As filed with the Securities and Exchange Commission on October 27,November 5, 2021.
Registration No. 333-260111
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
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 x
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. ☐
| | ||||||||||||||
Title of Each Class of Securities to be Registered | | | | Proposed Maximum Aggregate Offering Price(1)(2) | | | | Amount of Registration Fee(3) | | ||||||
Common Stock | | | | | $ | 44,722,220 | | | | | | $ | 4,141.28 | | |
Underwriters’ Warrants | | | | | $ | 1,344,672 | | | | | | $ | 124.24 | | |
Total | | | | | $ | 46,066,892 | | | | | | $ | 4,265.52 | | |
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.
EXPLANATORY NOTE
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.
| | | 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 | | |
| | | As of June 30, 2021 (unaudited) | | |||||||||
(in thousands) | | | Actual | | | As Adjusted(1) | | ||||||
Balance Sheet Data | | | | | | | | | | | | | |
Cash | | | | $ | 667 | | | | | $ | 29,592 | | |
Working capital(2) | | | | $ | 6,711 | | | | | $ | 35,636 | | |
Total assets | | | | $ | 50,207 | | | | | $ | 79,132 | | |
Line of credit | | | | $ | 22,963 | | | | | $ | 22,963 | | |
Total liabilities | | | | $ | 31,825 | | | | | $ | 31,825 | | |
Total stockholder’s equity | | | | $ | 18,382 | | | | | $ | 47,307 | | |
| | | 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 | | |
The following table sets forth our cash and capitalization as of June 30, 2021:
| | | As of June 30, 2021 | | |||||||||
| | | Actual | | | As Adjusted | | ||||||
| | | (in thousands) | | |||||||||
Cash | | | | $ | 667 | | | | | $ | 29,592 | | |
Line of credit | | | | | 22,963 | | | | | | 22,963 | | |
Notes payable, net of current portion | | | | | — | | | | | | — | | |
Capital leases, net of current portion | | | | | 126 | | | | | | 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, 0 shares issued and outstanding, actual; 100,000,000 shares authorized, 13,576,767 shares issued and outstanding, as adjusted | | | | | — | | | | | | 14 | | |
Net parent investment | | | | | 153,776 | | | | | | 153,776 | | |
Additional paid-in capital | | | | | — | | | | | | 28,911 | | |
Accumulated deficit | | | | | (136,146) | | | | | | (136,146) | | |
Accumulated other comprehensive income | | | | | 752 | | | | | | 752 | | |
Total stockholder’s equity | | | | $ | 18,382 | | | | | $ | 47,307 | | |
Total capitalization | | | | $ | 41,471 | | | | | $ | 70,396 | | |
SEC registration fee | $ | 4,266 | ||
FINRA filing fee | $ | 9,500 | ||
Exchange listing fee | $ | 50,000 | ||
Printing and engraving expenses | $ | 180,000 | ||
Legal fees and expenses | $ | 750,000 | ||
Accounting fees and expenses | $ | 2,200,000 | ||
Transfer agent and registrar fees | $ | 4,400 | ||
Miscellaneous expenses | $ | 426,834 | ||
Total | $ | 3,625,000 |
ITEM 14. INDEMNIFICATION OF CONTENTS
| Assumed initial public offering price per share | | | | | | | | | | $ | 9.00 | | |
| 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 | | | | $ | 1.87 | | | | |||||
| Pro forma net tangible book value per share as of June 30, 2021 | | | | $ | 1.87 | | | | |||||
| Increase in pro forma net tangible book value per share attributable to investors purchasing shares in this offering | | | | $ | 1.60 | | | | |||||
| Pro forma as adjusted net tangible book value per share after this offering | | | | $ | 3.47 | | | | |||||
| Dilution per share to investors in this offering | | | | | | | | | | $ | 5.53 | | |
| | | Shares Purchased | | | Total Consideration | | | Average Price Per Share | | |||||||||||||||||||||
| | | Number | | | Percent | | | Amount | | | Percent | | ||||||||||||||||||
Existing stockholder | | | | | 9,687,878 | | | | | | 71.4% | | | | | $ | 126,500,000 | | | | | | 78.3% | | | | | $ | 13.06 | | |
New investors | | | | | 3,888,889 | | | | | | 28.6% | | | | | $ | 35,000,000 | | | | | | 21.7% | | | | | $ | 9.00 | | |
Total | | | | | 13,576,767 | | | | | | 100% | | | | | $ | 161,500,000 | | | | | | 100% | | | | | $ | 11.90 | | |
| | | 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) | | |
| | | 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 | | |
| | | 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 | | |
| | | 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 | | |
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 | | |
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 | | |
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
II-2
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.
