Koil Energy Solutions, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001683168-25-002554
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001683168-26-002462
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 68 current paragraphs.
48 unchanged; 9 reworded; 11 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Global energy demand continues to rise. Meeting this demand requires incremental oil and natural gas production alongside growth in renewable energy sources. Years of underinvestment in offshore exploration and development are now fueling a resurgence in subsea activity. According to IHS Markit Ltd,, deepwater fields naturally decline at an average rate of 7% per year, underscoring the urgency for new development just to maintain current output. From our perspective, we are seeing global operators allocate more capital toward deepwater and ultra-deepwater developments, particularly in Brazil, the U.S., and West Africa.
Current report
There are three primary methods to maintain or expand subsea production:
Current report
Subsea tie-back development continues to gain momentum as a preferred approach among offshore operators. These projects allow operators to access nearby reservoirs, utilize available topside capacity, and leverage existing subsea infrastructure. In mature basins, tie-back strategies have been employed for decades. In emerging regions, operators are increasingly adopting this approach to accelerate first hydrocarbon production and enhance project returns.
Current report
A key advantage of subsea tie-back developments is the potential for shorter payback periods than traditional greenfield projects. Leveraging existing assets, these projects frequently have the potential to achieve first oil within two years of final investment decision. However, success hinges on meticulous planning and swift execution. Integrating new equipment into an aging infrastructure presents both technical challenges and opportunities, making adaptability and foresight essential. Proven, practical design, backed by a deep team experienced in subsea installation and commissioning, plays a critical role in ensuring reliability and staying on schedule.
Current report
Bidding activity and order intake for subsea tie-back and maintenance projects continued to increase throughout the year. During this period, we have continued to invest in new talent and additional assets to support our long-term growth strategy. We remain disciplined in balancing profitability with investment and are confident that our expanded capabilities position us well to execute on our backlog.
Current report
We remain focused on our strategic objective of becoming the leading provider of integrated subsea distribution systems and services globally. One indication of subsea activity is the number of subsea trees awarded and later installed. For both green fields and brown fields, industry analysts, such as Westwood Global Energy Group on March 6, 2026, reported an expected increase from 247 subsea tree awards in 2025 to 296 awards in 2026, a 20% increase. Our product sales tend to correlate with subsea tree awards, as we supply the controls infrastructure linking subsea trees to the topside production facility. The analyst also expects subsea tree installation activity, closely correlated with our service activity, to increase by approximately 8%, even when compared against last year’s elevated installation levels.
Current report
Compared to 2024, our revenue increased 6% in 2025. While product revenue saw a slight decrease as several large, product-heavy contracts did not ramp until late in the year, service revenue had an exceptional year, increasing 45% compared to 2024. This increase in service revenue included installation support and pre-commissioning of umbilicals and distribution systems for both oil & gas and offshore wind projects.
Current report
The decrease in gross profit was primarily driven by underutilization of personnel during the first half of the year. The Cost of sales increase was primarily driven by a $1,350 increase in personnel cost associated with higher direct head count and additional rent expense of $280 associated with the new Brazil office lease.
Current report
The increase in selling, general, and administrative expenses (“SG&A”) was driven by increased head count and employee benefits of $609, the reserve made against our receivable for $569, and legal expense increases of approximately $350 associated with patents and contractual agreements.
Current report
The Company recorded other income, net of $386 and $33 for the years ended December 31, 2025, and December 31, 2024, respectively, which increase primarily consisted of a $333 gain recognized in 2025 related to the settlement of the WW Champion lawsuit.
Current report
The $2,567 decrease in Modified EBITDA primarily resulted from increased SG&A expenses from growth initiatives which include patent legal expenses, sales and bidding costs, expenses associated with establishing the Brazil office, and expenses for outside consultants to strengthen and restructure administrative functions during the year ended December 31, 2025. Severance expense was associated with organizational changes to strengthen the accounting function. The decrease also included a $569 receivable that a reserve was made for in 2025.
Removed paragraphs (11)
Previous report
The current consensus among our customers is that the demand for energy is increasing. Our clients are indicating that the world’s energy demand will require supply growth within oil and natural gas as well as for renewables. Oil and natural gas supply from existing wells naturally declines over time, making sustained investments more important over the coming years. The years of underinvestment in offshore production appear to have triggered a general shift and returning focus on increasing production. As a result, several key subsea basins, particularly Gulf of America, the North Sea, and off the coasts of Brazil, are being prepared to contribute significantly to this production output. Our strengthened positioning in these markets is therefore essential to achieve a sustained level of growth. A leading indicator for our main products is the number of subsea trees purchased by operators. Our product lines include vital support systems for subsea trees. According to Westwood Global Energy Group, a market analyst firm, the global annual subsea tree awards included 284 and 279 awards in 2023 and 2024, respectively. This healthy market presents good opportunities for KOIL Energy going forward, as our offering, such as subsea distribution equipment and services, are typically awarded 1 to 1 ½ years after the subsea tree awards. During the first quarter of this year, we have seen a significant increase in bidding activity. We therefore anticipate experiencing the benefits of this positive momentum throughout this year and into next year.
