Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 12, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Superior Drilling Products, Inc. | |
Entity Central Index Key | 0001600422 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,762,342 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 2,262,251 | $ 1,961,441 |
Accounts receivable, net | 1,601,837 | 1,345,622 |
Prepaid expenses | 109,354 | 90,269 |
Inventories | 996,083 | 1,020,008 |
Asset held for sale | 40,000 | |
Other current assets | 42,751 | 40,620 |
Total current assets | 5,012,276 | 4,497,960 |
Property, plant and equipment, net | 7,211,648 | 7,535,098 |
Intangible assets, net | 527,778 | 819,444 |
Right of use assets | 65,624 | 99,831 |
Other noncurrent assets | 84,115 | 87,490 |
Total assets | 12,901,441 | 13,039,823 |
Current liabilities | ||
Accounts payable | 741,727 | 430,014 |
Accrued expenses | 1,468,257 | 1,091,519 |
Income tax payable | 122,826 | 106,446 |
Current portion of operating lease liability | 54,063 | 79,313 |
Current portion of financial obligation | 59,420 | 61,691 |
Current portion of long-term debt, net of discounts | 1,651,283 | 1,397,337 |
Total current liabilities | 4,097,576 | 3,166,320 |
Operating lease liability | 11,561 | 20,518 |
Long-term financial obligation, less current portion | 4,161,463 | 4,178,261 |
Long-term debt, less current portion, net of discounts | 1,341,487 | 1,451,049 |
Total liabilities | 9,612,087 | 8,816,148 |
Commitments and contingencies (Notes 8, 9 and 12) | ||
Shareholders' equity | ||
Common stock - $0.001 par value; 100,000,000 shares authorized; 25,762,342 shares issued and outstanding | 25,762 | 25,762 |
Additional paid-in-capital | 40,787,092 | 40,619,620 |
Accumulated deficit | (37,523,500) | (36,421,707) |
Total shareholders' equity | 3,289,354 | 4,223,675 |
Total liabilities and shareholders' equity | $ 12,901,441 | $ 13,039,823 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 25,762,342 | 25,762,342 |
Common stock, shares outstanding | 25,762,342 | 25,762,342 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Total Revenue | $ 2,424,653 | $ 5,357,763 |
Operating costs and expenses | ||
Cost of revenue | 1,175,593 | 2,314,508 |
Selling, general and administrative expenses | 1,515,590 | 2,017,899 |
Depreciation and amortization expense | 690,074 | 760,764 |
Total operating costs and expenses | 3,381,257 | 5,093,171 |
Operating income (loss) | (956,604) | 264,592 |
Other income (expense) | ||
Interest income | 48 | 4,688 |
Interest expense | (138,057) | (177,258) |
Impairment on asset held for sale | (30,000) | |
Gain on sale of assets | 10,000 | 142,234 |
Total other expense | (128,009) | (60,336) |
Income (loss) before income taxes | (1,084,613) | 204,256 |
Income tax expense | (17,180) | (6,210) |
Net income (loss) | $ (1,101,793) | $ 198,046 |
Basic income (loss) earnings per common share | $ (0.04) | $ 0.01 |
Basic weighted average common shares outstanding | 25,762,342 | 25,418,126 |
Diluted income (loss) per common share | $ (0.04) | $ 0.01 |
Diluted weighted average common shares outstanding | 25,762,342 | 25,418,126 |
Tool Revenue [Member] | ||
Revenue | ||
Total Revenue | $ 1,663,763 | $ 3,612,918 |
Contract Services [Member] | ||
Revenue | ||
Total Revenue | $ 760,890 | $ 1,744,845 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ (1,101,793) | $ 198,046 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 690,074 | 760,764 |
Share based compensation expense | 167,472 | 106,996 |
Gain on sale of assets | (10,000) | (142,234) |
Impairment on asset held for sale | 30,000 | |
Amortization of deferred loan costs | 4,631 | 4,631 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (256,215) | 625,419 |
Inventories | (41,795) | (303,122) |
Prepaid expenses and other noncurrent assets | (17,841) | 296,392 |
Accounts payable and accrued expenses | 688,451 | 660,731 |
Income tax payable | 16,380 | 6,210 |
Other long term liabilities | (61,421) | |
Net Cash Provided By Operating Activities | 139,363 | 2,182,412 |
Cash Flows From Investing Activities | ||
Purchases of property, plant and equipment | (9,236) | (37,850) |
Proceeds from sale of fixed assets | 50,000 | 117,833 |
Net Cash Provided By Investing Activities | 40,764 | 79,983 |
Cash Flows From Financing Activities | ||
Principal payments on debt | (135,403) | (975,440) |
Proceeds received from debt borrowings | 72,520 | |
Payments on revolving loan | (280,245) | (39,461) |
Proceeds received on revolving loan | 536,331 | 812,224 |
Debt issuance costs | ||
Net Cash Provided By (Used In) Financing Activities | 120,683 | (130,157) |
Net increase in Cash | 300,810 | 2,132,238 |
Cash at Beginning of Period | 1,961,441 | 1,217,014 |
Cash at End of Period | 2,262,251 | 3,349,252 |
Supplemental information: | ||
Cash paid for Interest | 130,363 | 182,368 |
Inventory converted to property, plant and equipment | 65,720 | 47,907 |
