Superior Drilling Products (SDPI) 10-Q 11 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 11, 2020
Cover [Abstract]
Entity Registrant Name	Superior Drilling Products, Inc.
Entity Central Index Key	0001600422
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,617,486
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash	$ 2,532,940	$ 1,217,014
Accounts receivable, net	1,414,774	3,850,509
Prepaid expenses	76,380	139,070
Inventories	1,302,181	924,032
Asset held for sale	40,000	252,704
Other current assets		252,178
Total current assets	5,366,275	6,635,507
Property, plant and equipment, net	7,755,738	8,045,692
Intangible assets, net	1,402,778	1,986,111
Right of use assets	177,303
Other noncurrent assets	93,619	93,619
Total assets	14,795,713	16,760,929
Current liabilities
Accounts payable	669,306	961,294
Accrued expenses	729,113	683,832
Customer deposits		61,421
Current portion of operating lease liability	114,070
Current portion of long-term debt, net of discounts	3,990,716	4,102,543
Total current liabilities	5,503,205	5,809,090
Operating lease liability	63,233
Long-term debt, less current portion, net of discounts	2,957,758	3,848,863
Total liabilities	8,524,196	9,657,953
Commitments and contingencies (Note 12)
Shareholders' equity
Common stock - $0.001 par value; 100,000,000 shares authorized; 25,434,776 and 25,418,126 shares issued and outstanding	25,435	25,418
Additional paid-in-capital	40,281,375	40,069,391
Accumulated deficit	(34,035,293)	(32,991,833)
Total shareholders' equity	6,271,517	7,102,976
Total liabilities and shareholders' equity	$ 14,795,713	$ 16,760,929

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	25,434,776	25,418,126
Common stock, shares outstanding	25,434,776	25,418,126

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue
Total Revenue	$ 2,024,388	$ 4,543,442	$ 7,382,151	$ 9,579,788
Operating costs and expenses
Cost of revenue	1,099,553	2,013,598	3,414,061	4,056,626
Selling, general and administrative expenses	1,340,213	1,816,195	3,358,112	3,885,235
Depreciation and amortization expense	680,375	930,410	1,441,139	1,941,515
Total operating costs and expenses	3,120,141	4,760,203	8,213,312	9,883,376
Operating loss	(1,095,753)	(216,761)	(831,161)	(303,588)
Other income (expense)
Interest income	942	21,431	5,630	40,364
Interest expense	(146,470)	(216,241)	(323,728)	(394,223)
Impairment on asset held for sale			(30,000)
Gain on disposition of assets		14,147	142,234	14,147
Total other expense	(145,528)	(180,663)	(205,864)	(339,712)
Loss before income taxes	(1,241,506)	(397,424)	(1,037,025)	(643,300)
Income tax expense	(225)		(6,435)
Net loss	$ (1,241,506)	$ (397,424)	$ (1,043,460)	$ (643,300)
Basic loss earnings per common share	$ (0.05)	$ (0.02)	$ (0.04)	$ (0.03)
Basic weighted average common shares outstanding	25,434,593	25,034,580	25,426,360	25,026,384
Diluted loss per common share	$ (0.05)	$ (0.02)	$ (0.04)	$ (0.03)
Diluted weighted average common shares outstanding	25,434,593	25,034,580	25,426,360	25,026,384
Tool Revenue [Member]
Revenue
Total Revenue	$ 1,343,432	$ 2,573,513	$ 4,956,350	$ 6,017,422
Contract Services [Member]
Revenue
Total Revenue	$ 680,956	$ 1,969,929	$ 2,425,801	$ 3,562,366

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows From Operating Activities
Net loss	$ (1,043,460)	$ (643,300)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense	1,441,139	1,941,515
Share based compensation expense	212,001	317,966
Impairment on asset held for sale	30,000
Gain on disposition of assets	(142,234)	(14,147)
Amortization of deferred loan costs	9,263	6,179
Changes in operating assets and liabilities:
Accounts receivable	2,435,735	(1,040,141)
Inventories	(860,431)	(158,881)
Prepaid expenses and other noncurrent assets	314,868	(108,142)
Accounts payable and accrued expenses	(224,624)	628,595
Other long term liabilities	(61,421)
Net Cash From Operating Activities	2,110,836	929,644
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(90,132)	(685,614)
Proceeds from sale of fixed assets	117,833
Net Cash From Investing Activities	27,701	(685,614)
Cash Flows From Financing Activities
Principal payments on debt	(1,953,673)	(2,895,957)
Proceeds received from debt borrowings	964,120	800,000
Payments on revolving loan	(842,880)	(437,922)
Proceeds received on revolving loan	1,009,822	1,309,836
Debt issuance costs		(70,103)
Net Cash From Financing Activities	(822,611)	(1,294,146)
Net Change in Cash	1,315,926	(1,050,116)
Cash at Beginning of Period	1,217,014	4,264,767
Cash at End of Period	2,532,940	3,214,651
Supplemental information:
Cash paid for Interest	340,027	466,976
Acquisition of equipment by issuance of note payable		330,840
Inventory converted to property, plant and equipment	482,282
Reduction of debt with sale of asset	$ 211,667

