Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36453 | |
Entity Registrant Name | SUPERIOR DRILLING PRODUCTS, INC. | |
Entity Central Index Key | 0001600422 | |
Entity Tax Identification Number | 46-4341605 | |
Entity Incorporation, State or Country Code | UT | |
Entity Address, Address Line One | 1583 South 1700 East | |
Entity Address, City or Town | Vernal | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84078 | |
City Area Code | 435 | |
Local Phone Number | 789-0594 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | SDPI | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,397,924 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 1,179,791 | $ 2,158,025 |
Accounts receivable | 4,687,791 | 3,241,221 |
Prepaid expenses | 351,840 | 367,823 |
Inventories | 3,152,403 | 2,081,260 |
Asset held for sale | 216,000 | |
Other current assets | 192,493 | 140,238 |
Total current assets | 9,564,318 | 8,204,567 |
Property, plant and equipment, net | 11,086,053 | 8,576,851 |
Intangible assets, net | 69,444 | |
Right of use assets | 559,405 | 638,102 |
Other noncurrent assets | 112,619 | 111,519 |
Total assets | 21,322,395 | 17,600,483 |
Current liabilities | ||
Accounts payable | 2,433,587 | 1,043,581 |
Accrued expenses | 959,966 | 891,793 |
Income tax payable | 524,687 | 351,618 |
Current portion of operating lease liability | 52,116 | 44,273 |
Current portion of financing obligation | 78,842 | 74,636 |
Current portion of long-term debt, net of discounts | 1,424,057 | 1,125,864 |
Other current liabilities | 216,000 | |
Total current liabilities | 5,473,255 | 3,747,765 |
Operating lease liability, less current portion | 342,344 | 523,375 |
Long-term financing obligation, less current portion | 3,996,937 | 4,038,022 |
Long-term debt, less current portion, net of discounts | 448,424 | 529,499 |
Deferred income | 675,000 | 675,000 |
Total liabilities | 10,935,960 | 9,513,661 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity | ||
Common stock - $0.001 par value; 100,000,000 shares authorized; 29,252,872 and 29,245,080 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 29,253 | 29,245 |
Additional paid-in-capital | 44,407,147 | 43,943,928 |
Accumulated deficit | (34,049,965) | (35,886,351) |
Total shareholders’ equity | 10,386,435 | 8,086,822 |
Total liabilities and shareholders’ equity | $ 21,322,395 | $ 17,600,483 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
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 | 29,252,872 | 29,245,080 |
Common stock, shares outstanding | 29,252,872 | 29,245,080 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,367,350 | $ 4,540,842 | $ 11,648,564 | $ 8,671,007 |
Operating cost and expenses | ||||
Cost of revenue | 2,013,167 | 2,116,096 | 4,251,758 | 3,883,995 |
Selling, general, and administrative expenses | 2,458,804 | 1,894,403 | 4,797,653 | 3,541,051 |
Depreciation and amortization expense | 349,447 | 402,648 | 675,460 | 813,379 |
Total operating cost and expenses | 4,821,418 | 4,413,147 | 9,724,871 | 8,238,425 |
Operating income | 545,932 | 127,695 | 1,923,693 | 432,582 |
Other income (expense) | ||||
Interest income | 13,755 | 2,980 | 30,653 | 3,176 |
Interest expense | (129,866) | (132,738) | (283,956) | (256,600) |
Recovery of related party note receivable | 350,262 | |||
Loss on disposition of assets | (22,146) | (22,146) | ||
Total other income (expense) | (116,111) | (151,904) | 96,959 | (275,570) |
Income (loss) before income taxes | 429,821 | (24,209) | 2,020,652 | 157,012 |
Income tax expense | (106,654) | (32,299) | (184,266) | (63,683) |
Net income (loss) | $ 323,167 | $ (56,508) | $ 1,836,386 | $ 93,329 |
Earnings (loss) per common share - basic | $ 0.01 | $ 0 | $ 0.06 | $ 0 |
Weighted average common shares outstanding - basic | 29,247,563 | 28,235,001 | 29,246,328 | 28,235,001 |
Earnings (loss) per common share - diluted | $ 0.01 | $ 0 | $ 0.06 | $ 0 |
Weighted average common shares outstanding - diluted | 29,295,761 | 28,235,001 | 29,294,526 | 28,305,101 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows from Operating Activities | ||
Net income | $ 1,836,386 | $ 93,329 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 675,460 | 813,379 |
Share-based compensation expense | 456,819 | 422,601 |
Amortization of right-of-use assets | 103,624 | |
Amortization of deferred loan costs | 3,087 | 9,262 |
Loss on disposition of assets | 22,146 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,446,570) | 72,452 |
Inventories | (1,071,143) | (149,223) |
Prepaid expenses and other current assets | (37,372) | (285,628) |
Accounts payable, accrued expenses, and other liabilities | 227,145 | 342,193 |
Income tax payable | 173,069 | 13,422 |
Net cash provided by operating activities | 920,505 | 1,353,933 |
Cash Flows From Investing Activities | ||
Purchases of property, plant and equipment | (2,432,561) | (1,249,419) |
Proceeds from recovery of related party note receivable | 350,262 | |
Net cash used in investing activities | (2,082,299) | (1,249,419) |
