Cover
Cover - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-30351 | |
Entity Registrant Name | DEEP DOWN, INC. | |
Entity Central Index Key | 0001110607 | |
Entity Tax Identification Number | 75-2263732 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1310 Rankin Road | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77073 | |
City Area Code | (281) | |
Local Phone Number | 517-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,888,202 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 3,543 | $ 3,676 |
Accounts receivable, net | 2,274 | 5,929 |
Employee retention tax credit receivable | 650 | 650 |
Inventory | 202 | 254 |
Contract assets | 418 | 352 |
Prepaid expenses and other current assets | 287 | 103 |
Total current assets | 7,374 | 10,964 |
Property, plant and equipment, net | 3,166 | 1,727 |
Intangibles, net | 42 | 38 |
Right-of-use operating lease assets | 7,114 | 1,861 |
Other assets | 183 | 136 |
Total assets | 17,879 | 14,726 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,191 | 2,310 |
Contract liabilities | 46 | 250 |
Current lease liabilities | 666 | 1,306 |
Total current liabilities | 2,903 | 3,866 |
Operating lease liability, long-term | 6,625 | 588 |
Total liabilities | 9,528 | 4,454 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, 24,500,000 shares authorized at $0.001 par value, 15,906,010 issued at September 30, 2022 and December 31, 2021 | 16 | 16 |
Additional paid-in capital | 73,757 | 73,686 |
Treasury stock, 4,017,808 shares at September 30, 2022 and 3,517,145 shares at December 31, 2021, at cost | (3,135) | (2,809) |
Accumulated deficit | (62,287) | (60,621) |
Total stockholders' equity | 8,351 | 10,272 |
Total liabilities and stockholders' equity | $ 17,879 | $ 14,726 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock shares authorized | 24,500,000 | 24,500,000 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock issued | 15,906,010 | 15,906,010 |
Treasury stock shares | 4,017,808 | 3,517,145 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,257 | $ 3,550 | $ 9,357 | $ 12,000 |
Cost of sales: | ||||
Cost of sales | 1,875 | 2,569 | 5,827 | 7,518 |
Depreciation expense | 113 | 144 | 366 | 511 |
Total cost of sales | 1,988 | 2,713 | 6,193 | 8,029 |
Gross profit | 269 | 837 | 3,164 | 3,971 |
Operating expenses: | ||||
Selling, general and administrative | 1,644 | 1,336 | 4,730 | 4,623 |
Depreciation and amortization | 48 | 65 | 164 | 220 |
Total operating expenses | 1,692 | 1,401 | 4,894 | 4,843 |
Operating loss | (1,423) | (564) | (1,730) | (872) |
Other (income) expense: | ||||
Interest expense, net | 5 | 1 | 10 | 8 |
Other income, net | 0 | (1,050) | (52) | (2,193) |
Loss (gain) on sale of property, plant and equipment | 147 | 148 | (41) | 94 |
Total other (income) expense | 152 | (901) | (83) | (2,091) |
Income (loss) before income taxes | (1,575) | 337 | (1,647) | 1,219 |
Income tax expense | 4 | 5 | 19 | 15 |
Net income (loss) | $ (1,579) | $ 332 | $ (1,666) | $ 1,204 |
Net income (loss) per share: | ||||
Basic | $ (0.13) | $ 0.03 | $ (0.14) | $ 0.10 |
Fully diluted | $ (0.13) | $ 0.03 | $ (0.14) | $ 0.10 |
Weighted-average shares outstanding: | ||||
Basic | 11,888 | 12,389 | 12,012 | 12,389 |
Fully diluted | 11,888 | 12,445 | 12,012 | 12,441 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 16 | $ 73,638 | $ (2,809) | $ (62,947) | $ 7,898 |
Balance at beginning, shares at Dec. 31, 2020 | 15,906 | ||||
Net income | 1,204 | 1,204 | |||
Share-based compensation | 46 | 46 | |||
Ending balance, value at Sep. 30, 2021 | $ 16 | 73,684 | (2,809) | (61,743) | 9,148 |
Balance at ending, shares at Sep. 30, 2021 | 15,906 | ||||
Beginning balance, value at Jun. 30, 2021 | $ 16 | 73,675 | (2,809) | (62,075) | 8,807 |
Balance at beginning, shares at Jun. 30, 2021 | 15,906 | ||||
Net income | 332 | 332 | |||
Share-based compensation | 9 | 9 | |||
Ending balance, value at Sep. 30, 2021 | $ 16 | 73,684 | (2,809) | (61,743) | 9,148 |
Balance at ending, shares at Sep. 30, 2021 | 15,906 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 16 | 73,686 | (2,809) | (60,621) | 10,272 |
Balance at beginning, shares at Dec. 31, 2021 | 15,906 | ||||
Net income | (1,666) | (1,666) | |||
Treasury shares purchased | (326) | (326) | |||
Share-based compensation | 71 | 71 | |||
Ending balance, value at Sep. 30, 2022 | $ 16 | 73,757 | (3,135) | (62,287) | 8,351 |
Balance at ending, shares at Sep. 30, 2022 | 15,906 | ||||
Beginning balance, value at Jun. 30, 2022 | $ 16 | 73,757 | (3,135) | (60,708) | 9,930 |
Balance at beginning, shares at Jun. 30, 2022 | 15,906 | ||||
Net income | (1,579) | (1,579) | |||
Ending balance, value at Sep. 30, 2022 | $ 16 | $ 73,757 | $ (3,135) | $ (62,287) | $ 8,351 |
Balance at ending, shares at Sep. 30, 2022 | 15,906 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,666) | $ 1,204 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Share-based compensation | 71 | 46 |
Depreciation and amortization | 530 | 731 |
