1-SA

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1-SA

SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A

For the Annual Period Ended December 31, 2020

FLOWER TURBINES, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 024-11330

Delaware

(State or other jurisdiction of
incorporation or organization)

240 Central Ave., IJ

Lawrence , NY. 11559

(Address of principal executive office)

631-552-0284

(Registrant’s telephone number, including area code)

46-3784856

(I.R.S. Employer Identification No.)

In this Special Financial Report, the term “Solutions Vending International,” “we,” or “the company” refers to Flower Turbines, Inc.

This report may contain forward-looking statements and information relating to, among other things, our its business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to our management. When used in this report, the words “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements, which constitute forward looking statements. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contained in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company does not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.

ITEM 1. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations for the twelve-month period ended December 31, 2020 (the “2020 Annual Period”), and the twelve-month period ended December 31, 2019 (the “2019 Annual Period”) should be read in conjunction with our audited consolidated financial statements and the related notes included in this report.

Overview

Our predecessor-in-interest, Flower Turbines, LLC, was formed as a New York limited liability company on September 15, 2013, and converted into Flower Turbines, Inc., a Delaware corporation, on December 27, 2019. Our headquarters are in Lawrence, New York. We develop and manufacture wind turbines.

On March 27, 2019, we formed Flower Turbines B.V., a Netherlands company, to sell, install, and develop sustainable energy solutions in the European Union. In January 2020, we extended our business into the electric mobility vertical through Flower Turbines B.V.’s acquisition of a product line of charging stations, which include stationary poles, outdoor benches, and workstations, which can charge electric vehicles and other products such as mobile phones. The charging stations generate power through wind, solar, and grid energy. We intend to outfit these charging stations with our wind turbines.

Results of Operation

Revenues

For the 2020 Annual Period we had revenues of $147,038, compared to no revenues for the 2019 Annual Period. 

Cost of Goods Sold

For the 2020 Annual Period our costs of goods sold was $370,968, compared to $0 for the 2019 Annual Period. 

Gross Loss

For the 2020 Annual Period our gross loss was $223,930, compared to $0 for the 2019 Annual Period. 

Operating Expenses

For the 2020 Annual Period, our operating expenses were $889,363, consisting of $9,882 for sales and marketing expenses, $241,660 for research and development, and $637,821 for general and administrative costs. For the 2019 Annual Period, our total operating expenses were $545,547, consisting of $23,229 for research and development expenses, $118,530 for sales and marketing expenses, and $403,788 for general and administrative costs. The increase in operating expenses during the 2020 Annual Period, primarily the result of increased general and administrative expenses and research and development as we expanded our operations.

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Loss from Operations

For the 2020 Annual Period we had an operating loss of $1,113,293, compared to an operating loss of $545,547 for the 2019 Annual Period. 

Other Income/Expenses

For the 2020 Annual Period, we had total other income and expenses of -$4,950, compared to other income and expense of $15,390 for the 2019 Annual Period. The higher income during the 2019 Annual Period resulted from a $16,913 gain we received from the sale of shares of Flower Turbines B.V.

Net Loss

For the 2020 Annual Period we had a net loss of $1,118,243, compared to a net loss of $530,157 for the 2019 Annual Period. The increase in net loss during 2020, is primarily a result of increased operating expenses and research and development expenses during 2020 as we expanded our operations.

Liquidity and Capital Resources

Since our inception, we have raised over $4,400,000 through various securities offerings, which we have used for operations, including, approximately $2,100,000 from Regulation CF Campaigns, and approximately $2,300,000 we have raised in our current Regulation A+ offering. As of December 31, 2020, we had $50,251 in cash, compared to $266,596 as of December 31, 2019. As of March 31, 2020, and excluding any future proceeds raised in our current Regulation A+ offering, we had sufficient operating capital to fund our operations through December 31, 2021.

As of December 31, 2020, we had total liabilities in the amount of $275,417 compared to $94,252 in total liabilities as of December 31, 2019.  The increase in total liabilities, primarily resulted from an increase in our accounts payables and the Note payable from the incurrence of $56,135 in debt pursuant to our loan with Rabo Bank, and accounts payable resulting from operating our business.

