorized Shares.   We have initially reserved             shares of our common stock for the issuance of awards under the 2021 Plan. This number will be subject to adjustment in the event of a stock split, stock dividend, or other change in our capitalization. The shares we issue under the 2021 Plan will be authorized but unissued shares or shares that we reacquire. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without the issuance of stock, expire, or are otherwise terminated, other than by exercise, under the 2021 Plan will be added back to the shares of common stock available for issuance under the 2021 Plan.

Non-Employee Director Limit.   Our 2021 Plan contains a limitation whereby the value of all awards under our 2021 Plan and all other cash compensation paid by us to (i) any non-employee director in any fiscal year may not exceed $350,000, and (ii) any non-employee chair of the board of directors, the Audit Committee, the Compensation Committee or the Nominating and Governance Committee in any fiscal year may not exceed $500,000.

Administration.   The 2021 Plan will be administered by our compensation committee. Our compensation committee will have full power to select, from among the individuals eligible for awards, the

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individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2021 Plan.

Eligibility.   Persons eligible to participate in the 2021 Plan will be those employees, non-employee directors and consultants, as selected from time to time by our compensation committee at its discretion.

Options.   The 2021 Plan permits the granting of both options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify. The option exercise price of each option will be determined by our compensation committee but may not be less than 100% of the fair market value of our common stock on the date of grant unless the option is granted as a substitute award in assumption of, or in substitution for, outstanding awards previously granted by an entity that we acquire. The term of each option will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each option may be exercised.

Stock Appreciation Rights.   Our compensation committee may award stock appreciation rights subject to conditions and restrictions it determines. Stock appreciation rights entitle the recipient to shares of common stock, or cash, equal to the value of the appreciation in our stock price over the exercise price. The exercise price may not be less than 100% of the fair market value of our common stock on the date of grant. The term of each stock appreciation right will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each stock appreciation right may be exercised.

Restricted Stock and Restricted Stock Units.   Our compensation committee may award restricted shares of common stock and restricted stock units to participants subject to conditions and restrictions it determines. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period.

Other Equity-Based Awards.   Our compensation committee may make other equity-based or equity-related awards not otherwise described by the terms of the 2021 Plan.

Dividend Equivalents.   A dividend equivalent is the right to receive payments in cash or in stock, based on dividends with respect to shares of stock. Dividend equivalents may be granted to participants in tandem with another award or as freestanding awards.

Change in Control.   The 2021 Plan provides that upon the effectiveness of a transaction that affects our common stock (including a “Change in Control,” as defined in the 2021 Plan, a recapitalization, stock split, reverse stock split, spin-off, reorganization, or similar transaction) or any unusual or infrequent event that affects us, an affiliate, or our financial statements or the financial statements of an affiliate, our compensation committee may, without limitation, provide (i) for the substitution or assumption of awards under the 2021 Plan, (ii) that options or stock appreciation rights that would not otherwise become exercisable prior to the Change in Control will be exercisable as to all common shares subject thereto and that any options or stock appreciation rights not exercised prior to the consummation of the Change in Control will terminate and be of no further force and effect as of the consummation of the Change in Control, and/or (iii) for the canceling any one or more outstanding awards and causing to be paid to the holders thereof, in cash, common stock, other securities or other property, or any combination thereof, the value of the awards, if any, as determined by our compensation committee, among other things.

Amendment.   Our board of directors may amend or discontinue the 2021 Plan and our compensation committee can amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose, but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2021 Plan will require the approval of our stockholders.

No awards may be granted under the 2021 Plan after the date that is ten years from the date of stockholder approval of the 2021 Plan. No awards under the 2021 Plan have been made as of the filing date of this registration statement.

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FlexEnergy, Inc. 2016 Target Incentive Plan

FEI adopted the 2016 Plan in October 2016. The 2016 Plan provides for the grant of cash payment awards, payable upon satisfaction of a performance condition (i.e. the occurrence of a Qualifying Sale constituting a Change in Control of FEI (as these terms are defined in the 2016 Plan)) and a service vesting condition (i.e. the vesting of an award based on continuous service). Under the 2016 Plan, cash payment awards of $3,248,821 in aggregate have been granted, and we do not expect there will be any further awards under the 2016 Plan. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI (as these terms are defined in the 2016 Plan) prior to the earlier of a Termination Transaction (as defined in the 2016 Plan) or the termination of the 2016 Plan or January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding.

FlexEnergy, Inc. 2013 Equity Incentive Plan

FEI adopted the 2013 Plan in January 2013. Payments under the 2013 Plan have been frozen and there will be no further grants made under the 2013 Plan. Under the 2013 Plan, an aggregate payment of $633,040 is due to the participants on the earlier of January 1, 2023 or a Change of Control of FEI (as defined in the 2013 Plan).

Other Elements of Compensation

401(k) Plan

We maintain a tax-qualified 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age. We match any contributions made by our employees (up to 6% of an employee’s wages), including executives. We temporarily suspended our matching contribution from June 2020 through December 2020, but have resumed this matching contribution as of January 1, 2021. We intend for our 401(k) plan to qualify under Section 401(a) and 501(a) of the Code so that contributions by employees to our 401(k) plan, and income earned on those contributions, are not taxable to employees until withdrawn from our 401(k) plan.

Executive Compensation Arrangements

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Mark Schnepel under which Mr. Schnepel (i) serves as President and Chief Executive Officer of FGS, (ii) serves as President and Chief Executive Officer of FEES, (iii) receives a base salary of $270,000, (iv) will receive      shares of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (v) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase     shares of common stock of FGS. Mr. Schnepel was originally promoted to President and Chief Executive Officer of FEES in 2013.

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Wes Kimmel under which Mr. Kimmel (i) serves as Chief Financial Officer, Treasurer and Secretary of FGS, (ii) serves as Chief Financial Officer and Secretary of FEES, (iii) receives a base salary of $270,000, (iv) will receive      shares of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (v) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase     shares of common stock of FGS. Mr. Kimmel was originally promoted to Chief Financial Officer and Secretary of FEES in 2013.

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Doug Baltzer under which Mr. Baltzer (i) serves as President and Chief Commercial Officer of FGS, (ii) serves as President of FLPS, (iii) receives an annual base salary of $270,000, (iv) will receive      shares

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of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (v) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase     shares of common stock of FGS. Mr. Baltzer was originally employed as President of FLPS in 2013.

Each named executive is also eligible to participate in, and receive one or more grants under, the 2021 Plan. Additionally, from time to time, our board of directors may approve annual bonuses for our named executives based on individual performance, company performance, or as otherwise determined to be appropriate.

Under the terms of each named executive’s employment agreement, the term of the executive’s employment continues until terminated by the executive or by us. Upon termination, each named executive will be entitled to accrued base salary and any unpaid expense reimbursements.

Potential Payments upon Termination

If we terminate a named executive’s employment without Cause outside of the six-month period immediately before or after a Change of Control (as these terms are defined in the executive’s employment agreement), then the executive will be entitled to accrued base salary and any unpaid expense reimbursements, plus (i) cash severance equal to six months of the executive’s base salary paid over a six-month period or, (ii) if we elect to extend the executive’s post-employment non-competition obligations from six months to 12 months, then cash severance equal to 12 months of the executive’s base salary paid over a 12-month period.

Alternatively, a named executive will be entitled to accrued base salary and any unpaid expense reimbursements, plus cash severance equal to 12 months of the executive’s base salary paid over a 12-month period if (i) the executive terminates the executive’s employment for Good Reason (as defined in the executive’s employment agreement) during the six-month period immediately before or after a Change of Control, or (ii) we terminate the executive’s employment without Cause during the six-month period immediately before or after a Change of Control.

Each named executive’s employment agreement conditions any payment of severance upon execution, effectiveness and irrevocability of a General Release (as defined in the executive’s employment agreement).

Outstanding Cash Awards at Fiscal Year-End

The following table summarizes the amounts under the 2016 Plan and 2013 Plan for each named executive officer as of December 31, 2020 that will payable on the terms of the respective plan:

Name	Award Date	Plan	Cash Award(1)
Mark Schnepel	February 6, 2013	2013 Plan	​	$	108,542
​	October 27, 2016	2016 Plan	​	$	958,310
Wes Kimmel	June 30, 2014	2013 Plan	​	$	35,442
​	October 27, 2016	2016 Plan	​	$	764,558
Doug Baltzer	—	2013 Plan	​	$	0
​	—	2016 Plan	​	$	0

(1)

As discussed above, under the 2013 Plan, an aggregate payout of $633,040 will be due to the participants upon the earlier of January 1, 2023 or a Change of Control (as defined in the 2013 Plan). Also, under the 2016 Plan an aggregate payout of $3,248,821 will become due to the participants if (and only if) a Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan) occurs on or prior to on January 1, 2026.

Director Compensation

We do not currently have a formal policy with respect to compensating our non-employee directors for service as directors, except that our 2021 Plan contains a limitation whereby the value of all awards under our 2021 Plan and all other cash compensation paid by us to (i) any non-employee director in any fiscal year may not exceed $350,000, and (ii) any non-employee chair of the board of directors, the Audit Committee, the Compensation Committee or the Nominating and Governance Committee in any fiscal year may not

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exceed $500,000. We have entered into a board chairperson compensation agreement with Mr. Walker, pursuant to which he will receive an annual retainer fee of $125,000, paid in increments of $31,250 at the end of each calendar quarter and will be reimbursed for expenses incurred in connection with his service. Mr. Walker is also eligible to participate in, and receive one or more grants under, our 2021 Plan. Following the consummation of this offering, we anticipate that directors who are not also officers or employees of FGS will receive compensation for their service on our board of directors and committees thereof. The amount and form of this compensation has not yet been determined. Each non-employee director will be reimbursed for out-of-pocket expenses incurred in connection with attending board and committee meetings.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Related Party Transactions

Thomas Denison and Patrick Connelly are each affiliated with entities (including RNS and TRF) that have invested in FPS, our sole stockholder prior to this offering as a result of the Contribution Transaction. These affiliated entities of Messrs. Denison and Connelly together hold a controlling interest in FPS and also hold some of the Notes that are currently due in full as of October 31, 2022. See “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.”

George Walker holds preferred units of FPS representing less than 1% of the fully diluted equity capital of FPS.

Debt

As discussed more fully in “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price,” since December 2015, FPS has entered into the Notes (whereby FPS contributed the cash received from the Notes to FEI and FLPS as capital) that, as of June 30, 2021, have an aggregate amount outstanding of $25.51 million. The Notes accrue interest in amounts ranging from 8% to 12% per annum and are due and payable in full on October 31, 2022. Further, in connection with the Contribution Transaction, FPS will pledge its shares of FGS in favor of the FPS Noteholders.

FPS’ Series B Preferred Units

As discussed more fully in “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – The agreement governing FPS’ Series B Preferred Units restricts our business and our ability to engage in certain corporate and financial transactions or in other businesses” and “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock– FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price”, FPS’ Series B Units may be called for redemption by a holder at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B Units is $37.22 million as of June 30, 2021. FPS’ Series B-1 Units may be called for redemption by a holder at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B-1 Units is $17.98 million as of June 30, 2021. In addition, under the terms of FPS’ Series B Preferred Units, FPS has agreed to certain covenants that our board believes restrict our ability to do business and enter into certain financial transactions.

SAFE Transaction

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds from the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

Registration Rights Agreement

In connection with the Contribution Transaction, we will enter into a Registration Rights Agreement (the “Registration Rights Agreement”) with FPS, RNS and TRF which provides certain registration rights

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to FPS, RNS and TRF and pursuant to which we are obligated, upon request from FPS, RNS or TRF (but subject to customary limitations provide for in the Registration Rights Agreement) to register for resale under the Securities Act the shares of our common stock issued to FPS in the Contribution Transaction. Subject to certain exceptions, we will bear all expenses of each registration pursuant to the Registration Rights Agreement, other than Selling Expenses (as defined in the Registration Rights Agreement).

Our Relationship with FPS

As a result of the Contribution Transaction, FGS will become a wholly owned subsidiary of FPS. Following this offering, we expect that FPS will continue to hold at least      % of our outstanding common stock for the foreseeable future, and as a result FPS will continue to have significant influence over our business. For additional information regarding our relationship with FPS, see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – After this offering, voting control with respect to our company will remain concentrated in the hands of FPS. FPS will continue to be able to exercise significant influence on us” and “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.”

Indemnification Agreements and Directors’ and Officers’ Liability Insurance

Section 145 of the Delaware General Corporation Law authorizes the board of directors of a corporation to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

Our Certificate of Incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for breach of the fiduciary duty of care, but will be liable for monetary damages for the following:

•

any breach of their duty of loyalty to our company or our stockholders;

•

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

•

unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

•

any transaction from which they derived an improper personal benefit.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our Certificate of Incorporation and Bylaws provide that we will indemnify and hold harmless, to the fullest extent permitted by the Delaware General Corporation Law, any director or officer who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees and other amounts) reasonably incurred. The foregoing rights to indemnification generally do not apply to a proceeding initiated by a director or officer unless the proceedings were approved by our board of directors, the indemnification is required by law or the director or officer is seeking enforcement of the indemnification and advancement

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rights. Our Certificate of Incorporation and our Bylaws will also provide that we must pay the expenses (including attorneys’ fees) incurred by a director or officer in defending any proceeding in advance of its final disposition, provided that such payment of expenses in advance of the final disposition of the proceeding will be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it is ultimately determined that the director or officer is not entitled to be indemnified.

Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in any such action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our Certificate of Incorporation, Bylaws and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We plan to obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement to be filed as Exhibit 1.1 to the registration statement of which this prospectus is a part will provide for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table and footnotes below sets forth information regarding the beneficial ownership of shares of our common stock as of September   , 2021 for:

•

the selling stockholder;

•

each person known by us to beneficially own more than 5% of our common stock;

•

each of the directors and named executive officers individually; and

•

all of our directors and executive officers as a group.

The number of shares beneficially owned by each stockholder is determined under rules of the SEC and includes voting or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power. In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, shares of common stock subject to options, warrants or other rights held by that person that are currently exercisable or will become exercisable within 60 days after September   , 2021 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

We have based our calculation of the percentage of beneficial ownership prior to this offering on                   shares of common stock presumed to be outstanding as of September   , 2021 after giving effect to the Contribution Transaction. For more information about estimated number of shares outstanding, see “Dilution.” We have based our calculation of the percentage of beneficial ownership after this offering on the sale of                   shares of common stock in this offering excluding any potential purchases in this offering by the persons and entities named in the table below.

Except as otherwise indicated in the footnotes below, the address of each beneficial owner is c/o FlexEnergy Green Solutions, Inc, 112 Corporate Drive, Portsmouth, NH 03801.

​

​

​

​

Beneficial Ownership After the Offering

​

Beneficial Ownership Before this Offering

Number of Shares Being Offered

Assuming No Exercise of the Underwriters’ Option

Assuming the Underwriters’ Option is Exercised in Full

Name of beneficial owner

Shares

%

Shares

%

Shares

%

5% and Selling Stockholder

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FlexEnergy Power Solutions, LLC(1)

​

​

​

100%

​

—

​

—

​

%

​

—

​

%

Named Executive Officers

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mark Schnepel

​

​

​

​

​

—

​

—

​

—

​

—

​

—

Wes Kimmel

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Doug Baltzer

​

—

​

—

​

—

​

—

​

—

​

—

​

—

George Walker

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Thomas Denison

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Patrick Connelly

​

—

​

—

​

—

​

—

​

—

​

—

​

—

All executive officers and directors together as a group (6 persons)(1)

​

—

​

—

​

—

​

—

​

—

​

—

​

—

(1)

The Managers of FPS are Thomas Denison and Patrick Connelly, each of whom may be deemed to have shared voting and investment power over the shares of our common stock owned by FPS.

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DESCRIPTION OF CAPITAL STOCK

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.

The following description of our capital stock and provisions of our Certificate of Incorporation and Bylaws are summaries and are qualified by reference to our Certificate of Incorporation and Bylaws. Copies of these documents will be filed with the Securities and Exchange Commission as exhibits to our registration statement, of which this prospectus forms a part.

Common Stock

Immediately prior to the closing of this offering, there will be             shares of our common stock outstanding and held of record by one stockholder, assuming the completion of the Contribution Transaction immediately prior to the completion of this offering.

Voting Rights

Holders of our common stock are entitled to one vote per share of common stock. Holders of shares of common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders. We do not provide for cumulative voting for the election of directors in our Certificate of Incorporation.

Economic Rights

Dividends.   Subject to preferences that may apply to shares of preferred stock outstanding at the time, if any, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and only then at the times and in the amounts that our board of directors may determine. See “Dividend Policy” for more information. Any dividend or distributions paid or payable to the holders of shares of common stock will be paid pro rata, on an equal priority, pari passu basis.

Right to Receive Liquidation Distributions.   Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders will be distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Preferred Stock

Under the terms of our Certificate of Incorporation, our board of directors is authorized to direct us to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, designations, powers and restrictions, including voting powers, dividend rights, conversion and redemption rights and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Upon the closing of this offering, there will be no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

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Choice of Forum

Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, or stockholders owed to us or our stockholders; (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or our Bylaws; or (4) any action asserting a claim against us governed by the internal affairs doctrine, except for, as to each of (1) through (4) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers.

Unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Under Section 22 of the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. Notwithstanding the foregoing, the forum selection clause will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the U.S. shall be the sole and exclusive forum. This choice of forum provision has important consequences for our stockholders. See “Risk Factors –Risk Factors Relating to Ownership of Our Common Stock– Our Certificate of Incorporation includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders.”

Anti-takeover Provisions

Stockholder Action; Special Meeting of Stockholders

So long as FPS holds stock representing at least 50% of the voting power in our company, stockholder action may be taken by written or electronic consent to action at a meeting, and stockholders holding a majority in voting power of all then-outstanding shares of capital stock of FGS entitled to vote generally in the election of directors may request that a special meeting of stockholders be called.

Our Certificate of Incorporation provides that, at any time after FPS ceases to hold at least 50% of the voting power in our company, (i) any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of our stockholders and may not be effected by any consent in writing by our stockholders, and (ii) except as otherwise required by law, special meetings of our stockholders can only be called by the chair of our board of directors or by the secretary upon the direction of our board of directors.

Amendment of Charter and Bylaws

Certain provisions of our Certificate of Incorporation and our Bylaws require the approval of a majority of the then authorized directors in order for our board of directors to amend or repeal certain provisions of our Certificate of Incorporation or our Bylaws or, at any time after FPS ceases to hold at least 50% of the voting power in our company, the approval of the holders of at least 66 2/3% of the voting power of all outstanding shares of voting stock is required in order for our stockholders to amend certain

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provisions of our Certificate of Incorporation or our Bylaws. Prior to the time that FPS ceases to hold at least 50% of the voting power in our company, the Certificate of Incorporation and Bylaws may be amended with the consent of the holders of at least 50% of the voting power of all then outstanding stock of FGS entitled to vote generally in the election of directors. This provision will have the effect of making it more difficult to amend certain provisions of our Certificate of Incorporation or our Bylaws.

Authorized but Unissued Shares

The authorized but unissued shares of our common stock and preferred stock are available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of Nasdaq. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

The foregoing provisions of our Certificate of Incorporation and Bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. However, these provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. These provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority stockholders.

Transfer Agent and Registrar

Upon completion of this offering, the transfer agent and registrar for our common stock will be                  . The address of the transfer agent and registrar is                  .

Limitations of Liability and Indemnification

See the section captioned “Certain Relationships and Related Party Transactions – Indemnification Agreements and Directors’ and Officers’ Liability Insurance.”

Listing

We have applied to list our common stock on Nasdaq under the symbol “FLXE.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and we cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares of our common stock will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at that time and our ability to raise equity capital in the future.

Following the completion of this offering,                   shares of common stock will be outstanding. Of these outstanding shares, all of the shares of our common stock sold in this offering will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act, would only be able to be sold in compliance with the Rule 144 limitations described below.

The remaining outstanding shares of our common stock not sold in this offering will be deemed “restricted securities” as defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule 144 under the Securities Act, which rule is summarized below. All of our executive officers, directors and holders of substantially all of our capital stock and securities exercisable or convertible into our capital stock have entered into lock-up agreements with the underwriters under which they have agreed, subject to specific exceptions, not to sell any of our stock for 180 days following the date of this prospectus. As a result of these agreements and subject to the provisions of Rule 144, shares of our common stock will be available for sale in the public market as follows:

•

beginning on the date of this prospectus, all             shares of our common stock sold in this offering will be immediately available for sale in the public market; and

•

beginning 181 days after the date of this prospectus, the remaining             shares of our common stock will be eligible for sale in the public market from time to time thereafter, subject in some cases to the volume and other restrictions of Rule 144, as described below, but subject to the rights of FPS, RNS and TRF to have some or all of their shares registered for resale – see “Registration Rights Agreement” below.

Lock-Up Agreements

We, all of our directors and officers, FPS, RNS and TRF have agreed or will agree that, without the prior written consent of Roth Capital Partners, during the period from the date of this prospectus and ending on the date 180 days after the date of this prospectus, we and they will not, among other things:

•

offer, pledge, sell, contract to sell, grant any option to purchase, make any short sale or otherwise dispose of any shares of common stock, options or warrants to purchase shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock; or

•

in our case, file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or

•

in the case of our directors, officers and other holders of our securities, make any demand for exercise of any rights with respect to the registration of any securities.

This agreement is subject to certain exceptions. See “Underwriting” below for additional discussion.

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Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares of our common stock proposed to be sold for at least six months is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares of our common stock on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described above, within any three-month period, a number of shares that does not exceed the greater of:

•

1% of the number of shares of our capital stock then outstanding, which will equal             shares immediately after this offering; or

•

the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales under Rule 144 by our affiliates or persons selling shares of our common stock on behalf of our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Registration Rights Agreement

In connection with the Contribution Transaction and the SAFE Transaction, we entered into the Registration Rights Agreement with FPS, RNS and TRF, which provides certain registration rights to FPS, RNS and TRF and pursuant to which we are obligated, upon request from FPS, RNS or TRF (but subject to customary limitations provide for in the Registration Rights Agreement) to register for resale under the Securities Act the shares of our common stock issued to FPS in the Contribution Transaction or transferred to RNS and TRF pursuant in the SAFE Transaction. Subject to certain exceptions, we will bear all expenses of each registration pursuant to the Registration Rights Agreement, other than Selling Expenses (as defined in the Registration Rights Agreement).

Registration Statement with Respect to our 2021 Plan

We intend to file a registration statement on Form S-8 under the Securities Act promptly after the completion of this offering to register shares of our common stock reserved for future issuance under our 2021 Plan. The registration statement on Form S-8 is expected to become effective immediately upon filing, and shares of our common stock covered by the registration statement will then become eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates, vesting restrictions and any applicable lock-up agreements. See “Executive Compensation – Equity Compensation” for a description of our equity incentive plans.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF OUR COMMON STOCK

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership and disposition of our common stock.

This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

•

U.S. expatriates and former citizens or long-term residents of the U.S.;

•

persons subject to the alternative minimum tax;

•

persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

•

banks, insurance companies, and other financial institutions;

•

brokers, dealers or traders in securities;

•

“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

•

partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);

•

tax-exempt organizations or governmental organizations;

•

persons deemed to sell our common stock under the constructive sale provisions of the Code;

•

persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;

•

tax-qualified retirement plans;

•

“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; and

•

persons subject to special tax accounting rules as a result of any item of gross income with respect to the stock being taken into account in an applicable financial statement.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

•

an individual who is a citizen or resident of the U.S.;

•

a corporation created or organized under the laws of the U.S., any state thereof, or the District of Columbia;

•

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

•

a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” ​(within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Distributions

As described in the section captioned “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “– Sale or Other Taxable Disposition.”

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder of our common stock will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which the dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on the

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effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Sale or Other Taxable Disposition

A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

•

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);

•

the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

•

our common stock constitutes a U.S. real property interest (“USRPI”) by reason of our status as a U.S. real property holding corporation (“USRPHC”) for U.S. federal income tax purposes.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on the effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to the losses.

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock will not be subject to U.S. federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and the Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

Payments of dividends on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such holder is a United States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.

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Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or gross proceeds from the sale or other disposition of, our common stock paid to a “foreign financial institution” or a “non-financial foreign entity” ​(each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” ​(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States-owned foreign entities” ​(each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock, and will apply to payments of gross proceeds from the sale or other disposition of such stock on or after January 1, 2020.

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

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UNDERWRITING

We have entered into an underwriting agreement with the underwriters listed in the table below. Roth Capital Partners, LLC is the representative of the underwriters. We refer to the several underwriters listed in the table below as the “underwriters.” Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and the underwriters have agreed to purchase from us, shares of our common stock. Our common stock will trade on the Nasdaq Stock Market under the symbol “FLXE.”

Pursuant to the terms and subject to the conditions contained in the underwriting agreement, we have agreed to sell to the underwriters named below, and each underwriter severally has agreed to purchase from us, the respective number of shares of common stock set forth opposite its name below:

Underwriter	Number of Shares
Roth Capital Partners, LLC	​
Total	​

The underwriting agreement provides that the obligation of the underwriters to purchase the shares of common stock offered by this prospectus is subject to certain conditions. The underwriters are obligated to purchase all of the shares of common stock offered hereby if any of the shares are purchased.

The selling stockholder has granted the underwriters an option to buy up to an additional             shares of common stock from us at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any. The underwriters may exercise this option at any time, in whole or in part, during the 30-day period after the date of this prospectus; however, the underwriters may only exercise the option once.

Discount, Commissions and Expenses

The underwriters propose to offer to the shares of common stock purchased pursuant to the underwriting agreement to the public at the public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $       per share. After this offering, the public offering price and concession may be changed by the underwriters. No such change shall change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

In connection with the sale of the common stock to be purchased by the underwriters, the underwriters will be deemed to have received compensation in the form of underwriting commissions and discounts. The underwriters’ commissions and discounts will be            % of the gross proceeds of this offering, or $       per share of common stock, based on the public offering price per share set forth on the cover page of this prospectus.

We have also agreed to reimburse Roth Capital Partners at closing for legal expenses incurred by it in connection with the offering up to a maximum of $      .

The following table shows the underwriting discounts and commissions payable to the underwriters by us in connection with this offering (assuming both the exercise and non-exercise of the over-allotment option to purchase additional shares of common stock we have granted to the underwriters):

​	Per Share(1)				Total
​	Without Over- allotment		With Over- allotment		Without Over- allotment		With Over- allotment
Public offering price	​	$	​	$	​	$	​	$
Underwriting discount	​	$	​	$	​	$	​	$

(1)

Does not include the underwriters’ warrants or the rights granted to the representative, each as described below.

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Underwriters’ Warrants

We have also agreed to issue to the underwriters’ warrants to purchase a number of our shares of common stock equal to an aggregate of 2.5% of the shares of common stock sold in this offering. The underwriters’ warrants will have an exercise price equal to 120% of the initial public offering price of the shares of common stock sold in this offering and may be exercised on a cashless basis. The underwriters’ warrants are not redeemable by us, become exercisable 180 days from the effective date of the registration statement of which this prospectus forms a part and will expire on the third anniversary of the effective date. The underwriters’ warrants will provide for adjustment in the number and price of the underwriters’ warrants (and the shares of common stock underlying the underwriters’ warrants) in the event of recapitalization, merger or other fundamental transaction. The underwriters’ warrants and the underlying shares of common stock have been deemed compensation by FINRA and are therefore subject to FINRA Rule 5110(g)(1). In accordance with FINRA Rule 5110(g)(1), neither the underwriters’ warrants nor any shares of our common stock issued upon exercise of the underwriter warrants may be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which the underwriters’ warrants are being issued, except the transfer of any security:

•

by operation of law or by reason of reorganization of the Company;

•

to any FINRA member firm participating in this offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder of the time period;

•

if the aggregate amount of securities of FGS held by either an underwriter or a related person do not exceed 1% of the securities being offered;

•

that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

•

the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period.

In addition, in accordance with FINRA Rule 5110(f)(2)(G), the underwriters’ warrants may not contain certain terms.

No Public Market

Prior to this offering, there has not been a public market for our common stock and the public offering price for our common stock will be determined through negotiations between us and the representative. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the representative believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant.

No assurance can be given that the initial public offering price will correspond to the price at which our common stock will trade in the public market subsequent to this offering or that an active trading market for our common stock will develop and continue after this offering.

Indemnification

Pursuant to the underwriting agreement, we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters or such other indemnified parties may be required to make in respect of those liabilities.

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Lock-up Agreements

We have agreed not to (i) offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock; (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of shares of common stock; or (iii) file any registration statement with the SEC relating to the offering of any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, without the prior written consent of Roth Capital Partners for a period of 180 days following the date of this prospectus (the “Lock-up Period”). This consent may be given at any time without public notice. These restrictions on future issuances are subject to exceptions for (i) the issuance of shares of our common stock sold in this offering, (ii) the issuance of shares of our common stock upon the exercise of outstanding options or warrants and the vesting of restricted stock awards or units, (iii) the issuance of employee stock options not exercisable during the Lock-up Period and the grant, redemption or forfeiture of restricted stock awards or restricted stock units pursuant to our equity incentive plans or as new employee inducement grants and (iv) the issuance of common stock or warrants to purchase common stock in connection with mergers or acquisitions of securities, businesses, property or other assets, joint ventures, strategic alliances, equipment leasing arrangements or debt financing.

In addition, FPS, RNS, TRF and each of our directors and executive officers has entered into a lock-up agreement with the underwriters. Under the lock-up agreements, the directors and executive officers may not, directly or indirectly, sell, offer to sell, contract to sell, or grant any option for the sale (including any short sale), grant any security interest in, pledge, hypothecate, hedge, establish an open “put equivalent position” ​(within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), or otherwise dispose of, or enter into any transaction which is designed to or could be expected to result in the disposition of, any shares of our common stock or securities convertible into or exchangeable for shares of our common stock, or publicly announce any intention to do any of the foregoing, without the prior written consent of Roth Capital Partners, for a period of 180 days from the closing date of this offering. This consent may be given at any time without public notice. These restrictions on future dispositions by our directors and executive officers are subject to exceptions for (i) one or more bona fide gift transfers of securities to immediate family members who agree to be bound by these restrictions and (ii) transfers of securities to one or more trusts for bona fide estate planning purposes. Each officer and director shall be immediately and automatically released from all restrictions and obligations under the lock up agreement in the event that he or she ceases to be a director or officer of our company and has no further reporting obligations under Section 16 of the Exchange Act.

Electronic Distribution

This prospectus may be made available in electronic format on websites or through other online services maintained by the underwriters or by their affiliates. In those cases, prospective investors may view offering terms online and prospective investors may be allowed to place orders online. Other than this prospectus in electronic format, the information on the underwriters’ websites or our website and any information contained in any other websites maintained by the underwriters or by us is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriter in its capacity as underwriter, and should not be relied upon by investors.

Price Stabilization, Short Positions and Penalty Bids

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act:

•

Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

•

Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short

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position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

•

Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. A naked short position occurs if the underwriters sell more shares than could be covered by the over-allotment option. This position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

•

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be discontinued at any time.

Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our shares of common stock. In addition, neither we nor the underwriters make any representation that the underwriter will engage in these transactions or that any transaction, if commenced, will not be discontinued without notice.

Offer restrictions outside the U.S.

Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Australia

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees

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not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

Canada

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriter is not required to comply with the disclosure requirements of NI33-105 regarding underwriter conflicts of interest in connection with this offering.

China

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”

European Economic Area – Belgium, Germany, Luxembourg and Netherlands

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.

An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

•

to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

•

to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

•

to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining our prior consent or any underwriter for any such offer; or

•

in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall require us to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

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France

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2 and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

Ireland

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

Israel

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.

Italy

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, “CONSOB” pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other than:

•

to Italian qualified investors, as defined in Article 100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and

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•

in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

•

made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

•

in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.

Japan

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

New Zealand

The shares of common stock offered hereby have not been offered or sold, and will not be offered or sold, directly or indirectly in New Zealand and no offering materials or advertisements have been or will be distributed in relation to any offer of shares in New Zealand, in each case other than:

•

to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money;

•

to persons who in all the circumstances can properly be regarded as having been selected otherwise than as members of the public;

•

to persons who are each required to pay a minimum subscription price of at least NZ$500,000 for the shares before the allotment of those shares (disregarding any amounts payable, or paid, out of money lent by the issuer or any associated person of the issuer); or

•

in other circumstances where there is no contravention of the Securities Act 1978 of New Zealand (or any statutory modification or reenactment of, or statutory substitution for, the Securities Act 1978 of New Zealand).

Portugal

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered

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or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Sweden

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” ​(as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Switzerland

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

United Arab Emirates

Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. We may not render services relating to the securities within the United Arab Emirates, including the receipt of applications and/or the allotment or redemption of such shares.

No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to “qualified investors” ​(within the meaning of section 86(7) of FSMA) in the United

96

Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply us.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together “relevant persons”). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

97

LEGAL MATTERS

Rutan & Tucker, LLP, Irvine, California will pass upon the validity of the shares of our common stock being offered by this prospectus. K&L Gates LLP, Irvine, California is acting as counsel to the underwriters.

EXPERTS

The combined consolidated financial statements of FlexEnergy Inc. and Flex Leasing Power & Services, LLC as of December 31, 2020 and 2019 and for each of the years in the two-year period ended December 31, 2020 included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the financial statements and includes an explanatory paragraph referring to the Company’s ability to continue as a going concern). Such financial statements have been included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The balance sheet of FlexEnergy Green Solutions, Inc. as of December 31, 2020 included in this prospectus has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such balance sheet has been included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. You may obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the public reference facilities and website of the SEC referred to above. We also maintain a website at www.flexenergy.com where, upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information on or that can be accessed through our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

98

INDEX TO FINANCIAL STATEMENTS

Audited Combined Consolidated Financial Statements
Fiscal Years Ended December 31, 2020 and 2019

Balance Sheets of FlexEnergy Green Solutions, Inc.	​
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Notes to Balance Sheets	F-4
Combined Consolidated Financial Statements of FlexEnergy, Inc. And Flex Leasing Power & Services, LLC	​
Report of Independent Registered Public Accounting Firm	F-5
Combined Consolidated Balance Sheets	F-6
Combined Consolidated Statements of Operations and Comprehensive Loss	F-7
Combined Consolidated Statements of Stockholder’s Equity	F-8
Combined Consolidated Statements of Cash Flows	F-9
Notes to Combined Consolidated Financial Statements	F-10

Unaudited Condensed Combined Consolidated Financial Statements
Six Months Ended June 30, 2021 and June 30, 2020

Condensed Combined Consolidated Financial Statements of FlexEnergy, Inc. And Flex Leasing Power & Services, LLC	​
Condensed Combined Consolidated Balance Sheets (unaudited)	F-27
Condensed Combined Consolidated Statements of Operations and Comprehensive Loss (unaudited)	F-28
Condensed Combined Consolidated Statements of Stockholder’s Equity (unaudited)	F-29
Condensed Combined Consolidated Statements of Cash Flows (unaudited)	F-30
Notes to Condensed Combined Consolidated Financial Statements (unaudited)	F-31

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholder and the Board of Directors of FlexEnergy Green Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of FlexEnergy Green Solutions, Inc. (the “Company”) as of December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte and Touche LLP

Hartford, CT

June 4, 2021

We have served as the Company’s auditor since 2020.

F-2

FLEXENERGY GREEN SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

​	June 30, 2021			December 31, 2020
​	(unaudited)			​	​	​
ASSETS	​	​	​	​	​	​
CURRENT ASSETS	​	​	​	​	​	​
Cash	​	$	0	​	$	0
TOTAL CURRENT ASSETS	​	​	0	​	​	0
TOTAL ASSETS	​	$	0	​	$	0
LIABILITIES AND STOCKHOLDER’S EQUITY	​	​	​	​	​	​
TOTAL LIABILITIES	​	$	0	​	$	0
STOCKHOLDER’S EQUITY	​	​	​	​	​	​
Retained earnings	​	$	0	​	$	0
TOTAL STOCKHOLDER’S EQUITY	​		0	​		0
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	​	$	0	​	$	0

See accompanying notes to the Consolidated Balance Sheet.

F-3

FLEXENERGY GREEN SOLUTIONS, INC

NOTES TO CONSOLIDATED BALANCE SHEETS

1.   Organization and Summary of Significant Accounting Policies

Organization

FlexEnergy Green Solutions, Inc. (the “Company”) is a Delaware corporation formed on December 31, 2020 that will not have any operating activity until the contribution of equity interests from FlexEnergy Power Solutions, LLC (“FPS”) of FlexEnergy, Inc and Flex Leasing Power & Service, LLC, known collectively as the Contribution Transaction. Accordingly, we believe that a discussion of the results of FlexEnergy Green Solutions, Inc would not be meaningful for the periods covered by these financial statements prior to the Contribution Transaction.

The Company and its subsidiaries are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company intends to file a Registration Statement on Form S-1 with the Securities and Exchange Commission with respect to an initial public offering of its stock.

2.   Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated upon consolidation. Subsequent events have been evaluated through the date the financial statements were issued.

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) as contained within the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholder and the Board of Directors of FlexEnergy Green Solutions, Inc., FlexEnergy, Inc., and the member and Board of Managers of Flex Leasing Power & Service, LLC

Opinion on the Financial Statements

We have audited the accompanying combined consolidated balance sheets of FlexEnergy, Inc. and Flex Leasing Power & Service, LLC (the “Company”) as of December 31, 2020 and 2019, the related combined consolidated statements of operations and comprehensive loss, stockholder’s equity and cash flows, for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses and sustained negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte and Touche LLP

Hartford, CT
June 4, 2021

We have served as the Company’s auditor since 2020.

F-5

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	December 31, 2020			December 31, 2019
Assets	​	​	​	​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	1,702	​	$	2,000
Accounts receivable, net of allowance of $45 and $60, respectively	​	​	2,416	​	​	2,940
Inventories, net	​	​	13,659	​	​	13,571
Prepaid expenses and other current assets	​	​	497	​	​	475
Total current assets	​	​	18,274	​	​	18,986
Long-term assets	​	​	​	​	​	​
Property and equipment, net	​	​	36,506	​	​	37,105
Deferred financing costs, net of amortization	​	​	630	​	​	792
Other non-current assets	​	​	166	​	​	98
Intangible assets, net	​	​	336	​	​	504
Total long-term assets	​	$	37,638	​	$	38,499
Total assets	​	$	55,912	​	$	57,485
Liabilities and stockholder’s equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	1,328	​	$	2,775
Accrued expenses	​	​	2,003	​	​	2,336
Deferred revenues	​	​	1,849	​	​	1,794
Current portion of notes payable	​	​	1,300	​	​	—
Current portion of capital lease obligations	​	​	148	​	​	174
Other current liabilities	​	​	214	​	​	403
Total current liabilities	​	​	6,842	​	​	7,482
Long-term liabilities	​	​	​	​	​	​
Capital leases, net of current portion	​	​	173	​	​	301
Line of credit	​	​	26,658	​	​	22,274
Notes payable, net of current portion	​	​	1,052	​	​	—
Other non-current liabilities	​	​	492	​	​	422
Total long-term liabilities	​	$	28,375	​	$	22,997
Total liabilities	​	$	35,217	​	$	30,479
Commitments and contingencies (see note 13)	​	​	​	​	​	​
Stockholder’s equity	​	​	​	​	​	​
Net parent investment	​	$	152,273	​	$	151,473
Accumulated other comprehensive income	​	​	543	​	​	100
Accumulated deficit	​	​	(132,121)	​	​	(124,567)
Total stockholder’s equity	​	$	20,695	​	$	27,006
Total liabilities and stockholder’s equity	​	$	55,912	​	$	57,485

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-6

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	Year Ended December 31,
​	2020			2019
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833
Turbine service on sold product	​	​	2,213	​	​	2,824
Manufactured product	​	​	3,276	​	​	5,716
Total revenue	​	​	23,327	​	​	25,373
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	​	4,884	​	​	5,442
Turbine service on sold product	​	​	1,691	​	​	2,797
Manufactured product	​	​	5,789	​	​	9,531
Depreciation of fleet turbines	​	​	5,007	​	​	4,713
Total cost of revenue	​	​	17,371	​	​	22,483
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	​	11,826	​	​	12,400
Research and development	​	​	120	​	​	237
Total operating expenses	​	​	11,946	​	​	12,637
Operating loss	​	​	(5,990)	​	​	(9,747)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	​	(1,114)	​	​	(992)
Other income (expense), net	​	​	31	​	​	(159)
Total other income (expense), net	​	​	(1,083)	​	​	(1,151)
Loss before income taxes	​	​	(7,073)	​	​	(10,898)
Income tax expense	​	​	(31)	​	​	(7)
Net loss	​	$	(7,104)	​	$	(10,905)
Other comprehensive loss	​	​	​	​	​	​
Foreign currency translation adjustments	​	​	443	​	​	185
Total other comprehensive loss	​	​	443	​	​	185
Comprehensive loss	​	$	(6,661)	​	$	(10,720)

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-7

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2019

​

$

143,673

​

$

(85)

​

$

(103,662)

​

$

39,926

Contributions

​

​

7,800

​

​

—

​

​

—

​

​

7,800

Distributions

​

​

—

​

​

—

​

​

(10,000)

​

​

(10,000)

Foreign currency translation adjustments

​

​

—

​

​

185

​

​

—

​

​

185

Net loss

​

​

—

​

​

—

​

​

(10,905)

​

​

(10,905)

Balance at December 31, 2019

​

$

151,473

​

$

100

​

$

(124,567)

​

$

27,006

Contributions

​

​

800

​

​

—

​

​

—

​

​

800

Distributions

​

​

—

​

​

—

​

​

(450)

​

​

(450)

Foreign currency translation adjustments

​

​

—

​

​

443

​

​

—

​

​

443

Net loss

​

​

—

​

​

—

​

​

(7,104)

​

​

(7,104)

Balance at December 31, 2020

​

$

152,273

​

$

543

​

$

(132,121)

​

$

20,695

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-8

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	Year Ended December 31,
​	2020			2019
Cash Flows from Operating Activities	​	​	​	​	​	​
Net income (loss)	​	$	(7,104)	​	$	(10,905)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization of property and equipment	​	​	6,716	​	​	5,892
Amortization of deferred financing costs	​	​	189	​	​	134
Amortization of intangible assets	​	​	168	​	​	168
Bad debt expense	​	​	300	​	​	36
Loss / (gain) on disposal of property and equipment	​	​	(58)	​	​	21
Changes in operating assets and liabilities:	​	​	​	​	​	​
Accounts receivable	​	​	224	​	​	(670)
Inventories	​	​	(4,804)	​	​	(9,952)
Prepaid expenses and other current assets	​	​	(53)	​	​	(1,668)
Other non-current assets	​	​	(68)	​	​	(36)
Accounts payable	​	​	(1,447)	​	​	(359)
Accrued expenses	​	​	(306)	​	​	113
Deferred revenues	​	​	55	​	​	2,007
Other current liabilities	​	​	(157)	​	​	301
Other non-current liabilities	​	​	70	​	​	70
Net Cash Used in Operating Activities	​	$	(6,275)	​	$	(14,848)
Cash Flows from Investing Activities	​	​	​	​	​	​
Purchases of property and equipment	​	​	(1,120)	​	$	(3,269)
Proceeds from disposal of property and equipment	​	​	43	​	​	38
Net Cash Used in Investing Activities	​	$	(1,077)	​	$	(3,231)
Cash Flows from Financing Activities	​	​	​	​	​	​
Distribution to parent	​	$	(450)	​	$	(10,000)
Contribution from parent	​	​	800	​	​	7,800
Proceeds from notes payable	​	​	2,352	​	​	—
Advances on line of credit	​	​	4,330	​	​	22,274
Deferred financing costs	​	​	—	​	​	(926)
Payments on capital leases	​	​	(143)	​	​	(325)
Net Cash (Used in) Provided by Financing Activities	​	$	6,889	​	$	18,823
Effects of Exchange Rate Changes on Cash	​	$	165	​	$	81
Net Increase / (Decrease) in Cash	​	$	(298)	​	$	825
Cash – Beginning	​	$	2,000	​	$	1,175
Cash – Ending	​	$	1,702	​	$	2,000
Supplemental Disclosure	​	​	​	​	​	​
Interest paid in cash	​	$	997	​	$	852
Taxes paid in cash	​	​	12	​	​	9
Non-Cash Investing Activities	​	​	​	​	​	​
Net transfers from inventory to property and equipment	​	$	4,717	​	$	8,231
Property and equipment acquired through capital leases	​	​	—	​	​	489

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-9

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS)

NOTE 1 — NATURE OF OPERATIONS

The combined consolidated financial statements include the combined accounts of FlexEnergy, Inc. (“FEI”) and Flex Leasing Power & Service LLC (“FLPS”), collectively referred to as “the Company”. The Company is headquartered in Portsmouth, New Hampshire with field offices in Colorado, North Dakota, Texas and Canada.

On January 1, 2016, FlexEnergy Power Solutions, LLC (“FPS”) was formed to hold FEI and FLPS. FEI manufactures the GT333 kilowatt turbine, the larger GT1300 kilowatt turbine (“Flex Turbine”) and stand-alone heat recovery products (“Flex Heat Recovery products”). FLPS provides a rental and leasing offering of the turbine generator, particularly in the North America oilfield market. Flex Leasing Power and Services, ULC (“FLPS ULC”), which is wholly-owned by Flex Power Co., is a Canadian entity that supports expansion into the Canadian market. Flex Power Co. is a wholly-owned subsidiary of FLPS.

On December 31, 2020, FPS formed FlexEnergy Green Solutions, Inc. (“FGS”) to be its wholly-owned subsidiary. FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS in exchange for 100% of the equity interests in FGS, which will result in FGS becoming a wholly-owned subsidiary of FPS, and FEI and FLPS becoming wholly-owned subsidiaries of FGS.

The Company is an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company’s Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of the Company’s operations and revenues. Flex Turbines provide the Company’s customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. In addition, the Company’s Flex Heat Recovery products are integral to promising emerging power sources, such as fuel cells for electrical power.

The Company serves a diverse range of customers in the global oil and gas (“O&G”),transportation, power, and commercial and industrial (“C&I”) end markets. The Company’s primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying combined consolidated financial statements include the accounts of FEI and its wholly owned subsidiaries and FLPS and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s combined consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries.

F-10

USE OF ESTIMATES

The preparation of the Company’s combined consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such estimates and assumptions include accounting for the accounts receivable allowance, the valuation of long-lived assets including intangible assets with finite lives, useful lives of long-lived assets such as property, equipment and intangible assets, valuation allowances for deferred income tax assets, inventory obsolescence, and exposure related to warranty and other contingent liabilities. Actual results could differ from those estimates.

SEGMENT INFORMATION

The Company is considered to be a single reporting segment. The Company’s chief operating decision makers (“CODM”), the Chief Executive Officer, the Chief Financial Officer and the Chief Commercial Officer, review financial information presented on a combined consolidated basis for purposes of allocating resources and evaluating financial performance. The business activities of this reporting segment are the engineering, production, sales and leasing of its proprietary energy efficient Flex Turbines and Flex Heat Recovery products, and related parts and service.

The Company conducts its business through various offices and facilities located throughout the U.S. and Canada. All the Company’s revenues were to external customers in 2020 and 2019. Of the sales in 2020, $19,960 were sales to the U.S., $2,874 to Canada, and $493 to non-North America countries. Long-lived assets held in the U.S. and Canada at December 31, 2020 were $28,203 and $9,435 respectively. Of the sales in 2019, $23,822 were sales to the U.S., $1,466 to Canada, and $85 to non-North America countries. Long-lived assets held in the U.S. and Canada at December 31, 2019 were $33,435 and $5,064, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the amount the Company expects to collect from balances outstanding at year end and represent amounts billed to customers and not yet collected, and are recorded when the right to consideration becomes unconditional. Based on the Company’s evaluation of uncollected accounts receivable at the end of each year, bad debts are provided for using an allowance for doubtful accounts method. The evaluation considers historical trends to identify receivables that the Company believes may be uncollectible. The allowance for bad debt was $45 and $60 as of December 31, 2020 and 2019, respectively.

INVENTORY

Inventory at FEI consists primarily of parts, components, and work in progress for the manufacture and repair of the Flex Turbine and Flex Heat Recovery products. Inventory at FLPS consists primarily of parts, components and turbines that are currently ready for or are being prepared for first time use. Once a turbine has been placed into service, the inventory is transferred to property and equipment. Inventoried parts and components are mainly used for commissioning and/or repairing the turbines. Inventory is valued at the lower of cost or net realizable value and is determined on a the first in, first out (“FIFO”) cost method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to ten years. Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

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The estimated useful lives used in computing depreciation of property and equipment are as follows:

Asset	Life
Turbines and other equipment	10 years
Leasehold improvements	Shorter of lease term or 10 years
Machinery and equipment	3-7 years
Furniture and fixtures	7 years
Fieldwork equipment	5 years
Computer equipment and software	3-5 years
Vehicles	4-5 years

Leasehold improvements are amortized using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation of assets leased to customers in the amount of $5,007 and $4,713, for the years ended December 31, 2020 and 2019, respectively is recorded to cost of revenue. All other depreciation, amounting to $1,709 and $1,179, for the years ended December 31, 2020 and 2019, respectively, is recorded to operating expenses within the accompanying combined consolidated statements of operations and comprehensive loss. The Company’s depreciation and amortization expense of property and equipment were $6,716 and $5,892 for the years ended December 31, 2020 and 2019, respectively.

INTANGIBLE ASSETS

Intangible assets, consisting of acquired patents, are presented at cost, net of accumulated amortization. Intangible assets are amortized over their estimated useful life of ten years on a straight-line basis. The Company continues to invest in its intellectual property portfolio and is actively filing for patent protection for its technology in both the U.S. and abroad. The costs, including legal, associated with compiling and filing patent applications are charged to selling, general, and administrative expenses as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets such as property and equipment and intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models and third-party independent appraisals, as considered necessary. The Company believes that there were no events or changes in circumstances that would trigger an impairment analysis for the years ended December 31, 2020 and 2019.

REVENUE RECOGNITION

The Company’s revenue consists of turbine leasing fleet revenue, the sales of manufactured Flex Turbine and Flex Heat Recovery products, and service revenues on sold product. Revenue is recognized upon transfer of control of the promised goods or the Company’s performance of the services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company excludes sales tax collected from customers from revenue in its combined consolidated statements of operations and comprehensive loss.

Significant Judgments — Contracts with Multiple Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that

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should be accounted for separately or combined as one unit of accounting may require significant judgment. The Company enters into contracts with its customers to manufacture Flex Turbines and Flex Heat Recovery products and provides certain products, parts, and accessories, collectively referred to as “products.” The Company will also provide services associated with these products and parts including commissioning and maintenance services, collectively referred to as “services.” These services are distinct and separate contractual arrangements.

Contracts may contain multiple products within the same agreement. However, each product is distinct as they are sold separately and revenue is only recorded when the individual product is completed and control of the product is transferred. Service contracts, and services noted within such contracts, are similar in that each service is distinct. Each service is explicitly stated in the contracts where the Company provides maintenance repairs and labor services in exchange for a fixed-rate per month per turbine. Revenue from maintenance service contracts is recognized over the term of the contract at the agreed upon monthly service fee as defined in the contract, while commissioning revenue is recognized at the agreed upon commissioning fee amount as defined within the contract once the Flex Turbine is installed and begins generating energy for the customer. The maintenance service contracts and commissioning revenue are each considered distinct and separated from other obligations in the contract since (i) the customer is able to benefit from the good or service separately or together with other resources made available through the arrangement and (ii) the services are each separately identifiable from the others provided in the contract.

Once distinct performance obligations are identified within a contract, the Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer.

Turbine Leasing Fleet

Turbine leasing fleet revenue consists of revenue generated on the Company’s owned fleet of Flex Turbines and owned ancillary field equipment that supports the turbines fleet’s generation in the field. It primarily consists of recurring monthly revenue associated with executed rental agreements (“Generator Rental Agreements”) where the Company is the lessor to the third-party customers. Leases can cover multiple Flex Turbine units and explicitly assert the monthly lease payment due over the length of the agreement (typically 12-36 months). Revenue is recognized over time over the duration of the lease, which represents the Company’s obligation to the customer. All current leases are classified as operating leases. Additionally, there are no “rent increases” contained within any of the Company’s current leasing agreements and lease payments are due to the Company in exchange for the use of the Flex Turbine generator and coverage for routine maintenance and monitoring. These agreements typically include preventative and regular maintenance costs embedded within the lease payment (“executory costs”) over the term of the agreement. Such executory costs are considered non-lease components with revenue recognized on a straight-line basis. Lease and non-lease revenue is distinct between the fee to use Flex Turbine and the amount that covers continuous remote monitoring and maintenance. Turbine leasing fleet revenue also includes (i) commissioning of leased units (ii) one-off billings to customers for repairs of leased Flex Turbine units outside the scope of the rental agreement and (iii) the rental of owned ancillary field assets such as standby diesel generators and automatic transfer switches.

Manufactured Product Sales

The Company’s standard terms of sales of new Flex Turbines and Flex Heat Recovery products to channel partners and direct end-users include transfer of title, care, custody and control of the goods at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations except for standard warranties provided on the products and parts sold. The Company offers standard assurance type warranty that its products and parts sold will operate free of material defects and function for a period of the greater of 18 months from delivery or 12 months from commissioning of the unit. Once the standard warranty expires, customers have the option to purchase service/maintenance coverage at a fixed rate. Revenue is recognized upon transfer of control of the promised goods to the Company’s customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Title and risk of loss or

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damage to products passes to the purchaser of newly manufactured Flex Turbines and Flex Heat Recovery products upon production test completion and tender of delivery to the carrier at the Company’s U.S. manufacturing facility. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer.

Service on Sold Product

Service performed by the Company consists primarily of commissioning and maintenance services on units sold to third-party customers. Customers with purchased units in operation that are out of warranty will contact the Company for replacement parts on their turbine generators such as a replacement engine. Once the customer agrees to the pricing and terms for the service order and places a purchase order, the Company will deliver the parts to the customer, recognizing revenue once the performance obligation is met.

Contracts for services are initiated through Service Request Orders (“SROs”), related to a combination of parts and labor. Like parts only, the Company will provide the customer with a quote for the service work and once accepted, will work to satisfy the transaction’s performance obligations and recognized revenue once parts are shipped and/or services have been rendered.

Service revenue also relates to commissioning Flex Turbines sold to third-party customers at the customers’ sites. This is a separate performance obligation from the purchase order to manufacture Flex Turbines. Typically, commissioning of manufactured units takes place within two months of tender for shipment, but can be delayed for up to several months based on when the customer submits its request for commissioning of the units and the commissioning takes place.

Lastly, the Company also provides maintenance service contracts on the existing installed base of Flex Turbines sold to its third-party customers. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is explicitly for the months covered and recognized over time on a straight-line basis over the length of the contract period, which represents the Company’s obligation to the customer.

Practical Expedient

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

INCOME TAXES

FLPS is taxed as a disregarded entity for U.S. federal tax purposes, and the operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. FLPS may incur income taxes that are subject to withholding requirements related to certain of operations within Canada and other foreign countries in which the Company operates. FEI and Flex Power Co. income taxes are accounted for utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the combined consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

In assessing the realizability of the deferred income tax assets, including net operating loss and state tax credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon evaluating both positive and negative evidence in making this assessment, of which

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management determined the need for a valuation allowance on all net deferred tax assets. Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in income tax expense in the accompanying combined consolidated statements of operations and comprehensive loss.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. As of December 31, 2018, the Company elected to account for GILTI as a period cost in the year the tax is incurred.

FOREIGN CURRENCY TRANSACTIONS

The financial statements of an international subsidiary, FLPS ULC, are translated into the functional reporting currency of the Company (USD) using the exchange rate in effect at each balance sheet date for assets and liabilities. Revenues and expenses were translated to USD at the average exchange rate for the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss through the cumulative translation adjustment (“CTA”) account. Foreign exchange transaction gains and losses are recorded in the combined consolidated statements of operations and comprehensive loss in other income (expense), net.

The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for comparable periods and because of the fluctuating exchange rate, actually post higher or lower profit depending on the exchange rate of Canadian Dollar (“CAD”) converted to USD on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

PRODUCT WARRANTY

The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty terms are for the greater of 18 months from delivery or 12 months from commissioning of the unit, to repair or replace any defective component in equipment supplied by the Company. The provision for product warranty is based primarily on historical rates, sales history and other considerations. The provision for product warranty was $90 and $276 for 2020 and 2019, respectively, and is reported within the classification of manufactured product cost of revenue in the accompanying combined consolidated statements of operations and comprehensive loss. Accrued product warranties were $526 and $644 for the years ended December 31, 2020 and 2019, respectively, and are reported within accrued expenses in the accompanying combined consolidated balance sheet.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred and reported in research and development costs in the accompanying combined consolidated statements of operations and comprehensive loss. Costs were $120 and $237 for the years ended December 31, 2020 and 2019, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

Emerging growth company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

Effective January 1, 2019, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The standard applies to all contracts with customers,

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except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company adopted the new revenue standard using the modified retrospective method in accordance with ASC 606 on January 1, 2019.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02” or “Topic 842”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and a lease liability for all leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for all leases with lease terms greater than 12 months. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients and accounting policy elections. ASU 2016-02 will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. ASU 2020-05 extended the adoption to fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of this update on its combined consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13” or “Topic 326”), which requires that all financial assets measured at amortized cost to be evaluated for current expected credit losses. Under the new guidance, immediate recognition of credit losses expected over the life of a financial instrument is required. The pronouncement eliminates the incurred credit loss impairment methodology and replaces it with an expected credit loss concept based on historical experience, current conditions, and reasonable and supportable forecasts. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this update on its combined consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences. It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for us the first quarter of fiscal 2021. There were no significant income tax implications to the Company’s tax provision as a result of the change in guidance.

In March of 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC 848, Reference Rate Reform) (“ASU 2020-04” or “Topic 848”) which provides guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance was issued on March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s combined consolidated financial statements.

NOTE 3  — GOING CONCERN

The accompanying combined consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about its ability to continue as a going concern within one year after the date of the

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combined consolidated financial statements are issued. The Company has sustained net losses of $7,104 and $10,905 for the years ended December 31, 2020 and 2019, respectively, has sustained negative cash flow from operations of $6,275 and $14,848 for the years ended December 31, 2020 and 2019, respectively and has an accumulated deficit of $132,121 as of December 31, 2020. The ability of the Company to continue as a going concern is dependent upon (i) expanding operations, (ii) obtaining additional capital and (iii) reducing operating expenses and/or selling existing turbine assets should this be required to preserve liquidity. Management’s plan in this regard is to implement the Company’s business plan and to secure additional funds through equity or debt financing. There can be no assurance that such alternate financing, if available, can be obtained on acceptable terms. The combined consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 — REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type. The Company believes that this aggregates the payor types by nature, amount, timing, and uncertainty of its revenue streams. The following table summarizes the Company’s disaggregated revenues for the years ended December 31, 2020 and 2019:

​	2020			2019
Manufactured product	​	$	3,276	​	$	5,716
Turbine service on sold product	​	​	2,213	​	​	2,824
Total non-lease revenue	​	$	5,489	​	$	8,540
Turbine leasing fleet revenue	​	​	17,838	​	​	16,833
Total revenue	​	$	23,327	​	$	25,373

Contract Balances

Contract liabilities consist of advance payments for goods as well as deferred revenue on service obligations and extended warranties. All of the Company’s deferred revenue is included in current liabilities under deferred revenue.

The following is a summary of the Company’s contract balances as of December 31, 2020 and 2019:

​	2020			2019
Turbine leasing fleet	​	$	1,548	​	$	2,318
Turbine service on sold product	​	​	318	​	​	376
Manufactured product	​	​	442	​	​	—
Other	​	​	153	​	​	306
Total trade accounts receivable	​	$	2,461	​	$	3,000
Contract assets	​	$	2,461	​	$	3,000
Allowance for doubtful accounts	​	​	(45)	​	​	(60)
Total trade accounts receivable, net	​	$	2,416	​	$	2,940

The amount of revenue recognized that was included in the deferred revenue on service obligations and extended warranty balance at the beginning of 2020 and 2019 was $193 and $58, respectively.

At December 31, 2020 and 2019, the Company had $1,849 and $1,794, respectively, of remaining performance obligations, which are included in deferred revenue. The Company expects to recognize approximately 100% of its remaining performance obligations as of December 31, 2020 as revenue during 2021. The Company recognized 100% of its remaining performance obligations as of 2019 as revenue during 2020.

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Bill-and-Hold Revenue

Certain customer arrangements consist of bill-and-hold characteristics under which the criteria for transfer of control is met, including the passing of title and significant risk and reward of ownership to the customers. Therefore, the customers are able to direct the use of the bill-and-hold inventory while the Company retains physical possession of the product until it is installed at a customer site at a point in time in the future. Revenue recognized in a bill-and-hold arrangement for the years ended December 31, 2020 and 2019 was $3,235 and $0, respectively.

Lessor Revenue

The Company’s lessor portfolio includes only operating leases. The following table presents future operating lease payments under non-cancellable lease arrangements to be received as of December 31, 2020:

Years ended December 31,	​	​
2021	$	7,912
2022	​	491
Total	$	8,403

NOTE 5 — INVENTORY

Inventory is stated at the lower of cost or net realizable value and consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Raw materials	​	$	9,367	​	$	9,804
Work in process	​	​	935	​	​	1,315
Finished goods	​	​	3,357	​	​	2,452
Total inventories, net	​	$	13,659	​	$	13,571

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Turbines and other equipment	​	$	61,973	​	$	57,416
Machinery and equipment	​	​	5,146	​	​	5,432
Leasehold improvements	​	​	782	​	​	2,447
Fieldwork equipment	​	​	4,032	​	​	4,339
Computer equipment and software	​	​	1,074	​	​	855
Vehicles	​	​	274	​	​	308
Furniture and fixtures	​	​	540	​	​	603
Property, plant and equipment, gross	​	$	73,821	​	$	71,400
Accumulated depreciation	​	​	(38,432)	​	​	(34,295)
Construction in progress	​	​	1,117	​	​	—
Property, plant and equipment, net	​	$	36,506	​	$	37,105

The Company has equipment that is used by customers under lease arrangements. The remaining property and equipment are used by the Company for the manufacture of machines and related assets. Depreciation expense for equipment used by customers under lease arrangements was $5,007 and $4,713 for

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the years ended December 31, 2020 and 2019, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of December 31, 2020 were $36,518 and $15,117, respectively. As of December 31, 2019, the gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements were $52,942 and $22,117, respectively. The Company recognized a gain on disposal of property and equipment of $58 for the year ended December 31, 2020 and a loss on disposal of property and equipment of $21 for the year ended December 31, 2019.

NOTE 7 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Patents	​	$	1,680	​	$	1,680
Accumulated amortization	​	​	(1,344)	​	​	(1,176)
Intangible assets, net	​	$	336	​	$	504

Definite-lived intangible assets had a weighted-average remaining useful life of 2.0 years and 3.0 years as of December 31, 2020 and 2019, respectively.

The amortization of intangible assets was $168 for each of the years ended December 31, 2020 and 2019. The estimated annual amortization expense based on the intangible asset balance for the next two years as of December 31, 2020:

Year ending December 31,	​	​
2021	$	168
2022	​	168
Total	$	336

NOTE 8 — DEFERRED REVENUE

Deferred revenue consists of billed amounts collected in advance from various customers for service obligations and deposits on future orders. The durations of the service agreements range between 12 and 120 months. Customer deposits on future orders are non-interest bearing and non-refundable. Deferred revenue was $1,849 and $1,794 at December 31, 2020 and 2019 respectively.

NOTE 9 — LEASES

The Company is obligated under operating leases for locations and apartments in New Hampshire, Colorado, North Dakota, Texas and Canada. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the related leases. In December 2020, the Company entered into a lessee sublease agreement with Pioneer New Hampshire LLC for approximately 5,800 rentable square feet of office space in Portsmouth, New Hampshire. This lease, which was entered into when the Company vacated its previous Portsmouth office space, expires in June 2024 with options to renew for up to an additional six years. In January 2019, the Company entered into a lease agreement for warehouse and manufacturing space in Dover, New Hampshire, with approximate monthly payments of $19 which expires in May 2024. There are no future minimum lease payment obligations after May 2024. The Company is also obligated under capital lease obligations related to vehicles and forklifts. Depreciation on these assets is recorded on a straight-line basis over the term of the lease and is included within depreciation expense. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. The Company recorded rental expense of $2,117 and $2,038 related to the leases for the years ended December 31, 2020 and 2019, respectively.

