Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36453 | |
Entity Registrant Name | Superior Drilling Products, Inc. | |
Entity Central Index Key | 0001600422 | |
Entity Tax Identification Number | 46-4341605 | |
Entity Incorporation, State or Country Code | UT | |
Entity Address, Address Line One | 1583 South 1700 East | |
Entity Address, City or Town | Vernal | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84078 | |
City Area Code | 435 | |
Local Phone Number | 789-0594 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | SDPI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,169,086 |
Condensed Consolidated balance
Condensed Consolidated balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 2,469,398 | $ 1,961,441 |
Accounts receivable, net | 2,046,073 | 1,345,622 |
Prepaid expenses | 266,371 | 90,269 |
Inventories | 1,067,738 | 1,020,008 |
Asset held for sale | 40,000 | |
Other current assets | 47,692 | 40,620 |
Total current assets | 5,897,272 | 4,497,960 |
Property, plant and equipment, net | 6,963,777 | 7,535,098 |
Intangible assets, net | 277,778 | 819,444 |
Right of use assets | 22,192 | 99,831 |
Other noncurrent assets | 65,880 | 87,490 |
Total assets | 13,226,899 | 13,039,823 |
Current liabilities | ||
Accounts payable | 802,157 | 430,014 |
Accrued expenses | 1,887,693 | 1,091,519 |
Income tax payable | 177,822 | 106,446 |
Current portion of operating lease liability | 13,832 | 79,313 |
Current portion of financial obligation | 63,561 | 61,691 |
Current portion of long-term debt, net of discounts | 1,445,230 | 1,397,337 |
Total current liabilities | 4,390,295 | 3,166,320 |
Operating lease liability | 8,360 | 20,518 |
Long-term financial obligation, less current portion | 4,129,802 | 4,178,261 |
Long-term debt, less current portion, net of discounts | 1,118,953 | 1,451,049 |
Total liabilities | 9,647,410 | 8,816,148 |
Commitments and contingencies (Note 11) | ||
Shareholders’ equity | ||
Common stock - $0.001 par value; 100,000,000 shares authorized; 26,429,955 and 25,762,342 shares issued and outstanding | 26,430 | 25,762 |
Additional paid-in-capital | 41,149,551 | 40,619,620 |
Accumulated deficit | (37,596,492) | (36,421,707) |
Total shareholders’ equity | 3,579,489 | 4,223,675 |
Total liabilities and shareholders’ equity | $ 13,226,899 | $ 13,039,823 |
Condensed Consolidated balanc_2
Condensed Consolidated balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 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 | 26,429,955 | 25,762,342 |
Common stock, shares outstanding | 26,429,955 | 25,762,342 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Total Revenue | $ 3,561,919 | $ 1,547,442 | $ 9,385,680 | $ 8,929,593 |
Operating costs and expenses | ||||
Cost of revenue | 1,441,943 | 870,655 | 3,841,713 | 4,284,716 |
Selling, general and administrative expenses | 1,551,462 | 1,529,887 | 4,540,134 | 4,887,999 |
Depreciation and amortization expense | 405,225 | 693,259 | 1,680,804 | 2,134,398 |
Total operating costs and expenses | 3,398,630 | 3,093,801 | 10,062,651 | 11,307,113 |
Operating income (loss) | 163,289 | (1,546,359) | (676,971) | (2,377,520) |
Other income (expense) | ||||
Interest income | 49 | 145 | 147 | 5,775 |
Interest expense | (130,221) | (126,482) | (413,798) | (450,210) |
Impairment on asset held for sale | (30,000) | |||
Loan forgiveness | 41,403 | 41,403 | ||
Gain (loss) on disposition of assets, net | (1,187) | 142,234 | ||
Total other expense | (130,172) | (84,934) | (414,838) | (290,798) |
Income (loss) before income taxes | 33,117 | (1,631,293) | (1,091,809) | (2,668,318) |
Income tax expense | (39,327) | (99,979) | (82,976) | (106,414) |
Net loss | $ (6,210) | $ (1,731,272) | $ (1,174,785) | $ (2,774,732) |
Basic loss earnings per common share | $ 0 | $ (0.07) | $ (0.05) | $ (0.11) |
Basic weighted average common shares outstanding | 26,154,202 | 25,555,167 | 25,894,397 | 25,469,609 |
Diluted loss per common share | $ 0 | $ (0.07) | $ (0.05) | $ (0.11) |
Diluted weighted average common shares outstanding | 26,154,202 | 25,555,167 | 25,894,397 | 25,469,609 |
