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EXPLANATORY NOTE

Broadwind Energy, Inc., referred to as the “Company,” “Broadwind” or “we”, “us” or “our,” is filing this Amendment No. 1, referred to as the “Amendment,” to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, referred to as the “Original Form 10-Q,” filed on November 14, 2008 with the Securities and Exchange Commission, referred to as the “SEC,” to correct certain information in “—Item 1. Financial Statements” of Part I of the Original Form 10-Q.

We are making corrections to information in “—Item 1. Financial Statements —Notes to Condensed Consolidated Financial Statements (unaudited) — Note 12 — Income taxes, and Note 18 — Segment information” of Part I of the Original Form 10-Q. These corrections relate to amounts included in such notes concerning (i) the “Provision for income taxes” for the three- and nine-month periods ended September 30, 2008, (ii) the net deferred tax liability as of September 30, 2008 related to temporary differences in indefinite-lived assets, and (iii) total cost of sales and gross profit for the nine-month period ended September 30, 2008.

We believe that the foregoing corrections made in the Amendment are not, individually or in the aggregate, material to our business, financial condition or results of operations.

In addition, pursuant to the rules of the SEC, “—Item 6. Exhibits” of Part II of the Original Form 10-Q has been amended to contain currently dated certifications from our Chief Executive Officer and Chief Financial Officer, as required by Rules 13a-14(a) and 13a-14(b) under the Securities Exchange Act of 1934, as amended, which certifications are filed herewith as Exhibits 31.1, 31.2, 32.1 and 32.2.

Except as required to reflect the items described above, no attempt has been made in this Amendment to modify or update disclosures in the Original Form 10-Q. This Amendment does not reflect events occurring after the filing of the Original Form 10-Q or modify or update any related disclosures. Information not affected by this Amendment is unchanged and reflects the disclosure made at the time of the filing of the Original Form 10-Q with the SEC on November 14, 2008. Among other things, forward-looking statements made in the Original Form 10-Q have not been revised to reflect events that occurred or facts that became known to us after the filing of the Original Form 10-Q, and such forward looking statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with the Original Form 10-Q and the Company’s filings made with the SEC subsequent to the filing of the Original Form 10-Q, including any amendments to those filings, as applicable.

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BROADWIND ENERGY, INC. AND SUBSIDIARIES

INDEX

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BROADWIND ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except share and per share data)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BROADWIND ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)
(in thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BROADWIND ENERGY, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and in thousands, except share and per share data)

Note 1 – Nature of business and summary of significant accounting policies

The accompanying unaudited condensed consolidated financial information has been prepared by Broadwind Energy, Inc., a Delaware corporation (“Broadwind”),  and its subsidiaries (also referred to as “we,” “us,” “our,” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, it does not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of this financial information have been included. Financial results for the interim three and nine-month periods ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. The December 31, 2007 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.  This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007.

Broadwind became a public company in February 2006, after a reverse shell transaction with Blackfoot Enterprises, Inc. which was incorporated in Nevada in 1996.  From the time following the reverse shell transaction through February 2008, the Company was known as Tower Tech Holdings, Inc.  On February 28, 2008 the Company changed its name to Broadwind Energy, Inc., and on June 20, 2008, Broadwind changed its state of incorporation from Nevada to Delaware.  The Company’s principal executive office is located at 47 East Chicago Avenue, Suite 332, Naperville, IL 60540, its phone number is (630) 637-0315 and its website address is www.broadwindenergy.com.

The Company’s business is dedicated to the production and servicing of components for energy and infrastructure-related industries. The Company is primarily focused on manufacturing components for the wind industry and energy-related industries, including: tower support structures through its Tower Tech Systems, Inc. (“Tower Tech”) subsidiary; mining and other heavy equipment through its R.B.A. Inc. (“RBA”) subsidiary; gearing systems through its Brad Foote Gear Works, Inc. (“Brad Foote”) subsidiary; construction, operations, support, maintenance, and component repairs for wind turbines through its Energy Maintenance Service, LLC (“EMS”) subsidiary; and specialized heavy haul trucking services through its Badger Transport, Inc. (“Badger”) subsidiary.

Manitowoc, Wisconsin serves as the main location of the manufacturing facility for Tower Tech, which is currently constructing additional wind tower manufacturing facilities in Brandon, South Dakota and Abilene, Texas.  RBA’s main facility is located in Manitowoc, Wisconsin and RBA also operates in a second facility located in Clintonville, Wisconsin.  Brad Foote has manufacturing and administrative facilities in Cicero, Illinois and Neville Island, Pennsylvania.  EMS is headquartered in Gary, South Dakota and operates service hub facilities in Abilene, Texas and Howard, South Dakota.  Badger is headquartered in Clintonville, Wisconsin with equipment dispatched throughout the United States.