In January 2020, FLPS entered into the First Amendment to Office Lease (the “First Amendment”) with GPI Plaza Tower, LP to acquire approximately 1,978 of additional rentable square feet for the Colorado

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office space as provided in the original Office Lease dated February 19, 2018. The lease term is approximately 5.5 years and is approximately $301 per year.

The future minimum lease payments under the Company’s capital and operating leases were as follows as of December 31, 2020:

Year ended December 31,	Capital Leases			Operating Leases
2021	​	$	153	​	$	1,363
2022	​	​	136	​	​	1,063
2023	​	​	58	​	​	866
2024	​	​	—	​	​	398
Total future minimum lease obligation	​	$	347	​	$	3,690
Less interest on capital leases	​	​	(26)	​	​	​
Net present value of capital lease obligations	​	$	321	​	​	​
Less current portion	​	​	(148)	​	​	​
Capital lease obligations, long term	​	$	173	​	​	​

NOTE 10 — INCOME TAXES

The income tax expense is composed of the following for the years ended December 31, 2020 and 2019:

​	2020			2019
Current	​	​	​	​	​	​
Federal	​	$	—	​	$	—
State	​	​	31	​	​	7
Foreign	​	​	—	​	​	—
Total current	​	$	31	​	$	7
Deferred	​	​	​	​	​	​
Federal	​	$	—	​	$	—
State	​	​	—	​	​	—
Foreign	​	​	—	​	​	—
Total deferred	​	​	​	​	​	​
Total income tax expense	​	$	31	​	$	7

The reconciliation of the Company’s effective taxes to the statutory federal income taxes is as follows for the years ended December 31, 2020 and 2019:

​	2020				2019
Income tax at statutory rate	​	$	(1,485)	21.0%	​	$	(2,289)	21.0%
State income taxes net of federal benefit	​	​	(435)	6.1%	​	​	(729)	6.7%
Income taxed at partnership level	​	​	207	(2.9)%	​	​	297	(2.7)%
Foreign rate differential	​	​	(57)	0.8%	​	​	13	(0.1)%
Permanent differences	​	​	29	(0.4)%	​	​	33	(0.3)%
State rate change	​	​	692	(9.8)%	​	​	228	(2.1)%
Valuation allowance	​	​	962	(13.6)%	​	​	2,132	(19.6)%
Other	​	​	118	(1.6)%	​	​	322	(2.9)%
Provision for income taxes	​	$	31	(0.4)%	​	$	7	0.0%

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The effective tax rate for the years ended December 31, 2020 and 2019 differs from the statutory federal tax rate primarily due to state income taxes, and the valuation allowance being applied to the federal and state deferred tax assets.

Significant components of the Company’s deferred tax assets consist of the following as of December 31, 2020 and 2019:

​	2020			2019
Net operating loss carryforwards	​	$	17,095	​	$	16,201
Interest limitation carryforward	​	​	8	​	​	4
Reserves and accrued expenses	​	​	641	​	​	633
Intangibles	​	​	102	​	​	89
Inventory	​	​	627	​	​	635
Gross deferred tax assets	​	$	18,473	​	$	17,562
Valuation allowance	​	​	(17,857)	​	​	(16,896)
Net deferred tax assets	​	$	616	​	$	666
Fixed assets	​	$	(616)	​	$	(666)
Gross deferred tax liabilities	​	$	(616)	​	$	(666)
Net deferred tax asset	​	$	—	​	$	—

Management believes that it is more likely than not the Company will not realize all the tax benefits of the deferred tax assets within the allowable carryforward period. Therefore, an appropriate valuation allowance has been provided. The valuation allowance as of December 31, 2019 primarily relates to U.S. federal and state deferred tax assets. The increase in the valuation allowance during the year ended December 31, 2020 was $961.

At December 31, 2020, the Company had federal, state and foreign net operating loss carryforwards of $106,855, $78,223 and $219, respectively, which will expire, if unused, beginning in 2031, 2026, and 2035 respectively. The federal net operating losses of $29,481 generated post-Tax Cuts and Jobs Act (“the Tax Act”) for the tax years ended December 31, 2018 and thereafter have an indefinite carryforward period and do not expire.

The Company’s ability to utilize net operating loss (“NOL”) carryforwards and other tax attributes to reduce future federal taxable income is subject to potential limitations under Internal Revenue Code Section 382 (“Section 382”) and its related tax regulations. The utilization of these attributes may be limited if certain ownership changes by 5% stockholders (as defined in Treasury regulations pursuant to Section 382) and the effects of stock issuances by the Company during any three-year period result in a cumulative change or more than 50% in the beneficial ownership of the Company.

The Company performed a Section 382 analysis to determine if an ownership change has occurred. It has been preliminarily determined that ownership changes occurred under these rules, and an annual limitation on the use of pre-ownership change NOL carryforwards and certain other losses and/or credits has been applied. The preliminary analysis indicates $48,398 of federal net operating loss carryforwards will expire unutilized. The Company has adjusted deferred tax asset accordingly.

In addition, certain future transactions regarding the Company’s equity, including the cumulative effects of small transactions as well as transactions beyond the Company’s control, could cause an ownership change and therefore a potential limitation on the annual utilization of their deferred tax assets.

For the year ended December 31, 2020, the Company has reflected an uncertain tax liability of $3 associated with tax positions taken on the Company’s historic tax returns. Interest and penalties, to the extent there are any, are included in income tax expense. As a result of historic losses, there was no interest or penalties accrued during or for the year ended December 31, 2020.

F-21

A reconciliation of the beginning and ending amounts of unrecognized tax benefits were as follows:

Unrecognized tax benefits January 1, 2020	$	3
Gross decrease for tax positions of prior year	​	—
Gross increase for tax positions of current year	​	—
Unrecognized tax benefits December 31, 2020	$	3

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The Company currently does not have any tax examinations in progress nor has it had any tax examinations since its inception. All of the Company’s tax years will remain open for examination by federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses and tax credits.

On December 22, 2017, the 2017 U.S. Tax Act was signed into law. The Tax Act reduced tax rates and modified certain policies, credits, and deductions and modified certain international tax provisions. The Tax Act reduced the federal corporate tax rate from a maximum of 35 percent to a flat 21 percent rate for tax years beginning after December 31, 2017. As such, the federal statutory rate was 21 percent for the year ended December 31, 2020.

The Tax Act also includes provisions for certain foreign-sourced earnings referred to as Global Intangible Low-Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”) and Base Erosion and Anti-abuse Tax (“BEAT”). None of which had an impact on the Company for the current period.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted into law. The CARES Act is aimed at providing emergency relief and health care for individuals and businesses affected by the COVID-19 pandemic. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferral of the employer portion of social security payments, expanded net operating loss application, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Company has completed its assessment of the impact of the legislation, and there is no significant impact to the combined consolidated financial statements due to the valuation allowance in the US.

As of December 31, 2020, the Company had no accumulated undistributed foreign earnings as Canada has historical losses. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

NOTE 11 — INDEBTEDNESS

Debt consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Line of credit	​	$	26,658	​	$	22,274
Note payable	​	​	2,352	​	​	—
Total debt	​	$	29,010	​	$	22,274
Less current debt	​	​	(1,300)	​	​	—
Total long-term debt	​	$	27,710	​	$	22,274

Line of Credit

On February 8, 2019, FLPS entered into a senior secured revolving credit facility (“the Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The initial commitment amount is for $30,000 and availability under the Credit Agreement is based on a borrowing base calculation of eligible

F-22

assets and other conditions. The facility is backed by a first priority lien on substantially all of the assets of FLPS, and the maturity date of the facility is February 8, 2024. The facility contains various covenants that limits the Company’s ability to, among other things, make restricted payments. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. Leverage ratio means as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all debt and (ii) annualized EBITDA. Base Rate means, for any day, the highest of (a) Prime Rate; (b) the sum of the Federal Funds Rate for the day plus half of one percent (0.50%); and (c) the adjusted Eurodollar Rate for the day plus one percent (1.00%). FLPS is charged a commitment fee based on the daily average unused portion of the revolving credit facility, and that fee ranges from 0.225% to 0.475% per daily average. Additionally, FLPS is charged a letter of credit fee of between 2.50% and 3.00% per quarter with respect to the amount of letters of credit issued under the revolving credit facility. The applicable margin for loans, the commitment fee and the letter of credit fee set forth above will vary quarterly based on the Company’s leverage ratio. Based on the leverage ratio applicable at December 31, 2020, the margin and base rate were 3.00% and 1.44%, respectively; the commitment fee for the unused portion of the revolving credit facility was 0.225%; and the letter of credit fee was 3.00%. FLPS is subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The maximum permitted leverage ratio is 3.50 to 1.00. The minimum fixed charge coverage ratio is 1.25 to 1.00. For the quarter ended December 31, 2020, the Company had an event of non-compliance with respect to the leverage ratio.

On February 12, 2021, the Company entered into a Limited Waiver of Leverage Ratio (the “Waiver”) with TCB pursuant to which the foregoing default event under the Credit Agreement was waived. In consideration of the waiver, (i) the Company agreed to pay TCB a fee of $22 upon execution of the Waiver, (ii) the Company made a $1,500 EBITDA equity contribution to FLPS (the “Waiver Contribution”), and (iii) FLPS made a $1,500 prepayment of its obligations to TCB under the Credit Agreement (the “Prepayment”). The Waiver also amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility, by the amount of the Waiver Contribution. FPS contributed $1,500 to the Company to fund the Waiver Contribution and Prepayment made to TCB.

Gross borrowings outstanding under this revolving credit facility amounted to $26,658 and $22,274 as of December 31, 2020 and 2019, respectively. This amount includes $10,000 of permitted distributions taken in 2019 as further described in Note 14. The Company incurred $27 in financing costs related to amendments to its existing revolving credit facility in 2020. In addition, financing costs were incurred in 2019 in relation to securing the revolving credit facility, which amounted to $926. These financing costs were capitalized under deferred financing costs on the combined consolidated balance sheet. Deferred financing costs are amortized to interest expense over the term of the agreement using the effective interest method. Amortization expense was $189 and $134 for the years ended December 31, 2020 and 2019, respectively.

On January 27, 2020, FLPS entered into an amendment to the Credit Agreement (“First Amendment”) and First Amendment to Pledge and Security Agreement with TCB. Under the terms of the amendment, the borrowing base was amended to include certain non-turbine field equipment which was previously not included.

On August 28, 2020, FLPS entered into the Second Amendment to Credit Agreement with TCB. Under the terms of the amendment, certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified.

On December 21, 2020, FLPS entered into the Third Amendment to Credit Agreement with TCB. Under the terms of the amendment, FLPS ULC was added as an additional loan party to the Credit Agreement. As of December 31, 2020 and 2019, the amounts available for drawdown were $1,429 and $7,726, respectively.

PPP Loans

In 2020, the Company entered into loan agreements under the Small Business Administration (the “SBA”) Paycheck Protection Program (“PPP”) enabled by the CARES Act. On April 14, 2020, TCB

F-23

entered into a note with FLPS and agreed to make available to FLPS a loan in the amount of $991. On May 6, 2020, Bank of America, N.A. (“Bank of America”) entered into a note with FEI and agreed to make available to FEI a loan in the amount of $1,361 (together, the “PPP Loans”). The PPP Loans bear interest at a rate per annum of 1.00%. The term of the PPP Loans are two years, ending April 14, 2022 and May 6, 2022, respectively.

The PPP Loans may be forgiven partially or in full if the funding received is used for payroll costs, interest on mortgages, rent, and utilities, provided that at least 60% of the forgiven amount has been used for payroll costs. Forgiveness is based on the Company maintaining, or quickly rehiring employees and maintaining applicable salary levels and is subject to the approval of the SBA. The PPP Loans are recorded as current portion of notes payable and notes payable, net of current portion on the accompanying combined consolidated balance sheets at December 31, 2020.

The Company used the proceeds to support qualifying expenses such as payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

In 2021, the Company applied for forgiveness on its PPP Loans. The Company will account for forgiveness on the PPP Loans in accordance with ASC 470 – Debt (“ASC 470”) and record a gain on extinguishment of debt on its combined consolidated financial statements and related footnote disclosures, provided the forgiveness is approved by the SBA.

Future minimum principal payments due on the line of credit and PPP Loans are as follows as of December 31, 2020:

For the year ending December 31,	​	​
2021	$	1,300
2022	​	1,052
2023	​	—
2024	​	26,658
Total future principal payments	$	29,010

NOTE 12 — CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

The Company’s three largest customers accounted for approximately 23%, 14%, and 10% of total revenue for the year ended December 31, 2020. In 2019, sales to the Company’s largest customer amounted to 28% of its total revenue. As of December 31, 2020, two customers accounted for 15% and 14% of the accounts receivable balance. As of December 31, 2019, one customer accounted for 32% of the accounts receivable balance. No single supplier accounted for more than 10% of the total cost of revenue for the years ended December 31, 2020 and 2019.

Cash could potentially subject the Company to concentrations of credit risk. However, because the Company maintains its cash with high-quality, accredited financial institutions, such funds are subject to minimal credit risk. The Company may maintain balances with financial institutions in excess of federally insured limits. The Company has not experienced any losses historically in these accounts and believes it is not exposed to significant credit risk in its cash.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Litigation and Legal Proceedings

Any material legal, tax or regulatory proceedings regarding matters arising in the ordinary course of business, which involve the Company’s assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable

F-24

or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred. The Company is not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.

Guarantees and Indemnifications

Between December 2015 and December 31, 2019, FPS issued a series of promissory notes with various investors that together, along with FPS’ affiliates, account for a majority of FPS’ voting equity and representation of its board of directors (the “Investor Notes”). The Investor Notes bear interest at an annualized rate ranging between 8.0% and 12.0% and are pre-payable without penalty at any time. The Investor Notes have a maturity date of June 30, 2022. FPS has the option to receive monthly interest in cash or to accrue monthly interest.

Prior to the closing of the Credit Agreement in February 2019, the Investor Notes were secured by a first priority lien of all assets of the Company and its subsidiaries. In connection with closing of the Credit Agreement, all noteholders of the Investor Notes entered into a Subordination and Intercreditor Agreement with TCB whereby all Investor Notes currently in place, and all future Investor Notes in substantially the same form, were from thereon secured by a second priority lien of all assets of FLPS and its subsidiaries, while the Investor Notes retained their first priority lien in all assets of all other existing and future subsidiaries of FPS.

NOTE 14 — RELATED PARTY TRANSACTIONS

The Company distributed $450 and $10,000, respectively, to FPS during the years ended December 31, 2020 and 2019. In addition, during the years ended December 31, 2020 and 2019, $800 and $7,800, respectively, were re-contributed to the Company for working capital purposes. There are no terms and conditions associated with the repayment of either of these amounts. The contributions were recorded within the Company’s net parent investment at December 31, 2020 and 2019.

NOTE 15 — EMPLOYEE BENEFIT PLAN

The Company sponsors defined contribution 401(k) plans covering substantially all of its employees. The plans entitle employees, almost immediately after their start date, to make voluntary contributions to the plans. Contributions cannot exceed the maximum amount allowed under applicable provisions of the Internal Revenue Code (the “Code”). The Company provided a matching contribution of 100% up to 6% of base salary. Employees are vested in the matching contributions immediately. The Company’s contributions to the plans amounted to approximately $342 and $609 for the years ended December 31, 2020 and 2019, respectively.

NOTE 16 — INCENTIVE PLANS

FlexEnergy, Inc. 2013 Equity Incentive Plan

On January 1, 2013, FEI implemented a long-term compensation incentive plan under which employees, officers, directors and other individuals providing services to FEI are eligible to receive cash payment awards (the “2013 Plan”). The values of each eligible payment under the 2013 Plan has been fixed through the amendment made on October 27, 2016 and there will be no further grants made. No forfeitures have been recognized under the 2013 Plan. An aggregate payout of $633 is due to the participants on the earlier of January 1, 2023 or when certain change in control terms (as provided below) are met. Under the 2013 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FEI, or upon a liquidation or dissolution. The weighted average contractual life remaining is 1.94 years for options outstanding and exercisable. The liability of $492 and $422 are recorded within Other non-current liabilities on the accompanying combined consolidated balance sheets as of December 31, 2020 and 2019, respectively. Share-based compensation expense was $70 and $71 for the 2013 Incentive Plan during the years ended December 31, 2020 and 2019, respectively, and was recorded in selling, general and administrative operating expenses on the accompanying combined consolidated statements of operations and comprehensive loss.

F-25

FlexEnergy, Inc. 2016 Target Incentive Plan (Participation Plan)

On October 27, 2016, FEI adopted the 2016 Target Incentive Plan (the “2016 Plan”), which provides for the grant of cash payment awards totaling $3,249 to certain officers and employees, payable upon satisfaction of a performance condition (i.e. the occurrence of a Change in Control, as defined) and a service vesting condition (i.e. the vesting of an award based on continuous service) . Any payments due under the 2016 Plan are required to be paid within 60 days following a Change in Control (as defined) that constitutes a Qualifying Sale. Under the 2016 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FPS or acquires 50% or more than the fair market value of its assets.

Under the 2016 Plan, cash payment awards of $3,249 in aggregate were granted in October 2016, and the Company does not expect there will be any further awards. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI prior to the earlier of a Termination Transaction or the termination of the 2016 Plan on January 1, 2026. The payments under the 2016 Plan are only due to the participants if certain change in control terms are met on or before the earlier of January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding. The change in control term is a performance condition and therefore the Company does not accrue or recognize any compensation cost until such event is considered probable. No compensation cost has been recognized on these awards to date as the event is not considered probable.

NOTE 17 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through June 4, 2021, the date these combined consolidated financial statements were available to be issued, to ensure that this filing includes all appropriate footnote disclosure of events both recognized in the combined consolidated financial statements as of December 31, 2020, and events which occurred subsequently but were not recognized in the combined consolidated financial statements. The Company has concluded that other than as disclosed in Note 11 and noted below, there were no subsequent events requiring adjustment to or disclosure in these combined consolidated financial statements.

On December 29, 2020, the Company entered into a sublease with Pioneer New Hampshire LLC to relocate its corporate headquarters to 112 Corporate Drive, Portsmouth, New Hampshire, thereby leasing office space of approximately 5,800 square feet of rentable space. The lease for the premises is effective at February 2021 and has a term of approximately 3.5 years, with two optional renewal options of three years each. The minimum monthly rent under the terms of the lease is $7.

F-26

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	June 30, 2021			December 31, 2020
Assets	​	​	​	​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	667	​	$	1,702
Accounts receivable, net of allowance of $11 and $45, respectively	​	​	1,443	​	​	2,416
Inventories, net	​	​	12,329	​	​	13,659
Prepaid expenses and other current assets	​	​	480	​	​	497
Total current assets	​	​	14,919	​	​	18,274
Long-term assets	​	​	​	​	​	​
Property and equipment, net	​	​	34,295	​	​	36,506
Deferred financing costs, net of amortization	​	​	679	​	​	630
Other non-current assets	​	​	62	​	​	166
Intangible assets, net	​	​	252	​	​	336
Total long-term assets	​	$	35,288	​	$	37,638
Total assets	​	$	50,207	​	$	55,912
Liabilities and stockholder’s equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	1,038	​	$	1,328
Accrued expenses	​	​	2,809	​	​	2,003
Deferred revenues	​	​	3,810	​	​	1,849
Current portion of notes payable	​	​	—	​	​	1,300
Current portion of capital lease obligations	​	​	130	​	​	214
Other current liabilities	​	​	421	​	​	148
Total current liabilities	​	​	8,208	​	​	6,842
Long-term liabilities	​	​	​	​	​	​
Capital leases, net of current portion	​	​	126	​	​	173
Line of credit	​	​	22,963	​	​	26,658
Notes payable, net of current portion	​	​	—	​	​	1,052
Other non-current liabilities	​	​	528	​	​	492
Total long-term liabilities	​	$	23,617	​	$	28,375
Total liabilities	​	$	31,825	​	$	35,217
Commitments and contingencies (see note 13)	​	​	​	​	​	​
Stockholder’s equity	​	​	​	​	​	​
Net parent investment	​	$	153,776	​	$	152,273
Accumulated other comprehensive income	​	​	752	​	​	543
Accumulated deficit	​	​	(136,146)	​	​	(132,121)
Total stockholder’s equity	​	$	18,382	​	$	20,695
Total liabilities and stockholder’s equity	​	$	50,207	​	$	55,912

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-27

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	Six Months Ended June 30,
​	2021			2020
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	1,601	​	​	1,120
Manufactured product	​	​	1,276	​	​	1,658
Total revenue	​	​	10,149	​	​	12,802
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	​	2,967	​	​	2,562
Turbine service on sold product	​	​	1,107	​	​	961
Manufactured product	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	2,167	​	​	2,766
Total cost of revenue	​	​	8,771	​	​	9,747
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	​	6,759	​	​	5,957
Research and development	​	​	67	​	​	75
Total operating expenses:	​	​	6,826	​	​	6,032
Operating loss	​	​	(5,448)	​	​	(2,977)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	​	(539)	​	​	(665)
Other income (expense), net	​	​	2,534	​	​	52
Total other income (expense), net	​	​	1,995	​	​	(613)
Loss before income taxes	​	​	(3,453)	​	​	(3,590)
Income tax expense	​	​	(178)	​	​	(4)
Net loss	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss)	​	​	​	​	​	​
Foreign currency translation adjustments	​	​	209	​	​	(213)
Total other comprehensive gain (loss)	​	​	209	​	​	(213)
Comprehensive loss	​	$	(3,422)	​	$	(3,807)

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-28

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(DOLLARS IN THOUSANDS)

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2020

​

$

151,473

​

$

100

​

$

(124,567)

​

$

27,006

Contributions

​

​

800

​

​

—

​

​

—

​

​

800

Distributions

​

​

(4)

​

​

—

​

​

(6)

​

​

(10)

Foreign currency translation adjustments

​

​

—

​

​

(213)

​

​

—

​

​

(213)

Net loss

​

​

—

​

​

—

​

​

(3,594)

​

​

(3,594)

Balance at June 30, 2020

​

$

152,269

​

$

(113)

​

$

(128,167)

​

$

23,989

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2021

​

$

152,273

​

$

543

​

$

(132,121)

​

$

20,695

Contributions

​

​

1,503

​

​

—

​

​

—

​

​

1,503

Distributions

​

​

—

​

​

—

​

​

(394)

​

​

(394)

Foreign currency translation adjustments

​

​

—

​

​

209

​

​

—

​

​

209

Net loss

​

​

—

​

​

—

​

​

(3,631)

​

​

(3,631)

Balance at June 30, 2021

​

$

153,776

​

$

752

​

$

(136,146)

​

$

18,382

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-29

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	Six Months Ended June 30,
​	2021			2020
Cash Flows from Operating Activities	​	​	​	​	​	​
Net loss	​	$	(3,631)	​	$	(3,594)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization of property and equipment	​	​	3,474	​	​	3,258
Amortization of deferred financing costs	​	​	107	​	​	94
Amortization of intangible assets	​	​	84	​	​	84
Bad debt expense	​	​	—	​	​	9
Forgiveness of debt – PPP loan	​	​	(2,378)	​	​	—
Gain on disposal of property and equipment	​	​	(32)	​	​	(57)
Changes in operating assets and liabilities:	​	​	​	​	​	​
Accounts receivable	​	​	973	​	​	(296)
Inventories, net	​	​	860	​	​	(4,188)
Prepaid expenses and other current assets	​	​	17	​	​	(219)
Other non-current assets	​	​	104	​	​	35
Accounts payable	​	​	(295)	​	​	(314)
Accrued expenses	​	​	831	​	​	357
Deferred revenues	​	​	1,961	​	​	(521)
Other current liabilities	​	​	208	​	​	(195)
Other non-current liabilities	​	​	35	​	​	—
Net Cash Provided by (Used in) Operating Activities	​	$	2,318	​	$	(5,547)
Cash Flows from Investing Activities	​	​	​	​	​	​
Purchases of property and equipment	​	​	(525)	​	​	(604)
Proceeds from disposal of property and equipment	​	​	24	​	​	193
Net Cash Used in Investing Activities	​	$	(501)	​	$	(411)
Cash Flows from Financing Activities	​	​	​	​	​	​
Distribution to parent	​	$	(394)	​	$	(10)
Contribution from parent	​	​	1,503	​	​	800
Proceeds from notes payable	​	​	—	​	​	2,352
Payments on line of credit	​	​	(8,528)	​	​	—
Advances from line of credit	​	​	4,678	​	​	4,330
Payments on capital leases	​	​	(64)	​	​	(82)
Net Cash (Used in) Provided by Financing Activities	​	$	(2,805)	​	$	7,390
Effects of Exchange Rate Changes on Cash	​	$	(47)	​	$	2
Net Increase / (Decrease) in Cash	​	$	(1,035)	​	$	1,434
Cash – Beginning	​	$	1,702	​	$	2,000
Cash – Ending	​	$	667	​	​	3,434
Supplemental Disclosure	​	​	​	​	​	​
Interest paid in cash	​	$	425	​	$	402
Taxes paid in cash	​	​	28	​	​	​
Non-Cash Investing and Financing Activities	​	​	​	​	​	​
Net transfers from inventory to property and equipment	​	$	1,447	​	$	3,115
Accrued but not paid deferred financing costs	​	​	156	​	​	27
Transfer from construction in process (CIP) to work in progress (WIP)	​	​	882	​	​	​
Forgiveness of debt – PPP loan	​	​	2,378	​	​	​

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

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NOTES TO UNAUDITED CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS)

NOTE 1 — NATURE OF OPERATIONS

The condensed combined consolidated financial statements include the combined accounts of FlexEnergy, Inc. (“FEI”) and Flex Leasing Power & Service LLC (“FLPS”), collectively referred to as “the Company”. The Company is headquartered in Portsmouth, New Hampshire with field offices in Colorado, North Dakota, Texas and Canada.

On January 1, 2016, FlexEnergy Power Solutions, LLC (“FPS”) was formed to hold FEI and FLPS. FEI manufactures the GT333 kilowatt turbine, the larger GT1300 kilowatt turbine (“Flex Turbine”) and stand- alone heat recovery products (“Flex Heat Recovery products”). FLPS provides a rental and leasing offering of the turbine generator, particularly in the North America oilfield market. Flex Leasing Power and Services, ULC (“FLPS ULC”), which is wholly-owned by Flex Power Co., is a Canadian entity that supports expansion into the Canadian market. Flex Power Co. is a wholly-owned subsidiary of FLPS.

On December 31, 2020, FPS formed FlexEnergy Green Solutions, Inc. (“FGS”) to be its wholly-owned subsidiary. FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS in exchange for 100% of the equity interests in FGS, which will result in FGS becoming a wholly-owned subsidiary of FPS, and FEI and FLPS becoming wholly-owned subsidiaries of FGS.

The Company is an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company’s Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of the Company’s operations and revenues. Flex Turbines provide the Company’s customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. In addition, the Company’s Flex Heat Recovery products are integral to promising emerging power sources, such as fuel cells for electrical power.

The Company serves a diverse range of customers in the global oil and gas (“O&G”), transportation, power, and commercial and industrial (“C&I”) end markets. The Company’s primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying condensed combined consolidated financial statements include the accounts of FEI and its wholly owned subsidiaries and FLPS and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s condensed combined consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. In the opinion of management, the accompanying unaudited condensed combined consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

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The interim results for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.

USE OF ESTIMATES

The preparation of the Company’s condensed combined consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such estimates and assumptions include accounting for the accounts receivable allowance, the valuation of long-lived assets including intangible assets with finite lives, useful lives of long- lived assets such as property, equipment and intangible assets, valuation allowances for deferred income tax assets, inventory obsolescence, and exposure related to warranty and other contingent liabilities. Actual results could differ from those estimates.

SEGMENT INFORMATION

The Company is considered to be a single reporting segment. The Company’s chief operating decision makers (“CODM”), the Chief Executive Officer, the Chief Financial Officer and the Chief Commercial Officer, review financial information presented on a condensed combined consolidated basis for purposes of allocating resources and evaluating financial performance. The business activities of this reporting segment are the engineering, production, sales and leasing of its proprietary energy efficient Flex Turbines and Flex Heat Recovery products, and related parts and service.

The Company conducts its business through various offices and facilities located throughout the U.S. and Canada. All the Company’s revenues were to external customers for the six months ended June 30, 2021 and 2020. Of the sales during the six months ended June 30, 2021, $6,267 were sales to the US, $3,218 to Canada and $664 to non-North America countries, respectively. Of the sales during the six months ended June 30, 2020, $11,269 were sales to the US, $1,292 to Canada and $241 to non-North America countries, respectively. Long-lived assets held in the U.S. and Canada as of June 30, 2021 were $26,150 and $9,138, respectively. Long-lived assets held in the U.S. and Canada at December 31, 2020 were $28,203 and $9,435, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the amount the Company expects to collect from balances outstanding at year end and represent amounts billed to customers and not yet collected, and are recorded when the right to consideration becomes unconditional. Based on the Company’s evaluation of uncollected accounts receivable at the end of each year, bad debts are provided for using an allowance for doubtful accounts method. The evaluation considers historical trends to identify receivables that the Company believes may be uncollectible. The allowance for bad debt was $11 and $45 as of June 30, 2021 and December 31, 2020, respectively.

INVENTORY

Inventory at FEI consists primarily of parts, components, and work in progress for the manufacture and repair of the Flex Turbine and Flex Heat Recovery products. Inventory at FLPS consists primarily of parts, components and turbines that are currently ready for or are being prepared for first time use. Once a turbine has been placed into service, the inventory is transferred to property and equipment. Inventoried parts and components are mainly used for commissioning and/or repairing the turbines. Inventory is valued at the lower of cost or net realizable value and is determined on a the first in, first out (“FIFO”) cost method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to ten years. Expenditures for repairs and

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maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

The estimated useful lives used in computing depreciation of property and equipment are as follows:

Asset	Life
Turbines and other equipment	10 years
Leasehold improvements	Shorter of lease term or 10 years
Machinery and equipment	3 – 7 years
Furniture and fixtures	5 – 7 years
Fieldwork equipment	5 years
Computer equipment and software	3 – 5 years
Vehicles	4 – 5 years

Leasehold improvements are amortized using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation of assets leased to customers was of $2,167 and $2,766 for the six months ended June 30, 2021 and 2020, respectively. Depreciation of assets leased to customers is recorded to cost of revenue. Depreciation of other assets was $1,307 and $492 for the six months ended June 30, 2021 and 2020, respectively. Depreciation of other assets is recorded to operating expenses within the accompanying condensed combined consolidated statements of operations and comprehensive loss. The Company’s depreciation and amortization expense of property and equipment was $3,474 and $3,258 for the six months ended June 30, 2021 and 2020, respectively.

INTANGIBLE ASSETS

Intangible assets, consisting of acquired patents, are presented at cost, net of accumulated amortization. Intangible assets are amortized over their estimated useful life of ten years on a straight-line basis. The Company continues to invest in its intellectual property portfolio and is actively filing for patent protection for its technology in both the U.S. and abroad. The costs, including legal, associated with compiling and filing patent applications are charged to selling, general, and administrative expenses as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets such as property and equipment and intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models and third-party independent appraisals, as considered necessary.

The Company did not record any impairment losses during the six months ended June 30, 2021 and 2020, and there have been no events that triggered an impairment analysis as of June 30, 2021 and December 31, 2020.

REVENUE RECOGNITION

The Company’s revenue consists of turbine leasing fleet revenue, the sales of manufactured Flex Turbine and Flex Heat Recovery products, and service revenues on sold product. Revenue is recognized upon transfer of control of the promised goods or the Company’s performance of the services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company excludes sales tax collected from customers from revenue in its condensed combined consolidated statements of operations and comprehensive loss.

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Significant Judgments — Contracts with Multiple Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. The Company enters into contracts with its customers to manufacture Flex Turbines and Flex Heat Recovery products and provides certain products, parts, and accessories, collectively referred to as “products.” The Company will also provide services associated with these products and parts including commissioning and maintenance services, collectively referred to as “services.” These services are distinct and separate contractual arrangements.

Contracts may contain multiple products within the same agreement. However, each product is distinct as they are sold separately and revenue is only recorded when the individual product is completed and control of the product is transferred. Service contracts, and services noted within such contracts, are similar in that each service is distinct. Each service is explicitly stated in the contracts where the Company provides maintenance repairs and labor services in exchange for a fixed-rate per month per turbine. Revenue from maintenance service contracts is recognized over the term of the contract at the agreed upon monthly service fee as defined in the contract, while commissioning revenue is recognized at the agreed upon commissioning fee amount as defined within the contract once the Flex Turbine is installed and begins generating energy for the customer. The maintenance service contracts and commissioning revenue are each considered distinct and separated from other obligations in the contract since (i) the customer is able to benefit from the good or service separately or together with other resources made available through the arrangement and (ii) the services are each separately identifiable from the others provided in the contract.

Once distinct performance obligations are identified within a contract, the Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer.

Turbine Leasing Fleet

Turbine leasing fleet revenue consists of revenue generated on the Company’s owned fleet of Flex Turbines and owned ancillary field equipment that supports the turbines fleet’s generation in the field. It primarily consists of recurring monthly revenue associated with executed rental agreements (“Generator Rental Agreements”) where the Company is the lessor to the third-party customers. Leases can cover multiple Flex Turbine units and explicitly assert the monthly lease payment due over the length of the agreement (typically 12-36 months). Revenue is recognized over time over the duration of the lease, which represents the Company’s obligation to the customer. All current leases are classified as operating leases. Additionally, there are no “rent increases” contained within any of the Company’s current leasing agreements and lease payments are due to the Company in exchange for the use of the Flex Turbine generator and coverage for routine maintenance and monitoring. These agreements typically include preventative and regular maintenance costs embedded within the lease payment (“executory costs”) over the term of the agreement. Such executory costs are considered non-lease components with revenue recognized on a straight-line basis. Lease and non-lease revenue is distinct between the fee to use Flex Turbine and the amount that covers continuous remote monitoring and maintenance. Turbine leasing fleet revenue also includes (i) commissioning of leased units (ii) one-off billings to customers for repairs of leased Flex Turbine units outside the scope of the rental agreement and (iii) the rental of owned ancillary field assets such as standby diesel generators and automatic transfer switches.

Manufactured Product Sales

The Company’s standard terms of sales of new Flex Turbines and Flex Heat Recovery products to channel partners and direct end-users include transfer of title, care, custody and control of the goods at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations except for standard warranties provided on the products and parts sold. The Company offers standard assurance type warranty that its products and parts sold will operate free of material defects and function for a period of the greater

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of 18 months from delivery or 12 months from commissioning of the unit. Once the standard warranty expires, customers have the option to purchase service/maintenance coverage at a fixed rate. Revenue is recognized upon transfer of control of the promised goods to the Company’s customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Title and risk of loss or damage to products passes to the purchaser of newly manufactured Flex Turbines and Flex Heat Recovery products upon production test completion and tender of delivery to the carrier at the Company’s U.S. manufacturing facility. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer.

Service on Sold Product

Service performed by the Company consists primarily of commissioning and maintenance services on units sold to third-party customers. Customers with purchased units in operation that are out of warranty will contact the Company for replacement parts on their turbine generators such as a replacement engine.

Once the customer agrees to the pricing and terms for the service order and places a purchase order, the Company will deliver the parts to the customer, recognizing revenue once the performance obligation is met.

Contracts for services are initiated through Service Request Orders (“SROs”), related to a combination of parts and labor. Like parts only, the Company will provide the customer with a quote for the service work and once accepted, will work to satisfy the transaction’s performance obligations and recognized revenue once parts are shipped and/or services have been rendered.

Service revenue also relates to commissioning Flex Turbines sold to third-party customers at the customers’ sites. This is a separate performance obligation from the purchase order to manufacture Flex Turbines. Typically, commissioning of manufactured units takes place within two months of tender for shipment, but can be delayed for up to several months based on when the customer submits its request for commissioning of the units and the commissioning takes place.

Lastly, the Company also provides maintenance service contracts on the existing installed base of Flex Turbines sold to its third-party customers. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is explicitly for the months covered and recognized over time on a straight-line basis over the length of the contract period, which represents the Company’s obligation to the customer.

Practical Expedient

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

INCOME TAXES

FLPS is taxed as a disregarded entity for U.S. federal tax purposes, and the operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. FLPS may incur income taxes that are subject to withholding requirements related to certain of operations within Canada and other foreign countries in which the Company operates. FEI and Flex Power Co. income taxes are accounted for utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the condensed combined consolidated financial statement carrying amounts of existing assets and liabilities

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and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

In assessing the realizability of the deferred income tax assets, including net operating loss and state tax credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon evaluating both positive and negative evidence in making this assessment, of which management determined the need for a valuation allowance on all net deferred tax assets. Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in income tax expense in the accompanying condensed combined consolidated statements of operations and comprehensive loss.

FOREIGN CURRENCY TRANSACTIONS

The financial statements of an international subsidiary, FLPS ULC, are translated into the functional reporting currency of the Company (USD) using the exchange rate in effect at each balance sheet date for assets and liabilities. Revenues and expenses were translated to USD at the average exchange rate for the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss through the cumulative translation adjustment (“CTA”) account. Foreign exchange transaction gains and losses are recorded in the condensed combined consolidated statements of operations and comprehensive loss in other income (expense), net.

The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for comparable periods and because of the fluctuating exchange rate, actually post higher or lower profit depending on the exchange rate of Canadian Dollar (“CAD”) converted to USD on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

PRODUCT WARRANTY

The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty terms are for the greater of 18 months from delivery or 12 months from commissioning of the unit, to repair or replace any defective component in equipment supplied by the Company. The provision for product warranty is based primarily on historical rates, sales history and other considerations. The provision for product warranty is reported within the classification of manufactured product cost of revenue in the accompanying condensed combined consolidated statements of operations and comprehensive loss. Accrued product warranties were $302 and $526 as of June 30, 2021 and December 31, 2020, respectively and are reported within accrued expenses in the accompanying condensed combined consolidated balance sheet.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred and reported in research and development costs in the accompanying condensed combined consolidated statements of operations and comprehensive loss. Costs were $67 and $75 for the six months ended June 30, 2021 and 2020, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

Emerging growth company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02” or “Topic 842”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the

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recognition of a right-of-use asset and a lease liability for all leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for all leases with lease terms greater than 12 months. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients and accounting policy elections. Topic 842 will be effective for the Company for fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of this update on its condensed combined consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13” or “Topic 326”), which requires that all financial assets measured at amortized cost to be evaluated for current expected credit losses. Under the new guidance, immediate recognition of credit losses expected over the life of a financial instrument is required. The pronouncement eliminates the incurred credit loss impairment methodology and replaces it with an expected credit loss concept based on historical experience, current conditions, and reasonable and supportable forecasts. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s condensed combined consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences. It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 on January 1, 2021. There were no significant income tax implications to the Company’s tax provision as a result of the change in guidance.

In March of 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC 848, Reference Rate Reform) (“ASU 2020-04” or “Topic 848”) which provides guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance was issued on March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s condensed combined consolidated financial statements.

NOTE 3 — GOING CONCERN

The accompanying condensed combined consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about its ability to continue as a going concern within one year after the date the condensed combined consolidated financial statements are issued. The Company has sustained net losses of $3,631 and $3,594 for the six months ended June 30, 2021 and 2020, respectively and has an accumulated deficit of $136,146 as of June 30, 2021. The ability of the Company to continue as a going concern is dependent upon (i) expanding operations, (ii) obtaining additional capital and (iii) reducing operating expenses and/or selling existing turbine assets should this be required to preserve liquidity. Management’s plan in this regard is to implement the Company’s business plan and to secure additional funds through equity or debt financing. There can be no assurance that such alternate financing, if available,

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can be obtained on acceptable terms. The condensed combined consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 — REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type. The Company believes that this aggregates the payor types by nature, amount, timing, and uncertainty of its revenue streams. The following table summarizes the Company’s disaggregated revenues for the six months ended June 30, 2021 and 2020:

​	2021			2020
Manufactured product	​	$	1,276	​	$	1,658
Turbine service on sold product	​	​	1,601	​	​	1,120
Total non-lease revenue	​	$	2,877	​	$	2,778
Turbine leasing fleet revenue	​	​	7,272	​	​	10,024
Total revenue	​	$	10,149	​	$	12,802

Contract Balances

Contract liabilities consist of advance payments for goods as well as deferred revenue on service obligations and extended warranties. All of the Company’s deferred revenue is included in current liabilities under deferred revenue.

The following is a summary of the Company’s contract balances as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Turbine leasing fleet	​	$	1,088	​	$	1,548
Turbine service on sold product	​	​	194	​	​	318
Manufactured product	​	​	62	​	​	442
Other	​	​	110	​	​	153
Total trade accounts receivable	​	$	1,454	​	$	2,461
Contract assets	​	$	1,454	​	$	2,461
Allowance for doubtful accounts	​	​	(11)	​	​	(45)
Total trade accounts receivable, net	​	$	1,443	​	$	2,416

The amount of revenue recognized during the six months ended June 30, 2021 that was included in the deferred revenue on service obligations and extended warranty balance at December 31, 2020 was $126.

At June 30, 2021, the Company had $3,810 of remaining performance obligations, which are included in deferred revenue. The Company expects to recognize approximately 100% of its remaining performance obligations as revenue during the subsequent 12-month period. At December 31, 2020, the Company had $1,849 of remaining performance obligations, which are included in deferred revenue. The Company recognized $1,732 of the performance obligations as revenue during the six months ended June 30, 2021. The Company expects to recognize 100% of its remaining performance obligations that existed as of December 31, 2020 by the end of fiscal year 2021.

Bill-and-Hold Revenue

Certain customer arrangements consist of bill-and-hold characteristics under which the criteria for transfer of control is met, including the passing of title and significant risk and reward of ownership to the

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customers. Therefore, the customers are able to direct the use of the bill-and-hold inventory while the Company retains physical possession of the product until it is installed at a customer site at a point in time in the future. Revenue recognized in a bill-and-hold arrangement for the six months ended June 30, 2021 and 2020 was $0 and $1,618, respectively.

Lessor Revenue

The Company’s lessor portfolio includes only operating leases. The following table presents future operating lease payments under non-cancellable lease arrangements to be received as of June 30, 2021:

Six months ended December 31, 2021	$	4,921
2022	​	1,078
2023	​	60
Total	$	6,059

NOTE 5 — INVENTORY

Inventory is stated at the lower of cost or net realizable value and consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Raw materials	​	$	6,621	​	$	9,367
Work in process	​	​	3,284	​	​	935
Finished goods	​	​	2,424	​	​	3,357
Total inventories, net	​	$	12,329	​	$	13,659

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2021 and December 31, 2020:

​	2021			2021
Turbines and other equipment	​	$	64,096	​	$	61,973
Machinery and equipment	​	​	5,167	​	​	5,146
Leasehold improvements	​	​	796	​	​	782
Fieldwork equipment	​	​	4,235	​	​	4,032
Computer equipment and software	​	​	654	​	​	1,074
Vehicles	​	​	305	​	​	274
Furniture and fixtures	​	​	540	​	​	540
Property, plant and equipment, gross	​	$	75,793	​	$	73,821
Accumulated depreciation	​	​	(41,651)	​	​	(38,432)
Construction in progress	​	​	153	​	​	1,117
Property, plant and equipment, net	​	$	34,295	​	$	36,506

The Company has equipment that is used by customers under lease arrangements. The remaining property and equipment are used by the Company for the manufacture of machines and related assets. Depreciation expense for equipment used by customers under lease arrangements was $2,167 and $2,766 for the six months ended June 30, 2021 and 2020, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of June 30, 2021 were $45,574 and $21,279, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of December 31, 2020 were $36,518 and $15,117, respectively. The Company

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recognized a gain on disposal of property and equipment of $32 for the six months ended June 30, 2021 and a gain on disposal of property and equipment of $57 for the six months ended June 30, 2020.

NOTE 7 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Patents	​	$	1,680	​	$	1,680
Accumulated amortization	​	​	(1,428)	​	​	(1,344)
Intangible assets, net	​	$	252	​	$	336

Definite-lived intangible assets had a weighted-average remaining useful life of 1.5 years and 2.0 years as of June 30, 2021 and December 31, 2020, respectively.

The amortization of intangible assets was $84 for each of the six months ended June 30, 2021 and 2020. The estimated annual amortization expense based on the intangible asset balance for the next two years as of June 30, 2021:

Six months ended December 31, 2021	$	84
2022	​	168
Total	$	252

NOTE 8 — DEFERRED REVENUE

Deferred revenue consists of billed amounts collected in advance from various customers for service obligations and deposits on future orders. The durations of the service agreements range between 12 and 120 months. Customer deposits on future orders are non-interest bearing and non-refundable. Deferred revenue was $3,810 and $1,849 as of June 30, 2021 and December 31, 2020, respectively.

NOTE 9 — LEASES

The Company is obligated under operating leases for locations and apartments in New Hampshire, Colorado, North Dakota, Texas and Canada. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the related leases. In December 2020, the Company entered into a lessee sublease agreement with Pioneer New Hampshire LLC for approximately 5,800 rentable square feet of office space in Portsmouth, New Hampshire. This lease, which was entered into when the Company vacated its previous Portsmouth office space, expires in June 2024 with options to renew for up to an additional six years. In January 2019, the Company entered into a lease agreement for warehouse and manufacturing space in Dover, New Hampshire, which was later amended on February 22, 2021, with approximate monthly payments of $22 which expires in May 2027. There are no future minimum lease payment obligations after June 2027. In January 2020, FLPS entered into the First Amendment to Office Lease (the “First Amendment”) with GPI Plaza Tower, LP to acquire approximately 1,978 of additional rentable square feet for the Colorado office space as provided in the original Office Lease dated February 19, 2018. The lease term is approximately 5.5 years and is approximately $301 per year.

The Company is also obligated under capital lease obligations related to vehicles and forklifts. Depreciation on these assets is recorded on a straight-line basis over the term of the lease and is included within depreciation expense. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. The Company recorded rental expense of $964 and $1,096 related to the leases for the six months ended June 30, 2021 and 2020, respectively.

On December 29, 2020, the Company entered into a sublease with Pioneer New Hampshire LLC to relocate its corporate headquarters to 112 Corporate Drive, Portsmouth, New Hampshire, thereby leasing

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office space of approximately 5,800 square feet of rentable space. The lease for the premises is effective at February 2021 and has a term of approximately 3.5 years, with two optional renewal options of three years each. The minimum monthly rent under the terms of the lease is $7.

The future minimum lease payments under the Company’s capital and operating leases were as follows as of June 30, 2021:

​	Capital Leases			Operating Leases
Six months ended December 31, 2021	​	$	74	​	$	661
2022	​	​	140	​	​	1,097
2023	​	​	60	​	​	898
2024	​	​	—	​	​	550
2025	​	​	—	​	​	288
Thereafter	​	​	—	​	​	433
Total future minimum lease obligation	​	$	274	​	$	3,927
Less interest on capital leases	​	​	(18)	​	​	​
Net present value of capital lease obligations	​	$	256	​	​	​
Less current portion	​	​	(130)	​	​	​
Capital lease obligations, long term	​	$	126	​	​	​

NOTE 10 — INCOME TAXES

The income tax expense is composed of the following for the six months ended June 30, 2021 and 2020:

​	Six Months Ended June 30,
​	2021		2020
Loss before income taxes	​	(3,453)	​	(3,590)
Income tax expense	​	(178)	​	(4)
Net loss	​	(3,631)	​	(3,594)
Income tax as a percentage of loss before income taxes	​	(5.15)%	​	(0.11)%

The calculation of the overall income tax provision for the six months ended June 30, 2021 primarily consists of state and foreign income taxes. During the six-month period ended June 30, 2021, the Company recorded an income tax provision of $178 on loss before income taxes of $3,453. For the six months ended June 30, 2020, the Company recorded an income tax provision of $4 on loss before income taxes of $3,590. The effective tax rate for the six months ended June 30, 2021 differs from the U.S. statutory rate of 21% primarily due to full valuation allowance on the Company’s US and foreign deferred tax assets.

As of December 31, 2020, the Company’s net deferred tax assets are fully offset by a valuation allowance. The valuation allowance is determined in accordance with the provisions of ASC 740, Income Taxes, which require an assessment of both negative and positive evidence when measuring the need for a valuation allowance. The Company reassesses the need for a valuation allowance on a quarterly basis. Based off the evidence currently available and the Company’s history of losses, the Company is maintaining a full valuation as of June 30, 2021.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted into law. The CARES Act is aimed at providing emergency relief and health care for individuals and businesses affected by the COVID-19 pandemic. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferral of the employer portion of social security payments, expanded net operating loss application, modifications to the net interest deduction limitations,

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and technical corrections to tax depreciation methods for qualified improvement property. The Company has completed its assessment of the impact of the legislation, and there is no significant impact to the condensed consolidated financial statements due to the valuation allowance in the US.

NOTE 11 — INDEBTEDNESS

Debt consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30 2021			December 31, 2020
Line of credit	​	$	22,963	​	$	26,658
Note payable	​	​	—	​	​	2,352
Total debt	​	$	22,963	​	$	29,010
Less current debt	​	​	—	​	​	(1,300)
Total long-term debt	​	$	22,963	​	$	27,710

Line of Credit

On February 8, 2019, FLPS entered into a senior secured revolving credit facility (“the Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The initial commitment amount is for $30,000 and availability under the Credit Agreement is based on a borrowing base calculation of eligible assets and other conditions. The facility is backed by a first priority lien on substantially all of the assets of FLPS, and the maturity date of the facility is February 8, 2024. The facility contains various covenants that limits the Company’s ability to, among other things, make restricted payments. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. Leverage ratio means as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all debt and (ii) annualized EBITDA. Base Rate means, for any day, the highest of (a) Prime Rate; (b) the sum of the Federal Funds Rate for the day plus half of one percent (0.50%); and (c) the adjusted Eurodollar Rate for the day plus one percent (1.00%). FLPS is charged a commitment fee based on the daily average unused portion of the revolving credit facility, and that fee ranges from 0.225% to 0.475% per daily average. Additionally, FLPS is charged a letter of credit fee of between 2.50% and 3.00% per quarter with respect to the amount of letters of credit issued under the revolving credit facility. The applicable margin for loans, the commitment fee and the letter of credit fee set forth above will vary quarterly based on the Company’s leverage ratio. Based on the leverage ratio applicable at June 30, 2021, the margin and base rate were 2.00% and 3.25%, respectively for base rate loans; the margin and Eurodollar rate loan were 3.00% and .09%, respectively for Eurodollar rate loans; the commitment fee for the unused portion of the revolving credit facility was 0.225%; and the letter of credit fee was 3.00%. As of June 30, 2021, $963 and $22,000 of the outstanding line of credit balance was subject to base rate loan interest and a Eurodollar rate loan interest, respectively. FLPS is subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The maximum permitted leverage ratio is 3.50 to 1.00. The minimum fixed charge coverage ratio is 1.25 to 1.00.

On February 12, 2021, the Company entered into a Limited Waiver of Leverage Ratio (the “Waiver”) with TCB pursuant to which the foregoing default event under the Credit Agreement was waived. In consideration of the waiver, (i) the Company agreed to pay TCB a fee of $22 upon execution of the Waiver, (ii) the Company made a $1,500 EBITDA equity contribution to FLPS (the “Waiver Contribution”), and (iii) FLPS made a $1,500 prepayment of its obligations to TCB under the Credit Agreement (the “Prepayment”). The Waiver also amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility, by the amount of the Waiver Contribution. FPS contributed $1,500 to the Company to fund the Waiver Contribution and Prepayment made to TCB.

Gross borrowings outstanding under this revolving credit facility amounted to $22,963 and $26,658 as of June 30, 2021 and December 31, 2020, respectively. This amount includes $10,000 of permitted distributions

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taken in 2019 as further described in Note 14. The Company incurred $156 and $27 in financing costs related to amendments to its existing revolving credit facility during the six months ended June 30, 2021 and 2020, respectively. Gross debt issuance cost was $1,108 and $953 as of June 30, 2021 and December 31, 2020, respectively. Related accumulated amortization was $430 and $323 as of June 30, 2021 and December 31, 2020, respectively. These financing costs were capitalized under deferred financing costs on the condensed combined consolidated balance sheet. Deferred financing costs are amortized to interest expense over the term of the agreement using the effective interest method. Amortization expense was $107 and $94 for the six months ended June 30, 2021 and 2020, respectively.

On January 27, 2020, FLPS entered into an amendment to the Credit Agreement (“First Amendment”) and First Amendment to Pledge and Security Agreement with TCB. Under the terms of the amendment, the borrowing base was amended to include certain non-turbine field equipment which was previously not included.

On August 28, 2020, FLPS entered into the Second Amendment to Credit Agreement with TCB. Under the terms of the amendment, certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified.

On December 21, 2020, FLPS entered into the Third Amendment to Credit Agreement with TCB. Under the terms of the amendment, FLPS ULC was added as an additional loan party to the Credit Agreement.

On February 12, 2021, FLPS amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility by $1,500.

On June 29, 2021, FLPS entered into the Fourth Amendment to Credit Agreement with TCB. Under the terms of the amendment, there was a modification of the due date of the FLPS financial statements to be delivered to TCB and decrease the availability under the revolving credit facility by an additional $2,000, resulting in a total decrease of availability of $3,500 when combined with the aforementioned amendment on February 12, 2021. As of June 30, 2021 and December 31, 2020, the amount available for drawdown were $2,942 and $1,429, respectively.

PPP Loans

In 2020, the Company entered into loan agreements under the Small Business Administration (the “SBA”) Paycheck Protection Program (“PPP”) enabled by the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). On April 14, 2020, TCB entered into a note with FLPS and agreed to make available to FLPS a loan in the amount of $991. On May 6, 2020, Bank of America, N.A. (“Bank of America”) entered into a note with FEI and agreed to make available to FEI a loan in the amount of $1,361 (together, the “PPP Loans”). The PPP Loans bear interest at a rate per annum of 1.00%. The term of the PPP Loans are two years, ending April 14, 2022 and May 6, 2022, respectively.

On May 5, 2021, the Company received notice that the SBA had reviewed the forgiveness application of the FLPS PPP loan and provided forgiveness of the entire principal of $991 plus accrued interest of $10. On June 17, 2021, the Company received notice that the SBA had reviewed the forgiveness application of the FEI PPP loan and provided forgiveness of the entire principal of $1,361 plus accrued interest of $16. The Company accounted for the forgiveness on the PPP Loans in accordance with ASC 470 — Debt (“ASC 470”) and recorded a gain on extinguishment of debt on its condensed combined consolidated financial statements and related footnote disclosures. The Company recognized a gain on extinguishment of the PPP loans of $2,378 during the six months ended June 30, 2021 and is recorded to other income, net within the accompanying condensed combined consolidated statements of operations and comprehensive loss.

Future minimum principal payments due on the line of credit are as follows as of June 30, 2021:

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Six months ended December 31, 2021	$	—
2022	​	—
2023	​	—
2024	​	22,963
Total future principal payments	$	22,963

NOTE 12 — CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

The Company’s two largest customers accounted for approximately 18% and 17% of total revenue for the six months ended June 30, 2021. The Company’s two largest customers accounted for approximately 24% and 13% of total revenue for the six months ended June 30, 2020. As of June 30, 2021, two customers accounted for 33% and 15% of the accounts receivable balance. As of December 31, 2020, two customers accounted for 15% and 14% of the accounts receivable balance. No single supplier accounted for more than 10% of the total cost of revenue for the six months ended June 30, 2021 and 2020.

Cash could potentially subject the Company to concentrations of credit risk. However, because the Company maintains its cash with high-quality, accredited financial institutions, such funds are subject to minimal credit risk. The Company may maintain balances with financial institutions in excess of federally insured limits. The Company has not experienced any losses historically in these accounts and believes it is not exposed to significant credit risk in its cash.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Litigation and Legal Proceedings

Any material legal, tax or regulatory proceedings regarding matters arising in the ordinary course of business, which involve the Company’s assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred. The Company is not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.

Guarantees and Indemnifications

Between December 2015 and July 2021, FPS issued a series of promissory notes with various investors that together, along with FPS’ affiliates, account for a majority of FPS’ voting equity and representation of its board of directors (the “Investor Notes”). The Investor Notes bear interest at an annualized rate ranging between 8.0% and 12.0% and are pre-payable without penalty at any time. The Investor Notes have a maturity date of October 31, 2022. FPS has the option to receive monthly interest in cash or to accrue monthly interest.

Prior to the closing of the Credit Agreement in February 2019, the Investor Notes were secured by a first priority lien of all assets of the Company and its subsidiaries. In connection with closing of the Credit Agreement, all noteholders of the Investor Notes entered into a Subordination and Intercreditor Agreement with TCB whereby all Investor Notes currently in place, and all future Investor Notes in substantially the same form, were from thereon secured by a second priority lien of all assets of FLPS and its subsidiaries, while the Investor Notes retained their first priority lien in all assets of all other existing and future subsidiaries of FPS.

NOTE 14 — RELATED PARTY TRANSACTIONS

The Company distributed $394 and $10, respectively, to FPS during the six months ended June 30, 2021 and 2020. In addition, during the six months ended June 30, 2021 and 2020, $1,503 and $800, respectively, were re-contributed to the Company for working capital purposes. There are no terms and

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conditions associated with the repayment of either of these amounts. The contributions were recorded within the Company’s net parent investment at June 30, 2021 and 2020.

NOTE 15 — EMPLOYEE BENEFIT PLAN

The Company sponsors defined contribution 401(k) plans covering substantially all of its employees. The plans entitle employees, almost immediately after their start date, to make voluntary contributions to the plans. Contributions cannot exceed the maximum amount allowed under applicable provisions of the Internal Revenue Code (the “Code”). The Company provided a matching contribution of 100% up to 6% of base salary. Employees are vested in the matching contributions immediately. The Company’s contributions to the plans amounted to approximately $210 and $236 for six months ended June 30, 2021 and 2020, respectively.

NOTE 16 — INCENTIVE PLANS

FlexEnergy, Inc. 2013 Equity Incentive Plan

On January 1, 2013, FEI implemented a long-term compensation incentive plan under which employees, officers, directors and other individuals providing services to FEI are eligible to receive cash payment awards (the “2013 Plan”). The values of each eligible payment under the 2013 Plan has been fixed through the amendment made on October 27, 2016 and there will be no further grants made. No forfeitures have been recognized under the 2013 Plan. An aggregate payout of $633 is due to the participants on the earlier of January 1, 2023 or when certain change in control terms (as provided below) are met. Under the 2013 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FEI, or upon a liquidation or dissolution. The weighted average contractual life remaining is 1.44 years for options outstanding and exercisable. The liability of $528 and $492 is recorded within Other non-current liabilities on the accompanying condensed combined consolidated balance sheets as of June 30, 2021 and December 31, 2020, respectively. Share-based compensation expense was $36 for the 2013 Incentive Plan during the six months ended June 30, 2021 and 2020, respectively and was recorded in selling, general and administrative operating expenses on the accompanying condensed combined consolidated statements of operations and comprehensive loss.

FlexEnergy, Inc. 2016 Target Incentive Plan (Participation Plan)

On October 27, 2016, FEI adopted the 2016 Target Incentive Plan (the “2016 Plan”), which provides for the grant of cash payment awards totaling $3,249 to certain officers and employees, payable upon satisfaction of a performance condition (i.e. the occurrence of a Change in Control, as defined) and a service vesting condition (i.e. the vesting of an award based on continuous service) . Any payments due under the 2016 Plan are required to be paid within 60 days following a Change in Control (as defined) that constitutes a Qualifying Sale. Under the 2016 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FPS or acquires 50% or more than the fair market value of its assets.

Under the 2016 Plan, cash payment awards of $3,249 in aggregate were granted in October 2016, and the Company does not expect there will be any further awards. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI prior to the earlier of a Termination Transaction or the termination of the 2016 Plan on January 1, 2026. The payments under the 2016 Plan are only due to the participants if certain change in control terms are met on or before the earlier of January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding. The change in control term is a performance condition and therefore the Company does not accrue or recognize any compensation cost until such event is considered probable. No compensation cost has been recognized on these awards to date as the event is not considered probable.

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NOTE 17 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through June 4, 2021, the date these condensed combined consolidated financial statements were available to be issued, to ensure that this filing includes all appropriate footnote disclosure of events both recognized in the condensed combined consolidated financial statements as of June 30, 2021, and events which occurred subsequently but were not recognized in the condensed combined consolidated financial statements. The Company has concluded that other than as noted below, there were no subsequent events requiring adjustment to or disclosure in these condensed combined consolidated financial statements.

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment, or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds of the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

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FLEXENERGY GREEN SOLUTIONS, INC.

Common Stock

Through and including                  , 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in our common stock, whether or not participating in our initial public offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, upon completion of this offering. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

SEC registration fee	​	*
FINRA filing fee	​	*
Exchange listing fee	​	*
Printing and engraving expenses	​	*
Legal fees and expenses	​	*
Accounting fees and expenses	​	*
Transfer agent and registrar fees	​	*
Miscellaneous expenses	​	*
Total	$	*

*

To be provided by amendment.

ITEM 14.   INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law authorizes the board of directors of a corporation to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

Our Certificate of Incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for breach of the fiduciary duty of care, but will be liable for monetary damages for the following:

•

any breach of their duty of loyalty to our company or our stockholders;

•

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

•

unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

•

any transaction from which they derived an improper personal benefit.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our Certificate of Incorporation and Bylaws provide that we will indemnify and hold harmless, to the fullest extent permitted by the Delaware General Corporation Law, any director or officer who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the

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corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees and other amounts) reasonably incurred. The foregoing rights to indemnification generally do not apply to a proceeding initiated by a director or officer unless the proceedings were approved by our board of directors, the indemnification is required by law or the director or officer is seeking enforcement of the indemnification and advancement rights. Our Certificate of Incorporation and our Bylaws will also provide that we must pay the expenses (including attorneys’ fees) incurred by a director or officer in defending any proceeding in advance of its final disposition, provided that such payment of expenses in advance of the final disposition of the proceeding will be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it is ultimately determined that the director or officer is not entitled to be indemnified.

Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in any such action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our Certificate of Incorporation, Bylaws and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement to be filed as Exhibit 1.1 to this registration statement will provide for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

ITEM 15.   RECENT SALES OF UNREGISTERED SECURITIES

In connection with the Contribution Transaction,          shares of common stock will be issued to FlexEnergy Power Solutions, LLC. The common stock will be issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering.

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ITEM 16.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Exhibits.   See the Exhibit Index attached to this registration statement, which is incorporated by reference herein.

(b)

Financial Statement Schedules.   All financial statement schedules are omitted because the information called for is not required or is shown either in the combined consolidated financial statements or in the notes thereto.

ITEM 17.   UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1)   For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)   For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
1.1*	Form of Underwriting Agreement.
2.1*	Form of Contribution Agreement, to be in effect at the consummation of this offering.
3.1	Form of Amended and Restated Certificate of Incorporation, to be in effect at the consummation of this offering.
3.2	Form of Amended and Restated Bylaws, to be in effect at the consummation of this offering.
4.1*	Form of Warrant to be issued to Roth Capital Partners, LLC in connection with this offering.
5.1*	Opinion of Rutan & Tucker, LLP.
10.1+*	2021 Incentive Award Plan and forms of award agreements thereunder.
10.2+*	Form of Indemnification Agreement between FlexEnergy Green Solutions, Inc. and each of its directors and executive officers.
10.3*	Form of Registration Rights Agreement among FlexEnergy Green Solutions, Inc., FlexEnergy Power Solutions, LLC, RNS Flex, LLC and TRF Platform Holdings, LLC to be in effect at the consummation of this offering.
10.4+*	Form of Board Chairperson Compensation Agreement between FlexEnergy Green Solutions, Inc. and George Walker, to be in effect at the consummation of this offering.
10.5+*	Form of Executive Employment Agreement between FlexEnergy Energy Systems, Inc. and Mark Schnepel, to be in effect at the consummation of this offering.
10.6+*	Form of Executive Employment Agreement between FlexEnergy Energy Systems, Inc. and Wes Kimmel, to be in effect at the consummation of this offering.
10.7+*	Form of Executive Employment Agreement between Flex Leasing Power & Service LLC and Doug Baltzer, to be in effect at the consummation of this offering.
10.8	Sublease between Pioneer New Hampshire LLC and FlexEnergy Systems, Inc. dated December 23, 2020.
10.9	Office Lease between Flex Leasing Power & Service LLC and GPI Plaza Tower, LP, dated February 19, 2018.
10.10	First Amendment to Office Lease between Flex Leasing Power & Service LLC and GPI Plaza Tower, LP, dated August 29, 2019.
10.11	Sublease between Flex Leasing Power & Service LLC and Energes, LLC, dated April 12, 2016.
10.12	Lease Agreement between Flex Leasing Power Service ULC and Bennett Financial Corp, dated December 1, 2015.
10.13	Lease Renewal Agreement between Flex Leasing Power Service ULC and Bennett Financial Corp, dated July 1, 2020.
10.14	Commercial Lease between Flex Leasing Power & Service LLC and West Epley LLC dated August 15, 2019.
10.15	Commercial Lease Amendment between Flex Leasing Power & Service LLC and West Epley LLC dated June 1, 2020.
10.16	Lease Agreement between FlexEnergy Energy Systems, Inc. and 1 Progress LLC, dated January 2019.
10.17	First Lease Amendment between FlexEnergy Energy Systems, Inc. and 1 Progress LLC, dated February 22, 2021.
10.18*	Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other loan parties from time to time party thereto, the lenders from time to time party thereto and Texas Capital Bank, National Association, as administrative agent, swing line lender and L/C issuer, dated February 8, 2019.