Reduction of debt with sale of asset | $ 211,667 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is an innovative drilling and completion tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. Our headquarters and manufacturing operations are located in Vernal, Utah. Our drilling solutions include the patented Drill-N-Ream® well bore conditioning tool (“Drill-N-Ream tool”) and the patented Strider™ Drill String Oscillation System technology (“Strider technology” or “Strider”). In addition, the Company is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field services company. We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well as customers’ custom products. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2021 and 2020, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations expected for the year ending December 31, 2021. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2020 and 2019 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. Concentrations of Credit Risk The Company has two significant customers that represented 85% and 84% of our revenue for the three months ended March 31, 2021 and 2020, respectively. These customers had approximately $846,000 and $2,120,000 in accounts receivable at March 31, 2021 and 2020, respectively. The Company had two vendors that represented 22% of our purchases for the quarter ended March 31, 2021. These vendors had approximately $221,000 in accounts payable at March 31, 2021 and purchases in the first quarter of 2021 from these vendors totaled approximately $239,000. The Company had two vendors that represented 26% of our purchases for the three months ended March 31, 2020. The vendors had approximately $454,000 in accounts payable at March 31, 2020 and purchases in the first quarter of 2020 from these vendors totaled approximately $524,000. Impact of COVID-19 The COVID-19 pandemic has impacted and may further impact the Company’s operations, and the operations of the Company’s suppliers and vendors, as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, financial condition and results of operations will depend on future developments, which are highly uncertain and depend on, among other things, the duration, spread, severity, and impact of the COVID-19 pandemic and the success and speed of vaccination efforts both in the United States and globally, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. Therefore, the Company cannot reasonably estimate future impacts of the COVID-19 pandemic at this time. Uncertain Tax Matters The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid; however, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur. Recent Accounting Pronouncements There are no recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | NOTE 2. LIQUIDITY We believe that our cash generated from operations and our borrowing capacity under our current credit facility will be sufficient to fund our operations for the next 12 months. To enhance liquidity, our operational and financial strategies include managing our operating costs, accelerating collections of international receivables, and reducing working capital requirements and restructuring our debt. If we are unable to do this, we may not be able to, among other things, (i) maintain our revised general and administrative spending levels; (ii) fund certain obligations as they become due; and (iii) respond to competitive pressures or unanticipated capital requirements. COVID-19 has also led to a significant disruption in the equity and debt capital markets, which could hinder our ability to raise new capital or obtain financing on acceptable terms. We cannot provide any assurance that financing will be available to us in the future on acceptable terms, if at all. In 2020, the Company filed a Form S-3 Shelf Registration that will allow the Company to offer and sell, from time to time, up to $20,000,000 of securities. We believe maintaining an active Shelf Registration provides additional financial flexibility to access the capital markets. However, there is no assurance that such financings could be consummated on acceptable terms or at all. Also in 2020, the Company received notification from the NYSE American to the Company indicating that, as a result of the Company’s stockholders’ equity of $4.7 million as of September 30, 2020, and reported losses for each of the last five fiscal years, the Company was not in compliance with the stockholders’ equity standards for continued listing on the NYSE American. On January 28, 2021, the Company received notice that the NYSE American had accepted the Company’s plan that was submitted on December 18, 2020, to regain compliance with the continued listing standards of the NYSE American. The Company has been granted a plan period through May 18, 2022 to regain compliance. NYSE American Regulations staff will review the Company periodically for compliance with the initiatives outlined in the plan. If the Company is not in compliance with the continued listing standards by May 18, 2022 or if the Company does not make progress consistent with the plan during the plan period, NYSE Regulation staff may initiate delisting proceedings as appropriate. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3. REVENUE Our revenue is derived from short-term contracts. Revenue is recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. We also assess our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 days. Revenue generally does not include right of return or other significant post-delivery obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We elected to treat shipping and handling costs as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for shipping and handling when incurred as an expense in cost of sales. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. In accordance with Topic 606, we do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. All of our contracts are less than one year in duration. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Disaggregation of Revenue Approximately 86% of our revenue is from North America and approximately 14% is from the Middle East for the three months ended March 31, 2021. For the three months ended March 31, 2020, approximately 85% of our revenue was from North America and approximately 15% was from the Middle East. Revenue disaggregated by revenue source are as follows: Three months ended March 31, 2021 2020 Tool Revenue: Tool and product sales $ 495,000 $ 990,734 Tool rental 336,453 777,253 Other related revenue 832,310 1,844,931 Total Tool Revenue 1,663,763 3,612,918 Contract Services 760,890 1,744,845 Total Revenue $ 2,424,653 $ 5,357,763 Contract Costs We do not incur any material costs of obtaining contracts. Contract Balances Under our sales contracts, we invoice customers after our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under Topic 606. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4. INVENTORIES Inventories are comprised of the following: March 31, 2021 December 31, 2020 Raw material $ 734,215 $ 733,734 Work in progress 99,261 50,631 Finished goods 162,607 235,643 $ 996,083 $ 1,020,008 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following: March 31, 2021 December 31, 2020 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,764,441 Building improvements 755,039 755,039 Machinery and equipment 11,373,601 11,298,642 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 18,667,615 18,592,656 Accumulated depreciation (11,455,967 ) (11,057,558 ) $ 7,211,648 $ 7,535,098 In 2019, the Company decided to sell the Company airplane and related hangar and reported the assets as assets held for sale on our balance sheet at their carrying value, which is lower than the expected fair value less costs to sell. The Company sold the airplane for a gain of approximately $142,000 in February 2020 and the Company sold the hangar for a gain of $10,000 in March 2021. Depreciation expense related to property, plant and equipment for the three months ended March 31, 2021 and 2020 was $398,408 and $469,098, respectively. The increase in machinery and equipment was mostly the result of the Company’s increased rental tool fleet for the Middle East operations. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 6. INTANGIBLE ASSETS Intangible assets are comprised of the following: March 31, 2021 December 31, 2020 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (14,372,222 ) (14,080,556 ) $ 527,778 $ 819,444 Amortization expense related to intangible assets was $291,666 for the three months ended March 31, 2021 and 2020. |
Related Party Note Receivable
Related Party Note Receivable | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Related Party Note Receivable | NOTE 7. RELATED PARTY NOTE RECEIVABLE In January 2014, we entered into a Note Purchase and Sale Agreement under which we agreed to purchase a loan made to Tronco Energy Corporation (“Tronco”), a party related to us through common control, in order to take over the legal position as Tronco’ s senior secured lender. Tronco is an entity owned by Troy and Annette Meier. Effective August 2017, the Company fully reserved the related party note receivable of $6,979,043, which reduced the related party note receivable balance to $0. The Company continues to hold the 8,267,860 shares of the Company’s common stock as collateral. The Company will record a recovery of the loan if and when consideration or payments of the loan are made in the future. On July 7, 2020, the Company entered into an amended and restated loan agreement and note with Tronco changing the payment terms on the note. As amended, the interest rate on the note is fixed at 2% per annum. Interest only is due December 31, 2021, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 8. LONG-TERM DEBT Long-term debt is comprised of the following: March 31, 2021 December 31, 2020 Hard Rock Note $ 1,500,000 $ 1,500,000 Credit Agreement 1,002,749 825,366 Machinery loans 440,716 466,448 Transportation loans 49,305 56,572 2,992,770 2,848,386 Less: Current portion (1,651,283 ) (1,397,337 ) Long-term debt, net $ 1,341,487 $ 1,451,049 Hard Rock Note In 2014, the Company purchased all of the interests of Hard Rock Solutions, LLC (“Hard Rock”). Consideration consisted of $12.5 million paid in cash at closing and a $12.5 million seller’s note (the “Hard Rock Note”). The