We will incur significant additional costs in commercializing our products, including, but not limited to, in production, marketing, sales and customer service, and intend to continue to fund our operations through funds received from this Offering. We may also engage in additional debt and/or equity financings as determined to be necessary. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. Accordingly, our independent auditors report includes a paragraph regarding substantial doubt about our ability to continue as a going concern

Debt

On November 4, 2019, Flower Turbines B.V., our subsidiary, entered into an unsecured loan agreement with Rabobank, pursuant to which two installments were advanced having in the aggregate principal amount of $56,135, and which mature in 84 months. This first advance was in the amount of $28,068, bears interest at 7.5% per annum, and requires monthly interest payments for 84 months with a final balloon payment on the maturity date. The second advance was in the amount of $28,067, bears interest at 7.5% per annum, requires interest only payments for the first 24 months, principal and interest payments of $468 for the next 60 months, with a final balloon payment on maturity date. Interest expenses for these loans totaled $_ for the year ending December 31, 2020, and the total unpaid principal balances on the loans were $_ as of December 31, 2020.

Plan of Operations

Throughout 2021, we intend to concentrate on the industrialization and commercialization of our wind turbines and charging stations and to actualize first projects of the latest models.

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The table below outlines significant goals for the next 12 months.

Estimated Start Date	Task	Estimated Costs
Q2 2021	First manufactured products (electronics) ready in US		200,000
	Testing of small and medium size turbines in wind tunnel with third party supervision		100,000
	Begin UL and CE certifications		150,000
Q3 2021	Continue development of manufactured products in US		300,000
	Add business development/operations person in US		200,000
	Expand installations and sales in US		200,000
Q4 2021	Continue development of manufactured products in US		400,000
	New off grid wind product on market in US		200,000
	Develop website,IT, and support team for increased US sales		200,000
	Continue UL and CE certifications		300,000
Q1 2022	Hire international business development manager		200,000
	Introduce largest size turbine to US market		200,000
	Certification activities for turbines		250,000

The extent to which we will be able to complete the milestones outlined above is dependent upon the funds raised in our current Regulation A+ offering. If we do not raise a sufficient amount of funds in the offering, we may not incur all the costs or complete all the milestones outlined above.

ITEM 2.  OTHER INFORMATION

On November 9, 2020, Flower Turbines B.V. amended its Employment Agreement with Roy Osinga, to extend the term of the Agreement through December 31, 2024. We also agreed that at such time as we have $500,000 in cash holdings, after payment of all outstanding accounts payables and invoices due for the following 60 days, Mr. Osinga shall receive a bonus of EU$2,000 for each month during which he provided services, prior to January 1, 2020. The employment agreement, as amended, provides for a monthly base salary of €8,000, and may be terminated, for any reason, by Flower Tubines, B.V., on 90 days notice, and by Mr. Osinga on 45 days notice. The amendment appears as an Exhibit to this Report.

On January 1, 2021, we entered into an Employment Agreement with Mark Daniel Farb, our sole officer and director. Pursuant to the Employment Agreement, we have agreed to pay Dr. Farb $15,000 per month. The Employment Agreement is at will, and may be terminated by either party, by providing 30 days advanced written notice of termination. The Employment Agreement is attached as an Exhibit to this Report.

ITEM 3.  FINANCIAL STATEMENTS

The accompanying semiannual financial statements are unaudited and have been prepared in accordance with the instructions to Form 1-SA. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included, and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that can be expected for the year ending December 31, 2020.

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INDEPENDENT AUDITOR’S REPORT

                      Members of: WSCPA AICPA PCPS 802 N. Washington PO Box 2163 Spokane, Washington 99210-2163 P 509-624-9223 TF 1-877-264-0485 mail@fruci.com www.fruci.com         To the Board of Directors and Stockholders
of Flower Turbines, Inc.       We have audited the accompanying consolidated financial statements of Flower Turbines, Inc., which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.   Management’s Responsibility for the Financial Statements   Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.   Auditor’s Responsibility   Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 from material misstatement.   An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.   We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.   Opinion   In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Flower Turbines, Inc. as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

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Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As disclosed in Note 3 of the financial statements, the Company has not generated profit, has negative cash flows from operations, and is reliant on third-party financing to fund operations. These matters raise substantial doubt about the Company’s 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.