Significant accounting policies disclosed in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007 remain applicable at September 30, 2008, including the following:

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Tower Tech, RBA, Brad Foote, EMS, and Badger. RBA and Brad Foote were acquired by the Company on October 1, 2007 and October 19, 2007, respectively. EMS and Badger were acquired by the Company on January 16, 2008 and June 4, 2008, respectively.  The financial position and results of operations of these subsidiaries are included in the Company’s consolidated financial statements from the date of acquisition. All significant intercompany accounts and transactions have been eliminated in consolidation.

Restricted Cash

The Company received cash down payments on certain contracts, the use of such cash is restricted as per the terms of the contract and relate to product shipments which will take place over the next several quarters, during which time restrictions on the use of such cash will be relieved.

Revenue Recognition

The Company recognizes revenue when the earnings process is complete and when persuasive evidence of an arrangement exists,

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transfer of title has occurred or services have been rendered, the selling price is fixed or determinable, collectability is reasonably assured, and delivery has occurred per the contract terms. Customer deposits and other receipts are deferred and recognized when earned.

Segment reporting

As of September 30, 2008, the Company operates and manages two reporting segments:  Products (formerly Products and Components); and Services (formerly Service, Transportation and Maintenance).  Initially, the Company created a Service and Maintenance segment in January 2008 when it acquired EMS.  In connection with the June 2008 acquisition of Badger, a specialized heavy haul trucking services company, the Company added a transportation component to this segment and created the Service, Transportation and Maintenance segment.  For the three and nine months ended September 30, 2007, the Company operated as a single segment, Towers and Fabrication, as the Company’s only subsidiary in existence as of September 30, 2007 was its Tower Tech subsidiary.  The Towers and Fabrication segment is now part of the Products segment, which also includes the Company’s previously reported Gearing Systems segment.  Refer to Note 18 “Segment information” for summarized financial information of the Company’s segments.

Reclassification

Certain reclassifications have been made in the prior periods financial statements to conform to current period presentation.

Effect of recently issued accounting standards

In February 2007, the FASB issued Statement of Financial Accounting Standards Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115 (“SFAS 159”). This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This standard is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted the provisions of SFAS 159 on January 1, 2008. The Company did not elect to measure any of its financial assets or liabilities using the fair value option of SFAS 159. The Company will assess at each measurement date whether to use the fair value option on any future financial assets or liabilities as permitted pursuant to the provisions of SFAS 159.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). This standard clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. Additionally, it establishes a fair value hierarchy that prioritizes the information used to develop those assumptions.  This standard was adopted and did not have a material impact on the financial statements.

In February 2008, the FASB issued FASB Staff Position No. 157-2 (“FSP 157-2”), which delayed the effective date by which companies must adopt the provisions of SFAS 157. FSP 157-2 defers the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis, to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The adoption of this standard is not anticipated to have a material impact on the Company’s financial position, results of operations, or cash flows.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141R, Business Combinations (“SFAS 141R”), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning after December 15, 2008. Early adoption is not permitted.  SFAS 141R is to be applied prospectively to business combinations for which the acquisition date is on or after the first reporting period beginning on or after December 15, 2008.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”), which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The Company has evaluated the effect of the adoption of SFAS 160, but does not presently anticipate it will have a material effect on its consolidated financial position or results of operations, as all subsidiaries are 100% owned.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and

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The following table summarizes the estimated fair values of the Badger assets acquired and liabilities assumed on the date of the acquisition:

The Company may adjust goodwill as necessary as it finalizes purchase price allocations for acquisitions.  Typical adjustments include outstanding working capital, professional fees and fixed asset valuations.  Goodwill and intangible assets associated with the purchase of Badger are not expected to be deductible for income tax purposes.

In connection with the Badger acquisition, the Company was required to fund approximately $4,500 of equipment purchases that Badger had on order for expansion.  The Company has funded $4,384 of this commitment as of November 3, 2008.

Energy Maintenance Service, LLC

As disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, on January 16, 2008, the Company acquired all of the outstanding membership interests in EMS, a South Dakota-based company engaged in the sale, installation, and repair of wind-powered electric generators. The aggregate purchase price was $32,250, exclusive of $536 of transaction-related costs.  The purchase price consisted of $18,429 of cash and 1,629,834 shares of the Company’s common stock at a price per share of $8.48.  The cash portion of the purchase price was financed by a private placement of Company common stock, as described in Note 10 “Stockholders’ equity” below.