Hard Rock Note and subsequent amendments are secured by all of the patents, patents pending, other patent rights, and trademarks transferred to Hard Rock. The Hard Rock Note has a remaining balance of $1,500,000 as of March 31, 2021, accrues interest at 8.00% per annum and is due in full by October 5, 2022. Under the amended terms of the Hard Rock Note, we are required to make the following payments: accrued interest on January 5, April 5, July 5 and October 5 in 2021 and 2022; plus $750,000 in principal on July 5, 2021 with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022. In January and April 2021, the Company made interest payments of $30,247 and $29,589, respectively. Credit Agreement In February 2019, the Company entered into a Loan and Security Agreement (the “Credit Agreement”) with Austin Financial Services, Inc. (“AFS”). The Credit Agreement provides a $4,500,000 credit facility, which includes a $1,000,000 term loan (the “Term Loan”) and a $3,500,000 revolver (the “Revolving Loan”). As of March 31, 2021, we had $583,330 outstanding on the Term Loan and $454,925 outstanding on the Revolving Loan. Amounts outstanding under the Revolving Loan at any time may not exceed the sum of: (a) up to 85% of accounts receivable or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect (less a dilution reserve as determined by AFS in its sole good faith discretion), plus (b) the lesser of (i) up to 50% of inventory or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect, or (ii) the inventory sublimit, minus (c) the borrowing base reserve as may be determined from time to time by AFS. Amounts outstanding on the Revolving Loan as of March 31, 2021, may not exceed $456,428, which is based on a calculation applying 85% of accounts receivable and 50% of inventory. A collateral management fee is payable monthly on the used portion of the Revolving Loan and Term Loan. Even if our borrowings are less than $1,000,000, we still pay interest as if we had borrowed $1,000,000. At March 31, 2021, we had approximately $10,000 of accrued interest. The Credit Agreement contains various restrictive covenants that, among other things, limit or restrict the ability of the Company to incur additional indebtedness; incur additional liens; make dividends and other restricted payments; make investments; engage in mergers, acquisitions and dispositions; make optional prepayments of other indebtedness; engage in transactions with affiliates; and enter into restrictive agreements. The Credit Agreement does not include any financial covenants. If an event of default occurs, the lenders are entitled to accelerate the advances made thereunder and exercise rights against the collateral. Borrowing under the Revolving Loan is classified as current debt as a result of the required lockbox arrangement and the subjective acceleration clause. At March 31, 2021, we were in compliance with the covenants in the Credit Agreement. The interest rate for the Term Loan and the Revolving Loan is prime plus 2%. At March 31, 2021, the interest rate for the Term Loan was 8.85%, which includes a 3.6% management fee rate. The effective interest rate for the Revolving Loan for the quarter ending March 31, 2021 was 9.56%. The obligations of the Company under the Credit Agreement are secured by a security interest in substantially all of the tangible and intangible assets of the Company, other than any assets owned by the Company that constitute real property (and fixtures affixed to such real property), certain excluded equipment, intellectual property, or aircraft. The Credit Agreement matures on February 20, 2023, subject to early termination pursuant to the terms of the agreement or extension as may be agreed by the parties. |
Financing Obligation
Financing Obligation | 3 Months Ended |
Mar. 31, 2021 | |
Financing Obligation | |
Financing Obligation | NOTE 9. FINANCING OBLIGATION On December 7, 2020, the Company entered into a sale agreement (the “Sale Agreement”). Pursuant to the terms of the Sale Agreement, the Company sold land and property related to the Company’s headquarters and manufacturing facility in Vernal, Utah (the “Property”) for a purchase price of $4,448,500. Concurrent with the sale of the Property, the Company entered into a fifteen-year lease agreement (the “Lease Agreement”), whereby the Company will lease back the Property at an annual rate of $311,395 with payments made monthly, subject to annual rent increases of 1.5%. Under the Lease Agreement, the Company has an option to extend the term of the lease and to repurchase the Property. Due to this repurchase option, the Company was unable to account for the transfer as a sale under ASC Topic 842, Leases The Company received cash of $1,622,106, retired real estate debt of $2,638,773 and recorded a financing obligation liability of $4,260,879 related to the transaction. There was no gain recorded since sale accounting was precluded. The financing obligation has an implied interest rate of 6.0%. At the conclusion of the fifteen-year lease period, the financing obligation residual will be $2,160,242, which will correspond to the carrying value of the property. The Company paid $25,950 of principal in 2020 that was prorated for the month of December. The financing obligation is summarized below: March 31, 2021 December 31, 2020 Finance obligations for sale-leaseback transactions $ 4,220,883 $ 4,239,952 Current principal portion of finance obligation (59,420 ) (61,691 ) Non-current portion of finance obligation $ 4,161,463 $ 4,178,261 |