II-4

Exhibit Number	Exhibit Description
10.19*	Pledge and Security Agreement among Flex Leasing Power & Service LLC, Flex Power Co. and Texas Capital Bank, National Association dated February 8, 2019.
10.20*	Parent Pledge and Limited Guaranty Agreement among FlexEnergy Power Solutions, LLC and Texas Capital Bank, National Association dated February 8, 2019.
10.21*	Subordination and Intercreditor Agreement among RNS Flex, LLC, Energy Special Situations Fund II, L.P., ESS Participation Fund II, L.P., TRF Platform Holdings, LLC, FlexEnergy Power Solutions, LLC, Flex Leasing Power & Service LLC and Texas Capital Bank, National Association dated February 8, 2019.
10.22*	First Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated January 27, 2020.
10.23*	Second Amendment to Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated August 28, 2020.
10.24*	Third Amendment to Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.25*	Letter Agreement Regarding Limited Waiver of Leverage Ration Financial Covenant among Flex Leasing Power & Service LLC, each of the other borrowers and loan parties party thereto and Texas Capital Bank, National Association, as administrative agent, dated February 12, 2021.
10.26*	Fourth Amendment to Credit Agreement among Flex Leasing Power & Service LLC, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated June 29, 2021.
10.27*	Joinder Agreement by Flex Leasing and Power Service ULC, in favor of Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.28*	Joinder Agreement and Amendment to Subordination and Intercreditor Agreement by Flex Leasing and Power Service ULC, in favor of Texas Capital Bank, National Association, as administrative agent, and acknowledged by the existing loan parties and subordinated lenders thereto dated December 22, 2020.
10.29*	Amendment to Security Agreement by Flex Power Co. dated December 22, 2020.
10.30*	Canadian Pledge and Security Agreement between Flex Leasing and Power Service ULC and Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.31*	Stock Pledge Agreement among FlexEnergy Power Solutions, LLC, RNS Flex, LLC, Energy Special Situations Fund II, L.P., ESS Participation Fund II, L.P. and TRF Platform Holdings, LLC, to be in effect at the consummation of this offering.
21.1	List of Subsidiaries of the Registrant.
23.1*	Consent of Deloitte & Touche LLP, independent registered public accounting firm.
23.2*	Consent of Rutan & Tucker, LLP (included in Exhibit 5.1).
24.1	Power of Attorney (see page II-6).

*

To be filed by amendment.

+

Management contract or compensatory plan or arrangement.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Portsmouth, New Hampshire, on the        day of September, 2021.

FLEXENERGY GREEN SOLUTIONS, INC.

By:

Name:

Mark Schnepel

Title:

Chief Executive Officer   

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Schnepel and Wes Kimmel, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Registration Statement on Form S-1 of FlexEnergy Green Solutions, Inc. and any or all amendments (including post-effective amendments) thereto and any new registration statement with respect to the offering contemplated thereby filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
Mark Schnepel	Chief Executive Officer (Principal Executive Officer)	​
Wes Kimmel	Chief Financial Officer (Principal Financial and Accounting Officer)	​
Thomas Denison	Director	​
Patrick Connelly	Director	​
George Walker	Director	​

II-6

EX-3.1

 

Exhibit 3.1

 

Delaware Page 1

The First State

 

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF “FLEXENERGY GREEN SOLUTIONS, INC.”, FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF MAY, A.D. 2021, AT 3:55 O’CLOCK P.M.

 

	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State

4596880 8100		Authentication: 203204629
SR# 20211769969		Date: 05-14-21

You may verify this certificate online at corp.delaware.gov/authver.shtml

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 03:55 PM 05/13/2021

FILED 03:55 PM 05/13/2021

SR 20211769969 - File Number 4596880

 

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

FLEXENERGY GREEN SOLUTIONS, INC.

 

(Pursuant to Sections 241 and 245 of the

General Corporation Law of the State of Delaware)

 

FlexEnergy Green Solutions, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

 

DOES HEREBY CERTIFY:

 

1.            That the name of this corporation is FlexEnergy Green Solutions, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on December 31, 2020.

 

2.            This corporation has not received any payment for any of its stock.

 

3.            That the Board of Directors (the “Board”) duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation, which resolution setting forth the proposed amendment and restatement is as follows:

 

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:

 

ARTICLE I.

 

The name of this corporation is FlexEnergy Green Solutions, Inc. (the “Company”).

 

ARTICLE II.

 

The address of the Company’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, Delaware 19808, and the name of the registered agent at such address is Corporation Service Company.

 

ARTICLE III.

 

The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).

 

ARTICLE IV.

 

Section A.      The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is one hundred five million (105,000,000) shares. One hundred million (100,000,000) shares shall be Common Stock, each having a par value of one-hundredth of one cent ($0.0001). Five million (5,000,000) shares shall be Preferred Stock, each having a par value of one-hundredth of one cent ($0.0001).

 

 

 

 

Section B.       The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Company (the “Board of Directors”) is hereby expressly authorized to provide for the issue of all or any number of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock.

 

Section C.        Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Company for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock). The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon, without a separate vote of the holders of the Common Stock.

 

ARTICLE V.

 

Section A.

 

1.       Director Nominations. For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that the business and the affairs of the Company shall be managed by or under the direction of the Board of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the number of directors constituting the Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors constituting the Board of Directors .

 

-2-

 

 

2.       Term of Office. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, all of the directors of the Company shall be of one class and shall be elected annually. Each director shall hold office until the next annual meeting of stockholders and, the foregoing notwithstanding, shall serve until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

 

3.       Removal of Directors. Subject to any limitations imposed by applicable law and except for the removal of directors, if any, elected by the holders of one or more series of Preferred Stock, voting separately as class, any individual director or directors may be removed by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors.

 

4.       Vacancies. Subject to any limitations imposed by applicable law and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.

 

Section B.

 

1.       Bylaw Amendments.

 

a.       The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Company (as so adopted, amended and restated, the “Bylaws”). Any adoption, amendment or repeal of the Bylaws of the Company by the Board of Directors shall require the approval of a majority of the authorized number of directors.

 

b.       During the period that FlexEnergy Power Solutions, LLC, a Delaware limited liability company (“FPS”), continues to hold stock representing at least 50% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors (the “Covered FPS Ownership Period”), the stockholders shall also have power to adopt, amend or repeal the Bylaws of the Company with, in addition to any vote of the holders of any class or series of stock of the Company required by law or by this Amended and Restated Certificate of Incorporation, (i) the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, and (ii) after the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class.

 

-3-

 

 

2.       Ballots. The directors of the Company need not be elected by written ballot unless the Bylaws so provide.

 

3.       Action Without a Meeting. During the Covered FPS Ownership Period, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or by electronic transmission setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. At the end of the Covered FPS Ownership Period, the stockholders’ ability to act by written consent or by electronic transmission pursuant to the immediately preceding sentence shall forever terminate, and, thereafter, (i) no action shall be taken by the stockholders of the Company except at an annual or special meeting of such stockholders and (ii) the stockholders may not take action by written consent or by electronic transmission.

 

4.       Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Company shall be given in the manner provided in the Bylaws of the Company.

 

5.       Special Meetings. Special meetings of the stockholders of the Company may be called only by (i) the Chairperson of the Board of Directors or (ii) the Board of Directors pursuant to a resolution adopted by a majority of the directors then holding office (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and the ability of the stockholders to call a special meeting is hereby specifically denied; provided, however, at any time prior to the conclusion of the Covered FPS Ownership Period, special meetings of the stockholders of the Company shall be called by the Company at the request of the holders of not less than a majority in voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors.

 

ARTICLE VI.

 

Section A.       The liability of the directors for monetary damages shall be eliminated to the fullest extent permitted by applicable law.

 

Section B.        To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article VI to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

 

Section C.        Any repeal or modification of this Article VI shall only be prospective and shall not affect the rights or protections or increase the liability of any director under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

 

-4-

 

 

ARTICLE VII.

 

Section A.        Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware or if and only if the Court of Chancery lack subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware (together with the Court of Chancery, the “Delaware Courts” and individually, a “Delaware Court”) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the DGCL, the Company’s Certificate of Incorporation or the Bylaws of the Company; or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Delaware Court determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court (and the indispensable party does not consent to the personal jurisdiction of the Delaware Court within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court, or (C) for which the Delaware Court does not have subject matter jurisdiction. Notwithstanding any of the foregoing to the contrary, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

 

Section B.        If any action the subject matter of which is within the scope of Section A of this Article VII (other than any complaint asserting a cause of action arising under the Securities Act of 1933, as amended) is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A of this Article VII (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

Section C.        If any provision or provisions of this Article VII is held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VII (including, without limitation, each portion of any sentence of this Article VII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article VII.

 

-5-

 

 

ARTICLE VIII.

 

Section A.        In recognition and anticipation that FPS and its Affiliates, and their respective partners, principals, directors, officers, members, managers, equityholders and/or employees, including without limitation any of the foregoing who serve as officer of the Company or members of the Board of Directors (collectively, the “Identified Persons” and each, an “Identified Person”) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company or any of its Affiliates, directly or indirectly, may engage or propose to engage, the provisions of this Article VIII are set forth to regulate and define the conduct of certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve any of the Identified Persons and the powers, rights, duties and liabilities of the Company and its directors, officers and stockholders in connection therewith. In furtherance of the foregoing, no Identified Person shall, to the fullest extent permitted by law, (A) have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Company or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Company or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities; and (B) the Company hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for an Identified Person and the Company or any of its Affiliates. Subject to Section B of this Article VIII, if any Identified Person acquires knowledge of a potential transaction or other business opportunity that may be a corporate opportunity for itself, herself or himself and the Company or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Company or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty as a stockholder, director or officer of the Company solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not communicate information regarding such corporate opportunity to the Company.

 

Section B.        Notwithstanding the foregoing provisions of this Article VIII, the Company does not renounce its interest in any corporate opportunity offered to any Identified Person (including any Identified Person who serves as an officer of the Company) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company, and the provisions of Section A of this Article VIII shall not apply to any such corporate opportunity.

 

Section C.        In addition to and notwithstanding the foregoing provisions of this Article VIII, a potential corporate opportunity shall not be deemed to be a corporate opportunity for the Company if it is a business opportunity that (i) the Company is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Company’s business or is of no practical advantage to the Company or (iii) is one in which the Company has no interest or reasonable expectancy.

 

-6-

 

 

Section D.        For purposes of this Article VIII, “Affiliate” means (i) in respect of FPS, any person or entity that, directly or indirectly, controls, is under common control with, or is controlled by FPS (other than the Company and any entity that is controlled by the Company), and shall be deemed to include, without limitation, Intervale Capital LLC and RNS Capital LLC, and (ii) in respect of the Company, any person or entity that, directly or indirectly, is controlled by the Company. For purposes of this Article VIII, “control” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting stock, by contract, or otherwise. A person or entity who is the owner of 20% or more of the outstanding voting securities of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person or entity holds voting stock, in good faith and not for the purpose of circumventing this Section D, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

Section E.        To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in any shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article VIII. Neither the alteration, amendment, addition to or repeal of this Article VIII, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation (or any certificate of designation filed with respect to a series of Preferred Stock) inconsistent with this Article VIII, shall eliminate or reduce the effect of this Article VIII in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article VIII, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article VIII shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Company under this Amended and Restated Certificate of Incorporation, any bylaws or applicable law.

 

ARTICLE IX.

 

Section A.        Indemnification of Directors and Officers. The Company shall indemnify its directors and officers to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the Company may modify the extent of the indemnification by individual contracts with its directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Company, (iii) indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the DGCL or any other applicable law or (iv) indemnification is required to be made under Section D of this Article IX.

 

Section B.        Indemnification of Employees and other Agents. The Company shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law.

 

The Board of Directors shall have the power to delegate to any person the Board of Directors decides the determination of whether indemnification shall be given.

 

-7-

 

 

Section C.        Expense. The Company shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer, of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Company of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article IX or otherwise.

 

Section D.        Enforcement. The rights conferred on any person by this Article IX shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Amended and Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

 

Section E.        Non-Exclusivity of Rights. The rights conferred on any person by this Article IX shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Amended and Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

 

Section F.        Survival of Rights. The rights conferred on any person by this Article IX shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Section G.        Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the Company, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Article IX.

 

Section H.        Amendments. Any repeal or modification of this Article IX shall only be prospective and shall not affect the rights under this Article IX in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Company,

 

-8-

 

 

Section I.        Savings Clause. If this Article IX or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Article IX that shall not have been invalidated, or by any other applicable law. If this Article IX is invalid due to the application of the indemnification provisions of another jurisdiction, then the Company shall indemnify each director and executive officer to the full extent under any other applicable law.

 

Section J.        Certain Definitions. For the purposes of this Article IX, the following definitions shall apply:

 

1.       The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

 

2.       The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

 

3.       The term the “Company” shall include, in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent entity, or is or was serving at the request of such constituent entity as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving corporation as he or she would have with respect to such constituent entity if its separate existence had continued.

 

4.       References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the Company shall include, without limitation, situations where such person is serving at the request of the Company as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

 

5.       References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article IX.

 

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ARTICLE X.

 

During the Covered FPS Ownership Period, the Company hereby expressly elects not to be governed by Section 203 of the DGCL.

 

ARTICLE XI.

 

The name and mailing address of the incorporator are Wes Kimmel, 112 Corporate Drive, Suite 3, Portsmouth, NH 03801.

 

ARTICLE XII.

 

Section A.        The Company reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in Section B of this Article XII, and all rights conferred upon the stockholders herein are granted subject to this reservation.

 

Section B.        Notwithstanding any other provisions of this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Company required by law or by this Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, (1) during the Covered FPS Ownership Period, the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, at any time, shall be required to alter, amend or repeal Articles V, VI, VII, VIII, IX, X or XII in any respect, or to adopt any provision or bylaw inconsistent therewith, and (2) after the Covered FPS Ownership Period, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, at any time, shall be required to alter, amend or repeal Articles V, VI, VII, VIII, IX, X or XII in any respect, or to adopt any provision or bylaw inconsistent therewith.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be signed on this 13 day of May, 2021.

 

	/s/ Wes Kimmel
	Name: Wes Kimmel
	Title: Incorporator

 

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EX-3.2

Exhibit 3.2 

AMENDED AND RESTATED BYLAWS

OF

FLEXENERGY GREEN SOLUTIONS, INC.

(A DELAWARE CORPORATION) 

(initially adopted on December 31, 2020)

(as amended and restated on May 10, 2021)

The following Amended and Restated Bylaws amend, restate and supersede the previously adopted Bylaws of FlexEnergy Green Solutions, Inc., a Delaware corporation (the “corporation”):

ARTICLE I
OFFICES

Section 1.        Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle.

Section 2.        Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II
CORPORATE SEAL

Section 3.       Corporate Seal. The Board of Directors may adopt a corporate seal. If adopted, the corporate seal shall consist of a die bearing the name of the corporation and the inscription, “Corporate Seal-Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE III
STOCKHOLDERS’ MEETINGS

Section 4.        Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, if any, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”) and Section 14(c).

Section 5.        Annual Meeting.

(a)         The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of stockholders (with respect to business other than nominations); (ii) brought specifically by or at the direction of the Board of Directors or any authorized committee thereof; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 5(b), who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5. For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business (other than matters properly included in the corporation’s notice of meeting of stockholders and proxy statement under Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “1934 Act”)) before an annual meeting of stockholders.

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(b)         At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under Delaware law and as shall have been properly brought before the meeting.

(1)        For nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(3) and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each nominee such stockholder proposes to nominate at the meeting: (1) the name, age, business address and residence address of such nominee, (2) the principal occupation or employment of such nominee, (3) the class and number of shares of each class of capital stock of the corporation which are owned of record and beneficially by such nominee, (4) the date or dates on which such shares were acquired and the investment intent of such acquisition and (5) such other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to Section 14 of the 1934 Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named as a nominee and to serving as a director if elected); and (B) the information required by Section 5(b)(4). The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee.

(2)        Other than proposals sought to be included in the corporation’s proxy materials pursuant to Rule 14a-8 under the 1934 Act, for business other than nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(3), and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each matter such stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent; and (B) the information required by Section 5(b)(4).

(3)        To be timely, the written notice required by Section 5(b)(1) or Section 5(b)(2) must be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth (90^th) day nor earlier than the close of business on the one hundred twentieth (120^th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that, subject to the last sentence of this Section 5(b)(3), if the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so received not earlier than the close of business on the one hundred twentieth (120^th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made. In no event shall an adjournment or a postponement of an annual meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period for the giving of a stockholder’s notice as described above.

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(4)        The written notice required by Section 5(b)(1) or Section 5(b)(2) shall also set forth, as of the date of the notice and as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “Proponent” and collectively, the “Proponents”): (A) the name and address of each Proponent, as they appear on the corporation’s books; (B) the class, series and number of shares of the corporation that are owned beneficially and of record by each Proponent; (C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal between or among any Proponent and any of its affiliates or associates, and any others (including their names) acting in concert, or otherwise under the agreement, arrangement or understanding, with any of the foregoing; (D) a representation that the Proponents are holders of record or beneficial owners, as the case may be, of shares of the corporation entitled to vote at the meeting and intend to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice (with respect to a notice under Section 5(b)(1)) or to propose the business that is specified in the notice (with respect to a notice under Section 5(b)(2)); (E) a representation as to whether the Proponents intend to deliver a proxy statement and form of proxy to holders of a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (with respect to a notice under Section 5(b)(1)) or to carry such proposal (with respect to a notice under Section 5(b)(2)); (F) to the extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice; (G) a description of all Derivative Transactions (as defined below) by each Proponent during the previous twelve (12)-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (H) as to any business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such Proponents.

(c)         A stockholder providing written notice required by Section 5(b)(1) or Section 5(b)(2) shall update and supplement such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the meeting and (ii) the date that is five (5) business days prior to the meeting and, in the event of any adjournment or postponement thereof, five (5) business days prior to such adjourned or postponed meeting. In the case of an update and supplement pursuant to clause (i) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than five (5) business days after the first public announcement of the record date for the meeting. In the case of an update and supplement pursuant to clause (ii) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than two (2) business days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two (2) business days prior to such adjourned or postponed meeting.

(d)         Notwithstanding anything in Section 5(b)(3) to the contrary, if the number of directors of the Board of Directors is increased and there is no public announcement of the appointment of a director to such class, or, if no appointment was made, of the vacancy in such class, made by the corporation at least ten (10) days before the last day a stockholder may deliver a notice of nomination in accordance with Section 5(b)(3), a stockholder’s notice required by this Section 5 and which complies with the requirements in Section 5(b)(1), other than the timing requirements in Section 5(b)(3), shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the corporation.

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(e)         A person shall not be eligible for election or re-election as a director unless the person is nominated either in accordance with clause (ii) of Section 5(a), or in accordance with clause (iii) of Section 5(a). Except as otherwise required by law, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, or the Proponent does not act in accordance with the representations in clauses (D) and (E) of Section 5(b)(4), to declare that such proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded, notwithstanding that proxies in respect of such nominations or such business may have been solicited or received.

(f)         Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to clause (iii) of Section 5(a).

(g)         Notwithstanding the foregoing provisions of this Section 5, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 5 to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(h)         For purposes of Section 5 and Section 6,

(1)        “affiliates” and “associates” shall have the meanings set forth in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”);

(2)        “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial: (A) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the corporation, (B) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the corporation, (C) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes, or (D) which provides the right to vote or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, with respect to any securities of the corporation, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the corporation held by any general or limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and

(3)        “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to 13, 14 or 15(d) of the 1934 Act.

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Section 6.           Special Meetings.

(a)         Special meetings of the stockholders of the corporation may be called only in the manner provided in the Certificate of Incorporation, as the same may be amended from time to time.

(b)         The Board of Directors shall determine the time and place, if any, of such special meeting. The Board of Directors may, in its sole discretion, determine that special meetings of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 14(c). Upon determination of the time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7. No business may be transacted at such special meeting otherwise than specified in the notice of meeting. The Board of Directors may postpone, reschedule or cancel any special meeting of the stockholders previously scheduled by the Chairperson of the Board of Directors or by the Board of Directors.

(c)         Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the corporation who is a stockholder of record at the time of giving notice provided for in this paragraph, who shall be entitled to vote at the meeting and who delivers written notice to the Secretary of the corporation setting forth the information required by Section 5(b)(1). If the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder of record may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s notice of meeting, if written notice setting forth the information required by Section 5(b)(1) shall be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the later of the ninetieth (90^th) day prior to such meeting or the tenth (10^th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The stockholder shall also update and supplement such information as required under Section 5(c). In no event shall an adjournment or a postponement of a special meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period for the giving of a stockholder’s notice as described above.

(d)         Notwithstanding the foregoing provisions of this Section 6, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to matters set forth in this Section 6. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to nominations for the election to the Board of Directors to be considered pursuant to Section 6(c).

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Section 7.           Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for notice of such meeting, such notice to specify the place, if any, date and hour, of the meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), and, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

Section 8.           Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairperson of the meeting or by vote of the holders of a majority of voting power of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute or by applicable stock exchange rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, a majority of the voting power of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.

Section 9.           Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairperson of the meeting or by the vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

Section 10.         Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.

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Section 11.         Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his or her act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of clause (c) shall be a majority or even-split in interest.

Section 12.        List of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. If the corporation makes the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation.

Section 13.        Action Without a Meeting. During the period that FlexEnergy Power Solutions, LLC, a Delaware limited liability company (“FPS”), continues to hold stock representing at least 50% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors (the “Covered FPS Ownership Period”), any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or by electronic transmission setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. After the Covered FPS Ownership Period, the stockholders’ ability to act by written consent or by electronic transmission pursuant to the immediately preceding sentence shall forever terminate, and, thereafter, (i) no action shall be taken by the stockholders of the corporation except at an annual or special meeting of such stockholders and (ii) the stockholders may not take action by written consent or by electronic transmission.

Section 14.        Organization.

(a)            At every meeting of stockholders, the Chairperson of the Board of Directors, or, if a Chairperson has not been appointed or is absent, the Chief Executive Officer, or, if the Chief Executive Officer is absent, the President, or, if the President is absent, a chairperson of the meeting chosen by the stockholders holding a majority in voting power of the stockholders entitled to vote, present in person or by proxy, shall act as chairperson. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the Chief Executive Officer or the President, shall act as secretary of the meeting.

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(b)         The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairperson of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.

(c)         If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by means of remote communication: (i) participate in a meeting of stockholders; and (ii) be deemed to be present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication; provided, that (A) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the corporation.

ARTICLE IV
DIRECTORS

Section 15.        Number and Term of Office. The authorized number of directors of the corporation shall be fixed in accordance with the Certificate of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.

Section 16.        Powers. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.

Section 17.        Annual Election. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, following the adoption of these Bylaws, all of the directors shall be of one class and shall be elected annually. Each director shall hold office until the next annual meeting of stockholders and, notwithstanding the foregoing provisions of this Section 17, shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

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Section 18.        Vacancies. Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred Stock or as otherwise provided by applicable law, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, and not by the stockholders, provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series shall be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.

Section 19.        Resignation. Any director may resign at any time upon notice to the corporation.When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until his successor shall have been duly elected and qualified.

Section 20.        Removal. Subject to any limitation imposed by applicable law and to the rights of holders of any series of Preferred Stock to elect additional directors under specified circumstances, any individual director or directors may be removed from office by the affirmative vote of the holders of capital stock of the corporation specified in the Certificate of Incorporation.

Section 21.        Meetings

(a)         Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.

(b)         Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairperson of the Board, the Chief Executive Officer or a majority of the authorized number of directors.

(c)         Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

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(d)         Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by US mail, it shall be sent by first class mail, postage prepaid at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

(e)         Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though it had been transacted at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 22.        Quorum and Voting.

(a)         Unless the Certificate of Incorporation requires a greater number, and except with respect to questions related to indemnification arising under Section 44 for which a quorum shall be one-third of the exact number of directors fixed from time to time, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.

(b)         At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.

Section 23.        Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 24.        Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

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Section 25.        Committees.

(a)         Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal (if any) of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.

(b)         Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.

(c)         Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of Section 25(a) or Section 25(b) may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

(d)        Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.

Section 26.        Duties of Chairperson of the Board of Directors. The Chairperson of the Board of Directors, if appointed and when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairperson of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The powers and duties of the Chairperson of the Board shall not include supervision or control of the preparation of the financial statements of the corporation (other than through participation as a member of the Board). The position of the Chairperson of the Board and Chief Executive Officer may be held by the same person. If a Chairperson of the Board is a director who is not independent and who serves as an employee of the corporation or one of its affiliates, then the Chairperson of the Board of Directors may also be referred to as Executive Chair.

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Section 27.     Organization. At every meeting of the directors, the Chairperson of the Board of Directors, or, if a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent (or is not a director), the President (if a director), or if the President is absent (or is not a director), the most senior Vice President (if a director), or, in the absence of any such person (or is not a director), a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary or other officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.

ARTICLE V
OFFICERS

Section 28.     Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chairperson, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer and the Treasurer. The Board of Directors may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.

Section 29.     Tenure and Duties of Officers.

(a)            General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.

(b)            Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors has been appointed and is present. Unless an officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.

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(c)            Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors, or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.

(d)            Duties of Vice Presidents. A Vice President may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. A Vice President shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or, if the Chief Executive Officer has not been appointed or is absent, the President shall designate from time to time.

(e)            Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.

(f)            Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. To the extent that a Chief Financial Officer has been appointed and no Treasurer has been appointed, all references in these Bylaws to the Treasurer shall be deemed references to the Chief Financial Officer. The President may direct the Treasurer, if any, or any Assistant Treasurer, or the controller or any assistant controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each controller and assistant controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.

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(g)            Duties of Treasurer. Unless another officer has been appointed Chief Financial Officer of the corporation, the Treasurer shall be the chief financial officer of the corporation and shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President, and, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President and Chief Financial Officer (if not Treasurer) shall designate from time to time.

Section 30.     Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

Section 31.     Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.

Section 32.     Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or by the Chief Executive Officer or by other superior officers upon whom such power of removal may have been conferred by the Board of Directors.

ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING

OF SECURITIES OWNED BY THE CORPORATION

Section 33.     Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation. All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do. Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

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Section 34.     Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairperson of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.

ARTICLE VII
SHARES OF STOCK

Section 35.     Form and Execution of Certificates. The shares of the corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board of Directors. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation represented by certificate shall be entitled to have a certificate signed by or in the name of the corporation by any two authorized officers of the corporation, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.

Section 36.     Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.

Section 37.     Transfers.

(a)            Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.

(b)            The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

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Section 38.     Fixing Record Dates.

(a)            In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote.

(b)            In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 39.     Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION

Section 40.     Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 36), may be signed by the Chairperson of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.

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ARTICLE IX
DIVIDENDS

Section 41.     Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.

Section 42.     Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE X
FISCAL YEAR

Section 43.     Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

ARTICLE XI
INDEMNIFICATION

Section 44.     Indemnification of Directors, Officers, Employees and Other Agents.

(a)            Directors and Officers. The corporation shall indemnify its directors and officers to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of the indemnification by individual contracts with its directors and officers; and, provided, further, that the corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) indemnification is required to be made under Section 44(d).

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(b)            Employees and other Agents. The corporation shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate to any person the Board of Directors decides the determination of whether indemnification shall be given.

(c)            Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer, of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 44 or otherwise.

(d)            Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under this Section 44 shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or officer. Any right to indemnification or advances granted by this Section 44 to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under this Section 44 or otherwise shall be on the corporation.

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(e)        Non-Exclusivity of Rights. The rights conferred on any person by this Section 44 shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

(f)         Survival of Rights. The rights conferred on any person by this Section 44 shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(g)        Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section 44.

(h)        Amendments. Any repeal or modification of this Section 44 shall only be prospective and shall not affect the rights under this Section 44 in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

(i)         Saving Clause. If this Section 44 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Section 44 that shall not have been invalidated, or by any other applicable law. If this Section 44 is invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under any other applicable law.

(j)         Certain Definitions. For the purposes of this Section 44, the following definitions shall apply:

(1)            The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

(2)            The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

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(3)            The term the “corporation” shall include, in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent entity, or is or was serving at the request of such constituent entity as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section 44 with respect to the resulting or surviving corporation as he or she would have with respect to such constituent entity if its separate existence had continued.

(4)            References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(5)            References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

ARTICLE XII
NOTICES

Section 45.     Notices.

(a)            Notice to Stockholders. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, notice to stockholders f may be sent by United States mail or nationally recognized overnight courier, or by facsimile or by electronic mail or other electronic means.

(b)            Notice to Directors. Any notice required to be given to any director may be given by the method stated in Section 45(a) or as otherwise provided in these Bylaws. If such notice is not delivered personally, it shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.

(c)            Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.

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(d)            Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

(e)            Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(f)            Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within sixty (60) days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.

ARTICLE XIII
AMENDMENTS

Section 46.     Amendments.

(a)            Subject to the limitations set forth in Section 44(h) or the provisions of the Certificate of Incorporation, the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation.

(b)            The stockholders also shall have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, (i) during the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, and (ii) after the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

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EX-10.8

Exhibit 10.8

SUBLEASE

BETWEEN

PIONEER NEW HAMPSHIRE LLC

AS

“SUBLESSOR”

AND

FLEXENERGY ENERGY SYSTEMS, INC.

AS

“SUBLESSEE”

TABLE OF CONTENTS
ARTICLE		PAGE
RECITALS		1
ARTICLE 1.	PREMISES	2
ARTICLE 2.	CONDITION OF SUBLEASED PREMISES - SUBLESSOR’S WORK	3
ARTICLE 3.	TERM	4
ARTICLE 4.	RENT	5
ARTICLE 5.	SUBLESSOR’S COMPLIANCE	6
ARTICLE 6.	SURRENDER OF SUBLEASED PREMISES	7
ARTICLE 7.	INSURANCE	8
ARTICLE 8.	SUBLESSOR’S RIGHT TO PERFORM SUBLESSEE’S COVENANTS	10
ARTICLE 9.	USE OF SUBLEASED PREMISES	11
ARTICLE 9A	[RESERVED]	12
ARTICLE 10.	LIENS	13
ARTICLE 11.	REPAIRS AND MAINTENANCE	14
ARTICLE 12.	RIGHT OF SUBLESSOR TO INSPECT AND REPAIR	15
ARTICLE 13.	GENERAL INDEMNIFICATION BY SUBLESSEE	16
ARTICLE 14.	UTILITIES	18
ARTICLE 15.	ALTERATIONS – SIGNS	19
ARTICLE 16.	DESTRUCTION AND RESTORATION	21
ARTICLE 16(A)	EMINENT DOMAIN	23
ARTICLE 17.	DEFAULT BY SUBLESSOR	24
ARTICLE 18.	DEFAULT BY SUBLESSEE	25
ARTICLE 19.	DELEGATION - ASSIGNMENT - SUBLEASES - MORTGAGES	28
ARTICLE 20.	[RESERVED]	30
ARTICLE 21.	ESTOPPEL CERTIFICATES	31
ARTICLE 22.	INVALIDITY OF PARTICULAR PROVISIONS	32
ARTICLE 23.	NOTICES	33
ARTICLE 24.	QUIET ENJOYMENT	34
ARTICLE 25.	ENVIRONMENTAL PROTECTION	35
ARTICLE 26.	MISCELLANEOUS	40
ARTICLE 27.	TERMINATION OF SUBLEASE	44

i 

EXHIBITS TO SUBLEASE

Exhibit

1	-	PRIMARY LEASE
2	-	VESTING DEED
3	-	PLANS DESIGNATING THE SUBLEASED PREMISES
4		SUBLESSOR’S WORK
5	-	LIST OF ENVIRONMENTAL LAWS AND REGULATIONS
6	-	RESERVED
7	-	FAA REQUIREMENTS

ii 

SUBLEASE

THIS SUBLEASE (“Sublease”) is made by and between Pioneer New Hampshire LLC, a New Hampshire limited liability company (“Sublessor”) and FlexEnergy Energy Systems, Inc., a Delaware corporation (“Sublessee”). (Sublessor and Sublessee may be referred to jointly as the “Parties.”)

RECITALS

A.       Pioneer New Hampshire LLC entered into a Sublease dated December 23, 1999 with the Pease Development Authority (“PDA”), an agency of the State of New Hampshire established pursuant to RSA ch 12-G for premises located at the Pease International Tradeport in Portsmouth, New Hampshire described as follows: Former Brackett School, Corporate Drive, Pease International Tradeport (the “Property”), which lease was amended effective September 6, 2012 a copy of which Sublease and Amendment are attached hereto as Exhibit 1 (collectively the “Primary Lease”).

B.       At the time of the Primary Lease, PDA anticipated acquiring fee title to the portion of the former Pease Air Force Base hereinafter designated Premises I and II from the United States of America (“Government” or “Air Force”) by public benefit transfer (i.e. transfer without consideration) pursuant to the general authority contained in 49 U.S.C. Sections 47151-47153 and other applicable provisions of law. (Together, Premises I and Premises II constitute the entirety of the Airport (the “Airport” or “Pease”)). Pending final disposition of the Airport, PDA and Air Force entered into a Lease as of April 14, 1992 for the Airport District, a Supplement No. 1 thereto dated August 4, 1992, a Supplement No. 2 thereto dated July 15, 1993 and a Supplement No. 3 thereto dated June 27, 1997.

C.       On October 15, 2003 the PDA acquired the portion of the Airport on which the Subleased Premises are located pursuant to a deed recorded in the Rockingham County Registry of Deeds (“Vesting Deed”) attached hereto as Exhibit 2.

D.       Attached as an exhibit to the Vesting Deed is a copy of the Federal Facilities Agreement (as amended, the “FFA”) required under Section 120 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601 et seq., that was entered into by the Air Force, the New Hampshire Department of Environmental Services (“NHDES”) and the United States Environmental Protection Agency (“EPA”) and pertains to certain contamination at Pease and the FFA also imposes certain requirements upon PDA, Sublessor (and therefore Sublessee) which are addressed in the terms and conditions of this Sublease.

E.       On June 28, 2013, Sublessor submitted the Property subject to the Primary Lease to a leasehold condominium pursuant to Declaration of Condominium dated May 30, 2013, and recorded in the Rockingham County Registry of Deeds at Book 5454, Page 2283 and site and floor plans recorded in said Registry as Plan #D-37765 (collectively, the “Condominium Instruments”).

1 

NOW, THEREFORE, in consideration of the covenants herein contained and other valuable consideration, the receipt of which is hereby acknowledged, Sublessor and Sublessee hereby agree as follows:

ARTICLE 1.

PREMISES

1.1.       Description of Subleased Premises

Sublessor, for and in consideration of the rents and covenants herein specified to be paid and performed by Sublessee, hereby leases to Sublessee, and Sublessee hereby hires from Sublessor, the premises described generally below, and more particularly on the plan attached as Exhibit 3 (the “Subleased Premises” or the “Premises”):

Approximately 5800 rentable square feet of space, located in Unit 3A, 112 Corporate Drive, Portsmouth, New Hampshire, together with the non-exclusive right to use in common with others entitled thereto, the sidewalks and driveways, and including the nonexclusive use of spaces for automobile parking facilities which are adjacent to said building for Sublessee’s employees and business invitees.

1.2.       Easements - Rights-of-Way

In addition to the Primary Lease, Vesting Deed and Condominium Instruments, this Sublease is subject to existing easements and rights-of-way of record and to (i) the Utility Sublease and License Agreement dated July 31, 1992 by and between PDA and Public Service Company of New Hampshire (“PSNH”), (ii) the utility Sublease and License Agreement dated May 10, 1995 by PDA and New England Telephone and Telegraph Company (“NETEL”); (iii) the Wastewater Disposal and Water Service Facilities Sublease and License Agreement dated as of January 1, 1993 and amended July 1, 1998 by and between PDA and the City of Portsmouth (“COP”) and (iv) the Pipeline Easement and Transfer Agreement dated August 12, 1998 by and between PDA, Portland Natural Gas Transmission System and Maritimes & Northeast Pipeline, L.L.C. Furthermore, in the Vesting Deed, the Government reserves, on behalf of the Federal Aviation Administration (“FAA”) for the use and benefit of the public, an avigation easement and a right of way for the free and unobstructed passage of aircraft in the airspace above the surface of the Airport, together with the right to cause in such airspace such sound, vibrations, fumes, dust, fuel particles, and all other effects as may be caused by the operation of aircraft, now known or hereafter used, for the navigation through or flight in the said airspace, and for use of said airspace for landing on, taking off from, or operating on the Airport.

1.3.       Access; Parking

Sublessee shall have the right to use 25 parking spaces as well as the right, in common with other Airport tenants and authorized Airport users, to use the entrances, exits and roadways designated by PDA for common use at the Airport, subordinate, however, to PDA’s rights to manage the common areas and roadways, which rights of PDA shall include, without limitation, the right to impose reasonable rules and regulations, and to add, delete, alter, or otherwise modify the designation and non-exclusive use of all parking areas, entrances, exists, roadways and other areas of the Airport.

END OF ARTICLE 1

2 

ARTICLE 2.

CONDITION OF SUBLEASED PREMISES – SUBLESSOR’S WORK

2.1       PDA shall not be responsible for any latent or other defect or change of condition in the Subleased Premises. Sublessee accepts the Subleased Premises in their present condition, subject only to Sublessor’s obligation to do the Work described on Exhibit 4. All Sublessor’s Work shall be done in a good and workmanlike manner and compliance with, and with all approvals required by, all applicable governmental regulations, codes, standards and other requirements, including fire, safety and building codes and Land Use Regulations promulgated by PDA, and shall be completed on or before February 1, 2021.

END OF ARTICLE 2

3 

ARTICLE 3.

TERM

3.1.       This Sublease shall commence on February 1, 2021 (“Commencement Date”) and shall end on June 30, 2024, unless terminated earlier or renewed in accordance with the provisions of this Sublease.

3.2       Option to Renew. Provided Sublessee is not in default under this Sublease, Sublessee will have two (2) options to renew this Sublease for a period of three (3) years each by giving Sublessor prior written notice of its intent to renew this Sublease not less than six (6) months before the expiration date of the then expiring term. The renewal will be on all of the same terms and conditions of this Sublease unless otherwise amended by both parties in writing, except that the Basic Rent for each year of each Option Term shall be three percent (3%) more than the Basic Rent for the immediately preceding year.

END OF ARTICLE 3

4 

ARTICLE 4.

RENT

4.1.       Commencing on the Rent Commencement Date, Sublessee shall pay to Sublessor Basic Rent for the initial term equal to $87,000 per annum or $7,250 per month (“Basic Rent” or “Base Rent”).

The Rent Commencement Date is March 1, 2021. If Sublessee exercises its Option to Renew set forth in Section 3.2, Basic Rent for each year of each Option Term shall be three percent (3%) more than the Basic Rent for the immediately preceding year.

4.2.       The Basic Rent due under Section 4.1 shall commence on the Rent Commencement Date. Rent shall be payable in each case in equal monthly installments of one twelfth thereof in advance on the first day of each month without offset (except as expressly provided for in this Sublease) in lawful money of the United States at the office of Sublessor at c/o Summit Land Development, 340 Central Avenue, Suite 202, Dover, New Hampshire 03820 or at such other address as Sublessor may hereafter designate in writing.

4.3.       This is a gross lease, and includes all utilities, meaning that Sublessor shall not be reimbursed by Sublessee for, and Sublessee shall not pay, insurance premiums, maintenance costs, taxes, utilities or, except as expressly provided in this Sublease, any other costs or expenses.

4.4.       In the event that rent, whether the same is Basic Rent is more than fifteen (15) days late, Sublessee shall pay to Sublessor a late fee in the amount of five (5%) percent of the total amount due. The Sublessee acknowledges and agrees that the characterization of rental amounts due under this Article 4 as Basic Rent, Additional Rent, or any other characterizations, shall not affect the Sublessor’s ability to collect said amount upon Sublessee’s default hereunder.

4.5.       Security Deposit. Upon execution of this Sublease, Sublessee shall pay to Sublessor the amount of $7,250, which amount shall be held by Sublessor as security for any default by Sublessee and will be returned to Sublessee within sixty (60) days after Sublessee’s surrender of the Premises in accordance with Article 6 below, provided no outstanding default exists.

END OF ARTICLE 4

5 

ARTICLE 5.

SUBLESSOR’S COMPLIANCE

Sublessor shall, at its sole cost and expense and in a timely manner, perform its respective obligations under the Vesting Deed, the FFA, the Primary Lease, and any other agreements encumbering the Subleased Premises, and shall comply with all restrictions and other requirements contained therein except to the extent they are delegated to Sublessee under this Sublease.

END OF ARTICLE 5

6 

ARTICLE 6.

SURRENDER OF SUBLEASED PREMISES

6.1       On the expiration or termination of this Sublease, Sublessee shall surrender to Sublessor the Subleased Premises, including all improvements and fixtures therein whether leased to Sublessee hereunder or otherwise owned by Sublessee, broom clean and in good order, condition and repair, reasonable wear and tear and damage by casualty and taking by eminent domain excepted, together with all alterations, decorations, additions and improvements that may have been made in, to or on the Subleased Premises, except that Sublessee shall be required to remove its personal property. Sublessee shall also be required to remove any Alterations made by Sublessee and to restore the Premises to its condition prior to such Alterations, provided that, as a condition of granting its consent, Sublessor required Sublessee to remove such Alterations. The Subleased Premises, including the Alterations and fixtures therein, shall be delivered free and clear of all subtenancies, liens and encumbrances, other than those, if any, permitted hereby or otherwise created or consented to by Sublessor, and if requested to do so, Sublessee shall execute, acknowledge and deliver to Sublessor such instruments of further assurance as in the reasonable opinion of Sublessor are necessary or desirable to confirm or perfect Sublessor’s right, title and interest in and to the Subleased Premises including said Alterations and fixtures. On or before the end of the Sublease term, Sublessee shall remove all of Sublessee’s personal and other property allowed or required to be removed hereunder and restore the Premises to its prior condition, and all such property not removed shall be deemed abandoned by Sublessee and may be utilized or disposed of by Sublessor without any liability to Sublessee. Sublessee’s liabilities under this Article 6 shall survive the expiration or termination of this Sublease.

END OF ARTICLE 6

7 

ARTICLE 7.

INSURANCE

7.1.       Sublessee’s Insurance. During the entire period that this Sublease shall be in effect, the Sublessee at its expense will carry and maintain:

(A)       Contents insurance coverage on Sublessee’s personal property kept or maintained by the Sublessee at the Subleased Premises in such amount as is reasonable and prudent.

(B)       Comprehensive general liability insurance, and products and completed operations liability insurance, on an “occurrence basis” in an amount of two million dollars ($2,000,000) per occurrence against claims for “personal injury”, including without limitation, bodily injury, death or property damage, occurring upon, in or about the land and buildings of which the Subleased Premises are a part as required pursuant to the Primary Lease.

(C)       Workers’ compensation and employer’s liability insurance in an amount and form which meets all applicable requirements of the labor laws of the State of New Hampshire, as amended from time to time, and which specifically covers the persons and risks involved in this Sublease.

(D)       Automobile liability insurance, where Sublessee’s operations require such coverage, in amounts approved from time to time by Sublessee, but not less than one million dollars ($1,000,000) combined single limit for owned, hired and non-owned automobiles.

7.2.       All policies of insurance required to be carried under this Article shall be effected under valid and enforceable policies, in such forms and amounts as may, from time to time, be required under this Sublease, issued by insurers of recognized responsibility which are authorized to transact such insurance coverage in the State of New Hampshire. All such policies of insurance shall be for the mutual benefit of Sublessor, PDA, and Sublessee as named insureds. Upon the execution of this Sublease (and thereafter not less than fifteen (15) days prior to the expiration date of each policy furnished pursuant to this Article) a certificate of insurance evidencing the required coverage shall be delivered by each party to the other.

7.3.       All policies of insurance shall provide for loss thereunder to be adjusted and payable to Sublessor or Sublessee in accordance with the terms of this Sublease.

7.4.       Each such policy or certificate therefor issued by the insurer shall to the extent reasonably obtainable, with the insurance companies with whom the parties normally do business, contain (i) a provision that no act or omission of Sublessee, Sublessor, or any employee, officer or agent thereof, which would otherwise result in forfeiture or reduction of the insurance therein provided shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained; (ii) an agreement by the insurer that such policy shall not be canceled without at least thirty (30) days prior written notice (or ten (10) days for non-payment of premiums) by registered mail to the appropriate parties hereof; and (iii) provide that the insurer shall have no right of subrogation against the PDA or the Sublessor.

8 

7.5.       All policies of insurance required to be maintained by Sublessee shall have attached thereto the Lender’s Loss Payable Endorsement, or its equivalent, or a loss payable clause acceptable to Sublessor, for the benefit of any Mortgagee, but the right of any Mortgagee to the payment of insurance proceeds shall at all times be subject to the provisions of this Sublease with respect to the application of the proceeds of such insurance.

7.6.       The Parties shall observe and comply with the requirements of all policies of insurance at any time in force with respect to the Subleased Premises and the Parties shall also perform and satisfy the requirements of the companies writing such policies so that at all times companies of good standing reasonably satisfactory to Sublessor shall be willing to write or to continue such insurance. Sublessee shall, in the event of any violations or attempted violations of the provisions of this Section 7.6 by a subtenant, take steps, immediately upon knowledge of such violation or attempted violation, to remedy or prevent the same as the case may be.

7.7.       Any insurance provided for in this Sublease may be effected by a policy or policies of blanket insurance; provided, however, that the amount of the total insurance allocated to the Subleased Premises shall be such as to furnish in protection the equivalent of separate policies in the amounts herein required, and provided further that in all other respects, any such policy or policies shall comply with the other provisions of this Sublease. In any such case, it shall not be necessary to deliver the original of any such blanket policy to Sublessor, but Sublessee shall deliver to Sublessor and to any Mortgagee a certificate or duplicate of such policy in form and content acceptable to Sublessor or Sublessee.

END OF ARTICLE 7

9 

ARTICLE 8.

SUBLESSOR’S RIGHT TO PERFORM SUBLESSEE’S COVENANTS

8.1.       If Sublessee shall at any time fail to make any payment or perform any other act on Sublessee’s part required by this Sublease, then Sublessor, after ten (10) days written notice to Sublessee (or, in case of any emergency, without notice, or with such notice as may be reasonable under the circumstances) and without waiving or releasing Sublessee from any obligation of Sublessee hereunder, may (but shall not be required to) make such payment or perform such other act on Sublessee’s part to be made or performed as provided in this Sublease, and may enter upon the Subleased Premises for such purpose and take all such necessary action as may reasonably be deemed appropriate by Sublessor to correct such failure of Sublessee, all at the expense of Sublessee.

8.2.       All reasonable sums so paid by Sublessor and all reasonable costs and expenses incurred by Sublessor in connection with the performance of any such act (together with interest thereon at the rate specified in Section 26.1 from the respective date(s) of Sublessor’s making of each such payment or incurring of each cost or expenses) shall constitute “Additional Rent” payable by Sublessee under this Sublease and shall be paid by Sublessee to Sublessor on demand.

END OF ARTICLE 8

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ARTICLE 9.

USE OF SUBLEASED PREMISES

9.1.       The sole purpose for which Sublessee may use the Subleased Premises is general office and for no other uses without Sublessor’s and PDA’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed by Sublessor. Sublessee shall not use, or permit to be used, the Subleased Premises for any other purpose without the prior express written consent of Sublessor and PDA. Sublessor’s and PDA’s consent shall be subject to the execution of an appropriate agreement which may include a provision requiring the payment of established fees and charges that may be applicable to any such additional uses consented to by Sublessor and PDA. Sublessee is prohibited from any use of the Subleased Premises not specifically granted in this Section 9.1.

9.2.       Sublessee recognizes that the uses authorized in Section 9.1 are not granted on an exclusive basis and that Sublessor and PDA may enter into subleases or other agreements with other tenants or users at areas of the building in which the Subleased Premises are a part or other areas of the Airport for similar, identical, or competing uses. No provision of this Sublease shall be construed as granting or authorizing the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act as the same may be amended from time to time.

9.3.       Sublessee agrees that it will keep the Premises in a neat, clean and orderly condition and shall be responsible for trash removal in accordance with the provisions of Chapters 300 through 500 of the Pease Development Authority Zoning Requirements, Site Plan Review Regulations and Subdivision Regulations (collectively the “Land Use Controls”) and such other rules and regulations from time to time promulgated, provided that Sublessee shall not be bound by any such rules and regulations until such time as it receives a copy thereof. Sublessor agrees to cause trash receptacles to be regularly emptied.

9.4.       Sublessee shall be solely responsible for determining the suitability of the Premises for its intended use and whether the same complies with all zoning and other laws. Sublessee warrants that it holds all certificates, permits, licenses or other entitlements required by federal, state or local laws in order to allow Sublessee to conduct the permitted uses hereunder, and that the same are and will be kept current, valid and complete. Sublessee further warrants that it shall at all times abide by and conform with all terms of the same and that it shall give immediate notice to Sublessor of any additions, renewals, amendments, suspensions or revocations. In the use and occupation of the Subleased Premises and the conduct of such business thereon, Sublessee, at its sole cost and expense, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions and boards, any national, state or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, so long as any such compliance does not require modification to the Subleased Premises or to its mechanical or electrical services or components.

9.5.       Sublessee shall have the right to contest by appropriate proceedings diligently conducted in good faith, without cost or expense to Sublessor, the validity or application of any law, ordinance, order, rule, regulation or requirement of the nature referred to in this Article. If compliance with any such law, ordinance, order, rule, regulation or requirement may be delayed on the basis of an order from a court of competent jurisdiction pending the prosecution of any such proceeding without the incurrence of any lien, charge or liability of any kind against the Subleased Premises or Sublessee’s interest therein and without subjecting Sublessor to any liability, civil or criminal, for failure so to comply therewith, Sublessee may delay compliance therewith consistent with such court order. Even if such lien, charge or civil liability would be incurred by reason of any such delay, Sublessee may, with the prior written consent of Sublessor, which consent shall not be unreasonably withheld, conditioned or delayed, contest as aforesaid and delay as aforesaid, provided that such contest or delay does not subject Sublessor to criminal liability, damages or expense and provided that Sublessee: (i) furnishes to Sublessor security, reasonably satisfactory to Sublessor, against any loss or injury by reason of such contest or delay; and (ii) prosecutes the contest with due diligence.

9.6.       Sublessor and PDA shall not be required to join in any proceedings referred to in Section 9.5 unless the provisions of any applicable laws, rules or regulations at the time in effect shall require that such proceedings be brought by and/or in the name of Sublessor and/or PDA and Sublessor and/or PDA determines that such action is in its best interests, in which event Sublessor and/or PDA shall join in the proceedings, or permit the same to be brought in its name, if Sublessee shall pay all expenses in connection therewith.

9.7.       Responsibility for compliance with all federal, state and local laws as required by this Article rests exclusively with the Sublessee so long as any such compliance does not require modification to the Subleased Premises or to its mechanical or electrical services or components. Sublessor assumes no enforcement or supervisory responsibility except with respect to matters committed to its jurisdiction and authority.

9.8.       Sublessee’s use of the Subleased Premises shall be orderly and efficient and shall not cause any disruptions to other Airport activities or other tenants in the building in which the Subleased Premises are a part. Sublessee shall not cause or maintain any nuisance on the Subleased Premises. Sublessee shall conduct all of its activities hereunder in compliance with Article 25 hereof and in an otherwise environmentally responsible manner.

9.9.       Sublessee shall have the right to obtain supplies or services from suppliers, vendors or contractors of its own choice at the Subleased Premises, provided that PDA in the Primary Lease reserved the right to prohibit persons from engaging in “aeronautical activities” (as defined in Advisory Circular AC 150/5190-2A of the Federal Aviation Administration) or the provisions of ground transportation services at the Airport except in accordance with concession contracts or operating agreements entered into between PDA and said persons.

9.10.       Sublessee acknowledges that PDA is subject to certain restrictions on the use of the Airport Property set forth in the Vesting Deed, including the attachments thereto. Notwithstanding any other provision of this Sublease or the Primary Lease, the Sublessee shall also comply with and be subject to the restrictions contained in the Vesting Deed to the extent applicable to the Subleased Premises or any rights granted to Sublessee under the Sublease.

9.11       Sublessee shall conduct its business so that it will not cause any noise or disturbance to other tenants in the Building.

END OF ARTICLE 9

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ARTICLE 9A.

[RESERVED]

END OF ARTICLE 9A

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ARTICLE 10.

LIENS

10.1.       During the term of this Sublease, Sublessee shall not permit to remain, and shall promptly discharge, at its cost and expense, all liens, encumbrances and charges upon the Subleased Premises or any part thereof which arise as a result of the actions/inactions of Sublessee. Sublessee shall, however, have the right to contest with due diligence the validity or amount of any lien or claimed lien, if Sublessee shall give to Sublessor such security as Sublessor may reasonably require to insure payment thereof and prevent any sale, foreclosure or forfeiture of Sublessee’s interest in the Subleased Premises or any portion thereof by reason of such nonpayment. On final determination of the lien or claim for lien, Sublessee shall immediately pay any judgment rendered with all proper costs and charges and shall have the lien released or judgment satisfied at Sublessee’s own expense, and if Sublessee shall fail to do so, Sublessor may at its option pay any such final judgment and clear the Subleased Premises therefrom. If Sublessee shall fail to contest with due diligence the validity or amount of any such lien or claimed lien, or to give Sublessor security as hereinabove provided, Sublessor may, but shall not be required to, contest the validity or amount of any such lien or claimed lien or settle or compromise the same without inquiring into the validity of the claim or the reasonableness of the amount thereof.

10.2.       Should any lien be filed against the Subleased Premises or the building in which the Subleased Premises are a part arising from work performed by or on behalf of Sublessee, or should any action of any character affecting the title thereto be commenced due to any actions or failure to act of Sublessee, Sublessee shall give to Sublessor written notice thereof as soon as notice of such lien or action comes to the knowledge of Sublessee and Sublessee shall cause any lien or action to be dismissed within a reasonable period time.

END OF ARTICLE 10

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ARTICLE 11.

REPAIRS AND MAINTENANCE

11.1.       Sublessee covenants and agrees, throughout the term of this Sublease, without cost to Sublessor, to take good care of the Subleased Premises and related improvements and fixtures and all mechanical equipment serving the interior of Subleased Premises, which is within the Subleased Premises and to keep the same in good order and condition, and shall promptly at Sublessee’s own cost and expense, make all necessary repairs of damage caused by its operations, including any negligence of the Sublessee, its employees or vendors and to keep the Subleased Premises and related improvements and fixtures in safe, clean and sanitary condition. All such repairs made by Sublessee shall be at least equal in quality and class to the original work and shall comply with the provisions of Article 15.

11.2       Unless the need for such repair or replacement is due to the misuse or negligence of Sublessee or its invitees, Sublessor agrees to repair, maintain and replace if necessary, at Sublessor’s expense, the roof, floors, HVAC, structural elements and foundation of the Building in which the Leased Premises is located. Additionally, Sublessor agrees to maintain and keep in good condition and repair (including making necessary capital repairs or replacements) all common areas, including common utilities, grounds, parking areas and walkways.

11.3       If Sublessor fails to maintain, repair, or replace any of the items for which Sublessor is responsible under this Sublease, and such failure continues for ten (10) days after written request by Sublessee, then Sublessee will have the right to perform such maintenance, repair, or replacement at Sublessor’s sole cost and expense (provided such costs and expenses are reasonable) by delivering notice to Sublessor. Sublessor agrees to reimburse Sublessee for the costs and expenses reasonably incurred by Sublessee in connection therewith.

END OF ARTICLE 11

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ARTICLE 12.

RIGHT OF SUBLESSOR TO INSPECT AND REPAIR

12.1.       Sublessee will permit Sublessor and/or PDA and their authorized agents and representatives to enter the Subleased Premises at all reasonable times and upon reasonable prior notice for the purpose of inspecting the same and/or making any necessary repairs and/or performing any work that may be necessary by reason of Sublessee’s failure to comply with the terms of this Sublease, provided, however, in the event of an emergency (as determined in Sublessor’s and/or PDA’s sole discretion) no prior notice need be given to Sublessee. Nothing herein shall imply any duty upon the part of Sublessor and/or PDA to do any such work and performance thereof by Sublessor and/or PDA shall not constitute a waiver of Sublessee’s default in failing to perform the same. Sublessor and/or PDA may during the progress of such work keep and store in or on the Subleased Premises all necessary materials, tools, supplies and equipment. Sublessor and/or PDA shall not be liable for inconvenience, annoyance, disturbance, loss of business or other damage of Sublessee by reason of making such repairs or the performance of any such work, on or account of bringing materials, tools, supplies or equipment into or through the Subleased Premises during the course thereof and the obligations of Sublessee under this Sublease shall not be affected thereby, provided, however, that Sublessor shall use commercially reasonable efforts not to interfere with Sublessee’s use of the Premises. Nothing herein shall limit the provisions of Article 8.

12.2.       Sublessee acknowledges that from time to time Sublessor and/or PDA may undertake construction, repair or other activities related to the operation, maintenance and repair of the Building of which the Subleased Premises are a part and/or the Airport (in the case of the PDA) which will require temporary accommodation by Sublessee. Sublessee agrees to accommodate PDA and Sublessor in such matters, even though Sublessee’s own activities may be inconvenienced or partially impaired, and Sublessee agrees that no liability shall attach to Sublessor, PDA, its members, employees or agents by reason of such inconvenience or impairment, unless such activities of Sublessor and/or PDA hereunder are performed in a negligent manner, provided, however, that Sublessor shall use commercially reasonable efforts not to interfere with Sublessee’s use of the Premises.

END OF ARTICLE 12

15 

ARTICLE 13.

GENERAL INDEMNIFICATION

13.1.       In addition to any other obligation of Sublessee under this Sublease to indemnify, defend and hold harmless Sublessor, Sublessee agrees to indemnify, defend and hold harmless Sublessor against and from any and all third party claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees) as a result of the action/inaction of the Sublessee resulting or arising during the term of this Sublease as follows:

(1)       from any condition of the Premises, or complaints of other occupants of the Building resulting from acts or omissions of the Sublessee, agents or employees; or

(2)       from any breach or default on the part of Sublessee in the performance of any covenant or agreement on the part of Sublessee to be performed pursuant to the terms of this Sublease, or from any act or omission of Sublessee, or any of its agents, contractors, servants, employees, sublessees, licensees or invitees; or

(3)       from any accident, injury, loss or damage whatsoever caused to any person or property occurring during the term by act or omission of Sublessee, on or about the Subleased Premises (including ramp and parking areas), or upon the land, streets, curbs or parking areas adjacent thereto.

If any action or proceeding is brought against Sublessor by reason of any matter for which Sublessee has hereby agreed to indemnify, defend, or hold harmless Sublessor, Sublessee, upon notice from Sublessor, covenants to resist or defend such action or proceeding. Notwithstanding the foregoing or anything else to the contrary contained in this Sublease, Sublessor waives the right to recover from Sublessee for any claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses to the extent covered by any insurance maintained by Sublessor.

13.2.       The term “Person” as used in this Article and Article 25 shall include individuals, corporations, partnerships, governmental units and any other legal entity entitled to bring a claim, action or other demand or proceeding on its own behalf or on behalf of any other entity.

13.3.       The Sublessee agrees to indemnify, save, hold harmless and defend the Air Force to the same extent required of Sublessor under the Primary Lease with respect to the Premises.

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13.4.       The Sublessee also expressly waives any claims against PDA and the State of New Hampshire and further agrees to indemnify, defend and hold harmless PDA and the State of New Hampshire to the same extent required of the Sublessor under the Primary Lease against and from any and all claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees) resulting or arising during the term of this Sublease: (1) from any act or omission of Sublessee, or any of its agents, contractors, servants, employees, sublessees, licensees or invitees; (2) from any breach or default on the part of the Sublessee in the performance of any covenant or agreement on the part of the Sublessee to be performed pursuant to the terms of this Sublease; or (3) from any accident, injury, death, loss or damage whatsoever caused to any person or property during the term of this Sublease on or about the Subleased Premises.

13.5.       Notwithstanding the preceding provisions of Sections 13.1, 13.3 and 13.4, Sublessee shall be under no obligation to PDA or the Air Force in respect to such matters included in Sections 13.1, 13.3 and 13.4 above in existence prior to the effective date of this Sublease or caused by the negligence or willful misconduct of PDA, its officers, agents or employees, or the gross negligence or willful misconduct of the Air Force, its assigns, agents, contractors, servants or employees or the negligence or willfill misconduct of Sublessor, its officers, agents or employees.

13.6       Sublessor agrees to indemnify, defend and hold harmless Sublessee against and from any and all claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees): (1) from any breach or default on the part of the Sublessor in the performance of any covenant or agreement on the part of the Sublessor to be performed pursuant to the terms of this Sublease; or (2) from any accident, injury, death, loss or damage whatsoever caused to any person or property during the term of this Sublease, on or about the Subleased Premises as a result of the gross negligence or willful misconduct of the Sublessor, its agents, employees or contractors.

END OF ARTICLE 13

17 

ARTICLE 14.

UTILITIES

14.1.       Sublessee shall not at any time overburden or exceed the capacity of the mains, feeders, ducts, conduits, or other facilities by which such utilities are supplied to, distributed in or serve the Subleased Premises. If Sublessee desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities provided by Sublessor, such installation shall be subject to Sublessor’s and PDA’s prior written approval of Sublessee’s plans and specifications therefor, which approval shall not be unreasonably withheld, conditioned or delayed. If such installation is approved by Sublessor and PDA and if Sublessor and PDA agree to provide any additional facilities to accommodate Sublessee’s installation, Sublessee agrees to pay Sublessor and/or PDA, in advance and on demand, the reasonable cost for providing such additional utility facilities or utility facilities of greater capacity.

PDA under the Primary Lease also reserved the right to run such utility lines as it deems necessary in connection with the development of the Airport to, from, or through the Subleased Premises, provided, however, that PDA in exercising such reserved right shall provide reasonable prior notice and the opportunity to confer with PDA and shall exercise reasonable efforts to avoid or minimize interference with use of the Subleased Premises and shall not reduce the useable floor area.

PDA under the Primary Lease, at its sole discretion, shall have the right from time to time, to alter the method and source of supply of the above enumerated utilities to the Subleased Premises and Sublessee agrees to execute and deliver to PDA such documentation as may be required to effect such alteration. If the alteration of the method and source of supply of the above enumerated utilities to the Subleased Premises unduly or unreasonably restricts or significantly adversely effects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

PDA under the Primary Lease, shall have the option to supply any of the above enumerated utilities to the Subleased Premises. If PDA shall elect to supply any of such utilities to the Subleased Premises, Sublessee will purchase its requirements for such services tendered by PDA, and Sublessee will pay PDA, within ten (10) days after mailing by PDA to Sublessee of statements therefor, at the applicable rates determined by PDA from time to time which PDA agrees shall not be in excess of the public utility rates for the same service, if applicable, to other aviation tenants at the Airport. If PDA so elects to supply any of such utilities, Sublessee shall execute and deliver to PDA, within ten (10) days after request therefor, any documentation reasonably required by PDA to effect such change in the method of furnishing of such utilities.

14.2.       All work and construction under this Article shall comply with the provisions of Article 15 of this Sublease applicable to construction work.

14.3.       Sublessee (and any sublessee or assignee of Sublessee) shall be required to comply with any and all land use control regulations promulgated by PDA and any and all federal, state and local requirements and standards concerning storm water discharges and discharges to sewage treatment works, including, without limitation, any pre-treatment requirements.

END OF ARTICLE 14

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ARTICLE 15.