The following table summarizes the estimated fair values of the EMS assets acquired and liabilities assumed on the date of the acquisition:

The Company may adjust goodwill as necessary as it finalizes purchase price allocations for acquisitions. Typical adjustments include outstanding professional fees and fixed asset valuations. Goodwill of $4,561 and other intangibles of $26,490 are expected to be deductible for income tax purposes over 15 years.

The Company does not have any contingent payments or commitments in relation to the acquisition of EMS, with the exception of certain stock options that were awarded as a result of the acquisition. Stock options are a share-based compensation expense and are subject to accounting treatment under SFAS No. 123(R) as discussed in Note 11 “Stock-based compensation”.

Brad Foote Gear Works, Inc.

As disclosed in the Company’s Annual Report filed on Form 10-KSB for the year ended December 31, 2007, on October 19, 2007, the Company acquired all of the outstanding capital stock of Brad Foote, an Illinois-based manufacturer of gearing systems for the wind turbine, oil and gas and energy-related industries. The aggregate consideration paid in connection with the Brad Foote acquisition, which included cash and unregistered shares of the Company’s common stock, was $133,326.

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Pro Forma Financial Information

The following table presents the consolidated financial information for the Company on a pro forma basis, assuming the acquisitions of Brad Foote, EMS and Badger had each occurred as of January 1, 2007. The Company is not including the pro-forma effect of RBA because the impact is not material to its results of operations for the nine-month period ended September 30, 2008 or 2007. The historical financial information has been adjusted to give effect to pro forma items that are directly attributable to the acquisitions and expected to have a continuing impact on the consolidated results. These items include adjustments to increase depreciation related to the stepped-up basis in machinery and equipment, adjust inventory to fair market value, record amortization of intangible assets, increase interest expense for certain long-term notes payable, and reclassify certain items to conform to the Company’s financial reporting presentation.

The table sets forth unaudited financial information and has been compiled from historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transaction occurred on the dates indicated or that may be achieved in the future.

Pro-forma tables illustrate results which are unaudited and are based on an acquired company’s history.  As a result, pro-forma results shown above are subject to adjustment upon audits and other financially qualitative studies done by the Company.

Note 4 – Goodwill and intangible assets

The changes in the gross carrying amount of intangible assets for the nine months ended September 30, 2008 were as follows:

Intangible assets subject to amortization were as follows as of September 30, 2008:

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Amortization expense on trademarks, customer relationships and non-compete agreements, which is being recorded ratably over the estimated life of the related intangible assets, was respectively $2,932 and $8,249 for the three and nine months ended September 30, 2008. There was no such amortization expense for the three and nine months ended September 30, 2007 as the underlying intangible assets were acquired subsequent to September 30, 2007.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2008 were as follows:

(1) Comprised primarily of purchase price allocation adjustments recorded in connection with the Company’s acquisition of Brad Foote in the fourth quarter of 2007. The adjustments were to adjust certain machinery and equipment to fair value and record additional acquisition-related costs. The adjustments also include additional acquisition costs that have been capitalized.  The Company may adjust goodwill as necessary as it finalizes purchase price allocations for acquisitions.  Typical adjustments include outstanding professional fees and fixed asset valuations.

The Company will review goodwill and other intangible assets for impairment annually, or more frequently, if circumstances indicate that the assets’ carrying amount may not be recovered. As of September 30, 2008, no such circumstances existed, and, accordingly, no impairment expense was recorded.

Note 5 – Accrued liabilities

Accrued liabilities at September 30, 2008 and December 31, 2007 consisted of the following:

Note 6 – Lines of credit and notes payable

Lines of credit and notes payable at September 30, 2008 and December 31, 2007 consisted of the following:

On April 24, 2008, Tontine Capital Overseas Master Fund, L.P. (“TMF”), Tontine Partners, L.P. (“TP”), and Tontine Overseas Fund (“TOF”) each converted the full original principal amount of their respective 9.5% related party notes into shares of Company common stock. Upon conversion, an aggregate of 3,333,332 shares of the Company’s common stock were issued to TMF, TP and

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TOF. Interest that had accumulated in the aggregate amount of $1,223 on the notes as of the conversation date was paid by the Company to TMF, TP, and TOF in cash.

In connection with its acquisition of EMS, on January 16, 2008 the Company issued a note to the then President of EMS, who subsequently resigned from his position with EMS in October 2008. The note was in the amount of $1,365 and related to a limited liability company tax payment. In May 2008, the Company paid the note in full.