Total Equity
Total Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Total Equity | NOTE 10. TOTAL EQUITY A summary of changes in total equity for the three months ended March 31, 2021 and 2020 is presented below: Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2020 25,762,342 $ 25,762 $ 40,619,620 $ (36,421,707 ) $ 4,223,675 Stock-based compensation expense - - 167,472 - 167,472 Net loss - - - (1,101,793 ) (1,101,793 ) Balance - March 31, 2021 25,762,342 $ 25,762 $ 40,787,092 $ (37,523,500 ) $ 3,289,354 Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2019 25,418,126 $ 25,418 $ 40,069,391 $ (32,991,833 ) $ 7,102,976 Stock-based compensation expense - - 106,996 - 106,996 Net income - - - 198,046 198,046 Balance - March 31, 2020 25,418,126 $ 25,418 $ 40,176,387 $ (32,793,787 ) $ 7,408,018 |
Geographical Operations Informa
Geographical Operations Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Geographical Operations Information | NOTE 11. GEOGRAPHICAL OPERATIONS INFORMATION The following summarizes revenue by geographic location: Three months ended March 31, 2021 Three months ended March 31, 2020 Revenue: North America $ 2,092,200 $ 4,580,510 Middle East 332,453 777,253 $ 2,424,653 $ 5,357,763 The following summarizes net property, plant and equipment by geographic location: March 31, 2021 December 31, 2020 Property, plant and equipment, net: North America $ 5,975,625 $ 6,008,431 Middle East 1,236,023 1,526,667 $ 7,211,648 $ 7,535,098 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12. COMMITMENTS AND CONTINGENCIES We are subject to litigation that arises from time to time in the ordinary course of our business activities. In February 2019, the Company filed a patent infringement lawsuit in the United States District Court for the Western District of Louisiana Lafayette Division asserting Stabil Drill Specialties, LLC (“Stabil Drill”) infringed on our patent that covers the Company’s well bore conditioning tool, the Drill-N-Ream. The lawsuit was subsequently moved from Louisiana to the United States District Court for the Southern District of Texas, Houston Division. Additionally, on May 20, 2019, Extreme Technologies, LLC sued Short Bit & Tool Co. and Lot William Short, Jr. (“Defendants”) in the Northern District of Texas - Dallas Division. Extreme sued for patent infringement based on the same patents discussed in the Stabil Drill litigation. On December 23, 2019, the Court stayed Extreme’s patent infringement claim against Defendants pending resolution of the Southern District of Texas Stabil Drill case. The court ordered the Company to serve discovery requests upon Stabil Drill and gave Stabil Drill deadlines to respond and produce documents and permit product inspection. Stabil Drill filed a motion for summary judgement and the Company responded and cross-moved for patent infringement. The parties are awaiting the judge’s decision. On October 1, 2020, Superior Energy Services, Stabil Drill’s parent company, filed for bankruptcy, which may result in a delay in the resolution of this litigation. Superior Energy Services announced on February 2, 2021 that it successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy. We are not currently involved in any other litigation which management believes could have a material effect on our financial position or results of operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is an innovative drilling and completion tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. Our headquarters and manufacturing operations are located in Vernal, Utah. Our drilling solutions include the patented Drill-N-Ream® well bore conditioning tool (“Drill-N-Ream tool”) and the patented Strider™ Drill String Oscillation System technology (“Strider technology” or “Strider”). In addition, the Company is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field services company. We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well as customers’ custom products. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. |
Unaudited Interim Financial Presentation | Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2021 and 2020, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations expected for the year ending December 31, 2021. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2020 and 2019 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company has two significant customers that represented 85% and 84% of our revenue for the three months ended March 31, 2021 and 2020, respectively. These customers had approximately $846,000 and $2,120,000 in accounts receivable at March 31, 2021 and 2020, respectively. The Company had two vendors that represented 22% of our purchases for the quarter ended March 31, 2021. These vendors had approximately $221,000 in accounts payable at March 31, 2021 and purchases in the first quarter of 2021 from these vendors totaled approximately $239,000. The Company had two vendors that represented 26% of our purchases for the three months ended March 31, 2020. The vendors had approximately $454,000 in accounts payable at March 31, 2020 and purchases in the first quarter of 2020 from these vendors totaled approximately $524,000. |
