Drilling Tools International (DTI) 10-Q 15 May 24 2024 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 15, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Entity File Number	001-41103
Entity Registrant Name	DRILLING TOOLS INTERNATIONAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-2488708
Entity Address, Address Line One	3701 Briarpark Drive
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77042
City Area Code	832
Local Phone Number	742-8500
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,768,568
Entity Central Index Key	0001884516
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	DTI
Security Exchange Name	NASDAQ
Entity Bankruptcy Proceedings, Reporting Current	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets, Current [Abstract]
Cash	$ 14,050	$ 6,003
Accounts receivable, net	35,730	29,929
Inventories, net	11,441	5,034
Prepaid expenses and other current assets	3,231	4,553
Investments - equity securities, at fair value	1,137	888
Total current assets	65,589	46,408
Property, plant and equipment, net	70,596	65,800
Operating lease right-of-use asset	18,296	18,786
Goodwill	2,556	0
Intangible assets, net	8,058	216
Deferred financing costs, net	864	409
Deposits and other long-term assets	992	879
Total assets	166,951	132,498
Current liabilities
Accounts payable	16,736	7,751
Accrued expenses and other current liabilities	8,442	10,579
Current portion of operating lease liabilities	3,965	3,958
Current maturities of long-term debt	5,000	0
Total current liabilities	34,143	22,289
Operating lease liabilities, less current portion	14,402	14,893
Long-term debt	20,000	0
Deferred tax liabilities, net	6,893	6,627
Total liabilities	75,438	43,809
Commitments and contingencies (See Note 15)
Shareholders' equity
Common stock, $0.0001 par value, shares authorized 500,000,000 as of March 31, 2024 and December 31, 2023, 29,768,568 issued and outstanding as of March 31, 2024 and December 31, 2023	3	3
Additional paid-in-capital	95,426	95,218
Accumulated deficit	(3,180)	(6,306)
Accumulated other comprehensive loss	(736)	(225)
Total shareholders' equity	91,513	88,690
Total liabilities and shareholders' equity	$ 166,951	$ 132,498

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	29,768,568	29,768,568
Common stock, shares outstanding	29,768,568	29,768,568
Preferred stock, shares issued

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue, net:
Revenue, net	$ 36,974	$ 40,799
Operating costs and expenses:
Selling, general, and administrative expense	17,942	18,423
Depreciation and amortization expense	5,365	5,015
Total operating costs and expenses	31,844	32,878
Income (loss) from operations	5,130	7,921
Other expense, net:
Interest expense, net	(182)	(573)
Gain (loss) on sale of property	0	69
Loss on asset disposal	(9)	0
Unrealized gain (loss) on equity securities	249	(33)
Other income (expense), net	(1,125)	40
Total other expense, net	(1,067)	(497)
Income before income tax expense	4,063	7,424
Income tax expense	(937)	(1,723)
Net income	3,126	5,701
Accumulated dividends on redeemable convertible preferred stock	0	314
Net income available to common shareholders	$ 3,126	$ 5,387
Basic earnings per share	$ 0.11	$ 0.45
Diluted earnings per share	$ 0.11	$ 0.29
Basic weighted-average common shares outstanding	29,768,568	11,951,137
Diluted weighted-average common shares outstanding	29,768,568	19,677,507
Comprehensive income:
Net income	$ 3,126	$ 5,701
Foreign currency translation adjustment, net of tax	(511)	0
Net comprehensive income	2,615	5,701
Tool Rental
Revenue, net:
Revenue, net	29,966	32,276
Operating costs and expenses:
Operating costs and expenses	7,001	8,137
Product Sale
Revenue, net:
Revenue, net	7,008	8,523
Operating costs and expenses:
Operating costs and expenses	$ 1,536	$ 1,303

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	As Previously Reported	Redeemable Convertible Preferred Stock	Redeemable Convertible Preferred Stock As Previously Reported	Redeemable Convertible Preferred Stock Revision of Prior Period, Adjustment	Common Stock	Common Stock As Previously Reported	Common Stock Revision of Prior Period, Adjustment	Treasury Stock As Previously Reported	Treasury Stock Revision of Prior Period, Adjustment	Additional Paid-In Capital	Additional Paid-In Capital As Previously Reported	Additional Paid-In Capital Revision of Prior Period, Adjustment	Accumulated Deficit	Accumulated Deficit As Previously Reported	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss As Previously Reported
Temporary equity, beginning balance at Dec. 31, 2022			$ 17,878	$ 17,878
Temporary equity, beginning balance, shares at Dec. 31, 2022			6,719,641	20,370,377	(13,650,736)
Beginning balance at Dec. 31, 2022	$ 31,224	$ 31,224				$ 1	$ 532	$ (531)	$ (933)	$ 933	$ 52,388	$ 52,790	$ (402)	$ (21,054)	$ (21,054)	$ (111)	$ (111)
Beginning balance, shares at Dec. 31, 2022						11,951,137	53,175,028	(41,223,891)	(811,156)	811,156
Accretion of redeemable convertible preferred stock to redemption value			$ 314
Accretion of redeemable convertible preferred stock to redemption value	(314)										(314)
Net Income (Loss)	5,701													5,701
Temporary equity, ending balance at Mar. 31, 2023			$ 18,192
Temporary equity, ending balance, shares at Mar. 31, 2023			6,719,641
Ending balance at Mar. 31, 2023	36,611					$ 1					52,074			(15,353)		(111)
Ending balance, shares at Mar. 31, 2023						11,951,137
Beginning balance at Dec. 31, 2023	88,690					$ 3					95,218			(6,306)		(225)
Beginning balance, shares at Dec. 31, 2023							29,768,568
Foreign currency translation adjustment, net of tax	(511)															(511)
Net Income (Loss)	3,126													3,126
Stock-based compensation	208										208
Ending balance at Mar. 31, 2024	$ 91,513					$ 3					$ 95,426			$ (3,180)		$ (736)
Ending balance, shares at Mar. 31, 2024						29,768,568

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income	$ 3,126	$ 5,701
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	5,365	5,015
Amortization of deferred financing costs	56	19
Non-cash lease expense	1,111	1,140
Provision for excess and obsolete inventory	0	17
Provision for excess and obsolete property and equipment	66	117
Provision for Credit Losses	(135)	334
Deferred tax expense	266	1,116
Gain on sale of property	0	(69)
Loss on asset disposal	9	0
Unrealized loss (gain) on equity securities	(249)	33
Unrealized loss on interest rate swap	0	105
Gross profit from sale of lost-in-hole equipment	(2,799)	(4,535)
Stock-based compensation expense	208	0
Changes in operating assets and liabilities:
Accounts receivable, net	(1,839)	(1,675)
Prepaid expenses and other current assets	1,723	713
Inventories, net	2,836	116
Operating lease liabilities	(1,067)	(1,086)
Accounts payable	(2,848)	3,208
Accrued expenses and other current liabilities	(2,517)	(3,180)
Net cash flows from operating activities	3,312	7,089
Cash flows from investing activities:
Acquisition of a business, net of cash acquired	(18,261)	0
Proceeds from sale of property and equipment	0	80
Purchase of property, plant and equipment	(6,228)	(7,067)
Proceeds from sale of lost-in-hole equipment	4,904	5,819
Net cash from investing activities	(19,585)	(1,168)
Cash flows from financing activities:
Payment of deferred financing costs	(389)	0
Proceeds from revolving line of credit	0	34,043
Payments on revolving line of credit	0	(41,496)
Proceeds from Term Loan	25,000	0
Net cash from financing activities	24,611	(7,453)
Effect of changes in foreign exchange rates	(291)
Net change in cash	8,047	(1,532)
Cash at beginning of period	6,003	2,352
Cash at end of period	14,050	820
Supplemental cash flow information:
Cash paid for interest	58	444
Cash paid for income taxes	153	0
Non-cash investing and financing activities:
ROU assets obtained in exchange for lease liabilities	314	1,360
Fair value of CTG liabilities assumed in CTG Acquistion	2,636	0
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities	5,018	1,575
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities	4,482	4,369
Undeclared dividends	0	314
Non-cash directors and officers insurance	327	0
Deferred financing fees included in accounts payable	$ 122	$ 0

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 3,126	$ 5,701

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Rule 10b5-1 Arrangement Modified	false
Non-Rule 10b5-1 Arrangement Modified	false