Spokane, Washington

May 4, 2021

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	2020			2019
ASSETS
Current Assets:
Cash and cash equivalents	$	50,251		$	266,596
Prepaid expenses		35,284			21,827
Accounts receivable		8,560			-
Other assets		21,147			2,694
Inventory		40,980			-
Due from officer - related party		-			2,171
Funds held in escrow		186,590			90,939
Total Current Assets		342,812			384,227
Non-Current Assets:
Property and equipment, net		11,130			2,154
Total Non-Current Assets		11,130			2,154
TOTAL ASSETS	$	353,942		$	386,381
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current Liabilities:
Accounts payable	$	98,982		$	29,945
Deferred revenue		94,707			6,447
Accrued expenses		19,587			1,725
Total Current Liabilities		213,276			38,117
Long-Term Liabilities:
Notes payable		62,141			56,135
Total Long-Term Liabilities		62,141			56,135
Total Liabilities		275,417			94,252
Stockholders' Equity:
Common stock, $0.0001 par, 2,500,000 shares authorized, 894,796 and 857,536 shares issued and outstanding as of December 31, 2020 and 2019, respectively.		90			86
Additional paid-in capital		2,465,484			1,553,604
Accumulated deficit		(2,371,498	)		(1,253,255	)
Accumulated other comprehensive loss		(15,551	)		(922	)
Stockholders' equity before noncontrolling interest		78,525			299,513
Equity attributable to noncontrolling interest		-			(7,384	)
Total Stockholders' Equity		78,525			292,129
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	353,942		$	386,381
	$	-		$	-

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	2020			2019
Net revenues	$	147,038		$	-
Cost of net revenues		(370,968	)		-
Gross profit/(loss)		(223,930	)		-
Operating Expenses:
General & administrative		637,821			403,788
Sales & marketing		9,882			118,530
Research and development		241,660			23,229
Total Operating Expenses		889,363			545,547
Loss from operations		(1,113,293	)		(545,547	)
Other Income/(Expense):
Interest expense		(4,945	)		(1,523	)
Interest income		3			-
Other expense		(8	)		-
Gain on sale of interest in subsidiary		-			16,913
Total Other Income/(Expense)		(4,950	)		15,390
Provision for income taxes		-			-
Net loss		(1,118,243	)		(530,157	)
Less:  net loss attributable to noncontrolling interest		-			7,384
Net loss attributable to Flower Turbines, Inc.		(1,118,243	)		(522,773	)
Foreign currency translation loss		(14,629	)		(922	)
Other comprehensive loss	$	(1,132,872	)	$	(523,695	)
Basic and diluted net loss per share	$	(1.28	)	$	(0.64	)
Weighted average shares outstanding - basic and diluted		876,099			815,757

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	Members' Equity						Common Stock
	Membership Units			Members' Equity			Number of Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
Balance at January 1, 2019		773,286		$	102,932			-	$	-	$	-		$	-		$	-		$	-
Issuance of membership units - Regulation CF		84,250			836,697			-		-		-			-			-			-
Offering costs		-			(116,421	)		-		-		-			-			-			-
Conversion to corporation		(857,536	)		(823,208	)		857,536		86		1,553,604			(730,482	)		-			823,208
Net loss		-			-			-		-		-			(522,773	)		(922	)		(523,695	)
Balance at December 31, 2019		-			-			857,536		86		1,553,604			(1,253,255	)		(922	)		299,513
Issuance of membership units - Regulation CF		-			-			37,160		4		910,464			-			-			910,468
Amounts in escrow		-			-			-		-		167,349			-			-			167,349
Offering costs		-			-			-		-		(168,933	)		-			-			(168,933	)
Shares issued in exchange for cash		-			-			100		-		3,000									3,000
Net loss		-			-			-		-		-			(1,118,243	)		(14,629	)		(1,132,872	)
Balance at December 31, 2020		-		$	-			894,796	$	90	$	2,465,484		$	(2,371,498	)	$	(15,551	)	$	78,525

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	2020			2019
Cash Flows From Operating Activities
Net loss	$	(1,118,243	)	$	(522,773	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		5,363			74
Loss attributable to noncontrolling interest		-			(7,384	)
Changes in operating assets and liabilities:
(Increase)/Decrease in prepaid expenses		(13,457	)		(21,047	)
(Increase)/Decrease in other assets		(18,453	)		(2,694	)
(Increase)/Decrease in inventory		(40,980	)		-
Increase/(Decrease) in accounts payable		69,037			19,598
Increase/(Decrease) in accrued expenses		17,862			1,725
Increase/(Decrease) in deferred revenue		87,333			6,448
Net Cash Used In Operating Activities		(1,011,538	)		(526,053	)
Cash Flows From Investing Activities
Purchase of property of equipment		(14,339	)		(2,228	)
Net Cash Used In Investing Activities		(14,339	)		(2,228	)
Cash Flows From Financing Activities
Proceeds from notes payable		6,006			56,135
Advances to related party		2,171			(2,171	)
Proceeds from issuance of member units		-			764,005
Proceeds from issuance of stock		984,917			-
Offering costs		(168,933	)		(96,934	)
Net Cash Provided By Financing Activities		824,161			721,035
Cash effects of foreign currency translation loss		(14,629	)		(922	)
Net Change In Cash		(216,345	)		191,832
Cash at Beginning of Period		266,596			74,764
Cash at End of Period	$	50,251		$	266,596
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	4,945		$	1,523
Cash paid for income taxes	$	-		$	-