Loss (gain) on sale of property, plant and equipment | (41) | 94 |
Bad debt expense (recovery) | (133) | 534 |
Non-cash lease (benefit) expense | 143 | (1) |
Forgiveness of PPP loan | 0 | (2,222) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 3,787 | (943) |
Contract assets | (66) | 97 |
Inventories | 52 | (67) |
Prepaid expenses and other current assets | (185) | 50 |
Other assets, net | (91) | (3) |
Accounts payable and accrued expenses | (119) | (321) |
Contract liabilities | (204) | (252) |
Net cash provided by (used in) operating activities | 2,078 | (1,053) |
Cash flows from investing activities: | ||
Proceeds from sale of property, plant and equipment | 258 | 171 |
Purchases of property, plant and equipment | (2,223) | (275) |
Payments received on note receivable | 4 | 9 |
Net cash used in investing activities | (1,961) | (95) |
Cash flows from financing activities: | ||
Proceeds from PPP loan | 0 | 1,111 |
Repurchase of common shares | (250) | 0 |
Net cash provided by (used in) financing activities | (250) | 1,111 |
Change in cash | (133) | (37) |
Cash, beginning of period | 3,676 | 3,745 |
Cash, end of period | 3,543 | 3,708 |
Supplemental schedule of non-cash investing and financing activities: | ||
Shares of common stock received in exchange for property, plant and equipment | $ 76 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1: BASIS OF PRESENTATION Basis of Presentation Unless otherwise indicated, the terms “Deep Down, Inc.”, “Deep Down”, “Company”, “we”, “our” and “us” are used in this Report to refer to Deep Down, Inc., a Nevada corporation (“Deep Down Nevada”), and its directly wholly owned subsidiary, Deep Down, Inc., a Delaware corporation (“Deep Down Delaware”). The accompanying unaudited condensed consolidated financial statements of Deep Down, 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, 2021. 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 Deep Down is an energy services company that provides equipment and support services to the world’s energy and offshore industries. Deep Down offers innovative solutions to complex customer challenges presented between the production facility and the energy source. Deep Down's core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, and related services. Additionally, Deep Down's highly experienced professionals can support subsea engineering, manufacturing, installation, commissioning, and maintenance projects located anywhere in the world. On February 22, 2022, Deep Down Nevada entered into an Agreement and Plan of Merger providing for the merger of the Company with the Company’s wholly-owned subsidiary, Koil Energy Solutions, Inc. (the “Merger”). As permitted by Section 92A.180 of the Nevada Revised Statutes, the purpose of the Merger is to effect a change of the Company’s name from Deep Down, Inc., to Koil Energy Solutions, Inc. (the “Name Change”). On February 25, 2022, in connection with the foregoing, Deep Down Nevada filed an Issuer Company-Related Action Notification Form with the Financial Industry Regulatory Authority (“FINRA”), requesting confirmation of the Name Change. On February 28, 2022, in connection with the foregoing, the Company filed an Issuer Company-Related Action Notification Form with FINRA, requesting a change of the Company’s ticker symbol (the “Symbol Change”). Subject to approval by FINRA, the Name Change and Symbol Change will not affect the rights of the Company’s security holders. The Company’s securities will continue to be quoted on the OTC Markets. Following the Name Change, the stock certificates, which reflect the name of the Company prior to the Merger, will continue to be valid. Certificates reflecting the Name Change will be issued in due course as old stock certificates are tendered for exchange or transfer to the Company’s transfer agent. Liquidity The Company’s cash on hand was $ 3,543 4,471 3,676 7,098 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 ongoing operations, and potential sales of PP&E. Given the volatility in oil prices and the impact on global economic activity caused by the COVID-19 pandemic, as well as recent increases in raw materials costs and ongoing supply chain constraints, the Company cannot predict this with certainty. To mitigate this uncertainty and preserve liquidity, the Company will continue to exercise discipline when making capital investments and practice opportunistic cost containment initiatives, which can include workforce alignment and limiting overhead spending and research and development efforts to only critical items. Principles of Consolidation The unaudited condensed consolidated financial statements presented herein include the accounts of Deep Down, Inc. and its wholly owned subsidiary for the three and nine months ended September 30, 2022 and 2021. All intercompany transactions and balances have been eliminated. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