Tool Revenue [Member] | ||||
Revenue | ||||
Total Revenue | $ 2,346,234 | $ 1,190,929 | $ 6,283,461 | $ 6,147,280 |
Contract Services [Member] | ||||
Revenue | ||||
Total Revenue | $ 1,215,685 | $ 356,513 | $ 3,102,219 | $ 2,782,313 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2019 | $ 25,418 | $ 40,069,391 | $ (32,991,833) | $ 7,102,976 |
Balance, shares at Dec. 31, 2019 | 25,418,126 | |||
Stock-based compensation expense | 106,996 | 106,996 | ||
Net income (loss) | 198,046 | 198,046 | ||
Balance at Mar. 31, 2020 | $ 25,418 | 40,176,387 | (32,793,787) | 7,408,018 |
Balance, shares at Mar. 31, 2020 | 25,418,126 | |||
Balance at Dec. 31, 2019 | $ 25,418 | 40,069,391 | (32,991,833) | 7,102,976 |
Balance, shares at Dec. 31, 2019 | 25,418,126 | |||
Net income (loss) | (2,774,732) | |||
Balance at Sep. 30, 2020 | $ 25,617 | 40,439,035 | (35,766,565) | 4,698,087 |
Balance, shares at Sep. 30, 2020 | 25,617,486 | |||
Balance at Mar. 31, 2020 | $ 25,418 | 40,176,387 | (32,793,787) | 7,408,018 |
Balance, shares at Mar. 31, 2020 | 25,418,126 | |||
Stock-based compensation expense | $ 17 | 104,988 | 105,005 | |
Stock-based compensation expense, shares | 16,650 | |||
Net income (loss) | (1,241,506) | (1,241,506) | ||
Balance at Jun. 30, 2020 | $ 25,435 | 40,281,375 | (34,035,293) | 6,271,517 |
Balance, shares at Jun. 30, 2020 | 25,434,776 | |||
Stock-based compensation expense | $ 182 | 157,660 | 157,842 | |
Stock-based compensation expense, shares | 182,710 | |||
Net income (loss) | (1,731,272) | (1,731,272) | ||
Balance at Sep. 30, 2020 | $ 25,617 | 40,439,035 | (35,766,565) | 4,698,087 |
Balance, shares at Sep. 30, 2020 | 25,617,486 | |||
Balance at Dec. 31, 2020 | $ 25,762 | 40,619,620 | (36,421,707) | 4,223,675 |
Balance, shares at Dec. 31, 2020 | 25,762,342 | |||
Stock-based compensation expense | 167,472 | 167,472 | ||
Net income (loss) | (1,101,793) | (1,101,793) | ||
Balance at Mar. 31, 2021 | $ 25,762 | 40,787,092 | (37,523,500) | 3,289,354 |
Balance, shares at Mar. 31, 2021 | 25,762,342 | |||
Balance at Dec. 31, 2020 | $ 25,762 | 40,619,620 | (36,421,707) | 4,223,675 |
Balance, shares at Dec. 31, 2020 | 25,762,342 | |||
Net income (loss) | (1,174,785) | |||
Balance at Sep. 30, 2021 | $ 26,430 | 41,149,551 | (37,596,492) | 3,579,489 |
Balance, shares at Sep. 30, 2021 | 26,429,955 | |||
Balance at Mar. 31, 2021 | $ 25,762 | 40,787,092 | (37,523,500) | 3,289,354 |
Balance, shares at Mar. 31, 2021 | 25,762,342 | |||
Stock-based compensation expense | 167,033 | 167,033 | ||
Net income (loss) | (66,781) | (66,781) | ||
Balance at Jun. 30, 2021 | $ 25,763 | 40,954,125 | (37,590,282) | 3,389,606 |
Balance, shares at Jun. 30, 2021 | 25,762,342 | |||
Stock-based compensation expense | $ 667 | 195,426 | 196,093 | |
Stock-based compensation expense, shares | 667,613 | |||
Net income (loss) | (6,210) | (6,210) | ||
Balance at Sep. 30, 2021 | $ 26,430 | $ 41,149,551 | $ (37,596,492) | $ 3,579,489 |
Balance, shares at Sep. 30, 2021 | 26,429,955 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities | ||
Net loss | $ (1,174,785) | $ (2,774,732) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization expense | 1,680,804 | 2,134,398 |
Stock-based compensation expense | 530,595 | 369,843 |
Impairment on asset held for sale | 30,000 | |
(Gain) loss on disposition of assets, net | 1,187 | (142,234) |
Gain on forgiveness of loan | (41,403) | |
Amortization of deferred loan costs | 13,893 | 13,894 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (700,451) | 2,408,726 |
Inventories | (551,189) | (942,831) |
Prepaid expenses and other noncurrent assets | (161,564) | 327,968 |
Accounts payable and accrued expenses | 1,168,317 | (18,728) |
Income tax payable | 71,376 | (34,692) |
Other long-term liabilities | (61,421) | |
Net Cash From Operating Activities | 878,183 | 1,268,788 |
Cash Flows From Investing Activities | ||
Purchases of property, plant and equipment | (75,541) | (154,475) |
Proceeds from sale of fixed assets | 50,000 | 117,833 |
Net Cash From Investing Activities | (25,541) | (36,642) |