ALTERATIONS - SIGNS

15.1.       Sublessee shall not place or construct any material improvements, changes, structures, alterations or additions (cumulatively referred to in this Article as “Alterations”), in, to or upon the Subleased Premises without Sublessor’s and PDA’s written consent, which shall not be unreasonably withheld, conditioned or unduly delayed by Sublessor. Unless Sublessee is subject to an earlier notice requirement under the PDA’s land use controls or other applicable requirements with respect to the information required under this section, any request for Sublessor’s and PDA’s consent shall be made upon sixty (60) days prior written notice and shall be accompanied by preliminary engineering or architectural plans or, if consented to by Sublessor and PDA, working drawings. If Sublessor and PDA each grants its consent all such work shall be done at Sublessee’s sole cost and expense, subject, in all cases, to the following covenants:

(1)       All work and Alterations shall be done in compliance with all applicable governmental regulations, codes, standards or other requirements, including fire, safety and building codes and Land Use Regulations promulgated by PDA and with the provisions of Article 25 of this Sublease. This obligation shall include compliance with all applicable provisions of the Vesting Deed, including obligations in respect to construction and construction related work.

(2)       All Alterations shall be of such a character as not to materially reduce the value and usefulness of any of the buildings or other improvements below their value and usefulness immediately before such Alteration. All work performed hereunder shall be performed in a good and workmanlike manner, shall conform to drawings and specifications approved by Sublessor and PDA in all material respects and shall not be disruptive of the overall operation of the Airport. All contractors engaged by Sublessee to perform such work shall employ labor that can work in harmony with all elements of labor at the Airport.

(3)       During the period of construction of any Alterations, Sublessee or any contractor, subcontractor or sublessee of Sublessee shall maintain or cause to be maintained the following insurance:

(i)       The comprehensive general liability and property damage and automobile insurance provided for in Section 7.1(B) shall be maintained for the limits specified thereunder and shall provide coverage for the mutual benefit of Sublessor, PDA and Sublessee as named insureds in connection with any Alteration permitted pursuant to this Article 15;

(ii)       Fire and any other applicable insurance provided for in Article 7 which if not then covered under the provisions of existing policies shall be covered by special endorsement thereto in respect to any Alteration, including all materials and equipment therefor incorporated in, on or about the Subleased Premises (including excavations, foundations, and footings) under a broad form all risks builder’s risk completed value form or equivalent thereof; and

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(iii)       Workers’ compensation insurance covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against PDA, Sublessor, Sublessee or the Subleased Premises, with statutory limits as then required under the laws of the State of New Hampshire.

The provisions of all applicable Sections of Article 7 of this Sublease shall apply to all insurance provided for in this Section.

(4)       Sublessee shall provide Sublessor and PDA with MYLAR as-built drawings when any Alteration authorized hereunder is completed.

15.2.       In addition to the requirements to provide notice to Sublessor and PDA under this Article 15 in respect to any Alteration, Sublessee shall also provide notice to, EPA and NHDES in the same manner and to the extent required of PDA under the Vesting Deed. In undertaking any Alteration, Sublessee shall comply with the Vesting Deed to the same extent required of Sublessor and PDA.

15.3.       Sublessee shall have the right to install a sign on the front door and existing sign monument at its sole cost and expense, subject to the prior written approval by Sublessor of the design and location, which approval shall not be unreasonably withheld, conditioned or delayed if such sign conforms to existing sign standards of the Building and complies with all laws, regulations and codes.

END OF ARTICLE 15

20 

ARTICLE 16.

DESTRUCTION AND RESTORATION

16.1.       Subject to the rights of Sublessor’s Mortgagee, if the Premises or the Building are substantially damaged by fire or casualty (the term “substantially damaged” meaning damage of such a character that the same cannot, in ordinary course, reasonably be expected to be repaired within one hundred eighty (180) days from the date of such damage or casualty), or if any substantial part of the Building is taken by any exercise of the right of eminent domain, then the Sublessor shall have the election either to terminate this Sublease in accordance with Section 16.2 as it relates to the damaged portions or to repair the damaged portions in accordance with Section 16.3, subject to the rights of the PDA under the Primary Lease and subject to the rights of Sublessor’s Mortgagee.

16.2.       If the Sublessor elects to terminate this Sublease as allowed in Section 16.1, it shall provide written notice of such termination to Sublessee within thirty (30) days following the occurrence of such damage or destruction, which termination shall be effective on the tenth (10th) day following the date of receipt of such notice. In such event, the proceeds received from any applicable policy of insurance obtained by Sublessor shall be applied first to Sublessor’s mortgagee, second to removing any debris and restoring the site to a condition satisfactory to the Sublessor, and third to any sums owed by Sublessee to the Sublessor under this Sublease, such as, for example, unpaid Rent, subject to rights of the PDA under the Primary Lease. Any balance remaining from any insurance proceeds shall then be apportioned between the Sublessor and Sublessee as follows:

First, to Sublessor an amount equal to the unamortized balance of leasehold improvements made at Sublessor’s expense calculated on a straight line basis over the useful life of said improvement;

Second, to Sublessee an amount equal to the unamortized balance of leasehold improvements made at Sublessee’s expense calculated on a straight line basis over the useful life of said improvement;

Third, to Sublessor any remaining balance; subject to the rights of the PDA under the Primary Lease.

16.3.       If the Sublessor shall elect to repair and restore the damaged premises, it shall provide written notice of such election to Sublessee within thirty (30) days following the occurrence of such damage or destruction and it shall use diligent, commercially reasonable efforts to repair and restore the damaged premises to its condition immediately prior to the occurrence of the fire or other cause as soon as reasonably practicable. In the event of a total loss of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 6 months after the date of written notice to Sublessee, have substantially completed the repair and restoration of the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease. In the event of a partial loss involving no damage to structural portions or components of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 60 days after the date of written notice to Sublessee, repair and restore the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease. In the event of a partial loss involving damage to structural portions or components of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 90 days after the date of written notice to Sublessee, repair and restore the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease.

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16.4.       Sublessor’s obligations to repair hereunder are subject to Sublessor’s receipt of insurance proceeds for such purpose from Sublessor’s mortgagee.

16.5.       All repair/restoration work under this Article shall comply with the provisions of Article 15 of this Sublease applicable to construction work.

16.6.       In the event the loss or damage to Subleased Premises is of such an extent of character that Sublessee’s use of the Premises is substantially effected, Sublessee shall have the option to surrender the Subleased Premises and terminate this Sublease upon thirty (30) days written notice to Sublessor or if Sublessee elects to continue its leasehold interest despite loss of use and unless the damage is caused by Sublessee’s willful misconduct, the Sublessor shall abate the Basic Rent in a just proportion to that part of the Subleased Premises that is unfit for use in Sublessee’s business. The abatement shall consider the nature and extent of interference to Sublessee’s ability to conduct business in the Premises and the need for access and essential services. The abatement shall continue from the date the damage occurred until ten (10) business days after Sublessor completes the repairs and restoration to the Subleased Premises or the part rendered unusable and notice to Sublessee that the repairs and restoration are completed, or until Sublessee again uses the Premises or the part rendered unusable, whichever is first. Sublessor is not obligated to repair or restore damage to Sublessee’s trade fixtures, furniture, equipment or other personal property, or any improvements made by Sublessee.

END OF ARTICLE 16

22 

ARTICLE 16A.

EMINENT DOMAIN

In the event that there is a taking by eminent domain of the whole of the Subleased Premises, this Sublease shall terminate. In the event that there is a taking by eminent domain of a portion of the Subleased Premises, then this Sublease shall terminate as to the portion taken. In the event that the taking shall not be of the entire Subleased Premises, but the part of the Subleased Premises remaining shall not be reasonably sufficient and suitable for Sublessee’s use and occupancy for the purposes permitted hereunder, then Sublessee may terminate this Sublease forthwith. In all cases, the entire damages attributable to land, buildings and improvements shall belong to Sublessor, provided, however, that Sublessee may receive moving expenses.

END OF ARTICLE 16A

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ARTICLE 17.

DEFAULT BY SUBLESSOR

If Sublessor fails to perform any of Sublessor’s obligations under this Sublease, which failure is not cured within fifteen (15) days after the giving of written notice thereof by Sublessee, unless such default is of such nature that it cannot be cured within such fifteen (15) day period, in which case no event of default shall occur so long as Sublessor shall commence the curing of the default within such fifteen (15) day period and shall thereafter diligently prosecute the curing of same (except in the event of an emergency situation, which is only subject to a five (5) day notice and cure period), then Sublessor shall be in default and Sublessee will have the right (in addition to all other rights and remedies available at law or in equity) to (i) perform such obligation on behalf of Sublessor at Sublessor’s sole cost and expense (provided such costs and expenses are reasonable) by delivering notice to Sublessor, in which event Sublessor agrees to reimburse Sublessee for the reasonable costs and expenses incurred by Sublessee in connection therewith within ten (10) days after request by Sublessee.

END OF ARTICLE 17

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ARTICLE 18.

DEFAULT BY SUBLESSEE

18.1.       The occurrence of any of the following events shall constitute a Default and breach of this Sublease by Sublessee:

A. The failure by Sublessee to pay when due the Basic Rent, or Additional Rent, or any other payment required to be made by Sublessee to Sublessor hereunder where such failure continues for seven (7) business days after written notice thereof by Sublessor to Sublessee.

B.       The abandonment or vacation of the Subleased Premises by Sublessee while in material breach or default of any other provision of this Sublease that lasts for thirty (30) days or more.

C.       The failure by Sublessee to observe and perform any other provision of this Sublease (including without limitation compliance with federal, state and local laws and regulations) to be observed or performed by Sublessee, where such failure continues for thirty (30) business days after written notice thereof by Sublessor to Sublessee; provided that if the nature of such default is such that the same cannot reasonably be cured within such thirty-business-day period, Sublessee shall not be deemed to be in default if Sublessee shall within such period commence such cure and thereafter diligently prosecutes the same to completion.

D.       The making by Sublessee of any general assignment for the benefit of creditors; the filing by or against a Sublessee of a petition to have Sublessee adjudged a bankrupt or of a petition for reorganization or arrangement under any law relating to bankruptcy; or the attachment, execution or other judicial seizure of substantially all of Sublessee’s assets or of Sublessee’s interest in this Sublease; provided, however, that in the event of an involuntary filing against Sublessee, the Sublessee shall have sixty (60) days in which to cause such filing to be dismissed.

E.       If any guarantor attempts to revoke its Guaranty.

18.2.       In the event of any Default by Sublessee, Sublessor shall have the option to terminate this Sublease and all rights of Sublessee hereunder by giving ten (10) days written notice of such intention to terminate in the manner specified herein, or Sublessor may elect among any one or more of the following remedies without limiting any other remedies available to Sublessor:

(1)       subject to available legal and factual defenses,

· a decree or order of a court of competent jurisdiction compelling specific performance by Sublessee of its obligations under the Sublease;

· a decree or order by a court of competent jurisdiction restraining or enjoining the breach by Sublessee of any of its obligations under the Sublease; and

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(2) to the extent allowed by law, the right to undertake to cure Sublessee’s default, in which event Sublessee shall pay Sublessor the reasonable costs incurred in such undertaking;

If Sublessor shall elect to so terminate this Sublease, then Sublessor may recover from Sublessee:

(i) any unpaid rent up to the effective date of termination; plus

(ii) all amounts necessary to compensate Sublessor for all the detriment proximately caused by Sublessee’s failure to perform its obligations under this Sublease or which in the ordinary course of things would be likely to result therefrom, including, the discounted value of the rental payments payable to Sublessor under the full term of this Sublease; provided, however, that Sublessor shall use reasonable efforts to relet the Premises; plus

(iii) the reasonable costs to relet the Premises (including repairs due to damage caused by Sublessee or Sublessee’s failure to maintain the interior of the Premises and reasonable remodeling costs, commissions and all other reasonable costs); plus

(iv) such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable New Hampshire law.

18.3.       In the event of any such default by Sublessee, Sublessor shall also have the right, with or without terminating this Sublease, to peaceably reenter the Subleased Premises and remove all persons and property from the Subleased Premises to the extent allowed under New Hampshire law. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Sublessee. Under no circumstances shall Sublessor be held liable in damages or otherwise by reason of any such peaceable reentry or eviction or by reason of the exercise by Sublessor of any other remedy provided in this Article. All property of Sublessee which is stored by Sublessor may be redeemed by Sublessee within thirty (30) days after Sublessor takes possession upon payment to Sublessor in full of all obligations then due from Sublessee to Sublessor and of all costs incurred by Sublessor in providing such storage. If Sublessee fails to redeem such property within this thirty (30) day period, Sublessor may sell the property in any reasonable manner, and shall apply the proceeds of such sale actually collected first against the costs of storage and sale and then against any other obligation due from Sublessee.

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18.4.       In the event of the vacation or abandonment of the Subleased Premises by Sublessee while in material breach or default of any other provision of the Sublease for thirty (30) days or in the event that Sublessor shall elect to reenter as provided in Section 18.3 or shall take possession of the Subleased Premises pursuant to any provision of New Hampshire law or pursuant to any notice provided by law, then if Sublessor does not elect to terminate this Sublease as provided in Section 18.2, Sublessor may from time to time, without terminating this Sublease, either recover all rental as it becomes due or relet the Subleased Premises or any part thereof for such terms and conditions as Sublessor in its reasonable discretion may deem advisable, including the right to make alterations and repairs to the Subleased Premises. In the event that Sublessor shall elect to relet, then rentals received by Sublessor from such reletting shall be applied: first, to the payment of any indebtedness other than rent due hereunder from Sublessee to Sublessor; second, to the payment of any reasonable cost of such reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Subleased Premises; fourth, to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Sublessor and applied in payment of future rent as the same may become due and payable hereunder. Should the amount of rental received from such reletting during any month which is applied to the payment of rent be less than that required to be paid during that month by Sublessee under this Sublease, the Sublessee shall pay such deficiency to Sublessor immediately upon demand by Sublessor. Such deficiency shall be calculated and paid monthly. Sublessee shall also pay to Sublessor, as soon as ascertained, any reasonable costs and expenses incurred by Sublessor in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting.

18.5.       The various rights and remedies reserved to Sublessor, including those not specifically described under this Sublease, shall be cumulative, and, except as otherwise provided by New Hampshire statutory law in force and effect at the time of the execution of this Sublease, Sublessor may pursue any or all of such rights and remedies, whether at the same time or otherwise.

18.6.       No delay or omission of Sublessor to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Sublessee.

18.7.       Notwithstanding any other provision of this Sublease, in the event the breach by Sublessee in the reasonable opinion of Sublessor or PDA affects or is likely to affect the efficient operation of the Airport or give rise to public safety concerns, in addition to any other remedy it may have under this Sublease, Sublessor and PDA under the terms of the Primary Lease shall also be entitled (but shall not be obligated) to take whatever actions is reasonably deemed necessary by Sublessor and/or PDA to abate or cure such situation and Sublessee shall reimburse Sublessor and/or PDA to abate or cure such situation and Sublessee shall reimburse Sublessor and/or PDA for all reasonable costs incurred by Sublessor and/or PDA in taking such action.

END OF ARTICLE 18

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ARTICLE 19.

DELEGATION - ASSIGNMENT - SUBLEASES - MORTGAGES

19.1.       Delegation. Sublessee shall not have the right to delegate any of its responsibilities or obligations under this Sublease.

19.2.       Assignment and Subleases. Sublessee may not assign this Sublease or sublet the Premises without the prior written approval of the Sublessor and PDA which consent shall not be unreasonably withheld, conditioned or delayed by Sublessor, provided the provisions of 19.3 below are satisfied.

19.3.       Consent. Any request for Sublessor’s approval shall be made at least forty-five (45) days prior to the commencement of such subtenancy or assignment and shall provide detailed information concerning the identity and financial condition of the proposed assignee or sublessee and the terms and conditions of the proposed sublease or assignment. Sublessor shall not unreasonably withhold or delay its consent to such sublease or assignment if: (1) the use of the Subleased Premises associated with any sublease(s) is permitted under Article 9 and is compatible with the other existing tenants of the Building in which the Subleased Premises is located, (2) the sublease(s)/assignment(s) are consistent with the terms and conditions of this Sublease and the Primary Lease; (3) Sublessee remains primarily liable to Sublessor to pay rent and to perform all other obligations to be performed by subtenant/assignee under this Sublease, (4) the proposed sublessee is financially and operationally responsible and (5) PDA has given its approval to the proposed sublease/assignment.

19.4.       Continuing Liability of Sublessee. No subletting, assignment or transfer, shall release Sublessee’s obligations or alter the primary liability of Sublessee to pay the rent and to perform all other obligations to be performed by Sublessee hereunder. The acceptance of rent by Sublessor from any other person shall not be deemed to be a waiver by Sublessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. If any assignee of Sublessee or any successor of Sublessee defaults in the performance of any of the terms hereof, Sublessor may proceed directly against Sublessee without the necessity of exhausting remedies against such assignee or successor. If Sublessee assigns this Sublease, or sublets all or a portion of the Subleased Premises, or requests the consent of Sublessor to any assignment or subletting, or if Sublessee requests the consent of Sublessor for any act that Sublessee proposes to do, then Sublessee shall pay Sublessor’s reasonable processing fee and reimburse Sublessor for all reasonable attorneys’ fees incurred in connection therewith. Any assignment or subletting of the Subleased Premises that is not in compliance with the provisions of this Article 19 shall be void.

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19.5.       Bankruptcy. If a petition is filed by or against Sublessee for relief under Title 11 of the United States Code, as amended (the “Bankruptcy Code”), and Sublessee (including for purposes of this Section Sublessee’s successor in bankruptcy, whether a trustee or Sublessee as debtor-in- possession) assumes and proposes to assign, or proposes to assume and assign, this Sublease pursuant to the provisions of the Bankruptcy Code to any person or entity who has made a bona fide offer to accept an assignment of this Sublease, then notice of the proposed assignment setting forth (a) the name and address of the proposed assignee, (b) all of the terms and conditions of the offer and proposed assignment, and (c) the adequate assurance to be furnished by the proposed assignee of its future performance under the Sublease, shall be given to Sublessor by Sublessee no later than twenty (20) days after Sublessee has made or received such offer, but in no event later than thirty (30) days prior to the date on which Sublessee applies to a court of competent jurisdiction for authority and approval to enter into the proposed assignment. Any person or entity to which this Sublease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed, without further act or documentation, to have assumed all of the Sublessee’s obligations arising under this Sublease on and after the date of such assignment. Any such assignee shall, upon demand, execute and deliver to Sublessor an instrument confirming such assumption. No provision of this Sublease shall be deemed a waiver of Sublessor’s rights or remedies under the Bankruptcy Code to oppose any assumption and/or assignment of this Sublease, to require a timely performance of Sublessee’s obligations under this Sublease, or to regain possession of the Premises if this Sublease has neither been assumed nor rejected within sixty (60) days after the date of the order for relief or within such additional time as a court of competent jurisdiction may have fixed. Notwithstanding anything in this Sublease to the contrary, all amounts payable by Sublessee to or on behalf of Sublessor under this Sublease, whether or not expressly denominated as rent, shall constitute rent for the purposes of Section 502(b)(6) of the Bankruptcy Code.

19.6.       Notwithstanding any other provision of this Sublease, any assignment or sublease shall comply with the provision of Article 25.

19.7.       Mortgages. Except as otherwise expressly agreed to by PDA and Sublessor in writing, Sublessee shall not have the right to engage in any financing or other transaction creating any mortgage upon the Subleased Premises. Any approval of PDA and Sublessor shall expressly be subject to the provisions of the Primary Lease.

END OF ARTICLE 19

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ARTICLE 20

[RESERVED]

END OF ARTICLE 20

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ARTICLE 21.

ESTOPPEL CERTIFICATES

21.1.       Sublessor, on or before twenty (20) days following receipt of a written request from Sublessee, and Sublessee, on or before twenty (20) days following receipt of a written request from Sublessor, shall deliver to the party making such request a statement in writing certifying that this Sublease is unmodified and in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications) and the date to which the rent and any other deposits or charges have been paid and stating whether or not, to the best knowledge of the party executing such certificate (based on reasonable investigation), the party requesting such statement is in default in the performance of any covenant, agreement or condition contained in this Sublease and, if so, specifying each such default of which the executing party has knowledge. Should any such estoppels certificate contain language subordinating this Sublease to any mortgage or other financing security document, Sublessee shall not be required to sign or deliver it unless it contains a non-disturbance clause preventing the termination of this Sublease so long as Sublessee is not in default of its terms beyond any applicable notice and time to cure period.

END OF ARTICLE 21

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ARTICLE 22.

INVALIDITY OF PARTICULAR PROVISIONS

22.1. If any term or provision of this Sublease, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Sublease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provisions of this Sublease shall be valid and be enforced to the fullest extent permitted by law.

END OF ARTICLE 22

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ARTICLE 23.

NOTICES

23.1       Whenever Sublessor or Sublessee shall desire to give or serve upon the other any notice, demand, request or other communication with respect to this Sublease or with respect to the Subleased Premises each such notice, demand, request or other communication shall be in writing and shall not be effective for any purpose unless same shall be given or served by personal delivery to the party or parties to whom such notice, demand, request or other communication is directed or by mailing the same, in duplicate, to such parties by reputable overnight carrier, delivery in hand or by certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Sublessor:	Pioneer New Hampshire LLC.
	Attention: Chad Kageleiry, Member
	P.O. Box 728
	Dover, New Hampshire 03821

If to Sublessee:	FlexEnergy Energy Systems, Inc.
	Attention: Mark Schnepel
	112 Corporate Drive
	Portsmouth, NH 03801

or at such other address or addresses as Sublessor or Sublessee may from time to time designate by notice given by certified mail.

Every notice, demand, request or communication hereunder shall be deemed to have been given or served if hand delivered, when received, if sent by overnight, the next business day, and otherwise as of the second business day following the date of such mailing

END OF ARTICLE 23

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ARTICLE 24.

QUIET ENJOYMENT

24.1.       Sublessor covenants and agrees that Sublessee, upon paying the rent and all other charges herein provided for and observing and keeping all covenants, agreements, and conditions of this Sublease on its part to be observed and kept, shall quietly have and enjoy the Subleased Premises during the term of this Sublease without hindrance or molestation by Sublessor and anyone claiming by, through or under Sublessor, subject, however, to the exceptions, reservations and conditions of this Sublease and the Vesting Deed.

END OF ARTICLE 24

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ARTICLE 25.

ENVIRONMENTAL PROTECTION

25.1.       Sublessee and any sublessee or assignee of Sublessee shall comply with all federal, state, and local laws, regulations, and standards that are or may become applicable to Sublessee’s or such sublessee’s or assignee’s activities at the Subleased Premises, including but not limited to, the applicable environmental laws and regulations identified in Exhibit 5, as amended from time to time.

25.2.       Sublessee and any sublessee or assignee of Sublessee shall be solely responsible for obtaining at their cost and expense any environmental permits required for their operations under this Sublease or any sublease or assignment, independent of any existing Airport permits.

25.3.       Sublessee shall indemnify, defend and hold harmless Sublessor, PDA and the Air Force against and from all claims, judgments, damages, penalties, fines, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, and sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees), resulting or arising from discharges, emissions, spills, releases, storage, or disposal of any Hazardous Substances by the Sublessee, or any other action by the Sublessee, or any sublessee or assignee of the Sublessee, giving rise to Sublessor or PDA or Air Force liability, civil or criminal, or responsibility under federal, state or local environmental laws.

This indemnification of Sublessor and PDA and Air Force by Sublessee includes, without limitation, any and all claims, judgment, damages, penalties, fines, costs and expenses, liabilities and losses incurred by Sublessor or PDA or Air Force in connection with any investigation of site conditions, or any remedial or removal action or other site restoration work required by any federal, state or local governmental unit or other person for or pertaining to any discharges, emissions, spills, releases, storage or disposal of Hazardous Substances arising or resulting from any act or omission of the Sublessee or any sublessee or assignee of the Sublessee at the Subleased Premises after the Occupancy Date. “Occupancy Date” as used herein shall mean the first day of Sublessee’s occupancy or use of the Subleased Premises. “Occupancy” or “Use” shall mean any activity or presence including preparation and construction in or upon the Subleased Premises.

The provisions of this Section shall survive the expiration or termination of the Sublease, and the Sublessee’s obligations hereunder shall apply whenever the Sublessor, PDA, or the Air Force incurs costs or liabilities for the Sublessee’s actions of the types described in this Article.

25.4.       Notwithstanding any other provision of this Sublease, Sublessee and its assignees do not assume any liability or responsibility for environmental impacts and damage caused by Air Force of Hazardous Substances on any portion of the Airport, including the Subleased Premises. The Sublessee and its assignees have no obligation to undertake the defense, remediation and cleanup, including the liability and responsibility for the costs of damages, penalties, legal and investigative services arising out of any claim or action in existence now, or which may be brought in the future by any person, including governmental units against theAir Force, because of any use of, or release from, any portion of the Airport (including the Subleased Premises) of any Hazardous Substances prior to the Occupancy Date.

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25.5.       As used in this Sublease, the term “Hazardous Substances” means any hazardous or toxic substance, material or waste, oil or petroleum product, which is or becomes regulated by any local governmental authority, the State of New Hampshire or the United States Government. The term “Hazardous Substances” includes, without limitation, any material or substance which is (i) defined as a “hazardous waste,” under New Hampshire RSA ch. 147-A, (ii) defined as a “hazardous substance” under New Hampshire RSA ch. 147-B, (iii) oil, gasoline or other petroleum product, (iv) asbestos, (v) listed under or defined as hazardous substance pursuant to Part Hc.P 1905 (“Hazardous Waste Rules”) of the New Hampshire Code of Administrative Rules, (vi) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. §1317), (vii) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903), or (viii) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. (42 U.S.C. §9601) and (ix) so defined in the regulations adopted and publications promulgated pursuant to any of such laws, or as such laws or regulations may be further amended, modified or supplemented (collectively “Hazardous Substance Laws”).

As used in this Sublease, the terms “release” and “storage” shall have the meanings provided in RSA 147-B:2, as amended, and the term “disposal” shall have the meaning provided in RSA 147-A:2.

25.6.       Sublessor’s rights under this Sublease and PDA’s rights under the Primary Lease specifically include the right of Sublessor and PDA to inspect the Subleased Premises and any buildings or other facilities thereon for compliance with environmental, safety, and occupational health laws and regulations, whether or not the Sublessor or PDA is responsible for enforcing them. Such inspections are without prejudice to the right of duly constituted enforcement officials to make such inspections.

25.7.       Notwithstanding any other provision of this Sublease and pursuant to the Primary lease, PDA is not responsible for any removal or containment of asbestos. If Sublessee and any sublessee or assignee intend to make any improvements or repairs that require the removal of asbestos, an appropriate asbestos disposal plan must be incorporated in the plans and specifications. The asbestos disposal plan shall identify the proposed disposal site for the asbestos. In addition, non-friable asbestos which becomes friable through or as a consequence of the activities of Sublessee will be abated by Sublessee at its sole cost and expense.

25.8.       Sublessor and Sublessee acknowledge that the Airport has been identified as a National Priority List (NPL) Site under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. Sublessee acknowledges that Sublessor has provided it with a copy of the Pease Federal Facility Agreement (“FFA”) entered into by EPA, and the Air Force on April 24,1991, and Modification No. 1 thereto, effective March 18, 1993, agrees that it will comply with the terms of the FFA to the extent the same may be applicable to the Subleased Premises and that should any conflict arise between the terms of the FFA and the provisions of this Sublease, the terms of the FFA will take precedence. The Sublessee further agrees that the Sublessor and PDA assume no liability to the Sublessee or any sublessee or assignee of Sublessee should implementation of the FFA interfere with their use of the Subleased Premises. The Sublessee and its sublessee(s) and assignee(s) shall have no claim on account of any such interference against the Sublessor, or PDA or any officer, agent, employee or contractor thereof, other than a claim to Sublessor for abatement of rent.

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25.9.       The Air Force, EPA and NHDES and their officers, agents, employees, contractors, and subcontractors have the right, upon reasonable notice to the Sublessee and any sublessee or assignee, to enter upon the Subleased Premises for the purposes enumerated in this subparagraph and for such other purposes consistent with the FFA:

(1)       to conduct investigations and surveys, including, where necessary, drilling, testpitting, borings and other activities related to the Pease Installation Restoration Program (“IRP”) or the FFA; and

(2)       to inspect field activities of the Air Force and its contractors and subcontractors in implementing the IRP or the FFA;

(3)       to conduct any test or survey required by the EPA and NHDES relating to the implementation of the FFA or environmental conditions at the Subleased Premises or to verify any data submitted to the EPA and NHDES by the Air Force relating to such conditions;

(4)       to construct, operate, maintain or undertake any other response or remedial action as required or necessary under the IRP or the FFA, including, but not limited to monitoring wells, pumping wells and treatment facilities.

25.10.       Sublessee and its sublessees and assignees agree to comply with the provisions of any health or safety plan in effect under the IRP or the FFA during the course of any of the above described response or remedial actions. Any inspection, survey, investigation, or other response or remedial action will, to the extent practicable, be coordinated with representatives designated by the Sublessee and any sublessee or assignee. Sublessee and any sublessee or assignee shall have no claim on account of such entries against the State as defined in FFA or any officer, agent, employee, contractor, or subcontractor thereof.

25.11.       Sublessee further agrees that in the event of any authorized sublease or assignment of the Subleased Premises, it shall provide to the Air Force, EPA and NHDES by certified mail a copy of the agreement of sublease or assignment of the Subleased Premises within fourteen (14) days after the effective date of such transaction. Sublessee may delete the financial terms and any other proprietary information from any sublease or assignment submitted to the above mentioned entities.

25.12.       The Airport air emissions offsets and Air Force accumulation points for hazardous and other wastes will not be made available to Sublessee. Sublessee shall be responsible for obtaining from some other source(s) any air pollution credits that may be required to offset emissions resulting from its activities under the Sublease.

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25.13.       Any permit required under Hazardous Substance Laws for the management of Hazardous Substances stored or generated by Sublessee or any sublessee or assignee of Sublessee shall be obtained by Sublessee or its sublessees or assignees and shall be limited to generation and transportation. Any violation of this requirement shall be deemed a material breach of this Sublease. Sublessee shall provide at its own expense such hazardous waste storage facilities, complying with all laws and regulations, as it needs for management of its hazardous waste.

25.14.       Sublessee, and any sublessee or assignee of Sublessee whose operations utilize Hazardous Substances, shall have a completed and approved plan for responding to Hazardous Substances spills prior to commencement of operations on the Subleased Premises. Such plan shall be independent of, but not inconsistent with, any plan or other standard of PDA applicable to the Airport and except for initial fire response and/or spill containment, shall not rely on use of the Airport or Sublessor personnel or equipment. Should the Sublessor provide any personnel or equipment, whether for initial fire response and/or spill containment or otherwise, on request of the Sublessee, or because the Sublessee was not, in the opinion of the Sublessor, conducting timely cleanup actions, the Sublessee agrees to reimburse the Sublessor for its costs.

25.15.       Sublessee, and any sublessee, or assignee of the Sublessee, must maintain and make available to PDA, the Air Force, EPA and NHDES all records, inspection logs, and manifests that track the generation, handling, storage, treatment and disposal of hazardous waste, as well as all other records required by applicable laws and requirements. PDA and the Air Force reserve the right to inspect the Subleased Premises and Sublessee’s, its sublessee’s or assignee’s records for compliance with Federal, State, local laws, regulations, and other requirements relating to the generation, handling, storage, treatment and disposal of hazardous waste, as well as the discharge or release of hazardous substances. Violations may be reported by PDA and the Air Force to appropriate regulatory agencies, as required by applicable law. The Sublessee, its sublessees or assignees, shall be liable for the payment of any fines and penalties or costs which may accrue to the United States of America or PDA as a result of the actions of Sublessee, its sublessees or assignees, respectively.

25.16.       Sublessee, its sublessees and assignees agree to comply with the provisions of any Wetlands Management Plan in effect at Pease. Sublessee, its sublessees and assignees will minimize the destruction, loss or degradation of wetlands on the Subleased Premises. Sublessee, its sublessees and assignees will obtain prior written approval from Sublessor and the Air Force before conducting any new construction in wetland areas. Sublessee, its sublessees and assignees will obtain all necessary permits or waivers under Section 404 of the Clean Water Act and the New Hampshire Fill and Dredge in Wetlands Act.

25.17.       Prior to the development of any portion of the Subleased Premises on which a wetland has been identified in the Final Supplemental Environmental Impact Statement dated August 1995 (“SEIS”), the Sublessee, its sublessees and assignees, as applicable, shall, if one has not previously been completed, perform a wetland delineation.

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25.18.       Prior to the storage, mixing, or application of any pesticide, as that term is defined under the Federal Insecticide, Fungicide, and Rodenticide Act, the Sublessee, its sublessees and assignees shall prepare a plan for storage, mixing and application of pesticides (“Pesticide Management Plan”). The Pesticide Management Plan shall be sufficient to meet all applicable Federal, State and local pesticide requirements. The Sublessee, its sublessees and assignees shall store, mix and apply all pesticides within the Subleased Premises only in strict compliance with the Pesticide Management Plan. The pesticides will only be applied by a licensed applicator.

25.19.       The Sublessee, its sublessees and assignees must notify the Sublessor and the Site Manager of its intent to possess, store, or use any licensed or licensable source or byproduct materials, as those terms are defined under the Atomic Energy Act and its implementing regulations; of Sublessee’s, its sublessees and assignees intent to possess, use, or store radium; and of Sublessee’s, its sublessees and assignees intent to possess or use any equipment producing ionizing radiation and subject to specific licensing requirements or other individual regulations, at least sixty (60) days prior to the entry of such materials or equipment upon the Airport. Upon notification, the Sublessor and the Site Manager may impose such requirements, including prohibition of possession, use, or storage, as deemed necessary to adequately protect health and human environment. Thereafter, the Sublessee must notify the Sublessor and the Site Manager of the presence of all licensed or licensable source or other byproduct materials, of the presence of all radium, and of the presence of all equipment producing ionizing radiation and subject to specific licensing requirements or other individual regulation; provided, however, that the Sublessee, its sublessees and assignees need not make either of the above notifications to the Sublessor and the Site Manager with respect to source and byproduct material which is exempt from regulation under the Atomic Energy Act. The Sublessee shall not, under any circumstances, use, own, possess or allow the presence of special nuclear material on the Subleased Premises.

25.20.       The Sublessee, its sublessees and assignees acknowledge that lead-based paint may be present in and on facilities within the Subleased Premises. The Air Force may conduct surveys to determine the existence and extent of any possible lead-based paint in or on the Subleased Premises. Prior to beginning any Alterations, other construction or construction related work, (to include paint stripping or sanding), excavating, demolition, or restoration, the Sublessee, any sublessee or assignee must test any paint which would be disturbed unless a conclusive determination has been made that lead-based paint is not present. If paint is lead-based, the Sublessee, any sublessee or assignee is required to handle it in accordance with Title X and all applicable Federal, State and local laws and regulations at its own expense. The Sublessee is required to ensure that any lead-based paint is maintained in good condition.

25.21.       The Sublessee acknowledges that chlordane was used at selected housing units as described in Environmental Condition Report, Exhibit D-l of the Master Lease. The Sublessee, its sublessees or assignees will follow all applicable laws and regulations should the Sublessee, its sublessee or assignee choose to disturb or excavate any of this material. Any cost associated with this action shall be at the Sublessee’s, its sublessee’s or assignee’s expense.

25.22.      The Sublessee, its sublessees and assignees acknowledge receipt of the Addendum to the June 24, 1997 Finding of Suitability to Lease (FOSL) attached hereto and incorporated herein as Exhibit 1.

END OF ARTICLE 25

39 

ARTICLE 26.

MISCELLANEOUS

26.1.         All rent and all other sums which may from time to time become due and payable by Sublessee to Sublessor under any of the provisions of this Sublease shall be made payable to the Sublessor and forwarded by the Sublessee direct to Sublessor’s address specified in Article 23. All such rent and other sums if not paid on the due date shall bear interest from and after the due date thereof at the higher of the then current rate applied to legal judgments by the courts of the State of New Hampshire or the rate of twelve percent (12%) per annum; provided, however, that such interest shall in no event exceed the maximum rate permitted by law.

26.2.         In all cases the language in all parts of this Sublease shall be construed simply, according to its fair meaning and not strictly for or against Sublessor or Sublessee.

26.3.         The word titles underlying the Article designations contained herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as any part of this instrument.

26.4.         In any action or proceeding which either Party may take to enforce such Party’s rights hereunder, whether prior to or after breach or termination, or to which such Party may be made a party because of any matters arising or growing out of this Sublease, and due to the act or default of the other, the Party whose act or default caused the other Party, without fault to become involved in such litigation, or who shall be defeated in such litigation, agrees to pay all costs incurred by the winning or other party therein, including reasonable attorneys’ fees.

26.5.         If Sublessee should remain in possession of the Subleased Premises after the expiration of the term of this Sublease and without executing a new lease, then such holding over shall be construed as a tenancy at sufferance and the Basic Rent due and payable shall be one and one half times the amount of the Basic Rent due under this Sublease immediately prior to the expiration of this Sublease.

26.6.         The individuals executing this Sublease on behalf of Sublessee and Sublessor represent and warrant that he or she is duly authorized to execute and deliver this Sublease on behalf of said entities, and that this Sublease is binding upon said entities in accordance with its terms. A Certificate of Authority to Do Business in the State of New Hampshire from the New Hampshire Secretary of State is attached as Exhibit 6.

26.7.         This Sublease covers in full each and every agreement of every kind or nature whatsoever between the Parties hereto concerning the Subleased Premises and all preliminary negotiations and agreements of every kind or nature whatsoever with respect to the Subleased Premises; and no other person, firm or corporation has at any time had any authority from Sublessor to make any representations or promises on behalf of Sublessor, and Sublessee expressly agrees that if any such representations or promises have been made by Sublessor or others, Sublessee hereby waives all right to rely thereon. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statute, law, or custom to the contrary notwithstanding. No provision of this Sublease may be amended or added to except by an agreement in writing signed by the Parties hereto or their respective successors in interest. Sublessee acknowledges that it has read this Section and understands it to be a waiver of any right to rely on any representations or agreements not expressly set forth in this Sublease.

40 

26.8.         Subject to the provisions hereof, this Sublease shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns, and wherever a reference in this Sublease is made to either of the Parties hereto, such reference shall be deemed to include, wherever applicable, also a reference to the successors and assigns of such party, as if in every case so expressed.

26.9.         Nothing contained in this Sublease shall be deemed or construed by the Parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between Sublessor and Sublessee, and neither the method of computation of rent nor any other provision contained in this Sublease nor any acts of the Parties hereto shall be deemed to create any relationship between Sublessor and Sublessee other than the relationship of landlord and tenant.

26.10.       Sublessee agrees that it dealt with no broker.

26.11.       This Sublease shall be construed and enforced in accordance with the laws of the State of New Hampshire.

26.12.       Any actions or proceedings with respect to any matters arising under or growing out of this Sublease shall be instituted and prosecuted only in courts located in the State of New Hampshire. Nothing contained in this Article or any other provision of this Sublease shall be deemed to constitute a waiver of the sovereign immunity of the State of New Hampshire, which immunity is hereby reserved to PDA and to the State of New Hampshire.

26.13.       This instrument may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

26.14.       Sublessee shall faithfully observe and comply with such rules and regulations as the PDA may adopt and modify from time to time for the operation of the Airport and such rules and regulations as Sublessor may reasonably adopt from time to time for the operation of the building and lot of which the Subleased Premises are a part. Neither PDA nor Sublessor shall be responsible to Sublessee for the violation or nonperformance by any other tenant of the PDA or Subtenant of Sublessor of such airport rules and regulations or of Sublessor’s rules and regulations, provided, however, that Sublessor shall use reasonable efforts to apply such rules and regulations uniformly to all tenants and subtenants.

41 

26.15.       Force Majeure. Except for the performance of any monetary payment obligations hereunder, the duties of Sublessor or Sublessee to observe or perform any of the provisions of this Sublease on its part to be performed or observed shall be excused for a period equal to the period of prevention, delay or stoppage due to causes beyond the control of the affected party, by reason of strikes, civil riots, shortages of materials (except in the event materials of like kind or quality are available), war, invasion, fire or other casualty, labor unrest (unless such labor unrest solely affects the Property and is not a result of Sublessee’s acts, omission or negligence but is caused by the acts, omissions or negligence of Sublessor), actions or public utilities, Acts of God, adverse seasonal or weather conditions beyond those normally experienced in the Portsmouth area, or other events beyond the reasonable control of the affected party (“Force Majeure”), provided that (a) the affected party has taken steps that are reasonable under the circumstances to mitigate the effects of such Force Majeure situation, and (b) the affected party notifies the other party in writing of the event of Force Majeure within five (5) days after the affected party obtains actual knowledge of the occurrence thereof. This clause shall not be applicable to any payment of rent or other charges due from Sublessee to Sublessor.

26.16.       Sublessee agrees to conform to such additional provisions required, from time to time, by the FAA (“FAA Requirements”) or its successor with respect to the operation of the Airport, or a portion thereof. The current FAA Requirements are attached hereto as Exhibit 7 and incorporated herein by reference.

26.17.       This Sublease is subject and subordinate to any agreements heretofore or hereafter made between PDA and the United States or the Air Force, the execution of which was required to enable or permit transfer of rights or property to PDA for airport purposes or expenditure of federal grant funds for airport improvement, maintenance or development, including, without limitation, the Vesting Deed and FFA. Sublessee shall abide by requirements of any agreement between PDA and the United States or the Air Force or the FAA applicable to the Subleased Premises or Sublessee’s activities at the Airport and shall consent to amendments and modifications of this Sublease if required by such agreements or as a condition of PDA’s entry into such agreements. If any such amendment or modification to this Sublease unduly or unreasonably restricts or significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

26.18.       This Sublease is further subject and subordinate to the Primary Lease between PDA and Sublessor, and Sublessee shall abide by the provisions of the Primary Lease applicable to the Subleased Premises or Sublessee’s activities at the Airport.

26.19.       Sublessee acknowledges that PDA, in its sole discretion, shall determine and may from time to time change the routes of surface ingress and egress connecting the Subleased Premises. PDA also reserves the right to further develop the Airport, or such portion of the Airport as is owned or controlled by PDA, as it sees fit, regardless of the desires or views of Sublessee and without interference or hindrance. If any such changes to ingress and egress or further development by the PDA significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

42 

26.20.       The Sublessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, that this Sublease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Premises herein leased nor shall the Sublessee, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Subleased Premises herein leased.

26.21.       All obligations of Sublessee to indemnify, defend and hold harmless Sublessor, and PDA and to make any monetary payment to Sublessor, and PDA shall survive the termination or expiration of this Sublease. All obligations of Sublessor to indemnify, defend and hold harmless Sublessee shall survive the termination or expiration of this Sublease.

END OF ARTICLE 26

43 

ARTICLE 27.

TERMINATION OF SUBLEASE

27.1.       The Parties acknowledge that: (i) this Sublease incorporates by reference a number of ancillary documents including but not limited to the Vesting Deed, the FFA, and the Primary Lease (the “Incorporated Documents”) and (ii) the PDA and the Sublessor have reserved certain rights therein and herein (the “Reserved Rights”). In the event that the provisions of the Incorporated Documents and/or the Reserved Rights, if exercised, unduly or unreasonably restrict or significantly adversely affect the Sublessee’s use and enjoyment of the Subleased Premises or impose a material obligation upon the Sublessee which is other than those expressly set forth in this Sublease, then the Sublessee may provide written notice to the Sublessor of the nature of the obligation or action or inaction and the consequent significant adverse effect such action or inaction has had on the Sublessee within ten (10) days after Sublessee has actual knowledge thereof. Failure of Sublessee to notify Sublessor within the ten (10) day time period shall be deemed a waiver of its right to terminate this Sublease. Sublessor shall have 60 days after receipt of Sublessee’s written notice in which to eliminate the significant or adverse effect on the Sublessee. If the Sublessor is unable to eliminate the significant adverse effect on the Sublessee within the 60-day period, Sublessee may terminate this Sublease by giving Sublessor a second written notice to Sublessor terminating this Sublease which termination shall be effective thirty (30) days after receipt of the second written notice by Sublessor. During any period that actions of the PDA or the Sublessor unduly or unreasonably restrict or significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, Sublessee’s rent shall be equitably abated during such period of time.

END OF ARTICLE 27

44 

EXECUTION

IN WITNESS WHEREOF, Sublessor and Sublessee have executed duplicate originals of this Sublease as of December 23, 2020.

SUBLESSOR:
PIONEER NEW HAMPSHIRE LLC
By:	/s/ Chad Kageleiry
	Chad Kageleiry, Its Member,
	Duly Authorized
SUBLESSEE:
FLEXENERGY ENERGY SYSTEMS, INC.
By:	/s/ Mark G. Schnepel
	Name: Mark G. Schnepel
	Title: President and CEO
	Duly Authorized

STATE OF NEW HAMPSHIRE

COUNTY OF Strafford

This instrument was acknowledged before me on this 29 day of December, 2020 by Chad Kageleiry as member of Pioneer New Hampshire LLC.

/s/ Melanie Morin

Notary Public/ Justice of the Peace

(Seal, if any)

My Commission Expires:

45 

STATE OF MASSACHUSETTS

COUNTY OF ESSEX

This instrument was acknowledged before me on this 23^rd day of December, 2020 by Mark G. Schnepel as President and CEO of FlexEnergy Energy Systems, Inc.

		/s/ Andrea Hellrigel
		Notary Public/ Justice of the Peace
(Seal, if any)
		My Commission Expires: 4.20.2023

46 

EXHIBIT 1

PRIMARY LEASE

On file with PDA

47 

EXHIBIT 2

VESTING DEED

On file with PDA

48 

EXHIBIT 3

PLANS DESIGNATING THE SUBLEASED PREMISES

[To Be Attached]

49 

 

50 

EXHIBIT 4

SUBLESSOR’S WORK

Sublessor will:

· Create a passage in between the two spaces

· Provide a fresh coat of paint on the walls

· Shampoo carpets

· Remove small kitchenette

· Add four (4) solid birch doors with full light

· Repair exterior stucco at entry

51 

EXHIBIT 5

LIST OF ENVIRONMENTAL LAWS AND REGULATIONS

Air Quality:	(a)	Clean Air Act & Amendments, 42 U.S.C. 7401-7642
	(b)	40 CFR Parts 50-52, 61, 62, 65-67, 81
	(c)	RSA ch. 125-C, Air Pollution Control, and rules adopted thereunder
	(d)	RSA ch. 125-H, Air Toxic Control Act, and rules adopted thereunder

Hazardous Materials:	(a)	Hazardous Materials Transportation Act, 49 U.S.C. 1801-1813, and Department of Transportation Regulations thereunder
	(b)	Emergency Planning and Community Right-To-Know Act, 42 U.S.C. 11001-11050
	(c)	49 CFR Parts 100-179
	(d)	40 CFR Part 302
	(e)	RSA ch. 277-A, Toxic Substances in the Workplace, and rules adopted thereunder

Hazardous Waste:	(a)	Resource Conservation and Recovery Act (RCRA) of 1976 and RCRA Amendments of 1984, 42 U.S.C. 6901-6991i
	(b)	Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, 42 U.S.C. 9601-9675
	(c)	40 CFR Parts 260-271, 300, 302
	(d)	RSA ch. 147-A, Hazardous Waste Management, and rules adopted thereunder

Water Quality:	(a)	Federal Water Pollution Control Act (Clean Water Act) and Amendments, 33 U.S.C. 1251-1387
	(b)	Safe Drinking Water Act, as amended, 42 U.S.C. 300f- 300j-26, 40 CFR Title 100-143, 401 and 403
	(c)	RSA ch. 146-A, Oil Spillage in Public Waters, and rules adopted thereunder
	(d)	RSA ch. 485, New Hampshire Safe Drinking Water Act, and rules adopted thereunder
	(e)	RSA ch. 485-A, Pollution and Waste Disposal, and rules adopted thereunder

52 

EXHIBIT 6

SUBLESSEE CERTIFICATE OF GOOD STANDING

State of New Hampshire

Department of State

CERTIFICATE

I, William M. Gardner, Secretary of State of the State of New Hampshire, do hereby certify that FLEXENERGY ENERGY SYSTEMS, INC. is a Delaware Profit Corporation registered to transact business in New Hampshire on April 04, 2011. I further certify that all fees and documents required by the Secretary of State’s office have been received and is in good standing as far as this office is concerned.

Business ID: 646930

Certificate Number: 0005053485

	IN TESTIMONY WHEREOF,
	I hereto set my hand and cause to be affixed the Seal of the State of New Hampshire, this 9th day of December A.D. 2020.
	/s/ William M. Gardner
	William M. Gardner
	Secretary of State

53 

EXHIBIT 7

SUBLEASE PROVISIONS REQUIRED BY

THE FEDERAL AVIATION ADMINISTRATION

1.       Sublessee, for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree that in the event facilities are constructed, maintained, or otherwise operated on the Subleased Premises, for a purpose for which a United States Department of Transportation (“DOT”) program or activity is extended or for another purpose involving the provision of similar services or benefits, Sublessee shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended.

2.       Sublessee, for himself, his personal representative, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree that: (i) no person on the grounds of race, color, or national origin, shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in the use of said facilities; (ii) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination; and (iii) that the Sublessee shall use the premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulation may be amended.

3.       That in the event of breach of any of the above nondiscrimination covenants, Sublessor shall have the right to terminate the Sublease, and to reenter and repossess said land and the facilities thereon, and hold the same as if said lease, had never been made or issued. This provision does not become effective until the procedures of 49 CFR, Part 21 are allowed and completed including expiration of appeal rights.

4.       Sublessee shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; PROVIDED THAT the Sublessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers.

5.       Non-compliance with Provision 4 above shall constitute a material breach thereof and in the event of such non-compliance Sublessor shall have the right to terminate this Sublease, and the estate hereby created without liability therefor or at the election of the Sublessor or the United States either or both of Sublessor or the United States shall have the right to judicially enforce provisions.

54 

6.       Sublessee agrees that it shall insert the above five provisions in any lease agreement, by which said Sublessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Subleased Premises.

7.       Sublessee assures that it will undertake an affirmative action program as required by 14 CFR, Part 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Part 152, Subpart E. Sublessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Sublessee assures that it will require that its covered suborganizations provide assurance to the Sublessor, that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as required by 14 CFR, Part 152, Subpart E, to the same effect.

8.       Sublessor reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of the Sublessee and without interference or hindrance.

9.       Sublessor reserves the right, but shall not be obligated to the Sublessee, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with the right to direct and control all activities of the Sublessee in this regard.

10.     This Sublease shall be subordinate to the provisions and requirements of any existing or future agreement the Sublessor and the United States, relative to the development, operation or maintenance of the Airport.

11.     There is hereby reserved to Sublessor, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Subleased Premises. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from or operation on the Airport.

12.     Sublessee agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event future construction of building is planned for the Subleased Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on Subleased Premises.

13.     Sublessee, by accepting this Sublease expressly agrees for itself, its successors and assigns that it shall not erect nor permit the erection of any structure or object not permit the growth of any tree on the land leased hereunder above the mean sea level elevation of 200 feet. In the event the aforesaid covenants are breached, Sublessor reserves the right to enter upon the Premises and to remove the offending structure or object and cut the offending tree, all of which shall be at the expense of the Sublessee.

14.     Sublessee, by accepting this Sublease, agrees for itself, its successors and assigns that it will not make use of the Subleased Premises in any manner which might interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, Sublessor reserves the right to enter upon the Subleased Premises, and cause the abatement of such interference at the expense of the Sublessee.

15.     It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349a).

16.     This Sublease and all the provisions hereof shall be subject to whatever right the United States Government now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airport or the exclusive or non-exclusive use of the Airport by the United States during the time of war or national emergency.

55 

EX-10.9

Exhibit 10.9

 

PLAZA TOWER ONE

Office Lease

BETWEEN

GPI PLAZA TOWER, LP,

A TEXAS LIMITED PARTNERSHIP,

AS LANDLORD,

AND

FLEX LEASING POWER & SERVICE LLC,

A DELAWARE LIMITED LIABILITY COMPANY,

AS TENANT

6400 SOUTH FIDDLERS GREEN CIRCLE

GREENWOOD VILLAGE, COLORADO 80111

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

i 

OFFICE LEASE

BASIC LEASE INFORMATION

1. Date of Lease: February 19, 2018

2. Building:

a. Name: PLAZA TOWER ONE

b. Address: 6400 SOUTH FIDDLERS GREEN CIRCLE

GREENWOOD VILLAGE, CO 80111

c. Building Rentable Area: 457,919 square feet

3. Tenant: Flex Leasing Power & Service LLC

4. Premises:

a. Suite: 900

b. Premises Rentable Area: 7,972 square feet

5. Basic Rent:

	Annual Rate Per		Basic
Rental	Square Foot of Premises		Monthly
Period	Rentable Area		Rent
Commencement Date
– Month 16	$	31.00	$	20,594.33	*
Months 17-28	$	31.78	$	21,109.19
Months 29-40	$	32.57	$	21,636.92
Months 41-52	$	33.38	$	22,177.84
Months 53-64	$	34.22	$	22,732.29

* Notwithstanding anything to the contrary contained in this Lease, Landlord agrees not to demand or collect from Tenant Basic Monthly Rent for the first four (4) months after the Commencement Date (the “Abatement Period”). If the Abatement Period ends on a day other than the first day of a calendar month, Basic Monthly Rent for the month in which the Abatement Period ends shall be prorated based on the number of days after the Abatement Period in such month and the number of days in such month. If a default beyond any applicable cure period provided for herein occurs at any time during the Term, the abated Basic Monthly Rent for the Abatement Period will be immediately due and payable. Except for such Basic Monthly Rent abatement, all of the terms and conditions of this Lease will be applicable during the Abatement Period.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

i 

6. Tenant’s Share: 1.74% (See subsection 1.1.2)

7. Operating Base Year: The calendar year 2018

8. Tax Base: The calendar year 2018

9. Term: Approximately sixty-four (64) full calendar months

10. Commencement Date: Upon Substantial Completion of the Tenant’s Improvements (as those terms are defined in Exhibit C), which is estimated to be May 1, 2018, subject to subsection 1.2.1

11. Expiration Date: The last day of the sixty-fourth (64^th) full calendar month after the Commencement Date, subject to subsection 1.2.1

12. Permitted Use: General office use.

13. Security Deposit: $22,732.29

14. Guarantor: None.

15. Addresses:

(a) Landlord: GPI Plaza Tower, LP

For Payment of RENT only:	WIRE INSTRUCTIONS FOR RENT
GPI Plaza Tower, LP
PO Box 201365	Bank Name Wells Fargo Bank, NA
Dallas, TX 75320-1365	ABA Number 121000248
	Account Name Granite Properties,
	Inc.
	Account Number 4945061919
	Reference 6400 South Fiddlers
	Green Circle and Suite Number

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

ii 

	For NOTICES only:	With a copy at the same time to:
	c/o Property Management	5601 Granite Parkway, Suite 800
	Plaza Tower One	Plano, Texas 75024
	6400 South Fiddlers Green Circle,	Attention: Director of Leasing
	Suite 500	Phone: 972-731-2300
	Greenwood Village, CO 80111	Fax: 972-731-2360
(b)	Tenant: Flex Leasing Power &
	Service LLC
	For Notices prior to the	For Notices from and after the
	Commencement Date:	Commencement Date:
	6400 S. Fiddler’s Green Circle	6400 S. Fiddler’s Green Circle
	Suite 450	Suite 900
	Greenwood Village, CO. 80111	Greenwood Village, CO. 80111
	Attention: Doug Baltzer	Attention: Doug Baltzer
	Phone: (720) 573-7664	Phone: (720) 573-7664
	Email:	Email:
	Doug.baltzer@flexleasingpower.com	Doug.baltzer@flexleasingpower.com
	With a copy to:	With a copy to:
	Lewis Roca Rothgerber	Lewis Roca Rothgerber
	Christie LLP	Christie LLP
	1200 17th Street, Suite 3000	1200 17th Street, Suite 3000
	Denver, CO 80202-5855	Denver, CO 80202-5855
	Attention: Joel Fry	Attention: Joel Fry
	Phone: (303) 628-9547	Phone: (303) 628-9547
	Email: jfry@lrrc.com	Email: jfry@lrrc.com

16. Parking:

2 Reserved spaces at $75.00

per month each

21 Unreserved spaces at $55.00

per month each

23 Total spaces

(Subject to Exhibit F)

17. Brokers: Colliers International (Robert Whittelsey and Katy Sheehy) on behalf of Landlord and JLL (Tim Bourdelais) on behalf of Tenant.

18. Tenant’s Improvements:

Shall be constructed on a “turn-key” basis by Landlord.

(Subject to Exhibit C)

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

iii 

TABLE OF CONTENTS

FOR OFFICE LEASE

	Page
ARTICLE 1 TERM AND POSSESSION	1
ARTICLE 2 RENT	6
ARTICLE 3 SECURITY DEPOSIT	13
ARTICLE 4 OCCUPANCY AND USE	13
ARTICLE 5 UTILITIES AND SERVICES	15
ARTICLE 6 MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS	18
ARTICLE 7 INSURANCE AND CASUALTY	20
ARTICLE 8 CONDEMNATION	25
ARTICLE 9 LIENS	25
ARTICLE 10 TAXES ON TENANT’S PROPERTY	26
ARTICLE 11 SUBLETTING AND ASSIGNING	26
ARTICLE 12 TRANSFERS BY LANDLORD, SUBORDINATION AND TENANT’S ESTOPPEL CERTIFICATE	28
ARTICLE 13 DEFAULT	29
ARTICLE 14 NOTICES	33
ARTICLE 15 MISCELLANEOUS PROVISIONS	33

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

iv 

EXHIBITS TO OFFICE LEASE

Exhibit A	Land Legal Description
Exhibit B	Premises Floor Plan
Exhibit C	Work Letter
Exhibit D	Rules and Regulations
Exhibit E	Acceptance of Premises Memorandum
Exhibit F	Parking Agreement

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

v 

OFFICE LEASE

This Office Lease (this “Lease”) is made by and between GPI PLAZA TOWER, LP, a Texas limited partnership (“Landlord”), and FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (“Tenant”). The Basic Lease Information attached hereto as pages i through iv (the “Basic Lease Information”) and all exhibits and other attachments to this Lease are incorporated into this Lease and made a part hereof. Capitalized terms used in this Lease without definitions have the respective meanings assigned to them in the Basic Lease Information.

ARTICLE 1

TERM AND POSSESSION

SECTION 1.1         LEASE OF PREMISES, COMMENCEMENT AND EXPIRATION.

1.1.1 Lease of Premises. The Building is constructed on the land described in Exhibit A attached hereto (the “Land”) and is served by a parking garage structure (the “Garage”). In consideration of the mutual covenants herein, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, subject to all the terms and conditions of this Lease. The Building includes a “Tower” and a “Retail Area”. The Premises are shown as the crosshatched area on Exhibit B attached hereto. The Building, the Garage, the Land and all other improvements located thereon and appurtenances thereto are referred to collectively herein as the “Property”.

1.1.2 Rentable Area. The agreed rentable area of the Premises is stipulated to be the Premises Rentable Area, which is set forth in the Basic Lease Information. The Tenant’s Share stipulated in the Basic Lease Information has been calculated by dividing the Premises Rentable Area by the Building Rentable Area, then expressing such quotient as a percentage.

1.1.3 Term and Commencement. The Term of this Lease shall commence on the Commencement Date (as such Commencement Date may be adjusted pursuant to subsection 1.2.1 below or the Work Letter (herein so called) attached hereto as Exhibit C) and, unless sooner terminated pursuant to the terms of this Lease, shall expire, without notice to Tenant, on the Expiration Date (as such Expiration Date may be adjusted pursuant to subsection 1.2.1 below or the Work Letter). In the event the Commencement Date occurs on other than on the first day of the month, such partial month shall be added to the Term and the Expiration Date shall be the last day of the last month of the Term.

SECTION 1.2         COMPLETION AND DELIVERY OF PREMISES.

1.2.1 Construction of Tenant’s Improvements. The Tenant’s Improvements shall be constructed in the Premises as defined and provided in the Work Letter. Landlord will use reasonable efforts to achieve Substantial Completion (as defined in the Work Letter) of the Tenant’s Improvements by the Commencement Date provided in the Basic Lease Information. If Substantial Completion of the Tenant’s Improvements is not achieved by the Commencement Date stated in the Basic Lease Information for any reason other than Tenant Delays (as defined in the Work Letter), or force majeure (as defined in Section 15.13), Tenant’s sole and exclusive remedies shall be as follows:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

1 

1.2.1.1 Tenant shall be entitled to an adjustment of the Commencement Date and the Expiration Date.

1.2.1.2 If Substantial Completion of the Tenant’s Improvements does not occur on or before September 1, 2018 (as such date may be extended on a day-for-day basis for any delay caused by Tenant Delays or force majeure), then Tenant shall be entitled to a Rent credit equal to one (1) day of Basic Annual Rent and Additional Rent for each day from and including September 1, 2018 until the date of Substantial Completion of the Tenant’s Improvements, which credit shall be applied against the next payments of Basic Annual Rent and Additional Rent due and owing by Tenant.

1.2.1.3 If Substantial Completion of the Tenant’s Improvements does not occur on or before January 1, 2019 (as such date may be extended on a day-for-day basis for any delay caused by Tenant Delays or force majeure), then Tenant shall have the right to terminate this Lease by the delivery of written notice to Landlord prior to the date of Substantial Completion of the Tenant’s Improvements, time being of the essence.

1.2.2 Acceptance of Premises Memorandum. Within ten (10) days after Substantial Completion of the Tenant’s Improvements, Landlord and Tenant shall execute the Acceptance of Premises Memorandum (herein so called) in the form attached hereto as Exhibit E; provided, however, that in the event Tenant occupies the Premises for the purpose of conducting its business therefrom and fails to timely execute an Acceptance of Premises Memorandum, the Premises shall be deemed to be Substantially Complete (as defined in the Work Letter) and suitable for the Permitted Use without Tenant’s execution of an Acceptance of Premises Memorandum.

1.2.3 Occupancy of the Premises. Tenant shall have no right to occupy any portion of the Premises prior to Substantial Completion. Notwithstanding the foregoing, Tenant and Tenant’s Contractors (as defined in the Work Letter) and consultants shall have the right to enter upon the Premises up to 14 days prior to the Commencement Date with Landlord’s prior written approval, such approval not to be unreasonably withheld or delayed, to perform installation of Tenant’s telephone systems, office equipment, trade fixtures and furnishings, provided Tenant and Tenant’s Contractors and consultants shall not interfere with the construction of the Tenant’s Improvements and further provided that such entry shall be subject to all terms and conditions of this Lease other than the obligation to pay Rent.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

2 

1.2.4 Temporary Space. Pursuant to that certain Sublease Agreement between Tenant, as subtenant, and Brightstar US, Inc., a Florida corporation, as sublandlord, dated effective as of January ___, 2015 (the “Sublease”), Tenant subleases and occupies approximately 5,078 rentable square feet of space known as Suite 450, located on the fourth (4^th) floor of the Building (the “Subleased Premises”). The Sublease expires by its terms on February 27, 2018 (the “Sublease Expiration Date”). In the event the Commencement Date has not occurred by the Sublease Expiration Date, then: (a) commencing on the Sublease Expiration Date, and continuing up to and including the Commencement Date, Landlord will make available to Tenant the Subleased Premises (referred to herein as the “Temporary Space”): (b) Tenant shall accept the Temporary Space in its “as is” condition as of the Sublease Expiration Date, (c) on the Commencement Date, Tenant will surrender the Temporary Space in the condition it was delivered, ordinary wear and tear excepted, and (d) Tenant’s use of the Temporary Space will be on all the terms and conditions of the Lease, except that Tenant shall not be obligated to pay Rent for the Temporary Space.

SECTION 1.3        REDELIVERY OF THE PREMISES. Upon the expiration or earlier termination of this Lease or upon the exercise by Landlord of its right to re-enter the Premises without terminating this Lease pursuant to subsection 13.2.2 below, Tenant shall immediately deliver to Landlord the Premises in a safe, clean, neat, sanitary and operational condition, ordinary wear and tear, damage by casualty and condemnation and repairs required to be made by Landlord hereunder excepted, together with all keys and parking and access cards. At Landlord’s option, (a) all fixtures installed in the Premises shall remain therein and become the property of Landlord, and (b) all voice and data cabling and wiring installed by Tenant shall be removed at Tenant’s expense.