LEASES | NOTE 2: LEASES In February 2016, the FASB issued ASU 2016-02, Leases (“ASC Topic 842”). Under this guidance, lessees are required to recognize on the balance sheet a lease liability and a right-of-use (“ROU”) asset for all leases, except for short-term leases with terms of twelve months or less. The lease liability represents the lessee’s obligation to make lease payments arising from a lease and will initially be measured as the present value of the lease payments. The ROU asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. ASC Topic 842 provides for certain practical expedients when adopting the guidance. The Company elected the package of practical expedients allowing the Company, for all leases that commenced prior to the adoption date, to not reassess whether any expired or existing contracts are, or contain, leases, the lease classification for any expired or existing leases, or initial direct costs for any expired or existing leases. The Company utilizes the land easements practical expedient allowing the Company to not assess whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under the existing leasing guidance. Instead, the Company will continue to apply its existing accounting policies to historical land easements. The Company elects to apply the short-term lease exception; therefore, the Company will not record an ROU asset or corresponding lease liability for leases with an initial term of twelve months or less that are not reasonably certain of being renewed and instead will recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The Company elects to apply the practical expedient to not separate lease components from non-lease components and instead account for both as a single lease component for all asset classes. The Company elects to not capitalize any lease in which the estimated value of the underlying asset at the commencement date is less than the Company’s capitalization threshold. A lease would need to qualify for the low value exception based on various criteria. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and a portion is recorded in cost of sales, and the remainder is recorded in selling, general and administrative expenses. The accounting for some leases may require significant judgment, which includes determining whether a contract contains a lease, determining the incremental borrowing rate to utilize in our net present value calculation of lease payments for lease agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. As of September 30, 2022, we do not have any finance lease assets or liabilities, nor do we have any subleases. The following tables present information about our operating leases: Lease information table September 30, 2022 December 31, 2021 Assets: Right-of-use assets $ 7,114 $ 1,861 Liabilities: Current lease liabilities 666 1,306 Non-current lease liabilities 6,625 588 Total lease liabilities $ 7,291 $ 1,894 The components of our lease expense were as follows: Components of lease expense Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating lease expense included in: Cost of sales $ 431 $ 313 $ 1,055 $ 946 Selling, general and administrative expenses 90 35 148 143 Short term lease expense 84 97 304 210 Total lease expense $ 605 $ 445 $ 1,507 $ 1,299 Lease term and discount rate: Lease term and discount rate September 30, 2022 December 31, 2021 Weighted-average remaining lease terms on operating leases (yrs.) 9.00 1.43 Weighted-average discount rates on operating leases 6.25 5.374 During the three months ended September 30, 2022, the Company did not have any sale/leaseback transactions. Present value of lease liabilities: Future minimum lease payments Operating Leases October 1, 2022 – September 30, 2023 $ 1,210 October 1, 2023 – September 30, 2024 962 October 1, 2024 – September 30, 2025 980 October 1, 2025 – September 30, 2026 993 Thereafter 6,483 Total lease payments $ 10,628 Less: Interest (3,337 ) Present value of lease liabilities $ 7,291 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 3: REVENUE FROM CONTRACTS WITH CUSTOMERS Revenues are recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. To determine the proper revenue recognition method for our customer contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of our fixed price contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability even if that single project results in the delivery of multiple units. Hence, the entire contract is accounted for as one performance obligation. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by fixed price and service contracts. Sales taxes are excluded from revenues. Disaggregation of revenue Three Months Ended September 30, 2022 2021 Fixed Price Contracts $ 1,206 $ 1,866 Service Contracts 1,051 1,684 Total $ 2,257 $ 3,550 Nine Months Ended September 30, 2022 2021 Fixed Price Contracts $ 3,635 $ 5,170 Service Contracts 5,722 6,830 Total $ 9,357 $ 12,000 Fixed price contracts For fixed price contracts, we generally recognize revenue over time as we perform because of continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. In our fixed price contracts, the customer either controls the work in process or we deliver products with no alternative use to the Company and have rights to payment for work performed to date plus a reasonable profit as evidenced by contractual termination clauses. Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new, or changes the existing, enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. We have a company-wide standard and disciplined quarterly estimate at completion process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on a performance obligation related to fixed price contracts, a provision for the entire loss on the performance obligation is recognized in the period the loss is estimated. Service Contracts 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 on a daily basis as the services are rendered to the customer. 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 or 60 days depending on the customer. Contract balances Costs and estimated earnings in excess of billings on uncompleted contracts arise when revenues are recorded based on the extent of progress towards completion but cannot be invoiced under the terms of the contract. Such amounts are invoiced upon completion of contractual milestones. Billings in excess of costs and estimated earnings on uncompleted contracts arise when milestone billings are permissible under the contract, but the related costs have not yet been incurred. All contract costs are recognized currently on jobs formally approved by the customer and contracts are not shown as complete until virtually all anticipated costs have been incurred and the risk of loss has passed to the customer. Assets related to costs and estimated earnings in excess of billings on uncompleted contracts, as well as liabilities related to billings in excess of costs and estimated earnings on uncompleted contracts, have been classified as current. The contract cycle for certain long-term contracts may extend beyond one year; thus, complete collection of amounts related to these contracts may extend beyond one year though such long-term contracts include contractual milestone billings as discussed above. At September 30, 2022 and December 31, 2021, there were no contracts with terms that extended beyond one year. The following table summarizes our contract assets, which are “Costs and estimated earnings in excess of billings on uncompleted contracts” and our contract liabilities, which are “Billings in excess of costs and estimated earnings on uncompleted contracts”. Schedule of earnings in excess of billings on uncompleted contracts September 30, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 421 $ 1,312 Estimated earnings on uncompleted contracts 265 1,485 Gross costs and estimated earnings 686 2,797 Less: Billings to date on uncompleted contracts (314 ) (2,695 ) Costs incurred plus estimated earning less billings on uncompleted contracts, net $ 372 $ 102 Included in the accompanying unaudited condensed consolidated balance sheets under the following captions: Contract assets $ 418 $ 352 Contract liabilities (46 ) (250 ) Costs incurred plus estimated earning less billings on uncompleted contracts $ 372 $ 102 The contract asset and liability balances at September 30, 2022 and December 31, 2021 consisted primarily of revenue related to fixed-price projects. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and excludes unexercised contract options, potential orders, and any remaining performance obligations for any sales arrangements that had not fully satisfied the criteria to be considered a contract with a customer pursuant to the requirements of ASC 606. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. Many of our services contracts are short-term in nature with a contract term of one year or less. For those contracts, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Additionally, our payment terms are short-term in nature with settlements of one year or less. We have, therefore, utilized the practical expedient in ASC 606-10-32-18 exempting the Company from adjusting the promised amount of consideration for the effects of a significant financing component given that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service is expected to be one year or less. Further, in many of our service contracts, we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date (for example, a service contract in which we bill a fixed amount for each hour of service provided). For those contracts, we have utilized the practical expedient in ASC 606-10-55-18, which allows us to recognize revenue in the amount for which we have the right to invoice. Accordingly, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4: PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: Schedule of property, plant and equipment September 30, 2022 December 31, 2021 Range of Asset Lives Buildings and improvements $ – $ 285 7 - 36 years Leasehold improvements – 899 2 - 10 years Equipment 5,692 11,885 2 - 30 years Furniture, computers and office equipment 166 429 2 - 8 years Construction in progress 1,978 60 – Total property, plant and equipment 7,836 13,558 Less: Accumulated depreciation and amortization (4,670 ) (11,831 ) Property, plant and equipment, net $ 3,166 $ 1,727 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 5: SHARE-BASED COMPENSATION Share-based compensation is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and in additional paid-in capital in the accompanying unaudited consolidated balance sheets. During the three and nine months ended September 30, 2022, the Company recognized no 71 9 46 |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