Previous report
As part of our growth strategy, we have also been focusing on expanding our service and product offerings to better address the operating expenditures of our energy customers. We also expect this expenditure to increase due to aging infrastructure. Re-termination of an umbilical cable on an existing installation is an example of our success in the maintenance market.
Previous report
The 48% year-over-year increase in our revenues for 2024 is exceptional and beyond the industry benchmark. This outstanding growth in revenue in a fairly flat market was the result of an assertive strategy and excellent work effort by our teams.
Previous report
We are one year into an ambitious 3-year strategy where continued profitable revenue growth is the objective. The strategy has been concentrated on further developing the systems that address the critical needs of our customers, while upselling more product and associated services. In April 2024 we announced the award of a major contract for a Subsea Safety Control System from a major international energy company. In August last year we announced the award of a significant contract for delivering Bend Stiffener Latchers (BSL®) to an operator in a new region. In October we secured a significant contract to provide umbilical re-termination (maintenance and repair) on an offshore production platform for an international oil and gas company. In December we were awarded a significant contract to supply Electrical and Hydraulic Distribution Manifolds for a project in West Africa. Although we secure numerous smaller contracts on a weekly basis, it is the major and significant awards that drive our growth.
Previous report
We continue progressing towards achieving our goal of becoming the premier provider of integrated subsea distribution systems.
Previous report
The 48 percent increase in revenues was primarily driven by an increase in fixed price contracts for the manufacture of subsea distribution equipment, such as flying leads and hydraulic distribution manifolds, partially offset by a decrease in service contract activity.
Previous report
The increase in gross profit was primarily driven by increased revenues. Gross profit percentage increased 6% when compared to the previous year.
Previous report
The reduction in selling, general, and administrative expenses (“SG&A”) was driven by lower administrative payroll expense, advertising expense, research and development expense, and rental expense related to the Company’s short-term lease for furniture at the Company’s operating facility.
Previous report
The Company recorded net other income of $33 and $50 for the years ended December 31, 2024 and December 31, 2023, respectively, which primarily consists of insurance policyholder dividends.
Previous report
The $4,419 increase in Modified EBITDA primarily resulted from revenue and gross profit improvement associated with the increase in fixed price contracts and lower SG&A during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous report
During the year ended December 31, 2023, the Company reported a $323 decrease in cash. The Company generated $203 of net cash from operating activities, primarily driven by changes in operating assets and liabilities of $1,234 and other adjustments to reconcile net loss to net cash provided by operating activities of $523, which includes items such as non-cash lease expense, gain on sale of property, plant and equipment, share-based compensation, bad debt expense (recovery), and depreciation and amortization. This was partially offset by a net loss of $1,554. The Company used $226 of net cash for investing activities, primarily to fund capital expenditures. The Company also used $300 of net cash in financing activities for principal payments made under its finance lease obligations.
Reworded paragraphs (9)
Previous wording
The Company records depreciation expense related to revenue-generating property, plant and equipment as cost of sales, which totaled $459 and $497 for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company records depreciation expense related to revenue-generating property, plant and equipment as cost of sales, which totaled $504 and $459 for the years ended December 31, 2025, and 2024, respectively.
Previous wording
The Company records depreciation and amortization expense related to administrative property, plant and equipment and intellectual property as SG&A, which totaled $112 and $108 for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company records depreciation and amortization expense related to administrative property, plant and equipment, capitalized software and intellectual property as SG&A, which totaled $86 and $112 for the years ended December 31, 2025, and 2024, respectively.
Previous wording
Net interest income for the year ended December 31, 2024 was $47 compared to net interest income of $7 for the year ended December 31, 2023. The increase of $40 is mainly due to an increase in interest received on the Company’s interest bearing financial instruments during the year ended December 31, 2024.
Current wording
Net interest income for the year ended December 31, 2025, was $6 compared to net interest income of $47 for the year ended December 31, 2024. The decrease of $41 is mainly due to increased invoice factoring expense to meet short-term liquidity requirements, which partially offset interest income.
Previous wording
The Company recorded loss of $1 and gain of $4 related to equipment sold by the Company during the years ended December 31, 2024 and December 31, 2023, respectively.
Current wording
The Company recorded gain of $12 and a loss of $1 related to equipment sold by the Company during the years ended December 31, 2025, and December 31, 2024, respectively.
Previous wording
The Company believes it will have adequate liquidity to meet its future operating requirements. We are generally dependent on our cash flows from operations to fund our working capital requirements, and the uncertainties noted above create risks that we may not achieve our planned earnings or cash flow from operations. On May 24, 2023, the Company entered into a Purchase and Sale Agreement/Security 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. At December 31, 2024 and 2023, respectively, the Company had no outstanding sales of accounts receivable to Amegy.
Current wording
The Company believes it will have adequate liquidity to meet its future operating requirements. We are generally dependent on our cash flows from operations to fund our working capital requirements, and the uncertainties noted above create risks that we may not achieve our planned earnings or cash flow from operations. On May 24, 2023, the Company entered into a Purchase and Sale Agreement/Security 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. At December 31, 2025, and 2024, respectively, the Company had $541 and no outstanding sales of accounts receivable to Amegy, respectively.