SECTION 1.4        HOLDING OVER. In the event Tenant retains possession of the Premises after the expiration or earlier termination of this Lease, such possession shall constitute a tenancy at sufferance only, subject, however, to all of the terms, provisions, covenants and agreements on the part of Tenant hereunder. In such event, Tenant shall be subject to immediate eviction and removal and shall pay Landlord as rent for the period of such holdover an amount equal to one and one-half (1-1/2) times the Basic Annual Rent and Additional Rent (each as hereinafter defined) in effect immediately preceding expiration or termination, as applicable, which payments shall be due and payable on or before the first (1^st) day of each month during any holdover period. Tenant shall also pay any actual damages sustained by Landlord as a result of such holdover but Tenant shall not be liable for any indirect, speculative, punitive, consequential or exemplary damages. Notwithstanding the foregoing, in the event such holdover exceeds thirty (30) days, Tenant shall also pay any consequential damages sustained by Landlord as a result of such holdover but Tenant shall not be liable for punitive or exemplary damages.

SECTION 1.5         RENEWAL OPTION.

1.5.1 If, and only if, on the date Tenant notifies Landlord of its intention to renew the term of this Lease (as provided below) and on the Expiration Date, (i) Tenant is not in default under this Lease beyond any applicable notice and cure period, (ii) Tenant (or an Affiliate, as defined in Section 11.1) then occupies all of the Premises, and (iii) this Lease is in full force and effect, then Tenant, but not any assignee or subtenant of Tenant (except an Affiliate, as defined in Section 11.1), shall have and may exercise an option to renew (the “Renewal Option”) this Lease for one (1) additional term of five (5) years (the “Renewal Term”) upon substantially the same terms and conditions contained in this Lease with the exceptions that (x) this Lease shall not be further available for renewal and (y) the rental for the Renewal Term shall be based on “Fair Market Value” hereinafter defined. “Fair Market Value” is hereby defined to mean the then fair market value payable by new and renewing tenants having a credit standing substantially similar to that of Tenant, for premises in buildings of similar quality, size, utility and location as the Building, including any additions thereto, in buildings located within the Denver southeast suburban market and leased for a renewal term approximately equal to the Renewal Term. Fair Market Value will take into consideration adjustments for those then current leasing inducements, leasing concessions, tenant improvements allowances, and parking concessions.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

3 

1.5.2 If Tenant desires to renew this Lease, Tenant must notify Landlord in writing of its intention to renew on or before the date which is at least nine (9) full months but no more than twelve (12) full months prior to the Expiration Date. Landlord shall, within the next thirty (30) days, notify Tenant in writing of Landlord’s determination of Fair Market Value and Tenant shall, within the next thirty (30) days following receipt of Landlord’s determination of the Fair Market Value, notify Landlord in writing of Tenant’s acceptance or rejection of Landlord’s determination of the Fair Market Value or Tenant’s desire to withdraw its election to exercise the Renewal Option. If Tenant timely notifies Landlord of Tenant’s acceptance of Landlord’s determination of the Fair Market Value, this Lease shall be extended as provided herein and Landlord and Tenant shall, within thirty (30) days of such acceptance enter into an amendment to this Lease to reflect the extension of the term and changes in Rent in accordance with this paragraph. If Tenant fails to timely respond to notice of Landlord’s determination of the Fair Market Value, Tenant will be deemed to have withdrawn Tenant’s election to exercise the Renewal Option and this Lease will terminate as of the Expiration Date.

1.5.3 If Tenant rejects Landlord’s determination of the Fair Market Value for an extension of the Term, Tenant will deliver notice of such dispute, together with Tenant’s proposed Fair Market Value, to Landlord within thirty (30) days of Tenant’s receipt of Landlord’s determination. The parties will then attempt in good faith to agree upon the Fair Market Value. If they fail to agree within fifteen (15) days, then Landlord and Tenant will each appoint an arbitrator meeting the criteria below within seven (7) days after the expiration of such fifteen (15) day period. Each arbitrator shall (i) be a real estate broker licensed under the laws of the State of Colorado, (ii) have been actively and continuously engaged in leasing office space in multi-story office buildings in the southeast Denver metropolitan area for not less than the previous ten (10) years, and (iii) during the previous ten (10) years been involved in transactions which in the aggregate total more than one million (1,000,000) square feet of rentable area of office space in the Denver metropolitan area. The arbitrator(s) selected by Landlord and Tenant shall not be the real estate brokers or agents that have previously represented Landlord or Tenant. The two arbitrators thus appointed will, within seven (7) days of their mutual appointment, together appoint a third arbitrator meeting the foregoing criteria. Within ten (10) days after the last arbitrator is so appointed, Landlord and Tenant may submit to the arbitrators their respective determinations of Fair Market Value and any supporting information or analysis. The arbitrators will determine, by majority vote which of Landlord’s determination of the Fair Market Value or Tenant’s determination of the Fair Market Value is the closest to the Fair Market Value and such determination shall be the final Basic Rental Rate for the Renewal Term.

1.5.4 Landlord and Tenant will each pay all costs, fees and expenses of the respective arbitrator they appointed. Landlord and Tenant will also each pay, directly to the third arbitrator, one-half of all costs, fees and expenses of the third arbitrator.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

4 

SECTION 1.6         RIGHT OF FIRST OFFER TO LEASE. Subject to the terms of this Section 1.6 and the rights of existing tenants in the Building as of the Date of Lease, Landlord grants to Tenant a continuous right of first offer (“Right of First Offer”) to lease any additional space on the ninth (9^th) floor of the Building (“ROFO Space”) that is “Available for Direct Lease” (as defined below), at the proposed economic terms determined by Landlord in its good faith determination (the “Market Terms”).

1.6.1 Available for Direct Lease. “Available for Direct Lease” shall mean vacant or not subject to any unexercised right by a third party; provided that if Tenant desires such space, Landlord will offer such space as required to trigger and resolve such third party right.

1.6.2 Space. Within twenty (20) days after Landlord’s receipt of a written request from Tenant for additional space in the Building (“Request for Space”). Landlord will notify Tenant of the availability of any ROFO Space that is currently Available for Direct Lease and any ROFO Space that Landlord anticipates may become Available for Direct Lease within six (6) months following Landlord’s receipt of the Request for Space (the “Designated ROFO Space”) including the date of availability and the Market Terms for such Designated ROFO Space (“Landlord’s Offer Notice”). Any Designated ROFO Space that is not currently Available for Direct Lease when Landlord delivers Landlord’s Offer Notice shall remain subject to availability. Landlord’s Offer Notice will contain a term that is coterminous with the Term of this Lease provided that the minimum term offered shall be at least thirty-six (36) full calendar months. Within ten (10) days after receipt of Landlord’s Offer Notice, Tenant shall notify Landlord in writing of Tenant’s intention to lease such Designated ROFO Space, which such notice, if provided, shall state that Tenant either does or does not accept the Market Terms. If Tenant does not accept the Market Terms and Tenant and Landlord are unable after good faith negotiations to agree on the Market Terms for such Designated ROFO Space within thirty (30) days thereafter, Tenant shall be deemed to have declined to lease such Designated ROFO Space. Failure of Tenant to timely respond in writing within ten (10) days after receipt of Landlord’s Offer Notice shall be deemed a refusal to lease such Designated ROFO Space. If Tenant elects to lease such Designated ROFO Space, Landlord and Tenant shall execute an amendment to this Lease which shall add such Designated ROFO Space to the Premises on the same terms and conditions for the remainder of the Term, except for the applicable Market Terms which will be as set forth in Landlord’s Offer Notice. If, however, Tenant fails to execute an amendment to this Lease for such Designated ROFO Space within thirty (30) days after receipt of the amendment from Landlord, Tenant shall thereafter have no rights hereunder with regard to such Designated ROFO Space and Tenant’s Right of First Offer shall terminate.

1.6.3 No Default. As a condition precedent to Tenant’s exercise of its Right of First Offer, Tenant shall not be in default after notice and opportunity to cure, at the time of Tenant’s Request for Space, Landlord’s Offer Notice or the date at which such Designated ROFO Space is to be delivered to Tenant. Any assignment or subletting of this Lease, or the Premises, other than to an Affiliate (as defined in Section 11.1), shall terminate Tenant’s rights under this Section 1.6.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

5 

ARTICLE 2

RENT

SECTION 2.1         BASIC RENT. Tenant shall pay as annual rent for the Premises the product of the Premises Rentable Area times the annual rate per square foot of Premises Rentable Area shown in the Basic Lease Information (such product is herein called “Basic Annual Rent”). The Basic Annual Rent shall be payable in monthly installments equal to the applicable “Basic Monthly Rent” shown in the Basic Lease Information, and the monthly installments of Basic Annual Rent shall be due in advance, without demand, offset or deduction, commencing on the Commencement Date and continuing on the first (1^st) day of each calendar month thereafter unless otherwise provided herein. If the Commencement Date occurs on a day other than the first day of the calendar month, the monthly installment of Basic Annual Rent for such partial month shall be prorated. Upon execution of this Lease, Tenant shall pay to Landlord an amount equal to the initial monthly installment of Rent due hereunder and such amount shall be applied to the first installment of Rent due hereunder. All payments shall be payable to Landlord and sent to the payment address or routing number provided to Tenant by Landlord. All payments shall be in the form of check or wire transfer unless otherwise designated by Landlord, provided that payment by check shall not be deemed made if the check is not duly honored with good funds.

SECTION 2.2         ADDITIONAL RENT.

2.2.1 Definitions. For purposes of this Lease, the following definitions shall apply:

(a) “Additional Rent” shall mean the sum of: (i) Tenant’s Share multiplied by the amount by which Operating Expenses (hereinafter defined) for such calendar year exceed the Operating Expenses for the Operating Base Year, plus (ii) Tenant’s Share multiplied by the amount by which Taxes (hereinafter defined) for such calendar year exceed Taxes for the Tax Base, plus (iii) any applicable rental, excise, sales, transaction, business activity tax or levy, imposed upon or measured by the rental required to be paid by Tenant under this Lease during the calendar year in question (“Rental Tax”).

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

6 

(b) “Operating Expenses” shall mean all of the costs and expenses Landlord incurs, pays or becomes obligated to pay in connection with operating, maintaining, insuring and managing the Property for a particular calendar year or portion thereof, as reasonably determined by Landlord in accordance with sound accounting principles and all taxes thereon, including, without limitation, all costs of maintaining and managing the Building or any part thereof to be sustainable and conform with the USGBC’s LEED rating system (as the same may be modified or updated and as applicable to the Building) or such other sustainability or “green building” certification system as may be selected by Landlord from time to time (individually and collectively “Green Building Certification”). Landlord shall reasonably allocate Operating Expenses between the Tower and the Retail Area. Notwithstanding the foregoing, the term Operating Expenses shall not include:

(i) management fees payable to the property management company managing the Property (the “Property Manager”), which Property Manager may be an affiliate of Landlord, in excess of the amounts reasonably customary in the marketplace for office buildings comparable to the Building

(ii) legal services, if incurred:

(A) in connection with tenant defaults, lease negotiations or procuring new tenants, or

(B) as the result of a specific claim or action for which another tenant in the Building is obligated under its lease to pay Landlord’s legal fees; and

(iii) any capital expenditures except for:

(A) the cost of any improvements made to the Property by Landlord that are required under any governmental law or regulation which was not promulgated, or which was promulgated but was not applicable to the Building, at the time of the Commencement Date, amortized over such period as Landlord shall reasonably determine (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate which is equal to the sum of two percent (2%) per annum plus the annual “Prime Rate” published by The Wall Street Journal in its listing of “Money Rates,” or if such rate is no longer published, a comparable rate of interest listed in a nationally circulated publication reasonably selected by Landlord, provided that such sum may in no event exceed the maximum interest allowed to be contracted for under applicable law (such sum is herein called the “Amortization Rate”);

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

7 

(B) the cost of any improvement made to the Common Areas or Service Corridors of the Property that is required under interpretations or regulations issued after the Commencement Date under, or amendments made after the Commencement Date to, the applicable provisions of state laws which apply to persons with disabilities and the provisions of the American With Disabilities Act of 1990, 42 U.S.C. §§12101-12213 (such statutes, interpretations and regulations are herein collectively called the “Disability Acts”). amortized over such period as Landlord shall reasonably determine (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate which, on the date the improvement in question is fully completed, is equal to the Amortization Rate;

(C) the cost of any other equipment installed in, or capital improvement made to, the Building to the extent such equipment reduces Operating Expenses, increases energy efficiency or decreases the Building’s use of natural resources or eliminates waste of the same, amortized over such period as is reasonably determined by Landlord (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate, which on the date the device or equipment in question is fully installed, is equal to the Amortization Rate;

(D) the cost of any improvements to the Building or equipment installed in or on the Building in connection with maintaining Green Building Certification, amortized over such period as is reasonably determined by Landlord (but not less than the useful life of such equipment), together with an amount equal to interest on the unamortized balance thereof at a rate, which on the date the improvement is completed or the equipment installed is equal to the Amortization Rate;

(iv) any costs or expenses associated with the leasing, marketing, solicitation, negotiation and execution of leases in the Building including without limitation promotional and advertising expenses, commissions, finders fees and referral fees, accounting, legal and other professional fees and expenses relating to the negotiation and preparation of any lease;

(v) any costs or expenses originally incurred in connection with the initial design and construction of the Building;

(vi) any portion of the wages, salaries, benefits, reimbursable expenses and taxes (or allocations thereof) paid to full and part time personnel of Landlord or Property Manager (collectively, “Compensation Expenses”) to the extent any employee’s time is devoted to efforts unrelated to the maintenance and operation of the Building, provided that in no event shall Compensation Expenses of Property Manager which are included in Operating Expenses exceed the then prevailing market compensation expense for a full-time building manager in comparable office buildings;

(vii) any costs or expenses incurred in connection with upgrading the Building to comply with life safety codes, ordinances, statutes or other laws in effect prior to the Commencement Date or to comply with a tenant’s separate specific request;

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

8 

(viii) any costs or expenses related to monitoring, testing, removal, cleaning, abatement or remediation of any Hazardous or Toxic Materials (hereinafter defined) in the Building or on the Land;

(ix) any costs of any service or items sold or provided to tenants or other occupants for which Landlord or Landlord’s managing agent has been or is entitled to be reimbursed by such tenants or other occupants for such service;

(x) any costs or expenses in connection with services or other benefits which are provided to another tenant or occupant of the Building and which do not benefit Tenant;

(xi) any costs for the purchase of sculptures, paintings, fountains or other objects of art or the display of such items;

(xii) any increase in Landlord’s insurance premiums caused by a specific use of another tenant;

(xiii) any Operating Expense covered by insurance or condemnation proceeds or reimbursed pursuant to warranty or service contracts;

(xiv) any costs or expenses incurred in connection with the renovation of space or construction of improvements for another tenant of the Building;

(xv) overhead or profits paid to subsidiaries or affiliates of Landlord or to any party as a result of a non-competitive selection process, for management of other services to the Building, or for supplies or other materials, to the extent that the costs of such supplies or materials exceed the costs that would have been paid had the services, supplies or materials been provided by parties unaffiliated with the Landlord on a competitive basis and are consistent with those incurred by similar buildings in the same metropolitan area in which the Building is located;

(xvi) any fines, costs, penalties or interest resulting from Landlord’s violation of any law, rule or regulation or from the gross negligence, willful misconduct or deliberate act or omission of the Landlord or its agents, contractors, or employees;

(xvii) any costs, fees, dues, contributions or similar political, charitable expenses; or

(xix) costs for capital reserves of any kind.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

9 

(c) “Taxes” shall mean (i) all real estate taxes and other taxes or assessments which are levied with respect to the Property or any portion thereof for each calendar year (but excluding any penalties thereon), (ii) any tax, surcharge or assessment, however denominated, including any excise, sales, capital stock, assets, franchise, transaction, business activity, privilege or other tax (other than any Rental Tax), which is imposed upon Landlord or the Property and which is attributable to rent or other revenue derived from the Property or which is imposed as a supplement to or in lieu of real estate taxes or as a means of raising government revenue to replace revenue lost because of a reduction in real estate taxes, and (iii) the costs and expenses of a consultant, if any, or of contesting the validity or amount of any tax, surcharge or assessment described in clause (i) or (ii) above. “Taxes” shall not include gross receipts taxes, personal and corporate income taxes, inheritance and estate taxes, other business taxes, franchise, gift, transfer taxes, business license fees or taxes, or and any penalties or interest due to Landlord’s failure to pay taxes when due.

2.2.2 Gross-Up. If the Building is not 95% occupied during any calendar year or partial calendar year, including the Operating Base Year, or if Landlord is not supplying services to 95% of the total square footage of Building Rentable Area at any time during a calendar year or partial calendar year, including the Operating Base Year, Operating Expenses shall be determined as if the Building had been 95% occupied and Landlord had been supplying services to 95% of the square footage of Building Rentable Area during that calendar year; provided, however, that Landlord agrees that Landlord will not collect or be entitled to collect Operating Expenses from all of its tenants of the Building in an amount which is in excess of one hundred percent (100%) of the Operating Expenses actually paid or incurred by Landlord in connection with the operation of the Property. The extrapolation of Operating Expenses under this subsection 2.2.2 shall be performed by Landlord by adjusting the cost of those components of Operating Expenses that are impacted by changes in the occupancy of the Building, including, without limitation, electricity, janitorial services and management fees.

2.2.3 Payment Obligation. In addition to the Basic Rent specified in this Lease, Tenant shall pay to Landlord the Additional Rent in monthly installments as hereinafter provided. Landlord shall use reasonable efforts to provide Tenant with written notice of Tenant’s estimated Additional Rent for the next calendar year and the amount of the monthly installment of Additional Rent due for such year by December 15 of each calendar year or as soon thereafter as is reasonably possible. Landlord shall have the right to increase Tenant’s estimated Additional Rent during any calendar year if Landlord reasonably believes Operating Expenses or Taxes have increased (or are likely to increase) during such year. Beginning on the Commencement Date and continuing on the first day of each month thereafter, Tenant shall pay to Landlord the applicable monthly installment of Additional Rent, without demand, offset or deduction, provided, however, if the applicable installment covers a partial month, then such installment shall be prorated on a daily basis.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

10 

(a) This subparagraph (a) applies to each calendar year during which Additional Rent is owing except for the calendar year in which the Expiration Date or termination date of this Lease occurs. Within ninety (90) days after the end of each calendar year or as soon thereafter as is reasonably possible, Landlord shall prepare and deliver to Tenant a statement showing Tenant’s actual Additional Rent for the applicable calendar year. If Tenant’s total monthly payments of estimated Additional Rent for the applicable year are less than Tenant’s actual Additional Rent, then Tenant shall pay to Landlord the amount of such underpayment. If Tenant’s total monthly payments of estimated Additional Rent for the applicable year are more than Tenant’s actual Additional Rent, then Landlord shall pay such amount to Tenant or, at Landlord’s option, credit against the next Additional Rent payment or payments due from Tenant the amount of such overpayment. This provision shall survive the expiration or earlier termination of this Lease with respect to the calendar year in which the Expiration Date or termination date occurs.

(b) Within ninety (90) days after the Expiration Date or termination date of this Lease or as soon thereafter as is reasonably possible, Landlord shall prepare and deliver to Tenant a statement (the “Final Additional Rent Statement”) showing Tenant’s actual Additional Rent for the period beginning January 1 of the year in which the Expiration Date or termination date occurs and ending on the Expiration Date or termination date (such period is herein called the “Final Additional Rent Period”). Landlord shall have the right to estimate the actual Operating Expenses and Additional Rent allocable to the Final Additional Rent Period which are not determinable within such ninety (90) day period. If the aggregate of Tenant’s monthly payments of estimated Additional Rent for the Final Additional Rent Period are less than Tenant’s actual Additional Rent for such period as set forth in the Final Additional Rent Statement, then Tenant shall pay to Landlord the amount of such underpayment. If Tenant’s monthly payments of estimated Additional Rent for the Final Additional Rent Period are more than Tenant’s actual Additional Rent for such period as set forth in the Final Additional Rent Statement, Landlord shall pay to Tenant the amount of such excess payments, less any amounts then owed to Landlord.

(c) Landlord will cause adequate books and records for Operating Expenses and Taxes and other amounts relevant to Tenant’s obligations under this Lease to be maintained in accordance with the provisions set forth herein. Unless Tenant takes written exception to any item within sixty (60) days after delivery to Tenant of an annual statement or a statement delivered for the Final Additional Rent Period, such statement shall be considered as final and accepted by Tenant. Within ten (10) business days following a request from Tenant, Landlord shall furnish written explanations to Tenant in reasonable detail for any computation made under this Lease. If Tenant questions such computation following receipt of such explanation, Tenant, within ten (10) business days following receipt of such explanation, shall give notice thereof to Landlord, and Landlord and Tenant shall, within twenty (20) business days thereafter, discuss, in good faith, such computation.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

11

(d) In the event the amount of Tenant’s Share of Operating Expenses increases by five percent (5%) or more over the prior year, Tenant shall have the right to perform, at Tenant’s expense, an audit of Landlord’s books and records to verify Landlord’s calculation of the actual Operating Expenses, provided that such audit shall be conducted by an unrelated, third party certified public accountant who is not a tenant in the Building, reasonably acceptable to Landlord, and not compensated on a contingent fee basis. Any such audit shall be conducted, if at all, (i) no later than one hundred twenty (120) days after delivery to Tenant of the annual statement in question, and within sixty (60) days after Landlord’s receipt of prior written notice that Tenant has decided to perform an audit, (ii) during Landlord’s normal business hours, (iii) at the place where Landlord maintains it records, and (iv) on a confidential basis. The auditor’s report reflecting the results of such audit shall properly apply the definition of “Operating Expenses” set forth in the Lease and include a certification that it was prepared in accordance with such definition of Operating Expenses. Prior to finalizing its report, Tenant’s auditor shall present its findings in draft form to Landlord for review. Landlord may discuss the findings with the auditor and offer comments, explanations and suggested changes to the report as Landlord believes appropriate. The final report of Tenant’s auditor and the determinations set forth therein (“Tenant’s Auditor’s Report”), if prepared in accordance with this subparagraph and if updated as necessary to properly incorporate Landlord’s comments, explanations and suggested changes, shall be binding on Landlord and Tenant. If Tenant’s Auditor’s Report reflects an overcharge in the total actual Operating Expenses of more than five percent (5%) in the aggregate for such audited calendar year, then Landlord shall reimburse Tenant for all actual reasonable out-of-pocket third-party costs (excluding travel costs) incurred by Tenant in connection with Tenant’s Auditor’s Report. If Tenant’s Auditor’s Report reflects that the actual Operating Expenses were overcharged or undercharged in the audited calendar year, Tenant shall, within thirty (30) days after receipt of such report, pay to Landlord the amount of any underpayment or, if applicable, Landlord shall pay to Tenant the amount of any overpayment.

SECTION 2.3      RENT DEFINED AND NO OFFSETS. Basic Annual Rent, Additional Rent and all other sums (whether or not expressly designated as rent) required to be paid to Landlord by Tenant under this Lease (including, without limitation, any sums payable to Landlord under any addendum, exhibit or schedule attached hereto) shall constitute rent and are sometimes collectively referred to as “Rent”. Each payment of Rent shall be paid by Tenant when due, without prior demand therefor and without deduction or setoff.

SECTION 2.4      LATE CHARGES; INTEREST RATE. If any Rent under this Lease shall not be paid within five (5) days after the date such payment is due, a “Late Charge” of ten percent (10%) of the payment then overdue may be charged by Landlord to defray Landlord’s administrative expense incident to the handling of such overdue payments. Furthermore, any amount due from Tenant to Landlord which is not paid within ten (10) days after the date due shall bear interest at the lower of (i) eighteen percent (18%) per annum or (ii) the highest rate from time to time allowed by applicable law, from the date such payment is due until paid. Notwithstanding the foregoing, Landlord shall waive the Late Charge and interest for late payment of Rent, no more than one (1) time in any calendar year if the late payment is received within five (5) days after notice to Tenant from Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

12

ARTICLE 3

SECURITY DEPOSIT

If a Security Deposit is specified in the Basic Lease Information, Tenant will pay Landlord on the Date of Lease such Security Deposit as security for the performance of the terms hereof by Tenant. Tenant shall not be entitled to interest thereon and Landlord may commingle such Security Deposit with any other funds of Landlord. The Security Deposit shall not be considered an advance payment of rental or a measure of Landlord’s damages in case of default by Tenant. If a default by Tenant shall occur under this Lease, Landlord may, but shall not be required to, from time to time, without prejudice to any other remedy, use, apply or retain all or any part of this Security Deposit for the payment of any Rent or any other sum in default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default, including, without limitation, costs and attorneys’ fees incurred by Landlord to recover possession of the Premises. If Landlord shall use, apply or retain all or any part of the Security Deposit as provided for above, Tenant shall restore the Security Deposit to the amount set forth in the Basic Lease Information within thirty (30) days after receipt of notice from Landlord. So long as Tenant (a) is not in default beyond applicable notice and cure period at the end of the Term, (b) surrenders the Premises in accordance with the terms and provisions of this Lease, and (c) has performed an end of Term walk through with Landlord, the Security Deposit or any balance of the Security Deposit shall be returned to Tenant within thirty (30) days after the Expiration Date.

ARTICLE 4

OCCUPANCY AND USE

SECTION 4.1       USE OF PREMISES.

4.1.1 General. The Premises shall, subject to the remaining provisions of this Section, be used solely for the Permitted Use. Without limiting the foregoing, Tenant shall comply with all laws, statutes, ordinances, orders, permits and regulations affecting Tenant’s use and occupancy of the Premises. Tenant will not do or permit anything which may disturb the quiet enjoyment of any other tenant of the Property. Tenant shall not permit the occupancy of the Premises to exceed a ratio of more than one (1) person per 250 square feet of Premises Rentable Area. Notwithstanding the foregoing, Landlord acknowledges that from time to time Tenant will have in excess of one person per 250 square feet of Premises Rentable Area due to meetings, conferences, training and similar circumstances, and Landlord agrees that such occasional use of the Premises exceeding the occupancy ratio shall not constitute a default under this Lease.

4.1.2 Landlord’s Compliance Obligation. Landlord shall comply with all laws, statutes, ordinances, orders and regulations relating to the Property (exclusive, however, of those with which Tenant is obligated to comply by reason of subsection 4.1.1) as of the Date of Lease. Landlord shall also be responsible for causing the Common Areas to be in compliance with the Disability Acts.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

13

4.1.3 Hazardous and Toxic Materials.

(a) For purposes of this Lease, hazardous or toxic materials shall mean asbestos containing materials and all other materials, substances, wastes and chemicals classified as hazardous or toxic substances, materials, wastes or chemicals (individually and collectively, “Hazardous or Toxic Materials”) under then-current applicable governmental laws, rules or regulations or that are subject to any right-to-know laws or requirements (individually and collectively, “Environmental Laws”).

(b) Tenant shall not knowingly incorporate into, or use or otherwise place or dispose of at the Premises or any other portion of the Property, any Hazardous or Toxic Materials, except for use and storage of cleaning and office supplies used in the ordinary course of Tenant’s business and then only if (i) such materials are in small quantities, properly labeled and contained, and (ii) such materials are handled and disposed of in accordance with the highest accepted industry standards for safety, storage, use and disposal. If Tenant or its employees, agents or contractors shall ever violate the provisions of paragraph (b) of this subsection 4.1.3 or otherwise contaminate the Premises or the Property, then, at Landlord’s election, either Tenant or Landlord shall clean, remove and dispose of the material causing the violation, in compliance with all applicable governmental standards, laws, rules and regulations and then prevalent industry practice and standards (the “Remediation Work”). In the event Tenant performs such work, Tenant shall repair any damage to the Premises or the Property (collectively with the Remediation Work, “Tenant’s Environmental Corrective Work”) in such period of time as may be reasonable under the circumstances after written notice by Landlord. In the event Landlord performs the Tenant’s Environmental Corrective Work, within thirty (30) days after receiving an invoice, Tenant shall reimburse Landlord for the costs incurred by Landlord to perform such Tenant’s Environmental Corrective Work. Tenant’s obligations under this subsection 4.1.3(b) shall survive the expiration or earlier termination of this Lease.

(c) Landlord has no current actual knowledge of the presence of, and Landlord shall not knowingly dispose of at the Premises or any other portion of the Property, any Hazardous or Toxic Materials that would materially and adversely affect Tenant’s access, use or occupancy of the Premises or otherwise pose any material risk or material threat to the health, safety or welfare of Tenant or any of its employees or guests.

SECTION 4.2      RULES AND REGULATIONS. Tenant will comply with all rules and regulations applying to tenants in the Building and the Garage (the “Rules and Regulations”) as may be adopted and uniformly applied from time to time by Landlord for (a) the management, safety, care and cleanliness of, and the preservation of good order and protection of property in, the Premises and the Building and at the Property, (b) the increase in energy efficiency of the Building and the Property, (c) the decrease in the use of natural resources in the Building and the Property or the waste of the same, (d) recycling of reusable items, and (e) such other goals which result in the decrease in the carbon footprint of the Building and the Property. Landlord reserves the right, without approval from Tenant, to rescind, supplement and amend any Rules and Regulations and to waive any Rules and Regulations with respect to any tenant or tenants so long as any change in the Rules and Regulations does not diminish the rights granted to Tenant in this Lease. The Rules and Regulations in effect on the date hereof are attached hereto as Exhibit D and included in Exhibit F to this Lease. All changes and amendments to the Rules and Regulations sent by Landlord to Tenant in writing and conforming to the foregoing standards shall be carried out and observed by Tenant. In the event of any conflict between the Rules and Regulations and the provisions of this Lease, the provisions of this Lease shall prevail. Landlord hereby reserves all rights necessary to implement and enforce the Rules and Regulations.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

14

SECTION 4.3      ACCESS. Without being deemed guilty of an eviction of Tenant and without abatement of Rent, Landlord and its authorized agents shall have the right to enter the Premises upon reasonable notice to Tenant, which notice may be oral, to inspect the Premises, to show the Premises to prospective lenders or purchasers, and to fulfill Landlord’s obligations or exercise its rights (including without limitation Landlord’s Reserved Right [as hereinafter defined]) under this Lease and, upon Landlord’s receipt of a notice of non-renewal from Tenant and in any event during the last six (6) months of the Term, to show the Premises to prospective tenants. Landlord will use commercially reasonable efforts to provide Tenant with at least twenty-four (24) hours’ prior notice of any such entry, except in the event of an emergency or in connection with providing janitorial services to the Premises, in which case no prior notice shall be required. Landlord shall have the right to use any and all means which Landlord may deem proper to enter the Premises in an emergency. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises and any other loss occasioned thereby. Landlord agrees to exercise reasonable, good faith efforts (i) to prosecute completion of any work within the Premises diligently, (ii) to minimize interference with Tenant’s use, access, occupancy and quiet enjoyment of the Premises including, without limitation, performing noisy and/or materially disruptive work such as structural work, coring, drilling and chipping after Normal Business Hours to the extent reasonably practicable in Landlord’s sole, but reasonable discretion, and (Hi) to protect Tenant’s property located in the Premises from damage. Landlord shall at all times have and retain a key with which to unlock the doors to and within the Premises, excluding Tenant’s furniture, file cabinets, storage lockers, vaults and safes.

SECTION 4.4      QUIET POSSESSION. Provided that no default beyond any applicable cure period provided for herein occurs and is continuing, Tenant shall have the quiet possession of the Premises for the entire Term hereof, subject to all of the provisions of this Lease.

SECTION 4.5     PERMITS. Landlord shall obtain the certificate of occupancy (or its equivalent), if any, required for Tenant’s occupancy of the Premises following construction of the Tenant’s Improvements. If any additional governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business in the Premises or any part thereof, Tenant, at its expense, shall procure and thereafter maintain such license or permit. Additionally, if any subsequent alteration or improvement is made to the Premises by Tenant, Tenant shall, at its expense, take all actions to procure any such modification or amendment or additional permit.

ARTICLE 5

UTILITIES AND SERVICES

SECTION 5.1      SERVICES TO BE PROVIDED.

Landlord agrees to furnish to the Premises the utilities and services described in subsections 5.1.1 through 5.1.7 below. As used in this Lease, “Normal Business Hours” shall mean 6:00 A.M. to 6:00 P.M. Monday through Friday, and 7:00 A.M. to 1:00 P.M. Saturday, except for New Year’s Day, Memorial Day, July 4, Labor Day, Thanksgiving Day and Christmas Day and any other national holiday observed by most businesses in the same market area as the Building.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

15

5.1.1 Elevator Service. Landlord shall provide automatic elevator facilities during Normal Business Hours, and shall have at least one (1) elevator available for use at all other times, except during emergencies.

5.1.2 Heat and Air Conditioning. During Normal Business Hours, Landlord shall ventilate the Premises and furnish heat or air conditioning, at such temperatures and in such amounts as is customary in buildings of comparable size and quality to, and in the general vicinity of, the Building, with such adjustments as may be reasonably necessary for the comfortable occupancy of the Premises, subject to events of force majeure and any governmental requirements, ordinances, rules, regulations, guidelines or standards relating to, among other things, energy conservation. Upon reasonable advance request from Tenant, Landlord shall make available to the Premises, at Tenant’s expense, heat or air conditioning during periods in addition to Normal Business Hours. Tenant shall submit to Landlord a list of all personnel who are authorized to make such requests. The current minimum charge and the hourly rate for the use of after-hours heat or air conditioning is $50.00 per hour with a two (2) hour minimum, subject to adjustment from time to time by Landlord, provided, however that the total charge for such usage shall not exceed the actual cost to Landlord, inclusive of a reasonable administrative fee.

5.1.3 Electricity.

(a) Landlord shall furnish electrical power for heating and air-conditioning services as described in subsection 5.1.2 and for lighting, including Tenant’s lighting and office equipment as described herein. Landlord shall use commercially reasonable efforts to furnish such electrical power in a cost-effective and environmentally responsible manner using environmentally responsible equipment, fixtures and supplies. Landlord shall furnish to the Premises electrical power for Tenant’s lighting in compliance with the governing energy code. Additionally, Landlord shall furnish 120 volt power to the Premises for electrical outlets to operate Tenant’s standard office equipment and the equipment to be installed in the Premises pursuant to the Tenant’s Improvements (as defined in the Work Letter). Any additional electrical power required above 120 volts will be considered excess electrical consumption (“Excess Electrical Consumption”) and will be separately measured by submeters (“Submeters”) at Tenant’s expense (which such expense shall not be duplicative of any Operating Expenses paid for by Tenant). The actual cost of such electrical usage as measured by such Submeters (“Excess Electrical Cost”, as hereinafter defined) shall be paid by Tenant. The present rate for lighting outside of Normal Business Hours is $5.00 per hour, subject to adjustment from time to time by Landlord. In the event Tenant regularly conducts Tenant’s business outside of Normal Business Hours, Tenant shall also pay for the cost of electricity regularly consumed at the Premises for lighting used in the Premises outside of Normal Business Hours, and the cost shall be considered Excess Electrical Consumption. Landlord agrees that Tenant may operate dedicated data/server rooms within the Premises and that all electrical usage of such rooms, including supplemental air, will be separately submetered at Tenant’s expense and the electrical usage, as measured by such Submeters shall be paid by Tenant as Excess Electrical Cost. Furthermore, in the event more than one third (1/3) of the Premises Rentable Area is at any time improved with cubicles, the Tenant’s Improvements shall include the installation of a transformer and an electrical panel.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

16

(b) Landlord may, from time to time, engage a reputable consultant to conduct a survey of electrical usage within the Premises (a “Consumption Survey”) or install one or more submeters (“Submeters”) to measure electrical usage within the Premises or a particular floor of the Premises. If the Consumption Survey or Submeters reflect Excess Electrical Consumption, then (i) Tenant shall be responsible for the costs of the Consumption Survey and Submeters, (ii) Tenant shall pay to Landlord, as Rent, the product of (A) the kilowatts of Excess Electrical Consumption during the period in question times (B) the cost per kilowatt of electricity charged to Landlord by the public utility for electricity consumed at the Property during such period (such product is herein called the “Excess Electrical Cost”), and (iii) Landlord shall have the right to install, at Tenant’s expense, permanent Submeters to measure the electrical consumption within the Premises. If Landlord installs permanent Submeters as permitted hereunder, Tenant shall, from time to time thereafter within twenty (20) days after receiving an invoice from Landlord, pay to Landlord any Excess Electrical Cost reflected by such Submeters and all costs incurred by Landlord to maintain, repair and read the Submeters.

5.1.4 Water. Landlord shall furnish cold water for drinking and cleaning and hot and cold water for lavatory and kitchen (if applicable) purposes only, at the points of supply generally provided in the Building.

5.1.5 Janitorial Services. Landlord shall provide janitorial services to the occupied portion of the Premises comparable to that provided in other offices of similar size and quality to, and in the general vicinity of, the Building.

5.1.6 Common Areas. Landlord shall perform routine maintenance in the Common Areas.

5.1.7 Bulbs and Ballasts. As necessary, Landlord shall provide bulbs and ballasts for the lighting fixtures in the Premises which are standard for the Building. Landlord shall also provide bulbs and ballasts for fixtures which are not standard for the Building (“Non-Building Standard”), provided Tenant shall pay Landlord’s standard charge therefor. All amounts due under this Section for such Non-Building Standard bulbs and ballasts shall be paid to Landlord within thirty (30) days after receipt of an invoice therefor.

5.1.8 Access. Landlord shall provide access to the Premises 24 hours a day 7 days a week; provided access after Normal Business Hours Monday through Friday shall be limited to card-key access.

5.1.9 Security. The on-site manned security shall be during to be determined hours (but at least during Normal Business Hours of the Building). In addition, the Building will have a surveillance camera system monitored during to be determined hours and will cover all entry and exit points of the Building, including during those hours when manned security is not present. The Building will have an access control system for door hardware to restrict access to the Building after hours. Elevators will be equipped with access control card readers to restrict entry after hours and individual floors shall be isolated.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

17

SECTION 5.2      ADDITIONAL SERVICES. In addition to the charges set forth in subsections 5.1.2 and 5.1.3(b), Landlord may impose a reasonable charge for any other services provided by Landlord by reason of any use of the services at any time other than Normal Business Hours or beyond the levels or quantities that Landlord agrees herein to furnish.

SECTION 5.3       SERVICE INTERRUPTION.

5.3.1 Service Interruption/Waiver of Landlord Liability. Landlord shall not be liable for and, except as provided in subsection 5.3.2 below, Tenant shall not be entitled to any abatement or reduction of Rent by reason of, interruption of any of the foregoing services when such interruption is caused by circumstances beyond Landlord’s reasonable control, nor shall any such interruption be construed as an eviction (constructive or actual) of Tenant or as a breach of the implied warranty of suitability, or relieve Tenant from the obligation to perform any covenant or agreement herein and in no event shall Landlord be liable for damage to persons or property (including, without limitation, business interruption), or be in default hereunder, as a result of any such interruption or results or effects thereof.

5.3.2 Limited Right to Abatement of Rent. If any portion of the Premises becomes unfit for occupancy because of any interruption of the services required under subsections 5.1.1 through 5.1.4 above as a result of Landlord’s act or omission, and provided such failure is not caused by Tenant, Tenant’s Contractors (as defined in Exhibit C or any of their respective agents or employees, and if the Premises remain unfit for occupancy and are actually unoccupied because of such failure for any period (other than a reconstruction period conducted pursuant to Section 7.1 or Article 8 below) exceeding five (5) consecutive business days after written notice by Tenant to Landlord, Tenant shall be entitled to a fair partial abatement of Basic Annual Rent and Additional Rent for any such portion of the Premises from the expiration of such five (5) business day period until such portion is again fit for occupancy.

5.3.3 Termination Right. In the event fifty percent (50%) or more of the Premises becomes unfit for occupancy because of any interruption of the services required under subsections 5.1.1 through 5.1.4 above as a result of Landlord’s act or omission, and provided such failure is not caused by Tenant, and such interruption continues for more than thirty (30) consecutive days in any one calendar year (other than a reconstruction period conducted pursuant to Section 7.1 or Article 8 below), Tenant shall, as its sole and exclusive remedy, have the right to terminate this Lease by delivering written notice thereof to Landlord after such 30-consecutive day period but prior to the resumption of the interrupted services.

SECTION 5.4      TELECOMMUNICATION EQUIPMENT. In the event that Tenant wishes at any time to utilize the services of a telephone or telecommunications provider whose equipment is not then servicing the Building, no such provider shall be permitted to install its lines or other equipment within the Building without first securing the prior written approval of Landlord.

ARTICLE 6

MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS

SECTION 6.1      LANDLORD’S OBLIGATION TO MAINTAIN AND REPAIR. Landlord shall, at its sole cost and expense (subject to including the costs thereof in Operating Expenses), maintain the foundation, floor and ceiling slabs, roof (including gutters, downspouts, and canopies), curtain wall, exterior glass and mullions, columns, beams, shafts (including elevator shafts) of the Building, including the Premises (collectively the “Building Structure”), all Common Areas, Service Corridors and Service Areas (all as defined in Section 15.5). and core Building mechanical, electrical, life safety, plumbing, sprinkler systems and core HVAC systems (collectively, the “Building Systems”) and shall operate the Building in a manner comparable to similar office buildings in the area. Notwithstanding anything in this Lease to the contrary, Tenant shall be neither required nor permitted to make any repair to, modification of, or addition to the Building Structure or the Building Systems except to the extent required (and after prior written approval by Landlord using contractors approved in writing by Landlord) because of Tenant’s use of all or a portion of the Premises for other than normal and customary business office operations. Except for the elements of the Building described herein, Landlord shall not be required to maintain or repair any portion of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

18

SECTION 6.2       TENANT’S OBLIGATION TO MAINTAIN AND REPAIR.

6.2.1 Tenant’s Obligation. Tenant shall, at Tenant’s sole cost and expense, (i) maintain and keep the Premises (including, but not limited to, all fixtures, walls, ceilings, floors, doors, windows [except replacement of exterior plate glass], appliances, supplemental HVAC units, data and phone cables, satellite dishes, antennas and any and all other equipment which is a part of or serves the Premises) in good repair and condition, ordinary wear and tear excepted, and (ii) repair or replace any damage or injury done to the Building or any other part of the Property caused by Tenant, Tenant’s agents, employees, licensees, invitees or visitors. All repairs and replacements performed by or on behalf of Tenant shall be performed diligently, in a good and workmanlike manner and in accordance with applicable governmental laws, rules, and regulations.

6.2.2 Rights of Landlord. In the event Tenant fails, in the reasonable judgment of Landlord, to maintain and repair the Premises in good order, condition and repair, Landlord shall have the right to perform such maintenance, repairs and replacements, and Tenant shall pay Landlord, as additional Rent, the cost thereof plus a management fee of ten percent (10%) of such cost.

SECTION 6.3       IMPROVEMENTS AND ALTERATIONS.

6.3.1 Landlord’s Construction Obligations. Landlord’s sole construction obligations under this Lease are as set forth in Exhibit C attached hereto.

6.3.2 Alteration of Building. Landlord shall have the right to repair, change, redecorate, alter, improve, modify, renovate, enclose or make additions to any part of the Property (including, without limitation, structural elements and load bearing elements within the Premises and to enclose and change the arrangement and location of driveways or parking areas or landscaping or other Common Areas of the Property), all without being held guilty of an actual or constructive eviction of Tenant or breach of the implied warranty of suitability and without an abatement of Rent (the “Reserved Right”). When exercising the Reserved Right, Landlord will interfere with Tenant’s use and occupancy of the Premises as little as is reasonably practicable. Landlord shall not obstruct or interrupt Tenant’s access to the Premises without providing alternative access during Normal Business Hours.

6.3.3 Alterations and Installations by Tenant. Tenant shall not, without the prior written consent of Landlord, not to be unreasonably withheld, make any alterations to, or install any equipment or machinery of any kind (other than office equipment and unattached personal property) in the Premises (all such alterations are herein collectively referred to as “Installations”). Notwithstanding the foregoing, Tenant shall be able to make non-structural, internal alterations to the Premises which do not involve the mechanical, electrical or plumbing systems of the Building and cost less than $10,000 in the aggregate without the prior consent of Landlord so long as Tenant gives Landlord prior written notice of its intent to make such alterations and the dates when such work is to be done and Tenant performs such work in compliance with all of the Building rules and regulations and insurance requirements related to construction. All work performed by Tenant or its contractor relating to the Installations shall be performed diligently and in a good and workmanlike manner, and shall conform to applicable governmental laws, rules and regulations, Landlord’s insurance requirements and all rules for performing work in the Building. Upon completion of the Installations, Tenant shall deliver to Landlord “as built” plans in a format acceptable to Landlord. If Landlord performs any Installations after completion of the Tenant’s Improvements (as defined in the Work Letter), Tenant shall pay Landlord, as Rent, the cost thereof plus a construction management fee of five percent (5%) of such cost; provided, however, the Construction Management Fee (as defined in the Work Letter) shall apply to the initial Tenant’s Improvements. All Installations that constitute improvements constructed within the Premises shall be surrendered with the Premises at the expiration or earlier termination of this Lease, unless prior to construction of the Installations and as a condition of Landlord’s approval thereof, Landlord requires that some or all of the Installations be removed by Tenant at Tenant’s sole cost and expense upon termination or expiration of this Lease. TENANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), DEMANDS, CLAIMS, CAUSES OF ACTION AND LIENS ARISING FROM OR IN CONNECTION WITH ANY INSTALLATIONS PERFORMED BY OR ON BEHALF OF TENANT BY TENANT’S CONTRACTORS. Landlord will have the right to periodically inspect the work on the Premises and may require changes in the method or quality of the work if necessary to cause the work to comply with the requirements of this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

19

ARTICLE 7

INSURANCE AND CASUALTY

SECTION 7.1 TOTAL OR PARTIAL DESTRUCTION OF THE BUILDING, THE GARAGE OR THE PREMISES.

(a) Total Destruction. If the Building or the Garage should be totally destroyed by fire or other casualty or if either the Building, the Garage (or any portion thereof) or the Premises should be so damaged that rebuilding or repairs cannot be completed, in Landlord’s reasonable opinion, within one hundred eighty (180) days after commencement of repairs to the Building, the Garage or the Premises, as applicable, Landlord shall within thirty (30) days after the casualty provide written notice of its opinion to Tenant, and either Landlord or Tenant may, at its option, terminate this Lease, in which event no further Basic Annual Rent and Additional Rent shall be payable to Landlord during the unexpired portion of this Lease effective as of the date of such damage. Landlord shall exercise the termination right pursuant to the preceding sentence, if at all, by delivering written notice of termination to Tenant within ten (10) days after determining that the repairs cannot be completed within one hundred eighty (180) days. Tenant shall exercise its termination right pursuant to this Section 7.1(a), if at all, by delivering written notice of termination to Landlord within ten (10) days after being advised by Landlord that the repairs cannot be completed within one hundred eighty (180) days or that the Premises will be unfit for occupancy or inaccessible by reasonable means for at least one hundred eighty (180) days after commencement of repairs to the Building.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 20

(b) Partial Destruction; Failure to Terminate. If the Building or the Garage or the Premises should be partially destroyed by fire or other casualty or if the Building or the Garage or the Premises is completely destroyed and neither Landlord nor Tenant elects to terminate this Lease pursuant to subsection 7.1(a), then Landlord shall promptly commence (and thereafter pursue with reasonable diligence) preparation of the plans and specifications for the repair of the Building, the Garage and the Premises (including the Tenant’s Improvements except as set forth in the next sentence) and thereafter diligently pursue repairing the Building, the Garage and the Premises to substantially the same condition which existed immediately prior to the occurrence of the casualty. To the extent the Tenant’s Improvements include any items required to be insured by Tenant under subsection 7.2.1(b) below, Landlord shall have the obligation to repair such items only to the extent the proceeds of such insurance are disbursed to Landlord for such repair.

(c) Limitation on Landlord’s Obligations; Abatement of Rent. In no event shall Landlord be required to rebuild, repair or replace any part of the furniture, equipment, fixtures, inventory, supplies or any other personal property or any other improvements (except Tenant’s Improvements to the extent set forth in subsection (b) above), which may have been placed by Tenant within the Building, the Garage or the Premises. Landlord shall allow Tenant a fair diminution of Basic Annual Rent and Additional Rent during the time the Premises are unfit for occupancy; provided, however, if the casualty in question was caused by Tenant, its agents, employees, licensees or invitees, Basic Annual Rent and Additional Rent shall be abated only to the extent Landlord is compensated for such Basic Annual Rent and Additional Rent by loss of rents insurance, if any.

(d) Termination Resulting from Mortgagee’s Use of Proceeds. Notwithstanding Landlord’s restoration obligation, in the event any mortgagee under a deed of trust or mortgage on the Building and the Garage should require that the insurance proceeds be used to retire or reduce the mortgage debt or if the insurance company issuing Landlord’s fire and casualty insurance policy fails or refuses to pay Landlord the proceeds under such policy, Landlord shall have no obligation to rebuild and this Lease shall terminate upon notice by Landlord to Tenant.

(e) Insurance Proceeds. Any insurance which may be carried by Landlord or Tenant against loss or damage to the Building, the Garage or the Premises shall be for the sole benefit of the party carrying such insurance and under its sole control.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 21

SECTION 7.2 TENANT’S INSURANCE.

7.2.1 Types of Coverage. From and after the date of this Lease, Tenant will carry, at its expense, the insurance set forth in paragraphs (a), (b), and (c) of this subsection.

(a) Commercial General Liability Insurance. Commercial General Liability Insurance covering the Premises and Tenant’s use thereof against claims for personal or bodily injury or death or property damage occurring upon, in or about the Premises (including contractual indemnity and liability coverage), such insurance to provide coverage of not less than $2,000,000.00 per occurrence and $2,000,000.00 annual aggregate, with a deductible reasonably acceptable to Landlord. This limit may be obtained through combining commercial general liability and excess umbrella policies, provided the specified coverage amounts are allocated and available for the Premises. All insurance coverage required under this subsection (a) shall extend to any liability of Tenant arising out of the indemnities provided for in this Lease to the extent such indemnity would be covered by commercial general liability insurance. Additionally, each such policy of insurance required under this subsection shall expressly insure Tenant and, as additional insureds, both Landlord and Property Manager.

(b) Property Insurance. Property insurance on an all-risk basis (including coverage against fire, wind, tornado, vandalism, malicious mischief, water damage and sprinkler leakage) covering all tenant owned fixtures, equipment and leasehold improvements, and other personal property located in the Premises and endorsed to provide one hundred percent (100%) replacement cost coverage. Such policy will be written in the name of Tenant. The property insurance may, with the consent of the Landlord, provide for a reasonable deductible.

(c) Workers Compensation’ and Employer’s Liability Insurance. Worker’s compensation insurance together with employer’s liability insurance in an amount of at least $1,000,000.00.

(d) Hired and Non-Owned Auto Liability Insurance. Hired and Non-Owned Auto Liability Insurance covering Tenant and its employees and agents in an amount of at least $500,000 per occurrence.

7.2.2 Other Requirements of Insurance. All such insurance will be issued and underwritten by companies with an AM Best rating of A or better and will contain endorsements that (a) such insurance may not lapse with respect to Landlord or Property Manager or be canceled or amended with respect to Landlord or Property Manager without the insurance company giving Landlord and Property Manager at least thirty (30) days prior written notice of such cancellation or amendment, (b) Tenant will be solely responsible for payment of premiums, (c) in the event of payment of any loss covered by such policy, Landlord or Landlord’s designees will be paid first by the insurance company for Landlord’s loss, and (d) Tenant’s insurance is primary in the event of overlapping coverage which may be carried by Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 22

7.2.3 Proof of Insurance. Within fifteen (15) days after the Date of Lease, but in any event prior to the Commencement Date, Tenant shall deliver to Landlord duly executed, original certificates of such insurance evidencing in-force coverage. Further, at least fifteen (15) days prior to the expiration of the policy in question, Tenant shall deliver to Landlord a duly executed, original certificate of insurance evidencing the renewal of each insurance policy required to be maintained by Tenant hereunder.

SECTION 7.3 LANDLORD’S INSURANCE.

7.3.1 Property Insurance. From and after the Date of Lease, Landlord will carry a policy or policies of all risk extended coverage insurance covering the Property (excluding property required to be insured by Tenant) endorsed to provide replacement cost coverage and providing protection against perils included within the standard Colorado form of fire and extended coverage insurance policy, together with insurance against sprinkler damage, vandalism, malicious mischief and such other risks as Landlord may from time to time determine and with any such deductibles as Landlord may from time to time determine.

7.3.2 Commercial General Liability Insurance. Landlord will carry Commercial General Liability policy or policies covering the Building against claims for personal or bodily injury, or death, or property damage resulting from the negligence of the Landlord or Property Manager or their agents, occurring upon, in or about the Building to afford protection to the limit of not less than $2,000,000 per occurrence, and $2,000,000 annual aggregate. This insurance coverage shall extend to any liability of Landlord arising out of the indemnities provided for in this Lease.

7.3.3 Other Requirements. Any insurance provided for in this Section 7.3 may be effected by self-insurance or by a policy or policies of blanket insurance covering additional items or locations or assureds, provided that the requirements of this Section 7.3 are otherwise satisfied. Tenant shall have no rights in any policy or policies maintained by Landlord.

SECTION 7.4      WAIVER OF SUBROGATION. LANDLORD AND TENANT EACH HEREBY WAIVES ANY RIGHTS IT MAY HAVE AGAINST THE OTHER (INCLUDING, BUT NOT LIMITED TO, A DIRECT ACTION FOR DAMAGES) ON ACCOUNT OF ANY LOSS OR DAMAGE OCCASIONED TO LANDLORD OR TENANT, AS THE CASE MAY BE (EVEN IF SUCH LOSS OR DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT, ACTS OR OMISSIONS OF THE RELEASED PARTY OR THE RELEASED PARTY’S DIRECTORS, EMPLOYEES, AGENTS OR INVITEES OR IF THE RELEASED PARTY OR THE RELEASED PARTY’S DIRECTORS, EMPLOYEES, AGENTS OR INVITEES WOULD OTHERWISE BE LIABLE UNDER STRICT LIABILITY), TO THEIR RESPECTIVE PROPERTY, THE PREMISES, ITS CONTENTS OR TO ANY OTHER PORTION OF THE BUILDING OR THE PROPERTY ARISING FROM ANY RISK (WITHOUT REGARD TO THE AMOUNT OF COVERAGE OR THE AMOUNT OF DEDUCTIBLE) COVERED BY THE ALL RISK PROPERTY INSURANCE REQUIRED TO BE CARRIED BY TENANT AND LANDLORD, RESPECTIVELY, UNDER SUBSECTION 7.2.1 AND SUBSECTION 7.3.1 ABOVE. The foregoing waiver shall be effective even if either or both parties fail to carry the insurance required by subsection 7.2.1 and subsection 7.3.1 above. If a party waiving rights under this Section 7.4 is carrying an all risk full replacement cost insurance policy in the promulgated form used in the State of Colorado and an amendment to such promulgated form is passed, such amendment shall be deemed not a part of such promulgated form until it applies to the policy being carried by the waiving party. Without limiting the foregoing waivers and to the extent permitted by applicable law, each of the parties hereto, on behalf of their respective insurance companies insuring the property of such party against loss, waive any right of subrogation that such party or Property Manager or its respective insurers may have against the other party or its respective officers, directors, employees, agents or invitees and all rights of their respective insurance companies based upon an assignment from its insured. Each party to this Lease agrees immediately to give to each such insurance company written notification of the terms of the mutual waivers contained in this Section and to have its insurance policies properly endorsed, if necessary, to prevent the invalidation of insurance coverage by reason of such waivers.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 23

SECTION 7.5       TENANT’S GENERAL INDEMNITY. TENANT WILL DEFEND, INDEMNIFY, AND HOLD HARMLESS LANDLORD, PROPERTY MANAGER, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (COLLECTIVELY, “LANDLORD’S PARTIES”) FROM AND AGAINST ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, LOSS, LIABILITIES, JUDGMENTS, COSTS AND EXPENSES, INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES AND COURT COSTS (EACH, A “LANDLORD CLAIM”) WHICH ARE SUFFERED BY, RECOVERED FROM OR ASSERTED AGAINST LANDLORD OR LANDLORD’S PARTIES AND ARISE FROM OR IN CONNECTION WITH (I) THE USE OR OCCUPANCY OF THE PREMISES, (II) ANY ACCIDENT, INJURY OR DAMAGE OCCURRING IN OR AT THE PREMISES, OR (III) ANY BREACH BY TENANT OF ANY REPRESENTATION OR COVENANT IN THIS LEASE, INCLUDING WITHOUT LIMITATION, TENANT’S FAILURE TO COMPLY WITH ALL APPLICABLE LAWS. TENANT’S INDEMNITY AND HOLD HARMLESS OBLIGATIONS SHALL APPLY EVEN IN THE EVENT OF THE FAULT OR NEGLIGENCE OF THE PARTIES INDEMNIFIED AND HELD HARMLESS HEREUNDER TO THE FULLEST EXTENT PERMITTED BY LAW, BUT IN NO EVENT SHALL THEY APPLY TO LIABILITY OR DAMAGE OR LOSS CAUSED BY THE WILLFUL MISCONDUCT OR SOLE NEGLIGENCE OF THE PARTIES INDEMNIFIED OR HELD HARMLESS. FURTHER, SUCH INDEMNIFICATION SHALL NOT INCLUDE ANY LANDLORD CLAIM WAIVED BY LANDLORD UNDER SECTION 7.4 ABOVE.

SECTION 7.6        LANDLORD’S GENERAL INDEMNITY. LANDLORD WILL DEFEND, INDEMNIFY AND HOLD HARMLESS TENANT AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (COLLECTIVELY, “TENANT’S PARTIES”) FROM AND AGAINST ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, LOSS, LIABILITIES, JUDGMENTS, COSTS AND EXPENSES, INCLUDING WITHOUT LIMITATION, ATTORNEY’S FEES AND COURT COSTS (EACH, A “TENANT CLAIM”) WHICH ARE SUFFERED BY, RECOVERED FROM OR ASSERTED AGAINST TENANT OR TENANT’S PARTIES AND ARISE FROM OR IN CONNECTION WITH (I) ANY ACCIDENT, INJURY OR DAMAGE OCCURRING IN OR AT THE PROPERTY (OTHER THAN IN THE PREMISES), OR (II) ANY BREACH BY LANDLORD OF ANY REPRESENTATION OR COVENANT IN THIS LEASE. LANDLORD’S INDEMNITY AND HOLD HARMLESS OBLIGATIONS SHALL APPLY EVEN IN THE EVENT OF THE FAULT OR NEGLIGENCE OF THE PARTIES INDEMNIFIED AND HELD HARMLESS HEREUNDER TO THE FULLEST EXTENT PERMITTED BY LAW, BUT IN NO EVENT SHALL THEY APPLY TO LIABILITY OR DAMAGE OR LOSS CAUSED BY THE WILLFUL MISCONDUCT OR SOLE NEGLIGENCE OF THE PARTIES INDEMNIFIED OR HELD HARMLESS. FURTHER, SUCH INDEMNIFICATION SHALL NOT INCLUDE ANY TENANT CLAIM WAIVED BY TENANT UNDER SECTION 7.4.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 24

ARTICLE 8

CONDEMNATION

If the Property or any portion thereof that, in Landlord’s or Tenant’s reasonable opinion, is necessary to the continued efficient or economically feasible use of the Property or the Premises shall be taken or condemned for public purposes, or sold to a condemning authority in lieu thereof, then either party may, at its option, terminate this Lease on the effective date of such taking by delivering written notice thereof to the other party on or before ten (10) days after the effective date of the taking, condemnation or sale in lieu thereof. If neither Landlord nor Tenant elects to exercise such termination right, then this Lease shall continue in full force and effect, provided that if the taking, condemnation or sale includes any portion of the Premises, the Basic Annual Rent and Additional Rent shall be redetermined on the basis of the remaining square feet of Premises Rentable Area. Landlord, at Landlord’s sole option and expense, shall restore and reconstruct the Building to substantially its former condition to the extent that the same may be reasonably feasible, but such work shall not be required to exceed the scope of the work done by Landlord in originally constructing the Building. Landlord shall receive the entire award (which shall include sales proceeds) payable as a result of a condemnation, taking or sale in lieu thereof. Tenant shall, however, have the right to recover from such authority through a separate award which does not reduce Landlord’s award, any compensation as may be awarded to Tenant on account of moving and relocation expenses and depreciation and removal of Tenant’s physical property.

ARTICLE 9

LIENS

Tenant shall keep the Premises and the Property free from all liens arising out of any work performed, materials furnished or obligations incurred by or for Tenant, and Tenant shall defend indemnify and hold harmless Landlord from and against any and all claims, causes of action, damages and expenses (including reasonable attorneys’ fees) arising from or in connection with any such liens. If Tenant shall not, within ten (10) days following notification to Tenant of the imposition of any such lien, cause the same to be released of record by payment or the posting of a bond in amount, form and substance acceptable to Landlord, Landlord shall have, in addition to all other remedies provided herein and by law, the right but not the obligation, to cause the same to be released by such means as it shall deem proper, including payment of or defense against the claim giving rise to such lien. All amounts paid or incurred by Landlord in connection therewith shall be paid by Tenant to Landlord on demand and shall bear interest from the date of demand until paid at the rate set forth in Section 2.4 above.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 25

ARTICLE 10

TAXES ON TENANT’S PROPERTY

Tenant shall be liable for and shall pay, prior to their becoming delinquent, any and all taxes and assessments levied against any personal property or trade or other fixtures placed by Tenant in or about the Premises.

ARTICLE 11

SUBLETTING AND ASSIGNING

SECTION 11.1        SUBLEASE AND ASSIGNMENT. Except as otherwise permitted herein and by Section 11.2 and Section 11.3 below, Tenant shall not assign this Lease, or allow it to be assigned, in whole or in part, by operation of law or otherwise (it being agreed that for purposes of this Lease, assignment shall include, without limitation, the transfer of a majority interest of stock, partnership or other forms of ownership interests, merger or dissolution) or mortgage or pledge the same, or sublet the Premises or any part thereof or permit the Premises to be occupied by any individual or business entity, or any combination thereof, other than Tenant, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding any subletting or assignment by Tenant hereunder or any provision herein to the contrary, Tenant shall remain fully liable for the performance of all the covenants, agreements, terms, provisions and conditions contained in this Lease on the part of Tenant to be performed. No assignee or subtenant of the Premises or any portion thereof may assign or sublet the Premises or any portion thereof. Any assignment made by Tenant shall contain a covenant of assumption by the assignee running to Landlord. All reasonable legal fees and expenses incurred by Landlord in connection with any assignment or sublease proposed by Tenant will be paid by Tenant within thirty (30) days of receipt of an invoice from Landlord.

