On May 24, 2023, Koil Energy entered into a Purchase and Sale Agreement/Security Agreement (the “Factoring Agreement”) with Zions Bancorporation, N.A., d/b/a Amegy Bank Business Credit (“Amegy”), which provided for the Company to sell its accounts receivable and other rights to payment to Amegy.

The purchase price for the receivables was the gross amount of the invoice minus the discount. The “discount” means 15% of the gross amount of an invoice that is generated by the rendering of services or selling of goods on a time and materials basis, and 25% of the gross amount of an invoice that is generated by the rendering of services or selling of goods on a milestone billing basis.

The receivables sold bore interest at a rate equal to the Prime Rate plus 2.00%. The Prime Rate had a floor of 8.00% for the purposes of the Factoring Agreement.

The Factoring Agreement was cancelled in May 2026 in conjunction with entering into the asset-based credit line with nFusion. Accordingly, as of June 30, 2026, Koil Energy had no factored invoices outstanding with Amegy, while on December 31, 2025, the Company had $541 of outstanding sales of accounts receivable to Amegy.