TREASURY STOCK | NOTE 6: TREASURY STOCK No No 500 326 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7: INCOME TAXES Income tax expense during interim periods is based on applying the estimated annual effective income tax rate to interim period operations. The estimated annual effective income tax rate may vary from the statutory rate due to the impact of permanent items relative to our pre-tax income, as well as by any valuation allowance recorded. We employ an asset and liability approach that results in the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial basis and the tax basis of those assets and liabilities. A valuation allowance is established when it is more likely than not that some of the deferred tax assets will not be realized. At September 30, 2022 and December 31, 2021, management has recorded a full deferred tax asset valuation allowance. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8: COMMITMENTS AND CONTINGENCIES Employment Agreement Our Chief Executive Officer is employed under an employment agreement containing severance provisions. In the event of termination of the CEO’s employment for any reason, the CEO will be entitled to receive all accrued, unpaid salary and vacation time through the date of termination and all benefits to which the CEO is entitled or vested under the terms of all employee benefit and compensation plans, agreements, and arrangements in which the CEO participates as of the date of termination. In addition, subject to executing a general release in favor of the Company, the CEO will be entitled to receive certain severance payments in the event his employment is terminated by the Company “other than for cause” or by the CEO with “good reason.” These severance payments include: (i) a lump sum in cash equal to one to two times the CEO’s annual base salary; (ii) a lump sum in cash equal to one to two times the average annual bonus paid to the CEO for the prior two full fiscal years preceding the date of termination; (iii) a lump sum in cash equal to a pro rata portion of the annual bonus payable for the period in which the date of termination occurs based on the actual performance under the Company’s annual incentive bonus arrangement, but no less than fifty percent of the CEO’s annual base salary; and (iv) if the CEO’s termination occurs prior to the date that is twelve months following a change of control, then each and every share option, restricted share award and other equity-based award that is outstanding and held by the CEO shall immediately vest and become exercisable. Litigation From time to time, the Company is party to various legal proceedings arising in the ordinary course of business. The Company expenses or accrues legal costs as incurred and is not involved in any material legal proceedings as of the date of this Report. In November 2011, the Company delivered equipment to Aker Solutions, Inc. (“Aker”), but Aker declined to pay the final invoice in the aggregate amount of $270 alleging some warranty items needed to be repaired. The Company made repairs, but Aker continued to claim further work was required. The Company repeatedly attempted to collect on the receivable and ultimately filed suit on November 16, 2012, in the Harris County District Court. Aker subsequently filed a counter claim on March 20, 2013 in the aggregate amount of $1,000 for reimbursement of insurance payments allegedly made for repairs. The parties convened for mediation on March 9, 2022, and on May 9, 2022, the Company and Aker finalized the terms of a definitive settlement agreement with a mutual dismissal with prejudice of all claims by and between them. The Company subsequently reversed a liability accrual of $ 100 no On August 6, 2018, GE Oil and Gas UK Ltd. (“GE”) requested that the Company mediate a dispute between the parties in the ICC International Centre for ADR (“ICC”). The dispute involved alleged delays and defects in products manufactured by the Company for GE dating back to 2013. During the second quarter of 2020, the parties finalized the terms of a definitive settlement agreement which is now final and binding. Per the terms of the settlement, the Company paid GE an aggregate of $ 750 750 90 no |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | NOTE 9: EARNINGS PER COMMON