Note 7 – Long-term debt

Long-term debt at September 30, 2008 and December 31, 2007 consisted of the following:

On September 30, 2008, EMS paid-off all outstanding long-term debt and short term notes payable due to DNB National Bank.  The total amounts satisfied with the pay-off were $2,420 in principal and $5 in outstanding interest.

Pursuant to a note extension agreement dated September 29, 2008, the terms of Brad Foote’s Amended and Restated Renewal Revolving Note (the “Revolving Note”) with Bank of America dated January 15, 2008 were changed, extending the maturity date from October 31, 2008 to January 15, 2009. Pursuant to the thirty-first amendment of the Loan and Security Agreement dated as of January 17, 1997, as amended (the “Loan Agreement”) between Brad Foote and Bank of America, the Principal due under the Revolving Note was required to be paid down by $3,000 in 2008.

Pursuant to the thirty-first amendment to the Loan Agreement, Brad Foote had an obligation to pay down the outstanding principal amount under the Revolving Loan by September 30, 2008, and made the required payment on October 1, 2008.  Brad Foote received a waiver from Bank of America with respect to this payment, and otherwise was in compliance with the financial and other covenants contained in the Loan Agreement on September 30, 2008.  The Company was in compliance with all other debt covenants as of September 30, 2008.

Future payments of long-term debt as of September 30, 2008 are summarized below:

Note 8 – Interest rate swaps

In 2007, the Company entered into two interest rate swap agreements to minimize the impact of interest rate fluctuations on its debt. Interest rate swap agreements involve exchanges of fixed or floating rate interest payments periodically over the life of the agreement without the exchange of the underlying principal amounts. Under the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 133, all derivatives are measured at fair value and recognized as either assets or liabilities in the Company’s balance sheet. The accounting for changes in the fair value of a derivative is dependent upon the use of the derivative and its resulting designation. Unless specific hedge accounting criteria are met, changes in fair value must be recognized currently in earnings. The Company’s interest rate swaps do not qualify for hedge accounting under SFAS No. 133. Therefore, the Company is required to

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recognize the swap at its fair market value and record the fluctuations in the fair value of the swap in current earnings. The unrealized gain/(loss) related to these fluctuations was approximately ($27) and ($16) for the three and nine-month periods ended September 30, 2008, respectively, and is recognized within other income (expense). The fair market value of the interest rate swaps of $404 and $388 is recorded as a long-term liability as of September 30, 2008 and December 31, 2007, respectively.

Note 9 – Capital leases

The Company leases equipment from various financing companies under capital leases with terms that extend to 2013. The economic substance of the leases is that the Company is financing the acquisition of the assets through the leases, and accordingly, they are recorded in the Company’s assets and liabilities. Amortization of the capital leases has been included in depreciation expense. The following is an analysis of the leased assets included in property and equipment as of September 30, 2008 and December 31, 2007.

Gross capital lease assets obtained through the acquisition of Badger was $1,416.

Future minimum rental payments due under capital leases were the following:

Note 10 – Stockholders’ equity

On January 16, 2008, to finance the cash portion of the EMS acquisition, the Company sold an aggregate of 2,031,250 shares of unregistered common stock in a private placement to TP and T25 at $8.48 per share for a total purchase price of $17,225, pursuant to a previously disclosed Amended and Restated Securities Purchase Agreement with Tontine Capital Partners, L.P., (“TCP”), TP and Tontine 25 Overseas Master Fund, L.P. (“T25”).

In connection with the acquisition of EMS, on January 16, 2008, the Company issued 1,629,834 shares of unregistered common stock to the members of EMS, calculated at $8.48 per share, for total stock consideration of $13,821. Upon consummation of the Company’s acquisition of EMS, 7,500 shares of restricted stock units previously granted to certain Company executives vested; another 7,500 restricted shares remain unvested, and have a vesting date of January 16, 2009.

In the second quarter of 2008, the Company completed transactions resulting in the sale of an aggregate of $100,500 worth of its unregistered common stock, of which $500, or 62,814 shares, was purchased by a member of the Company’s Board of Directors at a price of $7.96 per share and an aggregate of $100,000 worth, or 12,562,814 shares, was purchased by TCP, TP, TOF, and T25 at a price of $7.96 per share. Thomas Weisel Partners issued a fairness opinion in connection with both transactions.

