Enerflex Ltd.

CHANGES TO CONTRACTS

No aspect of the Company's business is reasonably expected to be materially affected by renegotiation or termination of contracts or sub-contracts.

In the second quarter of 2024, Enerflex issued a notice of Force Majeure to a customer following a drone attack that resulted in fatalities in proximity to a cryo project in Kurdistan, Northern Iraq. Work at the site was suspended and Enerflex demobilized its personnel.

In the following months, Enerflex worked collaboratively with its customer to evaluate the situation and assess potential options to complete the project notwithstanding the prevailing security situation at the project site. Despite these efforts, Enerflex received notice in August 2024 that its customer intended to terminate the EH Cryo project contract with effect as of September 8, 2024. Enerflex views the purported termination as a wrongful attempt by its customer to circumvent Enerflex’s contractual rights to suspend performance while the project site was unsafe; a conclusion that was supported by expert security input. In November 2024, Enerflex provided its customer with formal notice of termination of the project contract. Enerflex is seeking recovery of amounts owing in connection with the EH Cryo project. See “Legal Proceedings”.