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is an innovative drilling and completion tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. Our headquarters and manufacturing operations are located in Vernal, Utah. Our drilling solutions include the patented Drill-N-Ream® well bore conditioning tool (“Drill-N-Ream tool”) and the patented Strider™ Drill String Oscillation System technology (“Strider technology” or “Strider”). In addition, the Company is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field services company. We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well as customers’ custom products. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three and six months ended June 30, 2020 and 2019, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results of operations expected for the year ended December 31, 2020. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2019 and 2018 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. COVID-19 The COVID-19 pandemic-related reduction in energy demand and the dramatic decline in commodity prices that began in the first quarter of 2020 continued to cause disruptions and volatility in the second quarter of 2020. Sharp declines in crude oil and natural gas production along with reduced demand for refined products due to the economic shutdown in the wake of the pandemic affected our business in the second quarter, and we expect will continue to do so in the near term. Further, significant uncertainty remains regarding the duration and extent of the impact of the pandemic on the energy industry. See Note 2 – Liquidity. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires assets and liabilities that arise from all leases to be recognized on the balance sheet for lessees and expanded financial statement disclosures for both lessees and lessors. We adopted the new standard effective January 1, 2020 and elected the modified retrospective transition method and as such, the comparative financial information will not be restated and will continue to be reported under the lease standard in effect during those periods. The adoption of this standard resulted in approximately $270,000 of additional assets and liabilities on our consolidated balance sheet representing the recognition of operating lease right-of-use assets and operating lease liabilities. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statement of operations. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes an estimate of its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. See Note 8 – Leases. Significant Customers For the six months ended June 30, 2020, two customers represented 83% of our total revenue during the period. For the six months ended June 30, 2019, two customers represented 94% of our total revenue during the period. Significant Vendors We had one vendor that represented 15% of our purchases for the first six months ended June 30, 2020. The vendor had approximately $186,939 in accounts payable at June 30, 2020 and purchases in the six months of 2020 from this vendor totaled approximately $498,339. We had one vendor that represented 11% of our purchases for the first six months ended June 30, 2019. This vendor had approximately $158,000 in accounts payable at June 30, 2019 and purchases in the first six months of 2019 from this vendor totaled approximately $479,000. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. Early adoption is permitted and entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. For smaller reporting companies, as provided by Accounting Standards Update 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), ASU 2016-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2022. The adoption of ASU 2016-13 is currently not expected to have a material effect on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“Topic 740”) - Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020. The adoption of ASU 2019-12 is currently not expected to have a material effect on our consolidated financial statements.

Liquidity

Liquidity	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity	NOTE 2. LIQUIDITY The significant decline in oil demand due to COVID-19, the instability of oil prices caused by geopolitical issues and production levels, and the limited availability of storage capacity, have together resulted in our customers announcing significant reductions to their capital expenditure budgets for 2020. Management’s expectation is that demand for our products and services will be severely impacted for the duration of 2020 and potentially beyond; however, we are currently unable to estimate the full impact to our business, how long this significant drop in demand will last or the depth of the decline. In an effort to offset the reduction in revenue resulting from the weakened macroeconomic environment, we implemented certain cost reduction measures in April 2020. These measures included, but were not limited to, the following: ● 20% reduction of the base salary for the Company’s Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer; ● 20% reduction in the base salaries of certain non-executive officers of the Company; ● 20% reduction in fees to be paid to the independent directors on the Board for their service as directors; ● 5% to 10% reduction in salaries of other members of the management team and salaried workforce; and ● 20% reduction of the Company’s workforce. We entered into amended agreements with certain of our customers as discussed below in more detail. We have also reduced our planned capital expenditures for 2020 and we have decided to defer further investment in new technology development, including our Strider technology. We believe the U.S. onshore activity for the remainder of 2020 will remain at depressed levels and continue to be constrained. We believe that our borrowing capacity, cash generated from operations and the proceeds of the Paycheck Protection Program (“PPP”) loan (see Note 9 – Long-Term Debt) will be sufficient to fund our operations for the next 12 months. To enhance liquidity, our operational and financial strategies include managing our operating costs, accelerating collections of international receivables, and working capital and debt. We are working to minimize the decline in revenue and review additional cost containment measures in order to be cash flow positive. If we are unable to do this, we may not be able to, among other things, (i) maintain our revised general and administrative spending levels; (ii) fund certain obligations as they become due; and (iii) respond to competitive pressures or unanticipated capital requirements. COVID-19 has also led to a significant disruption in the equity and debt capital markets, which could hinder our ability to raise new capital or obtain financing on acceptable terms

Revenue

Revenue	6 Months Ended
	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Revenue	NOTE 3. REVENUE Our revenue is derived from short term contracts. Revenue is recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. We also assess our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 days. Revenue generally does not include right of return or other significant post-delivery obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We elected to treat shipping and handling costs as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for shipping and handling when incurred as an expense in cost of sales. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. In accordance with Topic 606, we do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. All of our contracts are less than one year in duration. 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. Disaggregation of Revenue Approximately 85% of our revenue was from the United States and approximately 15% is from the Middle East for the six months ended June 30, 2020. For the six months ended June 30, 2019, approximately 96% of our revenue was from the United States and approximately 4% was from the Middle East for the six months ended June 30, 2019. Tool Revenue Tool and Product Sales Tool Rental Other Related Revenue: Contract Services Drill Bit Manufacturing and Refurbishment Revenue disaggregated by revenue source are as follows: Six months ended June 30, 2020 2019 Tool Revenue: Tool and product sales $ 851,520 $ 2,303,489 Tool rental 1,287,172 449,648 Other related revenue 2,817,658 3,264,285 Total Tool Revenue 4,956,350 6,017,422 Contract Services 2,425,801 3,562,366 Total Revenue $ 7,382,151 $ 9,579,788 Contract Costs We do not incur any material costs of obtaining contracts. Contract Balances Under our sales contracts, we invoice customers after our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Inventories	NOTE 4. INVENTORIES Inventories are comprised of the following: June 30, 2020 December 31, 2019 Raw material $ 828,574 $ 800,662 Work in progress 155,196 75,235 Finished goods 318,411 48,135 $ 1,302,181 $ 924,032