| | | | | | | | | | | | 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) | | | | | 9,687,878 | | | | | | 100% | | | | | | 583,333 | | | | | | 9,271,212(2) | | | | | | 68.3% | | | | | | 9,104,545 | | | | | | 67.1% | | | | ||
Named Executive Officers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mark Schnepel | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Wes Kimmel | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Doug Baltzer | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
George Walker | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Thomas Denison(3) | | | | | — | | | | | | — | | | | | | — | | | | | | 208,333 | | | | | | 1.5% | | | | | | — | | | | | | — | | | | ||
Patrick Connelly(4) | | | | | — | | | | | | — | | | | | | — | | | | | | 208,333 | | | | | | 1.5% | | | | | | — | | | | | | — | | | | ||
All executive officers and directors together as a group (6 persons)(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |
| | | 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 | | |
| | | 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 | | |
| | | 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) | | |
| | | 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 | | |
| | | 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 | | |
| | | 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 | | |
| | | 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 | | |
| Years ended December 31, | | | | | | | |
| 2021 | | | | $ | 7,912 | | |
| 2022 | | | | | 491 | | |
| Total | | | | $ | 8,403 | | |
| | | 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 | | |
| | | 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 | | |
| | | 2020 | | | 2019 | | ||||||
Patents | | | | $ | 1,680 | | | | | $ | 1,680 | | |
Accumulated amortization | | | | | (1,344) | | | | | | (1,176) | | |
Intangible assets, net | | | | $ | 336 | | | | | $ | 504 | | |
| Year ending December 31, | | | | | | | |
| 2021 | | | | $ | 168 | | |
| 2022 | | | | | 168 | | |
| Total | | | | $ | 336 | | |
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 | | | | | | | | | | | |
| | | 2020 | | | 2019 | | ||||||
Current | | | | | | | | | | | | | |
Federal | | | | $ | — | | | | | $ | — | | |
State | | | | | 31 | | | | | | 7 | | |
Foreign | | | | | — | | | | | | — | | |
Total current | | | | $ | 31 | | | | | $ | 7 | | |
Deferred | | | | | | | | | | | | | |
Federal | | | | $ | — | | | | | $ | — | | |
State | | | | | — | | | | | | — | | |
Foreign | | | | | — | | | | | | — | | |
Total deferred | | | | | | | | | | | | | |
Total income tax expense | | | | $ | 31 | | | | | $ | 7 | | |
| | | 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% | | |
| | | 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 | | | | $ | — | | | | | $ | — | | |
| 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 | | |
| | | 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 | | |
| For the year ending December 31, | | | | | | | |
| 2021 | | | | $ | 1,300 | | |
| 2022 | | | | | 1,052 | | |
| 2023 | | | | | — | | |
| 2024 | | | | | 26,658 | | |
| Total future principal payments | | | | $ | 29,010 | | |
| | | 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 | | |
| | | 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) | | |
| | | 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 | | |
| | | 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 | | | | | | | | |
| | | 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 | | |
| | | 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 | | |
| Six months ended December 31, 2021 | | | | $ | 4,921 | | |
| 2022 | | | | | 1,078 | | |
| 2023 | | | | | 60 | | |
| Total | | | | $ | 6,059 | | |
| | | 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 | | |
| | | 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 | | |
| | | June 30, 2021 | | | December 31, 2020 | | ||||||
Patents | | | | $ | 1,680 | | | | | $ | 1,680 | | |
Accumulated amortization | | | | | (1,428) | | | | | | (1,344) | | |
Intangible assets, net | | | | $ | 252 | | | | | $ | 336 | | |
| Six months ended December 31, 2021 | | | | $ | 84 | | |
| 2022 | | | | | 168 | | |
| Total | | | | $ | 252 | | |
| | | 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 | | | | | | | | |
| | | 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)% | | |
| | | 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 | | |
| Six months ended December 31, 2021 | | | | $ | — | | |
| 2022 | | | | | — | | |
| 2023 | | | | | — | | |
| 2024 | | | | | 22,963 | | |
| Total future principal payments | | | | $ | 22,963 | | |
| SEC registration fee | | | | $ | 4,266 | | |
| FINRA filing fee | | | | $ | 9,500 | | |
| Exchange listing fee | | | | $ | 50,000 | | |
| Printing and engraving expenses | | | | $ | 180,000 | | |
| Legal fees and expenses | | | | $ | 750,000 | | |
| Accounting fees and expenses | | | | $ | 2,200,000 | | |
| Transfer agent and registrar fees | | | | $ | 4,400 | | |
| Miscellaneous expenses | | | | $ | 426,834 | | |
| Total | | | | $ | 3,625,000 | | |
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, 9,678,878 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.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) | Exhibits. See the Exhibit Index attached to this registration statement, which is incorporated by reference herein. |
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(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 Description | |||||
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. | |||||
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* | Previously filed. |
+ | Management contract or compensatory plan or arrangement. |
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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 27th5th day of October,November, 2021.
FLEXENERGY GREEN SOLUTIONS, INC. | ||
By: | /s/ Mark Schnepel | |
Name: | Mark Schnepel | |
Title: | Chief Executive Officer |
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 | |||||
/s/ Mark Schnepel | Chief Executive Officer | November 5, 2021 | |||||
Mark Schnepel | (Principal Executive Officer) | ||||||
/s/ Wes Kimmel | Chief Financial Officer | November 5, 2021 | |||||
Wes Kimmel | (Principal Financial and Accounting Officer) | ||||||
* | Director | ||||||
* | Director | ||||||
* | Director | ||||||
George Walker |
* By: | /s/ Wes Kimmel | |||||||
Wes Kimmel | ||||||||
Attorney-in-Fact |
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