Cash Flows From Financing Activities | ||
Principal payments on debt | (1,146,309) | (2,167,539) |
Proceeds received from debt borrowings | 964,120 | |
Payments on revolving loan | (540,078) | (1,018,690) |
Proceeds received on revolving loan | 1,341,702 | 1,185,319 |
Net Cash From Financing Activities | (344,685) | (1,036,790) |
Net Change in Cash | 507,957 | 195,356 |
Cash at Beginning of Period | 1,961,441 | 1,217,014 |
Cash at End of Period | 2,469,398 | 1,412,370 |
Supplemental information: | ||
Cash paid for Interest | 410,598 | 460,640 |
Inventory converted to property, plant and equipment | 513,558 | 922,993 |
Reduction of debt with sale of asset | $ 211,667 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 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 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 and other tools for a leading oil field services company and other customers including other oil field service companies and operators. 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 for other applications. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three and nine months ended September 30, 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 and nine months ended September 30, 2021 are not necessarily indicative of the results of operations expected for the year ended 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 86% 81% 1,081,000 432,000 The Company had two vendors that represented 12% 176,000 546,000 14% 218,000 772,000 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. Reclassifications Certain prior year amounts have been reclassified to the balance sheet to conform to the current year presentation. The reclassifications were within accounts payable and income tax payable and did not impact net income. 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. Income Tax Expense The Company recorded income tax expense during the quarter of $ 39,327 33,117 . |
LIQUIDITY
LIQUIDITY | 9 Months Ended |
Sep. 30, 2021 | |
Liquidity | |
LIQUIDITY | NOTE 2. LIQUIDITY We believe that our cash on hand, 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. 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. 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 1,739,131 1.15 1,739,103 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 NYSE American Regulations staff will review the Company periodically for compliance with the initiatives outlined in the plan. If the Company does not make progress consistent with the plan during the plan period, NYSE Regulation staff may initiate delisting proceedings as appropriate. The Company’s first quarterly plan update was submitted to the NYSE American in April 2021 and was subsequently approved by the NYSE compliance committee on May 21, 2021. On August 16, 2021, the Company submitted its second quarterly plan update which was approved by the NYSE on September 10, 2021. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 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 85% 15% 86% 14% Revenue disaggregated by revenue source are as follows: SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Tool Revenue: Tool and product sales 315,000 294,464 $ 1,470,000 $ 971,520 Tool rental 521,228 254,574 1,318,135 1,716,210 Other related revenue 1,510,006 641,891 3,495,326 3,459,550 Total Tool Revenue 2,346,234 1,190,929 6,283,461 6,147,280 Contract Services 1,215,685 356,513 3,102,219 2,782,313 Total Revenue $ 3,561,919 $ 1,547,442 $ 9,385,680 $ 8,929,593 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 | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4. INVENTORIES Inventories are comprised of the following: SCHEDULE OF INVENTORIES September 30, 2021 December 31, 2020 Raw material $ 568,904 $ 733,734 Work in progress 208,369 50,631 Finished goods 290,465 235,643 Inventories, net $ 1,067,738 $ 1,020,008 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 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: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT September 30, 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 