Property, Plant and Equipment

Property, Plant and Equipment	6 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	NOTE 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following: June 30, 2020 December 31, 2019 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,758,832 Building improvements 755,039 755,039 Machinery and equipment 10,727,358 10,343,486 Office equipment, fixtures and software 628,358 615,357 Transportation assets 350,871 350,871 18,106,483 17,704,001 Accumulated depreciation (10,350,745 ) (9,658,309 ) $ 7,755,738 $ 8,045,692 In 2019, the Company decided to sell the Company airplane and related hangar. Accordingly, these assets are reported as assets held for sale on our balance sheet as of December 31, 2019 at their carrying value, which is lower than the expected fair value less costs to sell. In February 2020, the Company sold the airplane for a gain of approximately $142,000. The Company recorded a $30,000 impairment related to the hanger in March 2020 and expects a sale of the hanger to be completed in the next 12 months. Depreciation expense related to property, plant and equipment for the three and six months ended June 30, 2020 was $388,708 and $857,806, respectively and for the three and six months ended June 30, 2019 was $425,410 and $824,849, respectively.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	NOTE 6. INTANGIBLE ASSETS Intangible assets are comprised of the following: June 30, 2020 December 31, 2019 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (13,497,222 ) (12,913,889 ) $ 1,402,778 $ 1,986,111 Amortization expense related to intangible assets for the three and six months ended June 30, 2020 was $291,667 and $583,333, respectively and for the three and six months ended June 30, 2019 was $505,000 and $1,116,666, respectively. Annually, and more often as necessary, we will perform an evaluation of our intangible assets for indications of impairment. If indications exist, we will perform an evaluation of the fair value of the intangible assets and, if necessary, record an impairment charge. As of June 30, 2020, the Company reviewed the net balance of the intangible assets and determined no impairment was needed.

Related Party Note Receivable

Related Party Note Receivable	6 Months Ended
	Jun. 30, 2020
Receivables [Abstract]
Related Party Note Receivable	NOTE 7. RELATED PARTY NOTE RECEIVABLE In January 2014, we entered into a Note Purchase and Sale Agreement under which we agreed to purchase a loan made to Tronco Energy Corporation (“Tronco”), a party related to us through common control, in order to take over the legal position as Tronco’ s senior secured lender. Effective August 2017, the Company fully reserved the related party note receivable of $6,979,043, which reduced the related party note receivable balance to $0. The Company continues to hold the 8,267,860 shares of the Company’s common stock as collateral. The Company will record a recovery of the loan upon receiving repayment of the note or interest in other income. As described in Note 13 – Subsequent Events, the Company and Tronco amended and restated the loan agreement and note in July 2020. As amended, the interest rate on the note is fixed at 2% annum. Interest only is due December 31, 2021 and 2022, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022.

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Leases	NOTE 8. LEASES The Company determines whether a contract is a lease, or contains a lease, at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The Company discounts lease payments based on an estimate of its incremental borrowing rate as the Company’s leases do not provide a readily determinable implicit rate. The Company leases certain facilities in Texas, Utah and Dubai under long-term operating leases with lease terms of one year to two years. Effective January 1, 2020, the Company adopted the provision of ASC 842 Leases. The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of June 30, 2020: Classification on Balance Sheet June 30, 2020 Assets Operating lease assets Operating lease right of use assets $ 177,303 Total lease assets $ 177,303 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 114,070 Noncurrrent liabilities Operating lease liability Long-term operating lease liability 63,233 Total lease liability $ 177,303 The lease expense and the cash paid under operating leases for the three and six months ended June 30, 2020 was $114,990. At June 30, 2020, the weighted average remaining lease terms were 2.03 years and the weighted average discount rate was 7.25%. The following is the aggregate future lease payments for operating leases as of June 30, 2020: 2020 (remaining) $ 61,706 2021 90,042 2022 23,304 2023 16,104 Total undiscounted lease payments 191,156 Less: effects of discounting (13,853 ) Present value of lease payments $ 177,303