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ITEM 4. EXHIBITS

EXHIBITS

1.0	Posting Agreement with StartEngine Crowdfunding, Inc.(1)
2.1	Certificate of Incorporation(2)
2.2	Bylaws (3)
4	Form of Subscription Agreement (4)
6.1	StartEngine Secure Services Agreement (5)
6.2	Employment Agreement with Greg Osinga(6)
6.3	License Agreement with Dr. Mark Daniel Farb(7)
6.4	IP Assignment Agreement(8)
6.5	Stock Option Plan (9)
6.6	Employment Agreement with Daniel Farb (10)
6.7	Amendment to Employment Agreement with Greg Osinga (11)
8.0	Escrow Agreement(12)
12.0	Opinion of Alliance Legal Partners, Inc. for Regulation A+ offering (13)

1.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex1.htm.
2.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex2-1.htm.
3.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex2-2.htm.
4.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex4.htm.
5.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex6-1.htm.
6.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex6-2.htm.
7.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex6-3.htm.

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8.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex6-4.htm.
9.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920130499/tm2030939d4_ex6-5.htm.
10. 11. 12.	Filed herewith. Filed herewith Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex8.htm.
13.	Filed as an exhibit to the Flower Turbines, Inc. Regulation A Offering Statement on Form 1-A (Commission File No. 024-11330) and incorporated herein by reference. Available at, https://www.sec.gov/Archives/edgar/data/1739997/000110465920110299/tm2030939d1_ex12.htm.

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SIGNATURES

Pursuant to the requirements of Regulation A, the issuer has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lawrence , NY., on May 5, 2021.

FLOWER TURBINES, INC.

By	/s/ Mark Daniel Farb
	Title:	Chief Executive Officer, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director
	Dated:	May 5, 2021

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EX1SA-6 MAT CTRCT

Exhibit 6.6

 

Extension of contract:

Date: November 9^th, 2020

This contract is an extension of the existing contract between Flower Turbines BV and Roy Osinga.

The contract is extended for another 4 years, through Dec.31, 2024, unless either party wishes to cancel., this with a 90-day notice for the employer and 45 days for the employee, or both parties agree to change the conditions.

The contract is the same with the following changes:

· The new salary is 8000 Euros per month.

· The sales bonuses will not be continued.

· The definition of competitive products is expanded to include other products sold by Flower Turbines BV in addition to wind turbines.

· When Flower Turbines Inc. has a bank balance of at least $500,000, after all outstanding bills for the upcoming 60 days are paid, Roy will receive a retroactive bonus of 2000 Euros per month worked prior to Jan. 1, 2021.

For Flower Turbines BV and Inc.

 

Mark Daniel Farb, CEO

Employee:

 

Roy Osinga

Correction to Contract for 2021

The statement

When Flower Turbines Inc. has a bank balance of at least $500,000, after all outstanding bills for the upcoming 60 days are paid, Roy will receive a retroactive bonus of 2000 Euros per month worked prior to Jan. 1, 2021.

Had a typo so that it should read:

When Flower Turbines Inc. has a bank balance of at least $500,000, after all outstanding bills for the upcoming 60 days are paid, Roy will receive a retroactive bonus of 2000 Euros per month worked prior to Jan. 1, 2020.

Date: May 3, 2021

 

MD Farb

 

Roy Osinga

EX1SA-6 MAT CTRCT

Exhibit 6.7

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of January 1, 2021 between Flower Turbines, Inc., a Delaware corporation, having an address at P.O. Box 647, Lawrence, New York 11559 ("Employer"), and Mark Daniel Farb, having an address at 240 Central Ave., Lawrence, NY 11559 ("Employee").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee and Employee desires to be employed by Employer upon the terms and conditions hereinafter set forth;

NOW THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:

ARTICLE 1: POSITION AND DUTIES

1.01Agreement to Employ and Acceptance of Employment. Employer hereby employs Employee, and Employee hereby accepts employment, for the position of CEO upon the terms and conditions set forth in this Agreement. Employee agrees to perform diligently and to the best of his abilities the duties and responsibilities appertaining to the position as reasonably directed by Employer. These duties may be modified and updated by Employer from time to time with the consent of Employee, which consent shall not be unreasonably withheld. Employee shall perform all other reasonable duties assigned by Employer and comply with all other reasonable instructions issued by Employer.