Cash Flows from Financing Activities | ||
Principal payments on debt | (283,139) | (281,487) |
Proceeds received from debt | 131,552 | 182,318 |
Payments on revolving loan | (499,887) | (553,650) |
Proceeds received from revolving loan | 828,626 | 553,631 |
Proceeds from exercise of stock options | 6,408 | |
Net cash provided by (used in) financing activities | 183,560 | (99,188) |
Net (decrease) increase in cash | (978,234) | 5,326 |
Cash at beginning of period | 2,158,025 | 2,822,100 |
Cash at end of period | 1,179,791 | 2,827,426 |
Supplemental information: | ||
Cash paid for interest | 281,703 | 247,952 |
Right of use assets obtained in exchange for lease obligations | 24,927 | |
Disposal of asset held for sale | 216,000 | |
Property, plant and equipment in accounts payable | $ 682,658 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 28,235 | $ 43,071,201 | $ (36,951,508) | $ 6,147,928 |
Balance, shares at Dec. 31, 2021 | 28,235,001 | |||
Share-based compensation expense | 422,601 | 422,601 | ||
Net income (loss) | 93,329 | 93,329 | ||
Balance at Jun. 30, 2022 | $ 28,235 | 43,493,802 | (36,858,179) | 6,663,858 |
Balance, shares at Jun. 30, 2022 | 28,235,001 | |||
Balance at Mar. 31, 2022 | $ 28,235 | 43,281,334 | (36,801,671) | 6,507,898 |
Balance, shares at Mar. 31, 2022 | 28,235,001 | |||
Share-based compensation expense | 212,468 | 212,468 | ||
Net income (loss) | (56,508) | (56,508) | ||
Balance at Jun. 30, 2022 | $ 28,235 | 43,493,802 | (36,858,179) | 6,663,858 |
Balance, shares at Jun. 30, 2022 | 28,235,001 | |||
Balance at Dec. 31, 2022 | $ 29,245 | 43,943,928 | (35,886,351) | 8,086,822 |
Balance, shares at Dec. 31, 2022 | 29,245,080 | |||
Share-based compensation expense | 456,819 | 456,819 | ||
Net income (loss) | 1,836,386 | 1,836,386 | ||
Exercise of stock options | $ 8 | 6,400 | 6,408 | |
Share based compensation arrangement by share-based payment award, options, exercises in period | 7,792 | |||
Balance at Jun. 30, 2023 | $ 29,253 | 44,407,147 | (34,049,965) | 10,386,435 |
Balance, shares at Jun. 30, 2023 | 29,252,872 | |||
Balance at Mar. 31, 2023 | $ 29,245 | 44,171,076 | (34,373,132) | 9,827,189 |
Balance, shares at Mar. 31, 2023 | 29,245,080 | |||
Share-based compensation expense | 229,671 | 229,671 | ||
Net income (loss) | 323,167 | 323,167 | ||
Exercise of stock options | $ 8 | 6,400 | 6,408 | |
Share based compensation arrangement by share-based payment award, options, exercises in period | 7,792 | |||
Balance at Jun. 30, 2023 | $ 29,253 | $ 44,407,147 | $ (34,049,965) | $ 10,386,435 |
Balance, shares at Jun. 30, 2023 | 29,252,872 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 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 in Vernal, Utah, where we manufacture solutions for the drilling industry, as well as customers’ custom products. We also operate a repair facility in Dubai. Our headquarters are also located in Vernal, Utah. 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 condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed 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. These condensed consolidated financial statements for the three and six months ended June 30, 2023 and 2022, and the related footnote disclosures included herein, are unaudited. The preparation of financial statements in conformity with GAAP requires the use of management’s estimates. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations expected for the year ended December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2022 and 2021 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”). Significant Accounting Policies The Company’s accounting policies are set forth in Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC. There were no significant updates or revisions to our accounting policies during the three or six months ended June 30, 2023. Concentrations of Credit Risk The Company has two significant customers that represented 84 89 2,540,000 1,751,000 The Company had two vendors that represented 13 14 471,000 77,000 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 2. REVENUE Disaggregation of Revenue The following table presents revenue disaggregated by type: SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Tool revenue: Tool and product sales $ 609,000 $ 627,200 $ 2,146,380 $ 1,291,500 Tool rental 1,042,295 519,724 1,861,969 904,874 Other related revenue 1,901,045 1,744,656 3,798,201 3,464,453 Total tool revenue 3,552,340 2,891,580 7,806,550 5,660,827 Contract services 1,815,010 1,649,262 3,842,014 3,010,180 Total revenue $ 5,367,350 $ 4,540,842 $ 11,648,564 $ 8,671,007 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. Contract Costs We did not incur any material costs of obtaining contracts. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 3. INVENTORIES Inventories were comprised of the following: SCHEDULE OF INVENTORIES June 30, 2023 December 31, 2022 Raw material $ 1,763,567 $ 1,334,669 Work in progress 752,136 168,214 Finished goods 636,700 578,377 Total inventories $ 3,152,403 $ 2,081,260 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) |