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Long-Term Debt	NOTE 9. LONG-TERM DEBT Long-term debt is comprised of the following: June 30, 2020 December 31, 2019 Real estate loans $ 2,768,365 $ 2,938,191 Hard Rock Note 1,500,000 3,000,000 Credit Agreement 1,144,163 1,134,626 Machinery loans 573,363 580,185 PPP Loan 891,600 - Transportation loans 70,983 298,404 6,948,474 7,951,406 Less: Current portion 3,990,716 (4,102,542 ) Long-term debt, net $ 2,957,758 $ 3,848,864 Real Estate Loans On February 1, 2019, we signed a loan agreement for $3,129,861 refinancing our commercial bank loan which is secured by the land and buildings at our Vernal, Utah campus. We paid $1,000,000 towards the previous loan that was scheduled to mature on February 15, 2019, upon refinancing. The loan requires monthly payments of approximately $43,000, including principal and interest at 7.25%, and is secured by the land and buildings at our Vernal, Utah Campus. A balloon payment of approximately $2,500,000 is due upon maturity on February 15, 2021. Hard Rock Note In 2014, the Company purchased all of the interests of Hard Rock. Consideration consisted of $12.5 million paid in cash at closing and a $12.5 million seller’s note (the “Hard Rock Note”). The Hard Rock Note and subsequent amendments are secured by all of the patents, patents pending, other patent rights, and trademarks transferred to Hard Rock. In April 2020, the Company amended and restated the Hard Rock Note. Prior to this amendment, the Company was required to pay principal payments of $750,000 (plus accrued interest) on January 5, April 5, July 5 and October 5 in 2020. The Company paid $803,630 of principal and accrued interest on January 5, 2020, and $790,223 of principal and accrued interest on April 5, 2020. Under the amended terms of the Hard Rock Note, we are required to make the following payments: accrued interest only on July 5 and October 5, 2020; accrued interest on January 5, April 5, July 5 and October 5 in 2021 and 2022; and $750,000 (plus accrued interest) on July 5, 2021 with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022. On July 5, 2020, the Company paid $29,759 of accrued interest. The remaining principal balance of the Hard Rock Note is $1,500,000. Credit Agreement In February 2019, the Company entered into a Loan and Security Agreement (the “Credit Agreement”) with Austin Financial Services, Inc. (“AFS”). The Credit Agreement provides a $4,500,000 credit facility, which includes a $1,000,000 term loan (the “Term Loan”) and a $3,500,000 revolver (the “Revolving Loan”). As of June 30, 2020, $360,229 was outstanding on the Revolving Loan. Amounts outstanding under the Revolving Loan at any time may not exceed the sum of: (a) up to 85% of accounts receivable 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 Credit Agreement contains various restrictive 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 Credit 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. Borrowing under the Revolving Loan is classified as current debt as a result of the required lockbox arrangement and the subjective acceleration clause. At June 30, 2020, we were in compliance with the covenants in the Credit Agreement. The interest rate for the Term Loan and the Revolving Loan is prime plus 2%. At June 30, 2020, the interest rate was 8.85%, which includes a 3.6% management fee rate. The obligations of the Company 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 Company that constitute real property (and fixtures affixed to such real property), certain excluded equipment, intellectual property, or aircraft. The Credit Agreement matures on February 20, 2023, subject to early termination pursuant to the terms of the agreement or extension as may be agreed by the parties. Paycheck Protection Program On April 21, 2020, the Company received loan proceeds of $891,600 under a promissory note from its existing commercial bank (the “PPP Loan”). The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. Some of the uncertainties related to the Company’s operations that are directly related to COVID-19 include, but are not limited to, the severity of the virus, the duration of the outbreak, governmental, business or other actions (which could include limitations on operations or mandates to provide products or services), impacts on the supply chain, and the effect on customer demand or changes to operations. In addition, the health of the Company’s workforce, and its ability to meet staffing needs to continue to build, repair and distribute drilling tools, and other critical functions, are uncertain and is vital to its operations. The PPP Loan certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company had approximately $341,000 of available credit under the Credit Agreement as of April 21, 2020. Further, the Company has a limited market capitalization and the Company’s shares have limited trading volume and as a result, the Company believes it meets the certification requirements. The term of the Company’s PPP Loan is two years. The annual interest rate on the PPP Loan is 1% and no payments of principal or interest are due during the six-month period beginning on the date of the PPP Loan.

Total Equity

Total Equity	6 Months Ended
	Jun. 30, 2020
Equity [Abstract]
Total Equity	NOTE 10. TOTAL EQUITY A summary of changes in total equity for the six months ended June 30, 2020 and 2019 is presented below: Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2019 25,418,126 $ 25,418 $ 40,069,391 $ (32,991,833 ) $ 7,102,976 Stock-based compensation expense 16,650 17 211,984 - 211,984 Net loss - - - (1,043,460 ) (1,043,460 ) Balance - June 30, 2020 25,434,776 $ 25,435 $ 40,281,375 $ (34,035,293 ) $ 6,271,517 Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2018 25,018,098 $ 25,018 $ 39,440,611 $ (32,055,410 ) $ 7,410,219 Stock-based compensation expense 16,649 17 317,949 - 317,966 Net loss - - - (643,300 ) (643,300 ) Balance - June 30, 2019 25,034,747 $ 25,035 $ 39,758,560 $ (32,698,710 ) $ 7,084,885

Geographical Operations Informa

Geographical Operations Information	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Geographical Operations Information	NOTE 11. GEOGRAPHICAL OPERATIONS INFORMATION The following summarizes revenue by geographic location: Three months ending June 30, Six months ending June 30, 2020 2019 2020 2019 Revenue: North America $ 1,688,933 $ 4,341,696 $ 6,269,443 $ 9,169,973 Middle East $ 335,455 $ 201,746 $ 1,112,708 $ 409,815 $ 2,024,388 $ 4,543,442 $ 7,382,151 $ 9,579,788 The following summarizes net property, plant and equipment by geographic location: June 30, 2020 December 31, 2019 Property, plant and equipment, net: North America $ 6,601,443 $ 7,160,646 Middle East 1,154,295 885,046 $ 7,755,738 $ 8,045,692