1.02Best Efforts. Employee promises to devote his full time during normal business hours to the business and affairs of Employer, to use his best efforts to promote the interests of Employer, and to faithfully and diligently perform his duties and responsibilities. Employee acknowledges that the Employment may sporadically require services outside of normal business hours. In such event, Employer agrees to either provide leave time to compensate for the after-hours Employment or to compensate Employee for the extra time the Employee spent in after-hours Employment.

ARTICLE 2: NATURE AND TERM OF EMPLOYMENT

2.01Term of Employment. The employment of Employee shall start on the date of this Agreement. The employment of Employee shall continue only as long as the services of Employee are satisfactory to Employer, notwithstanding any other provisions of this Agreement. Employer shall be the sole judge as to whether the services of Employee are satisfactory. Employee understands and acknowledges that Employee serves at the pleasure of Employer and that his employment is at will. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employer to terminate the services of Employee at any time.

2.02Good Faith Obligations of the Parties. Employer shall act as a good employer in all dealings with Employee; shall deal with Employee in good faith in all aspects of the employment relationship; and shall take all practicable steps to provide Employee with a safe and healthy work environment. Employee shall perform his duties with all reasonable skill and diligence; shall conduct his duties in the best interests of Employer and the employment relationship; shall deal with Employer in good faith in all aspects of the employment relationship; and shall take all practicable steps to perform the job in a way that is safe and healthy for himself and his fellow employees.

2.03Employee Has No Conflicting Obligations. Employee warrants and represents that Employee has the ability to enter into this Agreement, that entering into and performing this Agreement will not violate any agreement with or obligation to any third party, and that there are no restrictions or obligations to any third party which would restrict or interfere with Employee's performance of his duties or the discharge of his obligations under this Agreement.

ARTICLE 3: COMPENSATION

3.01Salary. Employer shall pay to Employee, for services rendered, a salary at the rate of $15,000 per month. Any further increases in Employee's salary shall be in the sole discretion of Employer. The aforesaid salary, as the same may be increased from time to time, shall constitute the "base salary" for purposes of this Agreement.

3.02Date and Method of Payment. Employee's pay shall be paid on the date and by the method that Employer customarily utilizes for paying employees. The compensation paid by Employer to Employee will be subject to applicable federal, state and local withholding taxes and payroll taxes and such other deductions as may be required by law.

3.03Reimbursement of Expenses. Employer shall pay or reimburse Employee for all reasonable expenses incurred by Employee in the performance of his duties in accordance with the policies and procedures established by Employer. The expenses which Employee may incur shall be ordinary and necessary expenses incurred in a trade or business as defined in federal income tax law. Employee shall provide an itemized account of expenditures and appropriate receipts to Employer, in accordance with policies established by Employer, when requesting reimbursement.

3.04Pay Records. Employer shall maintain proper and accurate attendance and pay records and shall provide Employee with a clear statement of earnings and deductions with each pay.

ARTICLE 4: VACATIONS AND LEAVE

4.01 Vacation. Employee shall be entitled to paid vacation for twenty business days during the first twelve months of employment and twenty business days during each twelve month period thereafter. However, Employee agrees not to take any vacation during the first three months of employment. Employee shall be entitled to carry over up to 20 vacation days from one year to the next. Employee has the right to cancel his vacation days and take payment for those 20 days instead pro-rated. National holidays shall not constitute vacation days. Employee may take his vacation in an uninterrupted break. Although the parties anticipate that vacations will be granted at the times requested by Employee, Employer reserves the right to determine or approve the vacation time in order to ensure the efficient and orderly operation of the business. Upon termination of employment Employee shall not be entitled to any compensation for unused vacation days.

ARTICLE 5: OTHER EMPLOYMENT OBLIGATIONS

5.01Employee to Devote Full Time to Employer. Employee will devote time, attention, and energies to the business of Employer, but during this employment may engage in any other business activity, regardless of whether such activity is pursued for profit, gain or other pecuniary advantage, as long as it does not interfere with his duties for Employer.