11,859,879 11,298,642 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 Property, plant and equipment, gross 19,153,893 18,592,656 Accumulated depreciation (12,190,116 ) (11,057,558 ) Property, plant and equipment, net $ 6,963,777 $ 7,535,098 The Company sold its airplane for a gain of approximately $ 142,000 10,000 Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2021 was $ 363,558 1,139,137 401,592 1,259,398 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS Intangible assets are comprised of the following: SCHEDULE OF INTANGIBLE ASSETS September 30, 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 Intangible assets, gross 14,900,000 14,900,000 Accumulated amortization (14,622,222 ) (14,080,556 ) Intangible assets, net $ 277,778 $ 819,444 Amortization expense related to intangible assets for the three and nine months ended September 30, 2021 was $ 41,667 541,667 291,667 875,000 |
RELATED PARTY NOTE RECEIVABLE
RELATED PARTY NOTE RECEIVABLE | 9 Months Ended |
Sep. 30, 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 0 8,267,860 2% 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 | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 8. LONG-TERM DEBT Long-term debt is comprised of the following: SCHEDULE OF LONG-TERM DEBT INSTRUMENTS September 30, 2021 December 31, 2020 Hard Rock Note $ 750,000 $ 1,500,000 Credit Agreement 1,390,881 825,366 Machinery loans 386,144 466,448 Transportation loans 37,158 56,572 2,564,183 2,848,386 Less: Current portion (1,445,230 ) (1,397,337 ) Long-term debt, net $ 1,118,953 $ 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 12.5 The Hard Rock Note has a remaining balance of $ 750,000 8.00% October 5, 2022 15,123 Under the amended terms of the Hard Rock Note, we are required to make the following additional payments: accrued interest on January 5, April 5, July 5 and October 5 in 2022; with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022. 89,754 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 1,000,000 3,500,000 416,662 1,000,462 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 September 30, 2021, may not exceed $ 1,000,000 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 September 30, 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% 8.85% 3.6% 9.78% 1,000,000 1,000,000 12,000 February 20, 2023 |
FINANCING OBLIGATION
FINANCING OBLIGATION | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
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 the Company entered into a fifteen-year lease agreement 311,395 1.5% Leases The Company received cash of $ 1,622,106 2,638,773 4,260,879 6.0% 2,160,242 25,950 The financing obligation is summarized below: SCHEDULE OF FINANCING OBLIGATION September 30, 2021 December 31, 2020 Finance obligations for sale-leaseback transactions $ 4,193,363 $ 4,239,952 Current principal portion of finance obligation (63,561 ) (61,691 ) Non-current portion of finance obligation $ 4,129,802 $ 4,178,261 |
GEOGRAPHICAL OPERATIONS INFORMA
GEOGRAPHICAL OPERATIONS INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
GEOGRAPHICAL OPERATIONS INFORMATION | NOTE 10. GEOGRAPHICAL OPERATIONS INFORMATION The following summarizes revenue by geographic location: SCHEDULE OF REVENUE AND PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC LOCATION Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Revenue: North America $ 3,040,691 $ 1,118,404 $ 8,073,945 $ 7,387,847 Middle East $ 521,228 $ 429,038 $ 1,311,735 $ 1,541,746 $ 3,561,919 $ 1,547,442 $ 9,385,680 $ 8,929,593 The following summarizes net property, plant and equipment by geographic location: September 30, 2021 December 31, 2020 Property, plant and equipment, net: North America $ 5,590,486 $ 6,008,431 Middle East 1,373,291 1,526,667 $ 6,963,777 $ 7,535,098 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. 