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 –SUMMARY OF SIGNIFI CANT ACCOUNTING POLICIES Organization and Nature of Operations Drilling Tools International Corporation, a Delaware corporation ("DTIC" or the "Company"), is a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle. On June 20, 2023 (the “Closing Date”), a merger transaction between Drilling Tools International Holdings, Inc. (“DTIH”), ROC Energy Acquisition Corp (“ROC”), and ROC Merger Sub, Inc., a directly, wholly owned subsidiary of ROC (“Merger Sub”), was completed (the “Merger”) pursuant to the initial merger agreement dated February 13, 2023 and subsequent amendment to the merger agreement dated June 5, 2023 collectively, (the “Merger Agreement”). In connection with the closing of the Merger, ROC changed its name to Drilling Tools International Corporation. The common stock of DTIC (“DTIC Common Stock” or the “Company’s Common Stock”) commenced trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DTI” on June 21, 2023. On March 15, 2024 (the “CTG Acquisition Date”), we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Casing Technologies Group Limited (“CTG”), certain shareholders of CTG, and a representative of CTG. Pursuant to the terms of the Share Purchase Agreement, the Company acquired one hundred percent ( 100 %) of the shares of CTG (the “CTG Acquisition”), which wholly owns Deep Casing Tools Limited (“Deep Casing”), an energy technology development company, for approximately £ 16.2 million, or $ 20.9 million, based on the British pound sterling to United States dollar exchange rate on the CTG Acquisition Date. For further details regarding the acquisition, refer to Note 3, “Business Combinations.” The Company’s United States (“U.S.”) operations have locations in Texas, California, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming. The Company’s international operations are located in Canada, Scotland, Germany, Ukraine, UAE, and Saudi Arabia. Operations outside the U.S. are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws and possible limitations on foreign investment. The Company does not engage in hedging activities to mitigate its exposure to fluctuations in foreign currency exchange rates. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as set forth by the Financial Accounting Standards Board ("FASB") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). References to US GAAP issued by the FASB in these notes to the accompanying unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Update (“ASUs”). Unaudited Interim Financial Information The accompanying interim unaudited condensed consolidated financial statements included in this quarterly report have been prepared in accordance with U.S. GAAP and, in the opinion of the Company, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2024, and its results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The condensed consolidated balance sheet at December 31, 2023 , was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time the Company is no longer considered to be an emerging growth company. At times, the Company may elect to early adopt a new or revised standard. As such, the Company’s financial statements may not be comparable to companies that comply with public company effective dates. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes as of the date of the unaudited condensed consolidated financial statements. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. In the current macroeconomic and business environment affected by the Russia-Ukraine and Israel-Hamas conflicts and inflationary pressures, these estimates require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated on consolidation. Further, the basis of consolidation incorporates the financial statements of our foreign entity, Casing Technologies Group Limited, which operates under UK Generally Accepted Accounting Principles ("UK GAAP"). Those financial statements are translated into US GAAP for consolidation purposes. The translation process adheres to established accounting standards and guidelines to ensure consistency and comparability across our consolidated financial statements. This approach enables us to accurately reflect the financial position, results of operations, and cash flows of our consolidated operations. Foreign Currency Translation and Transactions The Company has determined that the functional and reporting currency for its operations across the globe is the functional currency of the Company’s international subsidiaries. Accordingly, all foreign balance sheet accounts have been translated into United States dollars using the rate of exchange at the respective balance sheet date. Components of the unaudited condensed consolidated statements of income and comprehensive income have been translated at the average rates during the reporting period. Translation gains and losses are recorded in accumulated other comprehensive loss as a component of stockholders’ equity. Gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in the unaudited condensed consolidated statements of income and comprehensive income. For the three months ended March 31, 2024 and 2023 , the unrealized foreign currency fluctuation impacts on transactions included in the unaudited condensed consolidated statements of income and comprehensive income totaled approximately $ 28 thousand of gains and nil in losses, respectively. Revenue Recognition The Company recognizes revenue in accordance with Topic 842 (which addresses lease accounting) and Topic 606 (which addresses revenue from contracts with customers). The Company derives its revenue from two revenue types, tool rental services and product sales. Tool Rental Services Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842. Owned tool rentals represent the most significant revenue type and are governed by the Company’s standard rental contract. The Company accounts for such rentals as operating leases. The lease terms are included in the contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. The Company’s lease revenues do not include material amounts of variable payments. Owned tool rentals represent revenue from renting tools that the Company owns. The Company does not generally provide an option for the lessee to purchase the rented equipment at the end of the lease. The Company recognizes revenues from renting tools on a straight-line basis. The Company’s rental contract periods are daily, monthly, or per well. As part of this straight-line methodology, when the equipment is returned, the Company recognizes as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the drilling tool was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, the Company will have customers return the drilling tool and be contractually required to pay the Company more than the cumulative amount of revenue recognized to date under the straight-line methodology. Additionally, the Company has rental contracts that are based on usage, either on a per footage or per well basis. As these types of rental contracts primarily consist of variable lease payments, which are unknown at commencement, revenue is recognized when the changes in the factor on which the contingent lease payments are based occur. When the customer returns the rental equipment and the footage or usage becomes known, the Company recognizes revenue. The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its unaudited condensed consolidated balance sheet. As noted above, the Company is unsure of when the customer will return rented drilling tools. As such, the Company cannot provide a maturity analysis of future lease payments as it is unknown when the tool will be returned and what the customer will owe upon return of the tool. The Company’s drilling tools are generally rented for short periods of time (significantly less than a year). Lessees do not provide residual value guarantees on rented equipment. The Company expects to derive significant future benefits from its drilling tools following the end of the rental term. The Company’s rentals are generally short-term in nature, and its tools are typically rented for the majority of the time that the Company owns them. Product Sales Product sales consist of charges for rented tools that are damaged beyond repair, charges for lost-in-hole, and charges for lost-in-transit while in the care, custody or control of the Company’s customers, and other charges for made to order product sales. Product sales are accounted for under Topic 606. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the revenue standard. The transaction price is measured as consideration specified in a contract with a customer and excludes any sales incentives and taxes or other amounts collected on behalf of third parties. As each of the Company’s contracts with customers contain a single performance obligation to provide a product sale, the Company does not have any performance obligations requiring allocation of transaction prices. The performance obligation for made to order product sales is satisfied and revenue is recognized at a point in time when control of the asset transfers to the customer, which typically occurs upon delivery of the product or when the product is made available to the customer for pickup at the Company’s shipping dock. Additionally, pursuant to the contractual terms with the Company’s customers, the customer must notify the Company of, and purchase from the Company, any rented tools that are damaged beyond repair, lost-in-hole, or lost-in-transit while in the care, custody or control of the Company’s customers. Revenue is recognized for these products at a point in time upon the customer’s notification to the Company of the occurrence of one of these noted events. The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. Revenue per geographic location Revenue generated was concentrated within the United States. For the three months ended March 31, 2024 and 2023, the revenue generated within the United States was $ 32.3 million and $ 36.6 million , respectively, or 87 % and 90 % of total revenue. For the three months ended March 31, 2024 and 2023, the revenue generated outside of the United States, in Canada and International, was $ 4.7 million and $ 4.2 million , respectively, or 13 % and 10 % of total revenue. Contract Assets and Contract Liabilities Contract assets represent the Company’s rights to consideration for work completed but not billed. As of March 31, 2024 and December 31, 2023, the Company had contract assets of $ 4.6 million and $ 4.2 million , respectively. Contract assets were recorded in accounts receivable, net in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities consist of fees invoiced or paid by the Company’s customers for which the associated services have not been performed and revenue has not been recognized based on the Company’s revenue recognition criteria described above. As of March 31, 2024 and December 31, 2023 , the Company did not have any material contract liabilities. All deferred revenues are expected to be recognized during the following 12 months, and they were recorded in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company did no t have any cash equivalents as of March 31, 2024 and December 31, 2023 . Accounts Receivable, net The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within 30 to 60 days of the period in which the corresponding sales or rentals occur and do not bear interest. They are recorded at net realizable value less an allowance for doubtful accounts and are classified as accounts receivable, net on the unaudited condensed consolidated balance sheets. Allowance for Credit Losses The Company considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In our determination of the allowance for credit losses, we pool receivables by days outstanding and apply an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses. As of March 31, 2024 and December 31, 2023, the allowance for credit losses totaled $ 1.4 million and $ 1.5 million , respectively. Business Combinations The Company applies the acquisition method of accounting for business combinations, which requires us to make use of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets and liabilities acquired. We account for contingent assets and liabilities at fair value on the acquisition date, and record changes to fair value associated with these assets and liabilities as a period cost as incurred. We use established valuation techniques and engage reputable valuation specialists to assist us with these valuations. We use a reasonable measurement period to record any adjustment related to the opening balance sheet (generally, less than one year). After the measurement period, changes to the opening balance sheet can result in the recognition of income or expense as period costs. To the extent these items stem from contingencies that existed at the balance sheet date, but are contingent upon the realization of future events, the cost is charged to expense at the time the future event becomes known. Inventories, net Inventories are stated at the lower of cost or net realizable value. Cost is determined by using the specific identification method or the first-in-first-out ("FIFO") method, depending on the type of inventory. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on assumptions regarding future demand and market conditions. Inventory write-downs are charged to cost of rental revenue and cost of product sale revenue within operating costs section of the unaudited condensed consolidated statements of income and comprehensive income and establish a new cost basis for the inventory. Inventory includes raw material and finished goods. Property, Plant and Equipment, net Property, plant and equipment purchased by the Company are recorded at cost less accumulated depreciation. Depreciation is recorded using the straight-line method based on the estimated useful lives of the depreciable property or, for leasehold improvements, the remaining term of the lease, whichever is shorter. Assets not yet placed in use are not depreciated. Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost. The cost of refurbishments and renewals are capitalized when the value of the property, plant or equipment is enhanced for an extended period. Expenditures to maintain and repair property, plant and equipment, which do not improve or extend the life of the related assets, are charged to operations when incurred. When property, plant and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in operations. Leases The Company adopted ASC 842, Leases (“ASC 842”) as of January 1, 2022 using the modified retrospective transition approach, with no restatement of prior periods or cumulative adjustments to retained earnings. Upon adoption, the Company elected the package of transition practical expedients, which allowed it to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The Company elected the use-of-hindsight to reassess lease term. The Company elected not to recognize leases with an initial term of 12 months or less within the unaudited condensed consolidated balance sheets and to recognize those lease payments on a straight-line basis in the unaudited condensed consolidated statements of income and comprehensive income over the lease term. The new lease accounting standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the practical expedient to not separate lease and non-lease components for all leases. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the unaudited condensed consolidated balance sheets. The Company recognizes lease expense for its operating leases on a straight-line basis over the term of the lease. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from a lease. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of the future minimum lease payments over the lease term. Operating lease ROU assets also include the impact of any lease incentives. An amendment to a lease is assessed to determine if it represents a lease modification or a separate contract. Lease modifications are reassessed as of the effective date of the modification using an incremental borrowing rate based on the information available at the commencement date. For modified leases the Company also reassess the lease classification as of the effective date of the modification. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company’s lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option in the measurement of its ROU assets and liabilities. The Company considers contractual-based factors such as the nature and terms of the renewal or termination, asset-based factors such as physical location of the asset and entity-based factors such as the importance of the leased asset to the Company’s operations to determine the lease term. The Company generally uses the base, noncancelable, lease term when determining the ROU assets and lease liabilities. The right-of-use asset is tested for impairment in accordance with Accounting Standards Codification Topic 360, Property, Plant, and Equipment. Lessor Accounting Our leased equipment primarily consists of rental tools and equipment. Our agreements with our customers for rental equipment contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (iii) the customer directs the use of the identified assets throughout the period of use. Our lease contract periods are daily, monthly, per well or based on footage. Lease revenue is recognized on a straight-line basis based on these rates. We do not provide an option for the lessee to purchase the rented tools at the end of the lease and the lessees do not provide residual value guarantees on the rented assets. We recognized operating lease revenue within “Tool rental” on the unaudited condensed consolidated statements of income and comprehensive income. Intangible Assets Intangible assets with finite useful lives include customer relationships, trade name, patents, non-compete agreements and a supply agreement. These intangible assets are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible are realized. Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses. We evaluate Goodwill at least annually for impairment. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds its estimated fair value. We conduct our annual assessment of the recoverability of goodwill as of December 31 of each year. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or we elect not to perform a qualitative assessment, the quantitative assessment of goodwill test is performed. The goodwill impairment test is also performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, we will utilize a discounted cash flow analysis using management’s projections that are subject to various risks and uncertainties of revenues, expenses and cash flows as well as assumptions regarding discount rates, terminal value and control premiums. Estimates of future cash flows and fair value are highly subjective and inherently imprecise. These estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period. Accounting for Impairment of Long-lived Assets Long-lived assets with finite lives include property, plant and equipment and acquired intangible assets. The Company evaluates long-lived assets, including acquired intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group. For the three months ended March 31, 2024 and 2023 , management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets. Investments - Equity Securities Equity securities are stated at fair value. Unrealized gains and losses are reflected in the unaudited condensed consolidated statements of income and comprehensive income. The Company periodically reviews the securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of March 31, 2024 and December 31, 2023, the Company believes the cost of the securities was recoverable in all material respects. Redeemable Convertible Preferred Stock Prior to the closing of the Merger, there were outstanding shares of DTIH Series A redeemable convertible preferred stock (the “Redeemable Convertible Preferred Stock”), which was classified outside of permanent equity in mezzanine equity on the unaudited condensed consolidated balance sheets as it was redeemable on a fixed date. Upon the closing of the Merger, all of the Redeemable Convertible Preferred Stock was canceled in exchange for DTIC common stock and the right to receive cash. Accordingly, there was no Redeemable Convertible Preferred Stock outstanding as of March 31, 2024 or December 31, 2023. Preferred Stock As of the closing of the Merger, the Board of Directors have expressly granted authority to issue shares of preferred stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series and as may be permitted by the Delaware General Corporation Law. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the preferred stock, or any series thereof, unless a vote of any such holders is required pursuant to any preferred stock designation. The Board of Directors of the Company has no t issued any shares of any classes or series of preferred stock as of March 31, 2024 , and through the date these financial statements were available to be issued. Cost of Revenue The Company recorded all operating costs associated with its product sales and tool rental revenue streams in cost of product sale revenue and cost of tool rental revenue, respectively, in the unaudited condensed consolidated statements of income and comprehensive income. All indirect operating costs, including labor, freight, contract labor and others, are included in selling, general, and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income. Stock-Based Compensation The Company recognizes stock-based compensation expenses over the requisite service period. The Company historically granted stock-based compensation awards with performance based vesting conditions. These options all vested upon the closing of the merger with ROC. Subsequent to the closing of the merger with ROC, the Company’s stock-based compensation awards are subject only to service based vesting conditions. Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock awards with only service conditions that have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. ASC 718 requires that the cost of awards of equity instruments offered in exchange for employee services, including employee stock options and restricted stock awards, be measured based on the grant-date fair value of the award. The Company determines the fair value of stock options granted using the Black-Scholes-Merton option-pricing model (“Black-Scholes model”) and recognizes the cost over the period during which an employee is