Impact of COVID-19 | Impact of COVID-19 The COVID-19 pandemic has impacted and may further impact the Company’s operations, and the operations of the Company’s suppliers and vendors, as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, financial condition and results of operations will depend on future developments, which are highly uncertain and depend on, among other things, the duration, spread, severity, and impact of the COVID-19 pandemic and the success and speed of vaccination efforts both in the United States and globally, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. Therefore, the Company cannot reasonably estimate future impacts of the COVID-19 pandemic at this time. |
Uncertain Tax Matters | Uncertain Tax Matters The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid; however, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There are no recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Revenue | Revenue disaggregated by revenue source are as follows: Three months ended March 31, 2021 2020 Tool Revenue: Tool and product sales $ 495,000 $ 990,734 Tool rental 336,453 777,253 Other related revenue 832,310 1,844,931 Total Tool Revenue 1,663,763 3,612,918 Contract Services 760,890 1,744,845 Total Revenue $ 2,424,653 $ 5,357,763 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are comprised of the following: March 31, 2021 December 31, 2020 Raw material $ 734,215 $ 733,734 Work in progress 99,261 50,631 Finished goods 162,607 235,643 $ 996,083 $ 1,020,008 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment are comprised of the following: March 31, 2021 December 31, 2020 Land $ 880,416 $ 880,416 Buildings 4,764,441 4,764,441 Building improvements 755,039 755,039 Machinery and equipment 11,373,601 11,298,642 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 18,667,615 18,592,656 Accumulated depreciation (11,455,967 ) (11,057,558 ) $ 7,211,648 $ 7,535,098 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are comprised of the following: March 31, 2021 December 31, 2020 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (14,372,222 ) (14,080,556 ) $ 527,778 $ 819,444 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt is comprised of the following: March 31, 2021 December 31, 2020 Hard Rock Note $ 1,500,00 $ 1,500,000 Credit Agreement 1,002,749 825,366 Machinery loans 440,716 466,448 Transportation loans 49,305 56,572 2,992,770 2,848,386 Less: Current portion (1,651,283 ) (1,397,337 ) Long-term debt, net $ 1,341,487 $ 1,451,049 |
Financing Obligation (Tables)
Financing Obligation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Financing Obligation | |
Schedule of Financing Obligation | The financing obligation is summarized below: March 31, 2021 December 31, 2020 Finance obligations for sale-leaseback transactions $ 4,220,883 $ 4,239,952 Current principal portion of finance obligation (59,420 ) (61,691 ) Non-current portion of finance obligation $ 4,161,463 $ 4,178,261 |
Total Equity (Tables)
Total Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of Changes in Total Equity | A summary of changes in total equity for the three months ended March 31, 2021 and 2020 is presented below: Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2020 25,762,342 $ 25,762 $ 40,619,620 $ (36,421,707 ) $ 4,223,675 Stock-based compensation expense - - 167,472 - 167,472 Net loss - - - (1,101,793 ) (1,101,793 ) Balance - March 31, 2021 25,762,342 $ 25,762 $ 40,787,092 $ (37,523,500 ) $ 3,289,354 Common Stock Additional Accumulated Total Shares Par Value Capital Deficit Equity Balance - December 31, 2019 25,418,126 $ 25,418 $ 40,069,391 $ (32,991,833 ) $ 7,102,976 Stock-based compensation expense - - 106,996 - 106,996 Net income - - - 198,046 198,046 Balance - March 31, 2020 25,418,126 $ 25,418 $ 40,176,387 $ (32,793,787 ) $ 7,408,018 |
Geographical Operations Infor_2
Geographical Operations Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Property, Plant and Equipment by Geographic Location | The following summarizes revenue by geographic location: Three months ended March 31, 2021 Three months ended March 31, 2020 Revenue: North America $ 2,092,200 $ 4,580,510 Middle East 332,453 777,253 $ 2,424,653 $ 5,357,763 The following summarizes net property, plant and equipment by geographic location: March 31, 2021 December 31, 2020 Property, plant and equipment, net: North America $ 5,975,625 $ 6,008,431 Middle East 1,236,023 1,526,667 $ 7,211,648 $ 7,535,098 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounts receivable | $ 846,000 | $ 2,120,000 | |