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 for non-infringement. On October 1, 2020, Superior Energy Services, Stabil Drill’s parent company, filed for bankruptcy, which resulted in a brief, automatic stay of the litigation. Superior Energy Services announced on February 2, 2021 that it successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy. On March 9, 2021, the Court lifted the automatic bankruptcy stay. On May 12, 2021, the Court denied Stabil Drill’s non-infringement summary judgment motion. The parties are preparing this case for trial and expect a jury trial setting in 2022. 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. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 12. SHAREHOLDERS’ EQUITY On August 9, 2021, the Board of Directors granted 434,641 333,333 156,863 98,039 250,000 75,000 250,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13. SUBSEQUENT EVENTS On October 19, 2021, the Company completed an equity offering of 1,739,131 1.15 261,000 1,700,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 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 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 and other tools for a leading oil field services company and other customers including other oil field service companies and operators. 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 for other applications. Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. |
Unaudited Interim Financial Presentation | Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three and nine months ended September 30, 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 and nine months ended September 30, 2021 are not necessarily indicative of the results of operations expected for the year ended 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 86% 81% 1,081,000 432,000 The Company had two vendors that represented 12% 176,000 546,000 14% 218,000 772,000 |
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. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to the balance sheet to conform to the current year presentation. The reclassifications were within accounts payable and income tax payable and did not impact net income. |
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. |
Income Tax Expense | Income Tax Expense The Company recorded income tax expense during the quarter of $ 39,327 33,117 . |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE | Revenue disaggregated by revenue source are as follows: SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Tool Revenue: Tool and product sales 315,000 294,464 $ 1,470,000 $ 971,520 Tool rental 521,228 254,574 1,318,135 1,716,210 Other related revenue 1,510,006 641,891 3,495,326 3,459,550 Total Tool Revenue 2,346,234 1,190,929 6,283,461 6,147,280 Contract Services 1,215,685 356,513 3,102,219 2,782,313 Total Revenue $ 3,561,919 $ 1,547,442 $ 9,385,680 $ 8,929,593 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories are comprised of the following: SCHEDULE OF INVENTORIES September 30, 2021 December 31, 2020 Raw material $ 568,904 $ 733,734 Work in progress 208,369 50,631 Finished goods 290,465 235,643 Inventories, net $ 1,067,738 $ 1,020,008 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment are comprised of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT September 30, 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 11,859,879 11,298,642 Office equipment, fixtures and software 628,358 628,358 Transportation assets 265,760 265,760 Property, plant and equipment, gross 19,153,893 18,592,656 Accumulated depreciation (12,190,116 ) (11,057,558 ) Property, plant and equipment, net $ 6,963,777 $ 7,535,098 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets are comprised of the following: SCHEDULE OF INTANGIBLE ASSETS September 30, 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 Intangible assets, gross 14,900,000 14,900,000 Accumulated amortization (14,622,222 ) (14,080,556 ) Intangible assets, net $ 277,778 $ 819,444 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG-TERM DEBT INSTRUMENTS | Long-term debt is comprised of the following: SCHEDULE OF LONG-TERM DEBT INSTRUMENTS September 30, 2021 December 31, 2020 Hard Rock Note $ 750,000 $ 1,500,000 Credit Agreement 1,390,881 825,366 Machinery loans 386,144 466,448 Transportation loans 37,158 56,572 2,564,183 2,848,386 Less: Current portion (1,445,230 ) (1,397,337 ) Long-term debt, net $ 1,118,953 $ 1,451,049 |