Revision of Previously Issued F

Revision of Previously Issued Financial Statements	3 Months Ended
	Mar. 31, 2024
Prior Period Adjustment [Abstract]
Revision of Previously Issued Financial Statements	NOTE 2 – Revision of Previously Issued Financial Statements During the preparation of its unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, the Company identified certain errors in its previously issued unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023. The errors identified had no impact on the unaudited condensed consolidated balance sheets, statements of income and comprehensive income, and statements of changes in redeemable convertible preferred stock and shareholders’ equity. As described further below, the Company has revised its previously issued unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 within this Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2024. The following paragraphs describe the errors in the previously issued unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023, and the table following these paragraphs presents the quantitative impact of the errors described in the paragraphs below. Statement of cash flow errors related to leases The Company determined that the previously reported amount of $ 2.5 million in ROU assets obtained in exchange for lease liabilities disclosed within the non-cash investing and financing activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included amounts for Canadian leases that were excluded from the consolidated balance sheet due to their being immaterial. In addition, the calculation incorrectly included amounts for ROU assets obtained in exchange for lease liabilities whereby the leases had terminated. Also, with respect to leases, the Company determined that the previously reported amount of non-cash lease expense of negative $ 0.2 million within the operating activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The previously reported amount was calculated as solely the change in ROU assets from December 31, 2022 to March 31, 2023 without taking into account the fact that the change in ROU assets is also impacted by the non-cash ROU assets obtained in exchange for lease liabilities. In addition, the Company determined that the previously reported amount of $ 0.3 million for operating lease liabilities within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows was calculated incorrectly. The previously reported amount was calculated as solely the change in the operating lease liability from December 31, 2022 to March 31, 2023 without taking into account the fact that the change in the operating lease liability is also impacted by the non-cash ROU assets obtained in exchange for lease liabilities described above. Statement of cash flow errors related to inventory and property, plant, and equipment The Company determined that the previously reported amount of inventories of negative $ 1.4 million within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included the non-cash amounts expensed on the income statement for the provision for excess and obsolete inventory. The provision for excess and obsolete inventory should have been presented separately within the reconciliation of net income to net cash flows from operating activities in the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023. In addition, the Company determined that the previously reported amount of inventories of negative $ 1.4 million and accounts payable of positive $ 5.8 million within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 were not adjusted for the impact of the amount of purchases of inventory that were not paid in cash during the three months ended March 31, 2023. The previously reported amounts were calculated as solely the changes in inventories and accounts payable from December 31, 2022 to March 31, 2023 without taking into account the fact that the changes in both inventories and accounts payable are also impacted by the amount of inventory that has not yet been paid in cash at period end. The Company determined that the previously reported amount of proceeds from sale of lost-in-hole equipment of $ 5.3 million within the investing activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included the non-cash amounts expensed on the income statement for the provision for excess and obsolete property, plant and equipment. The amount for the provision for excess and obsolete property, plant and equipment should have been presented within the reconciliation of net income to net cash flows from operating activities on the unaudited condensed consolidated statement of cash flows for the March 31, 2023. Furthermore, the Company determined that the previously reported amount of purchases of property, plant and equipment of negative $ 10.8 million within the investing activities section of the unaudited condensed consolidated statement of cash flows for the March 31, 2023 was calculated incorrectly. The Company determined that the previously reported amount of purchases of property, plant and equipment was calculated using an incorrect amount for the additions to property, plant and equipment that were not paid for in cash during the March 31, 2023. Additionally, the Company determined that the previously reported amount of accounts payable of positive $ 5.8 million within the operating activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was not adjusted for the impact of the purchases of property, plant and equipment that were not paid for in cash during the three months ended March 31, 2023. Also, with respect to inventory and property, plant and equipment, the Company determined that the previously disclosed non-cash investing and financing activities section incorrectly failed to disclose the amounts of purchases of inventory and property, plant and equipment remaining in accounts payable as of March 31, 2023. The Company evaluated the errors described above (and quantified in the table below), both qualitatively and quantitatively, in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the previously issued financial statements taken as a whole. The unaudited consolidated financial statements presented herein as of and for the three months ended March 31, 2023 have been revised to correct the errors described above in accordance with SEC SAB Topic 1.M, as codified in ASC 250. For the three months ended March 31, 2023 Unaudited Condensed Consolidated Statement of Cash Flows As Previously Reported Adjustment As Revised Non-cash lease expense $ ( 220 ) $ 1,360 $ 1,140 Provision for excess and obsolete inventory — 17 17 Provision for excess and obsolete property and equipment — 117 117 Inventories, net ( 1,442 ) 1,558 116 Operating lease liabilities 274 ( 1,360 ) ( 1,086 ) Accounts payable 5,765 ( 2,557 ) 3,208 Accrued Expenses 207 ( 3,387 ) ( 3,180 ) Purchase of property, plant and equipment ( 10,815 ) 3,748 ( 7,067 ) Proceeds from sale of lost-in-hole equipment 5,315 504 5,819 ROU assets obtained in exchange for lease liabilities 2,516 ( 1,156 ) 1,360 Purchases of inventory included in accounts payable and accrued expenses and other current liabilities — 1,575 1,575 Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities — 4,369 4,369

BUSINESS COMBINATION

BUSINESS COMBINATION	3 Months Ended
	Mar. 31, 2024
Business Combinations [Abstract]
BUSINESS COMBINATION	NOTE 3 – BUSINESS COMBINATION On the CTG Acquisition Date, the Company’s wholly owned subsidiary, Drilling Tools International, Inc., entered into and consummated the Share Purchase Agreement with CTG, the shareholders of CTG, and a representative of CTG, to acquire 100 % of the shares of CTG for a gross cash purchase consideration of £ 16.2 million, or approximately $ 20.9 million, based on the British pound sterling to United States dollar exchange rate on the CTG Acquisition Date. CTG is incorporated in the United Kingdom and is the holding company of its wholly owned subsidiary, Deep Casing. Deep Casing specializes in the design, engineering, and manufacturing of a range of patented and innovative products for well construction, well completion, and casing installation processes for the global oil and gas sector. The CTG Acquisition allows the Company to further expand its geographical presence globally, especially in the Middle East, provides accretive earnings to consolidated results of operations, and expands the Company’s portfolio of intellectual property rights, through the acquisition of over 60 patents. The £ 16.2 million, or approximately $ 20.9 million, gross cash purchase consideration was used on the CTG Acquisition Date to (i) settle Deep Casing’s outstanding debt of £ 15.3 million, or approximately $ 19.8 million; (ii) pay Deep Casing’s legacy shareholders £ 0.3 million, or approximately $ 0.3 million, in accordance with the Share Purchase Agreement; and (iii) pay Deep Casing’s acquisition-related costs of £ 0.6 million, or approximately $ 0.8 million. The CTG Acquisition has been accounted for as a business combination in accordance with ASC 805, Business Combinations (“ ASC 805 ”) . Drilling Tools International, Inc. has been treated as the accounting acquirer. Accordingly, CTG’s tangible and identifiable intangible assets acquired and its liabilities assumed were recorded at their estimated fair values on the CTG Acquisition Date. The assets acquired and liabilities assumed in connection with the CTG Acquisition were recorded at their fair values on the CTG Acquisition Date as follows (in thousands): Assets Cash $ 2,674 Accounts receivable, net 3,781 Inventories, net 4,282 Prepaid expenses and other current assets 189 Property, plant and equipment , net 1,647 Operating lease ROU asset 315 Intangible assets, net 8,065 Goodwill 2,618 Total assets acquired $ 23,571 Liabilities Accounts payable 2,656 Accrued expenses and other current liabilities ( 295 ) Current portion of operating lease liabilities 95 Operating lease liabilities, less current portion 180 Total liabilities assumed $ 2,636 Total consideration transferred $ 20,935 The excess of the purchase price over the fair values of the net identifiable tangible and intangible assets acquired has been assigned to goodwill. Goodwill represents the future benefits as a result of the acquisition that will enhance the services available to both new and existing customers and increase the Company’s competitive position. Goodwill will be evaluated for impairment at least annually. Goodwill attributable to the CTG Acquisition is not deductible for tax purposes. The following table sets forth the amounts allocated to the identified intangible assets, the estimated useful lives of those intangible assets as of the CTG Acquisition Date, and the methodologies used to determine the fair values of those intangible assets ($ in thousands): Fair value Useful life Fair value methodology Intangible assets Trade names $ 819 15 Relief from royalty method Developed Technology 3,269 20 Relief from royalty method Customer relationships 3,977 20 Multi-period excess earnings method of the income approach Total intangible assets $ 8,065 The intangible assets acquired are expected to be amortized over their useful lives on a straight-line basis. The Company incurred acquisition-related costs of $ 0.3 million during the three months ended March 31, 2024, which are included in other income (expense), net in the condensed consolidated statement of income and comprehensive income. The Company’s condensed consolidated statement of income and comprehensive income for the three months ended March 31, 2024 includes CTG’s revenues of $ 0.8 million and net income of $ 0.2 from the CTG Acquisition Date through March 31, 2024. Supplemental Pro Forma Information The unaudited supplemental pro forma financial results below for the three months ended March 31, 2024 and 2023, combine the consolidated results of the Company and CTG, giving effect to the CTG Acquisition as if it had been completed on January 1, 2023. This unaudited supplemental pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2023, or any other date. Three months ended March 31, (in thousands) 2024 2023 Pro forma revenue $ 40,333 $ 45,308 Pro forma net income $ 2,420 $ 6,287 The unaudited supplemental pro forma financial information in the table above contains material nonrecurring pro forma adjustments to remove interest expense on CTG's debt as it is assumed that the business combination occurred and the debt was paid off on January 1, 2023.

INVESTMENTS - EQUITY SECURITIES

INVESTMENTS - EQUITY SECURITIES	3 Months Ended
	Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]
INVESTMENTS - EQUITY SECURITIES	NOTE 4 – INVESTMENTS – EQUITY SECURITIES The following table shows the cost and fair value of the Company’s investments in equity securities (in thousands): Cost Unrealized Fair Value March 31, 2024 $ 999 $ 138 $ 1,137 Cost Unrealized Fair Value December 31, 2023 $ 999 $ ( 111 ) $ 888 Unrealized holding gains on equity securities for the three months ended March 31, 2024 were approximately $ 0.2 million . Unrealized holding losses on equity securities for the three months ended March 31, 2023 were approximately $ 33 thousand .

BALANCE SHEET DETAILS - CURRENT

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES	NOTE 5 – BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES Inventories, net The following table shows the components of inventory (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 8,823 $ 5,022 Finished goods 2,673 16 Total inventories 11,496 5,038 Allowance for obsolete inventory ( 55 ) ( 4 ) Inventories, net $ 11,441 $ 5,034 Prepaid expenses and other current assets The following table shows the components of prepaid expenses and other current assets (in thousands): March 31, 2024 December 31, 2023 Prepaid expenses: Deposits on inventory 1,437 2,146 Prepaid income tax 362 362 Prepaid insurance 530 1,110 Prepaid rent 399 372 Prepaid equipment 331 331 Prepaid other 172 214 Other current assets: Other $ — $ 18 Total $ 3,231 $ 4,553 Accrued expenses and other current liabilities The following table shows the components of accrued expenses and other current liabilities (in thousands): March 31, 2024 December 31, 2023 Accrued expenses: Accrued compensation and related benefits $ 3,878 $ 4,999 Accrued insurance 435 978 Accrued transaction advisory fees 1,000 1,000 Accrued professional services 72 189 Accrued interest 126 58 Accrued property taxes 314 60 Accrued monitoring fees 373 373 Other 760 147 Other current liabilities: Income tax payable $ 1,757 $ 1,586 Sales tax payable ( 413 ) 71 Unbilled lost-in-hole revenue 96 76 Deferred revenue 44 1,042 Total accrued expenses and other current liabilities $ 8,442 $ 10,579

PROPERTY, PLANT AND EQUIPMENT,

PROPERTY, PLANT AND EQUIPMENT, NET	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT, NET	NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET The following table shows the component of property, plant and equipment, net (in thousands): Estimated Useful March 31, 2024 December 31, 2023 Rental tools and equipment 5 - 10 195,460 188,949 Buildings and improvements 5 - 40 6,686 6,672 Office furniture, fixtures and equipment 3 - 5 2,269 2,389 Transportation and equipment 3 - 5 783 793 Total property, plant and equipment 205,198 198,803 Less: accumulated deprecation ( 134,602 ) ( 133,003 ) Property, plant and equipment, net (excluding construction in progress) 70,596 65,800 Construction in progress - - Property, plant and equipment, net $ 70,596 $ 65,800 Total depreciation expense for the three months ended March 31, 2024 and 2023 was approximately $ 5.3 million and $ 5.0 million , respectively. The Company has not acquired any property, plant and equipment under financing leases. Property, plant and equipment, net, is concentrated within the United States. As of March 31, 2024 and December 31, 2023, property, plant and equipment, net held within the United States was $ 65.9 million and $ 63.0 million , respectively, or 93 % and 96 % of total property, plant and equipment, net. As of March 31, 2024 and December 31, 2023, property, plant and equipment, net held outside of the United States, in Canada and Internationally, was $ 4.7 million and $ 2.8 million , respectively, or 7 % and 4 % of total property, plant and equipment, net.

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS, NET	NOTE 7 – INTANGIBLE ASSETS, NET The following table shows the components of intangible assets, net (in thousands): Useful Lives (in Years) March 31, 2024 December 31, 2023 Trade name 10 - 15 $ 2,079 $ 1,280 Developed Technology 13 - 20 3,462 270 Customer Relationships 20 3,882 — Total intangible assets 9,423 1,550 Less: accumulated amortization ( 1,365 ) ( 1,334 ) Intangible assets, net $ 8,058 $ 216 Total amortization expense for the three months ended March 31, 2024 and 2023 was approximately $ 31 thousand and $ 12 thousand , respectively.