PROPERTY, PLANT & EQUIPMENT
PROPERTY, PLANT & EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT & EQUIPMENT | 4. PROPERTY, PLANT & EQUIPMENT Property, plant and equipment was comprised of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT June 30, 2023 December 31, 2022 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,764,441 Leasehold improvements 983,668 755,039 Machinery, equipment, and rental tools 17,432,649 14,546,060 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 Property, plant and equipment, gross 24,955,292 21,840,074 Accumulated depreciation (13,869,239 ) (13,263,223 ) Total property, plant and equipment, net $ 11,086,053 $ 8,576,851 Depreciation expense related to property, plant and equipment for the three months ended June 30, 2023 and 2022 was $ 284,347 360,981 606,016 730,046 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets were comprised of the following: SCHEDULE OF INTANGIBLE ASSETS June 30, 2023 December 31, 2022 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 Total intangible assets, gross 14,900,000 14,900,000 Less: accumulated amortization (14,900,000 ) (14,830,556 ) Total intangible assets, net $ - $ 69,444 Amortization expense related to intangible assets for the three months ended June 30, 2023 and 2022 was $ 27,778 41,667 69,444 83,333 |
RELATED PARTY RECEIVABLE
RELATED PARTY RECEIVABLE | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
RELATED PARTY RECEIVABLE | 6. RELATED PARTY 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”) in order to take over the legal position as Tronco’s senior secured lender. Tronco is an entity owned by Troy and Annette Meier. Effective August 2017, the Company fully reserved the related party note receivable of $ 6,979,043 0 8,267,860 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) On March 31, 2023, the Company entered into a fourth amended and restated loan agreement and note with Tronco to extend the maturity date of the principal to March 31, 2033 2.8 750,000 In the event the average closing price for the Company’s common stock for 10 consecutive trading days is equal to or greater than $3.00 per share, Tronco shall pay fifty percent of the then outstanding principal balance together with all accrued, unpaid interest within ten days of the date on which the 10-day trading average first equals or exceeds $3.00. In the event the average closing price for 10 consecutive trading days is $4.00 per share or greater, Tronco shall pay the entire outstanding principal balance together with all accrued, unpaid interest within ten (10) days of the date on which the 10-day average first equals or exceeds $4.00 350,262 6,613,000 6,884,000 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 7. LONG-TERM DEBT Long-term debt is comprised of the following: SCHEDULE OF DEBT OBLIGATIONS June 30, 2023 December 31, 2022 Credit Agreement $ 1,145,540 $ 813,713 Machinery loans 594,582 664,674 Transportation loan 13,617 20,027 Insurance loan 118,742 156,949 Total long-term debt 1,872,481 1,655,363 Less: current portion of long-term debt, net of discounts (1,424,057 ) (1,125,864 ) Total long-term debt, less current portion, net of discounts $ 448,424 $ 529,499 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 $ 4,300,000 800,000 3,500,000 1,146,000 814,000 Amounts outstanding under the Line of Credit 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. As of June 30, 2023, the Company had approximately $ 50,000 The interest rate for the Term Loan and the Line of Credit is prime plus 5.6 13.85 1,000,000 1,000,000 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) 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 Line of Credit is classified as current debt as a result of the required lockbox arrangement and the subjective acceleration clause. At June 30, 2023, we were in compliance with the covenants in the Credit Agreement. Machinery Loans The Company financed the purchase of machinery and equipment through various loans. The outstanding loans have interest rates ranging from 5.50 5.94 595,000 665,000 Transportation Loan The Company financed the purchase of a vehicle with a loan agreement. The term of the loan is 60 months and matures in June 2024 6.99 Insurance Loan The Company financed insurance premiums with a loan agreement. The term of the loan is 10 months and matures in March 2024. The interest rate of the loan is 7.08 119,000 157,000 |
FINANCING OBLIGATION LIABILITY
FINANCING OBLIGATION LIABILITY | 6 Months Ended |
Jun. 30, 2023 | |
Financing Obligation Liability | |