FINANCING OBLIGATION (Tables)
FINANCING OBLIGATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
SCHEDULE OF FINANCING OBLIGATION | The financing obligation is summarized below: SCHEDULE OF FINANCING OBLIGATION September 30, 2021 December 31, 2020 Finance obligations for sale-leaseback transactions $ 4,193,363 $ 4,239,952 Current principal portion of finance obligation (63,561 ) (61,691 ) Non-current portion of finance obligation $ 4,129,802 $ 4,178,261 |
GEOGRAPHICAL OPERATIONS INFOR_2
GEOGRAPHICAL OPERATIONS INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE AND PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC LOCATION | The following summarizes revenue by geographic location: SCHEDULE OF REVENUE AND PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC LOCATION Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Revenue: North America $ 3,040,691 $ 1,118,404 $ 8,073,945 $ 7,387,847 Middle East $ 521,228 $ 429,038 $ 1,311,735 $ 1,541,746 $ 3,561,919 $ 1,547,442 $ 9,385,680 $ 8,929,593 The following summarizes net property, plant and equipment by geographic location: September 30, 2021 December 31, 2020 Property, plant and equipment, net: North America $ 5,590,486 $ 6,008,431 Middle East 1,373,291 1,526,667 $ 6,963,777 $ 7,535,098 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Product Information [Line Items] | |||||
Accounts Receivable, after Allowance for Credit Loss | $ 1,081,000 | $ 432,000 | $ 1,081,000 | $ 432,000 | |
Accounts Payable, Current | 802,157 | 802,157 | $ 430,014 | ||
Income tax expense | 39,327 | 99,979 | 82,976 | 106,414 | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 33,117 | (1,631,293) | (1,091,809) | (2,668,318) | |
One Vendor [Member] | |||||
Product Information [Line Items] | |||||
Accounts Payable, Current | 176,000 | 176,000 | |||
Purchase Obligation | $ 546,000 | $ 546,000 | |||
Two Vendors [Member] | |||||
Product Information [Line Items] | |||||
Accounts Payable, Current | 218,000 | 218,000 | |||
Purchase Obligation | $ 772,000 | $ 772,000 | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 86.00% | 81.00% | |||
Supplier Concentration Risk [Member] | Purchases [Member] | Two Vendor [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 12.00% | ||||
Supplier Concentration Risk [Member] | Purchases [Member] | One Vendor [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 14.00% |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | Oct. 19, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders equity | $ 3,579,489 | $ 3,389,606 | $ 3,289,354 | $ 4,223,675 | $ 4,698,087 | $ 6,271,517 | $ 7,408,018 | $ 7,102,976 | |
Common Stock [Member] | |||||||||
Stockholders equity | $ 26,430 | $ 25,763 | $ 25,762 | 25,762 | $ 25,617 | $ 25,435 | $ 25,418 | $ 25,418 | |
Subsequent Event [Member] | Common Stock [Member] | |||||||||
Number of share issued | 1,739,131 | ||||||||
Stock issued price per share | $ 1.15 | ||||||||
Proceeds from issuance of common stock | $ 1,739,103 | ||||||||
Maximum [Member] | |||||||||
Sale of securities | $ 20,000,000 |
SCHEDULE OF REVENUE DISAGGREGAT
SCHEDULE OF REVENUE DISAGGREGATED BY REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 3,561,919 | $ 1,547,442 | $ 9,385,680 | $ 8,929,593 |
Tools and Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 315,000 | 294,464 | 1,470,000 | 971,520 |
Tool Rental [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 521,228 | 254,574 | 1,318,135 | 1,716,210 |
Other Related Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,510,006 | 641,891 | 3,495,326 | 3,459,550 |
Tool Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,346,234 | 1,190,929 | 6,283,461 | 6,147,280 |
Contract Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 1,215,685 | $ 356,513 | $ 3,102,219 | $ 2,782,313 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