REVOLVING CREDIT FACILITY AND T

REVOLVING CREDIT FACILITY AND TERM LOAN	3 Months Ended
	Mar. 31, 2024
Line of Credit Facility [Abstract]
REVOLVING CREDIT FACILITY AND TERM LOAN	NOTE 8 – REVOLVING CREDIT FACILITY AND TERM LOAN In December 2015, the Company entered into a credit facility with PNC Bank, National Association (the "Credit Facility"). The facility provided for a revolving line of credit with a maximum borrowing amount totaling $ 60.0 million. On March 15, 2024, the Company refinanced its revolving credit facility (the “Refinancing”) by entering into a Second Amended and Restated Revolving Credit, Term Loan and Security and Guaranty Agreement (the “Credit Facility”) with certain of the Company’s subsidiaries and PNC Bank, National Association as lender and as agent. Pursuant to the terms of the Credit Facility, the Company will be provided a revolving line of credit in a principal amount up to $ 80.0 million and a single draw term loan ( the "Term Loan") in a principal amount of $ 25.0 million. The Credit Facility and the Term Loan matures in March 2029 . The Credit Facility amends and restates the Company’s existing credit facility under that certain Amended and Restated Revolving Credit, Term Loan, and Security Agreement, dated as of June 20, 2023, by and among the Company, certain of its subsidiaries, and PNC Bank National Assoication. For the three months ended March 31, 2024, the interest on the term loan was based on SOFR or the bank’s base lending rate plus applicable margin (approximately 9.28 % at March 31, 2024 ). The Credit Facility is collateralized by substantially all the assets of the Company and matures March 15, 2029. As of March 31, 2024 , there were no amounts drawn against the line of credit. The Company is subject to various restrictive covenants associated with these borrowings including, but not limited to, a leverage ratio and a fixed charge ratio. As of March 31, 2024, the Company was in compliance with all restrictive covenants. Contingent Interest Embedded Derivative Liability Under the Credit Facility Agreement, the interest rate will reset (the 'Default Rate') upon the event of a default and an additional 2 % will be added to the base rate. The Company analyzed the Default Rate feature of the Credit Facility for derivative accounting consideration under ASC 815, Derivatives and Hedging , and determined the Default Rate met the definition of a derivative as it is a contingent interest feature. The Company also noted that the Default Rate feature (the 'Default Rate Derivative') required bifurcation from the host contract and was to be accounted for at fair value. In accordance with ASC 815-15, the Company bifurcated the Default Rate feature of the note and determined the derivative is liability classified. The Default Rate Derivative is treated as a liability, initially measured at fair value with subsequent changes in fair value recorded in earnings. Management has assessed the probability of occurrence for a non-credit default event and determined the likelihood of a referenced event to be remote. Therefore, the estimated fair value of the Default Rate Derivative was negligible as of March 31, 2024 and December 31, 2023 and therefore no amounts were recorded as of March 31, 2024 or December 31, 2023 .

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 9 – INCOME TAXES The Company recorded income tax expense on the unaudited condensed consolidated statements of income and comprehensive income of $ 0.9 million and $ 1.7 million for the three months ended March 31, 2024 and 2023, respectively. The income tax expense for the three months ended March 31, 2024 was calculated using a discrete approach. This methodology was used because changes in the Company's results of operations and acquisitions can materially impact the estimated annual effective tax rate. The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 were provisions of 23.1 % and 23.2 %, respectively. Such rates differed from the Federal Statutory rate of 21.0 % primarily due to the state taxes, foreign income taxes on the Company’s international operations, and permanent differences. The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating loss and tax credit carryovers. A valuation allowance is recorded to bring the net deferred tax assets to a level that is more likely than not to be realized in the foreseeable future. This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be realized, for tax purposes, in the foreseeable future. There was no significant change to the valuation allowance during the three months ended March 31, 2024 and 2023. The Company is still evaluating the tax impact of the CTG Acquisition, including the impact of the transaction costs. Additionally, the Company continues to evaluate the deferred tax assets and liabilities and corresponding valuation allowance in connection with the CTG Acquisition.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	NOTE 10 – STOCK-BASED COMPENSATION On June 20, 2023, the Company adopted the Drilling Tools International Corporation 2023 Omnibus Incentive Plan (the 2023 Plan). The 2023 Plan became effective on the closing of the Merger, which also occurred on June 20, 2023 . The 2023 Plan provides for the issuance of shares of Common Stock up to ten percent ( 10 %) of the shares of outstanding Common Stock as of the closing of the Merger (which equated to 2,976,854 shares as of December 31, 2023) and automatically increases on the first trading day of each calendar year by the number of shares of Common Stock equal to three percent ( 3 %) of the total number of outstanding Common Stock on the last day of the prior calendar year. The 2023 Plan allows for awards to be issued to employees, non-employee directors, and consultants in the form of options, stock appreciation rights, restricted shares, restricted stock units, performance based awards, other share-based awards, other cash-based awards, or a combination of the foregoing. As of March 31, 2024, there were 1,269,910 shares of Common Stock available for issuance under the 2023 Plan. In connection with the Merger, all outstanding options to purchase shares of DTIH common stock were canceled and exchanged for options to purchase shares of DTIC Common Stock ("Company Options"). The number of Company Options issued and the associated exercise prices were adjusted using the Common Exchange Ratio used for the Merger. As a result of the Merger, the Company issued options to purchase a total of 2,361,722 shares of the Company's Common Stock to former holders of the DTIH stock options. The vesting schedules, remaining term, and provisions (other than the adjusted number of underlying shares and exercise prices) of the Company Options issued, are identical to the vesting schedules, remaining term, and other provisions of the DTIH stock options that were exchanged. Per a post-closing amendment, Company Options currently held by former holders of DTIH stock options are no longer subject to employment considerations. The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model. Expected volatilities are based on comparable public company data. The Company uses future estimated employee termination and forfeiture rates of the options within the valuation model. The expected term of options granted is derived using the “plain vanilla” method due to the lack of history and volume of option activity at the Company. The risk-free rate is based on the approximate U.S. Treasury yield rate in effect at the time of grant. The Company’s calculation of share price involves the use of different valuation techniques, including a combination of an income and market approach. The Company used the quoted market price as of the grant date as an input into the Black-Scholes model. During the three months ended March 31, 2024, there were 2,600,000 options granted under the 2023 plan. During the three months ended March 31, 2024 , there were no exercises or forfeitures. Non-vested shares at March 31, 2024 and December 31, 2023 totaled 2,600,000 and nil , respectively, which consists of time based shares, for which the service conditions have not been satisfied at March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024 and 2023, there was $ 208 thousand and nil stock-based compensation expense recognized, respectively. As of March 31, 2024 and March 31, 2023, there was $ 4.4 million and $ 1.6 million, respectively, of unrecognized compensation expense. The unrecognized expense as of March 31, 2023 related to previously non-vested performance shares.

OTHER EXPENSES, NET

OTHER EXPENSES, NET	3 Months Ended
	Mar. 31, 2024
Other Income and Expenses [Abstract]
OTHER EXPENSES, NET	NOTE 11 – OTHER EXPENSES, NET The following table shows the components of other expenses, net for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Transaction fees ( 889 ) — Other, net ( 247 ) ( 7 ) Interest income 11 47 Other expense, net $ ( 1,125 ) $ 40

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 12 – RELATED PARTY TRANSACTIONS Management fees For the three months ended March 31, 2024 and 2023, management fees paid to Hicks Holdings Operating LLC, a shareholder of the Company, were approximately $ 0.2 million and $ 0.2 million , respectively. Management fees paid to a shareholder are included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income. Director fees For the three months ended March 31, 2024 and 2023, director fees paid to Board of Directors were approximately $ 85 thousand and $ 45 thousand , respectively. Management fees paid to a shareholder are included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income. Leases For the three months ended March 31, 2024 and 2023, the Company paid rent expense to Cree Investments, LLC, a shareholder of the Company, of approximately $ 13 thousand and $ 13 thousand , respectively, relating to the lease of a building.Future minimum lease payments related to this lease are included in the future minimum lease schedule in Note 13 - Leases .

LEASES

LEASES	3 Months Ended
	Mar. 31, 2024
Leases [Abstract]
LEASES	NOTE 13 – LEASES The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years. These leases often include options to extend the term of the lease which may be for periods of up to 5 years. When it is reasonably certain that the option will be exercised, the impact of the renewal term is included in the lease term for purposes of determining total future lease payments and measuring the ROU asset and lease liability. We apply the short-term lease policy election, which allows us to exclude from recognition leases with an original term of 12 months or less. We have not entered into any finance leases as of March 31, 2024. For the three months ended March 31, 2024, the components of the Company’s lease expense were as follows (in thousands): Three months ended March 31, 2024 Three months ended March 31, 2023 Operating Lease Cost $ 1,482 $ 1,518 Short-term Lease Cost 35 30 Variable Lease Cost 88 84 Sublease Income — ( 46 ) Total Lease Cost $ 1,605 $ 1,586 Supplemental balance sheet information related to leases was as follows (in thousands): Three months ended March 31, 2024 Weighted-average remaining lease term (in years) 6.45 Weighted average discount rate 5.86 % Three months ended March 31, 2024 Cash paid for amounts included in the measurement of lease liabilities 1,350 Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2024 were as follows (in thousands): 2024 $ 3,759 2025 4,244 2026 3,719 2027 2,540 2028 1,978 Thereafter 5,677 Total lease payments $ 21,917 Less: imputed interest ( 3,550 ) Present value of lease liabilities $ 18,367 The Company leases downhole drilling tools to companies in the oil and natural gas industry. Such leases are accounted for in accordance with ASC 842. For the three months ended March 31, 2024 and 2023, tool rental revenue for leases of downhole drilling tools was approximately $ 30.0 million and $ 32.3 million , respectively. Our lease contract periods are short-term in nature and are typically daily, monthly, per well, or footage based. Due to the short-term nature of the contracts, no maturity table is presented.

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS	3 Months Ended
	Mar. 31, 2024
Defined Benefit Plan [Abstract]
EMPLOYEE BENEFITS	NOTE 14 – EMPLOYEE BENEFITS The Company has a defined contribution plan that complies with Section 401(k) of the Internal Revenue Code. All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry date following six months of service. Plan entry dates are the first day of January and July. In March of 2020, the Company suspended any employee contribution match effective immediately and through the end of 2021. The match was reinstated on January 1, 2022. For 2022, the Company matched employee contributions 150 % of the first 3 % of employee contributions, not to exceed $ 2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximum contribution allowed under the Internal Revenue Service Regulations. The total expense for the three months ended March 31, 2024 and 2023 was approximately $ 0.3 million and $ 0.2 million , respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 15 – COMMITMENTS AND CONTINGENCIES The Company maintains operating leases for various facilities and vehicles. See Note 13 - Leases , for further information. Litigation From time to time, the Company may become involved in various legal proceedings in the ordinary course of its business and may be subject to third-party infringement claims.Such proceedings can be costly, time consuming, and unpredictable, and, therefore, no assurance can be given that the final outcome of such proceedings will not materially impact our consolidated financial condition or results of operations. Estimated losses are accrued for these proceedings when the loss is probably and can be estimated. While we maintain insurance coverage that we believe is adequate to mitigate the risks of such proceedings, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. The current liability for the estimated losses associated with these proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations. In the normal course of business, the Company may agree to indemnify third parties with whom it enters into contractual relationships, including customers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the Company’s products when used for their intended purposes infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim. Management Fee The Company is required to pay a monthly management fee to a shareholder. The fee is based upon a percentage of the Company’s trailing twelve months, earnings before interest, taxes and accumulated depreciation amount, as defined in the management agreement. See Note 12 – Related Party Transactions, for further information.

