BASIS OF PRESENTATION (Policies) |
6 Months Ended |
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Jun. 30, 2025 | |
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”), its directly wholly owned subsidiary, Koil Energy Solutions, Inc., a Delaware corporation (“Koil Energy Delaware”), and its directly wholly owned subsidiary Koil Energy Solution do Brasil Ltda., a Brazilian limited liability company (“Koil Energy Brazil”). 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, 2024.
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 considered necessary for a fair presentation of the consolidated financial statements have been included. All such adjustments are of a normal recurring nature.
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Liquidity | Liquidity
The Company’s cash on hand was $2,193 and working capital was $5,082 as of June 30, 2025. As of December 31, 2024, cash on hand and working capital was $3,422 and $5,682, respectively. The Company generally 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, and potential sales of PP&E. However, given the inherent volatility in oil prices and global economic activity, the Company cannot predict this with certainty. To mitigate this uncertainty, the Company exercises discipline when making capital investments and pursues opportunistic cost containment initiatives, which can include workforce alignment, limiting overhead spending, and limiting research and development efforts to only critical items. Additionally, on May 24, 2023, the Company entered into a Purchase and Sale Agreement/Security Agreement (the “Factoring Agreement”) with Zions Bancorporation, N.A., d/b/a Amegy Bank Business Credit (“Amegy”), which provides for Koil Energy from time to time to sell its accounts receivable and other rights to payment to Amegy, subject to Amegy’s right to approve or reject future accounts receivable and other rights proposed for sale, in its sole discretion. Any receivables sold shall bear an interest rate computed as the Wall Street Journal Prime Rate (“Prime Rate”) plus 2.00%. The Prime Rate has a floor and at no time shall it be less than 8.00% for the purposes of this agreement. At June 30, 2025 and December 31, 2024, the Company had no factored invoice outstanding with Amegy.
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Intangible Capitalized Software Development Costs, net | Intangible Capitalized Software Development Costs, net
The Company capitalizes certain costs related to the implementation of software systems during the application development stage. Capitalized software development costs are capitalized when application development begins and it is probable that the project will be completed and used as intended by the Company.
The capitalization policy provides for capitalizing certain payroll and payroll-related costs for employees who spend time directly associated with the configuration, development, and enhancement of software systems. Costs associated with preliminary project activities, data migration, training, maintenance, and all other post-implementation stage activities are expensed as incurred.
Capitalized software development costs are classified as Intangibles on the Condensed Consolidated Balance Sheets, and costs will be amortized on a straight-line basis over their estimated useful lives and will be included within depreciation and amortization expense in the condensed consolidated statements of operations. For the six months ended June 30, 20254, capitalized software development costs was $118.
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Principles of Consolidation | Principles of Consolidation
The unaudited condensed consolidated financial statements presented herein include the accounts of Koil Energy for the three and six months ended June 30, 2025 and 2024. All intercompany transactions and balances have been eliminated. |