FINANCING OBLIGATION LIABILITY | 8. FINANCING OBLIGATION LIABILITY On December 7, 2020, the Company entered into an agreement to sell land and property related to the Company’s headquarters and manufacturing facility in Vernal, Utah (the “Property”) for a purchase price of $ 4,448,500 the Company entered into a fifteen-year lease agreement 311,395 1.5 Leases The Company received cash of $ 1,622,106 2,638,773 4,260,879 6.0 2,188,710 36,879 32,532 The outstanding balance of the financing obligation liability is summarized below: SCHEDULE OF FINANCING OBLIGATION LIABILITY June 30, 2023 December 31, 2022 Financing obligation for sale-leaseback transaction $ 4,075,779 $ 4,112,658 Current principal portion of finance obligation (78,842 ) (74,636 ) Non-current portion of financing obligation $ 3,996,937 $ 4,038,022 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. 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 that Stabil Drill Specialties, LLC’s (“Stabil Drill”) Smoothbore Eccentric Reamer infringes the patents of Extreme Technologies, LLC (one of our subsidiaries) on our patented Drill-N-Ream well bore conditioning tool. The lawsuit was subsequently moved from Louisiana to the United States District Court for the Southern District of Texas, Houston Division. Additionally, on May 20, 2019, Extreme Technologies, LLC sued Short Bit & Tool Co. and Lot William Short, Jr. (“Defendants”) in the Northern District of Texas-Dallas Division for their work manufacturing the Smoothbore Eccentric Reamer for Stabil Drill. The Dallas lawsuit is stayed pending resolution of the first-filed, Houston suit. On October 1, 2020, Superior Energy Services, Stabil Drill’s parent company, filed for bankruptcy, which resulted in a brief, automatic stay of the litigation. Superior Energy Services announced on February 2, 2021, that it successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy, but this bankruptcy did not affect Extreme Technologies’ claims against Stabil Drill. On March 9, 2021, the Court lifted the automatic bankruptcy stay, and on May 12, 2021, the Court denied Stabil Drill’s motion for summary judgment of non-infringement. On May 23, 2022, the Court issued its Order on Claim Construction of the patents, adopting Extreme Technologies’ proffered interpretation on the disputed claim terms. On February 13, 2023, the lawsuit was reassigned to United States District Judge Drew B. Tipton and United States Magistrate Judge Peter Bray. On March 27, 2023, Judge Bray entered an amended Scheduling Order. In accordance with such amended Scheduling Order, fact discovery ended on April 14, 2023, and expert discovery is scheduled to end on or before August 31, 2023. On July 5, 2023, Judge Bray issued a Memorandum and Recommendation finding that Stabil Drill is prohibited from asserting its patent invalidity affirmative defenses. On August 2, 2023, Stabil Drill filed objections to the Court’s Order and the Court could possibly modify the Order based upon Stabil Drill’s filed objections. The parties are preparing this case for trial and expect a jury trial setting in early spring of 2024. We are not currently involved in any other litigation. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 10. EARNINGS PER SHARE Basic and diluted earnings (loss) per share of common stock have been computed as follows: SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 323,167 $ (56,508 ) $ 1,836,386 $ 93,329 Denominator: Weighted average shares of common stock outstanding - basic 29,247,563 28,235,001 29,246,328 28,235,001 Effect of dilutive options 48,198 - 48,198 70,100 Weighted average shares of common stock outstanding - diluted 29,295,761 28,235,001 29,294,526 28,305,101 Earnings (loss) per common share – basic $ 0.01 $ (0.00 ) $ 0.06 $ 0.00 Earnings (loss) per common share - diluted $ 0.01 $ (0.00 ) $ 0.06 $ 0.00 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
LEASES | 11. LEASES The Company leases certain facilities Utah and Dubai under long-term operating leases with lease terms of one year two years 63,000 23,000 126,000 25,000 Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) Other information related to operating leases: SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE Six Months Ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows $ 220,329 $ 187,394 Weighted average remaining lease-term (in years) 2.45 2.79 Weighted average discount rate 7.25 % 7.25 % |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 12. SEGMENT REPORTING We report our segment results based on our geographic areas of operations, North America and International. These segments have similarities from a product perspective, but management believes that due to operational differences, such as sales models and regulatory environments, information about the segments would be useful to readers of the financial statements. ● North America includes our PDC drill bit and specialty tool sales and contract services business in the United States and Mexico, which have been aggregated ● International includes our specialty tool rental business in the Middle East Revenue and certain operating expenses are directly attributable to each segment. Unallocated corporate costs primarily include corporate shared costs, such as payroll and compensation, professional fees, and rent, as well as costs associated with certain shared research