Koil Energy Solutions Inc

Evaluation of Disclosure Controls and Procedures. The Company’s disclosure controls and procedures are designed to ensure that such information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the principal executive and the principal accounting officer, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance that control objectives are attained. The Company’s disclosure controls and procedures are designed to provide such reasonable assurance.

The Company’s principal executive and principal accounting officer, with assistance from other members of management, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2023, as required by Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, the principal executive and principal accounting officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2023.

*Management’s Report on Internal Control Over Financial Reporting.*The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Although the internal controls over financial reporting were not audited, the Company’s management, including the principal executive and principal accounting officer, assessed the effectiveness of internal control over financial reporting as of December 31, 2023, based on revisions and updates issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to its report entitled*“Internal Control-Integrated Framework.”*

As disclosed in Part II Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, 2022, we identified a material weakness in internal control related to the controls designed to assess the subsequent measurement of our ROU assets based on a newly adopted accounting principle.

During 2022, management implemented our previously disclosed remediation plan that included: (i) enhancing the Company’s quarterly analysis of impairment indicators for its remaining long-lived assets by including an assessment of impairment indicators for its remaining ROU assets; (ii) improving documentation of underlying internal controls to promote knowledge transfer upon personnel and function changes; and (iii) enhanced quarterly reporting on the remediation measures to the Audit Committee of the Board of Directors.

During the fourth quarter of 2023, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective. As a result, we have concluded the material weakness has been remediated as of December 31, 2023.

*Changes in Internal Control Over Financial Reporting.*Except for the changes in connection with our implementation of the remediation plan discussed above, the Company’s management, with the participation of the principal executive and principal accounting officer, have concluded that there were no other changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2023.