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 12. COMMITMENTS AND CONTINGENCIES We are subject to litigation that arises from time to time in the ordinary course of our business activities. In February 2019, the Company filed a patent infringement lawsuit in the United States District Court for the Western District of Louisiana Lafayette Division asserting Stabil Drill Specialties, LLC (“Stabil Drill”) infringed on our patent that covers the Company’s well bore conditioning tool, the Drill-N-Ream. The lawsuit was subsequently moved from Louisiana to the United States District Court for the Southern District of Texas, Houston Division. The court ordered the Company to serve discovery requests upon Stabil Drill and gave Stabil Drill deadlines to respond and produce documents and permit product inspection. Stabil Drill filed a motion for summary judgement and the Company responded and cross-moved for patent infringement. The parties are awaiting the judge’s decision. We cannot predict the outcome of this matter, but our legal costs could have a material effect on our financial position or results of operations in future periods. We are not currently involved in any other litigation which management believes could have a material effect on our financial position or results of operations.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	NOTE 13. SUBSEQUENT EVENTS On July 7, 2020, the Company entered into an amended and restated loan agreement and note with Tronco changing the payment terms on the note. As amended, the interest rate on the note is fixed at 2% per annum. Interest only is due December 31, 2021 and 2022, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022. On August 7, 2020, the Board of Directors granted 259,765 restricted stock units to Troy Meier, Chairman and Chief Executive Officer, granted 199,219 restricted stock units to Annette Meier, President and Chief Operating Officer, granted 140,625 restricted stock units to Chris Cashion, Chief Financial Officer, and 87,891 restricted stock units to each of the three independent members of the Board of Directors. In addition, the Board of Directors authorized 675,000 restricted stock units to be granted to employees of the company other than Mr. and Mrs. Meier and Mr. Cashion. These restricted stock units will vest over three years.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Organization and Nature of Operations	Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is an innovative drilling and completion tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. Our headquarters and manufacturing operations are located in Vernal, Utah. Our drilling solutions include the patented Drill-N-Ream® well bore conditioning tool (“Drill-N-Ream tool”) and the patented Strider™ Drill String Oscillation System technology (“Strider technology” or “Strider”). In addition, the Company is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field services company. We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well as customers’ custom products. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”).
Basis of Presentation	Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries.
Unaudited Interim Financial Presentation	Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three and six months ended June 30, 2020 and 2019, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results of operations expected for the year ended December 31, 2020. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2019 and 2018 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”).
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets.
Covid 19	COVID-19 The COVID-19 pandemic-related reduction in energy demand and the dramatic decline in commodity prices that began in the first quarter of 2020 continued to cause disruptions and volatility in the second quarter of 2020. Sharp declines in crude oil and natural gas production along with reduced demand for refined products due to the economic shutdown in the wake of the pandemic affected our business in the second quarter, and we expect will continue to do so in the near term. Further, significant uncertainty remains regarding the duration and extent of the impact of the pandemic on the energy industry. See Note 2 – Liquidity.
Leases	Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires assets and liabilities that arise from all leases to be recognized on the balance sheet for lessees and expanded financial statement disclosures for both lessees and lessors. We adopted the new standard effective January 1, 2020 and elected the modified retrospective transition method and as such, the comparative financial information will not be restated and will continue to be reported under the lease standard in effect during those periods. The adoption of this standard resulted in approximately $270,000 of additional assets and liabilities on our consolidated balance sheet representing the recognition of operating lease right-of-use assets and operating lease liabilities. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statement of operations. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes an estimate of its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. See Note 8 – Leases.
Significant Customers	Significant Customers For the six months ended June 30, 2020, two customers represented 83% of our total revenue during the period. For the six months ended June 30, 2019, two customers represented 94% of our total revenue during the period.
Significant Vendors	Significant Vendors We had one vendor that represented 15% of our purchases for the first six months ended June 30, 2020. The vendor had approximately $186,939 in accounts payable at June 30, 2020 and purchases in the six months of 2020 from this vendor totaled approximately $498,339. We had one vendor that represented 11% of our purchases for the first six months ended June 30, 2019. This vendor had approximately $158,000 in accounts payable at June 30, 2019 and purchases in the first six months of 2019 from this vendor totaled approximately $479,000.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. Early adoption is permitted and entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. For smaller reporting companies, as provided by Accounting Standards Update 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), ASU 2016-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2022. The adoption of ASU 2016-13 is currently not expected to have a material effect on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“Topic 740”) - Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020. The adoption of ASU 2019-12 is currently not expected to have a material effect on our consolidated financial statements.

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Schedule of Revenue Disaggregated by Revenue	Revenue disaggregated by revenue source are as follows: Six months ended June 30, 2020 2019 Tool Revenue: Tool and product sales $ 851,520 $ 2,303,489 Tool rental 1,287,172 449,648 Other related revenue 2,817,658 3,264,285 Total Tool Revenue 4,956,350 6,017,422 Contract Services 2,425,801 3,562,366 Total Revenue $ 7,382,151 $ 9,579,788

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are comprised of the following: June 30, 2020 December 31, 2019 Raw material $ 828,574 $ 800,662 Work in progress 155,196 75,235 Finished goods 318,411 48,135 $ 1,302,181 $ 924,032

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	6 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant and Equipment	Property, plant and equipment are comprised of the following: June 30, 2020 December 31, 2019 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,758,832 Building improvements 755,039 755,039 Machinery and equipment 10,727,358 10,343,486 Office equipment, fixtures and software 628,358 615,357 Transportation assets 350,871 350,871 18,106,483 17,704,001 Accumulated depreciation (10,350,745 ) (9,658,309 ) $ 7,755,738 $ 8,045,692