Accounts payable | 741,727 | $ 430,014 | |
Two Vendors [Member] | |||
Accounts payable | 454,000 | ||
Purchases from vendor | $ 524,000 | ||
One Vendor [Member] | |||
Accounts payable | 221,000 | ||
Purchases from vendor | $ 239,000 | ||
Customer Concentration Risk [Member] | Revenue [Member] | Two Customers [Member] | |||
Concentration risk percentage | 85.00% | 84.00% | |
Supplier Concentration Risk [Member] | Purchases [Member] | Two Vendor [Member] | |||
Concentration risk percentage | 22.00% |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Subsequent Event [Line Items] | |||
Shareholders' equity | $ 3,289,354 | $ 4,223,675 | $ 4,700,000 |
Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Sale of securities | $ 20,000,000 |
Revenue (Details Narrative)
Revenue (Details Narrative) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Description of payment terms | All of our contracts are less than one year in duration. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. | |
Revenue [Member] | North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage of revenue | 86.00% | 85.00% |
Revenue [Member] | Middle East [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage of revenue | 14.00% | 15.00% |
Revenue - Schedule of Revenue
Revenue - Schedule of Revenue Disaggregated by Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 2,424,653 | $ 5,357,763 |
Tools and Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 495,000 | 990,734 |
Tool Rental [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 336,453 | 777,253 |
Other Related Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 832,310 | 1,844,931 |
Tool Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 1,663,763 | 3,612,918 |
Contract Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 760,890 | $ 1,744,845 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 734,215 | $ 733,734 |
Work in progress | 99,261 | 50,631 |
Finished goods | 162,607 | 235,643 |
Inventories, net | $ 996,083 | $ 1,020,008 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2021 | Feb. 29, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Gain on sale of airplane property | $ 10,000 | $ 142,000 | ||
Depreciation expense related to property, plant and equipment | $ 398,408 | $ 469,098 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 880,416 | $ 880,416 |
Buildings | 4,764,441 | 4,764,441 |
Building improvements | 755,039 | 755,039 |
Machinery and equipment | 11,373,601 | 11,298,642 |
Office equipment, fixtures and software | 628,358 | 628,358 |
Transportation assets | 265,760 | 265,760 |
Property, plant and equipment, gross | 18,667,615 | 18,592,656 |
Accumulated depreciation | (11,455,967) | (11,057,558) |
Property, plant and equipment, net | $ 7,211,648 | $ 7,535,098 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 291,666 | $ 291,666 |
Impairment of intangible assets |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 14,900,000 | $ 14,900,000 |
Accumulated amortization | (14,372,222) | (14,080,556) |
Intangible assets, net | 527,778 | 819,444 |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 7,000,000 | 7,000,000 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 6,400,000 | 6,400,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 1,500,000 | $ 1,500,000 |
Related Party Note Receivable (
Related Party Note Receivable (Details Narrative) - Tronco Energy Corporation [Member] - USD ($) | Aug. 31, 2017 | Mar. 31, 2021 | Jul. 07, 2020 |
Related party note receivable | $ 6,979,043 | ||
Debt instrument decrease | $ 0 | ||
Common stock hold as collateral | 8,267,860 | ||
Debt maturity description | Interest only is due December 31, 2021, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022. | ||
Debt interest rate | 2.00% |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2021 | Dec. 31, 2020 | Feb. 28, 2019 | |
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit interest rate | 8.85% | |||
Management fee rate, percentage | 3.60% | |||
Debt instrument interest rate effective percentage | 9.56% | |||
Debt instrument maturity date | Feb. 20, 2023 | |||
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit interest rate | 2.00% | |||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term line of credit | $ 4,500,000 | |||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term line of credit | 1,000,000 | |||
Loan outstanding amount | $ 583,330 | |||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term line of credit | $ 3,500,000 | |||
Loan outstanding amount | $ 454,925 | |||
Line of credit facility description | Amounts outstanding under the Revolving Loan at any time may not exceed the sum of: (a) up to 85% of accounts receivable or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect (less a dilution reserve as determined by AFS in its sole good faith discretion), plus (b) the lesser of (i) up to 50% of inventory or such lesser percentage as AFS in its sole discretion may deem appropriate if it determines that there has been a material adverse effect, or (ii) the inventory sublimit, minus (c) the borrowing base reserve as may be determined from time to time by AFS. | |||