and development activities. Our operating segments are not evaluated using asset information. Prior periods have been restated to conform with the current year presentation. This change was made due to international revenue becoming more significant in the current year. The following table summarizes information about our segments: SCHEDULE OF SEGMENTS INFORMATION WITH GEOGRAPHIC AREAS 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue: North America $ 4,325,055 $ 4,021,118 $ 9,800,115 $ 7,766,133 International 1,042,295 519,724 1,848,449 904,874 Total revenue $ 5,367,350 $ 4,540,842 $ 11,648,564 $ 8,671,007 Operating income: North America $ 2,774,629 $ 2,069,125 $ 6,442,644 $ 4,168,223 International 229,310 (69,223 ) 277,066 (216,870 ) Corporate costs, unallocated (2,458,007 ) (1,872,207 ) (4,796,017 ) (3,518,771 ) Total operating income $ 545,932 $ 127,695 $ 1,923,693 $ 432,582 North America revenue includes revenue from customers in Mexico totaling approximately $ 10,000 0 30,000 18,000 Information about products and services See Note 2 – Revenue Superior Drilling Products, Inc. N otes to the Condensed Consolidated Financial Statements (unaudited) |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 13. SUBSEQUENT EVENT Loan Agreement On July 28, 2023, the Company entered into a Loan Agreement (the “Loan Agreement”) among Vast Bank, National Association, as lender (the “Lender”), and various subsidiaries of the Company as guarantors (the “Guarantors”). The Loan Agreement provides for loans through the following facilities (collectively, the “Loans”): ● Revolving Line which provides the lesser of $ 750,000 1.00 7.50 ● Term Loan for $ 1,719,200 8.18 The Company will make payments of principal and interest monthly on the Term Loan, and interest only on the Revolving Line, commencing on August 28, 2023. The Company paid the Lender a non-refundable upfront fee of 0.75 A portion of the proceeds of the Loans were used to repay the Credit Agreement. In connection with the Loan Agreement, the Company entered into Business Manager Agreements for the purchase by the Lender of certain domestic and international accounts receivable of the Company. The face amount of the accounts under each agreement that may be purchased cannot exceed $ 2,500,000 2,000,000 1.25 2.0 Amendment to Lease In connection with entering into the Loan Agreement, Meier Properties, Series LLC, a subsidiary of the Company, entered into an amendment (the “Amendment”) to the lease for the Company’s facilities in Vernal, Utah. Under the amendment, the tenant paid a security deposit of approximately $ 80,000 Restricted Stock Units On August 10, 2023, the Board of Directors granted 250,943 192,453 90,556 56,604 75,000 three years |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 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 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 in Vernal, Utah, where we manufacture solutions for the drilling industry, as well as customers’ custom products. We also operate a repair facility in Dubai. Our headquarters are also located in Vernal, Utah. 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 condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed 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. These condensed consolidated financial statements for the three and six months ended June 30, 2023 and 2022, and the related footnote disclosures included herein, are unaudited. The preparation of financial statements in conformity with GAAP requires the use of management’s estimates. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations expected for the year ended December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2022 and 2021 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”). |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company has two significant customers that represented 84 89 2,540,000 1,751,000 The Company had two vendors that represented 13 14 471,000 77,000 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE | The following table presents revenue disaggregated by type: SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Tool revenue: Tool and product sales $ 609,000 $ 627,200 $ 2,146,380 $ 1,291,500 Tool rental 1,042,295 519,724 1,861,969 904,874 Other related revenue 1,901,045 1,744,656 3,798,201 3,464,453 Total tool revenue 3,552,340 2,891,580 7,806,550 5,660,827 Contract services 1,815,010 1,649,262 3,842,014 3,010,180 Total revenue $ 5,367,350 $ 4,540,842 $ 11,648,564 $ 8,671,007 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories were comprised of the following: SCHEDULE OF INVENTORIES June 30, 2023 December 31, 2022 Raw material $ 1,763,567 $ 1,334,669 Work in progress 752,136 168,214 Finished goods 636,700 578,377 Total inventories $ 3,152,403 $ 2,081,260 |
PROPERTY, PLANT & EQUIPMENT (Ta