Previous wording
The principal liquidity needs of the Company are to fund ongoing operations, working capital, and capital expenditures. During the year ended December 31, 2024, the Company reported a $1,392 increase in cash. The Company generated $1,726 of net cash provided by operating activities, primarily driven by cash used by changes in operating assets and liabilities of $1,824 and other adjustments to reconcile net income to net cash provided by operating activities of $930, which includes items such as non-cash lease expense, loss on sale of property, plant and equipment, share-based compensation, bad debt expense, and depreciation and amortization. This was partially offset by net income of $2,620. The Company used $373 of net cash for investing activities, primarily to fund capital expenditures. The Company also provided by $39 of net cash in financing activities for principal payments made under its finance lease obligations, proceeds from stock options exercised, and proceeds and principal payments on short-term borrowings.
Current wording
The principal liquidity needs of the Company are to fund ongoing operations, working capital, and capital expenditures. During the year ended December 31, 2025, the Company reported a $1,887 decrease in cash. The Company consumed $901 of net cash in operating activities, primarily driven by increased working capital to support customer contracts and vendor obligations of $2,436 partially offset by non-cash items including $375 of share-based compensation, $590 for depreciation and amortization, and $569 of credit loss expense. Net cash used in investing activities was $1,533, including $1,282 for new equipment and the overhaul of existing fixed assets and $263 for capitalized software development costs. Net cash provided by financing activities was $562, primarily related to short-term borrowings under the Amegy factoring facility.
Previous wording
The Company maintains a positive outlook on customer inquiries and views this as an opportunity to capitalize on its product, service, and rental offerings to address the subsea distribution and cable management needs of its customers. The reasons for this expected increase are set forth in the “Industry and Executive Outlook” section above. As such, 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. 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 concentrate capital investments on key growth needs and pursue opportunistic cost containment initiatives, which can include workforce alignment, restricting overhead spending and limiting research and development efforts to only critical items.
Current wording
The Company maintains a positive outlook on customer inquiries and views this as an opportunity to capitalize on its product, service, and rental offerings to address the subsea distribution and cable management needs of its customers. The reasons for this expected increase are set forth in the “Industry and Executive Outlook” section above. As such, 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 Property, Plant and Equipment (“PP&E”). 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 concentrate capital investments on key growth needs and pursue opportunistic cost containment initiatives, which can include workforce alignment, restricting overhead spending and limiting research and development efforts to only critical items.
Previous wording
We recognize revenue for service contracts measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The control over services is transferred over time when the services are rendered to the customer on a daily basis. Specifically, we recognize revenue as the services are provided as we have the right to invoice the customer for the services performed. Services are billed on a monthly basis. Payment terms for services are usually 30 days from invoice receipt but can increase to 45, 60, or 90 days depending on the customer.
Current wording
We recognize revenue for service contracts over time when labor, equipment rental, and other associated costs are incurred, which we believe best depicts the transfer of services to the customer. Control transfers as services are performed on a daily basis. Services are typically billed monthly. Payment terms are generally 30 days from invoice receipt but may extend to 45, 60, or 90 days depending on the customer.
Previous wording
The estimation of anticipated credit losses that may be incurred as we work through the invoice collection process with our customers requires us to make judgments and estimates regarding our customers’ ability to pay amounts due. We monitor our customers’ payment history and current creditworthiness, if needed, to determine that collectability is reasonably assured. We provide an allowance for credit losses based upon a review of each accounts receivable balance with respect to a customer’s ability to make payments. We also evaluate historical loss rates as well as consider forward-looking factors specific to the customers, the overall economic environment, and management expectations to determine expected losses. When certain accounts are determined to require an allowance, they are expensed by a provision for bad debts in that period. At December 31, 2024 and 2023, we estimated the allowance for credit losses requirement to be $0. Bad debt expense totaled $0 and $1 for the years ended December 31, 2024 and 2023, respectively. We believe that our allowance for credit losses is adequate to cover the anticipated credit losses under current conditions; however, uncertainties regarding changes in the financial condition of our customers, either adverse or positive, could impact the amount and timing of any additional credit losses that may be required.
Current wording
The estimation of anticipated credit losses that may be incurred as we work through the invoice collection process with our customers requires us to make judgments and estimates regarding our customers’ ability to pay amounts due. We monitor our customers’ payment history and current creditworthiness, if needed, to determine that collectability is reasonably assured. We provide an allowance for credit losses based upon a review of each accounts receivable balance with respect to a customer’s ability to make payments. We also evaluate historical loss rates as well as consider forward-looking factors specific to the customers, the overall economic environment, and management expectations to determine expected losses. When certain accounts are determined to require an allowance, they are expensed by a provision for credit losses in that period. On December 31, 2025, and 2024, we estimated the allowance for credit losses requirement to be $569 and $0 respectively. Credit loss expense totaled $569 and $0 for the year ended December 31, 2025, and 2024, respectively. We believe that our allowance for credit losses is adequate to cover the anticipated credit losses under current conditions; however, uncertainties regarding changes in the financial condition of our customers, either adverse or positive, could impact the amount and timing of any additional credit losses that may be required.