Notwithstanding the foregoing, Tenant shall have the right at any time during the Term of this Lease, without Landlord’s consent but with prior written notice to Landlord and reimbursement of Landlord for all reasonable out of pocket expenses related to review and negotiation of any documentation required by an Affiliate (hereinafter defined) or its lender, to sublet the Premises, or any portion thereof, to any Affiliate or to assign Tenant’s interest in this Lease to any Affiliate. Other than reimbursement of Landlord for reasonable out of pocket expenses, no economic consideration shall be payable to Landlord in connection with any assignment or sublease to an Affiliate. The term “Affiliate” shall mean an entity that is either (i) a surviving corporation in the event of a merger or consolidation by Tenant (it being agreed that Tenant may engage in any such merger or consolidation whether Tenant or the other entity is the survivor) so long as such survivor owns the majority of the assets of Tenant, (ii) Tenant’s parent corporation, a wholly-owned subsidiary of Tenant or an entity controlled by or under common control with Tenant or (iii) any entity which may acquire all or substantially all of the assets, stock or shares of Tenant. Prior to any such sublease or assignment to an Affiliate, Tenant shall give Landlord notice thereof, together with information reasonably acceptable to Landlord substantiating that such sublessee or assignee is, in fact, an Affiliate as herein provided. Notwithstanding any provisions to the contrary contained in this Article 11, Tenant may not, through the use of any of its rights under this Article 11, through two (2) or more transactions, at one time or over time, whether by first assigning this Lease to an Affiliate and then merging the Affiliate into another entity or selling the stock or other ownership interests of such Affiliate or the majority of its assets or by other means, assign this Lease or any interest herein or sublease the Premises or any portion thereof, in any manner otherwise prohibited by this Article 11 or otherwise requiring consent of Landlord under this Article 11 as a subterfuge by Tenant to avoid its obligations under this Lease or the restrictions on transfers under this Article 11.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 26

SECTION 11.2        LANDLORD’S RIGHTS. If Tenant desires to sublease any portion of the Premises or assign this Lease to a party which is not an Affiliate, Tenant shall submit to Landlord (a) in writing, the name of the proposed subtenant or assignee, the nature of the proposed subtenant’s or assignee’s business and, in the event of a sublease, the portion of the Premises which Tenant desires to sublease, (b) a current balance sheet and income statement for such proposed subtenant or assignee, (c) a copy of the proposed form of sublease or assignment, and (d) such other information as Landlord may reasonably request (collectively, the “Required Information”). Landlord shall, within fifteen (15) business days after Landlord’s receipt of the Required Information, deliver to Tenant a written notice (a “Landlord Response”) in which Landlord either (i) consents to the proposed sublease or assignment, or (ii) withholds its consent to the proposed sublease or assignment, which consent shall not be unreasonably withheld, conditioned or delayed so long as Tenant is not in default beyond any applicable cure period hereunder and Landlord has received all Required Information. The reasons for which Landlord shall be deemed to have reasonably withheld its consent to any sublease or assignment include but are not limited to (i) Landlord’s determination (in its sole discretion) that such subtenant or assignee is not of the character or quality of a tenant to whom Landlord would generally lease space in the Building, (ii) such sublease or assignment conflicts in any manner with this Lease, including, but not limited to, the Permitted Use or Section 4.1 hereof, (in) the proposed subtenant or assignee is a governmental entity, a school, a training facility, a provider of medical services or a telemarketing operation, (iv) the proposed subtenant’s or assignee’s primary business is prohibited by an non-compete clause then affecting the Building, (v) the proposed subtenant or assignee is a tenant of the Building or Landlord is currently negotiating with the proposed subtenant or assignee to become a tenant of the Building, or (vi) such subtenant or assignee does not meet the creditworthiness standards applied by Landlord generally in the selection of tenants for the Building (but taking into consideration the fact that Tenant remains liable under this Lease). In lieu of consenting to any such proposed sublease or assignment (and without regard to whether Landlord’s action is “reasonable” or “unreasonable”) Landlord shall have the right, within fifteen (15) business days after Landlord’s receipt of the Required Information to (1) suspend this Lease as to the space so affected as of the date on which the assignment or sublease was to be effective and for the duration of the proposed sublease or assignment, whereupon Tenant shall be relieved of all obligations hereunder as to such space during such suspension, but after such suspension, Tenant shall once again become liable hereunder as to the relevant space or, (2) if the proposed assignment or sublease is for the remainder of the term of this Lease, terminate this Lease as to the space so affected as of the date so specified by Tenant in its notice to Landlord, in which event Tenant shall be relieved of any and all further obligations hereunder as to such space. In the event Landlord consents to any sublease or assignment by Tenant, Landlord shall be entitled to fifty percent (50%) of the net profits, if any (after deducting all out-of-pocket subleasing costs including the unamortized cost of any tenant improvements paid by Tenant in connection with the subleasing or assignment), from any subleasing of all or any portion of the Premises, or the assignment of all of the Premises, to an entity or person other than an Affiliate.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 27

SECTION 11.3        LANDLORD’S RIGHTS RELATING TO ASSIGNEE OR SUBTENANT. If this Lease or any part hereof is assigned or the Premises or any part thereof are sublet, Landlord may at its option collect directly from such assignee or subtenant all rents becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord by Tenant hereunder. Tenant hereby authorizes and directs any such assignee or subtenant to make such payment of rent directly to Landlord upon receipt of notice from Landlord, and Tenant agrees that any such payments made by an assignee or subtenant to Landlord shall, to the extent of the payments so made, be a full and complete release and discharge of rent owed to Tenant by such assignee or subtenant. No direct collection by Landlord from any such assignee or subtenant shall be construed to constitute a novation or a release of Tenant or any guarantor of Tenant from the further performance of its obligations hereunder. In the event that, following an assignment or subletting, this Lease or the rights and obligations of Tenant hereunder are terminated for any reason, including without limitation in connection with default by or bankruptcy of Tenant, Landlord may, at its option, consider this Lease to be thereafter a direct lease to the assignee or subtenant of Tenant upon the terms and conditions contained in this Lease.

ARTICLE 12

TRANSFERS BY LANDLORD, SUBORDINATION AND

TENANT’S ESTOPPEL CERTIFICATE

SECTION 12.1        SALE OF THE PROPERTY. In the event of any transfer of title to the Property, the transferor shall automatically be relieved and freed of all obligations of Landlord under this Lease accruing after such transfer, provided that the transferee expressly assumes in writing all obligations of Landlord hereunder accruing after the date of such transfer and further provided that if a Security Deposit has been made by Tenant, Landlord shall not be released from liability with respect thereto unless Landlord’s transferee assumes responsibility for the Security Deposit.

SECTION 12.2        SUBORDINATION, ATTORNMENT AND NOTICE. This Lease is subject and subordinate (i) to each lease of all or any portion of the Property wherein Landlord is the tenant and to the lien of each mortgage and deed of trust encumbering all or any portion of the Property, regardless of whether such lease, mortgage or deed of trust now exists or may hereafter be created, (ii) to any and all advances (including interest thereon) to be made under each such lease, mortgage or deed of trust and (iii) to all modifications, consolidations, renewals, replacements and extensions of each such lease, mortgage or deed of trust; provided that the foregoing subordination to any mortgage or deed of trust placed on the Property after the date hereof shall not become effective until and unless the holder of such mortgage or deed of trust delivers to Tenant a non-disturbance agreement (which may include Tenant’s agreement to attorn as set forth below) permitting Tenant, if Tenant is not then in default beyond any applicable cure period under any provision of this Lease, to remain in occupancy of the Premises in the event of a foreclosure of any such mortgage or deed of trust. Tenant shall, in the event of the sale or assignment of Landlord’s interest in the Premises, attorn to and recognize such purchaser, assignee or lessor as Landlord under this Lease. Tenant shall, in the event of any proceedings brought for the foreclosure of, or in the event of the exercise of the power of sale under, any mortgage or deed of trust covering the Premises, attorn to and recognize the purchaser at foreclosure as Landlord under this Lease. The above subordination and attornment clauses shall be self-operative and no further instruments of subordination or attornment need be required by any mortgagee, trustee, lessor, purchaser or assignee. In confirmation thereof, Tenant agrees that, upon the request of Landlord, or any such mortgagee, trustee, lessor, purchaser or assignee, Tenant shall execute and deliver whatever instruments may be required for such purposes and to carry out the intent of this Section 12.2. In the event Tenant requests a subordination, non-disturbance and attornment agreement from any mortgagee, trustee, lessor, purchaser or assignee of Landlord, Tenant shall pay all legal fees and expenses incurred by Landlord in connection therewith, including any legal and other fees and expenses charged by Landlord’s mortgagee, trustee, lessor, purchaser or assignee.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 28

SECTION 12.3        TENANT’S ESTOPPEL CERTIFICATE. Tenant shall, upon the request of Landlord or any mortgagee of Landlord (whether under a mortgage or deed of trust), without additional consideration, deliver an estoppel certificate within ten (10) days after a request therefor, consisting of reasonable statements required by Landlord, any mortgagee or purchaser of any interest in the Property, which statements may include but shall not be limited to the following: this Lease is in full force and effect, with rental paid through the date specified in the certificate; this Lease has not been modified or amended; Tenant is not aware that Landlord is in default or that Landlord has failed to fully perform all of Landlord’s obligations hereunder; and such other statements as may reasonably be required by the requesting party. If Tenant is unable to make any statements contained in the estoppel certificate because the same is untrue or inaccurate, Tenant shall with specificity state the reason why such statement is untrue or inaccurate.

ARTICLE 13

DEFAULT

SECTION 13.1        DEFAULTS BY TENANT. The occurrence of any of the events described in subsections 13.1.1 through 13.1.4 shall constitute a default by Tenant under this Lease.

13.1.1 Failure to Pay Rent. With respect to the first payment of Rent not made by Tenant when due in any twelve (12) month period, the failure by Tenant to make such payment to Landlord within five (5) business days after Landlord gives Tenant written notice specifying that the payment was not made when due; with respect to any other payment of Rent during any twelve (12) month period, the failure by Tenant to make such payment of Rent to Landlord when due, no notice of any such failure being required.

13.1.2 Failure to Perform Other Obligations. Any failure by Tenant to observe and perform any provision of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after Landlord gives Tenant written notice of such failure, provided that if such failure by its nature cannot be cured within such thirty (30) day period, Tenant shall not be in default hereunder so long as Tenant commences curative action within such thirty (30) day period, diligently and continuously pursues the curative action and fully cures the failure within ninety (90) days after Landlord gives such written notice to Tenant.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 29

13.1.3 Repeated Failure to Perform. The third failure by Tenant in any twelve (12) month period to perform and observe a particular provision of this Lease to be observed or performed by Tenant (other than the failure to pay Rent, which in all instances will be governed by subsection 13.1.1 above), no notice being required for any such third failure.

13.1.4 Bankruptcy, Insolvency, Etc. Tenant or any Guarantor (i) becomes or is declared insolvent according to any law, (ii) makes a transfer in fraud of creditors according to any applicable law, (iii) assigns or conveys all or a substantial portion of its property for the benefit of creditors or (iv) files a petition for relief, or is the subject of an order for relief, under the Federal Bankruptcy Code or any other present or future federal or state insolvency, bankruptcy or similar law (collectively, “applicable bankruptcy law”) or a receiver or trustee is appointed for Tenant or Guarantor or its property; the interest of Tenant or Guarantor under this Lease is levied on under execution or under other legal process; or any involuntary petition is filed against Tenant or Guarantor under applicable bankruptcy law; provided, however, no action described in this subsection 13.1.4 shall constitute a default by Tenant if Tenant or Guarantor shall vigorously contest the action by appropriate proceedings and shall remove, vacate or terminate the action within sixty (60) days after the date of its inception.

SECTION 13.2 REMEDIES OF LANDLORD.

13.2.1 Termination of Lease. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process, terminate this Lease by giving written notice thereof to Tenant (whereupon all obligations and liabilities of Landlord hereunder shall terminate) and, without further notice and without liability, repossess the Premises. Landlord shall be entitled to recover all loss and damage Landlord may suffer by reason of such termination, whether through inability to relet the Premises on satisfactory terms or otherwise, including with limitation, accrued Rent to the date of termination and Late Charges, plus (a) interest thereon at the rate established under Section 2.4 above from the date due through the date paid or date of any judgment or award by any court of competent jurisdiction, (b) the unamortized cost of (i) the Tenant’s Improvements, (ii) brokers’ fees and commissions, (iii) attorneys’ fees, (iv) moving allowances, (v) equipment allowances and (vi) any other costs incurred by Landlord in connection with making or executing this Lease, (c) the cost of recovering the Premises, and (d) the costs of reletting the Premises (including, without limitation, advertising costs, brokerage fees, leasing commissions, reasonable attorneys’ fees and refurbishing costs and other costs in readying the Premises for a new tenant).

13.2.2 Repossession and Re-Entry. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process, immediately terminate Tenant’s right of possession of the Premises (whereupon all obligations and liability of Landlord hereunder shall terminate) without terminating this Lease, and, without notice, demand or liability, enter upon the Premises or any part thereof, take absolute possession of the same, expel or remove Tenant and any other person or entity who may be occupying the Premises and change the locks. If Landlord terminates Tenant’s possession of the Premises under this subsection 13.2.2, (i) Landlord shall have no obligation to tender to Tenant a key for new locks installed in the Premises, (ii) Tenant shall have no further right to possession of the Premises, and (iii) Landlord will have the right to relet the Premises or any part thereof on such terms as Landlord deems advisable, subject to any obligation to mitigate damages imposed by applicable law. Any rent received by Landlord from reletting the Premises or a part thereof shall be applied first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord (in such order as Landlord shall designate), second, to the payment of any cost of such reletting, including, without limitation, refurbishing costs, reasonable attorneys’ fees, advertising costs, brokerage fees and leasing commissions (in such order as Landlord shall designate) and third, to the payment of Rent due and unpaid hereunder, and Tenant shall satisfy and pay to Landlord any deficiency upon demand therefor. No such re-entry or taking of possession of the Premises by Landlord shall be construed as an election by Landlord to terminate this Lease unless a written notice of such termination is also given to Tenant pursuant to subsection 13.2.1 above. If Landlord relets the Premises, either before or after the termination of this Lease, all such rentals received from such lease shall be and remain the exclusive property of Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 30

13.2.3 Cure of Default. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process and without having any liability therefor, enter upon the Premises and do whatever Tenant is obligated to do under the terms of this Lease and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in effecting compliance with Tenant’s obligations under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action, WHETHER CAUSED BY THE NEGLIGENCE OF LANDLORD OR OTHERWISE.

13.2.4 Continuing Obligations. No repossession of or re-entering upon the Premises or any part thereof pursuant to subsection 13.2.2 or 13.2.3 above or otherwise and no reletting of the Premises or any part thereof pursuant to subsection 13.2.2 above shall relieve Tenant or any Guarantor of its liabilities and obligations hereunder, all of which shall survive such repossession or re-entering. In the event of any such repossession of or re-entering upon the Premises or any part thereof by reason of the occurrence of a default, Tenant will continue to pay to Landlord all Rent which is required to be paid by Tenant.

13.2.5 Cumulative Remedies. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy set forth herein or otherwise available to Landlord at law or in equity and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. In addition to the other remedies provided in this Lease and without limiting the preceding sentence, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief in case of the violation, or attempted or threatened violation, of any of the covenants, agreements, conditions or provisions of this Lease, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 31

13.2.6 Mitigation of Damages. For purposes of determining any recovery of rent or damages by Landlord that depends upon what Landlord could collect by using reasonable efforts to relet the Premises, whether the determination is required under subsections 13.2.1 or 13.2.2 or otherwise, it is understood and agreed that:

(a) Landlord may reasonably elect to lease other comparable, available space in the Building, if any, before reletting the Premises.

(b) Landlord may reasonably decline to incur out-of-pocket costs to relet the Premises, other than customary leasing commissions and legal fees for the negotiation of a lease with a new tenant.

(c) Landlord may reasonably decline to relet the Premises at rental rates below then prevailing market rental rates, because of the negative impact lower rental rates would have on the value of the Building and because of the uncertainty of actually receiving from Tenant the greater damages that Landlord would suffer from and after reletting at the lower rates.

(d) Before reletting the Premises to a prospective tenant, Landlord may reasonably require the prospective tenant to demonstrate the same financial wherewithal that Landlord would require as a condition to leasing other space in the Building to prospective tenant.

(e) Identifying a prospective tenant to relet the Premises, negotiating a new lease with such tenant and making the Premises ready for such tenant will take time, depending upon market conditions when the Premises first become available for reletting, and during such time no one can reasonably expect Landlord to collect anything from reletting.

SECTION 13.3         DEFAULTS BY LANDLORD. Landlord shall be in default under this Lease if Landlord fails to perform any of its obligations hereunder and such failure continues for a period of thirty (30) days after Tenant gives written notice to Landlord and each mortgagee who has a lien against any portion of the Property and whose name and address has been provided to Tenant stating that (a) Landlord is in breach of this Lease and (b) describing the breach with specificity, provided that if such failure cannot reasonably be cured within such thirty (30) day period, Landlord shall not be in default hereunder if the curative action is commenced within such thirty (30) day period and is thereafter diligently pursued until cured.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 32

SECTION 13.4         LANDLORD’S LIABILITY. If Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only out of the right, title and interest of Landlord in the Property as the same may then be encumbered and Landlord shall not be liable for any deficiency. In no event shall Tenant have the right to levy execution against any property of Landlord other than its interest in the Property as above provided. Landlord shall not be liable to Tenant for any claims, actions, demands, costs, expenses, damage or liability of any kind which (a) are caused by (i) tenants or any persons either in the Premises or elsewhere in the Building (unless occurring in the Common Areas and caused by Landlord’s negligence), (ii) occupants of property adjacent to the Building or Common Areas, (iii) the public, or (iv) the construction of any private, public or quasi-public work, or (b) are caused by any theft or burglary at the Premises or the Property.

SECTION 13.5          CONSEQUENTIAL DAMAGES. In no event shall either party by liable to the other party for consequential or special damages by reason of a failure to perform (or a default) by such party hereunder or otherwise, except as set forth in Section 1.4 above.

ARTICLE 14

NOTICES

Any notice or communication required or permitted in this Lease shall be given in writing, sent by (a) personal delivery (b) expedited delivery service, (c) United States mail, postage prepaid, registered or certified mail, return receipt requested, (d) electronic mail or facsimile, with proof of delivery on a business day and addressed as set forth in the Basic Lease Information or to such other address or to the attention of such other person as shall be designated from time to time in writing by the applicable party and sent in accordance herewith. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of delivery service, mail or electronic mail, as of the date of first attempted delivery at the address and in the manner provided herein. Reference is made to Section 13.3 of this Lease for other provisions governing notices.

ARTICLE 15

MISCELLANEOUS PROVISIONS

SECTION 15.1         BUILDING NAME AND ADDRESS. Tenant shall not, without the written consent of Landlord, use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the Premises and in no event shall Tenant acquire any rights in or to such names. Landlord shall have the right at any time to change the name, number or designation by which the Building is known.

SECTION 15.2         SIGNAGE. Landlord shall maintain a tenant directory in the main Building lobby, and shall provide Tenant identification in such directory, setting forth Tenant’s name and location. Tenant shall not otherwise inscribe, paint, affix, or display any signs, advertisements or notices on or in the Building or the Premises, except for such tenant identification information approved in advance by Landlord and installed adjacent to the access door or doors to the Premises. Tenant may also install its standard signage within the Premises so long as such signage is not visible from the Common Areas. Landlord will provide a building standard sign plaque at the main entry to the Premises at Landlord’s sole cost and expense. Landlord may reasonably withhold approval of any Tenant sign if necessary, in Landlord’s reasonable discretion, to preserve aesthetic standards for the Building. All signs permitted hereunder shall constitute Installations and shall be subject to the provisions of subsection 6.3.3, including without limitation Landlord’s rights under such subsection to perform and charge for the work necessary to complete Installations.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 33

SECTION 15.3         NO WAIVER. No waiver by Landlord or Tenant of any provision of this Lease shall be deemed to have been made unless such waiver is expressly stated in writing signed by the waiving party. No waiver by Landlord or Tenant of any breach by the other party shall be deemed a waiver of any subsequent breach of the same or any other provision. The failure of Landlord or Tenant to insist at any time upon the strict performance of any covenant or agreement or to exercise any option, right, power or remedy contained in this Lease shall not be construed as a future waiver thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly installment of Rent due under this Lease shall be deemed to be other than on account of the earliest Rent due hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy which may be available to Landlord.

SECTION 15.4          APPLICABLE LAW. This Lease shall be governed by and construed in accordance with the laws of the State of Colorado.

SECTION 15.5         COMMON AREAS. “Common Areas” shall mean all areas, spaces, facilities and equipment (whether or not located within the Building) made available by Landlord for the common and joint use of Landlord, Tenant and others designated by Landlord using or occupying space in the Building, including but not limited to, any conference centers, fitness centers (subject to any written indemnification or waiver agreements required by Landlord from any users of such fitness centers), tunnels, walkways, sidewalks and driveways necessary for access to the Building, Building lobbies, the Garage, landscaped areas, public corridors, public rest rooms, Building stairs, elevators open to the public, service elevators (provided that such service elevators shall be available only for tenants of the Building and others designated by Landlord), drinking fountains and any such other areas and facilities as are designated by Landlord from time to time as Common Areas. “Service Corridors” shall mean all loading docks, loading areas and all corridors that are not open to the public but which are available for use by Tenant and others designated by Landlord. “Service Areas” will refer to areas, spaces, facilities and equipment serving the Building (whether or not located within the Building) but to which Tenant and other occupants of the Building will not have access, including, but not limited to, mechanical, telephone, electrical and similar rooms and air and water refrigeration equipment. Tenant is hereby granted a nonexclusive right to use the Common Areas and Service Corridors during the term of this Lease for their intended purposes, in common with others designated by Landlord, subject to the terms and conditions of this Lease, including, without limitation, the Rules and Regulations and the Parking Agreement attached hereto as Exhibit F. The Building, Common Areas, Service Corridors and Service Areas will be at all times under the exclusive control, management and operation of Landlord and Property Manager. Tenant agrees and acknowledges that the Premises (whether consisting of less than one floor or one or more full floors within the Building) do not include, and Landlord hereby expressly reserves for its sole and exclusive use, any and all mechanical, electrical, telephone and similar rooms, janitor closets, elevator, pipe and other vertical shafts and ducts, flues, stairwells, any area above the acoustical ceiling and any other areas not specifically shown on Exhibit B as being part of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 34

SECTION 15.6          SUCCESSORS AND ASSIGNS. Subject to Article 11 hereof, all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.

SECTION 15.7         BROKERS. Tenant and Landlord each warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than the Brokers identified in the Basic Lease Information, and that it knows of no other real estate brokers or agents who are or claim to be entitled to a commission in connection with this Lease. Landlord and Tenant each agrees to defend, indemnify and hold harmless the other from and against any liability or claim, whether meritorious or not, arising with respect to any other broker or agent not so named and claiming to be entitled to a commission by, through or under such party. Landlord has agreed to pay the fees of Landlord’s Broker and Tenant’s Broker strictly in accordance with and subject to the terms and conditions of separate written commission agreements.

SECTION 15.8          SEVERABILITY. If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the application of such provisions to other persons or circumstances and the remainder of this Lease shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

SECTION 15.9          EXAMINATION OF LEASE. Submission by Landlord of this instrument to Tenant for examination or signature does not constitute a reservation of or option for lease. This Lease will be effective as a lease only upon execution by and delivery to both Landlord and Tenant.

SECTION 15.10      TIME. Time is of the essence in this Lease and in each and all of the provisions hereof. Whenever a period of days is specified in this Lease, such period shall refer to calendar days unless otherwise expressly stated in this Lease. If any date provided under this Lease for performance of an obligation or expiration of a time period is a Saturday, Sunday or a holiday generally recognized by businesses, the obligation shall be performed or the time period shall expire, as the case may be, on the next succeeding business day.

SECTION 15.11      DEFINED TERMS AND MARGINAL HEADINGS. The words “Landlord” and “Tenant” as used herein shall include the plural as well as singular. If more than one person is named as Tenant, the obligations of such persons are joint and several. The headings and titles to the articles, sections and subsections of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

SECTION 15.12       AUTHORITY. Landlord and Tenant and each person signing this Lease on behalf of such party represents to the other party as follows: Such party, if a corporation, limited liability company, limited partnership, limited liability partnership or partnership is duly formed and validly existing under the laws of the state of its formation and is duly qualified to do business in the State of Colorado. Tenant has all requisite power and all governmental certificates of authority, licenses, permits, qualifications and other documentation to lease the Premises and to carry on its business as now conducted and as contemplated to be conducted. Each person signing on behalf of Landlord or Tenant is authorized to do so. The foregoing representation in this Section 15.12 shall also apply to any corporation, limited liability company, limited partnership, limited liability partnership or partnership which is a general partner or joint venturer of Tenant.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 35

SECTION 15.13       FORCE MAJEURE. Whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, the party taking the action shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions or any other causes which are beyond the reasonable control of such party; provided, however, in no event shall the foregoing apply to the financial obligations of either Landlord or Tenant to the other under this Lease, including Tenant’s obligation to pay Basic Annual Rent, Additional Rent or any other amount payable to Landlord hereunder.

SECTION 15.14       NO RECORDING. This Lease shall not be recorded.

SECTION 15.15       PARKING. Exhibit F attached hereto sets forth agreements between Landlord and Tenant relating to parking.

SECTION 15.16       ATTORNEYS’ FEES. In the event of any legal action or proceeding brought by either party against the other arising out of this Lease, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in such action (including, without limitation, all costs of appeal) and such amount shall be included in any judgment rendered in such proceeding.

SECTION 15.17       SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold harmless agreement contained herein shall survive the expiration or termination of this Lease.

SECTION 15.18      RELOCATION OF PREMISES. Landlord may, upon ninety (90) days prior written notice to Tenant (the “Relocation Notice”), relocate the Premises to any other premises within the Building (hereinafter referred to as the “Relocated Premises”), provided that each of the following conditions are satisfied:

15.18.1 The Relocated Premises (a) are substantially the same size as the Premises; (b) have substantially the same configuration and leasehold improvements as the Premises; and (c) have substantially the same view as the Premises;

15.18.2 Landlord shall pay all out-of-pocket expenses incurred by Tenant in connection with any such relocation, including all costs of changes in signs, stationery costs, moving costs, reinstallation of telephone and computer equipment, wiring and cabling, and the expense of furnishing the Relocated Premises with substantially the same type and quality of leasehold improvements as the Premises; and

15.18.3 Such relocation shall be accomplished in a manner that will minimize the disruption to Tenant’s business.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 36

In the event of such relocation, this Lease shall continue in full force and effect without any change in the terms or conditions thereof, except that the Relocated Premises shall be substituted for the original Premises and if the Relocated Premises are smaller than the Premises, the Base Rent and Tenant’s Share shall be proportionately reduced as of the date on which Tenant surrenders the Premises; provided, that there shall be no increase to the Base Rent and Tenant’s Share if the Relocated Premises is larger than the original Premises. If Tenant shall not desire to so relocate, then within twenty (20) days after Landlord sends the Relocation Notice to Tenant, Tenant shall notify Landlord that Tenant does not desire to relocate (the “Tenant’s Response”), and either Landlord or Tenant may, but shall have no obligation to, terminate this Lease effective ninety (90) days after the date of the Relocation Notice by delivering written notice of termination to the other party within ten (10) days after Landlord’s receipt of the Tenant’s Response. If neither party timely delivers notice of termination after Landlord’s receipt of the Tenant’s Response, then the parties shall be deemed to have waived their respective rights to terminate this Lease pursuant to this Section 15.18, and Tenant shall be obligated to relocate to the Relocated Premises in accordance with the Relocation Notice and the other terms and provisions of this Section 15.18. There shall be no abatement of any Rent or other sums payable hereunder on account of Tenant’s relocation or any inconvenience or business loss caused to Tenant thereby so long as Landlord complies with all of the terms and provisions of this Section 15.18.

SECTION 15.19       CONFIDENTIALITY. Tenant and Landlord acknowledge that the terms and conditions of the Lease are to remain confidential for Landlord’s benefit and may not be disclosed by Tenant to anyone, by any manner or means, directly or indirectly, without Landlord’s prior written consent; however, Tenant may disclose the terms and conditions of the Lease if required by Law or court order, in connection with a dispute between Landlord and Tenant, and to its attorneys, accountants, employees and existing or prospective financial partners provided same are advised by Tenant of the confidential nature of such terms and conditions and agree to maintain the confidentiality thereof (in each case, prior to disclosure). Tenant shall be liable for any disclosures made in violation of this Section by Tenant or by any entity or individual to whom the terms of and conditions of the Lease were disclosed or made available by Tenant. The consent by Landlord to any disclosures shall not be deemed to be a waiver on the part of Landlord of any prohibition against any future disclosure.

SECTION 15.20       FINANCIAL STATEMENTS. Tenant warrants and represents that all of the financial statements provided to Landlord prior to the Date of Lease are true, correct and complete in all respects and fairly and accurately present the financial position of Tenant. During the Term of this Lease, Tenant shall, within fifteen (15) days after receipt of a written request therefor, deliver to Landlord, a current balance sheet and (as applicable) related statements of income, cash flow, retained earnings, and contingent liabilities showing the financial position and results of operations of Tenant (collectively referred to as “Financial Information”). The Financial Information shall be in form, scope and detail reasonably satisfactory to Landlord and shall be certified by an authorized representative of Tenant that the financial statements fairly and accurately present the financial position of Tenant. Except in connection with a proposed financing or sale of the Property and as otherwise provided herein, Landlord may request the Financial Information from Tenant no more than one (1) time in any twelve (12) month period. Notwithstanding the foregoing, Landlord may request the Financial Information upon each occurrence of any of the events described in subsections 13.1.1 through 13.1.4. Upon written request by Tenant, Landlord shall enter into a commercially reasonable confidentiality agreement covering any information that is disclosed by Tenant. Failure of Tenant to timely deliver its Financial Information in accordance with the provisions of this Section 15.20 shall be deemed to be a default under this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 37

SECTION 15.21       PROHIBITED PERSONS AND TRANSACTIONS. Tenant represents to Landlord: (i) that neither Tenant nor any person or entity that directly owns a 10% or greater equity interest in it, nor any of its officers, directors or managing members, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under Executive Order 13224 (the “Executive Order”) signed on September 24, 2001, and entitled “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”, or other Laws, (ii) that Tenant’s activities do not violate the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, or the regulations or orders promulgated thereunder, as they may be amended from time to time, or other anti-money laundering Laws (the “Anti-Money Laundering Laws”), and (iii) that throughout the Term of this Lease Tenant shall comply with the Executive Order and with the Anti-Money Laundering Laws.

SECTION 15.22       DIGITAL RECORDS. Landlord and Tenant agree to accept a digital image of this Lease, as executed in counterparts, as a true and correct original and admissible for the purposes of state law, Federal Rule of Evidence 1002, and like statutes and regulations.

SECTION 15.23       ENTIRE AGREEMENT. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or supplemented except by an agreement in writing signed by the parties hereto or their respective successors in interest.

[SIGNATURE PAGE FOLLOWS]

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 38

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Lease effective as of the Date of Lease set forth in the Basic Lease Information.

		LANDLORD:
		GPI PLAZA TOWER, LP,
		a Texas limited partnership
		By:	Granite Properties, Inc.,
			a Delaware corporation
			its general partner
Date:	2/19/18	By:	/s/ Stephanie T. Lawrence
			Stephanie T. Lawrence
			Senior Managing Director
		TENANT:
		FLEX LEASING POWER & SERVICE LLC,
		a Delaware limited liability company
Date:	2/16/18	By:	/s/ Doug Beltzer
		Name:	Doug Beltzer
		Title:	President

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 39

EXHIBIT A

LEGAL DESCRIPTION

Parcel 1:

Lot 4, Block 3,

GREENWOOD PLAZA SOUTH FILING NO. 1,

Less and Except those portions conveyed to the State of Colorado, Department of Transportation in Warranty Deeds recorded December 20, 2001 at Reception No. B1220860 and October 15, 2003 at Reception No. B3225671, County of Arapahoe, State of Colorado.

Parcel 2:

A non-exclusive easement for a tunnel road over a portion of Lot 1, Block 4, Greenwood Plaza South Filing No.1, as set forth in instrument recorded October 25, 1984 in Book 4292 at Page 302, County of Arapahoe, State of Colorado.

Parcel 3:

A non-exclusive easement for an underpass under the South Yosemite Street Overpass, as set forth in instrument recorded November 16, 1984 in Book 4309 at Page 230, County of Arapahoe, State of Colorado.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 40

EXHIBIT B

PREMISES FLOOR PLAN

(Premises crosshatched below and not to scale)

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 41

EXHIBIT C

WORK LETTER

1.            Plans.

1.1       Space Plan. Landlord-and Tenant have agreed that the Premises will be improved in accordance with the plans and specifications, including without limitation the Space Plan and related Notes dated November 13, 2017, attached hereto as Schedule C-1 (herein referred to as the “Space Plan”) approved and initialed by Landlord and Tenant.

1.2       Design and Color Scheme. Within seven (7) business days after the execution of this Lease by Tenant and Landlord, Tenant’s representatives shall meet with Landlord’s space planner, at Landlord’s expense to arrive at an acceptable Building Standard design of and color scheme for the Premises (such design and color scheme, when approved by Landlord and Tenant, the “Design and Color Scheme”). For purposes hereof, the term “Building Standard” (herein so called) shall mean certain component elements utilized in the design and construction of improvements in the Building that have been pre-selected by Landlord to ensure a minimum quality and appearance throughout the Building (which elements include as per the Space Plan, but are not limited to, ceiling systems, including ceiling grid, doors, hardware, window coverings, lights and light fixtures, HVAC components, electrical and plumbing systems). The Design and Color Scheme shall, in Landlord’s sole judgment, conform to the design criteria from time to time established by Landlord for the Building. Each day thereafter that the Design and Color Scheme not approved by Tenant shall constitute one (1) day of Tenant Delay.

1.3       Compliance with Disability Acts. Tenant shall promptly provide Landlord and Landlord’s space planner and/or architect, as applicable, with all information needed to cause the construction of the Tenant’s Improvements to be completed such that Tenant, the Premises and the Tenant’s Improvements (as constructed) will be in compliance with the Disability Acts.

1.4       Construction Plans. Within seven (7) business days after approval of the Design and Color Scheme by Landlord and Tenant, Landlord’s space planner and engineer will meet to prepare construction plans (such construction plans, when approved, and all changes and amendments thereto agreed to by Landlord and Tenant in writing, the “Construction Plans”) for all of the improvements to the Premises (individually and collectively, the “Tenant’s Improvements”) described in the Space Plan, the Design and Color Scheme, including complete detail and finish drawings for partitions, doors, reflected ceiling, telephone outlets, electrical switches and outlets and Building Standard heating, ventilation and air conditioning equipment and controls. Within five (5) business days after the Construction Plans are delivered to Tenant, Tenant shall approve (which approval shall not be unreasonably withheld) or disapprove same in writing and, if disapproved, Tenant shall provide Landlord and Landlord’s space planner and engineer specific reasons for disapproval. The foregoing process shall continue until the Construction Plans are approved by Tenant; provided that if Tenant fails to respond in any five (5) business day period, Tenant shall be deemed to have approved the last submitted construction plans. Each day thereafter that the Construction Plans are not approved by Tenant shall constitute one (1) day of Tenant Delay. Tenant’s Improvements shall not include any of Tenant’s trade fixtures, equipment, furniture, furnishings, telephone and data equipment or other personal property.

1.5       Changes to Approved Plans. If any redrawing or re-drafting of any of the Space Plan, the Design and Color Scheme or the Construction Plans is necessitated by Tenant’s requested changes (all of which shall be subject to Landlord’s approval), the expense of any such re-drawing or re-drafting and the expense of any work and improvements necessitated by such re-drawing or re-drafting are collectively defined as “Change Orders” hereunder and will be charged to Tenant, and any delay will be a Tenant Delay. The cost of all (a) Change Orders; (b) any alternate selections on the Space Plan that are selected by Tenant (“Alternate Selections”), and (c) any construction management fees associated with such Change Orders or Alternate Selections, are collectively referred to as “Excess Costs,” and shall be paid by Tenant pursuant to Section 2 below.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 42

1.6       Coordination of Planners and Designers. If Tenant shall arrange for interior design services or services above the scope of work referenced in 1.4 above, whether with Landlord’s space planner or any other planner or designer, it shall be Tenant’s responsibility to cause necessary coordination of its agents’ efforts with Landlord’s agents to ensure that no delays are caused to either the planning or construction of the Tenant’s Improvements.

2.            Construction and Costs of the Tenant’s Improvements

2.1       Construction Obligation and Cost of Tenant’s Improvements. Landlord shall construct the Tenant’s Improvements at its sole cost and expense, except for Excess Costs. Tenant shall bear the cost of any Excess Costs.

2.2       Excess Costs. Landlord will, prior to the commencement of construction of Tenant’s Improvements, advise Tenant of the Excess Costs, if any. Tenant shall have three (3) business days from and after the receipt of such advice within which to approve or disapprove the Excess Costs. If Tenant fails to approve same by the expiration of the third (3rd) such business day, then Tenant shall be deemed to have approved the proposed Excess Costs. If Tenant disapproves the Excess Costs within such three (3) business day period, then Tenant shall reduce the scope of the Tenant’s Improvements such that there shall be no Excess Costs. Subject to the last sentence of this subsection, the foregoing process shall continue until the Excess Costs, if any, are accepted or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to have approved) the Construction Plans and Excess Costs for the construction of the Tenant’s Improvements in writing prior to the commencement of construction.

2.3       Liens Arising from Excess Costs. Tenant agrees to keep the Premises free from any liens arising out of nonpayment of Excess Costs. The terms of Article 9 of the Lease shall apply to any such liens.

2.4       Construction Deposit. Tenant shall remit to Landlord an amount (the “Prepayment”) equal to the projected Excess Costs, if any, prior to commencement of construction by Landlord and commencement of work required by each change order involving Excess Costs-during the construction period. Should Tenant fail to timely make a Prepayment or pay any Excess Costs, Landlord shall have the right to suspend construction and each day of delay shall be a Tenant Delay. All sums due Landlord under this Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment shall constitute a default under the Lease and entitle Landlord to any and all remedies specified in the Lease., including without limitation, Late Charges.

3.            Delays. Each delay in the completion of construction of the Tenant’s Improvements or in obtaining a certificate of occupancy or a final inspection, if required by the applicable governmental authority, caused by Tenant, Tenant’s Contractors (hereinafter defined) or any person, firm or corporation employed by Tenant or Tenant’s Contractors shall constitute a “Tenant Delay” (herein so called). In the event that the Tenant’s Improvements are not Substantially Complete (hereinafter defined) by the Commencement Date set forth in the Basic Lease Information, then the Commencement Date shall be amended to be the Adjusted Substantial Completion Date (hereinafter defined) and the Expiration Date set forth in the Basic Lease Information shall be adjusted forward by the same number of days as is the Commencement Date, so that the Term of the Lease will be the Term set forth in the Basic Lease Information. The Adjusted Substantial Completion Date shall be the date the Tenant’s Improvements are Substantially Complete, adjusted backward, however, by one day for each day of Tenant Delay, if any. The foregoing adjustments in the Commencement Date and the Expiration Date, along with the other remedies described in Section 1.2 of the Lease, shall be Tenant’s sole and exclusive remedy in the event the Tenant’s Improvements are not Substantially Complete by the Commencement Date set forth in the Basic Lease Information.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 43

4.            Substantial Completion and Punch List. The terms “Substantial Completion” and “Substantially Complete” as applicable, shall mean when the Tenant’s Improvements are sufficiently completed in accordance with the Construction Plans so that Tenant can reasonably use the Premises for the Permitted Use (as described in the Basic Lease Information). When Landlord considers the Tenant’s Improvements to be Substantially Complete, Landlord will notify Tenant and within two (2) business days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items as are necessary for final completion of the Tenant’s Improvements (collectively, the “Punch List Items”). Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on the Punch List Items. Landlord will use reasonable efforts to cause the contractor to complete all Punch List Items within thirty (30) days after Landlord’s and Tenant’s agreement thereon.

5.            Tenant’s Contractors and Vendors. If Tenant should desire to enter the Premises or authorize its agent to do so prior to the Commencement Date of the Lease, to perform approved work not requested of the Landlord, or to install furniture, fixtures and equipment and data cabling/phones, Landlord shall permit such entry upon two (2) weeks prior to the anticipated Commencement Date, and subject to, the following terms and conditions:

(a)       Tenant shall use only such contractors and or vendors which Landlord shall approve in its reasonable discretion and Landlord shall have approved the plans to be utilized by Tenant, which approval will not be unreasonably withheld; and

(b)       Tenant, its contractors, vendors, workmen, mechanics, engineers, space planners or such others as may enter the Premises (collectively, “Tenant’s Contractors”), shall work in harmony with and shall not in any way disturb or interfere with Landlord’s space planners, architects, engineers, contractors, workmen, mechanics or other agents or independent contractors in the performance of their work (collectively, “Landlord’s Contractors”) or other tenants in the Building, it being understood and agreed that if entry of Tenant or Tenant’s Contractors would cause, has caused or is causing a material disturbance to Landlord or Landlord’s Contractors or other tenants, then Landlord may, with notice, refuse admittance to Tenant or Tenant’s Contractors causing such disturbance; and

(c)       Tenant, Tenant’s Contractors and other agents shall provide Landlord sufficient evidence that each is covered under Worker’s Compensation, and Commercial General Liability Insurance of $5,000,000 per occurrence for Tenant’s Contractors which are involved in the actual construction of improvements or the installation of fixtures within the Premises or Worker’s Compensation and Commercial General Liability Insurance of $2,000,000 per occurrence for Tenant’s Contractors which are involved in the installation of furnishings and equipment, including, without limitation, cabling, carpeting, and window treatments, in the Premises, together with such property insurance as Landlord may reasonably request for its protection. General Liability Insurance shall include coverage for ongoing and completed construction. Tenant’s Contractors will name Landlord and Property Manager as additional insureds on commercial general liability and property insurance policies. All liability policies will be primary and non-contributory and contain waivers of subrogation in favor of Landlord. Workers Compensation policy shall contain a waiver of subrogation in favor of Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 44

LANDLORD SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS MADE PRIOR TO THE COMMENCEMENT DATE AND NOT INSTALLED BY LANDLORD. TENANT SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD AND LANDLORD’S CONTRACTORS FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, LIABILITIES AND CAUSES OF ACTION ARISING OUT OF OR IN CONNECTION WITH WORK PERFORMED IN THE PREMISES BY OR ON BEHALF OF TENANT (BUT EXCLUDING WORK PERFORMED BY LANDLORD OR LANDLORD’S CONTRACTORS). LANDLORD IS NOT RESPONSIBLE FOR THE FUNCTION AND MAINTENANCE OF THE TENANT’S IMPROVEMENTS WHICH ARE DIFFERENT FROM THE BUILDING STANDARD IMPROVEMENTS AT THE PROPERTY OR IMPROVEMENTS, EQUIPMENT, CABINETS OR FIXTURES NOT INSTALLED BY LANDLORD. SUCH ENTRY BY TENANT AND TENANT’S CONTRACTORS PURSUANT TO THIS SECTION 5 SHALL BE DEEMED TO BE UNDER ALL OF THE TERMS, COVENANTS, PROVISIONS AND CONDITIONS OF THE LEASE EXCEPT THE COVENANT TO PAY RENT.

6.            Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other:

LANDLORD’S REPRESENTATIVE:
NAME	Richard Vannatta, Granite Properties
ADDRESS	6400 South Fiddlers Green Circle, Suite 500
	Greenwood Village, CO 80111
PHONE	303-804-4715
E-MAIL:	rvannatta@graniteprop.com
TENANT’S REPRESENTATIVE:
NAME	Doug Baltzer
ADDRESS	6400 S. Fiddler’s Green Circle, Suite 450
	Greenwood Village, CO 80111
PHONE	(720)573-7664
E-MAIL:	Doug.baltzer@flexleasingpower.com

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 45

Schedule C-1

Space Plan

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 46

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 47

EXHIBIT D

RULES AND REGULATIONS

1.       The sidewalks, walks, plaza entries, corridors, concourses, ramps, staircases, escalators and elevators of the Property shall not be obstructed or used by Tenant, or the employees, agents, servants, visitors or licensees of Tenant for any purpose other than pedestrian ingress and egress to and from the Premises. No bicycle or motorcycle shall be brought into the Building or kept on the Premises without the prior written consent of Landlord.

2.       No freight, furniture or bulky matter of any description will be received into the Property or carried into the elevators except in such a manner, during such hours and using such elevators and passageways as may be approved by Landlord, and then only upon having been scheduled in advance. Any hand trucks, carryalls, or similar equipment used for the delivery or receipt of merchandise or equipment shall be equipped with rubber tires, side guards and such other safeguards as Landlord shall require.

3.       Landlord shall have the right to prescribe the weight, position and manner of installation of safes or other heavy equipment which shall, if considered necessary by Landlord, be installed in a manner which shall insure satisfactory weight distribution. All damage done to the Property by reason of a safe or any other article of Tenant’s office equipment being on the Premises shall be repaired at the expense of Tenant. The time, routing and manner of moving safes or other heavy equipment shall be subject to prior approval by Landlord.

4.       Only persons authorized by Landlord will be permitted to furnish drinking water, barbering, shoe shining, janitorial services, and other similar services and concessions to Tenant, and only at hours and in compliance with security requirements established by Landlord.

5.       Tenant, or the employees, agents, servants, visitors or licensees of Tenant shall not at any time leave, place or discard any rubbish, paper, articles or objects of any kind whatsoever outside the doors of the Premises or in the corridors, stairways or passageways of the Property.

6.       Landlord shall have the right to prohibit any advertising by Tenant which includes the picture, name or address of the Property and which, in Landlord’s opinion, tends to impair the reputation of the Property or its desirability for offices, and, upon written notice from Landlord, Tenant will refrain from or discontinue such advertising.

7.       Tenant shall not place, or cause or allow to be placed, any sign, placard, picture, advertisement, notice or lettering whatsoever, in, about or on the exterior of the Premises, Building or Property except in and at such places as may be designated by Landlord and consented to by Landlord in writing. Any such sign, placard, advertisement, picture, notice or lettering so placed may be removed by Landlord without notice to and at the expense of Tenant. All lettering and graphics on corridor doors shall conform to the Building’s standard prescribed by Landlord. No trademark shall be displayed in any event.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 48

8.       Canvassing, soliciting or peddling in the Building or Property is prohibited, and Tenant shall cooperate to prevent same.

9.       Landlord shall have the right to exclude any person from the Property other than during customary business hours as set forth in the Lease, and any person in the Property will be subject to identification by employees and agents of Landlord. All persons in or entering the Property shall be required to comply with the security policies of the Property. If Tenant desires any additional security service for the Premises, Tenant shall have the right (with the advance written consent of Landlord) to obtain such additional service at Tenant’s sole cost and expense. Tenant shall keep doors to unattended areas locked and shall otherwise exercise reasonable precautions to protect property from theft, loss or damage. Landlord shall not be responsible for the theft, loss or damage of any property or for any error with regard to the exclusion from or admission to the Property of any person. In case of invasion, mob, riot or public excitement, Landlord reserves the right to prevent access to the Property during the continuance of same by closing the doors or taking other measures for the safety of the tenants and protection of the Property and property or persons therein.

10.     Only workmen employed, designated or approved by Landlord may be employed for repairs, installations, alterations, painting, material moving and other similar work that may be done in or on the Premises. Tenant will refer all contractors, contractor’s representatives and installation technicians rendering any service on or to the Premises for Tenant to Landlord for Landlord’s approval and supervision before performance of any contractual service. This provision shall apply to all work performed in the Building including installation of telephones, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings equipment or any other physical portion of the Building.

11.     Tenant shall not do any cooking (other than warming in a microwave oven) or conduct any restaurant, luncheonette, automat or cafeteria for the sale or service of food or beverages to its employees or to others. Tenant may, however, operate a coffee bar by and for its employees. Tenant shall not install or permit to be installed any vending machines in the Premises.

12.     Tenant shall not bring or permit to be brought or kept in or on the Premises or the Property any inflammable, combustible, corrosive, caustic, poisonous, or explosive substance, or cause or permit any odors to permeate in or emanate from the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Property by reason of light, radiation, magnetism, noise, odors or vibrations, or interfere in any way with other tenants or those having business in the Property.

13.     Except for the installation of pictures and standard office equipment and decoration within the Premises, Tenant shall not mark, paint, drill into, or in any way deface any part of the Property or the Premises. No boring, driving of nails or screws, cutting or stringing of wires shall be permitted, except as otherwise provided herein or with the prior written consent of Landlord, and as Landlord may direct. Tenant shall not install any resilient tile or similar floor covering in the Premises except with the prior approval of Landlord. The use of cement or other similar adhesive material is expressly prohibited.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 49

14.       No additional locks or bolts of any kind shall be placed on any door in the Property or the Premises and no lock on any door therein shall be changed or altered in any respect. Landlord shall furnish two keys for each lock on exterior doors to the Premises and shall, at Tenant’s request and at Tenant’s expense, provide additional duplicate keys. Tenant shall not make duplicate keys. All keys shall be returned to Landlord upon the termination of this Lease, and Tenant shall give to Landlord explanations of the combinations of all safes, vaults and combination locks remaining with the Premises. Landlord may at all times keep a pass key to the Premises. All entrance doors to the Premises shall be left closed at all times and left locked when the Premises are not in use. Landlord agrees to furnish to Tenant, at Landlord’s expense, two (2) CardKeys for access to the Building during such times as the Building is not open to the public. Upon written request from Tenant, or other parties authorized by Tenant, Landlord will furnish additional CardKeys to Tenant at Tenant’s expense. Should any CardKeys be lost or stolen, Tenant will immediately notify Landlord and Landlord will issue replacement CardKeys with a different computer code number. Such replacement CardKeys will be at Tenant’s expense.

15.       Tenant shall give immediate notice to Landlord in case of theft, unauthorized solicitation or accident in the Premises or in the Property or of defects therein or in any fixtures or equipment, or of any known emergency in the Property.

16.       Tenant shall not use the Premises or permit the Premises to be used for photographic or other forms of reproductions, except in connection with its own business and not as a service for others without Landlord’s prior permission.

17.       Tenant shall not use or permit any portion of the Premises to be used as an office for a public word processor, a printer, the sale of liquor or tobacco, a barber, a hair salon, a manicure shop, an employment bureau, a labor union office, a doctor’s or dentist’s office, a dance or music studio, any type of school, or for any use other than those specifically granted in this Lease.

18.       Tenant shall not advertise for laborers giving the Premises as an address, nor pay such laborers at a location on the Property.

19.       The requirements of Tenant will be attended to only after notice to Landlord at the Building or at such other address as may be designated by Landlord in the Lease. Employees of Landlord shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of Landlord.

20.       Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Business machines and mechanical and electrical equipment belonging to Tenant which cause noise, vibration, electrical or magnetic interference, or any other nuisance that may be transmitted to the structure or other portions of the Property or to the Premises to such a degree as to be objectionable to Landlord or which interfere with the use or enjoyment by other tenants of their premises or the public portions of the Property shall be placed and maintained by Tenant, at Tenant’s expense in settings of cork, rubber, spring type, or other vibration eliminators sufficient to eliminate noise or vibration.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 50

21.      No awning, draperies, shutters or other interior or exterior window coverings that are visible from the exterior of the Building or from the exterior of the Premises within the Building may be installed by Tenant.

22.     Tenant shall not place, install or operate within the Premises or any other part of the Property any engine, stove, or machinery, or conduct mechanical operations therein, without the written consent of Landlord.

23.      No portion of the Premises or any part of the Property shall at any time be used or occupied as sleeping or lodging quarters.

24.      Tenant shall at all times keep the Premises neat and orderly.

25.      The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who or whose employees or invitees shall have caused it.

26.      Landlord reserves the right to exclude or expel from the Property any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the Rules and Regulations of the Property.

27.      Tenant shall use no other method of heating or cooling than that supplied by Landlord.

28.     Tenant and its agents, employees and invitees shall observe and comply with the driving and parking signs and markers on the Property grounds and surrounding areas.

29.      Except for service animals, no animals, birds or fish shall be brought to or kept in or about the Property.

30.      Smoking of any kind (cigarette, pipe, etc.) is strictly prohibited within the Premises, Building, Common Areas (to include, but not limited to, lobbies, corridors, restrooms, elevators, stairwells, and the Garage) and any other areas not specifically designated as a Smoking Area by Landlord. Tenant hereby agrees that violation of this smoking prohibition by Tenant, Tenant’s employees, agents, visitors or invitees (individually and collectively, “Tenant Party”) shall be subject to a fine in the amount of One Hundred and No/100 Dollars ($100.00.) for the first violation by a Tenant Party and Two Hundred Fifty and No/100 Dollars ($250.00) for each subsequent violation by a Tenant Party, whether or not the violation involves the same Tenant Party or a different Tenant Party. Use of any electronic cigarette, electronic vaping device, personal vaporizer (PV), digital vapor device or electronic nicotine delivery system (ENDS) is prohibited in the Building or around the entries to the Building. Users of these devices should be directed to the designated smoking area. Repeated violations of this rule shall, at Landlord’s discretion, constitute a default under this Lease.

31.      Landlord shall have the right to install such devices within the Premises and elsewhere in the Building and on the Property as Landlord deems advisable to decrease consumption of utilities and waste on the Property, and Tenant shall cooperate with Landlord in the installation and use thereof. Landlord may establish such recycling programs as it deems advisable in its sole discretion, and guidelines for the same. Landlord may forbid or restrict the use of certain supplies by Tenant if alternatives are readily available at a comparable cost which are more readily recyclable or otherwise reduce the carbon footprint of the Property. Tenant shall ensure that all occupants of the Premises diligently observe the recycling program and the guidelines for the same as well as reasonable restrictions on the use of certain supplies. Landlord reserves the right to impose penalties on Tenant for the repeated failure of any occupant of the Premises to participate in the recycling program and observe the guidelines for the same or the repeated use of restricted supplies.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 51

EXHIBIT E

ACCEPTANCE OF PREMISES MEMORANDUM

This Acceptance of Premises Memorandum is being executed pursuant to that certain Lease Agreement (the “Lease”) dated the                      day of                                    , 20             between                                                           (“Landlord”) and                                                               (“Tenant”), pursuant to which Landlord leased to Tenant and Tenant leased from Landlord certain space in the office building located at                                                                               (the “Building”). Landlord and Tenant hereby agree that:

1. Except for the Punch List Items (as shown on the attached Punch List), Landlord has fully completed the construction work required under the terms of the Lease and the Work Letter attached thereto.

2. The Premises are tenantable, Landlord has no further obligation for construction (except with respect to Punch List Items) and Tenant acknowledges that the Building, the Premises and, except for the Punch List Items, the Tenant’s Improvements are satisfactory in all respects, and are suitable for the Permitted Use.

3. The Commencement Date of the Lease is the            day of                                          , 20      . If the date the Commencement Date set forth in the Base Lease Information is different from the date set forth in the preceding sentence, then the Basic Lease Information is hereby amended to be the Commencement Date set forth in the preceding sentence.

4. The Expiration Date of the Lease is the            day of                                          , 20      . If the date set forth in the Base Information Page of the Lease is different from the date set forth in the preceding sentence, then the Expiration Date set forth in the Basic Lease Information is hereby amended to be the Expiration Date set forth in the preceding sentence.

5. Tenant acknowledges receipt of the current Rules and Regulations for the Building.

6. All capitalized terms not defined herein shall have the meaning assigned to them in the Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 52

Agreed and Executed this                 day of                          , 20     .

LANDLORD:
By:	, its
By:
Name:
Title:
TENANT:
By:
Name:
Title:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 53

EXHIBIT F

PARKING AGREEMENT

1.          Throughout the Term of this Lease, Tenant shall lease from Landlord twenty-three (23) parking permits in the Garage. Of these, two (2) shall be reserved parking permits and twenty-one (21) shall be unreserved parking permits, and each of which parking permits shall be leased for the entirety of the Term.

2.          For each such parking permit. Tenant shall pay the Landlord or its agent, the prevailing market rate posted by Landlord from time to time during the term of the Lease (the “Parking Rent”). The current monthly rate is $75.00 per month plus taxes, if applicable, for each reserved parking permit and $55.00 per month for each unreserved parking permit plus taxes, if applicable, in the Garage. Notwithstanding the foregoing, Landlord agrees not to demand or collect from Tenant the Parking Rent for the parking permits for the first twenty-four (24) months after the Commencement Date (the “Parking Abatement Period”). If the Parking Abatement Period ends on a day other than the last day of a calendar month, Parking Rent for the month in which the Parking Abatement Period ends shall be prorated based on the number of days after the Parking Abatement Period in such month and the number of days in such month. If a default occurs at any time during the Term, the abated Parking Rent for the Parking Abatement Period will be immediately due and payable.

3.          The Parking Rent shall be payable in accordance with the policies established by Landlord (or its agent) from time to time for payment of Parking Rent in the Garage. Tenant shall indemnify and hold harmless Landlord from and against all claims, losses, liabilities, damages, costs and expenses (including, but not limited to, attorneys’ fees and court costs) arising or alleged to arise out of Tenant’s use of any such parking spaces. Tenant shall have no further rights to (a) any parking permit not taken at the beginning of the original Term or (b) any parking permit taken at the beginning of the original Term and thereafter released by Tenant with Landlord’s consent or terminated by Landlord for failure to pay Parking Rent or to comply with the other terms and conditions for the leasing of such parking permit imposed by Landlord. Upon the termination of this Lease, Tenant’s rights to the parking permits then being leased to Tenant hereunder shall terminate. In the event any of the above parking spaces are or become unavailable at any time or from time to time throughout the Term, whether due to casualty or any other cause, the Lease shall continue in full force and effect, and Tenant’s sole remedy shall be an abatement of Parking Rent for those parking spaces rendered unavailable, which abatement shall continue until such time as said parking spaces, or substitutes therefor, again become available, it being expressly agreed and understood that Landlord shall have no duty to provide substitute parking spaces for those spaces rendered unavailable; provided, however, that Landlord agrees to use reasonable efforts to restore the Garage to the condition immediately preceding such damage as soon as reasonably practicable.

4.           Tenant agrees to comply with all reasonable rules and regulations now or hereafter established by Landlord relating to the use of the Garage by contract parking patrons. A condition of any parking shall be compliance by the parking patron with Garage rules and regulations, including any sticker or other identification system established by Landlord. The following rules and regulations are in effect until notice is given to Tenant of any change. Landlord may refuse to permit any person who violates the rules to park in the Garage, and any violation of the rules shall subject the car to removal.

RULES AND REGULATIONS

1.         Cars must be parked entirely within the stall lines painted on the floor.

2.         All directional signs and arrows must be observed.

3.          The speed limit shall be 5 miles per hour.

4.         Parking is prohibited:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 54

 (a)       in areas not striped for parking

 (b)       in aisles

 (c)       where “No Parking” signs are posted

 (d)       in cross hatched areas

 (e)       in such other areas as may be designated by Landlord or Landlord’s agent(s).

 (f)       by tenants in Visitor, Delivery, Handicapped (except for handicapped tenants) or other specially designated parking areas

5.Parking stickers or any other device or form of identification supplied by Landlord shall remain the property of the Landlord and shall not be transferable. There will be a replacement charge payable by Tenant equal to the amount posted from time to time by Landlord for loss of any magnetic parking card or parking sticker.

6.Garage managers or attendants are not authorized to make or allow any exceptions to these Rules and Regulations.

7.Every parker is required to park and lock his own car. All responsibility for damage to cars or persons is assumed by the parker.

8.      No intermediate or full-size cars shall be parked in parking spaces limited to compact cars.

9.     All motorcycles/motorized bicycles are to be parked in the designated motorcycle area, and will be removed from the property if not in the designated area.

Failure to (a) promptly pay the Parking Rent required hereunder within five (5) business days after the date when due, no notice of any such failure being required, or (b) persistent failure on the part of Tenant or Tenant’s designated parkers to observe the rules and regulations above shall give Landlord the right to terminate Tenant’s right to use the Garage. No such termination shall create any liability on Landlord or be deemed to interfere with Tenant’s right to quiet possession of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 55

EX-10.10

Exhibit 10.10

FIRST AMENDMENT TO OFFICE LEASE

THIS FIRST AMENDMENT TO OFFICE LEASE (“First Amendment”) is entered into effective as of August 29, 2019 (the “Effective Date”), by and between GPI PLAZA TOWER, LP, a Texas limited partnership (“Landlord”), and FLEX LEASING POWER & SERVICE, LLC, a Delaware limited liability company (“Tenant”).

RECITALS

A.           Landlord and Tenant entered into that certain Office Lease dated February 19, 2018 (the “Lease”), for Suite 900 containing approximately 7,972 rentable square feet (the “Original Premises”), located on the ninth (9^th) floor of the office building known as Plaza Tower One located at 6400 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 (the “Building”).

B.            The parties desire to amend the Lease as more particularly set forth in this First Amendment.

AGREEMENT

NOW, THEREFORE, for and in consideration of the facts mentioned above, the mutual promises set forth below and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

1.            Capitalized Terms; Recitals. All capitalized terms used in this First Amendment which are not defined herein shall have their meanings in the Lease. The recitals are incorporated into this First Amendment as though set forth in full in it.

2.            Expansion Premises. Commencing on the Expansion Commencement Date (as defined in Exhibit B attached hereto), Landlord hereby leases to Tenant and Tenant leases from Landlord approximately 1,978 rentable square feet on the first floor of the Building, known as Suite 910, as shown on Exhibit A attached hereto and incorporated herein by this reference (the “Expansion Premises”), for a term that is coterminous with the Term, subject to all of the terms and provisions of the Lease, as amended by this First Amendment. Landlord will deliver the Expansion Premises to Tenant in accordance with Exhibit B attached hereto and incorporated herein by this reference (the “Work Letter”). Landlord estimates that the delivery and commencement date for the Expansion Premises will be December 1, 2019; provided, however, that the actual “Expansion Commencement Date” will be determined pursuant to the Work Letter.

3.            Premises. As of the Expansion Commencement Date, (a) the Original Premises and the Expansion Premises will collectively constitute the “Premises” under the Lease, (b) the Premises Rentable Area shall consist of a total of approximately 9,950 rentable square feet, (c) all references in the Lease to the “Premises” will be deemed to refer, collectively, to the Original Premises and the Expansion Premises, and (d) all references in the Lease to “Exhibit B” shall be deemed to include Exhibit A attached to this First Amendment.

4.            Basic Rent. Landlord agrees not to demand or collect from Tenant Basic Monthly Rent for the Expansion Premises the first four (4) months following the Expansion Commencement Date (the “Expansion Abatement Period”). If the Expansion Abatement Period ends on a day other than the first day of a calendar month, Basic Monthly Rent for the Expansion Premises for the month in which the Expansion Abatement Period ends shall be prorated based on the number of days after the Expansion Abatement Period in such month and the number of days in such month. If a default beyond any applicable cure period provided for herein occurs at any time during the Term and Landlord seeks to terminate the Lease as a result of such default, the abated Basic Monthly Rent for the Expansion Abatement Period will be immediately due and payable. The first day following the expiration of the Expansion Abatement Period shall be the “Expansion Premises Rent Commencement Date.” Prior to the Expansion Premises Rent Commencement Date, Tenant shall continue to pay Basic Rent for the Original Premises in accordance with the terms of the Lease. Notwithstanding anything to the contrary contained in the Lease, commencing on the Expansion Premises Rent Commencement Date, and continuing through the Term, Tenant shall pay monthly installments of Basic Rent for the entire Premises (on the same terms and conditions as set forth in the Lease, as modified herein) as set forth in the table below:

Rental Period	Annual Rate per Square Foot of Premises Rentable Area		Basic Monthly Rent
From the Expansion Premises Rent Commencement Date through September 30, 2020	$	31.78	$	26,350.92
October 1, 2020 – September30, 2021	$	32.57	$	27,005.96
October 1, 2021 – September 30, 2022	$	33.38	$	27,677.58
October 1, 2022 – September 30, 2023	$	34.22	$	28,374.08

5.            Tenant’s Share. Effective as of the Expansion Commencement Date, Tenant’s Share, as defined in Section 6 of the Basic Lease Information of the Lease, is hereby amended to be “2.17%”.

6.            Base Year. The Operating Base Year and Tax Base for the Expansion Premises shall be the calendar year 2020. The Operating Base Year and Tax Base for the Original Premises shall continue to be as set forth in the Lease.

7.            Condition of Expansion Premises. Landlord shall construct the Expansion Improvements (as defined in the Work Letter) pursuant to the terms and conditions of the Work Letter. The Work Letter shall be deemed effective upon both parties’ execution of this First Amendment and shall not need to be separately executed by the parties hereto. Other than as set forth in the Work Letter attached as Exhibit B hereto, Landlord shall have no obligation for the completion or remodeling of the Original Premises or the Expansion Premises, and Tenant shall accept the Expansion Premises in their “as is” condition as of the Expansion Commencement Date.

2 

8.            Parking. As of the Expansion Commencement Date, Tenant shall lease from Landlord an additional six (6) unreserved parking permits in the Garage (for a total of twenty-seven (27) unreserved parking permits), pursuant to the terms of Exhibit F and the Lease, Landlord agrees not to demand or collect from Tenant Parking Rent for such additional parking permits during the existing Parking Abatement Period (which, for the avoidance of doubt, expires by its terms on April 30, 2020).

9.            Additional Security Deposit. As of the Effective Date, Landlord and Tenant acknowledge and agree that Landlord holds a Security Deposit in the amount of $22,732.29 pursuant to Section 13 of the Basic Lease Information and Article 3 of the Lease. Prior to the Expansion Commencement Date, Tenant shall deliver to Landlord the sum of $5,641.79 as an additional security deposit to be held by Landlord under the Lease. As of such additional deposit, Section 13 of the Basic Lease Information is amended to provide that the Security Deposit under the Lease is $28,374.08.

10.          Broker. Tenant represents and warrants to Landlord that no broker or agent negotiated or was instrumental in the negotiation or consummation of this First Amendment other than the Brokers (as defined in Section 17 of the Basic Lease Information, except that Katy Sheehy is hereby amended to be Abby Pattillo). Landlord and Tenant each agree to indemnify and hold harmless the other party against any loss, expense, cost or liability incurred by such party as a result of any claims by any brokers acting on behalf of, or claiming to be acting on behalf of, the indemnifying party other than the Brokers.

11.          No Further Modifications. Except as otherwise set forth in this First Amendment, the terms and conditions of the Lease remain unchanged and in full force and effect. In the event of any conflict between the terms of the Lease and the terms of this First Amendment, the terms of this First Amendment shall govern and control.

12.          Headings. The paragraph headings that appear in this First Amendment are for purposes of convenience of reference only and are not in any sense to be construed as modifying the substance of the paragraphs in which they appear.

13.          Severability. In the event that any one or more of the provisions of this First Amendment shall for any reason be held to be invalid or unenforceable, the remaining provisions of this First Amendment shall be unimpaired, and shall remain in full force and effect and be binding upon the parties hereto.