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 Benchmark [Member] | Geographic Concentration Risk [Member] | North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 85.00% | 86.00% |
Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | Middle East [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 14.00% |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 568,904 | $ 733,734 |
Work in progress | 208,369 | 50,631 |
Finished goods | 290,465 | 235,643 |
Inventories, net | $ 1,067,738 | $ 1,020,008 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Sep. 30, 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 | 11,859,879 | 11,298,642 |
Office equipment, fixtures and software | 628,358 | 628,358 |
Transportation assets | 265,760 | 265,760 |
Property, plant and equipment, gross | 19,153,893 | 18,592,656 |
Accumulated depreciation | (12,190,116) | (11,057,558) |
Property, plant and equipment, net | $ 6,963,777 | $ 7,535,098 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Feb. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||||
Gain (Loss) on Disposition of Property Plant Equipment | $ 10,000 | $ 142,000 | $ (1,187) | $ 142,234 | ||
Depreciation expense related to property, plant and equipment | $ 363,558 | $ 401,592 | $ 1,139,137 | $ 1,259,398 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 14,900,000 | $ 14,900,000 |
Accumulated amortization | (14,622,222) | (14,080,556) |
Intangible assets, net | 277,778 | 819,444 |
Developed Technology Rights [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 and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 1,500,000 | $ 1,500,000 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of Intangible Assets | $ 41,667 | $ 291,667 | $ 541,667 | $ 875,000 |
RELATED PARTY NOTE RECEIVABLE (
RELATED PARTY NOTE RECEIVABLE (Details Narrative) - Tronco Energy Corporation [Member] - USD ($) | Aug. 31, 2017 | Sep. 30, 2021 | Jul. 07, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Related party note receivable | $ 6,979,043 | ||
Debt instrument decrease | $ 0 | ||
Common stock hold as collateral | 8,267,860 | ||
Debt interest rate | 2.00% | ||
Debt maturity description | Interest only is due December 31, 2021, with a balloon payment of all unpaid interest and principal due upon maturity on December 31, 2022. |
SCHEDULE OF LONG-TERM DEBT INST
SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long term debt, Total | $ 2,564,183 | $ 2,848,386 |
Current portion of long-term debt | (1,445,230) | (1,397,337) |
Long-term debt, net | 1,118,953 | 1,451,049 |
Hard Rock Note [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 750,000 | 1,500,000 |
Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 1,390,881 | 825,366 |
Machinery Loans [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | 386,144 | 466,448 |
Transportation Loans [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, Total | $ 37,158 | $ 56,572 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2021 | Feb. 28, 2019 | |
Debt Instrument [Line Items] | |||
Accrued interest | $ 12,000 | ||
Loans Payable [Member] | |||
Debt Instrument [Line Items] | |||
Payment interest | 1,000,000 | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument borrowing capacity amount | $ 1,000,000 | ||
Loan and Security Agreement [Member] | Term Loan and Revolving Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Feb. 20, 2023 | ||
Line of credit interest rate | 8.85% | ||
Management fee rate, percentage | 3.60% | ||
Debt instrument interest rate effective percentage | 9.78% | ||
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 Note [Member] | |||
Debt Instrument [Line Items] | |||
Long term line of credit | 1,000,000 | ||
Loan outstanding amount | $ 416,662 | ||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long term line of credit | $ 3,500,000 | ||
Loan outstanding amount | $ 1,000,462 | ||
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. | ||
Loan and Security Agreement [Member] | Austin Financial Services, Inc. [Member] | Revolving Loan One [Member] | |||
Debt Instrument [Line Items] | |||
Loan outstanding amount | $ 1,000,000 | ||