5.02Duty of Loyalty. Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interest of Employer and to do no act which would injure the business, interests or reputation of Employer or any of its affiliates. In keeping with these duties, Employee shall make full disclosure of all business opportunities pertaining to Employer or any of its affiliates’ business and shall not appropriate for Employee's own benefit any such business opportunity.

5.03Statements Concerning Employer. Employee shall refrain, both during the employment relationship and after the termination of the employment relationship, from publishing any oral or written statements about Employer or any of its affiliates or any officers, employees, agents or representatives thereof that are slanderous, libelous or defamatory, or that constitute an intrusion into the private lives or personal affairs of any of the foregoing, or that give rise to unreasonable or unfavorable publicity regarding any of the foregoing, or that constitute a misappropriation of the name or likeness of any of the foregoing.

5.04Confidential Information and Trade Secrets. Employee shall not, whether during the term of employment or after its termination for whatever reason, make any unauthorized disclosure of any confidential information or trade secrets of Employer or any of its affiliates, or make any use thereof except in the carrying out of Employee's duties hereunder. Employee shall keep all confidential information and trade secrets of Employer and its affiliates in strict confidence, and shall not misuse, misappropriate, give, sell, disclose, or impart any confidential information or trade secrets to any person, firm, corporation or other entity, other than as is necessary for the proper performance of his duties under this Agreement, or required by law, or consented to in writing by Employer. Confidential information and trade secrets include, without limitation, all proprietary software and system designs owned by or licensed to Employer or any of its affiliates, the marketing plans of Employer and its affiliates, the prices Employer or any of its affiliates obtains or has obtained or at which Employer or any of its affiliates sells or has sold products or services, compensation paid to employees, all confidential information and trade secrets provided to Employer or any of its affiliates by customers or vendors, all financial statements and other information relating to the financial condition of Employer and its affiliates, and all information relating to research and development activities, ideas or projects of Employer or any of its affiliates. Employee agrees to preserve and protect the confidential information and trade secrets of third parties to the same extent and on the same basis as the confidential information and trade secrets of Employer. All files, records, documents, memoranda, note, books, databases, drawings, email, voice mail, specifications, computer programs, mechanisms, devices, equipment or other items in any manner affecting or relating to the business of Employer or any of its affiliates, whether or not they are prepared by Employee, or come into Employee's possession in any other way and whether or not they contain or constitute trade secrets owned by Employer or any of its affiliates, are and shall remain the exclusive property of Employer and its affiliates and shall not be copied or otherwise duplicated or remove from the premises of Employer or any of its affiliates under any circumstances whatsoever without the prior written consent of Employer in each instance. A trade secret is any information, process or idea that is not generally known to persons outside of Employer and its affiliates, which Employer considers confidential, and which gives Employer or any of its affiliates a competitive advantage. All information, ideas, concepts, improvements, discoveries and inventions, whether patentable or not, which are conceived, made, developed or acquired by Employee individually or in conjunction with others during the employment of Employee by Employer, whether or not during working hours or on Employer's premises, which relate to Employer's business, products or services, shall be disclosed by Employee to Employer and shall be the sole and exclusive property of Employer.

5.06Conflicts of Interest. It is agreed that any direct or indirect interest in, connection with, or benefit from any outside activities, particularly commercial activities, may adversely affect Employer or any of its affiliates and may involve a conflict of interest. Employee shall not directly or indirectly knowingly become involved in or engage in any activity which conflicts with the interests of Employer or any of its affiliates. Employee shall not, either personally or as an employee, consultant or agent for any other entity or person, carry on or invest in any business in competition with Employer or any of its affiliates. If, while performing his duties and responsibilities under this Agreement, Employee becomes aware of any potential or actual conflict between his interests and those of Employer or any of its affiliates, then Employee shall immediately inform Employer. Where Employer forms the view that such a conflict does or could exist, it may direct Employee to take actions to resolve that conflict, and Employee shall comply with those directions. When acting in his capacity as Employee, Employee shall not, either directly or indirectly, receive or accept for his own benefit or the benefit of any person or entity other than Employer or any of its affiliates any gratuity, emolument or payment of any kind from any person having or intending to have any business with Employer or any of its affiliates. Notwithstanding the foregoing, Employee may invest in the stock of publicly traded corporations.