PROPERTY, PLANT & EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment was comprised of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT June 30, 2023 December 31, 2022 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,764,441 Leasehold improvements 983,668 755,039 Machinery, equipment, and rental tools 17,432,649 14,546,060 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 Property, plant and equipment, gross 24,955,292 21,840,074 Accumulated depreciation (13,869,239 ) (13,263,223 ) Total property, plant and equipment, net $ 11,086,053 $ 8,576,851 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets were comprised of the following: SCHEDULE OF INTANGIBLE ASSETS June 30, 2023 December 31, 2022 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 Total intangible assets, gross 14,900,000 14,900,000 Less: accumulated amortization (14,900,000 ) (14,830,556 ) Total intangible assets, net $ - $ 69,444 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT OBLIGATIONS | Long-term debt is comprised of the following: SCHEDULE OF DEBT OBLIGATIONS June 30, 2023 December 31, 2022 Credit Agreement $ 1,145,540 $ 813,713 Machinery loans 594,582 664,674 Transportation loan 13,617 20,027 Insurance loan 118,742 156,949 Total long-term debt 1,872,481 1,655,363 Less: current portion of long-term debt, net of discounts (1,424,057 ) (1,125,864 ) Total long-term debt, less current portion, net of discounts $ 448,424 $ 529,499 |
FINANCING OBLIGATION LIABILITY
FINANCING OBLIGATION LIABILITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Financing Obligation Liability | |
SCHEDULE OF FINANCING OBLIGATION LIABILITY | The outstanding balance of the financing obligation liability is summarized below: SCHEDULE OF FINANCING OBLIGATION LIABILITY June 30, 2023 December 31, 2022 Financing obligation for sale-leaseback transaction $ 4,075,779 $ 4,112,658 Current principal portion of finance obligation (78,842 ) (74,636 ) Non-current portion of financing obligation $ 3,996,937 $ 4,038,022 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE | Basic and diluted earnings (loss) per share of common stock have been computed as follows: SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 323,167 $ (56,508 ) $ 1,836,386 $ 93,329 Denominator: Weighted average shares of common stock outstanding - basic 29,247,563 28,235,001 29,246,328 28,235,001 Effect of dilutive options 48,198 - 48,198 70,100 Weighted average shares of common stock outstanding - diluted 29,295,761 28,235,001 29,294,526 28,305,101 Earnings (loss) per common share – basic $ 0.01 $ (0.00 ) $ 0.06 $ 0.00 Earnings (loss) per common share - diluted $ 0.01 $ (0.00 ) $ 0.06 $ 0.00 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE | Other information related to operating leases: SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE Six Months Ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows $ 220,329 $ 187,394 Weighted average remaining lease-term (in years) 2.45 2.79 Weighted average discount rate 7.25 % 7.25 % |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENTS INFORMATION WITH GEOGRAPHIC AREAS | The following table summarizes information about our segments: SCHEDULE OF SEGMENTS INFORMATION WITH GEOGRAPHIC AREAS 2023 2022 2023 2022 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue: North America $ 4,325,055 $ 4,021,118 $ 9,800,115 $ 7,766,133 International 1,042,295 519,724 1,848,449 904,874 Total revenue $ 5,367,350 $ 4,540,842 $ 11,648,564 $ 8,671,007 Operating income: North America $ 2,774,629 $ 2,069,125 $ 6,442,644 $ 4,168,223 International 229,310 (69,223 ) 277,066 (216,870 ) Corporate costs, unallocated (2,458,007 ) (1,872,207 ) (4,796,017 ) (3,518,771 ) Total operating income $ 545,932 $ 127,695 $ 1,923,693 $ 432,582 |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||
Accounts payable current | $ 2,433,587 | $ 1,043,581 | |
Two Vendors [Member] | |||
Product Information [Line Items] | |||
Accounts payable current | 471,000 | 77,000 | |
Two Customers [Member] | |||
Product Information [Line Items] | |||
Accounts receivable | $ 2,540,000 | $ 1,751,000 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 84% | 89% | |
Supplier Concentration Risk [Member] | Purchases [Member] | Two Vendors [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 13% | 14% |
SCHEDULE OF REVENUE DISAGGREGAT
SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 5,367,350 | $ 4,540,842 | $ 11,648,564 | $ 8,671,007 |
Tools And Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 609,000 | 627,200 | 2,146,380 | 1,291,500 |
Tool Rental [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,042,295 | 519,724 | 1,861,969 | 904,874 |
Other Related Tool Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,901,045 | 1,744,656 | 3,798,201 | 3,464,453 |
Tool Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,552,340 | 2,891,580 | 7,806,550 | 5,660,827 |
Contract Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,815,010 | $ 1,649,262 | $ 3,842,014 | $ 3,010,180 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 1,763,567 | $ 1,334,669 |
Work in progress | 752,136 | 168,214 |
Finished goods | 636,700 | 578,377 |