Line of credit facility description | Amounts outstanding on the Revolving Loan as of September 30, 2021, may not exceed $1,000,000, which is based on a calculation applying 85% of accounts receivable and 50% of inventory. | ||
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 | $ 750,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Debt instrument maturity date | Oct. 5, 2022 | ||
Accrued interest | $ 15,123 | ||
Debt Instrument, Periodic Payment, Interest | $ 89,754 | ||
Hard Rock Note [Member] | July 5, 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, payment terms | Under the amended terms of the Hard Rock Note, we are required to make the following additional payments: accrued interest on January 5, April 5, July 5 and October 5 in 2022; with the remaining balance of principal and accrued interest on the Hard Rock Note due on October 5, 2022. |
SCHEDULE OF FINANCING OBLIGATIO
SCHEDULE OF FINANCING OBLIGATION (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Finance obligations for sale-leaseback transactions | $ 4,193,363 | $ 4,239,952 |
Current principal portion of finance obligation | (63,561) | (61,691) |
Non-current portion of finance obligation | $ 4,129,802 | $ 4,178,261 |
FINANCING OBLIGATION (Details N
FINANCING OBLIGATION (Details Narrative) - USD ($) | Dec. 07, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Purchase price | $ 75,541 | $ 154,475 | ||
Lessee, Finance Lease, Description | the Company entered into a fifteen-year lease agreement | |||
Net proceeds received | $ 50,000 | $ 117,833 | ||
Sale Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Purchase price | 1,622,106 | |||
Real estate debt retired | 2,638,773 | |||
Net proceeds received | $ 4,260,879 | |||
Implied interest rate | 6.00% | |||
Financing obligation residual amount | $ 2,160,242 | |||
Principal payments | $ 25,950 | |||
Sale Agreement [Member] | Vernal, Utaht [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Purchase price | $ 4,448,500 | |||
Lease Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Lease, Cost | $ 311,395 | |||
Annual rent increases | 1.50% |
SCHEDULE OF REVENUE AND PROPERT
SCHEDULE OF REVENUE AND PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC LOCATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | $ 3,561,919 | $ 1,547,442 | $ 9,385,680 | $ 8,929,593 | |
Property, plant and equipment, net | 6,963,777 | 6,963,777 | $ 7,535,098 | ||
North America [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 3,040,691 | 1,118,404 | 8,073,945 | 7,387,847 | |
Property, plant and equipment, net | 5,590,486 | 5,590,486 | 6,008,431 | ||
Middle East [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 521,228 | $ 429,038 | 1,311,735 | $ 1,541,746 | |
Property, plant and equipment, net | $ 1,373,291 | $ 1,373,291 | $ 1,526,667 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) | Aug. 09, 2021USD ($)shares |
Defined Benefit Plan Disclosure [Line Items] | |
Stock options exercised | shares | 75,000 |
Troy Meier [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Stock issued uuring period, value, restricted stock award, gross | $ 434,641 |
Annette Meier [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Stock issued uuring period, value, restricted stock award, gross | 333,333 |
Chris Cashion [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Stock issued uuring period, value, restricted stock award, gross | 156,863 |
Three Independent Members [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Stock issued uuring period, value, restricted stock award, gross | 98,039 |
Board of Directors [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Stock issued uuring period, value, restricted stock award, gross | $ 250,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Common Stock [Member] | Oct. 19, 2021USD ($)$ / sharesshares |
Subsequent Event [Line Items] | |
Stock Issued During Period, Shares, New Issues | shares | 1,739,131 |
Purchase price per share | $ / shares | $ 1.15 |
Payments of stock issuance costs | $ 261,000 |
Proceeds from equity offering | $ 1,700,000 |