14.          Counterparts. This First Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which when executed and delivered shall together constitute one and the same instrument.

15.          Authority. Each party represents that the person executing this First Amendment for such party is acting on behalf of such party and is duly authorized to execute this First Amendment for such party.

16.          Entire Agreement. This First Amendment constitutes the entire and complete agreement of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, statements, promises, understandings, arrangements, and commitments.

17.          Governing Law. This First Amendment shall be governed by and construed in accordance with the internal laws and decisions of the state in which the Premises are located.

18.          Binding Effect. This First Amendment becomes effective as of the Effective Date only upon execution by both Landlord and Tenant.

[Signature Page Follows]

3 

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Office Lease as of the date first written above.

LANDLORD:			TENANT:
GPI PLAZA TOWER, LP, a Texas limited			FLEX LEASING POWER & SERVICE, LLC,
partnership			a Delaware limited liability company
By:	Granite Properties, Inc.,
	a Delaware corporation		By:	/s/ Doug Baltzer
	Its general partner		Name:	Doug Baltzer
			Title:	Chief Commercial Officer
	By:	/s/ Stephanie T. Lawrence
		Stephanie T. Lawrence
		Senior Managing Director

4 

EXHIBIT A

DEPICTION OF EXPANSION PREMISES

 

Exhibit A

EXHIBIT B

WORK LETTER

1. Plans.

1.1          Space Plan. Landlord and Tenant have agreed that the Expansion Premises will be improved in accordance with the plans and specifications, including without limitation the Space Plan and related Notes dated April 18, 2019, attached hereto as Schedule B-1 (herein referred to as the “Space Plan”) approved and initialed by Landlord and Tenant.

1.2          Design and Color Scheme. Within seven (7) business days after the Effective Date of the First Amendment, Tenant’s representatives shall meet with Landlord’s space planner, at Tenant’s expense (provided that such expense may be included in the Expansion Allowance) to arrive at an acceptable design of and color scheme for the Expansion Premises (such design and color scheme, when approved by Landlord and Tenant, the “Design and Color Scheme”) and an acceptable product specification list for all materials, products, finishes and work that Tenant desires to use that are not Building Standard (such product specification list, when approved by Landlord and Tenant, the “Above Standard Product Specification List”). The Design and Color Scheme shall, in Landlord’s sole judgment, conform to the design criteria from time to time established by Landlord for the Building, and the Above Standard Product Specification List shall be acceptable to Landlord in all respects. Delays in construction of the Expansion Improvements (hereinafter defined) caused by Tenant’s specification of a material, product, finish or type of work included in the Above Standard Product Specification List shall constitute a Tenant Delay (hereinafter defined). Each day thereafter that the Design and Color Scheme and Above Standard Product Specification List are not approved by Tenant shall constitute one (1) day of Tenant Delay.

1.3          Compliance with Disability Acts. Tenant shall promptly provide Landlord and Landlord’s space planner and/or architect, as applicable, with all information needed to cause the construction of the Expansion Improvements to be completed such that Tenant, the Expansion Premises and the Expansion Improvements (as constructed) will be in compliance with the Disability Acts.

1.4          Construction Plans. On or before seven (7) business days after approval of both the Design and Color Scheme and the Above Standard Product Specification List by Landlord and Tenant, Landlord’s space planner and engineer will meet to prepare construction plans (such construction plans, when approved, and all changes and amendments thereto agreed to by Landlord and Tenant in writing, the “Construction Plans”) for all of the improvements to the Expansion Premises (individually and collectively, the “Expansion Improvements”) described in the Space Plan, the Design and Color Scheme and the Above Standard Product Specification List, including complete detail and finish drawings for partitions, doors, reflected ceiling, telephone outlets, electrical switches and outlets and Building Standard heating, ventilation and air conditioning equipment and controls. Within five (5) business days after the Construction Plans are delivered to Tenant, Tenant shall approve (which approval shall not be unreasonably withheld) or disapprove same in writing and, if disapproved, Tenant shall provide Landlord and Landlord’s space planner and engineer specific reasons for disapproval. If Tenant disapproves of any aspect of the Construction Plans, Landlord shall cause Landlord’s space planner and engineer to revise the applicable portions of the Construction Plans to address Tenants objections, and shall deliver such revised documentation to Tenant. The foregoing process shall continue until the Construction Plans are approved by Tenant; provided that if Tenant fails to respond in any five (5) business day period, Tenant shall be deemed to have approved the last submitted construction plans. Each day thereafter that the Construction Plans are not approved by Tenant shall constitute one (1) day of Tenant Delay. The Expansion Improvements shall not include any of Tenant’s trade fixtures, equipment, furniture, furnishings, telephone and date equipment or other personal property.

Exhibit B, Page 1

1.5          Changes to Approved Plans. If any redrawing or re-drafting of either the Space Plan, the Design and Color Scheme, the Above Standard Product Specification List or the Construction Plans is necessitated by Tenant’s requested changes (all of which shall be subject to Landlord’s approval), the expense of any such re-drawing or re-drafting required in connection therewith and the expense of any work and improvements necessitated by such re-drawing or re-drafting will be charged to Tenant.

1.6          Coordination of Planners and Designers. If Tenant shall arrange for interior design services or services above the scope of work referenced in 1.4 above, whether with Landlord’s space planner or any other planner or designer, it shall be Tenant’s responsibility to cause necessary coordination of its agents’ efforts with Landlord’s agents to ensure that no delays are caused to either the planning or construction of the Expansion Improvements.

2.            Construction and Costs of the Expansion Improvements

2.1            Construction Obligation and Expansion Allowance. Landlord shall deliver, and Tenant shall accept, the Expansion Premises in “as is” condition subject to construction of the Expansion Improvements. Landlord agrees to obtain no less than three (3) different competitive bids to construct the Expansion Improvements, at Tenant’s cost and expense; provided, however, Landlord shall provide Tenant with an allowance up to $30.00 per square foot of rentable area of the Expansion Premises (the “Expansion Allowance”) which allowance shall be used solely for the Expansion Improvements and which allowance shall be disbursed by Landlord, from time to time, for payment of (in the following priority) (i) the contract sum required to be paid to the general contractor engaged to construct Expansion Improvements (the “Contract Sum”), (ii) the fees of the preparer of the Construction Plans and (iii) payment of the Construction Management Fee (hereinafter defined) (the foregoing costs hereinafter collectively, the “Permitted Costs”). Upon completion of the Expansion Improvements and in consideration of Landlord’s administering the construction of the Expansion Improvements, Tenant agrees to pay Landlord a fee equal to three percent (3%) of the Contract Sum (the “Construction Management Fee”). Any unused portion of the Expansion Allowance must be utilized within the first twelve (12) months after the Expansion Premises Commencement Date.

Exhibit B, Page 2

2.2          Excess Costs. If the sum of the Permitted Costs exceeds the Expansion Allowance, then Tenant shall pay all such excess costs (the “Excess Costs”), provided, however, Landlord will, prior to the commencement of construction of the Expansion Improvements, advise Tenant of the Excess Costs, if any, and the Contract Sum. Tenant shall have three (3) business days from and after the receipt of such advice within which to approve or disapprove the Contract Sum and the Excess Costs. If Tenant fails to approve same by the expiration of the third (3rd) such business day, then Tenant shall be deemed to have approved the proposed Contract Sum and Excess Costs. If Tenant disapproves the Contract Sum and Excess Costs within such three (3) business day period, then Tenant shall reduce the scope of the Expansion Improvements such that there shall be no Excess Costs. Subject to the last sentence of this subsection, the foregoing process shall continue until a Contract Sum and resulting Excess Costs, if any, are accepted or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to have approved) the Contract Sum for the construction of the Expansion Improvements in writing prior to the commencement of construction.

2.3          Liens Arising from Excess Costs. Tenant agrees to keep the Original Premises and the Expansion Premises free from any liens arising out of nonpayment of Excess Costs. The terms of Article 9 of the Lease shall apply to any such liens.

2.4          Construction Deposit. Tenant shall remit to Landlord an amount (the “Prepayment”) equal to the projected Excess Costs, if any, prior to commencement of construction by Landlord and commencement of work required by each change order involving Excess Costs-during the construction period. Should Tenant fail to timely make a Prepayment, Landlord shall have the right to suspend construction and each day of delay shall be a Tenant Delay. All sums due Landlord under this Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment shall constitute a default under the Lease and entitle Landlord to any and all remedies specified in the Lease, including without limitation, Late Charges.

3.            Delays. Each delay in the completion of construction of the Expansion Improvements or in obtaining a certificate of occupancy or a final inspection, if required by the applicable governmental authority, caused by Tenant, Tenant’s Contractors (hereinafter defined) or any person, firm or corporation employed by Tenant or Tenant’s Contractors shall constitute a ‘Tenant Delay” (herein so called).

4.            Expansion Premises Commencement Date. Landlord estimates that the delivery of the Expansion Premises to Tenant shall occur on December 1, 2019; provided, however, that the actual “Expansion Premises Commencement Date” shall be the date the Expansion Improvements in the Expansion Premises are Substantially Complete (as defined below), adjusted backward, however, by one day for each day of Tenant Delays, if any.

5.            Substantial Completion and Punch List. The terms “Substantial Completion” and “Substantially Complete” as applicable, shall mean when the Expansion Improvements are sufficiently completed in accordance with the Construction Plans so that Tenant can reasonably use the Expansion Premises for the Permitted Use (as described in the Basic Lease Information). When Landlord considers the Expansion Improvements to be Substantially Complete, Landlord will notify Tenant and within two (2) business days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Expansion Premises and identify any necessary touch-up work, repairs and minor completion items as are necessary for final completion of the Expansion Improvements (collectively, the “Punch List Items”). Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on the Punch List Items. Landlord will cause the contractor to complete all Punch List Items within thirty (30) days after Landlord’s and Tenant’s agreement thereon.

Exhibit B, Page 3

6.            Tenant’s Contractors. If Tenant should desire to enter the Expansion Premises or authorize its agent to do so prior to the Expansion Premises Commencement Date, to perform approved work not requested of the Landlord, Landlord shall permit such entry upon, and subject to, the following terms and conditions:

(a)          Tenant shall use only such contractors selected by Tenant but approved by Landlord in its reasonable discretion and Landlord shall have approved the plans to be utilized by Tenant, which approval will not be unreasonably withheld; and

(b)          Tenant, its contractors, workmen, mechanics, engineers, space planners or such others as may enter the Expansion Premises (collectively, “Tenant’s Contractors”), shall work in harmony with and shall not in any way disturb or interfere with Landlord’s space planners, architects, engineers, contractors, workmen, mechanics or other agents or independent contractors in the performance of their work (collectively, “Landlord’s Contractors”) or other tenants in the Building, it being understood and agreed that if entry of Tenant or Tenant’s Contractors would cause, has caused or is causing a material disturbance to Landlord or Landlord’s Contractors or other tenants, then Landlord may, with notice, refuse admittance to Tenant or Tenant’s Contractors causing such disturbance; and

(c)          Tenant, Tenant’s Contractors and other agents shall provide Landlord sufficient evidence that each is covered under Worker’s Compensation, and Commercial General Liability Insurance of $5,000,000 per occurrence for Tenant’s Contractors which are involved in the actual construction of improvements or the installation of fixtures within the Expansion Premises or Worker’s Compensation and Commercial General Liability Insurance of $2,000,000 per occurrence for Tenant’s Contractors which are involved in the installation of furnishings and equipment, including, without limitation, cabling, carpeting, and window treatments, in the Expansion Premises, together with such property insurance as Landlord may reasonably request for its protection. General Liability Insurance shall include coverage for ongoing and completed construction. Tenant’s Contractors will name Landlord and Property Manager as additional insureds on commercial general liability and property insurance policies. All liability policies will be primary and non-contributory and contain waivers of subrogation in favor of Landlord. Workers Compensation policy shall contain a waiver of subrogation in favor of Landlord.

LANDLORD SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS MADE PRIOR TO THE EXPANSION PREMISES COMMENCEMENT DATE AND NOT INSTALLED BY LANDLORD UNLESS SUCH INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS IS CAUSED BY LANDLORD’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. TENANT SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD AND LANDLORD’S CONTRACTORS FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, LIABILITIES AND CAUSES OF ACTION ARISING OUT OF OR IN CONNECTION WITH WORK PERFORMED IN THE EXPANSION PREMISES BY OR ON BEHALF OF TENANT (BUT EXCLUDING WORK PERFORMED BY LANDLORD OR LANDLORD’S CONTRACTORS). LANDLORD IS NOT RESPONSIBLE FOR THE FUNCTION AND MAINTENANCE OF THE EXPANSION IMPROVEMENTS WHICH ARE DIFFERENT FROM THE BUILDING STANDARD IMPROVEMENTS AT THE PROPERTY OR IMPROVEMENTS, EQUIPMENT, CABINETS OR FIXTURES NOT INSTALLED BY LANDLORD. SUCH ENTRY BY TENANT AND TENANT’S CONTRACTORS PURSUANT TO THIS SECTION 6 SHALL BE DEEMED TO BE UNDER ALL OF THE TERMS, COVENANTS, PROVISIONS AND CONDITIONS OF THE LEASE EXCEPT THE COVENANT TO PAY RENT WITH RESPECT TO THE EXPANSION PREMISES.

Exhibit B, Page 4

7.            Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other:

LANDLORD’S REPRESENTATIVE:
	NAME	Richard Vannatta, Granite Properties
	ADDRESS	6400 South Fiddlers Green Circle, Suite 500
		Greenwood Village, CO 80111
	PHONE	303-804-4715
	E-MAIL:	rvannatta@graniteprop.com
TENANT’S REPRESENTATIVE:
	NAME	Doug Baltzer
	ADDRESS	6400 S. Fiddler’s Green Circle, Suite 900
		Greenwood Village, CO 80111
	PHONE	720-573-7664
	E-MAIL:	Doug.baltzer@flexleasingpower.com

Exhibit B, Page 5

Schedule B-1

Space Plan

 

Schedule B-1, Page 1

 

Schedule B-1, Page 2

EX-10.11

Exhibit 10.11

SUBLEASE

This Sublease (this “Sublease”) is executed as of April 12, 2016, between Energes, LLC, a Texas limited liability company (“Sublessor”), and Flex Leasing Power & Service LLC, a Delaware limited liability company (“Sublessee”).

RECITALS

A.            Sublessor has the right to possession of the building and property located at 14417 45 J Street, NW, Alexander, North Dakota 58831, commonly known as the “Premises”, under that certain lease agreement dated June 5, 2014 (as amended to date, the “Base Lease”), between Elk Ridge B5L2, LLC, a Maryland limited liability company, as “Landlord”, and Sublessor as “Tenant”.

B.            Sublessee desires to sublease the Premises (as described in Exhibit A hereto), and Sublessor has agreed to lease the Premises to Sublessee on the terms and conditions contained herein.

AGREEMENTS

In consideration of the premises and other good and valuable consideration, Sublessor and Sublessee agree as follows:

1.            Premises Subleased & Term. Sublessor hereby subleases to Sublessee the Premises for a five-year term commencing on the later of (i) the date in which the Landlord under the Base Lease approves this Sublease, and (ii) May 1, 2016 (the “Sublease Commencement Pate”) and continuing until April 30,2021 (the “Term”).

2.            Right of First Refusal. At the expiration of the Term, so long as Sublessee is not in default under the Sublease, Sublessee will have a right of first refusal to sublease the Premises. Upon Sublessor notifying Sublessee of the terms on which Sublessor is willing to sublease the Premises, Sublessee shall have 30 days to notify Sublessor that it is either exercising or waiving its right of first refusal.

3.            Rent. As rent for this Sublease, Sublessee shall pay to Sublessor on the following schedule (“Rent”), together with its proportionate share of all other sums, including without limitation utility costs, insurance costs, operating costs, and taxes paid by Sublessor in its capacity as Tenant under the Base Lease (“Additional Rent”).

Year 1:   $13,000 NNN per month

Year 2:   $14,000 NNN per month

Year 3:   $15,500 NNN per month

Year 4:   $17,000 NNN per month

Year 5:   $18,000 NNN per month

Such rent shall be payable on the first day of each month based upon a reasonable estimate provided to Sublessee by Sublessor of the other sums payable by Sublessor for that month under the Base Lease. Within 15 days after the actual amount of other sums due under the Base Lease is known by Sublessor, Sublessor shall notify Sublessee thereof and of Sublessee’s portion thereof. If Sublessee has overpaid rent for the period in question, such overpayment shall be credited against the next installments of rent due or returned by Sublessor to Sublessee, or if Sublessee has underpaid rent, then Sublessee shall pay the amount of such underpayment to Sublessor within twenty days after the receipt of such notice. Payment of Rent and Additional Rent shall be made to Sublessor at its address written below or at such other place Sublessor may designate in writing, without any offset or deduction whatsoever. In addition if the Base Lease requires Tenant to make payments of real estate taxes and/or utilities which are applicable to the Premises directly to the taxing authorities and/or utility companies, as the case may be, Sublessee shall make such payments in a timely manner and promptly supply Sublessor with evidence thereof, and such shall be deemed to be additional rent hereunder.

4.            Acceptance. Sublessee acknowledges that it has inspected the Premises demised hereunder, and is fully satisfied with their condition and accepts the same, “AS IS.” Sublessor has made no representation or warranties of any nature whatsoever with regard to the Premises, other than those set forth herein, and Sublessor shall have no obligation or duty with regard to preparation of the Premises for occupancy by Sublessee. Sublessor shall deliver vacant possession of the Premises to Sublessee on Sublease Commencement Date.

5.            Base Lease Incorporated. The provisions of the Base Lease are, except as otherwise herein specifically provided, hereby incorporated in this Sublease with the same effect as if entirely rewritten herein, and shall fix the rights and obligations of the parties hereto with respect to the Premises with the same effect as if Sublessor and Sublessee were, respectively, the landlord and tenant named in the Base Lease. Sublessee hereby covenants to perform the covenants and undertakings of Sublessor as tenant under the Base Lease to the extent the same are applicable to the Premises during the term of this Sublease, and agrees not to do or permit to be done any act which shall result in a violation of any of the terms and conditions of said Base lease. Except as otherwise specifically provided herein, Sublessee is to have the benefit of the covenants and undertakings of Landlord in the Base Lease to the extent the same are applicable to the Premises during the term of this Sublease. It is expressly understood and agreed, however, that Sublessor is not in the position to render any of the services or to perform any of the obligations required of Landlord by the terms of this Sublease, and that performance by Sublessor of its obligations hereunder are conditioned upon due performance by owner of its corresponding obligations under the Base Lease. Notwithstanding the foregoing, Sublessor shall take all reasonable measures and use its reasonable efforts to enforce its rights under the Base lease and to insure that Landlord performs said obligations. So long as Sublesssor takes such reasonable measures and uses such reasonable efforts, Sublessor shall not be in default under this Sublease for failure to render such services or perform such obligations required by Sublessor by the terms of this Sublease that are the responsibility of the Landlord under the Base Lease. The terms “reasonable measures” and “reasonable efforts” shall not include legal action against Landlord for its failure to so perform unless Sublessee agrees to pay all actual costs and expenses in connection therewith.

Page 2

6.            Subordinate to Base Lease. This Sublease is subject and subordinate in all respects to the Base Lease, and Sublessee acknowledges that it has received a copy of the Base Lease, which is attached hereto as Exhibit B. Sublessor hereby represents and warrants to Sublessee that the copy of the Base Lease attached hereto as Exhibit B is a true and correct copy of the Base Lease and includes all amendments and supplements thereto.

7.            Holdover. Sublessee shall promptly vacate the Premises upon expiration or termination of this Sublease. Any holding over by Sublessee beyond the expiration date of this Sublease shall be deemed unlawful unless expressly consented to by Sublessor in writing, and Sublessor shall be entitled to any and all remedies in law or in equity by reason of such unlawful holding over by Sublessee, Sublessee agrees to indemnify and save Sublessor harmless against and from any and all loss, cost, expense and liability incurred by Sublessor under the Base Lease by reason of any such holding over.

8.            Indemnification. Sublessee shall indemnify and save harmless Sublessor against and from any and all liability, damage, expense, cause of action, suits, claims or judgments for injury or death to persons or damage to property sustained by anyone in and about said Sublease Premises or any part thereof, arising out of or in any way connected with Sublessee’s use or occupation of the Premises or this Sublease.

9.            Sublessor Covenants. Sublessor shall not, without prior written consent of Sublessee, modify or amend the Base Lease or take any action which would in any way (a) diminish Sublessee’s receipt of services to the Premises, (b) increase the Rent or Additional Rent under this Sublease, (c) shorten the term of this Sublease (except resulting from casualty or condemnation); (d) increase the obligations or decrease the rights of Sublessee under this Sublease or (e) decrease the obligations or increase the rights of Landlord with respect to the Premises and/or this Sublease.

10.            Sublessor Representations. Sublessor represents to Sublessee as follows:

(a)            The Base Lease is in full force and effect;

(b)            That as of the date of this Sublease there is no uncured default by either party under the Base Lease of which Sublessor has received notice.

11.            Assignment or Subletting. Sublessee shall not, without the prior written consent of Sublessor, assign the term hereby demised, or suffer or permit it to be assigned by operation of law or otherwise, nor shall the Sublessee, without the prior written consent of Sublessor, let or sublet or permit the said Sublease Premises or any part thereof to be used by others for hire.

12.            Landlord’s Consent. This Sublease is subject to and conditioned upon the written consent of Landlord to this subletting. If Landlord does not give its consent to this Sublease for any reason whatsoever within thirty (30) days after the date hereof, this Sublease shall be deemed null and void and of no effect.

13.            Insurance. Sublessee shall maintain insurance as required under the Base Lease in the amounts stated in the Base Lease, with Sublessor named as an additional insured. Sublessee shall furnish to Sublessor certificates of such insurance and other evidence satisfactory to Sublessor of the maintenance of all insurance coverage required hereunder.

Page 3

14.            Notices. All notices and other communications given pursuant to the Sublease shall be in writing and shall be (a) mailed by first class, United States mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address listed below, (b) hand delivered to the intended addressee, (c) sent by nationally recognized overnight courier, or (d) sent by prepaid telegram, cable, facsimile transmission, or telex followed by a confirmatory letter. Notice sent by certified mail, postage prepaid, shall be effective three business days after being deposited in the United States mail; all other notices shall be effective upon delivery to the address of the addressee. The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

Sublessor:	Energes, LLC
	32315 TAMINA RD. SUITE B
	MAGNOLIA, TX 77354
	Attention:	JAMES E. PUNG
Sublessee:	Flex Leasing Power & Service LLC
	Attention: Doug Baltzer
	6400 S. Fiddlers Green Circle
	Suite 450
	Greenwood Village, CO 80111
Landlord:	Elk Ridge B5L2, LLC
	1610 West Street, Suite 100
	Annapolis, MD 21401
	Attention: EricDitter

15.            Brokerage. Sublessor and Sublessee each warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Sublease outside of Energy Real Estate Solutions, LLC. Sublessee and Sublessor shall each indemnify the other against all costs, expenses, attorneys’ fees, and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through, or under the indemnifying party.

16.            Binding Effect: Governing Law. Except as modified hereby, the Base Lease shall remain in full effect and this Sublease shall be binding upon Sublessor and Sublessee and their respective successors and assigns. If any inconsistency exists or arises between the terms of this Sublease and the terms of the Base Lease, the terms of this Sublease shall prevail. This Sublease shall be governed by the laws of the State in which the Premises is located.

17.            Counterparts. This Sublease may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

Page 4

Executed as of the date first written above.

SUBLESSOR:	Energes, LLC
	By:	/s/ James E. Pung
	Name:	JAMES E. PUNG
	Title:	CEO
SUBLESSEE:	Flex Leasing Power & Service LLC
	By:	/s/ Doug Baltzer
	Name:	Doug Baltzer
	Title:	President

Page 5

EXHIBIT A

DESCRIPTION OF PREMISES

14417 41^st J St NW, Alexander, ND 58831

This two story wood-post frame property includes:

– 16,560 SF

– Four pull through bays

– 20’high ceilings

– Insulated shop

– Two story office space

– Eight 14’x14’ overhead doors

Zoned industrial and located on a 6.88 acre lot

 

Page 6

EXHIBIT B

[BASE LEASE]

Page 7

EXHIBIT C

LANDLORD’S CONSENT

The undersigned, Landlord under the Base Lease, executes below to evidence its consent to this Sublease. Such consent shall not release Sublessor from any liabilities or obligations under the Base Lease nor constitute consent to any further assignment or subletting. Sublessor shall remain fully liable under the Base Lease, and the provisions thereof shall apply to any further subleasing or assignment.

LANDLORD:	Elk Ridge B5L2, LLC
	By:
	Name:
	Title:

Page 8

EX-10.12

Exhibit 10.12

1

LEASE

THIS LEASE, dated for reference December 1, 2015, is made and entered into by the Landlord and the Tenant named herein who, in consideration of the rents, covenants and agreements herein contained, covenant and agree as follows:

ARTICLE 1

BASIC TERMS, DEFINITIONS AND INTERPRETATION

1.1 Basic Terms

The basic terms of this Lease are as follows:

(a)	(i)	Landlord:	BENNETT FINANCIAL CORP.
	(ii)	Address of Landlord:	10905 – 88A Street, Grande Prairie
			Alberta T8X 1N8
	(iii)	Email:	harvey.mainline@gmail.com
(b)	(i)	Tenant:	FLEX LEASING POWER AND SERVICE ULC
	(ii)	Address of Tenant:	#102, 9215 – 154 Avenue
			Clairmont, Alberta T8X 0L2
	(iii)	Email:
(c)	Premises:		#102, 9215 – 154 Avenue
			Clairmont, Alberta T8X 0L2
			CONDOMINUM PLAN 1320815
			UNIT 2
			AND 5000 UNDIVIDED ONE TEN THOUSANDTH SHARES IN THE COMMON PROPERTY EXCEPTING THEREOUT ALL MINES AND MINERALS
(d)	Term:		3 years
(e)	Commencement Date:		January 1, 2016
(f)	Occupancy Date:		December 1, 2015
(g)	Annual Basic Rent:		$129,600.00 + GST
(h)	Permitted Use:		Sales and leasing of turbines, general office space
(i)	Right to Renew:		1 term of 3 years as set out in Schedule C

2

The foregoing Basic Terms are agreed to by the parties and each reference in this Lease to any of the Basic Terms will be construed to include the foregoing provisions and all of the additional applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Definitions

The Landlord and the Tenant agree that, in this Lease, the words or phrases set out in Schedule A attached hereto will, unless there is something in the context inconsistent therewith, have the meanings set out in Schedule A attached hereto.

1.3 Schedules

The Schedules attached to this Lease are incorporated into and form an integral part of this Lease and are as follows:

Schedule A	Definitions
Schedule B	Rules and Regulations
Schedule C	Right to Renew

ARTICLE 2

DEMISE AND TERM

2.1 Demise

The Landlord hereby leases the Premises to the Tenant and the Tenant leases the Premises from the Landlord, subject to the terms and conditions set out in this Lease, for the Term. The Tenant acknowledges that subject to Section 9.4 herein, it is leasing the Premises from the Landlord on an “as is where is” basis, and that the Landlord will not be required to perform any work or provide any materials or services in respect of the Premises whatsoever

ARTICLE 3

RENT AND OTHER PAYMENTS

3.1 Annual Basic Rent and Additional Rent

Subject to the provision below, the Tenant will pay to the Landlord or as the Landlord may in writing direct, in lawful money of Canada, the aggregate of:

(a) Beginning on the Commencement Date, Annual Basic Rent for each Lease Year, payable in advance in equal consecutive monthly instalments of $10,800.00 plus GST on the first day of each month in each year of the Term; and

(b) Beginning on the Occupancy Date, the Tenant’s proportionate shares of the Operating Costs and Property Taxes, payable in accordance with Section 3.2.

Rent will be payable at the Landlord’s address specified in Paragraph 1.1(a)(ii) or at such other place as the Landlord may from time to time direct in writing.

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3.2 Operating Costs and Property Taxes

Additional Rent (including, without limitation that Tenant’s proportionate share of, Operating Costs and Property Taxes) payable by the Tenant will be estimated on an annual basis by the Landlord for such annual period as is designated by the Landlord from time to time. The Tenant will pay the Landlord the estimated amount in monthly instalments in advance on the first day of each calendar month during the designated period. Within sixty (60) days following the designated period, the Landlord will furnish to the Tenant a statement setting out the Operating Costs and Property Taxes for such period. If the amount payable by the Tenant as shown on any such statement is greater or less than the aggregate of amounts paid by the Tenant under this Section 3.2, the proper adjusting credit or payment will be made between the parties within 14 days after delivery of the statement. Any credit made by the Landlord or payment made by the Tenant and accepted by the Landlord in respect of any adjustment made hereunder, will be without prejudice to the Landlord’s or Tenant’s right to claim a readjustment provided such claim is made within 12 months from the date of delivery of the statement referred to in this Section 3.2. Landlord shall keep accurate and current records in respect of such Additional Rent, which records may be reviewed by the Tenant or the Tenant’s agent upon request.

3.3 Tenant’s Taxes

The Tenant will promptly pay the Tenant’s Taxes as they become due. The Tenant will provide to the Landlord, upon request, the official receipt for each payment made by the Tenant in respect of the Tenant’s Taxes.

3.4 Utilities

Beginning on the Occupancy Date, the Tenant will pay all electricity, gas, other fuel, water, sewer and other utilities consumed in the Premises, except water which shall be billed to the Landlord the charges of which shall form part of the Additional Rent, directly to the applicable utility provider, whether billed by the supplying utility to the Landlord or to the Tenant directly. The Tenant will be solely responsible for arranging for supply of utilities to the Premises with utility service providers.

3.5 Irregular Periods

If, for any reason, it becomes necessary to calculate Annual Basic Rent or Additional Rent for irregular periods, an appropriate pro rata adjustment will be made on a daily basis in order to compute such rent for such irregular periods, unless otherwise expressly set out in this Lease.

3.6 Net Lease

This Lease will be absolutely net to the Landlord such that, without limitation, except as specifically set out in this Lease, all costs, expenses and obligations of every kind and nature whatsoever relating to the Premises, whether or not referred to in this Lease and whether or not of a kind now existing or within the contemplation of the parties hereto, will be paid by the Tenant.

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3.7 Deposit

The Landlord acknowledges that it currently holds a deposit of $22,680.00 inclusive of GST on account of the first and last month’s Basic Rent. The aforementioned deposit will not bear interest.

ARTICLE 4

TENANT’S OPERATING COVENANTS

4.1 Use of Premises

The Tenant will not:

(a) use the Premises nor allow the Premises to be used for any purpose other than that specified in Subsection 1.1(h) without the prior written consent of the Landlord, which consent may not be unreasonably withheld or delayed;

(b) use, exercise, or carry on, or permit or suffer to be used, exercised or carried on, in, upon or about the Premises, or any part thereof, any noxious, illegal, noisome or offensive act, trade, business, occupation or calling, nor do or permit to be done on the Premises anything which damages the Premises, nor keep, sell, use handle or dispose of any merchandise, goods or things which are objectionable, or by which the Premises or any part thereof may be damaged other than reasonable wear and tear; or

(c) do or permit to be done any act, matter or thing whatsoever in or upon the Premises, or any part thereof, which may result in nuisance, grievance, damage or disturbance to any occupiers or owners of any other lands or premises or to the holders of any registered easement, right of way or other encumbrance charging the whole or part of the Premises.

In any of the foregoing events, the Tenant will forthwith remedy the same.

4.2 Signs

The Tenant shall have the right to place prominent external signage on the face of the Building at the Tenant’s cost. The design, size and location of the signage shall be subject to the approval of the Landlord, which approval may not be unreasonably delayed or withheld, and which shall comply at all times with the requirements of any lawful authority having jurisdiction over signs.

4.3 Rubbish

The Tenant will keep the Premises clean and tidy and in good order and will not permit waste or garbage to be placed or accumulate outside of the Premises. The Tenant will dispose of waste or garbage in the manner designated by the Landlord from time to time, acting reasonably.

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4.4 Compliance with Laws

The Tenant will do, observe and perform all of its obligations and all matters and things necessary or expedient to be done, observed or performed by the Tenant by virtue of any law, statute, by-law, ordinance, regulation or lawful requirements of any governmental authority or any public utility lawfully acting under statutory authority. The Tenant will immediately advise the Landlord of the presence of and will do all things necessary to remove any dangerous condition from time to time existing on the Premises.

4.5 Rules and Regulations

The Tenant will observe and perform, and will cause its employees, agents, invitees (and others over whom the Tenant can reasonably be expected to exercise control) to observe and perform, the Rules and Regulations attached hereto as Schedule B and such other reasonable rules and regulations or amendments as may be made from time to time by the Landlord. In the event of any conflict between a provision of this Lease and any of the Rules and Regulations, the provision of this Lease will govern.

4.6 Vacate on Termination

At the termination of this Lease, whether by the effluxion of time or otherwise, the Tenant will vacate and deliver up possession of the Premises in the condition required by this Lease and will inform the Landlord of all combinations of locks, safes and vaults, if any, in the Premises.

ARTICLE 5

HAZARDOUS SUBSTANCES

5.1 Hazardous Substances

Except as otherwise expressly provided for in Section 4.1, the Tenant will not bring or permit to be brought into the Premises, and will not use in any way, or permit the use of the Premises or any part thereof to either directly or indirectly prepare, produce, use, generate, manufacture, refine, treat, transport, store, maintain, handle, dispose of, transfer, process, release or permit any other dealing with, any Hazardous Substances unless it has received the prior written consent of the Landlord, which shall not be arbitrarily and unreasonably withheld or delayed. Any substance which the Landlord permits the Tenant to treat, store, transfer or dispose of will be dealt with in strict compliance with all applicable laws and environmental permits. The Tenant will not release nor permit the release of any Hazardous Substances into any soil, water courses, culverts, drains or sewers on or nearby the Premises. The Tenant will comply with all applicable laws and environmental permits from time to time in force regulating any dealing with Hazardous Substances by the Tenant to which the Landlord has consented.

5.2 Removal of Hazardous Substances

On or before the expiry or sooner termination of this Lease, the Tenant will remove all Hazardous Substances which the Tenant has brought onto or created upon the Premises during the Term or Renewal Term.

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5.3 Notice of Hazardous Substances

The Tenant will advise the Landlord forthwith after becoming aware of any release of any Hazardous Substances on the Premises or any other part of the Premises or any adjacent property and will provide the Landlord with all information, notices, reports and other documents it has regarding such release and the remediation steps being undertaken by the Tenant with respect to the release or as may reasonably be required by the Landlord of the Tenant.

5.4 Restoration After Contamination

If the Tenant has brought onto or created upon the Premise any Hazardous Substance on the Premises during the Term or any extension or renewal thereof, the Tenant will promptly take all actions at its sole risk and expense as are necessary to return the Premises to the condition existing prior to the introduction of any such Hazardous Substance or other substance on the Premises.

5.5 Clean Up Plans

If any government authority requires the clean up of any Hazardous Substance held, released, spilled, abandoned or placed upon the Premises or any other lands by the Tenant or released, spilled, leaked, pumped, poured, emitted, emptied, discharged, injected, escaped, leached, disposed or dumped into the environment by the Tenant in the course of the Tenant’s business or as a result of the Tenant’s use or occupancy of the Premises during the Term or any extension or renewal thereof, the Tenant will, at its own risk and expense:

(a) prepare all necessary studies, plans and proposals and submit them for approval;

(b) provide all bonds and other security required by any governmental authority;

(c) carry out the work required and keep the Landlord fully informed; and

(d) provide to the Landlord full information with respect to proposed plans and comply with the Landlord’s reasonable requirements with respect to such plans.

5.6 Indemnity to Landlord

The Tenant shall be solely responsible for and will indemnify and save harmless the Landlord from any damage to the Premises caused by any spill, discharge or release of any contaminant or Hazardous Substance by the Tenant or the breach of any environmental laws by the Tenant during the Term of this Lease to the extent that such damage, spill, discharge, release or breach occurred or was occasioned by the activities of the Tenant or any person for whom the Tenant is responsible for at law. The Tenant hereby expressly agrees that this indemnification will survive the expiration or earlier termination of this Lease.

5.7 Indemnity to Tenant

The Landlord shall be responsible for and will indemnify and save harmless the Tenant from any Hazardous Substances existing on, under or within the Premises prior to the Commencement Date or any Hazardous Substances that are spilled, discharged or released onto the Premises or into the environmental as a result of the negligence or wilful misconduct of the Landlord or any person for whom the Landlord is responsible for at law. The Landlord hereby expressly agrees that this indemnification will survive the expiration or earlier termination of this Lease.

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5.8 Phase 1 Environmental Report

(a) The Landlord shall, within 90 days of the Occupancy Date, at its expense provide a Phase 1 Environmental Report on terms acceptable to the Tenant with baseline testing done immediately prior to the Commencement Date (the “Baseline Environmental Report”). At the expiration of this Lease the Tenant shall at its expense pay for a Phase 1 Environmental Report on similar terms (the “Post-Termination Environmental Report”). If the Post-Termination Environmental Report shows any increase in the level(s) of Hazardous Substances identified and described in the Baseline Environmental Report, or if there appears to be the presence of Hazardous Substances that were not present in the Baseline Environmental Report, then, subject to Section 5.5(b) and (c), the responsibility and liability for such Hazardous Substances shall be allocated to the Tenant.

(b) If the results of the Baseline Environmental Report identify any contamination of the Environment, the responsibility, liability and all necessary or recommended actions required by Applicable Laws or otherwise, to perform further assessments, report, clean up and remediate such contamination of the Environment, including without limitation, leaching and seepage of a contaminant(s), shall be allocated to the Landlord, at the sole expense of the Landlord.

(c) If the Baseline Environmental Report recommends any further action, including but not limited to the performance of a phase 2 environmental assessment and/or remedial action, the Landlord shall comply with said recommendations within a reasonable time. Notwithstanding the foregoing, the Landlord or the Tenant may choose to terminate this Lease, by thirty (30) days written notice to the other party, due to the results of the Baseline Environmental Report or any subsequent reports. Should this Lease be terminated by either party, the Landlord shall not be obligated to take any further action in regards to the Environment.

(d) The Landlord and Tenant agree that the Post-Termination Environmental Report set out in Section 5.7(a) shall be conducted by the same company that performed the original Baseline Environmental Report or, another company to be approved by the Landlord. Such report shall be conducted using methods and procedures substantially the same as those used in the preparation of the Baseline Environmental Report.

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ARTICLE 6

TENANT’S REPAIRS AND ALTERATIONS

6.1 Repair

Excepting only reasonable wear and tear and repairs for which the Landlord is responsible under section 9.2 of this Lease, the Tenant will, at its own expense, repair and maintain the Premises and all equipment, fixtures and improvements (including all electrical, mechanical, plumbing and sprinkler equipment and all heating, ventilating and air-conditioning equipment exclusively serving the Premises) in a condition of the same quality as at the Occupancy Date or better. At the end or sooner termination of the Term or any extension or renewal thereof the Tenant will deliver to the Landlord the Premises repaired and maintained in the condition required by this Section 6.1, and this obligation will survive the expiration or earlier termination of the Term or any extension thereof.

6.2 Repair on Notice

Upon 72 hours’ prior written notice (except in any emergency when no notice is required), the Landlord and its duly authorized agents or nominees may, with or without workers and others, enter upon the Premises for the purpose of examining the state of repair, condition and use thereof, and in every case the Tenant will cooperate with and assist the Landlord in such entry and examination and, upon notice in writing of any defect or want of repair being given by the Landlord, the Tenant will cause the same to be repaired, as required by Section 6.1, within 30 days from the date of the giving of such notice by the Landlord or any such longer period if reasonably necessary in the circumstances to complete the repairs or maintenance. In exercising the foregoing rights, the Landlord will make reasonable efforts to minimize any disruption of the Tenant’s business.

6.3 Business and Trade Fixtures

The Tenant may install its usual business and trade fixtures, provided that the installation does not damage the Premises.

All business and trade fixtures owned or installed by the Tenant in or on the Premises will remain the property of the Tenant and will be removed by the Tenant at the expiration of the Term or any renewal thereof or at the sooner termination thereof, provided that the Tenant at its expense will repair any damage to the Premises caused by such removal..

6.4 Alterations and Additions

The Tenant will not make any change to the Premises, including the installation of any trade fixtures or leasehold improvements, without having first submitted plans and specifications of the proposed change to the Landlord and having obtained the prior written consent of the Landlord to the proposed change, such consent not to be unreasonably delayed or withheld. All work will be done in a first class manner. The Tenant will obtain and pay for all required building and occupancy permits in respect of its work. The Tenant will, at its own cost and expense, take out any additional insurance coverage reasonably required by the Landlord to protect the respective interests of the Landlord and the Tenant during all periods when any such work is being performed. Notwithstanding anything contained in this Lease, the Landlord will not be obligated to repair, maintain, replace or insure such installations, alterations, additions, partitions and fixtures or anything in the nature of a leasehold improvement made or installed by or on behalf of the Tenant and the Landlord may require the Tenant, at the Tenant’s cost, to remove any or all installations, alterations, additions, partitions, improvements or fixtures made or installed by or on behalf of the Tenant during the Term of any renewal thereof.

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6.5 Liens

If any claim of lien is filed against the Premises by any person claiming against the Tenant, the Tenant will take all necessary steps to have the claim of lien cancelled and discharged from title to the Premises within 30 days of the date the Tenant has knowledge of such filing and the Tenant will indemnify and save the Landlord harmless from any and all loss, cost, expense, damage and liability relating to such claim of lien.

ARTICLE 7

INSURANCE/INDEMNIFICATION

7.1 Tenant’s Insurance

(a) The Tenant will, at its sole cost, during any period that the Tenant occupies the Premises, take out and maintain in full force and effect, the following:

(i) “all risks” insurance (or its equivalent), including earthquake, fire, flood and sewer backup perils, upon all merchandise, stock-in-trade, furniture, fixtures, equipment, leasehold improvements and other property of every kind and description located at the Premises, owned by the Tenant or for which the Tenant is responsible or legally liable, in an amount at least equal to the full insurable value thereof, calculated on a full replacement cost basis;

(ii) “comprehensive form” boiler and machinery insurance (or its equivalent) upon any boilers, pressure vessels or mechanical equipment located at the Premises in such amount as the Landlord may reasonably require from time to time;

(iii) commercial bodily injury and property damage liability insurance (or its equivalent) applying to the operations of the Tenant carried on, in and from the Premises and which will include, without limitation, personal injury liability, product liability, contractual liability, non-owned automobile liability, protective liability and Tenant’s legal liability with respect to the occupancy by the Tenant of the Premises; and such insurance will be written for an amount of not less than $2,000,000.00.

(b) All policies of liability insurance referred to in this Section 7.1 will name the Landlord as additional insured and provide that the Landlord will be insured in the same manner and to the same extent as if separate policies had been issued to the Landlord.

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(c) All policies of insurance referred to in this Section 7.1 will be underwritten by insurers reasonably acceptable to the Landlord and on policy forms satisfactory to the Landlord, reasonably acting. The Tenant will deliver to the Landlord certificates of insurance upon request of the Landlord. Whenever required by the Landlord, the Tenant will provide the Landlord with evidence that all premiums for all insurance policies have been paid.

(d) The Tenant will not do or permit anything to be done upon the Premises which might cause any policy of insurance against loss or damage to the Premises or against legal liability for damage to persons or property caused by the ownership, maintenance, use or occupancy of the Premises, or by reason of the conduct of any business carried on thereon, to be invalidated, and, for such purpose, upon receipt of notice in writing from any insurer of the Premises requiring the execution of works or a discontinuance of any operations in order to correct such situation, the Tenant will immediately comply with the notice.

(e) The Tenant will not do or permit anything to be done or exist upon the Premises that would cause an increase in the cost of the Landlord’s insurance or subject any such insurance to cancellation.

7.2 Landlord’s Insurance

At the Tenant’s own expense, the Landlord will take out and maintain in force such insurance as the Landlord deems appropriate, acting reasonably.

7.3 Indemnify Landlord

Save for where caused by the negligence or wilful misconduct of the Landlord or any person for whom the Landlord is responsible for at law, the Tenant will indemnify and save harmless the Landlord from and against any actions or causes of action, damages, costs, loss or expenses of whatever kind which the Landlord may become liable for or suffer by reason of a breach, violation or non-performance by the Tenant of any covenant, term or provision in this Lease or by reason of any injury occasioned to or suffered by any person or persons or any property damage resulting from the wrongful act, neglect or default on the part of the Tenant or any person for whom the Tenant is responsible for at law or arising out of the use and occupation by the Tenant of the Premises and the business of the Tenant conducted thereon and such liability to indemnify and save harmless will survive any termination of this Lease.

7.4 Indemnify Tenant

Save for where caused by the negligence or wilful misconduct of the Tenant or any person for whom the Tenant is responsible for at law, the Landlord will indemnify and save harmless the Tenant from and against any actions or causes of action, damages, costs, loss or expenses of whatever kind which the Tenant may become liable for or suffer by reason of a breach, violation or non-performance by the Landlord of any covenant, term or provision in this Lease or by reason of any injury occasioned to or suffered by any person or persons or any property damage resulting from the wrongful act, neglect or default on the part of the Landlord or any person for whom the Landlord is responsible for at law and such liability to indemnify and save harmless will survive any termination of this Lease.

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7.5 Damage or Injury

Except for any structural repairs or any structural default of the Building or the Premises and expect to the extent attributable to the negligence or wilful misconduct of the Landlord, or any persons for whom the Landlord, at law, is responsible, the Landlord will not be liable for any personal injury, death or property loss or damage sustained by the Tenant, or its employees, agents, assignees, subtenants, licensees, invitees or those doing business with it in the Premises, and the Tenant hereby releases the Landlord and its directors, officers, shareholders, agents and employees from all claims for damages or other expenses arising out of such personal injury, death or property loss or damage and will indemnify the Landlord and its directors, officers, shareholders, agents and employees against all actions or liabilities arising out of such personal injury, death or property damage or loss.

7.6 Tenant Responsible for Damages

The Tenant acknowledges and agrees that it will be solely responsible, at its own cost, for repairing any and all damage, including without limitation replacement of broken windows, caused to the Premises by the Tenant, its employees, agents, contractors, customers, invitees or other persons for whom the Tenant is responsible at law.

ARTICLE 8

DISPOSITIONS

8.1 Assignment and Subletting

The Tenant shall not make, grant, execute, enter into, consent to, or permit any subletting without the prior written consent of the Landlord, such consent not to be unreasonably withheld, conditioned or delayed. In the event that the Tenant desires to make, grant, execute, enter into, consent to, or permit any subletting then the Tenant shall give prior written notice to the Landlord of such desire, specifying therein the proposed subtenant and providing to the Landlord such information on the nature of the business of the proposed subtenant, together with its financial responsibility and standing, as the Landlord may reasonably require, together with the terms and conditions of the proposed subletting. The Tenant shall also deliver to the Landlord a copy of the sublease intended to be executed by the Tenant and the Transferee, together with the Landlord’s administration fee required hereunder. The Landlord shall, within 10 Business Days thereafter, notify the Tenant in writing that:

(a) it consents to such subletting, or

(b) that it does not consent to such subletting, in which event the Landlord must advise the Tenant of its reason for not consenting.

Notwithstanding the forgoing, provided the Tenant is not then in material default of any of the terms of this Lease, the Tenant shall have the right (without being required to first obtain the Landlord’s prior consent) to assign this Lease or sublet all or a portion of the Premises to (i) an affiliate of the Tenant, or (ii) a third party purchaser of all or substantially all of the Tenants assets in Alberta. The Tenant shall provide a minimum of 60 days written notice to the Landlord of any such assignment or sublet as soon as is reasonably practicable.

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8.2 Tenant’s Charges

The Tenant will:

(a) not mortgage or charge its leasehold interest in the Premises without the prior written consent of the Landlord, such consent not to be unreasonably withheld; and

(b) pay all money owed by it under any mortgage or charge of its leasehold interest in the Premises and immediately upon making all of the payments thereunder, obtain a memorandum of satisfaction or other appropriate document of discharge and register the same at its own expense in the proper land title office or other appropriate office of public record (as applicable).

8.3 Subordination

This Lease is and will be subject, subordinate and postponed to all mortgages and charges, including, without limitation, any debentures and any deeds of trust and mortgages securing bonds and all indentures supplemental thereto (collectively called the “Mortgages”) which may now or hereafter charge the Premises and to all renewals, modifications, consolidations, replacements and extensions of the Mortgages, without execution of any document other than this Lease provided the holder of any such Mortgages delivers a reasonable Non-Disturbance Agreement to the Tenant for execution by the Tenant. Without limiting the generality of the foregoing, the Tenant agrees to execute promptly any document in confirmation of such subordination, postponement and priority which the Landlord reasonably may request.

8.4 Estoppel Certificate

Each party will, at any time and from time to time, upon ten (10) days’ prior written notice from the other party, execute and deliver to the requesting party (or if requested by the Landlord, to the Landlord’s Mortgagees or a prospective purchaser of the Premises), a statement in writing as to the then status of this Lease, including, without limitation, as to whether it is in full force and effect, is modified or unmodified, confirming the Rent payable hereunder and the state of accounts between the Landlord and the Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as reasonably required by the requesting party.

8.5 Exhibit Premises

The Landlord may, on reasonable notice to the Tenant, enter and exhibit the Premises to prospective tenants or subtenants during the six (6) month period prior to the expiry of the Term or any renewal or extension thereof, and to the Landlord’s Mortgagees or prospective mortgagees or purchasers at any time during the Term or any extension thereof. The Landlord will make reasonable efforts to minimize any disruption of the Tenant’s business caused thereby.

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ARTICLE 9

LANDLORD’S COVENANTS

9.1 Quiet Enjoyment

If the Tenant pays the Rent and performs the covenants contained in this Lease, the Tenant will be entitled to quiet enjoyment of the Premises, subject to the rights of owners or occupiers of the easements and rights-of-way, if any, now or hereafter registered against title to the Premises.

9.2 Structural Repairs

The Landlord will, at its own cost, make all necessary structural repairs, both exterior and interior, to the Roof, foundations, sub-floors and perimeter load-bearing walls of the Building and any related repairs to the mechanical and electrical works included within the Premises, including all electrical, mechanical, plumbing, and sprinkler equipment and all heating, ventilating and air-conditioning equipment, which may be required as a direct result of a structural issue. The Landlord shall make reasonable efforts to minimize any disruption to the Tenant’s business as a result of carrying out such repairs.

9.3 Payment of Property Taxes

Subject to the Tenant’s obligation to pay the Property Taxes, the Landlord will pay the Property Taxes in respect of the Premises. If the Landlord is obligated to pay Property Taxes in advance for or during the year or other period in which the Property Taxes are or are to become due, the Landlord may establish a reserve from which to pay the Property Taxes when due, and if it does so, the Tenant will, notwithstanding Section 3.2, pay the Property Taxes in equal monthly instalments in advance on the first day of each month, in amounts sufficient to fund such reserve so as to enable the Landlord to pay the Property Taxes in advance, when due.

9.4 Landlord’s Repairs

Prior to the Commencement Date, the Landlord shall complete the following:

(a) Ensure the electrical, mechanical, plumbing, bay doors, and HVAC systems are in good working order;

(b) Patch all holes in the office, and clean and paint the office area;

(c) Finish office space upstairs to include stairway from shop, conference room, and breakroom with sink, cabinets, and countertops; and

(d) Fix gap between the wall and floor upstairs.

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ARTICLE 10

DEFAULT

10.1 Re-entry on Default

If at any time during the Term or any extension or renewal thereof:

(a) any payments of the Rent or any part thereof, are not paid within thirty (30) days after written notice from the Landlord that they are overdue;

(b) the Tenant breaches or fails to observe or perform any covenant, agreement, stipulation, proviso, condition, rule or regulation contained in this Lease and the breach, non-observance or non-performance continues for 30 days after written notice thereof to the Tenant (or such longer period as may be reasonably necessary in the circumstances in order to rectify such breach or failure);

(c) the Premises are abandoned;

(d) the Term or any extension thereof or any of the goods and chattels of the Tenant is seized or taken in attachment by any creditor of the Tenant;

(e) the Tenant becomes bankrupt or insolvent or takes the benefit of any statute at the time in force for bankrupt or insolvent debtors; or

(f) the Tenant assigns, sublets or parts with possession of all or any part of the Premises without the Landlord’s consent as herein required,

then:

(g) the Landlord, in addition to any other remedy available to it, may re-enter and take possession immediately of the Premises or any part thereof.

10.2 Sale and Reletting

Upon the Landlord becoming entitled to re-enter the Premises under any of the provisions of this Lease, the Landlord, in addition to all other rights and remedies it may have under this Lease or otherwise, may enter the Premises and relet the Premises and receive all rent therefor. The Landlord may also take possession of any business and trade fixtures of the Tenant and any goods and property whatsoever on the Premises, sell them at public or private sale without notice and apply the proceeds of such sale and any rent derived from reletting the Premises, after deducting its costs of conducting such sale and its costs of reletting, in payment of the Rent due under this Lease, and the Tenant will be liable to the Landlord for any deficiency.

10.3 Termination

Upon the Landlord becoming entitled to re-enter upon the Premises under any of the provisions of this Lease, the Landlord, in addition to all other rights and remedies, may immediately terminate this Lease by giving notice in writing addressed to the Tenant of its intention so to do. Upon such termination, Rent will be computed, apportioned and paid in full to the date of such termination, the Tenant will pay any other amounts for which it is liable pursuant to Section 10.5, the Tenant will forthwith deliver up possession of the Premises to the Landlord and the Landlord may re-enter and take possession of the Premises.

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10.4 Payments by Landlord Regarded as Rent

If the Tenant fails to observe or perform any of the covenants or obligations of the Tenant under or in respect of this Lease within the applicable cure periods, the Landlord may at its discretion perform any of such covenants or obligations or any part thereof and for such purpose may do such things as may be necessary and may enter upon the Premises to do such things and all costs and expenses incurred and expenditures made by or on behalf of the Landlord will be paid by the Tenant to the Landlord on demand.

10.5 Landlord’s Expenses Enforcing Lease

If it is necessary for the Landlord to retain the services of any person for the purpose of assisting the Landlord in enforcing any of its rights under this Lease or otherwise available at law, the Landlord may collect from the Tenant the cost of its reasonable legal fees and disbursements in connection with all necessary court proceedings at trial or on appeal as if the same were Rent in arrears.

10.6 Remedies Cumulative

No remedy conferred upon or reserved to the Landlord under this Lease, by statute or otherwise, will be considered exclusive of any other remedy, but the same will be cumulative and in addition to every other remedy available to the Landlord and all such remedies and powers of the Landlord may be exercised concurrently and from time to time and as often as the Landlord deems expedient.

10.7 No Waiver

The failure of the Landlord to exercise any right or option in connection with any breach or violation of any term, covenant or condition herein contained will not be deemed to be a waiver or relinquishment of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of the Rent or any portion hereunder by the Landlord will not be deemed to be a waiver of a preceding breach by the Tenant of any term, covenant or condition of this Lease other than the failure of the Tenant to pay the particular amount of the Rent so accepted, regardless of the Landlord’s knowledge of such preceding breach at the time of acceptance of such amount of the Rent.

10.8 Interest

Interest on any money due to the Landlord under this Lease will be paid by the Tenant and will accrue at the rate of Prime Rate plus 2% per annum, such rate of interest to be calculated and compounded monthly, not in advance, from the respective date upon which any such money becomes due to the Landlord.

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ARTICLE 11

DAMAGE AND DESTRUCTION/EXPROPRIATION

11.1 Damage and Destruction

The Landlord and the Tenant agree that:

(a) if all or any part of the Premises is damaged by fire or other casualty and all or a portion of the Premises is rendered unusable by the Tenant (as determined by the tenant, acting reasonably and in good faith), then Rent will abate, in the proportion that that part of the Premises which is rendered unusable bears to the whole of the Premises.;

(b) except as provided in Subsection 11.1(c), if the Premises are damaged by fire or other casualty insured against by the Landlord or for the Landlord’s benefit, the damage to the Premises will be repaired by the Landlord at its expense except that repairs to installations, alterations, additions, partitions, improvements and fixtures made by or on behalf of the Tenant or any part thereof will be performed by the Tenant. All repairs which the Landlord is required to make under this Subsection 11.1(b) will be made with due diligence, provided that the Landlord will not be liable to the Tenant for any loss or damage suffered by the Tenant as a result of any delay which may arise by reason of adjustment of insurance on the part of the Landlord or on account of labour troubles or any other cause beyond the Landlord’s control; and

(c) notwithstanding the foregoing, the Landlord will have no obligation to repair, reconstruct or restore the Premises or the Building if any of the following occurs:

(i) the Building is damaged by fire or other casualty to the extent that it cannot reasonably be repaired or rebuilt within 180 days after the occurrence of such damage;

(ii) the holder of any mortgage or security agreement encumbering the Premises elects not to permit the insurance proceeds payable upon damage to or destruction of the Building or Premises to be used for such repair, reconstruction or restoration;

(iii) the damage or destruction is not fully covered by insurance maintained by the Landlord or for the Landlord’s benefit; or

(iv) the damage or destruction occurs during the last 24 months of the initial Term or any extension or renewal thereof.

If the Landlord decides not to restore the Building, the Landlord will, within 90 days after the happening of such fire or other casualty, give to the Tenant a notice in writing of such decision and the Term and any extension thereof will expire forthwith and the Tenant will vacate the Premises and surrender them to the Landlord within 90 days of receiving such notice. If the Building is damaged to the extent set out above and the Landlord does not give notice of a decision not to restore, the Landlord will diligently proceed to repair the Building to the extent set out in Subsection 11.1(b). Upon the termination of this Lease by the Landlord as provided in this Subsection 11.1(c), the Tenant’s liability for the Rent will cease as of the day following the fire or casualty.

17

11.2 Expropriation

It the Premises will be acquired or condemned by an authority having the power for such acquisition or condemnation then the Term and any extension thereof will cease from the date of entry by such authority. Nothing in this Lease will prevent the Landlord or the Tenant or both from recovering damages from such authority for the value of their respective interests or for such other damages and expenses allowed by law.

ARTICLE 12

MISCELLANEOUS

12.1 No Warranties

No representations, warranties, agreements or conditions have been made to or for the Landlord or the Tenant other than those expressed herein, and no agreement collateral to this Lease will be binding upon the Landlord or the Tenant unless it is made in writing and duly executed by the Landlord and the Tenant.

12.2 Notices

Any notice, demand, request, consent, invoice, objection or other instrument which may be or is required to be given under this Lease will be in writing and delivered personally or sent by registered mail, postage prepaid, or by e-mail (except that cheques and other documents requiring an original signature by law may not be sent by email), and will be addressed, if to the Landlord, to the address set out in Paragraph 1.1(a)(ii) and, if sent by email, to the email address set out in Paragraph 1.1(a)(iii) and, if to the Tenant, to the Premises or, at the Landlord’s option, to the address set out in Paragraph 1.1(b)(ii) (if different) or to the Tenant’s registered office in Alberta or in any other jurisdiction and, if sent by email, to the email address set out in Paragraph 1.1(b)(iii). In the event of a postal disruption, any notice will only be delivered personally or sent by email.

Any such notice will be conclusively deemed to have been given or made on the day on which such notice is delivered or, if sent by registered mail, then 72 hours following the date of mailing or, if sent by email, on the date the email was transmitted.

Either party may from time to time give written notice to the other (in the manner provided in this Section 12.2) of any change of address or email address of the party giving such notice and, from and after the giving of such notice, the address or email address therein specified will be deemed to be the address or email address of such party for the purpose of giving notice hereunder.

12.3 Overholding

If the Tenant holds over after the expiration of the Term or any extension thereof and the Landlord accepts Rent or any portion thereof, the new tenancy thereby created will be deemed a monthly tenancy and not a yearly tenancy and will be subject to the covenants and conditions contained in this Lease insofar as they are applicable to a monthly tenancy, except that the monthly instalments of Annual Basic Rent will be 150% of the monthly instalments of Annual Basic Rent payable for the last month of the Term or any extension thereof. In the future event that a replacement lease shall subsequently come into effect, any excess rental paid by the Tenant to the Landlord in pursuant of this Section 12.3 shall be adjusted in accordance with such replacement lease for the commencement date thereof and an appropriate adjusting payment shall be made by the Landlord to the Tenant.

18

12.4 Continuation of Obligations

This Lease and the obligations of the Tenant under it will continue in full force and effect notwithstanding any change in the person or persons comprising the Landlord.

12.5 Assignment by Landlord

If there is a sale, lease or other disposition by the Landlord of the Premises or any part thereof, or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder, and to the extent that the purchaser or assignee assumes the covenants and obligations of the Landlord hereunder, the Landlord will, thereupon and without further agreement, be relieved of all further liability with respect to its covenants and obligations.

12.6 Caveat

The Tenant shall be permitted to register a caveat in respect of this lease against title to the Premises provided no financial terms of this Lease are disclosed on said caveat. Such caveat shall be removed by the Tenant within a reasonable time after the Tenant vacates the Premises.

12.7 Acknowledgement re Condominium Unit

The provisions contained in this Lease shall be subject to and deemed to be modified as required to reflect the fact that the Premises comprise a unit in a condominium of which the Landlord is an owner and that certain payments and obligations of the Landlord may in fact be made or performed by the Condominium Corporation, notwithstanding which, the Landlord shall be deemed to have fulfilled its obligations hereunder. It is further understood that certain payments and obligations of the Tenant may in fact be made or performed by the Condominium Corporation and that the costs of the same may be included in the monthly condominium fees rather than charged to the Tenant under certain other Additional Rent provisions found in this Lease. Accordingly, it is agreed that the Additional Rent charged to the Tenant under this Lease shall be without duplication with respect to utilities or services supplied by the Condominium Corporation and paid for by the Tenant by way of condominium fees and charged to the Tenant as Operating Costs.

19

ARTICLE 13

INTERPRETATION

13.1 Interpretation

The parties agree that:

(a) This Lease will be construed in accordance with, and governed by, the laws of Alberta.

(b) All of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision hereof.

(c) If any provision or provisions of this Lease is found to be illegal or not enforceable it or they will be considered separate and severable from this Lease and its remaining provisions will remain in force and be binding upon the parties hereto as though the said provision or provisions had never been included.

(d) Time is of the essence of this Lease.

(e) The headings of the Articles and Sections in this Lease are inserted for convenience only and in no way define, limit, construe or describe the scope or intent of such Articles or Sections nor in any way affect this Lease.

(f) This Lease will extend to, be binding upon and enure to the benefit of the Landlord and the Tenant and their respective successors and permitted assigns.

(g) This Lease sets out the entire agreement between the parties with respect to the subject matter of this Lease and will not be modified, amended or waived except by an instrument in writing duly executed and delivered by the parties or by their successors and permitted assigns.

(h) This agreement may be signed and accepted in counterpart and delivered by facsimile or portable document format (pdf).

SIGNATURE PAGE TO FOLLOW

….INTENTIONAL PAGE BREAK

20

IN WITNESS WHEREOF the parties hereto have duly executed and delivered this Lease as of the day and year first above written.

TENANT :	FLEX LEASING POWER AND SERVICE ULC
	Per:	/s/ [ILLEGIBLE]
LANDLORD :	BENNETT FINANCIAL CORP.
	Per:

EX-10.13

Exhibit 10.13

AGREEMENT TO RENEW LEASE MADE THIS 1^st DAY OF JULY, 2020;

BETWEEN:

BENNETT FINANCIAL CORP.

(hereinafter called “the Landlord”)

-and-

FLEX LEASING POWER AND SERVICE ULC

(hereinafter called “the Tenant”)

WHEREAS by a written lease agreement dated the 1^st day of December, 2015 (the “Lease”), the Landlord leased to the Tenant the premises legally described as follows:

CONDOMINIUM PLAN 1320815

UNIT 2

AND 5000 UNDIVIDED ONE TEN

THOUSANTH SHARES IN THE COMMON

PROPERTY

EXCEPTING THEREOUT ALL MINES AND MINERALS

AND WHEREAS the Term (as described in the Lease) of the Lease was renewed for a further year by a renewal agreement dated December 14, 2018 (the “First Renewal Agreement”);

AND WHEREAS the Term was subsequently renewed for a further year by a renewal agreement dated October 1^st, 2019 (the “Second Renewal Agreement”);

AND WHEREAS the World Health Organization has declared a pandemic caused by the COVID-19 coronavirus (the “Pandemic”);

AND WHEREAS the Pandemic has caused economic hardship to businesses in Alberta and abroad;

AND WHEREAS the Landlord recognizes the Pandemic has affected the business of the Tenant and has offered to abate the Tenant’s monthly rent by 30% ($3,645.00) for a monthly amount payable of $8,505.00 plus GST for the months of June 2020, July 2020, and August 2020 (the “Abatement”);

AND WHEREAS in consideration for the Abatement, the Tenant has agreed to extend the Term of its Lease for one year;

NOW THEREFORE in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereto agree as follows:

1. The Landlord has agreed with the Tenant to renew the Lease for a period of one (1) year to commence on the 1^st day of January, 2021 and end on the 31^st day of December, 2021 (the “Third Renewal Term”).