SHARE Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income (loss) by the weighted-average number of common shares and dilutive effect of common stock equivalents (warrants, nonvested stock awards and stock options) using the treasury method. In each relevant period, the net income used in the basic and diluted EPS calculations is the same. The following table reconciles the weighted-average basic number of common shares outstanding and the weighted-average diluted number of common shares outstanding for the purpose of calculating basic and diluted EPS. Reconciliation of number of shares in earnings per share calculation Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Weighted average common shares outstanding - basic 11,888 12,389 12,012 12,389 Dilutive effect of common stock equivalents – 56 – 52 Weighted average common shares outstanding - diluted 11,888 12,445 12,012 12,441 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10: RELATED PARTY TRANSACTIONS On August 15, 2019, Mr. Ronald E. Smith, the Company's Founder, resigned as Chief Executive Officer and as a member of the Board, effective as of August 31, 2019. In connection with Mr. Smith's resignation, the Company entered into a Transition Agreement with him, effective as of September 1, 2019 (the “Transition Agreement”). The Transition Agreement provided for Mr. Smith to serve as an independent consultant to the Company from September 1, 2019 through December 31, 2021. The Company agreed to pay Mr. Smith $ 42 15 45 135 In addition to the other payments provided for under the Transition Agreement, the Company also agreed to pay Mr. Smith 1.5% of the net sale or lease value of two carousels owned by Company, if such sale or lease occurred prior to December 31, 2021, and subject to certain other conditions. Such carousels were not sold prior to December 31, 2021. No 4 5 On January 5, 2022, the Company repurchased 234 150 119 147 100 |
EMPLOYEE RETENTION CREDIT
EMPLOYEE RETENTION CREDIT | 9 Months Ended |
Sep. 30, 2022 | |
Employee Retention Credit | |
EMPLOYEE RETENTION CREDIT | NOTE 11: EMPLOYEE RETENTION CREDIT Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. Since there are no generally accepted accounting principles for for-profit business entities that receive government assistance that is not in the form of a loan, an income tax credit or revenue from a contract with a customer, we determined the appropriate accounting treatment by analogy to other guidance. The Company accounted for the employee retention credit by analogy to International Accounting Standards (“IAS”) 20, “Accounting for Government Grants and Disclosure of Government Assistance, of International Financial Reporting Standards (IFRS).” Under an IAS 20 analogy, a business entity would recognize the employee retention credit on a systematic basis over the periods in which the entity recognizes the payroll expenses for which the grant (i.e., tax credit) is intended to compensate when there is reasonable assurance (i.e., it is probable) that the entity will comply with any conditions attached to the grant and the grant will be received. The Company recognized a $ 650 650 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Unless otherwise indicated, the terms “Deep Down, Inc.”, “Deep Down”, “Company”, “we”, “our” and “us” are used in this Report to refer to Deep Down, Inc., a Nevada corporation (“Deep Down Nevada”), and its directly wholly owned subsidiary, Deep Down, Inc., a Delaware corporation (“Deep Down Delaware”). The accompanying unaudited condensed consolidated financial statements of Deep Down, 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, 2021. 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 Deep Down is an energy services company that provides equipment and support services to the world’s energy and offshore industries. Deep Down offers innovative solutions to complex customer challenges presented between the production facility and the energy source. Deep Down's core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, and related services. Additionally, Deep Down's highly experienced professionals can support subsea engineering, manufacturing, installation, commissioning, and maintenance projects located anywhere in the world. On February 22, 2022, Deep Down Nevada entered into an Agreement and Plan of Merger providing for the merger of the Company with the Company’s wholly-owned subsidiary, Koil Energy Solutions, Inc. (the “Merger”). As permitted by Section 92A.180 of the Nevada Revised Statutes, the purpose of the Merger is to effect a change of the Company’s name from Deep Down, Inc., to Koil Energy Solutions, Inc. (the “Name Change”). On February 25, 2022, in connection with the foregoing, Deep Down Nevada filed an Issuer Company-Related Action Notification Form with the Financial Industry Regulatory Authority (“FINRA”), requesting confirmation of the Name Change. On February 28, 2022, in connection with the foregoing, the Company filed an Issuer Company-Related Action Notification Form with FINRA, requesting a change of the Company’s ticker symbol (the “Symbol Change”). Subject to approval by FINRA, the Name Change and Symbol Change will not affect the rights of the Company’s security holders. The Company’s securities will continue to be quoted on the OTC Markets. Following the Name Change, the stock certificates, which reflect the name of the Company prior to the Merger, will continue to be valid. Certificates reflecting the Name Change will be issued in due course as old stock certificates are tendered for exchange or transfer to the Company’s transfer agent. |