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2024
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 15 – EARNINGS PER SHARE Basic earnings per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding for the period plus dilutive potential common shares, including performance share awards, using the treasury stock method. Performance share awards are included based on the number of shares that would be issued as if the end of the reporting period was the end of the performance period and the result was dilutive. The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands except share and per share data): Three months ended March 31, 2024 2023 Numerator: Net income $ 3,126 $ 5,701 Less: Redeemable Convertible Preferred Stock dividends — ( 314 ) Net income attributable to common shareholders — basic $ 3,126 $ 5,387 Add: Redeemable Convertible Preferred Stock dividends — 314 Net income attributable to common shareholders — diluted $ 3,126 $ 5,701 Denominator Weighted-average common shares used in computing 29,768,568 11,951,137 Weighted-average effect of potentially dilutive securities: Effect of potentially dilutive time-based stock options — 1,006,729 Effect of potentially dilutive performance-based stock options — — Effect of potentially dilutive redeemable convertible — 6,719,641 Weighted-average common shares outstanding — diluted 29,768,568 19,677,507 Earnings per share — basic $ 0.11 $ 0.45 Earnings per share — diluted $ 0.11 $ 0.29 As of March 31, 2024, the Company’s potentially dilutive securities consisted of options to purchase common stock. As of March 31, 2023, the Company's potentially dilutive securities consisted of redeemable convertible preferred stock and options to purchase common stock. Based on the amounts outstanding as of the three months ended March 31, 2024 and 2023, the Company excluded the following potential common shares from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. The options excluded from the diluted earnings per share calculations were as follows: Three months ended March 31, 2024 2023 Time-based options outstanding 4,427,659 140,135 Total 4,427,659 140,135 Our performance-based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-based stock options were also excluded from the diluted earnings per share calculations for the three months ended March 31, 2023 because all necessary performance conditions were not satisfied by March 31, 2023. The options excluded from the diluted earnings per share calculations were as follows: Three months ended March 31, 2024 2023 Performance-based options outstanding 534,063 534,063 Total 534,063 534,063

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated all events occurring through the date on which the unaudited condensed consolidated financial statements were issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Organization and Nature of Operations	Organization and Nature of Operations Drilling Tools International Corporation, a Delaware corporation ("DTIC" or the "Company"), is a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle. On June 20, 2023 (the “Closing Date”), a merger transaction between Drilling Tools International Holdings, Inc. (“DTIH”), ROC Energy Acquisition Corp (“ROC”), and ROC Merger Sub, Inc., a directly, wholly owned subsidiary of ROC (“Merger Sub”), was completed (the “Merger”) pursuant to the initial merger agreement dated February 13, 2023 and subsequent amendment to the merger agreement dated June 5, 2023 collectively, (the “Merger Agreement”). In connection with the closing of the Merger, ROC changed its name to Drilling Tools International Corporation. The common stock of DTIC (“DTIC Common Stock” or the “Company’s Common Stock”) commenced trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DTI” on June 21, 2023. On March 15, 2024 (the “CTG Acquisition Date”), we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Casing Technologies Group Limited (“CTG”), certain shareholders of CTG, and a representative of CTG. Pursuant to the terms of the Share Purchase Agreement, the Company acquired one hundred percent ( 100 %) of the shares of CTG (the “CTG Acquisition”), which wholly owns Deep Casing Tools Limited (“Deep Casing”), an energy technology development company, for approximately £ 16.2 million, or $ 20.9 million, based on the British pound sterling to United States dollar exchange rate on the CTG Acquisition Date. For further details regarding the acquisition, refer to Note 3, “Business Combinations.” The Company’s United States (“U.S.”) operations have locations in Texas, California, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming. The Company’s international operations are located in Canada, Scotland, Germany, Ukraine, UAE, and Saudi Arabia. Operations outside the U.S. are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws and possible limitations on foreign investment. The Company does not engage in hedging activities to mitigate its exposure to fluctuations in foreign currency exchange rates.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as set forth by the Financial Accounting Standards Board ("FASB") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). References to US GAAP issued by the FASB in these notes to the accompanying unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Update (“ASUs”).
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying interim unaudited condensed consolidated financial statements included in this quarterly report have been prepared in accordance with U.S. GAAP and, in the opinion of the Company, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2024, and its results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The condensed consolidated balance sheet at December 31, 2023 , was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
Emerging Growth Company	Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time the Company is no longer considered to be an emerging growth company. At times, the Company may elect to early adopt a new or revised standard. As such, the Company’s financial statements may not be comparable to companies that comply with public company effective dates.
Use of Estimates	Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes as of the date of the unaudited condensed consolidated financial statements. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. In the current macroeconomic and business environment affected by the Russia-Ukraine and Israel-Hamas conflicts and inflationary pressures, these estimates require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.
Principles of Consolidation	Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated on consolidation. Further, the basis of consolidation incorporates the financial statements of our foreign entity, Casing Technologies Group Limited, which operates under UK Generally Accepted Accounting Principles ("UK GAAP"). Those financial statements are translated into US GAAP for consolidation purposes. The translation process adheres to established accounting standards and guidelines to ensure consistency and comparability across our consolidated financial statements. This approach enables us to accurately reflect the financial position, results of operations, and cash flows of our consolidated operations.
Foreign Currency Translation and Transactions	Foreign Currency Translation and Transactions The Company has determined that the functional and reporting currency for its operations across the globe is the functional currency of the Company’s international subsidiaries. Accordingly, all foreign balance sheet accounts have been translated into United States dollars using the rate of exchange at the respective balance sheet date. Components of the unaudited condensed consolidated statements of income and comprehensive income have been translated at the average rates during the reporting period. Translation gains and losses are recorded in accumulated other comprehensive loss as a component of stockholders’ equity. Gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in the unaudited condensed consolidated statements of income and comprehensive income. For the three months ended March 31, 2024 and 2023 , the unrealized foreign currency fluctuation impacts on transactions included in the unaudited condensed consolidated statements of income and comprehensive income totaled approximately $ 28 thousand of gains and nil in losses, respectively.
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with Topic 842 (which addresses lease accounting) and Topic 606 (which addresses revenue from contracts with customers). The Company derives its revenue from two revenue types, tool rental services and product sales. Tool Rental Services Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842. Owned tool rentals represent the most significant revenue type and are governed by the Company’s standard rental contract. The Company accounts for such rentals as operating leases. The lease terms are included in the contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. The Company’s lease revenues do not include material amounts of variable payments. Owned tool rentals represent revenue from renting tools that the Company owns. The Company does not generally provide an option for the lessee to purchase the rented equipment at the end of the lease. The Company recognizes revenues from renting tools on a straight-line basis. The Company’s rental contract periods are daily, monthly, or per well. As part of this straight-line methodology, when the equipment is returned, the Company recognizes as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the drilling tool was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, the Company will have customers return the drilling tool and be contractually required to pay the Company more than the cumulative amount of revenue recognized to date under the straight-line methodology. Additionally, the Company has rental contracts that are based on usage, either on a per footage or per well basis. As these types of rental contracts primarily consist of variable lease payments, which are unknown at commencement, revenue is recognized when the changes in the factor on which the contingent lease payments are based occur. When the customer returns the rental equipment and the footage or usage becomes known, the Company recognizes revenue. The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its unaudited condensed consolidated balance sheet. As noted above, the Company is unsure of when the customer will return rented drilling tools. As such, the Company cannot provide a maturity analysis of future lease payments as it is unknown when the tool will be returned and what the customer will owe upon return of the tool. The Company’s drilling tools are generally rented for short periods of time (significantly less than a year). Lessees do not provide residual value guarantees on rented equipment. The Company expects to derive significant future benefits from its drilling tools following the end of the rental term. The Company’s rentals are generally short-term in nature, and its tools are typically rented for the majority of the time that the Company owns them. Product Sales Product sales consist of charges for rented tools that are damaged beyond repair, charges for lost-in-hole, and charges for lost-in-transit while in the care, custody or control of the Company’s customers, and other charges for made to order product sales. Product sales are accounted for under Topic 606. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the revenue standard. The transaction price is measured as consideration specified in a contract with a customer and excludes any sales incentives and taxes or other amounts collected on behalf of third parties. As each of the Company’s contracts with customers contain a single performance obligation to provide a product sale, the Company does not have any performance obligations requiring allocation of transaction prices. The performance obligation for made to order product sales is satisfied and revenue is recognized at a point in time when control of the asset transfers to the customer, which typically occurs upon delivery of the product or when the product is made available to the customer for pickup at the Company’s shipping dock. Additionally, pursuant to the contractual terms with the Company’s customers, the customer must notify the Company of, and purchase from the Company, any rented tools that are damaged beyond repair, lost-in-hole, or lost-in-transit while in the care, custody or control of the Company’s customers. Revenue is recognized for these products at a point in time upon the customer’s notification to the Company of the occurrence of one of these noted events. The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. Revenue per geographic location Revenue generated was concentrated within the United States. For the three months ended March 31, 2024 and 2023, the revenue generated within the United States was $ 32.3 million and $ 36.6 million , respectively, or 87 % and 90 % of total revenue. For the three months ended March 31, 2024 and 2023, the revenue generated outside of the United States, in Canada and International, was $ 4.7 million and $ 4.2 million , respectively, or 13 % and 10 % of total revenue.
Contract Assets and Contract Liabilities	Contract Assets and Contract Liabilities Contract assets represent the Company’s rights to consideration for work completed but not billed. As of March 31, 2024 and December 31, 2023, the Company had contract assets of $ 4.6 million and $ 4.2 million , respectively. Contract assets were recorded in accounts receivable, net in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities consist of fees invoiced or paid by the Company’s customers for which the associated services have not been performed and revenue has not been recognized based on the Company’s revenue recognition criteria described above. As of March 31, 2024 and December 31, 2023 , the Company did not have any material contract liabilities. All deferred revenues are expected to be recognized during the following 12 months, and they were recorded in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company did no t have any cash equivalents as of March 31, 2024 and December 31, 2023 .
Accounts Receivable, net	Accounts Receivable, net The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within 30 to 60 days of the period in which the corresponding sales or rentals occur and do not bear interest. They are recorded at net realizable value less an allowance for doubtful accounts and are classified as accounts receivable, net on the unaudited condensed consolidated balance sheets.
Allowance for Credit Losses	Allowance for Credit Losses The Company considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In our determination of the allowance for credit losses, we pool receivables by days outstanding and apply an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses. As of March 31, 2024 and December 31, 2023, the allowance for credit losses totaled $ 1.4 million and $ 1.5 million , respectively.
Business Combinations	Business Combinations The Company applies the acquisition method of accounting for business combinations, which requires us to make use of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets and liabilities acquired. We account for contingent assets and liabilities at fair value on the acquisition date, and record changes to fair value associated with these assets and liabilities as a period cost as incurred. We use established valuation techniques and engage reputable valuation specialists to assist us with these valuations. We use a reasonable measurement period to record any adjustment related to the opening balance sheet (generally, less than one year). After the measurement period, changes to the opening balance sheet can result in the recognition of income or expense as period costs. To the extent these items stem from contingencies that existed at the balance sheet date, but are contingent upon the realization of future events, the cost is charged to expense at the time the future event becomes known.
Inventories, net	Inventories, net Inventories are stated at the lower of cost or net realizable value. Cost is determined by using the specific identification method or the first-in-first-out ("FIFO") method, depending on the type of inventory. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on assumptions regarding future demand and market conditions. Inventory write-downs are charged to cost of rental revenue and cost of product sale revenue within operating costs section of the unaudited condensed consolidated statements of income and comprehensive income and establish a new cost basis for the inventory. Inventory includes raw material and finished goods.
Property, Plant and Equipment, net	Property, Plant and Equipment, net Property, plant and equipment purchased by the Company are recorded at cost less accumulated depreciation. Depreciation is recorded using the straight-line method based on the estimated useful lives of the depreciable property or, for leasehold improvements, the remaining term of the lease, whichever is shorter. Assets not yet placed in use are not depreciated. Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost. The cost of refurbishments and renewals are capitalized when the value of the property, plant or equipment is enhanced for an extended period. Expenditures to maintain and repair property, plant and equipment, which do not improve or extend the life of the related assets, are charged to operations when incurred. When property, plant and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in operations.
Leases	Leases The Company adopted ASC 842, Leases (“ASC 842”) as of January 1, 2022 using the modified retrospective transition approach, with no restatement of prior periods or cumulative adjustments to retained earnings. Upon adoption, the Company elected the package of transition practical expedients, which allowed it to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The Company elected the use-of-hindsight to reassess lease term. The Company elected not to recognize leases with an initial term of 12 months or less within the unaudited condensed consolidated balance sheets and to recognize those lease payments on a straight-line basis in the unaudited condensed consolidated statements of income and comprehensive income over the lease term. The new lease accounting standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the practical expedient to not separate lease and non-lease components for all leases. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the unaudited condensed consolidated balance sheets. The Company recognizes lease expense for its operating leases on a straight-line basis over the term of the lease. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from a lease. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of the future minimum lease payments over the lease term. Operating lease ROU assets also include the impact of any lease incentives. An amendment to a lease is assessed to determine if it represents a lease modification or a separate contract. Lease modifications are reassessed as of the effective date of the modification using an incremental borrowing rate based on the information available at the commencement date. For modified leases the Company also reassess the lease classification as of the effective date of the modification. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company’s lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option in the measurement of its ROU assets and liabilities. The Company considers contractual-based factors such as the nature and terms of the renewal or termination, asset-based factors such as physical location of the asset and entity-based factors such as the importance of the leased asset to the Company’s operations to determine the lease term. The Company generally uses the base, noncancelable, lease term when determining the ROU assets and lease liabilities. The right-of-use asset is tested for impairment in accordance with Accounting Standards Codification Topic 360, Property, Plant, and Equipment. Lessor Accounting Our leased equipment primarily consists of rental tools and equipment. Our agreements with our customers for rental equipment contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (iii) the customer directs the use of the identified assets throughout the period of use. Our lease contract periods are daily, monthly, per well or based on footage. Lease revenue is recognized on a straight-line basis based on these rates. We do not provide an option for the lessee to purchase the rented tools at the end of the lease and the lessees do not provide residual value guarantees on the rented assets. We recognized operating lease revenue within “Tool rental” on the unaudited condensed consolidated statements of income and comprehensive income.
Intangible Assets	Intangible Assets Intangible assets with finite useful lives include customer relationships, trade name, patents, non-compete agreements and a supply agreement. These intangible assets are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible are realized.
Goodwill	Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses. We evaluate Goodwill at least annually for impairment. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds its estimated fair value. We conduct our annual assessment of the recoverability of goodwill as of December 31 of each year. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or we elect not to perform a qualitative assessment, the quantitative assessment of goodwill test is performed. The goodwill impairment test is also performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, we will utilize a discounted cash flow analysis using management’s projections that are subject to various risks and uncertainties of revenues, expenses and cash flows as well as assumptions regarding discount rates, terminal value and control premiums. Estimates of future cash flows and fair value are highly subjective and inherently imprecise. These estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period.
Accounting for Impairment of Long-lived Assets	Accounting for Impairment of Long-lived Assets Long-lived assets with finite lives include property, plant and equipment and acquired intangible assets. The Company evaluates long-lived assets, including acquired intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group. For the three months ended March 31, 2024 and 2023 , management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets.
Investments - Equity Securities	Investments - Equity Securities Equity securities are stated at fair value. Unrealized gains and losses are reflected in the unaudited condensed consolidated statements of income and comprehensive income. The Company periodically reviews the securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of March 31, 2024 and December 31, 2023, the Company believes the cost of the securities was recoverable in all material respects.
Redeemable Convertible Preferred Stock	Redeemable Convertible Preferred Stock Prior to the closing of the Merger, there were outstanding shares of DTIH Series A redeemable convertible preferred stock (the “Redeemable Convertible Preferred Stock”), which was classified outside of permanent equity in mezzanine equity on the unaudited condensed consolidated balance sheets as it was redeemable on a fixed date. Upon the closing of the Merger, all of the Redeemable Convertible Preferred Stock was canceled in exchange for DTIC common stock and the right to receive cash. Accordingly, there was no Redeemable Convertible Preferred Stock outstanding as of March 31, 2024 or December 31, 2023.
Preferred Stock	Preferred Stock As of the closing of the Merger, the Board of Directors have expressly granted authority to issue shares of preferred stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series and as may be permitted by the Delaware General Corporation Law. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the preferred stock, or any series thereof, unless a vote of any such holders is required pursuant to any preferred stock designation. The Board of Directors of the Company has no t issued any shares of any classes or series of preferred stock as of March 31, 2024 , and through the date these financial statements were available to be issued.
Cost of Revenue	Cost of Revenue The Company recorded all operating costs associated with its product sales and tool rental revenue streams in cost of product sale revenue and cost of tool rental revenue, respectively, in the unaudited condensed consolidated statements of income and comprehensive income. All indirect operating costs, including labor, freight, contract labor and others, are included in selling, general, and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income.
Stock-Based Compensation	Stock-Based Compensation The Company recognizes stock-based compensation expenses over the requisite service period. The Company historically granted stock-based compensation awards with performance based vesting conditions. These options all vested upon the closing of the merger with ROC. Subsequent to the closing of the merger with ROC, the Company’s stock-based compensation awards are subject only to service based vesting conditions. Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock awards with only service conditions that have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. ASC 718 requires that the cost of awards of equity instruments offered in exchange for employee services, including employee stock options and restricted stock awards, be measured based on the grant-date fair value of the award. The Company determines the fair value of stock options granted using the Black-Scholes-Merton option-pricing model (“Black-Scholes model”) and recognizes the cost over the period during which an employee is required to provide service in exchange for the award, generally the vesting period, net of estimated forfeitures. The Board of Directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved. The factors considered include, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as the sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares.
Earnings Per Share	Earnings Per Share Basic earnings per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted earnings is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted earnings is computed by dividing the diluted net income (loss) by the weighted-average number of common shares outstanding for the period, including potential dilutive common stock. For the purposes of this calculation, outstanding stock options and Redeemable Convertible Preferred Stock are considered potential dilutive common stock and are excluded from the computation of net loss per share if their effect is anti-dilutive. The Redeemable Convertible Preferred Stock did not contractually entitle its holders to participate in profits or losses. As such, it was not treated as a participating security in periods of net income or net loss.
Income Taxes	Income Taxes Income taxes are provided for the tax effects of transactions reported in the unaudited condensed consolidated financial statements and consist of taxes currently due plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and liabilities. The Company is subject to state income taxes in various jurisdictions. The Company follows guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the unaudited condensed consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits and upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the unaudited condensed consolidated financial statements equals the largest amount that is greater than 50 % likely to be realized upon its ultimate settlement. The Company has no uncertain tax positions at March 31, 2024 and December 31, 2023. The Company believes there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date. The Company records income tax related interest and penalties, if applicable, as a component of the provision for income tax expense. However, there were no amounts recognized relating to interest and penalties in the unaudited condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2024 and 2023 .
Derivative Financial Instruments	Derivative Financial Instruments From time to time, the Company may enter into derivative instruments to manage exposure to interest rate fluctuations. During 2016, the Company entered into an interest swap agreement with respect to amounts outstanding under its revolving line of credit. The Company’s interest rate swap is a pay-fixed, receive-variable interest rate swap based on SOFR swap rate. The SOFR swap rate is observable at commonly quoted intervals for the full term of the swap and therefore is considered a Level 2 item. For interest rate swaps in an asset position, the credit standing of the counterparty is analyzed and factored into the fair value measurement of the asset. The impact of the Company’s creditworthiness has also been factored into the fair value measurement of the interest rate swap in a liability position. For the three months ended March 31, 2023, the application of valuation techniques applied to similar assets and liabilities has been consistent. This arrangement was designed to manage exposure to interest rate fluctuations by effectively exchanging existing obligations to pay interest based on floating rates for obligations to pay interest based on a fixed rate. These derivatives are marked-to-market at the end of each quarter and the realized/unrealized gain or loss is recorded as interest expense. For the three months ended March 31, 2023 , the Company recognized an unrealized gain due to the change in fair value of its interest rate swap of approximately $ 0.1 million. The interest swap agreement was settled on July 10, 2023 . No new interest swaps were entered into subsequently or during the three months ended March 31, 2024 .
Fair Value Measurements	Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels: Level 1 – Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. Level 2 – Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the assets or liabilities being measured. Level 3 – Valuation inputs are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Asset and liabilities measured at fair value are summarized as follows (in thousands): Assets at Fair Value as of March 31, 2024 Level 1 Level 2 Level 3 Total Investments, equity securities $ 1,137 $ — $ — $ 1,137 Total assets at fair value $ 1,137 $ — $ — $ 1,137 Assets at Fair Value as of December 31, 2023 Level 1 Level 2 Level 3 Total Investments, equity securities $ 888 $ — $ — $ 888 Total assets at fair value $ 888 $ — $ — $ 888 As of March 31, 2024 and December 31, 2023 , the Company did no t have any Level 2 or 3 assets or liabilities.
Fair value of Financial Instruments	Fair value of Financial Instruments The Company's financial instruments consist of cash, accounts receivable, and accounts payable. The carrying amount of such instruments approximates fair value due to their short-term nature.
Concentration of Credit Risk and Other Risks and Uncertainties	Concentration of Credit Risk and Other Risks and Uncertainties The Company’s customer concentration may impact its overall credit risk, either positively or negatively, in that these entities may be similarly affected by changes in economic or other conditions affecting the oil and gas industry. During the three months ended March 31, 2024 and 2023, the Company generated approximately 30.0 % and 31.0 % , respectively, of its revenue from 2 customers. Amounts due from these customers included in accounts receivable at March 31, 2024 and December 31, 2023 were approximately $ 6.6 million and $ 9.3 million , respectively. During the three months ended March 31, 2024, the Company had 2 vendor that represented approximately 30 % of its vendor purchases. During the three months ended March 31, 2023, the Company had 1 vendor that represented approximately 11 % of its vendor purchases. Amounts due to these vendors included in accounts payable at March 31, 2024 and December 31, 2023 were approximately $ 3.7 million and $ 3.4 million , respectively. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company maintains accounts in federally insured financial institutions in excess of federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held and of the money market funds in which these investments are made.
Operating Segment	Operating Segment Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding resource allocation and assessing performance. The Company’s Chief Executive Officer is the CODM. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operations decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates in one operating and reportable segment.
Accounting Standards Issued But Not Yet Effective	Accounting Standards Issued But Not Yet Effective In December 2023, FASB issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. This standard is effective for the Company beginning January 1, 2025 with early adoption permitted. The Company is evaluating the effects of adopting this new accounting guidance on its disclosures but does not currently expect adoption will have a material impact on the Company’s consolidated financial statements. The Company does not intend to early adopt this ASU. In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which includes requirements for more robust disclosures of significant segment expenses and measures of a segment’s profit and loss used in assessing performance. This standard is effective for the Company’s annual period beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption permitted. The Company is still evaluating the effects of adopting this new accounting guidance on its disclosures.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Summary of Asset and Liabilities Measured at Fair Value	Asset and liabilities measured at fair value are summarized as follows (in thousands): Assets at Fair Value as of March 31, 2024 Level 1 Level 2 Level 3 Total Investments, equity securities $ 1,137 $ — $ — $ 1,137 Total assets at fair value $ 1,137 $ — $ — $ 1,137 Assets at Fair Value as of December 31, 2023 Level 1 Level 2 Level 3 Total Investments, equity securities $ 888 $ — $ — $ 888 Total assets at fair value $ 888 $ — $ — $ 888