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Intangible assets are comprised of the following: June 30, 2020 December 31, 2019 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (13,497,222 ) (12,913,889 ) $ 1,402,778 $ 1,986,111

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Schedule of Lease Related Assets and Liabilities	The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of June 30, 2020: Classification on Balance Sheet June 30, 2020 Assets Operating lease assets Operating lease right of use assets $ 177,303 Total lease assets $ 177,303 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 114,070 Noncurrrent liabilities Operating lease liability Long-term operating lease liability 63,233 Total lease liability $ 177,303
Schedule of Aggregate Future Lease Payments for Operating Leases	The following is the aggregate future lease payments for operating leases as of June 30, 2020: 2020 (remaining) $ 61,706 2021 90,042 2022 23,304 2023 16,104 Total undiscounted lease payments 191,156 Less: effects of discounting (13,853 ) Present value of lease payments $ 177,303

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt is comprised of the following: June 30, 2020 December 31, 2019 Real estate loans $ 2,768,365 $ 2,938,191 Hard Rock Note 1,500,000 3,000,000 Credit Agreement 1,144,163 1,134,626 Machinery loans 573,363 580,185 PPP Loan 891,600 - Transportation loans 70,983 298,404 6,948,474 7,951,406 Less: Current portion 3,990,716 (4,102,542 ) Long-term debt, net $ 2,957,758 $ 3,848,864

Total Equity (Tables)

Total Equity (Tables)	6 Months Ended
	Jun. 30, 2020
Equity [Abstract]
Summary of Changes in Total Equity	A summary of changes in total equity for the six months ended June 30, 2020 and 2019 is presented below: Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2019 25,418,126 $ 25,418 $ 40,069,391 $ (32,991,833 ) $ 7,102,976 Stock-based compensation expense 16,650 17 211,984 - 211,984 Net loss - - - (1,043,460 ) (1,043,460 ) Balance - June 30, 2020 25,434,776 $ 25,435 $ 40,281,375 $ (34,035,293 ) $ 6,271,517 Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2018 25,018,098 $ 25,018 $ 39,440,611 $ (32,055,410 ) $ 7,410,219 Stock-based compensation expense 16,649 17 317,949 - 317,966 Net loss - - - (643,300 ) (643,300 ) Balance - June 30, 2019 25,034,747 $ 25,035 $ 39,758,560 $ (32,698,710 ) $ 7,084,885

Geographical Operations Infor_2

Geographical Operations Information (Tables)	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Schedule of Revenue and Property, Plant and Equipment by Geographic Location	The following summarizes revenue by geographic location: Three months ending June 30, Six months ending June 30, 2020 2019 2020 2019 Revenue: North America $ 1,688,933 $ 4,341,696 $ 6,269,443 $ 9,169,973 Middle East $ 335,455 $ 201,746 $ 1,112,708 $ 409,815 $ 2,024,388 $ 4,543,442 $ 7,382,151 $ 9,579,788 The following summarizes net property, plant and equipment by geographic location: June 30, 2020 December 31, 2019 Property, plant and equipment, net: North America $ 6,601,443 $ 7,160,646 Middle East 1,154,295 885,046 $ 7,755,738 $ 8,045,692

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jan. 02, 2020	Dec. 31, 2019
Operating lease right-of-use assets	$ 177,303		$ 270,000
Operating lease liabilities	114,070		$ 270,000
Accounts payable	669,306			$ 961,294
Vendor [Member]
Accounts payable	186,939	$ 158,000
Purchases from vendor	$ 498,339	$ 479,000
Customer Concentration Risk [Member] | Revenue [Member] | Two Customers [Member]
Concentration risk percentage	83.00%	94.00%
Supplier Concentration Risk [Member] | Purchases [Member] | One Vendor [Member]
Concentration risk percentage	15.00%	11.00%

Liquidity (Details Narrative)

Liquidity (Details Narrative)	1 Months Ended
	Apr. 30, 2020
Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer [Member]
Subsequent Event [Line Items]
Percentage of reduction in basic salary	20.00%
Non-executive Officers [Member]
Subsequent Event [Line Items]
Percentage of reduction in basic salary	20.00%
Independent Directors [Member]
Subsequent Event [Line Items]
Percentage of reduction in fee payable	20.00%
Other Members of Management Team and Salaried Workforce [Member] | Minimum [Member]
Subsequent Event [Line Items]
Percentage of reduction in basic salary	5.00%
Other Members of Management Team and Salaried Workforce [Member] | Maximum [Member]
Subsequent Event [Line Items]
Percentage of reduction in basic salary	10.00%
Workforce [Member]
Subsequent Event [Line Items]
Percentage of reduction in basic salary	20.00%

Revenue (Details Narrative)

Revenue (Details Narrative)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Description of payment terms	All of our contracts are less than one year in duration. 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.
Tool Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue agreement, description	While the duration of the rents vary by job and number of runs, these rents are generally less than one month. The rental agreements are typically based on the price per run or footage drilled and do not have any minimum rental payments or term.
Revenue [Member] | United States [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage of revenue	85.00%	96.00%
Revenue [Member] | Middle East [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage of revenue	15.00%	4.00%

