Koil Energy Solutions Inc. (KLNG)

[b9molecule]

JoeSmith and everyone, here is my take on the recent 10Q, which shows massive improvement from last period in many areas, and a couple of items where they fell short. So, below, my take, warts and all:

FORM 10-Q - 2nd Quarter Report 2008

At May 14, 2008, there were 115,846,019 shares of common stock outstanding.
March 2008 ---------- Dec 2007
115,846,019 --------- 85,976,526 an increase of 29,869,493 shares

Weighted-average common shares outstanding:
2008 ------------------ 2007
87,185,242 ---- 81,036,838

Cash and equivalents
March 2008 ---------- Dec 2007
$3,115,818 - - - - - $2,206,220 net increase: + $909,508

Year over Year Revenues
Total revenues
2008 ---------------- 2007
$6,279,465 ---- $2,098,394 an increase of: + $4,181,071, or roughly +200%

Gross Profit
2008 ---------------- 2007
$2,403,094 --- $846,305 an increase of: + $1,556,789, or roughly +185%

good to see gross profit increase by an equivilent metric to increase in revenues.
percentage-wise, increases in revenue go to the bottom line.

S,G, & A
2008 ---------------- 2007
$1,762,247---- $659,651 an increase of: $1,102,596, or roughly +160%


Total stockholders' equity $18,985,552

Gross margin as a percentage of revenue was 38% in the current period as compared to 40% in the prior period.

The Gross Margin numbers are an area where the company needs to improve, as they stated they thought they would last reporting period. If there is disappointment in the report, this is one.

Net loss was negligible, and down a small amount from last period...$89,447, compared to a net loss of $109,258 for the same prior year period. For a growth company early in the growth phase, this is pretty good.

Excluding the one-time gain and non-cash interest and stock based compensation charges, earnings before depreciation, interest, amortization, taxes and other non-cash charges (“EBITDA”) for the three months ended March 31, 2008 was $749,958 compared to $186,654, an increase of $563,304, or 302% over the same prior year period.

" Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud."

" There were no changes in Deep Down’s internal control over financial reporting "

They still have CONTROLS AND PROCEDURES problems, and do not seem to have improved much in this area from last report. Something to keep an eye on. But really....how many companies show "stellar" controls, only to be proven frauds in the end (Enron, HealthSouth, etc, etc.)? Still, it is in the report so it bears noting.

Now, regarding Dahlman Rose estimates.....
DeepDown is no longer listed on their Coverage Group page:
http://www.dahlmanrose.com/Content/Coverage_Group.asp

The "RECOMMENDATION TRENDS" table in the Analyst Opinion section on Yahoo does not show an opinion for the current month:
http://finance.yahoo.com/q/ao?s=DPDW.OB

A fair question, is DAHLMAN ROSE & COMPANY still covering DPDW?

Let's jaw.

~b9molecule