5.07Privacy of Clients and Customers. Employee shall not breach the privacy of any client or customer of Employer in the course of his employment.

5.08Non-Competition after Termination of Employment. Employee hereby agrees not to compete directly or indirectly with the business of Employer or any of its affiliates, within Tri-State Region, during the period of employment and for a period of 3 Years following the termination of employment, notwithstanding the cause or reason for termination. As used herein "not to compete" shall mean that Employee shall not own, manage, operate, advise, consult, invest in, be employed in or otherwise assist a business substantially similar to, or competitive with, the present business of Employer or any of its affiliates or such other business activity in which Employer or any of its affiliates may engage during the employment of Employee.

5.09Non-Solicitation of Clients and Customers after Termination of Employment. Employee agrees that following the termination of his employment for whatever reason, she shall not, either personally or as an employee, consultant or agent for any other entity or person, seek to solicit or carry out any work of the same or similar nature, or offer, develop, license or perform any similar product or service, for any client or customer of Employer or any of its affiliates with which Employee had any contact or dealings while employed by Employer. As used herein "similar product or service" shall mean any product or service similar to that offered, licensed, contemplated or developed by Employer or any of its affiliates during the employment of Employee's by Employer. All records of the accounts of Employer and its affiliates, of any nature and whether existing at the time of Employee's employment, procured through the efforts of Employee or obtained by Employee from any other source, and whether prepared by Employee, Employer or otherwise, shall be the exclusive property of Employer or any of its affiliates regardless of who actually purchased the original book, storage media or other record on which the information is recorded. All such records shall be immediately given to Employer on the termination of Employee's employment, whether or not any dispute exists between Employer and Employee. Employee shall not transact any business pertaining to suppliers or customer of Employer or any of its affiliates which, in any manner, would have or would be likely to have a material adverse effect on Employer or any of its affiliates.

5.10Non-Solicitation of Other Employees. Employee agrees that she shall not, either personally, or as an employee, consultant or agent for any other entity or person, solicit or engage or employ any employee of Employer or any of its affiliates with whom Employee had any dealings while employed by Employer. Employee shall not induce any employee of Employer or any of its affiliates to terminate his or his employment with Employer or any of its affiliates, or hire or assist in the hiring of any such employee by any other entity or person.

5.11The Consideration for Employee's Other Obligations. Employee has undertaken the obligations set forth in this Article as part of the consideration for the compensation and benefits to be paid and provided to Employee under this Agreement, and as an additional incentive for Employer to enter into this Agreement.

5.12Enforcement and Remedies. Employee acknowledges that money damages would not be sufficient remedy for any breach of this Article by Employee, and Employer shall be entitled to enforce the provisions of Article by specific performance and injunctive relief as a remedy for any such breach or threatened breach. Said remedies shall not be deemed the exclusive remedies for a breach or threatened breach of this Article, but shall be in addition to all remedies available at law or in equity to Employer and its affiliates, including recovery of damages from Employee or the termination of any payments then owing to Employee under this Agreement.

5.13Reformation. It is expressly understood and agreed that Employer and Employee consider the restrictions contained in this Article to be reasonable and necessary for the protection of the proprietary information and business of Employer and its affiliates. Nevertheless, if any of the foregoing restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions set forth in this Article to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

ARTICLE 6: RESOLVING DISPUTES AND EMPLOYMENT RELATIONSHIP PROBLEMS

6.01Arbitration. Any dispute under this Agreement shall be resolved by binding arbitration. Each party shall select one arbitrator and both arbitrators shall select a third. The arbitration shall be governed by the rules of the American Arbitration Association. Arbitration must be demanded within 21 calendar days of the time when the demanding party knows or should have known of the event or events giving rise to the claim unless a later time is agreed to by the other party. Any awarded rendered shall be made by means of a written opinion explaining the arbitrators' reasons for the award. The arbitrators may not amend or vary any provision of this Agreement. Judgment upon the award rendered by the arbitrators may be entered in any court of competent jurisdiction, which court shall have the power to review such award for compliance with this Agreement.

6.02Injunctive Relief. Employee acknowledges that actual or threatened violations of Article 5 would give rise to irreparable injury to Employer or any of its affiliates, inadequately compensable in damages and, therefore, Employer and its affiliates shall be entitled to seek and obtain injunctive relief against the breach or threatened breach of Employee's obligations and undertakings thereunder, in addition to other legal remedies which may be available.

