Superior Drilling Products, Inc. Restructures $6 Million Note
November 27, 2018
Levelizes payments over two years and extends maturity to October
2020
VERNAL, Utah–(BUSINESS WIRE)–Superior
Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or “Company”),
a designer and manufacturer of drilling tool technologies, today
announced the amendment and restatement of the promissory note (the
“Note”) related to the Company’s 2014 acquisition of Hard Rock
Solutions. Effective November 21, 2018, under the amended and restated
note, the remaining $6.0 million in principal will be paid in equal
quarterly installments of $750,000 over the next two years. Interest
will accrue at a rate of 7.25% on remaining principal balance and will
be paid quarterly with principle amounts due. The note matures on
October 5, 2020.
Christopher Cashion, SDP’s Chief Financial Officer, commented, “The
restructuring of this note simplifies the recapitalization of our
balance sheet and measurably improves our liquidity ratio. We continue
to advance options regarding our $4.2 million mortgage currently due
February 15, 2019 and believe we will have that completed by year end.”
In 2014, the Company purchased the patented Drill-N-Ream® well bore
conditioning tool (DnR) including all of the interests of Hard Rock
Solutions, LLC (“Hard Rock”). Initial consideration consisted of $12.5
million paid in cash at closing and a $12.5 million seller’s note (the
“Hard Rock Note”). The Note and subsequent amendments are secured by all
of the patents, patents pending, other patent rights, and trademarks
transferred to Hard Rock.
The DnR is a unique drilling tool technology that conditions the well
bore simultaneously while drilling, driving efficiencies by reducing
days on well, increasing penetration rates and extending the life of the
bottom hole assembly. Globally, the DnR is increasing market acceptance
with leading operators and service companies standardizing on the tool.
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge drilling
tool technology company providing cost saving solutions that drive
production efficiencies for the oil and natural gas drilling industry.
The Company designs, manufactures, repairs and sells drilling tools. SDP
drilling solutions include the patented Drill-N-Ream® well bore
conditioning tool and the patented StriderTM oscillation
system technology. In addition, SDP is a manufacturer and refurbisher of
PDC (polycrystalline diamond compact) drill bits for a leading oil field
service company. SDP operates a state-of-the-art drill tool fabrication
facility, where it manufactures its solutions for the drilling industry,
as well as customers’ custom products. The Company’s strategy for growth
is to leverage its expertise in drill tool technology and innovative,
precision machining in order to broaden its product offerings and
solutions for the oil and gas industry.
Additional information about the Company can be found at: www.sdpi.com.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements and information
that are subject to a number of risks and uncertainties, many of which
are beyond our control. All statements, other than statements of
historical fact included in this release, regarding our strategy, future
operations, the rate at which the Company penetrates the Middle East
market, plans and objectives of management, are forward-looking
statements. The use of words “could,” “believe,” “anticipate,” “intend,”
“estimate,” “expect,” “may,” “continue,” “predict,” “potential,”
“project”, “forecast,” “should” or “plan, and similar expressions are
intended to identify forward-looking statements, although not all
forward -looking statements contain such identifying words. Certain
statements in this release may constitute forward-looking statements,
including statements regarding the Company’s financial position, market
success with specialized tools, effectiveness of its sales efforts,
success at developing future tools, and the Company’s effectiveness at
executing its business strategy and plans, to include expansion into the
Middle East. These statements reflect the beliefs and expectations of
the Company and are subject to risks and uncertainties that may cause
actual results to differ materially. These risks and uncertainties
include, among other factors, the status of the oil & gas industry,
geopolitical events, the environmental effort to reduce the use of
carbon based energy, our business strategy and prospects for growth; our
cash flows and liquidity; our financial strategy, budget, projections
and operating results; the amount, nature and timing of capital
expenditures; the availability and terms of capital; competition and
government regulations; and general economic conditions. These and other
factors could adversely affect the outcome and financial effects of the
Company’s plans and described herein.
Contacts
For more information, contact investor relations:
Deborah K.
Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com