Current borrowing | $ 1,000,000 | $ 1,000,000 | ||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Loan One [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan outstanding amount | $ 456,428 | |||
Line of credit facility description | Amounts outstanding on the Revolving Loan as of March 31, 2021, may not exceed $456,428, which is based on a calculation applying 85% of accounts receivable and 50% of inventory. | |||
Credit Agreement [Member] | Revolving Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Accrued interest | $ 10,000 | |||
Hard Rock Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Business combination, consideration transferred, liabilities incurred | $ 12,500,000 | |||
Payments to acquire businesses, gross | $ 12,500,000 | |||
Notes payable | $ 1,500,000 | |||
Hard Rock Note [Member] | July 5, 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principle payment term | The Hard Rock Note has a remaining balance of $1,500,000 as of March 31, 2021, accrues interest at 8.00% per annum and is due in full by October 5, 2022. Under the amended terms of the Hard Rock Note, we are required to make the following payments: accrued interest on January 5, April 5, July 5 and October 5 in 2021 and 2022; plus $750,000 in principal on July 5, 2021 with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022. In January and April 2021, the Company made interest payments of $30,247 and $29,589, respectively. | |||
Principle payment | $ 750,000 | |||
Hard Rock Note [Member] | January 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest payment | 30,247 | |||
Hard Rock Note [Member] | April 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest payment | $ 29,589 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long term debt, Total | $ 2,992,770 | $ 2,848,386 |
Current portion of long-term debt | (1,651,283) | (1,397,337) |
Long-term debt, net | 1,341,487 | 1,451,049 |
Hard Rock Note [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 150,000 | 1,500,000 |
Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 1,002,749 | 825,366 |
Machinery Loans [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 440,716 | 466,448 |
Transportation Loans [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | $ 49,305 | $ 56,572 |
Financing Obligation (Details N
Financing Obligation (Details Narrative) - USD ($) | Dec. 07, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Purchase price | $ 9,236 | $ 37,850 | |
Net proceeds received | 50,000 | 117,833 | |
Sale Agreement [Member] | |||
Purchase price | 1,622,106 | ||
Real estate debt retired | $ 2,638,773 | ||
Sale Agreement [Member] | Vernal, Utaht [Member] | |||
Purchase price | $ 4,448,500 | ||
Lease Agreement [Member] | |||
Lease term | 15 years | ||
Lease back property, annual rate | $ 311,395 | ||
Annual rent increases | 1.50% | ||
Option to extend | true | ||
Net proceeds received | $ 4,260,879 | ||
Implied interest rate | 6.00% | ||
Financing obligation residual amount | $ 2,160,242 | ||
Principal payments | $ 25,950 |
Financing Obligation - Schedule
Financing Obligation - Schedule of Financing Obligation (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Obligation | ||
Finance obligations for sale-leaseback transactions | $ 4,220,883 | $ 4,239,952 |
Current principal portion of finance obligation | (59,420) | (61,691) |
Non-current portion of finance obligation | $ 4,161,463 | $ 4,178,261 |
Total Equity - Summary of Chang
Total Equity - Summary of Changes in Total Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock [Member] | ||
Beginning balance | $ 25,762 | $ 25,418 |
Beginning balance, shares | 25,762,342 | 25,418,126 |
Stock-based compensation expense | ||
Net income (loss) | ||
Ending balance | $ 25,762 | $ 25,418 |
Ending balance, shares | 25,762,342 | 25,418,126 |
Additional Paid-in Capital [Member] | ||
Beginning balance | $ 40,619,620 | $ 40,069,391 |
Stock-based compensation expense | 167,472 | 106,996 |
Net income (loss) | ||
Ending balance | 40,787,092 | 40,176,387 |
Accumulated Deficit [Member] | ||
Beginning balance | (36,421,707) | (32,991,833) |
Stock-based compensation expense | ||
Net income (loss) | (1,101,793) | 198,046 |
Ending balance | (37,523,500) | (32,793,787) |
Total Shareholders Equity [Member] | ||
Beginning balance | 4,223,675 | 7,102,976 |
Stock-based compensation expense | 167,472 | 106,996 |
Net income (loss) | (1,101,793) | 198,046 |
Ending balance | $ 3,289,354 | $ 7,408,018 |
Geographical Operations Infor_3
Geographical Operations Information - Schedule of Revenue and Property, Plant and Equipment by Geographic Location (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenue | $ 2,424,653 | $ 5,357,763 | |
Property, plant and equipment, net | 7,211,648 | $ 7,535,098 | |
North America [Member] | |||
Revenue | 2,092,200 | 4,580,510 | |
Property, plant and equipment, net | 5,975,625 | 6,008,431 | |
Middle East [Member] | |||
Revenue | 332,453 | $ 777,253 | |
Property, plant and equipment, net | $ 1,236,023 | $ 1,526,667 |