Liquidity | Liquidity The Company’s cash on hand was $ 3,543 4,471 3,676 7,098 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 ongoing operations, and potential sales of PP&E. Given the volatility in oil prices and the impact on global economic activity caused by the COVID-19 pandemic, as well as recent increases in raw materials costs and ongoing supply chain constraints, the Company cannot predict this with certainty. To mitigate this uncertainty and preserve liquidity, the Company will continue to exercise discipline when making capital investments and practice opportunistic cost containment initiatives, which can include workforce alignment and limiting overhead spending and 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 Deep Down, Inc. and its wholly owned subsidiary for the three and nine months ended September 30, 2022 and 2021. All intercompany transactions and balances have been eliminated. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Lease information table | Lease information table September 30, 2022 December 31, 2021 Assets: Right-of-use assets $ 7,114 $ 1,861 Liabilities: Current lease liabilities 666 1,306 Non-current lease liabilities 6,625 588 Total lease liabilities $ 7,291 $ 1,894 |
Components of lease expense | Components of lease expense Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating lease expense included in: Cost of sales $ 431 $ 313 $ 1,055 $ 946 Selling, general and administrative expenses 90 35 148 143 Short term lease expense 84 97 304 210 Total lease expense $ 605 $ 445 $ 1,507 $ 1,299 |
Lease term and discount rate | Lease term and discount rate September 30, 2022 December 31, 2021 Weighted-average remaining lease terms on operating leases (yrs.) 9.00 1.43 Weighted-average discount rates on operating leases 6.25 5.374 |
Future minimum lease payments | Future minimum lease payments Operating Leases October 1, 2022 – September 30, 2023 $ 1,210 October 1, 2023 – September 30, 2024 962 October 1, 2024 – September 30, 2025 980 October 1, 2025 – September 30, 2026 993 Thereafter 6,483 Total lease payments $ 10,628 Less: Interest (3,337 ) Present value of lease liabilities $ 7,291 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Disaggregation of revenue Three Months Ended September 30, 2022 2021 Fixed Price Contracts $ 1,206 $ 1,866 Service Contracts 1,051 1,684 Total $ 2,257 $ 3,550 Nine Months Ended September 30, 2022 2021 Fixed Price Contracts $ 3,635 $ 5,170 Service Contracts 5,722 6,830 Total $ 9,357 $ 12,000 |
Schedule of earnings in excess of billings on uncompleted contracts | Schedule of earnings in excess of billings on uncompleted contracts September 30, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 421 $ 1,312 Estimated earnings on uncompleted contracts 265 1,485 Gross costs and estimated earnings 686 2,797 Less: Billings to date on uncompleted contracts (314 ) (2,695 ) Costs incurred plus estimated earning less billings on uncompleted contracts, net $ 372 $ 102 Included in the accompanying unaudited condensed consolidated balance sheets under the following captions: Contract assets $ 418 $ 352 Contract liabilities (46 ) (250 ) Costs incurred plus estimated earning less billings on uncompleted contracts $ 372 $ 102 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Schedule of property, plant and equipment September 30, 2022 December 31, 2021 Range of Asset Lives Buildings and improvements $ – $ 285 7 - 36 years Leasehold improvements – 899 2 - 10 years Equipment 5,692 11,885 2 - 30 years Furniture, computers and office equipment 166 429 2 - 8 years Construction in progress 1,978 60 – Total property, plant and equipment 7,836 13,558 Less: Accumulated depreciation and amortization (4,670 ) (11,831 ) Property, plant and equipment, net $ 3,166 $ 1,727 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of number of shares in earnings per share calculation | Reconciliation of number of shares in earnings per share calculation Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Weighted average common shares outstanding - basic 11,888 12,389 12,012 12,389 Dilutive effect of common stock equivalents – 56 – 52 Weighted average common shares outstanding - diluted 11,888 12,445 12,012 12,441 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Cash | $ 3,543 | $ 3,676 |
Working capital | $ 4,471 | $ 7,098 |
LEASES (Details - Operating lea
