UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
February 20, 2019
SUPERIOR DRILLING PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
| Utah | 46-4341605 |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
| | |
1583 South 1700 East Vernal, Utah | 84078 |
| (Address of principal executive offices) | (Zip code) |
Commission File Number:001-36453
Registrant’s telephone number, including area code:(435) 789-0594
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01.Entry into a Material Definitive Agreement.
On February 20, 2019, Superior Drilling Company, Inc. (the “Company”) and certain of its subsidiaries entered into a Loan and Security Agreement with Austin Financial Services, Inc. (“AFS”). Each of the entities is a borrower under the agreement. The agreement provides for a new $4.3 million credit facility, which includes a $0.8 million term loan and a $3.5 million revolver. Amounts outstanding under the revolver at any time may not exceed the sum of: (a) up to 85% of accounts or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect; less a dilution reserve as determined by AFS in its sole good faith discretion, plus (b) the lesser of (i) up to 50% of inventory or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect, or (ii) the inventory sublimit, minus (c) the borrowing base reserve as may be determined from time to time by AFS.
The interest rate for the term loan and the revolver is prime plus 2%. The obligations of the borrowers under the agreement are secured by a security interest in substantially all of the tangible and intangible assets of the borrowers, other than any assets owned by the borrowers that constitute real property (and fixtures affixed to such real property), certain excluded equipment, intellectual property, or aircraft. The facilities mature on February 20, 2023, subject to early termination pursuant to the terms of the agreement or extension as may be agreed by the parties.
The agreement contains a number of covenants that, among other things, limit or restrict the ability of the borrowers to incur additional indebtedness; incur additional liens; make dividends and other restricted payments; make investments; engage in mergers, acquisitions and dispositions; make optional prepayments of other indebtedness; engage in transactions with affiliates; and enter into restrictive agreements. The agreement does not include any financial covenants. If an event of default occurs, the lenders are entitled to accelerate the advances made thereunder and exercise rights against the collateral.
The foregoing summary is qualified in its entirety by reference to the full text of the Loan and Security Agreement which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 2.02.Results of Operations and Financial Condition.
On February 20, 2019, the Company issued a press release announcing its preliminary financial results and certain operational results for the quarter and fiscal year ended December 31, 2018. A copy of the press release making the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached Exhibit 99.1 shall be deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 9.01Financial Statements and Exhibits.
* Filed herewith
** Furnished herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 22, 2019
| | SUPERIOR DRILLING PRODUCTS, INC. |
| | |
| | /s/ Christopher D. Cashion |
| | Christopher D. Cashion |
| | Chief Financial Officer |