Revision of Previously Issued_2

Revision of Previously Issued Financial Statements (Tables)	3 Months Ended
	Mar. 31, 2024
Prior Period Adjustment [Abstract]
Summary of Effects of Corrections of Errors	The Company evaluated the errors described above (and quantified in the table below), both qualitatively and quantitatively, in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the previously issued financial statements taken as a whole. The unaudited consolidated financial statements presented herein as of and for the three months ended March 31, 2023 have been revised to correct the errors described above in accordance with SEC SAB Topic 1.M, as codified in ASC 250. For the three months ended March 31, 2023 Unaudited Condensed Consolidated Statement of Cash Flows As Previously Reported Adjustment As Revised Non-cash lease expense $ ( 220 ) $ 1,360 $ 1,140 Provision for excess and obsolete inventory — 17 17 Provision for excess and obsolete property and equipment — 117 117 Inventories, net ( 1,442 ) 1,558 116 Operating lease liabilities 274 ( 1,360 ) ( 1,086 ) Accounts payable 5,765 ( 2,557 ) 3,208 Accrued Expenses 207 ( 3,387 ) ( 3,180 ) Purchase of property, plant and equipment ( 10,815 ) 3,748 ( 7,067 ) Proceeds from sale of lost-in-hole equipment 5,315 504 5,819 ROU assets obtained in exchange for lease liabilities 2,516 ( 1,156 ) 1,360 Purchases of inventory included in accounts payable and accrued expenses and other current liabilities — 1,575 1,575 Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities — 4,369 4,369

BUSINESS COMBINATION (Tables)

BUSINESS COMBINATION (Tables)	3 Months Ended
	Mar. 31, 2024
Business Combinations [Abstract]
Summary of Assets Acquired and Liabilities Assumed in Connection with Acquisition	The assets acquired and liabilities assumed in connection with the CTG Acquisition were recorded at their fair values on the CTG Acquisition Date as follows (in thousands): Assets Cash $ 2,674 Accounts receivable, net 3,781 Inventories, net 4,282 Prepaid expenses and other current assets 189 Property, plant and equipment , net 1,647 Operating lease ROU asset 315 Intangible assets, net 8,065 Goodwill 2,618 Total assets acquired $ 23,571 Liabilities Accounts payable 2,656 Accrued expenses and other current liabilities ( 295 ) Current portion of operating lease liabilities 95 Operating lease liabilities, less current portion 180 Total liabilities assumed $ 2,636 Total consideration transferred $ 20,935
Summary of Identified Intangible Assets, Estimated Useful Lives and Methodologies Used to Determine Fair Values	The following table sets forth the amounts allocated to the identified intangible assets, the estimated useful lives of those intangible assets as of the CTG Acquisition Date, and the methodologies used to determine the fair values of those intangible assets ($ in thousands): Fair value Useful life Fair value methodology Intangible assets Trade names $ 819 15 Relief from royalty method Developed Technology 3,269 20 Relief from royalty method Customer relationships 3,977 20 Multi-period excess earnings method of the income approach Total intangible assets $ 8,065
Summary of Unaudited Supplemental Pro Forma Financial Information	The unaudited supplemental pro forma financial results below for the three months ended March 31, 2024 and 2023, combine the consolidated results of the Company and CTG, giving effect to the CTG Acquisition as if it had been completed on January 1, 2023. This unaudited supplemental pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2023, or any other date. Three months ended March 31, (in thousands) 2024 2023 Pro forma revenue $ 40,333 $ 45,308 Pro forma net income $ 2,420 $ 6,287