Total inventories | $ 3,152,403 | $ 2,081,260 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 880,416 | $ 880,416 |
Buildings | 4,764,441 | 4,764,441 |
Leasehold improvements | 983,668 | 755,039 |
Machinery, equipment, and rental tools | 17,432,649 | 14,546,060 |
Office equipment, fixtures and software | 628,358 | 628,358 |
Transportation assets | 265,760 | 265,760 |
Property, plant and equipment, gross | 24,955,292 | 21,840,074 |
Accumulated depreciation | (13,869,239) | (13,263,223) |
Total property, plant and equipment, net | $ 11,086,053 | $ 8,576,851 |
PROPERTY, PLANT & EQUIPMENT (De
PROPERTY, PLANT & EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense related to property, plant and equipment | $ 284,347 | $ 360,981 | $ 606,016 | $ 730,046 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | $ 14,900,000 | $ 14,900,000 |
Total intangible assets, gross | 14,900,000 | 14,900,000 |
Less: accumulated amortization | (14,900,000) | (14,830,556) |
Total intangible assets, net | 69,444 | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 7,000,000 | 7,000,000 |
Total intangible assets, gross | 7,000,000 | 7,000,000 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 6,400,000 | 6,400,000 |
Total intangible assets, gross | 6,400,000 | 6,400,000 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 1,500,000 | 1,500,000 |
Total intangible assets, gross | $ 1,500,000 | $ 1,500,000 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 27,778 | $ 41,667 | $ 69,444 | $ 83,333 |
RELATED PARTY RECEIVABLE (Detai
RELATED PARTY RECEIVABLE (Details Narrative) - Tronco Energy Corporation [Member] - USD ($) | Mar. 31, 2023 | Mar. 24, 2023 | Aug. 31, 2017 | Jun. 30, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | |||||
Related party note receivable | $ 6,979,043 | ||||
Debt instrument, increase (decrease),net | $ 0 | ||||
Common stock hold as collateral | 8,267,860 | ||||
Principal maturity date | Mar. 31, 2033 | ||||
Interest rate | 280% | ||||
Principal amount | $ 750,000 | ||||
Debt average conversion | In the event the average closing price for the Company’s common stock for 10 consecutive trading days is equal to or greater than $3.00 per share, Tronco shall pay fifty percent of the then outstanding principal balance together with all accrued, unpaid interest within ten days of the date on which the 10-day trading average first equals or exceeds $3.00. In the event the average closing price for 10 consecutive trading days is $4.00 per share or greater, Tronco shall pay the entire outstanding principal balance together with all accrued, unpaid interest within ten (10) days of the date on which the 10-day average first equals or exceeds $4.00 | ||||
Principal and interest payment | $ 350,262 | ||||
Accured interest | $ 6,613,000 | $ 6,884,000 |
SCHEDULE OF DEBT OBLIGATIONS (D
SCHEDULE OF DEBT OBLIGATIONS (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,872,481 | $ 1,655,363 |
Less: current portion of long-term debt, net of discounts | (1,424,057) | (1,125,864) |
Total long-term debt, less current portion, net of discounts | 448,424 | 529,499 |
Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 1,145,540 | 813,713 |
Machinery Loans [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 594,582 | 664,674 |
Transportation Loans [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 13,617 | 20,027 |
Insurance Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 118,742 | $ 156,949 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Feb. 28, 2019 | |
Line of Credit Facility [Line Items] | |||
Line of credit availability | $ 50,000 | ||
Equipment Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Notes payable | $ 595,000 | $ 665,000 | |
Transportation Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Notes payable | 6.99% | ||
Loan matures | June 2024 | ||
Insurance Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Notes payable | 7.08% | ||
Notes payable | $ 119,000 | 157,000 | |
Minimum [Member] | Equipment Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Notes payable | 5.50% | ||
Maximum [Member] | Equipment Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Notes payable | 5.94% | ||
Loan and security agreement [Member] | Term Loan and Revolving Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit interest rate | 5.60% | ||
Management fee rate, percentage | 13.85% | ||
Line of credit borrowing capacity | $ 1,000,000 | ||
Line of credit borrowing interest paid | 1,000,000 | ||
Loan and security agreement [Member] | Austin Financial Services Inc [Member] | |||
Line of Credit Facility [Line Items] | |||
Long term line of credit | $ 4,300,000 | ||
Loan and security agreement [Member] | Austin Financial Services Inc [Member] | Term Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Long term line of credit | 800,000 | ||
Loan and security agreement [Member] | Austin Financial Services Inc [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Long term line of credit | $ 3,500,000 | ||
Outstanding line of credit | $ 1,146,000 | $ 814,000 |