On April 24, 2008, TMF, TP, and TOF each converted the full original principal amount of their respective 9.5% related party notes into shares of Company common stock. Upon conversion, an aggregate of 3,333,332 shares of the Company’s common stock were issued to TMF, TP and TOF.

On June 4, 2008, the Company acquired all of the outstanding capital stock of Badger for total purchase price of $11,811, exclusive of transaction-related acquisition costs. A portion of the purchase price consisted of 581,959 unregistered shares of Broadwind’s common stock at a price per share of $10.31.

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state and local income taxes. Consistent with 2006 and 2007, the Company continues to maintain a full valuation allowance against net deferred tax assets exclusive of deferred tax liabilities associated with indefinite-lived assets. As of September 30, 2008, after valuation allowance, the Company has a net deferred tax liability of $1,294 related to temporary differences in indefinite-lived assets. These indefinite-lived assets consist of tax deductible goodwill from recent business acquisitions. The income tax expense for the three and nine months ended September 30, 2008 of $467 and $667, respectively relates to the current quarter temporary differences in these indefinite-lived assets.

Note 13 – Employee benefit plans

On October 19, 2007, the Company began sponsoring a defined contribution savings plan for Brad Foote, Tower Tech and corporate employees that allows substantially all employees to contribute a portion of their pre-tax and/or after-tax income up to statutory limits. The plan requires the Company to match 50% of the participants’ contributions up to 4% of the participants’ compensation. The Company recognized $153 of matching expense during the nine months ended September 30, 2008 related to the plan.

Effective as of the date of the acquisition of RBA, the Company sponsors a defined contribution savings plan that allows RBA employees to contribute a portion of their pre-tax and/or after-tax income up to statutory limits. The plan requires the Company to match 100% of the participants’ contributions up to 3% of the participants’ compensation. RBA recognized $26 of matching expense during the nine months ended September 30, 2008 related to this plan.

Effective as of the date of the acquisition of EMS, the Company sponsors a defined contribution savings plan covering substantially all EMS employees. The Company can provide a discretionary match and/or profit sharing contribution each year. EMS recognized $0 of matching expense during the period ended September 30, 2008 related to this plan.

Effective as of the date of the acquisition of Badger, the Company sponsors a defined contribution savings plan covering substantially all Badger employees. The plan requires the Company to match 100% of the participants’ contributions up to 3% and an additional 50% up to 5% of the participants’ compensation. Badger recognized $13 of matching expense during the period ended September 30, 2008 related to this plan.

On October 24, 2007, the Company adopted its 2007 Deferred Compensation Plan, which provides incentives and rewards to certain key employees and non-employee directors of the Company who are selected by the Board of Directors to participate. As of September 30, 2008 and December 31, 2007, the Company had accrued $197 and $0, respectively, for amounts due under this plan.

As part of the collective bargaining agreement at Brad Foote, the Company maintains a life insurance policy for each member of the collective bargaining group who has retired. For 2008, the collective premiums on the policy were less than $1.

In addition to the plans described, the Company participates in certain customary employee benefit plans, including those which provide health and life insurance benefits to employees.

Note 14 – Operating leases – related party

During 2007, the Company amended one of the operating leases under which the Company leases manufacturing and office space for its Products segment from City Centre, LLC. In addition, the Company assumed a lease between RBA and City Centre, LLC upon its acquisition of RBA. City Centre, LLC is a limited liability company owned in part by two former directors of the Company, one of whom was also the Company’s former President, and each of whom were affiliates during 2007 and a portion of 2008. Neither of these individuals currently holds any position within the Company. The leases call for monthly rents of $42 and $8, and expire on December 31, 2014 and July 31, 2017, respectively. The lease ending December 31, 2014 grants the Company five options to renew, each for a five-year renewal term that begins at the end of the lease period just ended. The lease ending July 31, 2017 grants the Company two options to renew, each for a five-year renewal term that begins at the end of the lease period just ended.

In 2007, the Company entered into a 15-year lease with City Centre, LLC for a third building utilized for its Tower Tech and RBA operating facilities. The lease period commenced in June 2008 with a monthly payment due of $19.

The Company’s Services segment leases its primary administrative offices, a machine shop, a residential property, and storage facilities from the former President of EMS, who resigned from his position at EMS in October 2008. The lease agreement currently expires on December 31, 2009 and requires monthly payments of $10.

The former President of EMS, through a separate entity, owns residential real estate for investment purposes, which is typically rented to third parties. Occasionally, the Company has entered into short-term lease agreements to rent apartments from this entity for use by Company personnel.

All related party operating lease rents approximate market rates and are recorded as rent expense in the Company’s statements of operations.