Revenue - Schedule of Revenue

Revenue - Schedule of Revenue Disaggregated by Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total Revenue	$ 2,024,388	$ 4,543,442	$ 7,382,151	$ 9,579,788
Tool and Product Sales [Member]
Disaggregation of Revenue [Line Items]
Total Revenue			851,520	2,303,489
Tool Rental [Member]
Disaggregation of Revenue [Line Items]
Total Revenue			1,287,172	449,648
Other Related Revenue [Member]
Disaggregation of Revenue [Line Items]
Total Revenue			2,817,658	3,264,285
Tool Revenue [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,343,432	2,573,513	4,956,350	6,017,422
Contract Services [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	$ 680,956	$ 1,969,929	$ 2,425,801	$ 3,562,366

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw material	$ 828,574	$ 800,662
Work in progress	155,196	75,235
Finished goods	318,411	48,135
Inventories, net	$ 1,302,181	$ 924,032

Property, Plant and Equipment_2

Property, Plant and Equipment (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
	Mar. 31, 2020	Feb. 29, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Gain on sale of airplane property		$ 142,000
Impairment of assets	$ 30,000				$ 30,000
Depreciation expense related to property, plant and equipment			$ 388,708	$ 425,410	$ 857,806	$ 824,849

Property, Plant and Equipment -

Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Land	$ 880,416	$ 880,416
Buildings	4,764,441	4,758,832
Building improvements	755,039	755,039
Machinery and equipment	10,727,358	10,343,486
Office equipment, fixtures and software	628,358	615,357
Transportation assets	350,871	350,871
Property, plant and equipment, gross	18,106,483	17,704,001
Accumulated depreciation	(10,350,745)	(9,658,309)
Property, plant and equipment, net	$ 7,755,738	$ 8,045,692

Intangible Assets (Details Narr

Intangible Assets (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 291,667	$ 505,000	$ 583,333	$ 1,116,666
Impairment of intangible assets

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 14,900,000	$ 14,900,000
Accumulated amortization	(13,497,222)	(12,913,889)
Intangible assets, net	1,402,778	1,986,111
Developed Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	7,000,000	7,000,000
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,400,000	6,400,000
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 1,500,000	$ 1,500,000

Related Party Note Receivable (

Related Party Note Receivable (Details Narrative) - Tronco Energy Corporation [Member] - USD ($)	Aug. 31, 2017	Jun. 30, 2020
Related party note receivable	$ 6,979,043
Debt instrument decrease	$ 0
Common stock hold as collateral	8,267,860
Debt interest rate		2.00%
Debt maturity description		Interest only is due December 31, 2021 and 2022, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022.

Leases (Details Narrative)

Leases (Details Narrative)	3 Months Ended	6 Months Ended
	Jun. 30, 2020USD ($)	Jun. 30, 2020USD ($)
Leases [Abstract]
Lease expense	$ 114,990	$ 114,990
Weighted average remaining lease terms	2 years 11 days	2 years 11 days
Weighted average discount rate	7.25%	7.25%

Leases - Schedule of Lease Rela

Leases - Schedule of Lease Related Assets and Liabilities (Details) - USD ($)	Jun. 30, 2020	Jan. 02, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease assets	$ 177,303
Total lease assets	177,303	$ 270,000
Current liabilities, Operating lease liability	114,070	$ 270,000
Noncurrrent liabilities, Operating lease liability	63,233
Total lease liability	$ 177,303

Leases - Schedule of Aggregate

Leases - Schedule of Aggregate Future Lease Payments for Operating Leases (Details)	Jun. 30, 2020USD ($)
Leases [Abstract]
2020 (remaining)	$ 61,706
2021	90,042
2022	23,304
2023	16,104
Total undiscounted lease payments	191,156
Less: effects of discounting	(13,853)
Present value of lease payments	$ 177,303

Long-Term Debt (Details Narrati

Long-Term Debt (Details Narrative) - USD ($)	Apr. 21, 2020	Feb. 01, 2019	Dec. 31, 2014	Jun. 30, 2020	Jun. 30, 2019	Feb. 28, 2019
Debt Instrument [Line Items]
Previous debt payment paid					$ 70,103
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Line of credit facility description	The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business.
Line of credit interest rate	1.00%
Proceeds from loan	$ 891,600
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member]
Debt Instrument [Line Items]
Line of credit interest rate				8.85%
Management fee rate, percentage				3.60%
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Line of credit interest rate				2.00%
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member] | Management Fee Rate [Member]
Debt Instrument [Line Items]
Debt instrument maturity date				Feb. 20, 2023
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member]
Debt Instrument [Line Items]
Long term line of credit						$ 4,500,000
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Long term line of credit						1,000,000
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Loan [Member]
Debt Instrument [Line Items]
Long term line of credit						$ 3,500,000
Loan outstanding amount				$ 360,229
Line of credit facility description				Amounts outstanding under the Revolving Loan at any time may not exceed the sum of: (a) up to 85% of accounts receivable 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.
Current borrowing				$ 1,000,000
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Loan One [Member]
Debt Instrument [Line Items]
Loan outstanding amount				$ 364,157
Line of credit facility description				Amounts outstanding on the Revolving Loan as of June 30, 2020, may not exceed $364,157, which is based on a calculation applying 85% of accounts receivable and 50% of inventory.
Credit Agreement [Member]
Debt Instrument [Line Items]
Proceeds from loan	$ 341,000
Credit Agreement [Member] | Revolving Loan [Member]
Debt Instrument [Line Items]
Accrued interest				$ 10,390
Commercial Bank Loan [Member]
Debt Instrument [Line Items]
Debt instrument		$ 3,129,861
Previous debt payment paid		$ 1,000,000
Debt instrument, maturity date description		We paid $1,000,000 towards the previous loan that was scheduled to mature on February 15, 2019, upon refinancing.
Debt instrument, periodic principal payments including interest		$ 43,000
Debt instrument, interest rate		7.25%
Debt balloon payment		$ 2,500,000
Debt instrument maturity date		Feb. 15, 2021
Hard Rock Note [Member]
Debt Instrument [Line Items]
Debt instrument maturity date				Oct. 5, 2020
Business combination, consideration transferred, liabilities incurred			$ 12,500,000
Payments to acquire businesses, gross			$ 12,500,000
Debt note, payment description				Under the amended terms of the Hard Rock Note, we are required to make the following payments: accrued interest only on July 5 and October 5, 2020; accrued interest on January 5, April 5, July 5 and October 5 in 2021 and 2022; and $750,000 (plus accrued interest) on July 5, 2021 with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022
Notes payable				$ 1,500,000
Hard Rock Note [Member] | January 5, 2020 [Member]
Debt Instrument [Line Items]
Debt instrument, periodic principal payments including interest				750,000
Payment of outstanding debt				803,630
Hard Rock Note [Member] | April 5, 2020 [Member]
Debt Instrument [Line Items]
Debt instrument, periodic principal payments including interest				750,000
Payment of outstanding debt				790,223
Hard Rock Note [Member] | July 5, 2020 [Member]
Debt Instrument [Line Items]
Debt instrument, periodic principal payments including interest				750,000
Accrued interest				29,759
Hard Rock Note [Member] | October 5, 2020 [Member]
Debt Instrument [Line Items]
Debt instrument, periodic principal payments including interest				750,000
Hard Rock Note [Member] | July 5, 2021 [Member]
Debt Instrument [Line Items]
Debt instrument, periodic principal payments including interest				$ 750,000

