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BASIS OF PRESENTATION (Policies)
3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

Unless otherwise indicated, the terms “Koil Energy Solutions, Inc.”, “Koil Energy”, “Company”, “we”, “our” and “us” are used in this Report to refer to Koil Energy Solutions, Inc., a Nevada corporation (“Koil Energy Nevada”), and its directly wholly owned subsidiary, Koil Energy Solutions, Inc., a Delaware corporation (“Koil Energy Delaware”). The accompanying unaudited condensed consolidated financial statements of Koil Energy Solutions, Inc. were prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC” or the “Commission”) pertaining to interim financial information and instructions to Form 10-Q. As permitted under those rules, certain notes or other financial information that are normally required by United States generally accepted accounting principles (“US GAAP”) can be condensed or omitted. Therefore, these statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

Preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosed amounts of contingent assets and liabilities, and the reported amounts of revenues and expenses. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, then the actual amounts may differ from those included in the accompanying unaudited condensed consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

 

Organization

Organization

 

In 2022, we changed our name from Deep Down, Inc. to Koil Energy Solutions, Inc. In connection with the name change, our ticker symbol was changed to “KLNG”.

 

Liquidity

Liquidity

 

The Company’s cash on hand was $1,519 and working capital was $3,883 as of March 31, 2023. As of December 31, 2022, cash on hand and working capital was $2,353 and $3,896, respectively. The Company does not have a credit facility in place and depends on cash on hand, cash flows from operations, and potential opportunistic sales of property, plant and equipment (“PP&E”) to satisfy its liquidity needs.

 

The Company believes it will have adequate liquidity to meet its future operating requirements through a combination of cash on hand, cash expected to be generated from operations, potential sales of PP&E, and potentially securing a credit facility or similar financing arrangement. Given the inherent volatility in oil prices and global economic activity, the Company cannot predict this with certainty. To mitigate this uncertainty and preserve liquidity, the Company will exercise discipline when making capital investments and pursue opportunistic cost containment initiatives, which can include workforce alignment, limiting overhead spending, and limiting research and development efforts to only critical items.

 

Principles of Consolidation

Principles of Consolidation

 

The unaudited condensed consolidated financial statements presented herein include the accounts of Koil Energy for the three months ended March 31, 2023 and 2022. All intercompany transactions and balances have been eliminated. 

 

Segments

Segments

 

For the three months ended March 31, 2023 and 2022, the Company’s operations were organized as one reportable segment.