Page 2

2. The Annual Basic Rent described in 1.1(g) of the Lease shall be $145,800.00 + GST ($18.00/sq ft + GST) for the Third Renewal Term.

3. The Landlord and the Tenant agree that section 3.1(a) of the Lease shall be amended to read as follows:

(a) Beginning on January 1, 2021, Annual Basic Rent for each Lease Year, payable in advance in equal consecutive monthly instalments of $12,150.00 plus GST on the first day of each month in each year of the Third Renewal Term;

4. The Tenant and Landlord further agree that the Lease for this Third Renewal Term shall be on the same terms and conditions as the initial Lease except as set out herein.

5. The Tenant further agrees to pay the following sums, as Additional Rent, on or before January 1^st, 2021:

a. $10,600.00 + GST, which represents 10% of the grading costs for the Premises.

6. All other terms and conditions of the Lease will continue in force and effect, except there shall be no right to renew the Lease unless by agreement between the Parties hereto.

7. This Agreement shall be binding upon and enure to the benefit of the heirs, executors, administrators, successors and assigns of the Parties hereto.

8. This Agreement may be signed and accepted in counterpart and delivered by facsimile or portable document format (pdf).

IN WITNESS WHEREOF the Parties hereto have executed this agreement effective the day, month and year first above written.

BENNETT FINANCIAL CORP.

Per:

/s/ [ILLEGIBLE]

(authorized signatory)

FLEX LEASING POWER AND SERVICE ULC

Per:

/s/ [ILLEGIBLE]

(authorized signatory)

EX-10.14

Exhibit 10.14

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21 . i.l TEXAS REALTORS COMMERCIAL LEASE USE Of THIS FORM BY PERSONS IM-tO ARE NOT MEMBERS OF n;e TEXAS ASSOCIATION OF REAL TORse . INC. IS NOT AlmlORIZED. OTnaa Auocllllon of ~L TO- . Inc. 2014 Table of Contents Paragraph Description Parties .......................................................... 2 Leased Premises ..... ... . .. . . .. . . .... .. . . ... . ... ... .. .. . . 2 Term A. Term ...................................................... 2 B. Delay of Occupancy ............................... 2 C. Certificate of Occupancy ........................ 3 Rent and Expenses A. Base Monthly Rent ................................. 3 B. Addit ional Rent ....................................... 3 C. First Full Month's Rent ........................... 3 D. Prorated Rent ......................................... 3 E. Place of Payment ................................... 3 F. Method of Payment ................................ 3 G. Late Charges ......................................... 4 H. Returned Checks ........ ........................... 4 Security Deposit ........................................... 4 Taxes ............................................................ 4 Utilities .......................................................... 4 Insurance ....................................... ......... ...... 5 Use and Hours ............................................. 6 Legal Compliance ......................................... 6 Signs ............................................................ 6 Access By Landlord ...................................... 7 Move-In Condition ........................................ 7 Move-Out condition ..................................... 7 Maintenance and Repairs A. Cleaning ................................................. 7 B. Conditions Caused by a Party ................ 8 C. Repair & Maintenance Responsibility J 8 D. Repair Persons ...................................... 8 E. HVAC Service Contract ......................... 9 F. Common Areas ...................................... 9 G. Notice of Repairs ................................... 9 H. Failure to Repair .................................... 9 Alterations ..... ............................................... 9 Liens ............................................................. 9 Liability ......................................................... 9 Indemnity ...................................................... 10 Removal of Property & Lockout .................... 1 O 24. 25. 26. 27. 28. 29. 30. 31 . 32. 33. 34. 35. 36. 00 □ □ □ □ 8 D D D P a ragraph D e scription Assignment and Subletting ........................... 11 Relocation . . . . .. . . . .. . . .. . . . . . .. . . . . .. . ... . .. . . .. .. . . . . . . . . . . . 11 Subordination . .. . .... . . .. .... . . .. .. .. .. . ... . .. .. .. .. . .. . . . . . 11 Estoppel Certificates & Financial Info ........... 11 Casualty Loss ............................................... 12 Condemnation .............................................. 12 Attorney's Fees ............................................. 12 Representations ........................................... 12 Brokers ......................................................... 13 Addenda ....................................... ................ 13 Notices ......................................................... 13 Special Provisions ........................................ 14 Agreement of the Parties .............................. 14 ADD ENDA & EXHIBITS {check all that apply) Exhibit A - Building Plans Exhibit B Photos & Finishout Commercial Lease Addendum for Broker's Fee (TXR-2102) Commercial Lease Addendum for Expense Reimbursement {TXR-2103) Commercial Lease Addendum for Extension Option {TXR-2104) . Commercial Lease Addendum for Percentage Rent (TXR-2106) Commercial Lease Addendum for Parking (TXR-2107) Commercial Landlord's Rules and Regulations (TXR-2108) Commercial Leas~ Guaranty (TXR-2109) Commercial Lease Addendum for Right of First Refusal (TXR-2105) Commercial Lease Addendum for Optional Space (TXR-2110) Commercial Lease Addendum for Construction (TXR-2111 ) or (TXR-2112) Commercial Lease; Addendum for Contingencies (TXR-2119) ~~:n u ~~~~~~t:·i~t~~; ~·pti~- ~·-~f·Utilii~~:·········· 10 ~ 22. Holdover ....................................................... 10 x Information About Brokerage Services 23. Landlord's Lien & Security Interest ............... 11 {TXR-2501) (TXR-2101) 4-1-14 Initialed for Identification by Landlord: "'~v , __ , and Tenant: r/, __ _ Page 1 of 15 :\ 'RG Jl,all y Grogp. LLC. 6191 Hl11hw,,y 161,S¥kt ◄J0 lrv lll;TX 750.lll Phone' (l141534•'11l76 Fax. J1111lo Dodd Produced wi1h zipForm® by z,ploglx 18070 Fifteen Milt Road, Fraser, Mich~ "8026 ,.,..,,, JiRb pgix oom nex Le11lng

i.l TEXAS REALTORS COMMERCIAL LEASE USE OF THIS FORM BY PERSONS \MIO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS®, INC. IS NOT AIJll,IORIZEO. OTtlH AHociatlon of REALTORS®, Inc. 2014 1. PARTIES: The parties to this lease are: Landlord: West Epley LLC ___ ___________________________ ; and Tenant: Flex Leasing Power and Service, LLC 2. LEASED PREMISES: A. Landlord leases to Tenant the following described real property, known as the "leased premises," along with all its improvements (Check only one box): D (1) Multiple-Tenant property: Suite or Unit Number ____ containing approximately _ ___ _ square feet of rentable area in _ _________________ (project name) at .-:---:-:----------------~---------------- (address) in ____________ (city), ___________ (county), Texas, which is legally described on attached Exhibit or as follows: ~ (2) Sjngle-Tenant Property: The real property containing approximately _ ___;1:..::o=o-=-00=--- square feet of rentable area at: 13906 W IH 20 E ________________________ _ ___ (address) in Odessa (city), - ---~ M =id=l=an::.:.d;;;...._ ____ (county), Texas, which is legally described on attached Exhibit or as follows: Lot 6 Block 2 Sandridge being 5.01 Acres B. If Paragraph 2A(1) applies: (1) "Property" means the building or complex In which the leased premises are located, inclusive of any common areas, drives, parking areas, and walks; and (2) the parties agree that the rentable area of the leased premises may not equal the actual or useable area within the leased premises and may include an allocation of common areas in the Property. The rentable area D will lil will not be adjusted if re-measured. 3. TERM: A Term: The term of this lease is 60 months and __ ........;. 1-=-6--'---_ days, commencing on: August 15, 2019 (Commencement Date} and ending on August 31, 2024 (Expiration Date}. B. Delay of Occupancy: If Tenant is unable to occupy the leased premises on the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially (TXR-2101) 4-1-14 Initialed for Identification by Landlord: 'fdV. _ , and Tenant: X-., __ _ Page 2 of 15 Producad w!Ch zlpF om'41> by aoploglx 18070 Fifteen Mie Road. Fra ..,,._ M,ctugan 48026 Wttl/ ml ggjx com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ===-:.:.:.....=.:..::.:... _____ _ _____________ _ ___ _ complete or a prior tenant's holding over of the leased premises, Landlord will not be liable to Tenant for such delay and this lease will remain enforceable. In the event of such a delay, the Commencement Date will automatically be extended to the date Tenant is able to occupy the Property and the Expiration Date will also be extended by a like number of days, so that the length of this lease remains unchanged. If Tenant is unable to occupy the leased premises after the 90th day after the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially complete or a prior tenant's holding over of the leased premises, Tenant may terminate this lease by giving written notice to Landlord before the leased premises become available to be occupied by Tenant and Landlord will refund to Tenant any amounts' paid to Landlord by Tenant. This Paragraph 38 does not apply to any delay in occupancy caused by cl~aning or repairs. C. Certificate of Occupancy: Unless the parties agree otherwise, Tenant is responsible for obtaining a certificate of occupancy for the leased premises if required by a governmental body. 4. RENT AND EXPENSES: A. Base Monthly Rent: On or before the first day of each month during this lease, Tenant will pay Landlord base monthly rent as described on attached Exhibit N/A or as follows: Dates Rate per rentable square foot (optional) Base Monthly From To $ Monthly Rate $ Annual Rate Rent$ 08/15/2019 08/31/2019 I rsf / month / rsf / vear 12 051.61 09/01/2019 08/31/2024 / rsf / month / rsf I year 23 350.00 / rsf I month / rsf I vear I rsf / month / rsf / vear I rsf / month / rsf I year B. Additjonal Rent: In addition to the base monthly rent, Tenant will pay Landlord all other amounts, as ~ ovided by the attached (Check all that apply.): (1) Commercial Lease Addendum for Expense Reimbursement (TXR-2103) (2) Commercial Lease Addendum for Percentage Rent (TXR-2106) (3) Commercial Lease Addendum for Parking (TXR-2107) (4) Reimbursement for Property taxes and Property Insurance billed by Landlord. All amounts payable under the applicable addenda are deemed to be "rent" for the purposes of this lease. C. Fjrst Fun Month's Rent: The first full monthly rent is due on or before - - --= S =-"e,:.c p:.:;t e:.: m=b=e=-r _,_1,a..:2::..;0::...;1:.::9 '----- D. Prorated Rent: If the Commencement Date is on a day other than the first day of a month, Tenant will pay Landlord as prorated rent, an amount equal to the base monthly rent multiplied by the following fraction: the number of days from the Commencement Date to the first day of the following month divided by the number of days in the month in which this lease commences. The prorated rent is due on or before the Commencement Date. E. Place of Payment: Tenant will remit all amounts due to Landlord under this lease to the following person at the place stated or to such other person or place as Landlord may later designate in writing: Name: West Epley LLC via Electronic Payment Address: 327 E Loop 338 Odessa TX 79765 F. Method of Payment: Tenant must pay all rent timely without demand, deduction, or offset, except as permitted by law or this lease. If Tenant fails to timely pay any amounts due under this lease or if any (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ , __ , and Tenant: !}C__ , _ _ _ Page 3 of 15 Prowcedw11h z,pfer .. ~y ziplogix 18070 Flt_, Mile Road FraH<. M'Chgan 48026 WM1 n,tgqlx cgm

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ~----~=-'-"-'-.=;.::;....-______________________ _ check of Tenant is returned to Landlord by the institution on which it was drawn, Landlord after providing written notice to Tenant may require Tenant to pay subsequent amounts that become due under this lease in certified funds. This paragraph does not limit Landlord from seeking other remedies under this lease for Tenant's failure to make timely payments with good funds. G. Late Charges: If Landlord does not actually receive a rent payment at the designated place of payment within 5 days after the date it is due, Tenant will pay Landlord a late charge equal to 10% of the amount due. In this paragraph, the mailbox is not the agent for receipt for Landlord. The late charge is a cost associated with the collection of rent and Landlord's acceptance of , late charge does not waive Landlord's right to exercise remedies under Paragraph 20. H. Returned Checks: Tenant will pay$ 35.00 for each check Tenant tenders to Landlord which is returned by the institution on which it is drawn for any reason, plus any late charges until Landlord receives payment. 5. SECURITY DEPOSIT: A. Upon execution of this lease, Tenant will pay$ =2=3,=3-=-50=·--0-=-0 _______ to Landlord as a security deposit. B. Landlord may apply the security deposit to any amounts owed by Tenant under this lease. If Landlord applies any part of the security deposit during any time this lease is in effect to amounts owed by Tenant, Tenant must, within 10 days after receipt of notice from Landlord, restore the security deposit to the amount stated. C. Within 60 days after Tenant surrenders the leased premises and provides Landlord written notice of Tenant's forwarding address, Landlord will refund the security deposit less any amounts applied toward amounts owed by Tenant or other charges authorized by this lease. 6. TAXES: Unless otherwise agreed by the parties, Landlord will pay all real property ad valorem taxes assessed against the leased premises. 7. UTILITIES: A. The party designated below will pay for the following utility charges to the leased premises and any connection charges for the utilities. (Check all that apply.) (1) Water (2) Sewer (3) Electric (4) Gas (5) Telephone (6) Internet (7) Cable (8) Trash (9) ----------- - ---­ (10)AII other utilities ~ X Landlord Tenant X X X X X X X X B. The party responsible for the charges under Paragraph 7 A will pay the charges directly to the utility service provider. The responsible party may select the utility service provider except that if Tenant selects the provider, any access or alterations to the Property or leased premises necessary for the utilities may be made only with Landlord's prior consent, which Landlord will not unreasonably withhold. If Landlord incurs any liability for utility or connection charges for which Tenant is responsible to pay (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~, __ . and Tenant: ?r , _ _ _ Page 4 of 15 PrOCM:ed w'oth i,pFormll) by zipl oglK 18070 Flf1een Mile Road, Fraser, t,11,c;higan 48026 -« ZlDLgpllC com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ===-a.;.:_;..:;..:...=::.... ________________ _ ______ _ and Landlord pays such amount, Tenant will immediately upon written notice from Landlord reimburse Landlord such amount. C. Notice: Tenant should determine if all necessary utilities are available to the leased premises and are adequate for Tenant's Intended use. D. After-Hours HVAC Charges: "HVAC services" means heating, ventilating, and air conditioning of the leased premises. (Check one box only.) 0 (1) Landlord is obligated to provide the HVAC services to the leased premises only during the Property's operating hours specified under Paragraph 9C. 0 (2) Landlord will provide the HVAC services to the leased premises during the operating hours specified under Paragraph 9C for no additional charge and will, at Tenant's request, provide HVAC services to the leased premises during other hours for an additional charge of $ ______ _ per hour. Tenant will pay Landlord the charges under this paragraph immediately upon receipt of Landlord's invoice. Hourly charges are charged on a half-hour basis. Any partial hour will be rounded up to the next half hour. Tenant will comply with Landlord's procedures to make a request to provide the additional HVAC services under this paragraph. ~ (3) Tenant will pay for the HVAC services under this lease. 8. INSURANCE: A During all times this lease is in effect, Tenant must, at Tenant's expense, maintain in full force and effect from an insurer authorized to operate in Texas: (1) public liability insurance naming Landlord as an additional insured with policy limits on an occurrence basis in a minimum amount of: (check only (a) or (b) below) D (a} $1 ,000,000; or ~ (b) $2,000,000. If neither box is checked the minimum amount will be $1 ,000,000. (2) personal property damage insurance for the business operations being conducted in the leased premises and contents in the leased premises in an amount sufficient to replace euch contents after a casualty loss; and 0 (3) business interruption insurance sufficient to pay 12 months of rent payments; B. Before the Commencement Date, Tenant must provide Landlord with a copy of insurance certificates evidencing the required coverage. If the insurance coverage is renewed or changes in any manner or degree at any time this lease is in effect, Tenant must, not later than 10 days after the renewal or change, provide Landlord a copy of an insurance certificate evidencing the renewal or change. C. If Tenant fails to maintain the required insuranee in full force and effect at all times this lease is in effect, Landlord may: (1) purchase insurance that will provide Landlord the same coverage as ,he required insurance and Tenant must immediately reimburse Landlord for such expense; or (2) exercise Landlord's remedies under Paragraph 20. D. Unless the parties agree otherwise, Landlord will maintain in full force and effect insurance for: (1) fire and extended coverage in an amount to cover the reasonable replacement cost of the improvements of the Property; and (2) any public liability insurance in an amount that Landlord determines reasonable and appropriate. E. If there is an increase in Landlord's insurance premiums for the leased premises or Property or its contents that is caused by Tenant, Tenant's use of the leased premises, or 1ny improvements made by or for Ten ant, Tenant will, for each year this lease is in effect. pay Landlord the increase immediately {TXR-2101) 4-1-14 Initialed for Identification by Landlord: .{\/ . __ . and Tenant:~, ___ Page 5 of 15 Produced with zjpFcnnlD by ziplogD< 18070 Fillean M,le Road. F rH et, Michigan 48026 www.zml og,x com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ..:;;..::==--..;.:;.;.....:...=.;~------------------------- after Landlord notifies Tenant of the increase. Any charge to Tenant under this Paragraph 8E will be equal to the actual amount of the increase in Landlord's insurance premium. 9. USE ANO HOURS: A. Tenant may use the leased premises for the following purpose and no other: General Office and administrative work, storage and maintenance of gas powered generators, trailers, trucks, electrical equipment, and other equipment owned, leased, or used by Tenant. B. Unless otherwise specified in this lease, Tenant will operate and conduct its business in the leased premises during business hours that are typical of the industry in which Tenant represents it operates. C. The Property maintains operating hours of (specify hours, days of week, and if inclusive or exclusive of weekends and holidays): as determined by Tenant 10. LEGAL COMPLIANCE: A. Tenant may not use or permit any part of the leased premises or the Property to be used for: (1) any activity which is a nuisance or is offensive, noisy, or dangerous; (2) any activity that interferes with any other tenant's normal business operations or Landlord's management of the Property; (3) any activity that violates any applicable law, regulation, zoning ordinance, restrictive covenant, governmental order, owners' association rules, tenants' association rules, Landlord's rules or regulations, or this lease; (4) any hazardous activity that would require any insurance premium on the Property or leased premises to increase or that would void any such insurance; (5) any activity that violates any applicable federal, state, or local law, including but not limited to those laws related to air quality, water quality, hazardous materials, wastewater, waste disposal, air emissions, or other environmental matters; (6) the permanent or temporary storage of any hazardous material; or (7) Steam Cleaning and Power Washing in approved areas only. No employee Housing or lodging on the property. No water sales from the property. B. "Hazardous material" means any pollutant, toxic substance, hazardous waste, hazardous material, hazardous substance, solvent, or oil as defined by any federal, state, or local environmental law, regulation, ordinance, or rule existing as of the date of this lease or later ena. cted. C. Landlord does not represent or warrant that the leased premises or Property conform to applicable restrictions, zoning ordinances, setback lines, parking requirements, impervious ground cover ratio requirements, and other matters that may relate to Tenant's intended use, . Tenant must satjsfy itself that the leased premises may be used as Tenant intends by independently investigating all matters related to the use of the leased premises or Property. Tenant agrees that it js not relying on any warranty or representation made by Landlord, Landlord's agent, or any broker concerning the use of the leased premises or Property, 11. SIGNS: A. Tenant may not post or paint any signs or place any decoration outside the leased premises or on the Property without Landlord's written consent. Landlord may remove any unauthorized sign or decorations, and Tenant will promptly reimburse Landlord for its cost to remove any unauthorized sign or decorations. (TXR-2101) 4•1-14 Initialed for Identification by Landlord: ~jl/ , __ , and Tenant~. ___ Page 6 of 15 Produc:edwilh z,pFonr,eby zil)LoglX 18070 Fjjeen Mile Road. Fraser, M' ~ 48026 www ZIPb999 G9ID

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -====-'=-;...:;.:..-z.. _ ______________________ _ B. Any authorized sign must comply with all laws, restrictions, zoning ordinances, and any governmental order relating to signs on the leased premises or Property. Landlord may temporarily remove any authorized sign to complete repairs or alterations to the leased premises or the Property. C. By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move­ out and at Tenant's expense, to remove, without damage to the Property or leased premises, any or all signs or decorations that were placed on the Property or leased premises by or at the request of Tenant. Any signs or decorations that Landlord does not require Tenant to remove and that are fixtures, become the property of the Landlord and must be surrendered to Landlord at the time this lease ends. 12. ACCESS BY LANDLORD: A. During Tenant's normal business hours Landlord may enter the leased premises for any reasonable purpose, including but not limited to purposes for repairs, maintenance, alterations, and showing the leased premises to prospective tenants or purchasers. Landlord may access the leased premises after Tenant's normal business hours if : (1) entry is made with Tenant's permissi'on; or (2) entry is necessary to complete emergency repairs. Landlord will not unreasonably interfere with Tenant's business operations when accessing the leased premises. B. During the last ~ days of this lease, Landlord may place a "For Lease" or similarly worded sign on the leased premises. 13. MOVE-IN CONDITION: Tenant has inspected the leased premises and accepts it in its present (as-is) condition unless expressly noted otherwise in this lease or in an addendum. Landlord and any agent have made no express or irooUed warranties as to the condition or permitted use of the leased premises or Property. 14. MOVE-OUT CONDITION ANO FORFEITURE OF TENANT'S PERSONAL PROPERTY: A. At the time this lease ends, Tenant will surrender the leased premises in the same condition as when received, except for normal wear and tear. Tenant will leave the leased premises in a clean condition free of all trash, debris, personal property, hazardous materials, and environmental contaminants. B. If Tenant leaves any personal property in the leased premises after Tenant surrenders possession of the leased premises, Landlord may: (1) require Tenant, at Tenant's expense, to remove the personal property by providing written notice to Tenant; or (2) retain such personal property as forfeited property to Landlord. C. "Surrender" means vacating the leased premises and returning all keys and access devices to Landlord. "Normal wear and tear" means deterioration that occurs without negligence, carelessness, accident, or abuse. D. By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move­ out and at Tenant's expense, to remove, without damage to the Property or leased premises, any or all fixtures that were placed on the Property or leased premises by or at the request of Tenant. Any fixtures that Landlord does not require Tenant to remove become the property of the Landlord and must be surrendered to Landlord at the time this lease ends. 15. MAINTENANCE AND REPAIRS: A. Cleanjng: Tenant must keep the leased premises clean and sanitary and promptly dispose of all garbage in appropriate receptacles. D Landlord ~ Tenant will provide, at its expense, janitorial services to the leased premises that are customary and ordinary for the property type. Tenant will maintain any grease trap on the Property which Tenant uses, including but not limited to periodic (TXR-21 01) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant:~, __ _ Page 7 of 15 Producedwilh Zl)FO<mllb-/ ZJplogoc 18070 Fifteen Mole Road, FraSM, Mlchigan 48026 www z10Logn, com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -~~-----........ ~----- ------------------- emptying and cleaning, as well as making any modification to the grease trap that may be necessary to comply with any applicable law. B. Repairs of Condjtjons Caused by a Party: Each party must promptly repair a condition in need of repair that is caused, either intentionally or negligently, by that party or that party's guests, patrons, invitees, contractors or permitted subtenants. c. Repair and Maintenance Responsibility: Except as otherwise provided by this Paragraph 15, the party designated below, at its expense, is responsible to maintain and repair the following specified items in the leased premises (if any). The specified items must be maintained iri clean and good operable condition. If a governmental regulation or order requires a modification to any of the specified items, the party designated to maintain the item must complete and pay the expense of the modification. The specified items include and relate only to real property in the leased premises. Tenant is responsible for the repair and maintenance of its personal property. (Check all that apply.) m ~~~:i=~~"_:.~:a:~•. ~ . .. II~:.'~~'.. ~~~ ~t~~~ . •t~ . ~~' . •.l~~~~~~~~t~ .: ::: N ~/A Lan~ ~ord Te i:~ant (3) Fire protection equipment .................................................................. . (4) Fire sprinkler systems ....................................................................... . (5) Exterior & overhead doors, including closure devices, molding, locks, and hardware .... ........ .......... ... . .. ............... .... .... . .... .... .... .... .. ..... 0 (6) Grounds maintenance, including landscaping and irrigation systems .............................................................................................. 0 (7) Interior doors, including closure devices, frames, molding, locks, and hardware ..................................................................................... . (8) Parking areas and walks .................................................................... . (9) Plumbing systems, drainage systems and sump pumps .................. .. (10) Electrical systems, mechanical systems .......................................... .. (11) Ballast and lamp replacement .......................................................... .. (12) Heating, Ventilation and Air Conditioning (HVAC) systems ............... . (13)HVAC system replacement ................................................................ . (14) Signs and lighting: .............................................................................. . (a) Pylon ............................................................................................ . (b) Facia ............................................................................................ . (c) Monument .................................................................................... . (d) Door/Suite .................................................................................... . (e) Other: _ ______________ ............. X (15) Extermination and pest control, excluding wood-destroying insects. (16) Fences and Gates ............................................................................. . (17) Storage yards and storage buildings ................................................ .. (18) Wood-destroying insect treatment and repairs ................................. .. (19) Cranes and related systems ............................................................. .. (20)N/A (21)M/A (22) All other items and systems .............................................................. .. □ □ X D. Repair Persons: Repairs must be completed by trained, qualified, and insured repair persons. (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ , __ , .tnd Tenant: ,;y-- , __ _ Produced Wllh z,pForm®by z,plogbc 18070 Fifteen M,le Road, FraHr. Mldllgan 40026 www zoplggjx GP!D X X X X X X X X X X X X X X X X Page 8 of 15

13906 W IM 20 E Commercial Lease concerning: Odessa TX 79765 ~=-="'""--'"-'-'--'--'-=------------------------- E. HVAC Servjce Contract: If Tenant maintains the HVAC system under Paragraph 15C(12), Tenant D is ~ is not required to maintain, at its expense, a regularly scheduled maintenance and service contract for the HVAC system. The maintenance and service contract must be purchased from a HVAC maintenance company that regularly provides such contracts to similar properties. If Tenant fails to maintain a required HVAC maintenance and service contract in effect at all times during this lease, Landlord may do so and Tenant will reimburse Landlord for the expense of such maintenance and service contract or Landlord may exercise Landlord's remedies under Paragraph 20. F. Common Areas: Landlord will maintain any common areas in the Prope~y in a manner as Landlord determines to be in the best interest of the Property. Landlord will maintain any elevator and signs in the common area. Landlord may change the size, dimension, and location of any common areas, provided that such change does not materially impair Tenant's use and access to the leased premises. Tenant has the non-exclusive license to use the common areas in compliance with Landlord's rules and regulations. Tenant may not solicit any business in the common areas or interfere with any other person's right to use the common areas. This paragraph does not apply if Paragraph 2A(2) applies. G. Notice of Repairs: Tenant must promptly notify Landlord of any item that is in need of repair and that is Landlord's responsibility to repair. All requests for repairs to Landlord must be in writing. H. Failure to Repair: Landlord must make a repair for .which Landlord is responsible within a reasonable period of time after Tenant provides Landlord written notice of the needed repair. If Tenant fails to repair or maintain an item for which Tenant is responsible within 4G days after Landlord provides Tenant written notice of the needed repair or maintenance, Landlord may: (1) repair or maintain the item, without liability for any damage or loss to Tenant. and Tenant must immediately reimburse Landlord for the cost to repair or maintain; or (2) exercise Landlord's remedies under Paragraph 20. 16. ALTERATIONS: A. Tenant may not alter (including making any penetrations to the roof, exterior walls or foundation), improve, or add to the Property or the leased premises without Landlord's written consent. Landlord will not unreasonably withhold consent for the Tenant to make reasonable non-structural alterations. modifications, or improvements to the leased premises. B. Tenant may not alter any locks or any security devices on the Property or the leased premises without Landlord's consent. If Landlord authorizes the changing, addition, or rekeying of any locks or other security devices, Tenant must immediately deliver the new keys and access devices to Landlord. C . If a governmental order requires alteration or modification to the leased premises, the party obligated to maintain and repair the item to be modified or altered as designated in Paragraph 15 will, at its expense, modify or alter the item in compliance with the order and in compliance with Paragraphs 16A and 17. D. Any alterations, improvements, fixtures or additions to the Property or leased premises installed by either party during the term of this lease will become Landlord's property and must be surrendered to Landlord at the time this lease ends, except for those fixtures Landlord requires Tenant to remove under Paragraph 11 or 14 or if the parties agree otherwise in writing. 17. LIENS: Tenant may not do anything that will cause the title of the Property or leased premises to be encumbered in any way. If Tenant causes a lien to be filed against the Property or leased premises, Tenant will within 20 days after receipt of Landlord's demand: (1) pay the lien and have the lien released of record; or (2) take action to discharge the lien. Tenant will provide Landlord a copy of any release Tenant obtains pursuant to this paragraph. 18. LIABILITY: Jo the extent permitted by law, Landlord is NOT responsible to Tenant or Tenant's employees, patrons, guests. or invitees for any damages, injuries, or losses to person or property caused by: (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant: ~ . ___ Page 9 of 15 Produced will\ z,pFoor,4!1 by ziploglx 18070 Fofteen Mile Road. Fraser, M,a,,gan 48026 www ziploqQC com Flntn1lng

13906 W IH 20 E Commercial Lease conceming: .,_ O=de=s:.:::s.:.ia...:T.:..:X~7:..:9c.:.7;::.:65::,__ ___________________ _ __ _ A an act, omission. or neglect of: Tenant: Tenant's agent: Tenant's guest; Tenant's employees· Tenant's patrons; Tenant's jnyitees: or any other tenant on the Property: B. fire, flood, water leaks, ice, snow, hail, winds, explosion. smoke riot. strike. interruption of utilities, theft, burgiacy robbery. assault. vandalism other persons. environmental contaminants, or other occurrences or casualty losses. 19. INDEMNITY: Each party will indemnify. defend, and hold the other party harmless from any property damage. personal injury, suits, actions. ljabjljties. damages, cost of repairs or service to the leased premises or Property or any other loss caused, negligently or otherwise. by that party or that party's employees, patrons guests, or invitees. 20. DEFAULT: A. If Landlord fails to comply with this lease within 30 days after Tenant notifies Landlord of Landlord's failure to comply, Landlord will be in default and Tenant may seek any remedy provided by law. If, however, Landlord's non-compliance reasonably requires more than 30 days to cure, Landlord will not be in default if the cure is commenced within the 30-day period and is diligently pursued. B. If Landlord does not actually receive at the place designated for payment any rent due under this lease within 5 days after it is due, Tenant will be in default. If Tenant fails to comply with this lease for any other reason within 10 days after Landlord notifies Tenant of its failure to comply, Tenant will be in default. C. If Tenant is in default, Landlord may, with at least .a days written notice to Tenant: (i) terminate this lease, or (ii) terminate Tenant's right to occupy the leased premises without terminating this lease and may accelerate all rents which are payable during the remainder of this lease or any renewal period. Landlord will attempt to mitigate any damage or loss caused by Tenant's breach by using commercially reasonable means. If Tenant is in default, Tenant will be liable for: (1) any lost rent; (2) Landlord's cost of reletting the leased premises, including brokerage fees, advertising fees, and other fees necessary to relet the leased premises; (3) repairs to the leased premises for use beyond normal wear and tear; (4) all Landlord's costs associated with eviction of Tenant, such as attorney's fees, court costs, and prejudgment interest; (5) all Landlord's costs associated with collection of rent such as collection fees, late charges, and returned check charges; (6) cost of removing any of Tenant's equipment or fixtures left on the leased premises or Property; (7) cost to remove any trash, debris, personal property, hazardous materials, or environmental contaminants left by Tenant or Tenant's employees, patrons, guests, or invitees in the leased premises or Property; (8) cost to replace any unreturned keys or access devices to the leased ~remises, parking areas, or Property; and (9) any other recovery to which Landlord may be entitled under this lease or under law. 21.ABANDONMENT, INTERRUPTION OF UTILITIES, REMOVAL OF PROPERTY, ANO LOCKOUT: Chapter 93 of the Texas Property Code governs the rights and obligations of the parties with regard to: (a) abandonment of the leased premises; (b) interruption of utilities: (c) removal of Tenant's property; and (d) "lock-out" of Tenant. 22. HOLDOVER: If Tenant fails to vacate the leased premises at the time this lease ends, Tenant will become a tenant-at-will and must vacate the leased premises immediately upon receipt of demand from Landlord. No holding over by Tenant, with or without the consent of Landlord, will extend this lease. Tenant will (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ • and Tenant: ef , __ _ Page 10 of 15 Procu:eo with ~cmie by zlplog,x 18070 F'1eon Mii. Roa<! Frase,. Midligor, 4~ Wfttl ••Q\ gg,x com fle• l.eHing

13906 W IH 20 E Commercial lease concerning: Odessa TX 79765 __ _._-'-'---"--'-"-"------------- - ----------- indemnify Landlord and any prospective tenants for any and all damages caused by the holdover. Rent for any holdover period will be 150% of the base monthly rent plus any additiorlal rent calculated on a daily basis and will be immediately due and payable daily without notice or demand. 23. LAN9LOA:9'8 bliN .t..ND Gi;CUAITV INTEREST: Te eee1:1r:e Tel'laflt'e ~eFferffleRee 1::1REler tl'lis lease, TeRaRt areAts te Laedlerd a lieR emf seeuFjt>; ietereet agaieet an of TeAaRt's AeReMefJlpt eeFeeAel er-eee(h' that is iA U=ie !eaeee ereFAises or QB ihe Prepefly, This lease is e seeuri~ agreemeRt fer u,e l'tlflleeee ef the UAifeFffl G8fflffl8Feial Gede. LenEllerEI Mey file a fiAaReiAg steteMeflt to J'OAeet LaAdlerd's seeuFi~r iMoreot t:1Ader the URi#erm CeMMereiel Geae. 24. ASSIGNMENT AND SUBLETTING: Landlord may assign this lease to any subsequent owner of the Property. Tenant may not assign this lease or sublet any part of the leased premises without Landlord's written consent. An assignment of this lease or subletting of the leased premis~s without Landlord's written consent is voidable by Landlord. If Tenant assigns this lease or sublets any ~art of the leased premises, Tenant will remain liable for all of Tenant's obligations under this lease regardless if the assignment or sublease is made with or without the consent of Landlord. 25. RELOCATION: D A. By providing Tenant with not less than 90 days advanced written notice, Landlord may require Tenant to relocate to another location in the Property, provided that the other location is equal in size or larger than the leased premises then occupied by Tenant and contains similar leasehold improvements. Landlord will pay Tenant's reasonable out-of-pocket moving expenses for moving to the other location. "Moving expenses" means reasonable expenses payable to professional movers, utility companies for connection and disconnection fees, wiring companies for connecting and disconnecting Tenant's office equipment required by the relocation, and printing companies for reprinting Tenant's stationary and business cards. A relocation of Tenant will not change or affect any other provision of this lease that is then in effect, including rent and reimbursement amounts, except that the description of the suite or unit number will automatically be amended. ~ B. Landlord may not require Tenant to relocate to another location in the Property without Tenant's prior consent. 26. SUBORDINATION: A. This lease and Tenant's leasehold interest are and will be subject, subordinate, and inferior to: (1) any lien, encumbrance, or ground lease now or hereafter placed on the leased premises or the Property that Landlord authorizes; (2) all advances made under any such lien, encumbrance, or ground lease; (3) the interest payable on any such lien or encumbrance; (4) any and all renewals and extensions of any such lien, encumbrance, or ground lease; (5) any restrictive covenant affecting the leased premises or the Property; and (6) the rights of any owners' association affecting the leased premises or Property. B. Tenant must, on demand, execute a subordination, attornment, and non-disturbance agreement that Landlord may request that Tenant execute, provided that such agreement is made on the condition that this lease and Tenant's rights under this lease are recognized by the lien-holder. 27. ESTOPPEL CERTIFICATES & FINANCIAL INFORMATION: A. Within 10 days after receipt of a written request from Landlord, Tenant will execute and deliver to Landlord an estoppel certificate that identifies the terms and conditions of this lease. Initialed for Identification by landlord: ~ . __ , and Tenant: ~ . __ _ Page 11 of 15 Procfu"8d will> z,pForn,$ by zlplog,x 18070 Fifteen Milt Road. F,... ,_ Miet\igan ~ www r!PI 9Pil G9fD Fits l.n1oinJ

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -'--'-"-=-.;.;;..c.....a~=------------------------- B. Within 30 days after receipt of a written request from Landlord, T en~mt will provide to Landlord Tenant's current financial information (balance sheet and income statement). Landlord may request the financial information no more frequently than once every 12 months. 28. CASUALTY LOSS: A. Tenant must immediately notify landlord of any casualty loss in the leased premises. Within 20 days after receipt of Tenant's notice of a casualty loss, Landlord will notify Tenant if the leased premises are less than or more than 50% unusable, on a per square foot basis, and if Landlord can substantially restore the leased premises within 120 days after Ten ant notifies Landlord of the casualty loss. B. If the leased premises are less than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord will restore the leased premises to substantially the same condition as before the casualty. If Landlord fails to substantially restore within the time required, Tenant may terminate this lease. C. If the leased premises are more than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord may: (1) terminate this lease; or (2) restore the leased premises to substantially the same condition as before the casualty. If Landlord chooses to restore and does not substantially restore the leased premises within the time required, Tenant may terminate this lease. D. If Landlord notifies Tenant that Landlord cannot substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty loss, Landlord may: (1) choose not to restore and terminate this lease; or (2) choose to restore, notify Tenant of the estimated time to restore, and give Tenant the option to terminate this lease by notifying Landlord within 10 days. E. If this lease does not terminate because of a casualty loss, rent will be reduced from the date Tenant notifies Landlord of the casualty loss to the date the leased premises are substantially restored by an amount proportionate to the extent the leased premises are unusable. 29. CONDEMNATION: If after a condemnation or purchase in lieu of condemnation the leased premises are totally unusable for the purposes stated in this lease, this lease will terminate, If after a condemnation or purchase in lieu of condemnation the leased premises or Property are partially unusable for the purposes of this lease, this lease will continue and rent will be reduced in an amount proportionate to the extent the leased premises are unusable. Any condemnation award or proceeds in lieu of condemnation are the property of Landlord and Tenant has no claim to such proceeds or award. Tenant may seek compensation from the condemning authority for its moving expenses and damages to Tenant's personal property. 30. ATTORNEY'S FEES: Any person who is a prevailing party in any legal proceeding brought under or related to the transaction described in this lease is entitled to recover prejudgment interest, reasonable attorney's fees, and all other costs of litigation from the nonprevailing party. 31. REPRESENTATIONS: A. Tenant's statements in this lease and any application for rental are material representations relied upon by Landlord. Each party signing this lease represents that he or she is of legal age to enter into a binding contract and is authorized to sign the lease. If Tenant makes any misrepresentation in this lease or in any application for rental, Tenant is in default. B. Landlord is not aware of any material defect on the Property that would affect the health and safety of an ordinary person or any environmental hazard on or affecting the Property that would affect the (TXR-2101) 4-1-14 Initialed for Identification by Landlord: * , _ _ , and Tenant: ~ . __ _ Page 12 of 15 Produced w,lh zip~ormll by z,plogix 1&070 Flf1e«i Milo Road, F«uer, Machigal ◄8026 WWW Z!Pb99iJt ggm FlnLn,lna

13906 W IH 20 E Commercial Lease conceming:-=O=de =s= s=a -'-TX-=---7-=9c.:...76=5'---- -------- - - - ---------- - health or safety of an ordinary person, except: NIA -'--'-'-'--'----------- - --- - --- C. Each party and each signatory to this lease represents that: (1) it is not a person named as a Specially Designated National and Blocked Person as defined in Presidential Executive Order 13224; (2) it is not acting, directly or indirectly, for or on behalf of a Specially Designated and Blocked Person; and (3) is not arranging or facilitating this lease or any transaction related to this lease for a Specially Designated and Blocked Person. Any party or any signatory to this lease who is a Specially Designated and Blocked person will indemnify and hold harmless any other person who relies on this representation and who suffers any claim, damage, loss, liability or expense as a result of ihis representation. 32. BROKERS: A. The brokers to this lease are: Principal Broker: -- - -------- K irk Straban Realty Cooperating Broker: _ _ __________ _ NRG Realty Group LLC Agent: Kirk Strahan Address:3915 Tanglewood Lane Odessa, TX 79762 Agent: Justin Dodd Address:6191 Hwy 161 , Ste. 430 Irving TX 75038 Phone & Fax: (432)366-5475 E-mail: kirk@strahanrealty.com (432)366-5477 Phone & Fax: ...,,(2:.:..14--'-'}.=.;534~-7""'9.;..;76 =----------­ E-mail: justin@nrgrealtvgroup.com License No.: __ 53""'6""'60=2 a..-_________ _ License No.: =60::...:1-=- 0"""'10 ____ _ ______ _ __ _ Principal Broker: (Check only one box) Cooperating Broker represents Tenant. ~ represents Landlord only. represents Tenant only. is an intermediary between Landlord and Tenant. B. ~ : [ii (1 ) Principal Brokers fee will be paid according to: (Check only one box). liJ (a) a separate written commission agreement between Principal Broker and: ~ Landlord O Tenant. 0 (b) the attached Commercial Lease Addendum for Broker's Fee (TXR-2102). Ii] (2) Cooperating Broker's fee will be paid according to: (Check only one box). D (a) a separate written commission ~reement between Cooperating Broker and: D Principal Broker D Landlord LJ Tenant. lil (b) the attached Commercial Lease Addendum for Broker's Fee (TXR-2102). 33. ADDENDA: Incorporated into this lease are the addenda, exhibits and other information marked in the Addenda and Exhibit section of the Table of Contents. If Landlord's Rules and Regulations are made part of this lease, Tenant agrees to comply with the Rules and Regulations as Landlord may, at its discretion, amend from time to time. 34. NOTICES: All notices under this lease must be in writing and are effective when hand-delivered, sent by mail, or sent by facsimile transmission to: Landlord at: West Epley LLC Address: 327 E Loop 338, Odessa. Texas 79762 (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ . _ . and Tenant:~, _ _ _ Page 13 of 15 Produced with zipForme by z,plog lx 18070 Fdteen Mile Road. Fn1ter, Michigan 480 26 W'f/W zipLggix oom

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ~~-=--~~~------------ - ----------- Phone: (325)668-1605 Fax:----,,----------- and a copy to: Kirk Strahan Realty LLC Address: 3915 . ----:------:-------------___;_ _________ _ Phone: (432)366-5475 Fax: _____ _ ______ _ ~ Landlord also consents to receive notices by e-mail at: Kirk@kirkstraha1nrealty.com Ten ant at the leased premises, and a copy to: Flex leasing Power and Service, LLC Address: 6400 S. Fiddlers Green Circle, Suite 900, Greenwood VIiiage, co 80111 Phone: _ _______ ____ Fax: 0 Tenant also consents to receive notices by e-mail at: -------------- 35. SPECIAL PROVISIONS: 1) Regarding the Liability Insurance as outlined in Paragraph 8, the insurance policy will include the following as Additional Insured: West Epley, LLC 327 E Loop 338 Odessa, TX, 79762 2) Landlord agrees to add a 25' x 50' covered lighted wash bay to the end of the building. Completed with electricity and water faucet. Pad with aprons and catch basin. 3) Add a 30' wide x 16' over head door between existing shop and wash bay. Door Is in place of the standard 16' x 16' overhead door. 4) Add 5 ton overhead crane to the shop. Installation of crane will not delay commencement date. 5) The Rent will not commence until the building is complete inclusive of power, either from the utility or by backup generator. 6) Landlord will provide a one year warranty on the building including all mechanical systems. 7) Landlord will provide Building plans and photos of example building next door for approval of finishes. 8) Tenant will be allowed to have their vendors install IT, Telecom, furniture, fixtures and equipment in the building and the yard between August 1 and August 14, 2019. 36. AGREEMENT OF PARTIES: A. Entire Agreement: This lease contains the entire agreement between Lan'dlord and Tenant and may not be changed except by written agreement. B. Binding Effect: This lease is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, successors, and permitted assigns. C. Jojnt and Several: All Tenants are jointly and severally liable for all provisions of this lease. Any act or notice to, or refund to, or signature of, any one or more of the Tenants regarding any term of this lease, its renewal, or its termination is binding on all Tenants. D. Controlling Law: The laws of the State of Texas govern the interpretation, performance, and enforcement of this lease. E. Severable Ctauses: If any clause in this lease is found invalid or unenforceable by a court of law, the remainder of this lease will not be affected and all other provisions of this lease will remain valid and enforceable. F. Wajyer: Landlord's delay, waiver, or non-enforcement of acceleration, contractual or statutory lien, rental due date, or any other right will not be deemed a waiver of any other or subsequent breach by Tenant or any other term in this lease. (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant:~ , ___ Page 14 of 15 Produced wlfl'I zipForrneby ziplogix 18070 Fifieen Mlle Roact Fraser M>Chigan 48026 www.Wb99il< com

13906 W IH 20 E Commercial Lease concerning: .;::;O..:::.de:::a.;s:c.:s=a'-'TX:...:..:...:..;79::..::7'-=6.:.5 _ _____________ ~---------- G. Oujet Enjoyment: Provided that Tenant is not in default of this tease, Landlord covenants that Tenant will enjoy possession and use of the leased premises free from material interference. H. force Majeure: If Landlord's performance of a term in this lease is delayed by strike, lock-out, shortage of material, governmental restriction. riot, flood, or any cause outside Landlord's control, the time for Landlord's performance will be abated until after the delay. I. Il!M: Time is of the essence. The parties require strict compliance with the times tor performance. Brokers are not qualified to render legal advice, property inspections, surveys, engineering studies, environmental assessments, tax advice, or compliance Inspections. The parties should seek experts to render such services. READ THIS LEASE CAREFULLY. If you do not understand the effect of this Lease, consult your attorney BEFORE signing. t..dard: West Epley LLC By (signature): ---.....JC....-&:.----..r..,c..;.'------­ Printed Name: -~~u.........1:M11U11a::!::.-------~- Title: _______ ..........,..._ ___ _ By: ________________ _ By (signature): ____________ _ Printed Name: ____________ _ Title: __________ Date: ___ _ (TXR-2101) Tenant: flex Leasing Power and Service LLC By: ________ --rr--------- By (signature): ~~--- Printed Name: DM1N ~ 1/t/C Title: <;vP Date: , ,Z!f · l'j By: _ _______________ _ By (signature): _ ___________ _ Printed Name: ____________ _ Title: _ _________ Date: ___ _ Page 15 of 15 Produced wlih z,pFom,®by zipl.ogaJC 19070 Fll'leen M, .. Road Fra- M~ <l802tl WWW H>Lggjx com

i.1 TEXAS REALT ORS COMMERCIAL LEASE ADDENDUM FOR EXPENSE REIMBURSEMENT USE OF THIS FORM BY PERSONS IMtO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REAL TORS®. INC. 1s NOT AUTliORIZED. m .. u Aasoctatlon or REAL TORS®, lne. 2010 ADDENDUM TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED PARTIES CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 In addition to rent stated in the lease, Tenant will pay Landlord the additional rent described in this addendum. Tenant will pay the additional rent each month at the time the base-monthly rent in the lease is due. A. Definitions: (1) "Tenant's pro rata share" is 100.000 %. (2) "CAM" means all of Landlord's expenses reasonably incurred to maintain. repair, operate, manage, and secure the Property (for example, security, lighting, painting, cleaning, decorations, utilities, trash removal, pest control, promotional expenses, and other expenses reasopably related the Property's operations); CAM does not include capital expenditures, interest, depreciation, tenant improvements, insurance, taxes, or brokers' leasing fees Notwithstanding the foregoing, CAM does include the amortized costs incurred by Landlord in making capital improvements or other modifications to the Property to the extent such improvements or modifications reduce CAM overall. These costs will be amortized over the useful life of the improvement or modification on a straight-line basis; however, in no event will the charge for such amortization included in CAM exceed the actual reduction in CAM achieved by the improvements and modifications. (3) "Insurance" means Landlord's costs to insure the leased premises and the Property including but not limited to insurance for casualty loss, general liability, and reasonable rent loss. (4) "Taxes" means the real property ad valorem taxes assessed against the leased premises and Property inclusive of all general and special assessments and surcharges. (5) "Structural" means all of Landlord's expenses reasonably incurred to maintain, repair, and replace the roof, foundation, exterior walls, load bearing walls and other structural components of the Property. B. Method: The additional rent will be calculated under the following method: Note: "CAM 0 does not include taxes and insurance costs. 0 (1) Base-year expens es: Each month Tenant will pay Tenant's pro rata share of the projected monthly expenses for the Property that exceed the amount of the monthly base-year expenses for the calendar year ____ for: 0 taxes; 0 insurance; D CAM; 0 structural; and □--------- D (2) Expense-stop: Each month Tenant will pay Tenant's pro rata share of the projected mont~ . expenses for the P'3Perty that exceed $ ____ _ __ per square foot per year for: 0 taxes; U insurance; 0 CAM; LJ structural; and □ ---------------------- . I&] (3) .&m: Each month Tenant will pay Tenant's pro rata share of the projected monthly expenses for the Property for: !&] taxes; ~ insurance; I&] CAM; 0 structural; and □ ------------ C. Proiected Monthly Expenses: On or about December 31 of each calendar year, Landlord will project the applicable monthly expenses (those that Tenant is to pay under this addendum} for the following calendar year and will not ify Tenant of the projected expenses. The projected expenses are based on Landlord's estimates of such expenses. The actual expenses may vary. (TXR-2103) 1-26-10 Initialed for Identification by Landlord:~ , __ , and lenant:~ _ _ Page 1 of 2 NRG R.,.liy (lr oup, LLC. 6191 ffll hW I) ' 1 61. Sul .. 430 lrv los 1" X 7~38 Phone· (214)53~797' Fax: Fltx L .. J l■1 J...ii ■ Dodd ProdUCed wrth ZljlForrn4!1 by zlpLogix 18070 Fifteen Mil e Road. Fra,et, Michigan 48026 www zlpLogntcom

Expense Reimbursement Addendum concerning ""'13,..9..,.0.,._&~w .... 1.._. H ..... 2.,.o_.E....,,. O.,,.de,..s..,.s..,a,.._.J...,X._._,79...,.7_..6.._5 ___ ~ - --------- ~ : The applicable projected expenses at the time which the above-referenced lease commences are shown in the table below. The total area of the Property presently used by Landlord for calculating expense reimbursements is 10000 rentable square feet (including any add on factor for common areas). Projected Expenses I $ Monthly Rate I $ Annual Rate 0.20 / rsf I month I 2.00 / rsf / year D. Reconcmation: Within a reasonable time after the end of each calendar year, Landlord will notify Tenant of the actual costs of the applicable expenses (those that Tenant is to pay under this addendum) for the previous year. If the actual costs of the applicable expenses exceed the amounts paid or owed by Tenant for the previous year, Tenant must pay the deficient amount to Landlord within 30 days after Landlord notifies Tenant of the deficient amount. If the actual costs of the applicable expenses are less than the amounts paid by Tenant for the previous year, Landlord will refund the excess to Tenant or will credit the excess to Tenant's next rent payment. Tenant may audit or examine those items in Landlord's records that relate to Tenant's obligations under this addendum. Landlord will promptly refund to Tenant any overpayment revealed by an audit or examination. If the audit or examination reveals an error of more than 5% over the amounts Landlord collected in a calendar year from Tenant under this addendum, Landlord will pay the reasonable cost of the audit or examination. Landlord may not seek a deficiency from Tenant under this paragraph if Landlord fails to timely provide the required notice. E. Special Provisions: Landlord: By: __ =~-H--r~-+-r- / __ By (signature): _ _,, _.,e.L{fl.~Wc..=. _ --1,/L- '---------- Printed Name: ____________ _ Title: ______________ _ _ By: ________________ _ By (signature): ____________ _ Printed Name: ____________ _ Title: _____________ _ _ _ (TXR-2103) 1-26-10 Tenant: _______________ _ By: ~ g f)-- ~ - By (signature): ~ \~ .. - Printed Name: ____________ _ Title: ___ _ ___________ _ By:--------'--------- - By (signature): ___ ;,.._ ____ _ ___ _ Printed Name: ___ .,:_.. ________ _ Title:-------;,---------- - Page 2 of2 Pt~with zipFom,~ by z:lplogo< 18070 F'lll.oen M,le Road. Fraser, Mieh;gan 48026 www zlploplJ< com

i.l TEXAS REALTORS COMMERCIAL LEASE ADDENDUM FOR BROKER'S FEE USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF 1'HE TI:)(AS ASSOCIATION OF REALTORS® INC. IS NOT AUTHORIZED. <PT•xas ANOclalion of REAL TORS®, Inc. 2014 ADDENDUM TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED LANDLORD ANO TENANT CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 A . Leasjng Fees: All leasing fees are earned when the above referenced lease is executed. (1) Landlord will pay Principal Broker a leasing fee calculated and payable as follows: D (a) ______ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: one-half of such amount at the time Landlord and Tenant execute the lease and the remainder on the date the lease commences. D (b) _____ _ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: ---------------------------- -- ~ (c) 3% of all Base Rents within 30 days of Lease Commencement (2) Landlord will pay Cooperating Broker a leasing fee calculated and payable as follows: O (a) ____ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: one-half of such amount at the time Landlord and Tenant execute the lease and the remainder on the date the lease commences. D (b} ____ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows:- - --- - ------------------------- [i] (c} 3% of all Base Rents within 30 days of Lease Commencement B. Renewal and Expansion Fees: If Landlord and Tenant subsequently renew, extend, or expand the lease, including a new lease for more, less, or different space in the Property or in any other property owned, controlled, or managed by Landlord, the brokers will be paid the fees set forth below. The fees will be earned and payable when the extension, renewal, expansion, or new lease is executed or commences, whichever is earlier. (1) _____________________ will pay Principal Broker a renewal fee of: 0 (a) _____ % of all base monthly rents to be paid for the term of1the renewal, extension, or new lease and the same percentage of the expense reimbursements stated or estimated in the lease governing the renewal, extension, or new lease; (TXR-210 2) 4-1-14 Initialed for Identification by Landlord: ~ , __ , and Tenant: ~ . _ Page 1 of 3 SRC RffllyCroep. 1.1.C. 6191 Hlp.,1)' 161,Soit•OO lning TX 7!038 Phone: (214)534,7976 Fax. Jullltl OCtdd Proc1.tce<:I wllh zipF«me by zil'Logix 18070 Fdtaen Mia Road Fraser Micnigan ~ !"«:« t iPl,pgjx com

Addendum for Broker's Fee concerning ...., 13..,9..,06._W........,IH ....... 20,.__E,._.O...,d ... e,..ss...,a,.__ T _..,X,._._79..., 7 ... 6,.._ 5 ______ _ __ _ _ ____ _ D (b) ____ % of all base monthly rents to be paid for the term of the expansion and the same percentage of the expense reimbursements stated or estimated in the lease governing the expansion; or 0 (c) - - - ------- - - ------,-------- (2) Landlord will pay Cooperating Broker a renewal fee of: D (a) ___ _ % of all base monthly rents to be paid for the term of the renewal, extension, or new lease and the same percentage of the expense reimbursements stated or estimated in the lease governing the renewal, extension, or new lease; D (b) ____ % of all base monthly rents to be paid for the term of the expansion and the same percentage of the expense reimbursements stated or estimated in the lease governing the expansion; or 00 (c) 3% of all Base Rent. s within 30 days of Lease Execution C. Fees in the Eyent of a Sale: If, during any time the lease is in effect or during any time Tenant occupies the leased premises, including any extension, renewal, or expansion, Tenant agrees to purchase the leased premises or Property by oral or written agreement or option, brokers will be paid the additional fees set forth below. The additional fees will be earned at the time Landlord and Tenant enter into an agreement for the sale, purchase, or option for the leased premises or Property, and are payable at the time the sale or purchase closes. (1) _ ____ _ __ _ ___ _ ___ _ __ will pay Principal Broker an additional fee of: 0 (a} _____ % of the sales price for the purchase. □ (b) _________________ _ _ __ _ _ (2) _ _________________ will pay Cooperating Broker an additional fee of: 0 (a) % of the sales price for the purchase. 0 (b) - ------- - - ---- - -----,------ - - 0. County: All fees under this addendum are payable in _____________ County, Texas. E. Attorney's Fees: If Landlord, Tenant, or any broker is a prevailing party in any legal proceeding brought as a result of a dispute under this addendum or any transaction related to or contemplated by this addendum, such party will be entitled to recover from the non-prevailing parties all costs of such proceeding, prejudgment interest, and reasonable attorney's fees. F. Special Provisjons: (TXR -2102) 4-1-14 Initialed for Identification by Landlord:~. __ , and Tenant:~. _ _ Page 2 of3 Pr~ With zipFormel by z,plogoc 1 8070 Fifteen Mile Road. Fraser. Mochio-n 48026 WWW zlpLogoc com

Addendum for Broker's Fee concerning .,_ 13,..Q..,,0,..6uWCL.JJIHu.a.20.....,E .._. o_de.., s;i;; s .., a.._. JX-1.A..J]:.;i 9 .r..76K, 5,L_ _ ________________ _ NOTICE: Under Chapter 62, Texas Property Code, Broker is entitled to claim a lien against the Property to secure payment of an eamed commission. Landlord: Tenant: _ __________ _ ____ _ By (signature): - ~~qp.---, 4..-,1::::.....~-- - -- - Printed Name: ...,..:,.._.:.i:,;:..=.w....::::sJ4.:'I-/ __ _ __ _ Title: ( . ) 0 By: ~ l,..,,......__., By (signature): _ _.., ~_. ,_ _ _ /. _ 2 _ .: __ ~ ....; .._ =------- Printed Name: _ _ ______ _ __ _ _ _ Title: ________________ _ By: _ _______________ _ By: _______ -'-- ---- - --- - By (signature): _____________ _ By (signature): ___ ....._ ________ _ _ Printed Name: _ _ ___________ _ Printed Name: _____________ _ Title: ______ _ _ _ _ ______ _ Title: _____ _ _____ _ _ _ __ _ Principal Broker: Cooperating Broker: Broker / Company Name: __ _ ________ _ Broker / Company Name: NRG Realty Group, LLC License No. _ _ _ _ _ License No. 9004023 By (signature): _____________ _ By (signature): _ ____________ _ Printed Name: _____________ _ Printed Name: "'J=- us::.:t::.: in .;.; D::.o::.d::.:d=-- ---- - ---- Title: ________ License No. _ ___ _ Title: Pres License No. 601010 (TXR-210 2) 4-1-14 Page 3 of3 Pr oduce d with z,pFonn® by ziplogix 18070 Fi!t"'1 Mile Road Fraser. MlChlgan 48026 WWW ziploqjx com

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ExhibitB To the Lease agreement between West Epley LLC (Landlord) and Flex Energy Services (Tenant) for the property located at Lot 6 Block 2 Sandridge Addition also known as 13906 W IH 20 E Odessa, Texas. The follow pictures are provided as an example of the finish out to the subject property currently under construction. The final finish may very slightly but the overall quality and construction will be similar to the attached photos. The final building will be a SO' x 200' metal building with a SO' x 25' washbay attached to the north end of the building. The property will also have a 5 ton crane covering the shop area. The interior finishes will include tile flooring, textured and painted walls, a suspended ceiling with 2' x 4' lay in lights. The finish will include an office restroom, breakroom and shop restroom. All of the offices and restrooms will be heated and cooled. Photos are examples of final finishes.

Exhibit B (cont) Exterior finishout will be the building with tan siding and brown trim. Yard will be stablized with a perimeter 6' foot chain link fence and a gate. Inside shop area will be insulated with 8 14' x 16' overhead doors and I - 30' x 16' overhead door on the northend of the shop. Photos are examples of final fmishes.

EX-10.15

Exhibit 10.15

i.l TEXAS REALTORS. COMMERCIAL LEASE AMENDMENT USE OF THIS FORM BY PER SONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS® IS NOT AUTHORIZED. ffl"oxas Association of REALTORSfl>, Inc. 2010 AMENDMENT TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED PARTIES CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 Effective on - - -=--Ju=n '-'-' e :;.......:.. 1,i....;; 2 ;;;..: 0 = 2 :...::. 0 __ , Landlord and Tenant amend the above-referenced lease as follows: D A. Leased Premises: The suite or unit number identified in Paragraph 2A(1) is: D (1) changed to ____ _ D (2) contains approximately ________ _ _ _ square feet. ~ 8. Ifilm: Ix] (1) The length of the term stated in Paragraph 3A is changed to 61 months and 15 days. D (2) The Commencement Date stated in Paragraph 3A is changed to __________ _ Ix] (3) The Expiration Date stated in Paragraph 3A is changed to ____ O _ct _ o_ b_ er _1 _5 ~,_ 2_ 02 _4 ___ _ ~ C. Rent: The amount of the base monthly rent specified in Paragraph 4A is changed to: $ 7,833.55 from ___ 06 _/_ 01 _ /2 _0 _ 2_ 0 __ to ---=- 09 =/= 30 = /2 =0 = 2 c.:;._ 0 __ $ _________ from to ________ _ $ ~m ~ - - - - - - - - - $ ~m ~ - -- - - - - - - $ ~m ~ - ---- - - -- D D. Security Deposit: The amount of the security deposit in Paragraph 5 is changed to $ _ ______ _ _ D E. Maintenance and Repairs: The following item(s) specified in the identified subparagraph of Paragraph 1 SC will be maintained by the party designated below: Para. No. Description Responsible Party ~ NIA~ Landlord ~ Tenant NIA Landlord Tenant N/A Landlord Tenant N/A Landlord Tenant D F. Parking: D (1) Common Parking: The number of vehicles identified in Paragraph A(1) of the Commercial Lease Parking Addendum is changed ____ ___ to vehicles. D (2) Restricted Common Parking for Tenants: The number of vehicles identified in Paragraph A(2) of the Commercial Lease Parking Addendum is changed to ______ _ vehicles. (TXR-2114) 1-26-10 Initialed for Identification by Landlord: ~;l/ , __ , and Tenant: __ , _ _ Page 1 of 2 NRG Really Group, LLC, 6191 Hiahway 161, Sultc430 Irving TX 7503K Phone: (214)534-7976 Fax: Flex Lcasln" Justin Do>dd Produced with zipForm® by ziplogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www zlplgglx com

Amendment to Commercial Lease concerning ""13..,9"'0 ,.,. 6_. W ........ IH ..... 2..,0'-.JE ..,,'--" O,...d..,.e ... s..,sa..,,_, TX.a.....Z .... 9._.7...,_6.,,_ 5 __ _ __ _ __ _ __ _ _ _ _ D (3) Assigned Parking: Tenant's assigned parking areas identified in Paragraph A(3) of the Commercial Lease Parking Addendum is changed to -- - -- - ------ - ------ - - - D (4) Parking Rental: The amount of rent identified in Paragraph B of the Commercial Lease Parking Addendum is changed to$ ____ _ _ __________ _ _ D G. Other: Paragraph(s) ________ are changed to read (cite specific paragraphs and copy the applicable paragraphs verbatim, making any necessary changes): ::••lorn, ::;;;2:/ By(signature): ✓~ Printed Name: ____________ _ Tenant: Flex e Power and Seryjce, LLC By: ~ By (signature): ____________ _ Printed Name: Darin Romine Title: _________ _ Date: __ _ _ Title: SVP Date: 5/29/20 ---- - ----- By: _ _______ _ _______ _ By: _______________ _ _ By (signature): ____________ _ By (signature): _ ___________ _ Printed Name: ____________ _ Printed Name: ____________ _ Title: _ _________ Date: ___ _ Title: __________ Date: ___ _ (TXR-2114) 1-26-10 Page 2 of 2 Produced with zipFonn® by ziplogix 18070 Fift een Mi e Road, Frase r. Mi chigan 48026 WWW ziplpglx oom Flex Lcasini;:

EX-10.16

Exhibit 10.16

EX-10.17

Exhibit 10.17

EX-21.1

Exhibit 21.1

FLEXENERGY GREEN SOLUTIONS, INC.

SUBSIDIARIES OF THE REGISTRANT

 

Name of Subsidiary	State or Other Jurisdiction of Incorporation or Organization
FlexEnergy, Inc.	Delaware
Flex Leasing Power & Service LLC	Delaware
FlexEnergy Energy Systems, Inc.	Delaware
FlexEnergy Support Services, Inc.	Delaware
Flex Power Co.	Delaware
Flex Leasing Power and Service ULC	Alberta, Canada