ARTICLE 7: TERMINATION OF EMPLOYMENT

7.01Voluntary Resignation by Employee. Employment under this Agreement may be terminated by Employee by giving written notice to Employer at least thirty days in advance of the termination date stated in such notice. In the event of a termination of employment pursuant to this provision, Employee shall continue to work for Employer until the stated termination date, unless otherwise requested by Employer. The compensation of Employee shall be adjusted as of the date employment terminates.

7.02Voluntary Termination by Employer. Employment under this Agreement may be terminated by Employer by giving written notice to Employee at least thirty days in advance of the termination date stated in such notice. In the event of a termination of employment pursuant to this provision, Employee may continue to work for Employer until the stated termination date or may terminate his employment prior to said date. The compensation of Employee shall be adjusted as of the date employment terminates.

7.03Termination by Employer for Cause. Employer may terminate the employment of Employee for cause by written notice to Employee stating the specifics of the cause for termination. The causes for termination include: a conviction of a felony, any act involving moral turpitude, or a misdemeanor where imprisonment is imposed; commission of any act of theft, fraud, dishonesty or falsification of any employment or business records of Employer or any of its affiliates; misconduct in connection with the performance of any of Employee's duties including without limitation misappropriation of funds or property of Employer or any of its affiliates, or securing or attempting to secure personally profit in connection with any transaction entered into on behalf of Employer; any violation of law or regulations to which Employer or any of its affiliates is subject; deliberate destruction of any property belonging to Employer or any of its affiliates; harassment of a work colleague or customer; improper disclosure of the confidential or proprietary information of Employer or any of its affiliates; willful actions that Employee knows or should know may have a serious detrimental effect on the business or reputation of Employer or any of its affiliates; serious or repeated failure to follow reasonable instructions of Employer; chronic absenteeism, or failure or inability to perform any reasonable assigned duties after written notice from Employer and a reasonable opportunity to cure; or a material breach by Employee of any provision of this Agreement which is not cured within 30 days written notice. For purposes hereof, termination for "cause" shall not include any act or failure to act on Employee's part if done or omitted to be done by his in demonstrable good faith and with the reasonable belief that his act or omission was in the best interest of Employer or any of its affiliates or pursuant to an express policy of Employer at the time of such act or omission. In the event Employer wishes to investigate any alleged misconduct, Employer may, after discussing the proposal of suspension with Employee and considering Employee's views, suspend Employee on pay while the investigation is carried out.

7.04Obligations of Employee upon Termination. Upon the termination of Employee's employment for any reason, or at any other time upon the request of Employer, Employee shall immediately return to Employer all information, material or property including without limitation computer disks, printouts, manuals, reports, letters, memos, plans, diagrams, security cards, keys, and laptop computers either belonging to or the responsibility of Employer and all copies of that material, which are in Employee's possession or under his control.

ARTICLE 8: MISCELLANEOUS

8.01Notices. All notices, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been properly given if delivered by hand or by Federal Express courier or by registered or certified mail, return receipt requested, with postage prepaid, to Employer or Employee, as the case may be, at their addresses first above written, or at such other addresses as they may designate by notice given hereunder.

8.02Entire Agreement. This Agreement contains the whole and entire agreement between the parties with respect to the subject matter hereof. Each party to this Agreement acknowledges that no representation, inducement, promise or agreement, oral or written, has been made by either party or by anyone acting on behalf of either party, which is not embodied herein.

8.03Changes Must Be In Writing. This Agreement may not be altered, amended, changed, modified, waived or terminated in any respect or particular unless the same shall be in writing signed by the party to be bound.

8.04Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

8.05No Agency or Authority to Contract. Nothing in this Agreement shall be deemed to create a partnership or agency relationship between Employer and Employee or to make Employee jointly liable with Employer for any obligation arising out of the activities or services contemplated by this Agreement. Employee has no right to enter into a contract or otherwise obligate Employer unless Employer gives express written authorization to do so.

8.06Affiliates. As used in this Agreement the term "affiliate" shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership of control with, Employer.

8.07Severability. If any provisions of this Agreement shall be unenforceable or invalid, such unenforceability or invalidity shall not affect the remaining provisions of this Agreement.

8.08Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. Affiliates of Employer shall be third party beneficiaries of Employee's obligations under this Agreement. Employee must personally perform the duties and responsibilities of Employee under this Agreement and no subcontracting or assignment by Employee is permissible unless Employer shall consent thereto in writing.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

FLOWER TURBINES, INC.
By
	President
Mark Daniel Farb