Koil Energy Solutions Inc. (KLNG)

[locustsuc]

We may face penalties if we fail to timely obtain effectiveness of this Registration Statement.

If this Registration Statement is not declared effective by September 3 , 2008 (the “Required Effective Date”), then for each day following the Required Effective Date, until but excluding the date the Commission declares the Registration Statement effective, the Company shall, for each such day, pay each Purchaser with respect to any such failure, as damages, an amount equal to 0.0333% of the purchase price paid by such Purchaser for the shares purchased pursuant to the Purchase Agreement. Furthermore, if a Purchaser is prohibited from selling shares under the Registration Statement as a result of a suspension of more than thirty (30) days or suspensions on more than two (2) occasions of not more than thirty (30) days each in any 12-month period, then for each day on which a suspension is in effect that exceeds the maximum allowed period for suspensions, but not including any day on which a suspension is lifted, the Company shall pay such Purchaser, as damages an amount equal to 0.0333% of the purchase price paid by such Purchaser for its shares pursuant to the Purchase Agreement for each such day. Assuming that this Registration Statement is not declared effective by the Required Effective Date and/or all Purchasers are prohibited from selling their shares under this Registration Statement, we will be required to pay daily damages of $13,332 per day to the Purchasers. As a result, our failure to obtain timely effectiveness of this Registration Statement could cause a material adverse effect on our results of operations and/or force us to pay penalties to the Purchasers.