SCHEDULE OF FINANCING OBLIGATIO
SCHEDULE OF FINANCING OBLIGATION LIABILITY (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Obligation Liability | ||
Financing obligation for sale-leaseback transaction | $ 4,075,779 | $ 4,112,658 |
Current principal portion of finance obligation | (78,842) | (74,636) |
Non-current portion of financing obligation | $ 3,996,937 | $ 4,038,022 |
FINANCING OBLIGATION LIABILIT_2
FINANCING OBLIGATION LIABILITY (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 07, 2020 | Jun. 30, 2023 | Jun. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Purchase price | $ 2,432,561 | $ 1,249,419 | |
Sale Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Proceeds from financial obligation | $ 1,622,106 | ||
Real estate debt retired | 2,638,773 | ||
Financing obligation liability | $ 4,260,879 | ||
Implied interest rate | 6% | ||
Financing obligation residual amount | $ 2,188,710 | ||
Principal payments | $ 36,879 | $ 32,532 | |
Sale Agreement [Member] | UTAH | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Purchase price | $ 4,448,500 | ||
Lessee finance lease description | the Company entered into a fifteen-year lease agreement | ||
Lease Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Lease cost | $ 311,395 | ||
Annual rent increases | 1.50% |
SCHEDULE OF BASIC AND DILUTED E
SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net income (loss) | $ 323,167 | $ (56,508) | $ 1,836,386 | $ 93,329 |
Denominator: | ||||
Weighted average shares of common stock outstanding - basic | 29,247,563 | 28,235,001 | 29,246,328 | 28,235,001 |
Effect of dilutive options | 48,198 | 48,198 | 70,100 | |
Weighted average shares of common stock outstanding - diluted | 29,295,761 | 28,235,001 | 29,294,526 | 28,305,101 |
Earnings (loss) per common share – basic | $ 0.01 | $ 0 | $ 0.06 | $ 0 |
Earnings (loss) per common share - diluted | $ 0.01 | $ 0 | $ 0.06 | $ 0 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases | ||
Operating cash flows | $ 220,329 | $ 187,394 |
Weighted average remaining lease term | 2 years 5 months 12 days | 2 years 9 months 14 days |
Weighted average discount rate | 7.25% | 7.25% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating lease expense | $ 63,000 | $ 23,000 | $ 126,000 | $ 25,000 |
Minimum [Member] | ||||
Operating lease term | 1 year | 1 year | ||
Maximum [Member] | ||||
Operating lease term | 2 years | 2 years |
SCHEDULE OF SEGMENTS INFORMATIO
SCHEDULE OF SEGMENTS INFORMATION WITH GEOGRAPHIC AREAS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 5,367,350 | $ 4,540,842 | $ 11,648,564 | $ 8,671,007 |
Operating income: | ||||
Total operating income | 545,932 | 127,695 | 1,923,693 | 432,582 |
North America [Member] | ||||
Revenue: | ||||
Total revenue | 4,325,055 | 4,021,118 | 9,800,115 | 7,766,133 |
Operating income: | ||||
Total operating income | 2,774,629 | 2,069,125 | 6,442,644 | 4,168,223 |
International [Member] | ||||
Revenue: | ||||
Total revenue | 1,042,295 | 519,724 | 1,848,449 | 904,874 |
Operating income: | ||||
Total operating income | 229,310 | (69,223) | 277,066 | (216,870) |
Corporate Costs Unallocated [Member] | ||||
Operating income: | ||||
Total operating income | $ (2,458,007) | $ (1,872,207) | $ (4,796,017) | $ (3,518,771) |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 5,367,350 | $ 4,540,842 | $ 11,648,564 | $ 8,671,007 |
MEXICO | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 10,000 | $ 0 | $ 30,000 | $ 18,000 |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) - Subsequent Event [Member] - USD ($) | Aug. 10, 2023 | Jul. 28, 2023 |
Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Vesting period | 3 years | |
Chairman and Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 250,943 | |
President and Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 192,453 | |
Chief Financial Officer [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 90,556 | |
Director One [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 56,604 | |
Director Two [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 56,604 | |
Director Three [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 56,604 | |
Empolyees [Member] | Restricted Stock Units (RSUs) [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted | 75,000 | |
Revolving Line [Member] | ||
Subsequent Event [Line Items] | ||
Term loan | 0.75% | |
Loan Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility current borrowing capacity | $ 750,000 | |
Term loan | 8.18% | |
Line of credit | $ 1,719,200 | |
Security deposit | $ 80,000 | |
Loan Agreement [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Term loan | 1% | |
Loan Agreement [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Term loan | 7.50% | |
Domestic Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Term loan | 1.25% | |
Debt instrument face amount | $ 2,500,000 | |
International Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Term loan | 2% | |
Debt instrument face amount | $ 2,000,000 |