INVESTMENTS - EQUITY SECURITI_2

INVESTMENTS - EQUITY SECURITIES (Tables)	3 Months Ended
	Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]
Summary of Cost and Fair Value of Investments in Equity Securities	The following table shows the cost and fair value of the Company’s investments in equity securities (in thousands): Cost Unrealized Fair Value March 31, 2024 $ 999 $ 138 $ 1,137 Cost Unrealized Fair Value December 31, 2023 $ 999 $ ( 111 ) $ 888

BALANCE SHEET DETAILS - CURRE_2

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Inventories, Net	Inventories, net The following table shows the components of inventory (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 8,823 $ 5,022 Finished goods 2,673 16 Total inventories 11,496 5,038 Allowance for obsolete inventory ( 55 ) ( 4 ) Inventories, net $ 11,441 $ 5,034
Summary of Prepaid Expenses and Other Current Assets	Prepaid expenses and other current assets The following table shows the components of prepaid expenses and other current assets (in thousands): March 31, 2024 December 31, 2023 Prepaid expenses: Deposits on inventory 1,437 2,146 Prepaid income tax 362 362 Prepaid insurance 530 1,110 Prepaid rent 399 372 Prepaid equipment 331 331 Prepaid other 172 214 Other current assets: Other $ — $ 18 Total $ 3,231 $ 4,553
Summary of Accrued Expenses and Other Current Liabilities	Accrued expenses and other current liabilities The following table shows the components of accrued expenses and other current liabilities (in thousands): March 31, 2024 December 31, 2023 Accrued expenses: Accrued compensation and related benefits $ 3,878 $ 4,999 Accrued insurance 435 978 Accrued transaction advisory fees 1,000 1,000 Accrued professional services 72 189 Accrued interest 126 58 Accrued property taxes 314 60 Accrued monitoring fees 373 373 Other 760 147 Other current liabilities: Income tax payable $ 1,757 $ 1,586 Sales tax payable ( 413 ) 71 Unbilled lost-in-hole revenue 96 76 Deferred revenue 44 1,042 Total accrued expenses and other current liabilities $ 8,442 $ 10,579

PROPERTY, PLANT AND EQUIPMENT_2

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
Summary of Component of Property, Plant and Equipment, Net	The following table shows the component of property, plant and equipment, net (in thousands): Estimated Useful March 31, 2024 December 31, 2023 Rental tools and equipment 5 - 10 195,460 188,949 Buildings and improvements 5 - 40 6,686 6,672 Office furniture, fixtures and equipment 3 - 5 2,269 2,389 Transportation and equipment 3 - 5 783 793 Total property, plant and equipment 205,198 198,803 Less: accumulated deprecation ( 134,602 ) ( 133,003 ) Property, plant and equipment, net (excluding construction in progress) 70,596 65,800 Construction in progress - - Property, plant and equipment, net $ 70,596 $ 65,800

INTANGIBLE ASSETS, NET (Tables)

INTANGIBLE ASSETS, NET (Tables)	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Components of Intangible Assets, Net	The following table shows the components of intangible assets, net (in thousands): Useful Lives (in Years) March 31, 2024 December 31, 2023 Trade name 10 - 15 $ 2,079 $ 1,280 Developed Technology 13 - 20 3,462 270 Customer Relationships 20 3,882 — Total intangible assets 9,423 1,550 Less: accumulated amortization ( 1,365 ) ( 1,334 ) Intangible assets, net $ 8,058 $ 216

OTHER EXPENSES, NET (Tables)

OTHER EXPENSES, NET (Tables)	3 Months Ended
	Mar. 31, 2024
Other Income and Expenses [Abstract]
Summary of Components of Other Expenses, Net	The following table shows the components of other expenses, net for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Transaction fees ( 889 ) — Other, net ( 247 ) ( 7 ) Interest income 11 47 Other expense, net $ ( 1,125 ) $ 40

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2024
Leases [Abstract]
Summary of Components of Lease Expense	For the three months ended March 31, 2024, the components of the Company’s lease expense were as follows (in thousands): Three months ended March 31, 2024 Three months ended March 31, 2023 Operating Lease Cost $ 1,482 $ 1,518 Short-term Lease Cost 35 30 Variable Lease Cost 88 84 Sublease Income — ( 46 ) Total Lease Cost $ 1,605 $ 1,586
Summary of Supplemental Balance Sheet Information Related to Leases	Supplemental balance sheet information related to leases was as follows (in thousands): Three months ended March 31, 2024 Weighted-average remaining lease term (in years) 6.45 Weighted average discount rate 5.86 % Three months ended March 31, 2024 Cash paid for amounts included in the measurement of lease liabilities 1,350
Summary of Future Undiscounted Cash Flows	Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2024 were as follows (in thousands): 2024 $ 3,759 2025 4,244 2026 3,719 2027 2,540 2028 1,978 Thereafter 5,677 Total lease payments $ 21,917 Less: imputed interest ( 3,550 ) Present value of lease liabilities $ 18,367

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2024
Earnings Per Share [Abstract]
Summary of Computation of The Company's Basic and Diluted Earnings Per Share	The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands except share and per share data): Three months ended March 31, 2024 2023 Numerator: Net income $ 3,126 $ 5,701 Less: Redeemable Convertible Preferred Stock dividends — ( 314 ) Net income attributable to common shareholders — basic $ 3,126 $ 5,387 Add: Redeemable Convertible Preferred Stock dividends — 314 Net income attributable to common shareholders — diluted $ 3,126 $ 5,701 Denominator Weighted-average common shares used in computing 29,768,568 11,951,137 Weighted-average effect of potentially dilutive securities: Effect of potentially dilutive time-based stock options — 1,006,729 Effect of potentially dilutive performance-based stock options — — Effect of potentially dilutive redeemable convertible — 6,719,641 Weighted-average common shares outstanding — diluted 29,768,568 19,677,507 Earnings per share — basic $ 0.11 $ 0.45 Earnings per share — diluted $ 0.11 $ 0.29
Summary of Company's Potentially Dilutive Securities Excluded	As of March 31, 2024, the Company’s potentially dilutive securities consisted of options to purchase common stock. As of March 31, 2023, the Company's potentially dilutive securities consisted of redeemable convertible preferred stock and options to purchase common stock. Based on the amounts outstanding as of the three months ended March 31, 2024 and 2023, the Company excluded the following potential common shares from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. The options excluded from the diluted earnings per share calculations were as follows: Three months ended March 31, 2024 2023 Time-based options outstanding 4,427,659 140,135 Total 4,427,659 140,135 Our performance-based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-based stock options were also excluded from the diluted earnings per share calculations for the three months ended March 31, 2023 because all necessary performance conditions were not satisfied by March 31, 2023. The options excluded from the diluted earnings per share calculations were as follows: Three months ended March 31, 2024 2023 Performance-based options outstanding 534,063 534,063 Total 534,063 534,063

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) £ in Millions	1 Months Ended		3 Months Ended
	Mar. 31, 2024 USD ($) shares	Mar. 31, 2024 GBP (£)	Mar. 31, 2024 USD ($) Segment shares	Mar. 31, 2023 USD ($)	Mar. 15, 2024	Dec. 31, 2023 USD ($)
Accounting Policies [Line Items]
Foreign currency translation adjustment, net of tax			$ (511,000)	$ 0
Unrealized foreign currency gain loss			28,000	0
Cash equivalents	$ 0		0			$ 0
Revenue			36,974,000	40,799,000
Contract assets	4,600,000		4,600,000			4,200,000
Allowance for credit losses	$ 1,400,000		$ 1,400,000			1,500,000
Preferred stock, shares issued | shares
Number of operating segment | Segment			1
Number of reportable segment | Segment			1
Minimum percentage of unrecognized tax benefits that would impact effective tax rate			50%
Unrecognized tax benefits	$ 0		$ 0			0
Unrecognized tax benefits accrued for interest and penalties	0		0	$ 0
Assets fair value	1,137,000		$ 1,137,000			888,000
CTG
Accounting Policies [Line Items]
Business acquisition percentage					100%
Casing Technologies Group Limited
Accounting Policies [Line Items]
Revenue	800,000
Casing Technologies Group Limited | Deep Casing Tools Limited
Accounting Policies [Line Items]
Purchase consideration	20,900,000	£ 16.2
Customer Concentration Risk | Sales Revenue | Two Customers
Accounting Policies [Line Items]
Concentration risk percentage			30%	31%
Customer Concentration Risk | Vendor Purchases | One Vendor
Accounting Policies [Line Items]
Concentration risk percentage				11%
Customer Concentration Risk | Vendor Purchases | Two Vendors
Accounting Policies [Line Items]
Concentration risk percentage			30%
Customer Concentration Risk | Accounts Receivable
Accounting Policies [Line Items]
Receivables from customers	6,600,000		$ 6,600,000			9,300,000
Customer Concentration Risk | Accounts Payable
Accounting Policies [Line Items]
Amounts due to vendors	3,700,000		$ 3,700,000			3,400,000
Interest Rate Swap
Accounting Policies [Line Items]
Unrealized gain (loss) due to change in fair value				$ 100,000
Interest swap agreement settlement date			Jul. 10, 2023
Level 3
Accounting Policies [Line Items]
Assets fair value	0		$ 0			0
Liabilities fair value	$ 0		0			$ 0
United States
Accounting Policies [Line Items]
Revenue			$ 32,300,000	$ 36,600,000
Percentage of revenue			87%	90%
Canada
Accounting Policies [Line Items]
Revenue			$ 4,700,000
International
Accounting Policies [Line Items]
Revenue				$ 4,200,000
Percentage of revenue			13%	10%

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Asset and Liabilities Measured at Fair Value (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	$ 1,137,000	$ 888,000
Total assets at fair value	1,137,000	888,000
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	1,137,000	888,000
Total assets at fair value	1,137,000	888,000
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	0	0
Total assets at fair value	0	0
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	0	0
Total assets at fair value	$ 0	$ 0

Revision of Previously Issued_3

Revision of Previously Issued Financial Statements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 314	$ 1,360
Non-cash lease expense	1,111	1,140
Operating lease liabilities	(1,067)	(1,086)
Accounts payable	(2,848)	3,208
Proceeds from sale of lost-in-hole equipment	4,904	5,819
Purchase of property, plant and equipment	$ 6,228	7,067
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Right-of-use assets obtained in exchange for new operating lease liabilities		2,516
Non-cash lease expense		(220)
Operating lease liabilities		274
Inventories of negative		1,400
Accounts payable		5,765
Proceeds from sale of lost-in-hole equipment		5,315
Purchase of property, plant and equipment		$ 10,815

Revision of Previously Issued_4

Revision of Previously Issued Financial Statements - Summary of Effects of Corrections of Errors (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense	$ 1,111	$ 1,140
Provision for excess and obsolete inventory	0	17
Provision for excess and obsolete property and equipment	66	117
Inventories, net	2,836	116
Operating lease liabilities	(1,067)	(1,086)
Accounts payable	(2,848)	3,208
Accrued Expenses	(2,517)	(3,180)
Purchase of property, plant and equipment	(6,228)	(7,067)
Proceeds from sale of lost-in-hole equipment	4,904	5,819
ROU assets obtained in exchange for lease liabilities	314	1,360
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities	5,018	1,575
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities	$ 4,482	4,369
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense		(220)
Provision for excess and obsolete inventory		0
Provision for excess and obsolete property and equipment		0
Inventories, net		(1,442)
Operating lease liabilities		274
Accounts payable		5,765
Accrued Expenses		207
Purchase of property, plant and equipment		(10,815)
Proceeds from sale of lost-in-hole equipment		5,315
ROU assets obtained in exchange for lease liabilities		2,516
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		0
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		0
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense		1,360
Provision for excess and obsolete inventory		17
Provision for excess and obsolete property and equipment		117
Inventories, net		1,558
Operating lease liabilities		(1,360)
Accounts payable		(2,557)
Accrued Expenses		(3,387)
Purchase of property, plant and equipment		3,748
Proceeds from sale of lost-in-hole equipment		504
ROU assets obtained in exchange for lease liabilities		(1,156)
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		1,575
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		$ 4,369