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long term debt, Total	$ 6,948,474	$ 7,951,406
Current portion of long-term debt	(3,990,716)	(4,102,543)
Long-term debt, net	2,957,758	3,848,863
Real Estate Loans [Member]
Debt Instrument [Line Items]
Long term debt, Total	2,768,365	2,938,191
Hard Rock Note [Member]
Debt Instrument [Line Items]
Long term debt, Total	1,500,000	3,000,000
Credit Agreement [Member]
Debt Instrument [Line Items]
Long term debt, Total	1,144,163	1,134,626
Machinery Loans [Member]
Debt Instrument [Line Items]
Long term debt, Total	573,363	580,185
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Long term debt, Total	891,600
Transportation Loans [Member]
Debt Instrument [Line Items]
Long term debt, Total	$ 70,983	$ 298,404

Total Equity - Summary of Chang

Total Equity - Summary of Changes in Total Equity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Common Stock [Member]
Beginning balance	$ 25,418	$ 25,018
Beginning balance, shares	25,418,126	25,018,098
Stock-based compensation expense	$ 17	$ 17
Stock-based compensation expense, shares	16,650	16,649
Net loss
Ending balance	$ 25,435	$ 25,035
Ending balance, shares	25,434,776	25,034,747
Additional Paid-in Capital [Member]
Beginning balance	$ 40,069,391	$ 39,440,611
Stock-based compensation expense	211,984	317,949
Net loss
Ending balance	40,281,375	39,758,560
Accumulated Deficit [Member]
Beginning balance	(32,991,833)	(32,055,410)
Stock-based compensation expense
Net loss	(1,043,460)	(643,300)
Ending balance	(34,035,293)	(32,698,710)
Total Shareholders Equity [Member]
Beginning balance	7,102,976	7,410,219
Stock-based compensation expense	211,984	317,966
Net loss	(1,043,460)	(643,300)
Ending balance	$ 6,271,517	$ 7,084,885

Geographical Operations Infor_3

Geographical Operations Information - Schedule of Revenue and Property, Plant and Equipment by Geographic Location (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue	$ 2,024,388	$ 4,543,442	$ 7,382,151	$ 9,579,788
Property, plant and equipment, net	7,755,738		7,755,738		$ 8,045,692
North America [Member]
Revenue	1,688,933	4,341,696	6,269,443	9,169,973
Property, plant and equipment, net	6,601,443		6,601,443		7,160,646
Middle East [Member]
Revenue	335,455	$ 201,746	1,112,708	$ 409,815
Property, plant and equipment, net	$ 1,154,295		$ 1,154,295		$ 885,046

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	Aug. 07, 2020	Jul. 07, 2020	Jun. 30, 2020
Tronco Energy Corporation [Member]
Subsequent Event [Line Items]
Debt instrument, interest rate			2.00%
Subsequent Event [Member] | Tronco Energy Corporation [Member]
Subsequent Event [Line Items]
Debt instrument, interest rate		2.00%
Debt note, payment description		Interest only is due December 31, 2021 and 2022, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022.
Debt instrument maturity date		Dec. 31, 2022
Subsequent Event [Member] | Troy Meier [Member]
Subsequent Event [Line Items]
Number of restricted stock unit	$ 259,765
Subsequent Event [Member] | Annette Meier [Member]
Subsequent Event [Line Items]
Number of restricted stock unit	199,219
Subsequent Event [Member] | Chris Cashion [Member]
Subsequent Event [Line Items]
Number of restricted stock unit	140,625
Subsequent Event [Member] | Three Independent Members [Member]
Subsequent Event [Line Items]
Number of restricted stock unit	87,891
Subsequent Event [Member] | Board of Directors [Member]
Subsequent Event [Line Items]
Number of restricted stock unit	$ 675,000