LEASES (Details - Operating lease info) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Right-of-use assets | $ 7,114 | $ 1,861 |
Liabilities: | ||
Current lease liabilities | 666 | 1,306 |
Non-current lease liabilities | 6,625 | 588 |
Total lease liabilities | $ 7,291 | $ 1,894 |
LEASES (Details - Minimum lease
LEASES (Details - Minimum lease payments) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Short term lease expense | $ 84 | $ 97 | $ 304 | $ 210 |
Total lease expense | 605 | 445 | 1,507 | 1,299 |
Cost of Sales [Member] | ||||
Operating lease expense | 431 | 313 | 1,055 | 946 |
Selling, General and Administrative Expenses [Member] | ||||
Operating lease expense | $ 90 | $ 35 | $ 148 | $ 143 |
LEASES (Details - Lease Term An
LEASES (Details - Lease Term And Discount) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Weighted-average remaining lease terms on operating leases (yrs.) | 9 years | 1 year 5 months 4 days |
Weighted-average discount rates on operating leases | 6.25% | 5.374% |
LEASES (Details - Present Value
LEASES (Details - Present Value) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
October 1, 2022 – September 30, 2023 | $ 1,210 | |
October 1, 2023 – September 30, 2024 | 962 | |
October 1, 2024 – September 30, 2025 | 980 | |
October 1, 2025 – September 30, 2026 | 993 | |
Thereafter | 6,483 | |
Total lease payments | 10,628 | |
Less: Interest | (3,337) | |
Present value of lease liabilities | $ 7,291 | $ 1,894 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details - Disaggregation of Revenue) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,257 | $ 3,550 | $ 9,357 | $ 12,000 |
Fixed-Price Contract [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,206 | 1,866 | 3,635 | 5,170 |
Servicing Contracts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,051 | $ 1,684 | $ 5,722 | $ 6,830 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details - Contract balances) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Costs incurred on uncompleted contracts | $ 421 | $ 1,312 |
Estimated earnings on uncompleted contracts | 265 | 1,485 |
Gross costs and estimated earnings | 686 | 2,797 |
Less: Billings to date on uncompleted contracts | (314) | (2,695) |
Costs incurred plus estimated earning less billings on uncompleted contracts, net | 372 | 102 |
Included in the accompanying unaudited condensed consolidated balance sheets under the following captions: | ||
Contract assets | 418 | 352 |
Contract liabilities | (46) | (250) |
Costs incurred plus estimated earning less billings on uncompleted contracts | $ 372 | $ 102 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 7,836 | $ 13,558 |
Less: Accumulated depreciation and amortization | (4,670) | (11,831) |
Property, plant and equipment, net | 3,166 | 1,727 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 0 | 285 |
Range of Asset Lives | 7 - 36 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 0 | 899 |
Range of Asset Lives | 2 - 10 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 5,692 | 11,885 |
Range of Asset Lives | 2 - 30 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 166 | 429 |
Range of Asset Lives | 2 - 8 years | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 1,978 | $ 60 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted Stock Awards [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-based compensation | $ 0 | $ 9 | $ 71 | $ 46 |
TREASURY STOCK (Details Narrati
TREASURY STOCK (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||
Stock repurchases, Share | 0 | 0 | 500 | 0 |
Stock purchased, Value | $ 326 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Liability accrual | $ 100 | ||
Litigation liability | 0 | ||
Litigation settlement | 750 | ||
Litigation liability | $ 0 | $ 90 | $ 750 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding - basic | 11,888 | 12,389 | 12,012 | 12,389 |
Dilutive effect of common stock equivalents | 0 | 56 | 0 | 52 |
Weighted average common shares outstanding - diluted | 11,888 | 12,445 | 12,012 | 12,441 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jun. 03, 2022 | Mar. 24, 2022 | Jan. 05, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2019 | |
Related Party Transaction [Line Items] | ||||||||
Consulting expenses | $ 45 | $ 135 | ||||||
Commissions paid | $ 0 | $ 5 | $ 0 | $ 5 | ||||
Stock Repurchased During Period, Shares | 0 | 0 | 500 | 0 | ||||
Payments for Repurchase of Common Stock | $ 250 | $ 0 | ||||||
Smith [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Commissions paid | 4 | |||||||
Stock Repurchased During Period, Shares | 147 | 119 | 234 | |||||
Payments for Repurchase of Common Stock | $ 100 | $ 150 | ||||||
Mr. Ronald E. Smith [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Severance payable | $ 15 | $ 15 | $ 42 |
EMPLOYEE RETENTION CREDIT (Deta
EMPLOYEE RETENTION CREDIT (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Employee Retention Credit | |
Employee retention credit | $ 650 |
Employee retention receivable | $ 650 |