BUSINESS COMBINATION (Details)

BUSINESS COMBINATION (Details) £ in Millions			1 Months Ended		3 Months Ended
	Mar. 15, 2024 USD ($) Patent	Mar. 15, 2024 GBP (£)	Mar. 31, 2024 USD ($)	Mar. 31, 2024 GBP (£)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Business Acquisition [Line Items]
Goodwill			$ 2,556,000		$ 2,556,000		$ 0
Stock-based compensation expense					208,000	$ 0
Acquisition-related costs					300,000
Revenue					36,974,000	40,799,000
Net income					$ 3,126,000	$ 5,701,000
CTG
Business Acquisition [Line Items]
Business acquisition percentage	100%
Casing Technologies Group Limited
Business Acquisition [Line Items]
Goodwill	$ 2,618,000
Revenue			800,000
Net income			200,000
Casing Technologies Group Limited | CTG Purchase Agreement
Business Acquisition [Line Items]
Business acquisition percentage	100%
Gross cash purchase consideration	$ 20,900,000	£ 16.2
Number of intellectual property rights patent | Patent	60
Casing Technologies Group Limited | Deep Casing
Business Acquisition [Line Items]
Gross cash purchase consideration			$ 20,900,000	£ 16.2
Settlement of outstanding debt	$ (19,800,000)	(15.3)
Payment to legacy shareholders	300,000	0.3
Acquisition-related costs	$ 800,000	£ 0.6

BUSINESS COMBINATION - Summary

BUSINESS COMBINATION - Summary of Assets Acquired and Liabilities Assumed in Connection with Acquisition (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 15, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill	$ 2,556		$ 0
Casing Technologies Group Limited
Business Acquisition [Line Items]
Cash		$ 2,674
Accounts receivable, net		3,781
Inventories, net		4,282
Prepaid expenses and other current assets		189
Property, plant and equipment , net		1,647
Operating lease ROU asset		315
Intangible assets, net		8,065
Goodwill		2,618
Total assets acquired		23,571
Accounts payable		2,656
Accrued expenses and other current liabilities		(295)
Current portion of operating lease liabilities		95
Operating lease liabilities, less current portion		180
Total liabilities assumed		2,636
Total consideration transferred		$ 20,935

BUSINESS COMBINATION - Summar_2

BUSINESS COMBINATION - Summary of Identified Intangible Assets, Estimated Useful Lives and Methodologies Used to Determine Fair Values (Details) - Casing Technologies Group Limited $ in Thousands	Mar. 15, 2024 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 8,065
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 819
Intangible assets, useful life	15 years
Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 3,269
Intangible assets, useful life	20 years
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 3,977
Intangible assets, useful life	20 years

BUSINESS COMBINATION - Summar_3

BUSINESS COMBINATION - Summary of Unaudited Supplemental Pro Forma Financial Information (Details) - Casing Technologies Group Limited - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Business Acquisition [Line Items]
Pro forma revenue	$ 40,333	$ 45,308
Pro forma net income	$ 2,420	$ 6,287

INVESTMENTS - EQUITY SECURITI_3

INVESTMENTS - EQUITY SECURITIES - Summary of Cost and Fair Value of Investments in Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Net Investment Income [Line Items]
Cost	$ 999	$ 999
Unrealized gain (Loss)	138	(111)
Fair value	$ 1,137	$ 888

INVESTMENTS - EQUITY SECURITI_4

INVESTMENTS - EQUITY SECURITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Unrealized holding gain (loss) on equity securities	$ 249	$ (33)

BALANCE SHEET DETAILS - CURRE_3

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Inventories, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory, Net [Abstract]
Raw materials	$ 8,823	$ 5,022
Finished goods	2,673	16
Total inventories	11,496	5,038
Allowance for obsolete inventory	(55)	(4)
Inventories, net	$ 11,441	$ 5,034

BALANCE SHEET DETAILS - CURRE_4

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Prepaid expenses:
Deposits on inventory	$ 1,437	$ 2,146
Prepaid income tax	362	362
Prepaid insurance	530	1,110
Prepaid rent	399	372
Prepaid equipment	331	331
Prepaid other	172	214
Other current assets:
Other	0	18
Total	$ 3,231	$ 4,553

BALANCE SHEET DETAILS - CURRE_5

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued expenses:
Accrued compensation and related benefits	$ 3,878	$ 4,999
Accrued insurance	435	978
Accrued transaction advisory fees	1,000	1,000
Accrued professional services	72	189
Accrued interest	126	58
Accrued property taxes	314	60
Accrued monitoring fees	373	373
Other	760	147
Other current liabilities:
Income tax payable	1,757	1,586
Sales tax payable	(413)	71
Unbilled lost-in-hole revenue	96	76
Deferred revenue	44	1,042
Total accrued expenses and other current liabilities	$ 8,442	$ 10,579

PROPERTY, PLANT AND EQUIPMENT_3

PROPERTY, PLANT AND EQUIPMENT, NET - Summary of Component of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 205,198	$ 198,803
Less: accumulated deprecation	(134,602)	(133,003)
Property, plant and equipment, net (excluding construction in progress)	70,596	65,800
Construction in progress	0	0
Property, plant and equipment, net	70,596	65,800
Rental Tools and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 195,460	188,949
Rental Tools and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years
Rental Tools and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	10 years
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 6,686	6,672
Buildings and Improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years
Buildings and Improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	40 years
Office Furniture, Fixtures and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 2,269	2,389
Office Furniture, Fixtures and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years
Office Furniture, Fixtures and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years
Transportation and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 783	$ 793
Transportation and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years
Transportation and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years

PROPERTY, PLANT AND EQUIPMENT_4

PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 5,300	$ 5,000
Property, plant and equipment, net	70,596		$ 65,800
United States
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 65,900		$ 63,000
Property, plant and equipment net, Percentage	93%		96%
Canada and Internationally
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 4,700		$ 2,800
Property, plant and equipment net, Percentage	7%		4%

INTANGIBLE ASSETS, NET - Summar

INTANGIBLE ASSETS, NET - Summary of Components of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 9,423	$ 1,550
Less: accumulated amortization	(1,365)	(1,334)
Intangible assets, net	8,058	216
Trade Name
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 2,079	1,280
Trade Name | Maximum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	15 years
Trade Name | Minimum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	10 years
Developed Technology
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 3,462	270
Developed Technology | Maximum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	20 years
Developed Technology | Minimum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	13 years
Customer Relationships
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 3,882	$ 0
Useful lives (in years)	20 years

INTANGIBLE ASSETS, NET (Details

INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Indefinite-Lived Intangible Assets [Line Items]
Amortization expense	$ 31	$ 12

REVOLVING CREDIT FACILITY AND_2

REVOLVING CREDIT FACILITY AND TERM LOAN (Details) - Revolving Credit Facility - USD ($)		3 Months Ended
	Mar. 15, 2024	Mar. 31, 2024	Dec. 31, 2015
Line of Credit Facility [Line Items]
Revolving line of credit	$ 80,000,000		$ 60,000,000
Line of credit	$ 25,000,000
Date the credit facility matures	Mar. 31, 2029
Credit Facility, collateral		The Credit Facility is collateralized by substantially all the assets of the Company and matures March 15, 2029.
Line of credit		$ 0
SOFR
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)		9.28%
Base Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)		2%

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 937,000	$ 1,723,000
Effective tax rate	23.10%	23.20%
Federal Statutory rate	21%	21%
Change to the valuation allowance	$ 0	$ 0

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($)		3 Months Ended		12 Months Ended
	Jun. 20, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Payment Arrangement, Expense		$ 208,000	$ 0
Share-based compensation arrangement by share-based payment award, options, outstanding, number		2,361,722
Unrecognized compensation expense		$ 4,400,000	$ 1,600,000
Time Based Shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non-vested shares		2,600,000		0
2023 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Maximum percentage of common stock issuable in accordance with outstanding Common stock	10%
Annual increase in percentage of common stock issuable in accordance with outstanding common stock	3%
Issued options to purchase shares of the common stock				2,976,854
Stock options granted		2,600,000
Number of options exercised		0
Number of options forfeited		0
Common stock issuable in accordance with outstanding Common stock				2,976,854
Shares of common stock available for issuance		1,269,910

OTHER EXPENSES, NET - Summary o

OTHER EXPENSES, NET - Summary of Components of Other Expenses, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Schedule Of Other Expenses [Line Items]
Transaction Fees	$ (889)	$ 0
Other, net	(247)	(7)
Interest income	11	47
Other expense, net	$ (1,125)	$ 40

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Board of Directors
Related Party Transaction [Line Items]
Director fees paid	$ 85	$ 45
Hicks Holdings Operating LLC
Related Party Transaction [Line Items]
Management fees paid to shareholder	200	200
Cree Investments, LLC
Related Party Transaction [Line Items]
Rent expense paid to shareholder	$ 13	$ 13

LEASES (Details)

LEASES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Lessee, Lease, Description [Line Items]
Operating lease description	The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years.
Operating lease, existence of option to extend	true
Operating lease option to extend	These leases often include options to extend the term of the lease which may be for periods of up to 5 years.
Operating lease renewl term	5 years
Tool rental revenue	$ 30	$ 32.3
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 month
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	14 years

LEASES - Summary of Components

LEASES - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Lease, Cost [Abstract]
Operating Lease Cost	$ 1,482	$ 1,518
Short-term Lease Cost	35	30
Variable Lease Cost	88	84
Sublease Income	0	(46)
Total Lease Cost	$ 1,605	$ 1,586

LEASES - Summary of Supplementa

LEASES - Summary of Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Leases [Abstract]
Weighted-average remaining lease term (in years)	6 years 5 months 12 days
Weighted average discount rate	5.86%
Cash paid for amounts included in the measurement of lease liabilities	$ 1,350

LEASES - Summary of Future Undi

LEASES - Summary of Future Undiscounted Cash Flows (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
2024	$ 3,759
2025	4,244
2026	3,719
2027	2,540
2028	1,978
Thereafter	5,677
Total lease payments	21,917
Less: imputed interest	(3,550)
Present value of lease liabilities	$ 18,367

EMPLOYEE BENEFITS (Details)

EMPLOYEE BENEFITS (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2022
Defined Benefit Plan [Abstract]
Maximum annual contributions per employee, percent			3%
Employer matching contribution, percent of match			150%
Defined contribution per employee			$ 2,000
Total expense	$ 300,000	$ 200,000
Defined contribution plan nature and effect of change, description	All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry date following six months of service. Plan entry dates are the first day of January and July. In March of 2020, the Company suspended any employee contribution match effective immediately and through the end of 2021. The match was reinstated on January 1, 2022. For 2022, the Company matched employee contributions 150% of the first 3% of employee contributions, not to exceed $2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximum contribution allowed under the Internal Revenue Service Regulations.

EARNINGS PER SHARE - Summary of

EARNINGS PER SHARE - Summary of Computation of Company's Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator:
Net income	$ 3,126	$ 5,701
Less: Redeemable Convertible Preferred Stock dividends	0	(314)
Net income attributable to common shareholders - basic	3,126	5,387
Add: Redeemable Convertible Preferred Stock dividends	0	314
Net income attributable to common shareholders - diluted	$ 3,126	$ 5,701
Denominator
Weighted-average common shares used in computing earnings per share - basic	29,768,568	11,951,137
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive redeemable convertible preferred stock	0	6,719,641
Weighted-average common shares outstanding - diluted	29,768,568	19,677,507
Earnings per share - basic	$ 0.11	$ 0.45
Earnings per share - diluted	$ 0.11	$ 0.29
Time-based Stock Options
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive stock options	0	1,006,729
Performance-based Stock Options
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive stock options	0	0

EARNINGS PER SHARE - Summary _2

EARNINGS PER SHARE - Summary of Company's Potentially Dilutive Securities Excluded - Time-based Options Outstanding (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Time-based Options Outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	4,427,659	140,135

EARNINGS PER SHARE - Summary _3

EARNINGS PER SHARE - Summary of Company's Potentially Dilutive Securities Excluded - Performance-based Options Outstanding (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Performance-based Options Outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	534,063	534,063